Good morning, everyone, and welcome to the 2020 Annual General Meeting of Healius Limited. Thank you for joining us. My name is Jenny Macdonald, and I'm your company's Chair. I'd like to begin by acknowledging the traditional owners of the land on which we meet today. In particular, the traditional owners of the Gadigal Nation, and pay my respects to elders past, present, and emerging. It is past 11 A.M., Sydney time, and as the company secretary has informed me that we have a quorum present, I declare the meeting open. This is our first-ever hybrid meeting, and a little bit unfortunately, we have had a little bit of a technical difficulty with the slides for people who are logging on into the webcast. Now, if you would like to see the slides, they are on Healius' own website and the ASX.
Please do that and we will try and fix that during the meeting. Shareholders have the option to participate and vote either in person at the meeting at the Four Seasons Hotel or online through the Computershare AGM platform. Here in person with me today in Sydney, we have on my left to right, we've got Kate McKenzie, an Independent Non-Executive Director. Professor John Mattick, Independent Non-Executive Director. Charles Tilley, Company Secretary. Malcolm Parmenter, which is our Managing Director and CEO. Sally Evans, who's our Independent Non-Executive Director. Gordon Davis, Independent Non-Executive Director, and Paul Jones. Dr. Paul Jones, I should say, Independent Non-Executive Director. For those of you who are regular AGM attendees, the agenda today is relatively routine. However, we do encourage questions of any item of business.
As outlined in our notice of general meeting, Gordon Davis is retiring by rotation and standing for re-election today as a non-executive director. Professor John Mattick is standing for election today as a non-executive director. In terms of remuneration, in addition to the Remuneration Report for the financial year 2022, we are also seeking your approval for the issues of securities under a new long-term incentive plan, and also the issue of securities to Malcolm under that new plan and also under the short-term incentive plan. We also seek your approval for the issue of share rights and restricted shares to non-executive directors under the Non-Executive Director Share Plan. Finally, we seek your approval to renew the proportional takeover provisions in the company's constitution for three years. Before we begin, a few brief housekeeping points.
Should you require assistance during the meeting, if you're in the room, please raise your hand and one of the Computershare team will assist you. For those online, a guide of how to participate is available on the Healius website. The phone number to get assistance is in this guide and on the slide on the screen now as well, which is just for people online, it's +61 3 9415 4024. Also, a recording of this meeting will be available on the Healius website afterwards. For those of you who feel comfortable with the technology, the polls in relation to all items of business are now open. This means you can vote from now on. You will have the opportunity to vote throughout the meeting, and I'll let you know when voting is abo ut to close.
The online question portal is also now open. You can also submit written questions online if you wish, and your questions will be placed in a queue. Charles Tilley, our company secretary, will say more about how to ask questions and how to vote when we move to the formal part of the meeting. Having covered the procedural matters, I'd now like to take a moment to speak to you about your board and a few words on this topic. As you are aware, Rob Hubbard, our previous chair, has sadly stepped away from the board due to health reasons. Dr. Paul Jones, right at the end there, also announced his retirement this month, effective at the end of this AGM, and he tells me he's very much looking forward to his retirement.
On behalf of the board, I'd like to express my enormous gratitude to both of them for their steadfast guidance, invaluable insights, and considered approach throughout the period of considerable change at Healius Limited. They leave behind a great legacy. Your company has a good balance sheet, a streamlined portfolio, and multiple growth pathways. We have a dedicated team and a clear focus on sustainability, underscored by our role in ensuring Australians have access to quality healthcare irrespective of their circumstances. It's a privilege to be appointed as the new chair, and I am committed to helping Healius build on the achievements under Rob's tenure for the benefit of all shareholders.
Together with Sally Evans, who chairs our People and Governance Committee, I will look to fill the two vacancies on the Healius board over the next 12-24 months, and informed by an assessment of our current optimal mix of skills and experiences that the board should have. We'll undertake this assessment shortly, and that will be in November. I like the cadence of a new director each year in terms of board renewal. This is an opportunity to give us some different skills and different perspectives on the board. As the new chair, I'm turning my mind to executive succession planning. This is a priority for your board. Over the past three years, we have come through a period of transition in terms of portfolio, strategy, and technology, as well as managing the near-term imperatives of COVID-19.
Now we must look to establish the leadership team which will best steer your company in the next phase of the evolution. We'll update the market where appropriate. Let me make some observations on our vision and strategy for Healius. Our vision is to create sustainable value through the provision of comprehensive diagnosis in support of clinical decision-making across the national healthcare system. This is why we're here, to make Australians healthy. Our strategy rests on three pillars. On delivering precise insights for screening, diagnosis, and therapy, on providing patients and clinicians with superior healthcare experiences, and on creating value by investing in new and gr owing clinical domains.
This strategy is underpinned by key drivers, including the increasing importance of screening and diagnosis in reducing downstream healthcare costs, the growing autonomy and choice of individuals as healthcare consumers, and the rapid expansion of innovation and technology in treatment of disease. We are building a digital future for diagnostics, changing for the better the service experience for our patients and referrers, and we are focusing on the highest burden disease group, including cancer and cardiovascular disease. As an example, in August, we announced a partnership with the U.S. company, C2N Diagnostics, and we'll soon be offering their blood test to help the evaluation of Alzheimer's disease. Making Australians healthy and healthier and reducing the cost burden to society is the essence of your company's vision. Now let me move to capital management and shareholder returns, which I'm sure all shareholders are very interested in.
Your company remains committed to the target gearing ratio of 1.7x-2.2x EBITDA. That is our optimal gearing ratio. We have been below that over the last two years with the high level of COVID-19 screening. We will look to selectively invest where our money is best used, in our SIP digital and innovation programs, in M&A to improve our existing footprint and where we can see value accretion, and in shareholders value. As you're aware, we carried out a AUD 200 million buyback in calendar year 2021, funded by the sale of the medical centers in 2020. In March this year, we announced another more tactical buyback of up to AUD 100 million, where we have brought back on market about AUD 41 million worth of shares. In addition, our dividend have grown.
has grown strongly over the last two years, mirroring our performance with AUD 0.1325 per share declared in 2021 and AUD 0.16 per share in 2022, and they were all fully franked. We would like to continue to grow dividends in real terms, but with profits fluctuating around COVID testing, this may be difficult in the short term. Nevertheless, your board will remain focused on the returns it makes to shareholders. We've set our payout ratio of between 50%-70% of reported profits, and we will continue to ensure the discipline of a strong payout ratio is instilled in the company's capital management. Just on sustainability, over the past year, we've set our sustainable aspirations and identified five priority areas.
I might just refer you to the company's website, which has got the second year of our sustainability report. In terms of sustainability, our success is underpinned by ability to attract and retain the right talent, providing them with the right tools and support to deliver the best possible outcomes. We recognize that climate change is a global issue requiring the collective efforts of every person, business, community, and government. While we're not an emitter of a large amount of greenhouse gases, our priority is still centered around reducing our carbon footprint, reducing single-use plastics, and disposal of medical wastes. In terms of our customers and in line with our vision, Healius aims to permanently change for the better how consumers access diagnostic care in Australia.
Our company considers information security and safeguarding the health data in our system to be a priority. We are executing a program of 30+ strategies to further mitigate cybersecurity threats, including modernizing our firewalls, segmenting our networks to reduce exposure to attacks, and implementing an industry-leading security management solution. Our ongoing commitment to offer bulk billing for many of our services enables all Australians to access the care they need, irrespective of their circumstances. Our contribution to our community goes beyond this to charitable outreach as a national and local level, and support of clinical university placements. We're also committed to supporting human rights by aiming to eliminate any modern slavery from any of our operations. We are currently using the sustainable development goals developed by the United Nations as a framework for our FY 2022 sustainable report.
As I said, you can read more about our sustainability initiatives in our 2022 sustainability report, which is online. Before I hand over to Malcolm, I'd like to extend my thanks and gratitude to the entire Healius team, especially those who work in the front line, who have demonstrated their unwavering commitment to service during the COVID-19 pandemic. It's been another extraordinary year, and I would thank them for their dedication and resilience. Finally, I thank you, our shareholders, for your continued support and look forward to delivering again in the financial year 2023. I'll now hand over to Malcolm.
Thank you, Jenny, and let me add my welcome to all of you, either here in person or virtually online. Look, first and foremost, I'd like to extend my sincere thanks to our people for their dedication and commitment in serving the healthcare needs of Australians during the pandemic and during the past financial year in particular. I'm very grateful for their untiring efforts. You know, the last 2.5 years have been an unprecedented time for Australian healthcare, with enormous swings in demand. You know, there have been times when demand has been something like 40% down across all of our businesses, only to swing to more than 40% up in a matter of weeks. You can probably imagine the pressure that that puts on people delivering those se rvices.
At Healius, our people have faced every challenge COVID could throw at them and have kept backing up. I'm very grateful to our people and very honored to have been a part of that. I'd like to also thank our executive team, who are all nicely lined up here in the front row, for their commitment and outstanding results that they and their teams have produced during another challenging year. They're here to answer any questions that I don't know the answer to back me up. We might get each of you, as I call your name, to stand up so that everybody can see where you are. First of all, we have Maxine Jaquet, who's our CFO and COO. Thanks, Max. Janet Payne, our Group Executive, Corporate Affairs.
John McKechnie, who's the CEO of our Pathology division. Henry Barclay, CEO of our Montserrat Day Hospitals division. Prasad Arav, who's Group Executive, Digital and Technology. Mark Neeham, Group Executive, Government Affairs. Now, Peter Wilson, who has been our Group Executive, People and Shared Services, has recently announced that he'll be retiring, and I'd like to thank Peter at this point for his contribution and advice and support over the last three years and wish him the very best. I'm also pleased to welcome Rob Phipps, who's here today, who's been appointed Group Executive, People, Culture, and Sustainability. Rob has an extensive track record of experience in people and culture functions globally, and he's well-placed to lead the area going forward.
Both Rob and John are celebrating birthdays today, and I was thinking that, I mean, AGMs tend to be such somber affairs that we might sing happy birthday, but then I've heard the executive team sing before, and I'm not sure that would be a good idea, so I don't think we'll do that. Look, finally, we are looking forward to appointing our new CEO of Lumus Imaging, who will start in January. Look, turning to the year in review, from July 2021 through to January 2022, the focus for Healius was on the provision of COVID PCR testing across Australia. Indeed, over the course of the pandemic, Healius has delivered more than 13 million COVID PCR tests.
However, since the peak of the Omicron variant in January and February of this year, demand for PCR testing has progressively declined. During that period of time, PCR testing was only part of the story. Throughout the pandemic, we've provided critical non-COVID pathology, imaging, and day hospital services, but at lower than historical trend levels, which have been impacted by various COVID-induced lockdowns, elective surgery, and cancellations. The strong financial performance of your company is self-evident in the results, with a more than doubling of underlying net profit to over AUD 300 million and free cash flow of over AUD 500 million in the year. Now, as Jenny mentioned, just under half of this cash was paid out in buybacks and dividends.
Our record results were underpinned by, firstly, the group's ability to successfully scale up and down with demand and to contain cost growth below revenue growth. Secondly, the implementation of nearly half of our sustainable improvement program initiatives. Thirdly, progress across our digital program. In terms of our sustainable improvement program, or as we call it, SIP, we've made substantial progress on initiatives during the year, including optimizing our collection center footprint to improve the average revenue and margin per center. Reengineering our back office and lab processes to reduce cost, the introduction of tools to better manage labor in line with demand, and a number of significant procurement wins. We remain on track to exit FY 2023 at the target margin of 13% or 14% after AASB 16 benefits, assuming business as usual volumes continue to recover as we expect they will.
The benefit profile of our sustainable improvement program will be underpinned by the digital agenda that is underway. Now, this digital agenda has two types of work. One, a fast-paced digitization of customer-facing workflows where the customer is both the patient and the referrer. The other part is a steady pace cut-over of the components of our new laboratory information system. Now, on the digitization front, we introduced a range of key consumer innovations in FY 2022, which included e-referrals in pathology and imaging. Now, for those of you who don't know what that is, an e-referral is a digital order that comes directly to our lab or imaging information systems from the referring practitioner, which, you know, compared to historically, a traditional piece of paper that is handed to the patient.
Our other innovations are a digital collections portal to deliver seamless customer experience in our pathology collection centers, and a digital voice of the customer feedback platform where our patients have rated our services highly, giving net promoter scores consistently above 75. We continue to use those NPS scores and embed them in management performance metrics. Now, by the end of this calendar year, we will have installed a new digital image and report delivery system across Lumus Imaging that will significantly enhance the user experience for our referrers. In calendar 2023, we have a pipeline of digital products coming, including queue management to reduce waiting times for patients, better digital pathology results delivery, pathology results delivery for referrers, and e-bookings in imaging.
The difference between e-referrals and e-bookings is that in e-bookings, a patient can make an imaging exam booking directly into our imaging booking system. Now, the second part of our digital agenda is the steady paced implementation of our laboratory information system, including the cut-over of our laboratory instruments. Now, we've been talking about this for a while, but now we're underway with it, and we've already cut over one regional lab and are now configuring the first of four major labs to the new instrument manager. You may remember we have already successfully moved our imaging businesses onto one unified platform, a significant factor in the recent Hunter New England contract win. Now, healthcare has been historically slow to adopt new digital ways of connecting.
Customers have consistently, over the years, complained of things like difficulty accessing the care they need, long waiting times, and problems accessing results, let alone understanding them. At Healius, we believe our digital enhancements can change the traditional delivery of healthcare for the better. Do you know, waiting rooms are not places where we mostly enjoy spending time, you know? I think that would be probably something that everybody shares. By the same token, they don't have to be physical either. Waiting rooms can be virtual, allowing you to arrive just in time to walk straight in and have your test. Pathology results don't have to be just numbers on a page. They can be dynamic with graphs and explanations that help you understand your health.
E-referrals preserve the accuracy of patient and referrer information and allow the sending of reminders for testing where needed. Patient portals can allow you to keep track of your imaging and pathology results on your devices. An imaging patient portal is imminent. Pathology will take a little longer. All of these and more are on the way, and they have the potential for real benefits to health as well. For example, we know that more than 20% of people who are asked by their doctor to have a pathology test don't actually ever get around to it. Perhaps with better communication, we can reduce that dropout. As I mentioned, in addition to the digitization of customer interfaces, we're upgrading our laboratory information system over the next 18 months.
There are efficiencies to be had from the standardization of many laboratory tests across all our labs and the unification of our multiple systems onto one single platform. That's the sort of scene for technology. As a company, we've come a long way over the last few years. We now have a streamlined portfolio with the sale of the medical center business in FY 2020, and more recently, the sale of Adora Fertility. As evidence of this, 99% of our FY 2022 EBIT came from diagnostics, compared to 59% in FY 2019. We're now undertaking a sales process for our hospital division. As you may be aware, Healius has been delivering services in day and short stay hospitals for a long time, since the 1990s, in fact.
The division grew substantially with the acquisition of Montserrat in 2018. The sale of this division will enable us to realize our investment and leave us with a portfolio of diagnostics businesses that are well-placed for growth. In FY 2022, we continued to invest in diagnostics. We acquired Axis Diagnostics in Queensland, developed two imaging facilities in New South Wales, and rolled out the new Lumus Imaging brand. We won a substantial hospital imaging contract covering 32 hospitals across the Hunter New England Local Health District. Now, this means that together with our northern New South Wales contract, Lumus Imaging provides reporting services for almost all hospitals in New South Wales, north of Newcastle. In January, we acquired Agilex Biolabs, one of Australia's leading bioanalytical laboratories.
While too small to report separately, Agilex has high growth and high margin potential, and is a logical adjacency to Healius' existing core pathology business. We've seen growth in Agilex with year-on-year revenues of up, being up 52% and the pipeline up 80%. Our current focus is in supporting Agilex to service the demand that is patently there and grow profitably. We expect it to achieve a double-digit ROIC target within five years and become an integral part of a specialty pathology division over this time. Now, while investing in growth, as Jenny stated, we intend to maintain a strong balance sheet with a target gearing of 1.7-2.2x . We're focused on small bolt-on acquisitions such as the Axis Diagnostics.
We will also create space for more medium-sized acquisitions in imaging when trading returns to higher levels and where we see value accretion. In terms of the trading update, our business as usual or non-COVID revenues grew 5.5% compared to the prior comparable period in quarter one. In imaging, we're seeing progressive and strong above market growth, with last week's revenue was up more than 13% on the average it was in July, which was our low point for the year. It's the result of the investment we've made and continue to make in digital together with a rebound in hospital volumes. In non-COVID pathology, trading is also growing steadily but progressively. Last week's revenue was up more than 8% on July's average.
However, COVID testing has continued to drop away in Australia and our tests per working day are now under 4,000 per working day in October. We've moved COVID testing into our normal network and, as have many other providers of pathology services, we've shut down many of our drive-throughs. We now treat COVID as part of our BAU service, and I believe that that will continue to be the case. In terms of profitability, managing this transition away from COVID testing, the costs of sick leave, of site closures when understaffed and of last-minute patient cancellations made performance choppy during the quarter. We're resetting our cost base as we progressively close COVID infrastructure and align to where long-term volumes appear to be landing. We will have reset our cost base in the second half of this financial year.
Conditions changed rapidly in the first quarter. The trend in business as usual testing is definitely improving, but still has some way to go to reach the long-term trend line. In terms of potential FY 2023 outcomes, we would like to see a few more weeks of trading, and armed with that knowledge, it's our intention to provide a full year forecast for the first time, I think, for about three years before the end of the calendar year. Most importantly, underlying healthcare demand drivers remain strong, including population growth and an aging population with greater longevity but more complex health issues. With these drivers, reversion of our volumes and revenue to long-term growth rates is expected to occur. It always has in the past. I also expect to see a period of catch-up for the known underdiagnosis in the system over the past three years.
You know, unfortunately, diseases such as cancer did not simply go away because we stopped testing and because people stopped being screened. In fact, as we know, they progress. The level of underdiagnosis in Australia remains a concern. A small baseload level of COVID-19 testing, we believe, is also likely to continue as COVID-19 also remains of clinical concern. The exact timing of the return of business as usual services is hard to predict, as there is still some hesitation around accessing care, especially among the more vulnerable in society, although this is definitely reducing. There's also a well-published shortage of GPs in the country, with many of the older GPs having hung up their stethoscopes during the COVID-19 pandemic, and not enough medical students opting for a career in general practice as has been well-publicized recently.
The government has indicated it will free up the red tape that slows the migration of overseas trained GPs to Australia, and probably allocate some funding in the upcoming budget to improve the financial attractiveness of general practice as a career for medical graduates. The reversion to long-term BAU growth trends, the backlog of underdiagnosed illnesses, and a small but likely baseload level of COVID testing in combination, should deliver strong growth through the latter part of FY 2023 and FY 2024. Healius is well positioned to capitalize on that growth. In the meantime, we're adjusting to a world with lower COVID screening, resetting our cost base, and delivering on our sustainable improvement program, and moving at pace with those dig ital initiatives we spoke about. In conclusion, in com...
If we compare where we are today with where we were before the pandemic, we're in a far better position. We have a well-placed, scalable portfolio at attractive diagnostics markets, more competitive networks, including more profitable collection center footprints, growing margins through our sustainable improvement program, a compelling digital proposition with a customer-centric reorientation, broader growth options, including high-burden disease groups and pathology specialties such as genomics and clinical trials, less capital intensity in our business, and greater free cash flow to deliver this growth. Thank you for listening. I'll now hand you back to Jenny. Thank you.
Thank you, Malcolm. We now move to the formal part of the meeting. Hang on, because we've got a few things to go through before that. The notice of meeting was sent to all members, either electronically or those who have opted to receive it in that way or in the mail. In accordance with our usual practice at our AGMs, I will take the notice of meeting as read. The minutes of the previous meeting of the members of Healius Limited, which was the AGM held on Thursday, the 21st of October, 2021, were approved by the board and signed by Rob Hubbard as chair of the meeting in accordance with Section 251A of the Corporations Act.
The original minutes are tabled and a copy of those minutes will be made available for inspection should any shareholder wish to see them. To do so, simply make contact with the Company Secretary after the meeting at cosec@healius.com.au, Company Secretary being Charles Tilley. I will now hand over to Charles Tilley, our Company Secretary, to explain the procedures for asking questions and for voting.
Thank you, Jenny. We're grateful to everyone for taking the time to attend today, and we want to ensure that shareholders have adequate opportunity to ask questions. Today, as we move to a hybrid meeting format after two years of purely online AGMs, we'll be returning to a more conventional order for questions. The meeting will consider each item of business in turn, the proxy position will be reported, and then there will be an opportunity for shareholder questions before the item is formally put to the meeting to be voted on. Please remember that the right to ask questions is limited to shareholders. If you are not a shareholder, you will have been registered as a guest when joining this AGM. This means you are in attendance as an observer, and for those online, the buttons for asking questions and voting will not be activated in your case.
This year, we will be taking shareholders' questions on each item of business in the following order. First, questions asked by shareholders attending in person. We received questions in advance of the meeting from two shareholders who indicated they will be joining us today. It's good to see them here, and they would prefer to ask their questions from the floor. Second, we will deal with written questions asked online. Finally, we will be dealing with any spoken questions asked online. When the chair invites questions from those attending in person, please raise your hand to make yourself known, and one of our roving microphones will be brought to you. When the mic is brought to you, please confirm you're a shareholder by showing your blue attendance card, looks like that you received when you registered on arrival this morning.
Before asking your question, please give your name and, if you represent an organization, the name of that organization. For those online who wish to ask questions, you can start entering written questions on any item of business now to join the questions queue. You don't have to wait for us to reach that item of business. For those in the room, you can also use your device to submit a question online if you wish. We'll deal with your question in the same way as for shareholders who are attending online. If you wish to ask a question online, please tap the question and answer icon on your screen. It looks like a speech bubble. Then type your question in the text field at the bottom of your screen, then press the Send button at the bottom right of your screen to send your question.
Your question can be general in nature, or it can relate to one or more of the items of business. If your question relates to a specific item of business, please remember to include which item or items of business your question relates to. If you'd like to ask more than one question, please send each question separately so that we can easily alternate between shareholders and allocate each question to the correct item of business. This will also allow us to group questions that relate to similar subject matter. Once again, if you are intending to ask a written question and you haven't already lodged your question in advance of the meeting, I encourage you to start submitting now. Your question will be placed in the queue. There is a slightly different process for asking audio questions online.
To ask a spoken question, first, pause your meeting on the Computershare platform, and then dial the number provided on your screen. You will be prompted to enter your participant pin and transfer to the operator, where you will be required to provide your name and company details if applicable. Once connected on the call, you can continue to listen to the meeting while waiting to ask your question. To ask your question, you'll need to press zero followed by one on your telephone keypad. If you wish to make a comment rather than ask a question, please follow the same instructions as for questions. Likewise, if for any reason you wish to raise a formal or a procedural point, please follow the same instructions as for questions. I'd now like to turn to the procedures for voting. Firstly, voting for those in the room.
To vote in person, if you haven't voted in advance, you can fill in your votes on the back of your blue shareholder card. Please sign and place your card in the ballot box, which will be staffed by a Computershare representative at the end of the meeting. Please remember, if you have voted in advance, but you do wish to vote in the meeting today, your blue card will override any advanced votes that you have cast. For those online, as the polls have been open since the meeting commenced, you should be able to see the voting icon on your device's screen. When you press this icon, the voting screen will appear, and you will see votes available for business items two through eight. Remember, item one is not a voting item, so you won't see item one.
To cast your vote, simply press the button of your choice for, against, or abstain, which will then be highlighted on screen. There's no need to do anything further. To change your vote, simply press your new selection. There's no send button needed for voting. Whichever option you have highlighted at the time the polls close, or if you log out before the polls close, when you log out, will be recorded as your vote. If you have voted in advance of the meeting, you will have been given the choice when you registered today to let your advance vote stand, or alternatively, to vote in the meeting. If you chose to vote in the meeting, please ensure you do vote because your advance votes were canceled when you registered. Again, if you have not yet voted, I encourage you to vote now to ensure your vote is recorded.
You can change your vote on any item right up to the closure of the polls, and the chair will provide a warning that the voting will shortly be closed for all items of business to enable you to finalize your votes. Following the closure of the meeting, the results of the poll on each item of business will be published via the ASX and on the company's website. Turning now to proxies. The chair has made rulings on the appointment of proxies. The number of proxy forms received by the company's registry, Computershare, by 11 A.M. on Tuesday the 18th of October, 2022, was 588. The chair has ruled all of those proxy appointments as valid.
In accordance with Section 251AA of the Corporations Act, the minutes of this meeting will record in respect of each resolution in the notice of meeting, the total number of proxy votes exercisable by all proxies validly appointed, the directions in the proxy forms, and the total votes in favor, total votes against, and total of abstentions. I now hand back to Jenny to continue the formal part of the meeting.
Thank you, Charles. There are a few other procedural matters to cover before we move to the items of business. To ensure a full representation of our shareholders in the hybrid meeting environment, I have determined that all items of business will be decided by a poll. Maria Jopalik of Computershare will also act as Returning Officer for the poll, and Maria is just over there. Subject to any required voting exclusions, I'll be voting all proxies available to me as the chair of this meeting in favor of each item of business. Likewise, subject to any required voting exclusions, any open proxies received by the directors or other key management personnel will be voted in favor of each item. Just before I go on, I'd just note that at item one, I will be asking for general questions. Mo ving to.
Moving now to item one in the notice of meeting, the company's financial statements and the reports of the directors and auditors for the financial year ended 30 June 2022 are before the meeting. Item one in the notice of meeting concerns the receipt of the company's annual financial report. I would therefore like to invite Gordon Davis to, in his capacity as Chair of the Audit Committee, to speak on this item. Thank you, Gordon.
Thank you, Jenny. Good morning to everyone. I'd like to add my thanks to our people for the achievements of producing an excellent performance in financial year 2022. Turning to the 2022 annual financial report of your company, while we cannot dismiss the significant benefits of COVID PCR testing, what the statements really highlight is the ability of the business to keep its costs down, and particularly the ability to flex costs against dramatically changed demand fluctuations, which Malcolm pointed out. Also apparent is the continued focus from management on the digital program to open up new sources of revenue. Also, it's a good example that the business isn't just sitting on its laurels from the pandemic effects, but looking to its next challenges. I note our auditor, Mr.
Doug Bain from EY is in attendance today should there be any questions for him. I'm sure he's looking forward to them. This is Doug's final AGM as Healius audit partner, as he now hands over to Katrina Zrilic as part of the usual partner rotation process that's essential to maintain auditor independence. I'd like to thank Doug, who's been the audit partner since we appointed EY five years ago, for his efforts in getting to know the business and for his and his team's hard work over the past few years. I think it's fair to say that the audit process under the COVID umbrella had to be significantly changed, and credit to EY in keeping up the standard and the quality in what must have been a very difficult time. Thank you. I'll now hand back to Jenny.
Thank you, Gordon. As I was ex-audit chair, I'd like to also thank Doug. I would like, if there's a possibility for a really hard question, to go to Doug. Anyone, if you're open, that would be great. Oh, good. Item one is now open for discussion. We'll now move to the question session on item one. In addition to questions about the financial statements, this is your opportunity as a shareholder to ask questions about or make comment on the management of the company. These can be general questions which need not relate to any specific item of business before the meeting. If you could, any questions should be directed to me at the first instance. The benefit of being chair is that I can throw it out to anyone else in the management team or to the directors.
Everyone watch out because it might come to you. Now is the time in the meeting where questions for the auditors may also be asked in relation to the conduct of the audit. This is your time for Doug to answer that. However, no written questions for the auditors were received prior to the deadline of five business days before today. Any questions for the auditor should also be directed to me in the first instance. As there were no items or questions on this item or any other item submitted in advance of the meeting, we will start with questions from shareholders in attendance in person today. To ask your question, please raise your hand and a microphone will be brought to you by either Gemma or Janice.
Please remember to show your blue attendance card and to identify yourself and what your organization, if applicable. Could I ask for questions? I saw I've got two people, and I think Natasha might have been up first.
Thank you, Chair. I'd like to thank the board and the team of Healius for their results. Yeah, I've just got a few questions. Do you want them one at a time or?
Yeah, look, one at a time would be good.
Yeah.
Natasha, maybe if you go through yours, and then I'll hand to Patricia from the ASA.
Yeah. Natasha Lee, shareholder, by the way, if you didn't already know.
I know. Yes. Thank you, Natasha.
I was interested to hear about the company's work on cancer biomarkers, and if you could give a bit of information of does this involve the liquid biopsies from blood or genetic analysis of solid tumors and how this is associated with your various partnerships or with various universities?
Thank you, Natasha, and thanks for the question. Probably to give justice to your question, I will be passing that one to Malcolm.
Before I do, I'm just going to mention one thing. Today, I think on item four, you are electing to your board a world-renowned expert in this area, Professor John Mattick. That's. He's that way. So maybe at the end of the meeting, if you wanna have a cup of tea, I'm sure he will be happy to talk to you. In the meantime, I'll pass to Malcolm to answer your question.
Thanks, Jenny. Genomics from a clinical perspective has been evidenced at a conference that Max and I were at quite recently is quite a long way behind where the science is in terms of the demand from clinicians for genomic testing worldwide trails where the science is at. Having said that, we have a number of tests across solid tumors and proteomics that we provide, but we don't do liquid biopsy at this point. It's an emerging science. It is clearly part of the future, and it's coming very quickly from a scientific perspective, but there is little or no funding in the private sector right at this point in time.
You know, in terms of the provision of genomic testing, we need to find a way to kind of make that viable from a commercial perspective as well. And that's where it is. As Jenny mentioned, the C2N assay, the proteomics assay that we will be providing that's part of a U.S. thing, these tests are expensive, right? That test sells for $1,600. We're not sure about what the pricing in Australia will be, but that obviously limits the number of people who can actually access that until you've got some kind of MBS funding. There is a process for achieving MBS funding across this, and there'll be a lot of work in that space, particularly as we get to targeted medicine and precision diagnostics.
In other words, where you have a particular mutation with a tumor that you're looking for, and there is a viable treatment for that tumor, on the end. Those tests will come thick and fast. You know, our previous health minister had a real focus on this. We haven't really heard whether the current government has as much of a focus in that area going forward, but it clearly is an area that will grow quite quickly, we think, over time. We have the expertise to do it. Just need to find a way to commercialize it.
Yes. Thanks.
Thank you.
Natasha, you've got more? Yep.
Yeah, I noticed that there's been a large increase in loans and net debt in the last financial year. Malcolm did touch on this a little bit in his presentation. What is the company's position on the level of debt going forward? I presume at least part of the net sales from things such as the day hospitals will be used to reduce the debt level.
Yes. Thanks, Natasha. I'll take that one, I think. Look, as we said, sort of, I guess the medium-term optimization for our gearing is probably between 1.7x-2.2x EBITDA. Probably in the longer term, it's probably about 2x EBITDA. You're quite right, our debt has gone up, and it's gone up because of the Agilex acquisition, which was all debt funded. You know, we feel that that's probably optimal for us. In terms of the day hospitals, you're right. Any proceeds from, you know, that divestment, we will always look at the amount, what's good for the company, our capital management strategy, and it might be used to reduce debt. We'll look at it at the time.
No, that's fine. Look, I understand that, these things are sort of a work in progress, and there may be an opportunity to purchase another asset which will generate income. So you-
Yeah.
won't reduce debt. You'll use it to buy something else.
That's right. Yes.
Yeah. Just to get that feel. While I understand the company's strategy to have as many possible services bulk billed, there is the risk that, which I'm sure you're quite mindful of, that your margins could be squeezed with rising inflation if the government doesn't increase its contribution. What is the company's strategy to manage the situation?
Thanks, Natasha. Another good question. I'm gonna answer it probably in three parts because we do look at the strategy in three parts. Look, I think we should understand that Healius is committed to providing affordable healthcare to the Australian community, and that will involve bulk billing. We will always have bulk billing as part of our strategy. Of course, we are growing and diversifying our revenue streams with private billings, such as the, you know, commercial initiatives that we're going after. Also, you know, something like Agilex that we've bought. It's not reliant on Medicare. It's purely private billings. The second part of your question, which is good in this economic environment, is about inflation.
You know, we are very conscious of the economic environment that we're working in, and we're very cost conscious, and we're looking at our costs all the time for the reasons that you've spoken about. I guess the third thing that I would say is that we are part of a lot of industry associations, and with those and us directly, we are talking to government all the time about those issues that you talk about. They're sort of the three strategies that we go after.
That's great. The final question is, yeah. A number of pathology patients, and I know that Malcolm has talked about this on your digital strategy. A number of pathology patients request a copy of their results so that they can monitor their health, me being one of them. These reports are generally posted, and I'm sure you're looking at this, but I think that it would be more efficient if there was some way either for the results to be emailed to patients or establish some sort of secure site where we can download the reports directly.
Look, I will pass to Malcolm on this because he's an expert in this about patients, etc . Just before I do, just a couple of comments. Patients' needs and data are really complex, and I'll get Malcolm to go into that a little bit further. I think you have touched on our digital transformation, so I think you're getting to the heart of our digital transformation. I'll just pass to Malcolm with that one.
Thanks, Jenny. Natasha, look, I basically agree with you. You know, I think, you know, when I have a blood test, I'd quite like it to turn up on my, on my device. I mean, clearly there's a range, though, of results, and not all of them are suitable for that kind of delivery. There are, there clearly are things that are. You know, like, if you're on warfarin and you wanna know, you know, what your INR level is, if you're a diabetic and you wanna know what your HbA1c is, if you're on cholesterol-lowering drugs and you wanna know what your cholesterol is, you really don't necessarily need a clinician to interpret that. I mean, you probably don't wanna get a HIV positive result turning up on your device, right?
There are a range of things around what you can and can't do from that perspective. There's also an expectation around, you know, our customers who, you know, as I was explaining before, is a mix of referrers and patients. There is a transition that's happening between the empowering of the consumer and where referrers, doctors are still at in terms of the way they think of the world. Now, COVID has moved that on quite a bit. You know, we've gotten used to getting our COVID result on a device, negative or positive, you know? Prior to that was almost unheard of, that a result would turn up like that. It's changed the way people think, and I think that's a trend that will continue.
I think doctors will get less frightened about results turning up on devices as we go. As I said, we're about to introduce it in imaging, and in imaging, you can, because you can send the images and not necessarily the report at the same time, you can control bad news, right? It's easier that way. Pathology results, which are a number that give you a normal range, and it's clearly way out of range, tend to frighten people sometimes. You've got to manage that balance between that. You don't want to be terrorizing the community. At the same time, you want to be trying to improve the way in which they're engaged in their healthcare, where that's appropriate. I think there is a balance there, and that's what we're wor king to do.
That's why I was saying imaging's coming imminently, in terms of delivering that. Pathology probably takes a little bit longer to get there. It will go the same way, I think.
Yeah. No, thank you, Malcolm. Yeah, that's quite informative. You know, obviously I'm looking at things from my point of view and doing the analysis, and not very much frightens me, so.
It frightens me, but.
Yeah, I understand that part of this involves a conversation between the GP and the patient.
Yeah
On sort of what box to tick, saying, "Do you want to receive your results electronically, or do you wanna come in and have a chat about them?" That, that's great. Yeah. Yeah, I'd just also like to say, look, it's great having an even a hybrid or at least having the face-to-face meetings. It's, the last couple of years have been terrible and also, you know, I'd like to express all the best for Rob going forward.
Natasha, thank you very much, and we'll pass that on to Rob. Look, I believe, Patricia, you were next, if I could.
Thank you, Madam Chair. Yes, I'm Patricia Beal. I'm an independent shareholder, and I'm also representing the Australian Shareholders' Association with proxies from 54 other shareholders and over 385,000 actual votes. We try to pull significant weight when we get our proxies from both shareholder association shareholders and others who regard even if they're not members, regard us as the voices, or voice for independent shareholders who hold their own shares individually. Firstly, thanks for the opportunity and good wishes to Rob. We were sorry to hear that he needed to resign and do wish him well for the future.
Thank you, Patricia.
Next, congratulations on a good year, and even if the share price is not precisely reflecting that, we mostly understand that lots of things move share prices that are not necessarily related to the merits or otherwise of the particular company. Our company is changing with the way that things have come and gone from being owned by the divisions for, and different sections of the company have come and gone. While we certainly welcome the purchase of Agilex, which will add significant merit, I would imagine, in coming years, how are things going at Lumus? Because it seems the CEO resigned with apparently no appropriate succession plan, if you still haven't appointed a permanent successor.
I know there's a lot of other companies in the imaging field, and we wonder quite how those comparisons are going. I do have another question, but maybe I'll leave it at that for the moment.
Yeah. I'll come back to you.
To that.
Yes, absolutely. Patricia, first of all, I'd just like to thank you and the ASA for your interest in Healius. We are grateful for your interest. You always come very well prepared, so you do represent your members very well. Thank you very much. Just in terms of imaging, Lumus, we do have a new CEO coming in. They will start at the, I think the first week of January. Can I just con-
Ninth.
Ninth of January. At the moment, we've got an interim CEO.
Oh, yes.
Anything further on imaging, he can tell you hook, line, and sinker, I think. That's the first thing. I think you're right about Agilex. We think it is a really good acquisition. It is part of our diagnostic. It's right at the very start of the diagnostic journey, so we're really excited about it. And you might have read in your report, it's the growth last year was 52%. We've got a very good pipeline, so we're very excited. In terms of just sort of imaging overall, in the short term, we're really looking at greenfield growth, any bolt-on acquisitions that make sense, and winning of contracts, which we've done just very recently, haven't we?
that we believe that we can really grow imaging and the current CEO is on the hook to make sure that that happens. Thank you, Patricia.
Okay. Well, I'll press on with.
Yes, please do.
My other question was basically regarding the audits, and we had.
Fantastic.
I'm glad you're happy.
Because I'm part of it, right?
Haven't asked the question yet, but there you go. Well, we had noticed that it was the fifth year that the one person had done the audit, so we were hoping and presuming that that had also become apparent to you, and glad to see the future replacement in attendance. The other part of the question though is regarding other matters that were also audited by the same firm, and we were not so thrilled by that, seeing we would rather see it spread amongst different firms if the extra auditing needed to be quite as substantial compared to the main audit.
Yes.
Thank you.
Yes. Thank you, Patricia. I'm just going to just talk about. I'm gonna do it in two ways, talk about the process of changing out not EY as our auditors.
No
… changing audit partners. We did undertake that, you know, probably about six months ago. You know, Doug said, "Look, of course, after five years I need to retire." We are very sad to see him go, but that's the procedure and to keep it independent. Doug sort of said, "Look, there are about three or four people at EY who actually could do your audit, that we think could do your audit." Myself and our CFO did go and meet the three to four, and we were very lucky to get Katrina. We're very, very happy with Katrina. She's very experienced and really, I think is looking forward to starting on the audit. Of course, Katrina did shadow Doug over the last-
Yes
Year-end audit, so I think it's gonna be a very smooth handover. Confirm that, please. Thank you. Just in terms of the other matters, you're quite right. Look, I as audit chair, whenever we do get EY to do other services, anyone in the executive team who want to do that has to come to me. I am very conscious that I wanna keep independence. When that happens, I make sure that they give me a hook, line and sinker of why we're doing it. In most instances in this year, I said yes because EY was the best people to do it. Sometimes they are, and I do. You know, I don't want to go over one on one. You know, it can't be more than what we pay in the audit fee.
EY has a process where they also look at it to make sure that they feel that they continue to be independent. I tic-tac with the audit partner, and we agree that it's actually independence, and it will not impact their independence. There is quite a procedure that we go through, but it really is EY the best people to do it. If we do think that they are, for a variety of reasons, we will do it, just that it won't go over a certain a mount of money.
Okay.
Thank you, Patricia.
Thank you. That's.
Thank you. Could I ask if there's any more other questions? Thank you both to Natasha and Patricia. Appreciate the questions. It's always nice to get those questions and put Malcolm under the spotlight. Always good. We'll now move to questions submitted by shareholders online during the meeting. Charles, would you please read the first question?
Jenny, our first question is from Mr. Adam Cordell, shareholder. Can you please elaborate on the pivot away from day hospitals?
Look, thank you, Adam. Look, it's a good question. I might hand over to Malcolm just to do that. I do wanna say just before I do hand to Malcolm, we're a diagnostic company. The day hospitals are great businesses but very long-term. They, although we could still keep the day hospitals, they probably aren't a part of a portfolio of a diagnostic company. But maybe, Malcolm, if you just could add some comments to that.
Sure. Thank you, Jenny. Thanks for the question, Adam. Look, Healius and formerly Primary Health Care have been in day hospitals since the nineties, albeit those day hospitals were largely based in medical centers. With the acquisition of Montserrat, it, that division became significantly larger for us. Look, we have a strong belief in the future of day hospitals and short stay hospitals. I think, as we've spoken about previously, there is a, you know, there is a transition occurring in every Western country where longer stay or current procedures that are done in longer stay will slowly transition across to short stay. You know?
Things like joint replacements in in otherwise healthy people in a number of countries around the world are done as day procedures with the hospital care occurring in the home. That part of things hasn't changed in terms of the way we think about it. As our day hospital business has got bigger and we've opened larger facilities and we compete in that hospital sector, we started to think about where that goes as it gets much bigger over time. We are a large provider of diagnostics to other hospital providers. The question is, can we be a hospital provider and a provider of diagnostics? You know, where we've got the focus on growing our diagnostics, we want our imaging to be bigger.
If we're gonna get our imaging bigger, part of that is being, having those imaging services in hospitals. Montserrat, as it was not competitive in that space. As we start to build larger and bigger facilities in places, it will become so over time. That's the decision about where we go from a diagnostics portfolio, is that our best chance here in terms of the best opportunity, we believe for Healius as a company, is to build on our diagnostics and to divest our day hospital business at this point.
Thanks, Malc. Thanks, Malcolm, and thanks, Adam, for the question. Charles, any more questions from online?
Yes, Jenny, we have a further question from Mr. Adam Cordell. Relative to companies like Sonic Healthcare, Healius carries a much higher level of debt to EBITDA. What is the board's plan to reduce this debt to more sustainable levels, particularly as the COVID-19 testing revenues are falling away?
Look, thank you, Adam, for that question. Look, perhaps if I answer that. We really don't compare ourselves to other companies about our debt level. We really look at capital management for Healius and what is best for Healius. Speaking to investors, I think generally the consensus is that we don't have a lazy balance sheet. I think that they're all very comfortable that we bought Agilex through debt. Look, it's all really under our capital management reviews and what we feel is best for Healius. As we've previously said, long term, we think the optimal ratio for us, gearing ratio for us, is 2x EBITDA levels. Currently, we sort of probably sit in the medium term between 1.7x - 2.2x. Thank you.
Charles, could I ask you, is there any more questions?
No, there are no more questions, Jenny. I've also, our tech team has indicated to me that there are no spoken questions awaiting online either.
Great. Thank you. Since there's no further questions, I think we will go on to the item one of today. As item one is a non-voting item, we'll now move to item two. Item two in the notice of meeting concerns the adoption of the 2022 Remuneration Report, which is set out on pages 43 - 64 of the company's 2022 annual report. I'd now like to invite Sally Evans in her capacity as Chair of the People and Governance Committee to speak on this item. Over to you, Sally.
Thanks, Jenny. Ladies and gentlemen, it is a pleasure to be able to table our Remuneration Report again this year as Chair of the People and Governance Committee. I would like to say a few words before we ask shareholders to vote on the report. We are a people business, and our success depends on having the right people with the right tools and the right culture to deliver the best outcomes. Hence, our remuneration framework is focused on attracting, retaining, and rewarding talented people. It is also structured to align incentive arrangements to sustained shareholder value creation.
Turning to the details of the financial year 2022 remuneration for our three key management personnel, the first point I'd like to make is that there was no fixed increase in fixed rem for our CEO again, but increases for our other two KMP in light of our benchmarking assessment. Secondly, in relation to short-term incentives, your KMP have received awards ranging from 89%-93% of the maximum available to them. These were based on balanced scorecards, which assessed financial outcomes as well as strategy, operations, and sustainability, with company values acting as a gateway. Consistent with last year, your board considered what was required to successfully deliver our COVID-19 testing program and the business as usual services, as well as the progress on the strategic and margin expansion initiatives that you've heard Malcolm and Jenny talking about earlier.
Thirdly, FY 2022 was the first year of measurement of the Transformation Long-Term Incentive Plan or TLTIP, which was approved at the AGM in November 2019 and is being assessed in financial years FY 2022 - FY 2024. The TLTIP was established by the board to ensure senior executives were aligned to shareholder returns over five years, given the long-dated nature of the digital technology changes underway in pathology. As you've heard today, a significant number of those initiatives have been delivered or are in flight. While acknowledging the large quantum of options exercised this year, these options are a mathematical outcome of the terms of the TLTIP and reflect its purpose in rewarding executives for growth in share holder returns.
Looking at this growth from 1 July 2019 - 30 June 2022, the Healius share price grew by 22% compared to a 1% decline in the S&P/ASX 200. Our earnings per share compound average growth rate was 61.1%, and our total shareholder return was 37.2%. In terms of your company's equity holding policies, for your non-executive directors, we have a target of one year's fees in equity by 30 June 2025 under this policy, and the policy was introduced last year. All directors are progressing towards this target.
A policy requiring executive KMP to hold equity remains under active consideration by your board. As Jenny mentioned, board succession planning is ongoing, and a review of director fees is underway this year to ensure the board continues to recruit directors that bring the skills and experience required for the next phase of Healius' growth. Finally, I hope you find our remuneration report readable. We have again included a non-statutory table showing the KMP's actual take-home pay at section five. We welcome feedback on ways we can continue to improve the remuneration. Continue to support us by voting to adopt the remuneration report. Thank you. I'll now hand back to Jenny.
Thank you, Sally. I will now report the position as to valid proxies and direct votes in relation to the adoption of the remuneration report and say a few words about the voting position. The position as to proxies and direct votes is shown on the screen, but if we haven't got it up at the moment, for is about 430 million compared to against 7.8 million and 1.8 abstaining. It appears from the lodged proxies and direct votes that there is strong shareholder support for the adoption of the remuneration report. Item two is now open for discussion. We will now move to the question session on item two. To ask a question, please raise your hand, and a microphone, of course, will be brought to you if you're in at the Four Seasons.
Please remember to show your blue attendance card and to identify yourself and what organizations you represent, if applicable. May I ask if there's any questions on the floor? As there's no questions from the floor, we'll now move to questions submitted by shareholders online during the meeting. Charles?
Jenny, I'm not showing any questions online. I'm just confirming from the tech team. Thank you very much. They're not showing any questions online, either written or spoken.
Okay, great. Thank you. Since there are no further questions, thank you, and thank you to everyone who's actually. Thank you to Sally for going through the remuneration report. We'll now move to vote on item two. I note that I have notified the meeting of the proxy and direct voting status of this item. This item has been open for discussion, including questions, and that discussion is now closed. I'll now put the motion that the remuneration report for the year ended 30 June 2022 be adopted. As previously directed, we will proceed directly to a poll. The poll for this item is now open and has been open since the meeting commenced. To vote for the resolution, against the resolution, or to abstain from voting, please press or select the corresponding button on your device's screen.
To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting. We'll now move to the next item of business. Item three in the notice of meeting concerns the reelection of Gordon Davis. Before I invite Gordon to speak, I'll report the position as to the valid proxies and direct votes in relation to Gordon's reelection and say a few words about the voting position. The position as to proxies and direct votes is shown on the screen, and we have approximately 433 million for, 6.7 against, and it appears from the lodged proxies and direct votes that there is strong shareholder support for Gordon's reelection. I'd now like to invite Gordon to say a few words on his candidacy.
Thanks, Chair. It's a pleasure to be back here again after only one year. Of course, the circumstances of that are most unfortunate in that Rob Hubbard having moved on and the obligation to have a director retire. That said, it is heartening that the numbers have held up over the year. I thank shareholders for that. Look, I think just by way of similar comments I made last year, yeah, Healius has been through a range of changes over the time. We had the pandemic issues, but prior to that, we'd embarked on a longer-term plan to substantially rebuild the business, which Malcolm and his team have been focused on.
It's quite heartening that the last twelve months underscored the achievements in the group with the record financial results. Our company now faces a new set of challenges, of course. Nothing stands still. As we move to a post-pandemic world. I think we all struggle to work out what normal is these days, and I don't think it's particularly useful to try to. What we know is that we have to be well-positioned for whatever challenges we get thrown up. I think Malcolm quite succinctly pointed out that in the future, there's a lot of opportunity as well. I believe Healius as a company is well-placed to adjust to our new reality. Strong management team, sound balance sheet, but you can't stand still, and we need to be pragmatic.
We're gonna have opportunities for growth and development. Not all will be good, and not all will have equal merit. Keeping those disciplines on evaluating opportunities, I think is very important over the next period. That said, we've been able to show over the last 12 months with the acquisition of Agilex, the portfolio structure around decisions around day hospitals that we can continue to evolve the company. In addition to the strategic big picture, we have to remain focused on the day-to-day, which is around efficient operations and keeping that capability and flexibility which allowed Malcolm and the team to react in such a constructive way to the challenges of COVID, which no one could fairly have put in a five-year plan.
The sustainable improvement program, digital offering, customer focus, all of these things are very important. Also the work, the thinking that goes on in the business about stakeholders, both the medical profession, professions we interact with and the patients individually. All these things mean it's a very exciting time at part of Healius. I've made the commitment last year that I'd commit my time to helping the board and helping management achieve its potential, and I reiterate that this year. I thank shareholders for their support, and in the normal course of events, you won't have to hear from me for another two years.
Three.
Three years.
Thank you, Gordon. Item three is now open for discussion, so we'll now move to the question session on item three. Again, if you're on the floor, please raise your hand and a microphone will be brought to you by one of our attendants. Please remember to show the blue card, the attendance card, and to identify yourself and what organization you represent, if applicable. Are there any questions on the floor? I don't think there are any questions on the floor, so I'll now turn to Charles. Is there any questions, Charles?
No, Jenny, I'm indicating that there are no questions online, either written or spoken.
Okay, great. Thank you. No questions. I will close this question session. You know, thank you to everyone. We now move to the vote on item three. I note that I have notified the meeting of the proxy and direct voting statement of this item. This item has been open for discussion, including questions, and that discussion is now closed. I now put the motion that Gordon Davis, a non-executive director, retire in accordance with the company's constitution, and being eligible for re-election, is re-elected as a non-executive director of the company. As previously directed, we will proceed directly to the poll. The poll for this item is now open and has been open since the commencement of the meeting. To vote for the resolution, against the resolution, or to abstain from voting, please press or select the corresponding button on your device.
To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting. We'll now move to the next item of business. Item four in the notice of meeting concerns the election of Professor John Mattick. Before I invite John to speak, I'll report the positions as to valid proxies and direct votes in relation to John's election and say a few words about the voting position. The position as to proxies and direct votes is shown on the screen, but I'll just There are four. It's about approximately 438 million against 1.9. It appears from the lodged proxies and direct votes that there is strong support for John's election. I'd now like to invite John to say a few words on his candidacy.
Over to you, John.
Thank you, Jenny, and that's very heartening. Thank you all. Good afternoon. I'm really delighted to have this opportunity to speak to you today and put myself forward, albeit slightly under the weather, forgive me, for election as a non-executive director of Healius. I believe I'm well-suited to joining the Healius board. I've many years' experience in biomedical research and its translation, especially in relation to the power of data to improve the efficiency and precision of healthcare. Until recently, I was the chief executive of Genomics England, where I wrote the 2019-2023 national vision and plan for the development of genomically informed healthcare in the United Kingdom.
Prior to that, I was the executive director of the Garvan Institute of Medical Research here in Sydney, where I established one of the first centers in the world capable of sequencing human genomes for less than AUD 1,000. I note the price has recently gone down again. Australia's first genome medicine clinic in partnership with St Vincent's Hospital. Healius is fundamentally an information business, providing genetic, biochemical, cellular, and imaging analysis to healthcare professionals and patients. Accurate information is essential to the quality of healthcare for accurate diagnosis, accurate prescribing, and informed anticipation of problems that can be avoided by early action.
The integration of clinical records, smart devices, and personal genetic information, subject, of course, to strict privacy protection and informed consent, has the potential to transform lives, make massive savings, and lead to a much healthier society with all of the benefits that will bring. One example is the current revolution in the detection of cancer risk, accurate molecular diagnosis, and informed treatment of cancer. Another is the use of genetic information to avoid, and this may surprise you, roughly 30% of useless prescriptions and the 10% that have adverse effects. I believe my research and technical experience puts me in a strong position to add value to Healius, to help the company anticipate the future, chart its strategic direction, outperform the competition, and become the leading health provider of healthcare information in Australia and beyond.
I value the richness of diversity and believe that a collaborative relationship between board members and senior executives in the development of the company's strategy is foundational to maximizing shareholder value. It would be an honor to be elected to the Board of Healius and to be able to continue to work with my fellow directors, Malcolm and the executive team, to ensure ongoing success and growth of our company. Natasha, I can talk to you about liquid biopsies after the meeting. I now hand back to Jenny. Thank you very much.
Thank you, John. Item four is now open for discussion, so we will now move to the question session on item four. To ask a question, again, please raise your hand and someone will bring you the microphone. Of course, just show your blue card. Could I ask for any questions from the floor? Since there are no questions from the floor, Charles, could I ask for you anything online?
Confirming there are no online questions, written or spoken, Jenny. Thank you.
Right. Thank you. Thank you to everyone. We will now move. We'll now move to the vote on item four. I note that I have notified the meeting of the proxy and direct voting status of this item. This item has been open for discussion, including questions, and that discussion is now closed. I now put the motion that John Mattick, being a director appointed by the board as a casual appointee since the last AGM, who retires in accordance with the constitution of the company and being eligible, offers himself for election, is elected as a non-executive director of the company. As previously directed, we will proceed directly to a poll. The poll for this item is now open. It has been open since the meeting commenced.
Again, to vote for the resolution, against the resolution, or to abstain from voting, please select, press or select the corresponding button on your device's screen. To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting. We'll now move to the next item of business, which is item five. Item five in the notice of meeting concerns the approval of a new long-term incentive plan. At the 2019 AGM, shareholders approved the Transformation Long-Term Incentive Plan, which saw grant options to the executive leadership team. This grant covered financial years 2020, 2021 and 2022. With the expiry of that three-year plan, a new long-term plan is required for FY 2023.
The new plan has the following aims. Just as Sally said, firstly, to align more closely with the market practice, in particular for the CEO, with the gradual aim of moving the CEO's remuneration package to an equal mix of 33% fixed remuneration, 33% short-term remuneration, and 33% of long-term incentive. Secondly, to ensure the design motivates and rewards performance with increased transparency for recipients. Thirdly, to maintain a similar cost to the company while expanding the number of eligible participants. To achieve these aims, the new plan uses the following design. Firstly, the new plan uses performance rights rather than options, and this makes for a much more simple plan. Secondly, the performance hurdles place a greater weight on relative total shareholder return or RTSR, compared to the previous plan.
This is to drive a greater external focus for the eligible participants and even closer alignment to you shareholders. Thirdly, the comparative group companies that we have used for assessing the RTSR performance is broadened to the ASX 100 - 200 companies, but it is minus financial service companies, technology companies, and anyone in the resource sector, because we need to make it very closely aligned to Healius. Your Board therefore requests your support on item five to help keep management and shareholders' interests aligned. I'll now report the position as to valid proxies and direct votes in relation to the long-term incentive plan. The position as to proxies and direct votes is shown on the screen, and basically for, it's approximately 426 million for, and against approximately 12.3 million.
It appears from the lodged proxies and direct votes that there is strong shareholder support for the approval of the new long-term incentive plan. Item five is now open for discussion, so we will now move to the question sessions on item five. Again, if you're on the floor, if you would like to raise a question, we'll get one of the attendants to bring you a microphone, and if you could just show your blue card. Could I open to see if there is any questions from the floor? Since there doesn't seem to be any questions from the floor, I'll just turn to Charles and ask, is there anything online?
Thanks, Jenny. I confirm no online questions, written or spoken.
Great. Thank you. We now move to the vote on item five. I note that I have notified the meeting of the proxy and direct voting status of this item. This item has been open for discussions, including questions, and the discussion is now closed. I now put the motion that for the purposes of Listing Rule 7.2, exception 13, and for all other purposes, the issue of securities under the long-term incentive plan, the terms of which are described in the explanatory statement to the notice of meeting, be approved. As previously directed, we will proceed directly to a poll. The poll of this item is now open and has been open since the commencement of the meeting. To vote for the resolution, against the resolution, or to abstain from voting, please press or select the corresponding button on your device's screen.
To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting, and we will now move to the next item of business, which is item six. Item six in the notice of meeting concerns the acquisition of securities by the Managing Director and Chief Executive, Malcolm Parmenter, under the long-term incentive plan and also under the short-term incentive plan. Before reporting the voting positions and taking questions, I'd like to make a few remarks just to explain it. Part of the approval being sought relates to Malcolm's participation in the long-term incentive plan, which we have just voted on in item five. I won't repeat my remarks about that. In addition to the long-term plan, Malcolm is also eligible to receive an award under the short-term incentive plan. That being, we call that STIP.
We are seeking shareholders' approval now so that if Malcolm has met his performance targets for the year, the board is able to make a STIP award to him after the end of this financial year but before the next AGM. That would mean that if Malcolm received his STIP in 2022, we can actually award him shares before the AGM because two-thirds will be in cash and one-third will be in equity. The equity will be restricted shares, which cannot be traded until the deferral period is over. Unlike the current STIP, we will be deferring half the equity award for one year. That is until 1 July 2024, and the other half for two years. That's until 1 July 2025.
I emphasize that any STIP award in relation to FY 2023 will only be made if relevant financial and behavioral targets are met by Malcolm Parmenter. Your board requests your support on item six to enable us to have the ability to award equity to your CEO as part of this STIP, and therefore keep management and shareholders' interests aligned. I will now report the positions of lodged proxies and direct votes in relation to the allocation of securities to Malcolm Parmenter. Approximately 423 million for against approximately 15.1 million. Therefore, it appears to me that from lodged proxies and direct votes, that there is strong shareholder support for the approval of acquisition of securities for Malcolm Parmenter. Item six is now open for discussion, so we will now move to the discussion session on item six. Again, for anyone to...
On the floor to ask questions, please raise your hand and your blue card, and I'll get the attendants to bring the microphone to you. Could I ask if there are any questions from the floor? Since there doesn't appear to be any questions from the floor, maybe, Charles, I could turn to you.
Confirming no online questions, written or spoken, Jenny.
Great. Thank you, Charles. Therefore, if there's no questions, we'll move to the vote on item six. I note that I have notified the meeting of the proxy and direct voting statement, status of this item. This item has been open for discussion, including questions, and that discussion is now closed. I now put the motion that approval is given for all purposes for the grant or issue of securities under the short-term incentive plan and under the long-term incentive plan to the Managing Director and Chief Executive, Malcolm Parmenter, in the manner set out in the explanatory statement to the notice of meeting. As previously directed, we'll proceed directly to a poll. The poll of this item is now open and has been open since the commencement of the meeting.
To vote for the resolution, against the resolution, or to abstain from voting, please press or select the corresponding button on your device's screen. To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting. We'll now move to the next item of business, which is item seven. Item seven in the notice of meeting concerns shareholder approval for the issue of share rights and restricted shares to non-executive directors under the NED Share Plan. I'm part of this, so it'd be good if you could vote for it. This was last approved at the 2021 AGM, and since then, a number of directors have participated in the plan, me being one of them. This plan is a salary sacr ifice or fee.
Well, strictly speaking, a fee sacrifice plan, by which non-executive directors can sacrifice a portion of their cash fees on a pre-tax basis to acquire shares in the company at market prices. Look, we find that this plan is a good way for directors to build their shareholding in the company and further align the interests between directors and shareholders. This year's approval has been sought so our new director, John Mattick, can participate. I'll now report the position as to delivered proxies and direct votes in relation to the NED share plan. For is approximately 428 million, against is approximately 11.8 million. From the voting, it appears that there is strong shareholder support for this plan. Item seven is now open for discussion, we'll now move to the question session on item seven.
Again, I will go to the floor first, and could I ask if there's any questions? Yes, Natasha. Thank you.
Hi, Natasha Lee. Just to break the monotony.
Yes, I know. I'm sorry. Yes.
I don't really have a question. Just make a comment that, yes, I think the scheme is really great because there is an expectation by ordinary shareholders, such as myself, that the board of directors have skin in the game, and this is a great way to ensure that that's happening so that, as you said, your interests and ordinary shareholders' interests are aligned. Thank you.
Thanks, Natasha. That's good. That's nice of you to break the monotony, which is good. Look, I do think it is really important, and it's a fee sacrifice. You'll note that all directors. You'll see in the annual report how many shares they have. I will just note, though, of course, there are times where we just cannot buy shares because, of course, there are trading blackout periods. I just make sure everyone understands that we just can't buy shares every day, etc. Good. Thank you, Natasha. As there's no more questions, any questions, Charles?
No. Confirming no online questions.
Great. Thank you. If there's no online, no further questions, we'll move to the vote on item seven. I note that I've notified the meeting of the proxy and direct voting statement of this item. This item has been open for discussions, including questions, and that discussion is now closed. I now put the motion that approval is given for all purposes for the grant or issue of securities under the Non-Executive Director Share Plan to all non-executive directors for the next three years in the manner set out in the explanatory statement to the notice of meeting. As previously directed, we will proceed directly to a poll. The poll for this item is now open and has been open since the commencement of the meeting.
To vote for the resolution, against the resolution, or to abstain from voting, please press or select the corresponding button on your device's screen. To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting, and we'll now move on to the final item of business. We're in the home stretch. Item eight is the last item of notified business in the notice of meeting and concerns approval for the renewal of the proportional takeover approval provisions contained in Schedule Two of the company's constitution, which were last renewed three years ago on the 25th of November, 2019. This is a special resolution, which means that to pass, it needs at least 75% of votes cast in favor.
I'll now report the position as to valid proxy, and direct votes in relation to the proportional takeover provisions. For is approximately 436 million against approximately 3.7 million. Again, it appears that the lodged proxies and direct votes, that there is strong shareholder support for renewal of the proportional takeover approval provisions. Item eight is now open for discussion. We'll now move to the question session on item eight. Again, if there are any questions from the floor, I'll just open the floor to questions. Since there are no questions from the floor, can I ask Charles if there are any questions from online?
Confirming no questions online.
Right. Thank you very much. If there's no questions online, we'll now move to the vote on item eight. I note that I have notified the meeting of the proxy and direct voting statement of this item. This item has been open for discussion, including questions, and that discussion is now closed. I now put the motion that the proportional takeover approval provisions contained in Schedule two of the company's constitution are renewed for a period of three years, with effect from the date of this meeting. As previously directed, we will proceed directly to the poll. The poll for this item has now been open and has been open since the meeting commenced. To vote for the resolution, against the resolution, or to abstain from voting, please press or select the corresponding button on your device's screen.
To change your vote, simply press or select your new choice. The poll will remain open for the remainder of the meeting. Thank you for bearing with me because we have now reached the conclusion of the formal business of the meeting. I'll now pause for 60 seconds to allow those shareholders yet to vote to finalize and submit your votes, and then I will formally close the polls on all items of business. Just in the room, you have your blue cards. If you've got your blue cards, Computershare is just walking around, taking them. Thank you. Thank you, Charles. I think the 60 seconds is up, so I hope everyone has voted. Just before I close the meeting, I'm just wondering if there's any further questions that shareholde rs might have.
I don't see anything in the room, but I'll just ask Charles just to ensure that we're finalized.
Just confirm, just refreshing my feed now. No. No further questions, Jenny, online.
Great. Thank you. Thank you, Charles. Thank you, ladies and gentlemen. I now declare all polls on all items of business closed, and that concludes the business of the meeting. The results of today's poll will be published on the company's website and to the ASX. I now declare the meeting closed. Thank you for your attendance and for your interest in Healius. For those present in person today, I invite you to join us for so me light refreshments in the foy er. Thank you very much.