Good to go. Good morning, ladies and gentlemen. My pleasure to welcome you to this annual general meeting of the IPD Group. For those who don't know me, I'm David Rafter. I'm the independent, non-executive chair of the group and also the chair of this meeting today. As stated in the notice regarding the AGM, we will have some shareholders, hopefully, participating via a live webcast. However, just be kindly advised that you will not be able to ask questions or vote if you're joining us via that technology. We do have a quorum, so I will declare the meeting open, and I will start with some introductions. Fellow board directors, in no particular order, we've got Michael Sainsbury to my left. Michael is CEO and also an executive director. On Michael's left is Andrew Moffat, fellow non-executive director. To Andrew's left is Mohamed Yoosuff.
Mohamed's a Director of Strategic Development for the group and also an Executive Director. So, I don't think we have any apologies. We're all here. I'll also introduce Jade Cook. So, Jade's to my right. Jade is our Company Secretary, and we have our representative, our company's auditors here. So, Scott, if you could just raise your hand at the front here. Scott's from PKF and conducted the audit for the most recent financial year. I believe there was no written question submitted for PKF. Is that still the case? However, I'm sure that Scott will be pleased to address any questions that are raised by shareholders today during the course of the meeting. A couple of people here from Computershare. So, we've got Gemma, and I've been introduced to.
Archer.
Okay. Thank you. Welcome. So, when you're ready to vote, the box is there, and these guys can help with any registration issues, etc. So, welcome. Three components to today's meeting. So, firstly, I will provide a Chair's address, which will look at the company's sales and operations for FY24. We'll then go through the formal business of the meeting and give you the opportunity to ask any questions on the resolutions that are proposed. I will then close the AGM, and then Michael, CEO, will present an update on recent business developments. So, my address was released on the market this morning. So, I'll try and stick to what's released, so it's consistent. And apologies if that's a bit monotonous for everyone. But look, again, welcome to our shareholders.
We were, and I am delighted to report that the company has delivered record financial results in FY24, both through organic growth and also the contributions of two major acquisitions, being EX Engineering and CMI Operations. I think there's a summary of what I'm talking to, if there is. So, revenue increased by 28% versus FY23, and the underlying net profit after tax by 44.7%. We did change our capital structure during the year. So, the part funding of CMI acquisition, $92.1 million. So, we successfully raised $65 million of equity, and we also established a $40 million debt facility with the Commonwealth Bank of Australia. We've now reduced that facility down to $30 million, and I'll talk more to our net debt position shortly. So, it was our first-ever debt facility, and it balanced the desire to preserve shareholder equity against cost-effective debt funding.
Pleasingly, the group's strong operating free cash flow conversion of 88% throughout FY24 has resulted in a modest year-end net debt of only AUD 8.8 million and a cash balance of AUD 22.3 million. While CMI was the largest acquisition the group has undertaken to date, this approach to funding and a strong performance over the period once again allowed the board to approve total dividends to shareholders of AUD 0.108 per share, fully franked, for FY24. So, this equated to shareholder payments of AUD 11.2 million and a payout ratio of half our net profit after tax, which was in line with our dividend policy range of 40%-60%. The total dividend of AUD 0.108 per share was 16.1% higher than FY23.
From a governance perspective, we as a board placed particular focus across the year on M&A due diligence, evaluating expert advice on the best way to fund the CMI acquisition, a lot of succession planning exercises, cybersecurity, and getting prepared for the upcoming mandatory climate reporting legislation. We also have Jason Boschetti in the room. Jason's our CFO, and FY24 represented the first full financial year of Jason's time in that role. So, he assumed that role in January 2023 when Mohamed was the former CFO and moved to the role of Director of Strategic Development. So, we are really pleased to note that that transition was very smooth and has been followed by continued strong execution on the part of both Jason and Mohamed, as reflected in the record FY24 results and the two successful acquisitions completed during that year.
Alongside Michael as CEO, the board is highly confident that the seasoned senior management team in place will continue to execute against IPD's strategic priorities in the years ahead. Given the group's strong balance sheet, expanding range of products and services, and ongoing focus on strategic M&A, IPD Group is ideally placed to continue supporting our customers as they execute against a multitude of megatrend tailwinds, in turn delivering earnings growth for our shareholders. To close, I would like to thank my fellow directors for their support and guidance across a very busy schedule in FY24. We do appreciate the trust and support of our shareholders, and the board understands that the passion, drive, and expertise of our staff and supply partners have been fundamental to our success across FY24, and we thank all for their support and loyalty. I can take any questions.
We've got a presentation from Michael at the end. Otherwise, we can move to the formal procedural matters of the meeting. So, setting the scene of the legislation, we have been this meeting convened in accordance with the Corporations Act. The notice of meeting was lodged with the ASX on the 25th of October 2024, and therefore within the required notice period. There are no objections. I will take no notices read. So, registration. Is anyone not registered, shareholders? I need you guys to register, please. And if you don't register, your votes will not be taken into consideration. Okay. So, the voting system, if you're a shareholder, you vote with your green card. Yoosuff.
Can you register, or have you already voted on? Okay. No worries.
Okay. The yellow voting card for shareholders, proxy holders, representatives who have already voted and/or not intending to vote change the vote cast at the AGM. And the white card is for visitors and invited guests. In terms of voting, all resolutions to be considered at this meeting shall be decided by a poll. And for this purpose, may I request all members present in person or by proxy finally fill in the green voting card? Gemma, could you just hold up the green voting card? That item. If you are a shareholder and wish to cast all your votes for a resolution, please place a mark in either the for, against, or abstain box. If you wish to split your votes, please write the number or the portion of votes you wish to cast in the corresponding box.
Please note that the sum of the split votes must not exceed your total holding. The voting cards will then be collected at the end of the meeting and counted by our share registry. Shareholders in attendance that have already submitted a vote by proxy should note that your votes will already be counted towards the poll. You do not need to lodge another vote unless you wish to change your proxy instruction. Are there any questions in relation to the voting process? In order to provide you with enough time to vote, I now declare voting open on all resolutions. You can submit your votes at any time, and I'll give you a warning before I move to close voting.
I would like to highlight that where undirected proxies have been given in favor of the chair, I will be voting those proxies in favor of all resolutions being put to the meeting today. I will disclose proxy votes prior to the vote being taken for each item. These figures will be as at the closing time for the receipt of proxies, which was 11:00 A.M. on Sunday just gone, the 24th of November. Question and Answer. During the meeting, I will put the various resolutions to the meeting, and shareholders can raise questions that relate to the business of those resolutions by raising your yellow or green card as appropriate. It would be helpful if you could state your name and capacity before asking your question. Visitors are not permitted to participate in the question and answer session of the meeting.
Questions should be addressed to me as the Chair, and if I'm capable, I will deal with the question or ask someone who's better placed to respond, and we will do our best to answer any relevant question raised within a reasonable timeframe. We can now move to the formal component of the meeting, so the first item relates to financial statements and reports, so this is to receive and consider the annual financial report of the company and the related directors' and auditors' report in respect to the financial year ended 30 June 2024. This is just an item for discussion, and there is no formal requirement, sorry, formal resolution required for this item. As we said, we have Scott Tobutt in the room, and I'll just put to the meeting, are there any questions or comments on the financial report for the auditors?
I'll put it back here, sir.
My question to the auditors is that the report mentions the four pillars of IPD, the IPD, the EX Engineering, and CMI. In the actual financials, doesn't actually provide any information about the revenue of each of those sectors or each of those businesses or their profits towards the company. I just think that's a bit of something that the board should have been aware of, and why weren't there any further financials given in relation to those four businesses?
Yeah, I think there's a requirement to include segment reporting within the financial statements. That has been disclosed in accordance with the accounting standard. And what the board and management have included in their report at the front section is more from their perspective. So, within the financial statements, that is disclosed in segment reporting, which is from a different perspective.
I guess the.
So, I just think it should have been included because we did, in fact, purchase those businesses, and there should have been some information about how they were performing. And I just think that the auditors should have ensured that in the report, there was some segment reporting included rather than just the general report. I mean, most other businesses, when I see the annual report, they do have quite a breakup in the segment reporting. I just thought it was something that you should have insisted that was included in the report.
I'm very, very satisfied with how this has been reported. We'll ensure their consent not on board for next year. It is in accordance with the standards.
The plans need to be approved. It's clearly not very useful for our own business to know what the revenue is coming from those different things.
I think, Bruce, from our perspective, we take on board your feedback. It may not necessarily be an auditor's position because there is just making sure we're in accordance with the standard. But as a management team, we take on board your feedback, and we'll endeavor to be able to give you more transparency in the future.
Last year, in your presentation, you presented very clearly how you expect these new businesses to perform, and there's nothing in the annual report that's sufficient.
Got it. Yep. I appreciate that.
They're not perfectly performing in the new. And whether or if they didn't, why they didn't, if they exceeded it, why they exceeded it, that's a bit too lacking.
Got it, Bruce. Thank you. Loud and clear, Matt.
Thank you. Any other questions regarding this resolution? Okay. So, I'll now ask Jade, as Company Secretary, to record that the annual financial report and related reports in respect to the financial year 30 June 2024 have been received and considered by the shareholders. Thank you. We move on to resolution number one, which is the adoption of the remuneration report. So, this resolution appears on screen. I'll take it as read. And also on the screen are the proxy votes received before the close of proxies for this resolution. So, I now open this resolution for any discussion. Last call. Okay. So, no questions. I will formally put this resolution to the meeting, and please cast your votes on the resolution. Thank you. Now on to resolution number two, relates to the re-election of Mohamed Yoosuff as the director of the company.
I would ask Mohamed to just provide a brief bio on his candidacy for renewing as a director of the company.
Thank you, David, and good morning, all. Good to see a lot of familiar faces. Those of you who don't know me, my name is Mohamed Yoosuff, and I have been in the business since 2005. So, that comes next June. I would have worked in the business for 20 years. The first 18 years of that would have been as a CFO of the company. And the last two years, since Jason took over as a CFO, since January 2023, I've been working as a director for strategic development. That covers the mergers and acquisitions. Also, it covers investor relations, the present job of working with our shareholders where I can. And also, I look after the overseas operations in Sri Lanka and Philippines.
By training, I'm an accountant, and I started most of my working life. I've spent in financial roles in large industrial companies, and some of them U.S. multinationals, U.K. multinationals. And my last role prior to the IPD business was as a CFO for a listed company called Tutt Bryant Group, which is no longer. That was sold out by German company. So, most of my working life has been in industrial companies and financial roles, and I'm quite excited to be here, and I'm looking forward to working for a lot longer and enjoying the role and contributing to the business.
Great. Thank you, Mohamed.
Thanks, David.
Okay. So, we've got the proxy voting on the screen, and I can now open this resolution for discussion. Last call. Okay. So, I may have formally put this resolution to the meeting, and please cast your vote. Thank you. Resolution number three relates to the approval of the employee incentive plan. Resolution's on the screen. I'll take it as read. We also have the proxy votes received resolution, and I can now open this resolution for discussion. Last call. Okay. Thank you. I've formally put this resolution to the meeting, and please cast your vote. Resolution number four relates to the approval of the issue of performance rights to Michael Sainsbury, our director of the company. Resolution's on the screen, as are the proxy votes. I can now open this resolution for any discussion. Last call. Okay.
I've formally put this resolution to the meeting, and please cast your votes. Resolution number five relates to the approval of the issue of performance rights to Mohamed Yoosuff as a director of the company. Again, resolution's on the screen, and I'll take it as being read, and the proxy votes are also displayed, and I now open this resolution for any discussion. Last call. Okay. Thank you. I've formally put this resolution to the meeting. Please cast your vote. Resolution number six relates to the approval to renew the proportional takeover provisions of our constitution. Again, this is a special resolution, and it appears on the screen. I'll take that as read. And we have the proxy voting stats there as well, and I open this resolution for any discussion. Last call, well done. Thank you. I've formally put this resolution to the meeting for voting.
Please cast your vote. Anyone like any more time to vote, or? All good? Okay. General questions. So, are there any questions on the matters we've presented, or any general questions relating to the business of the company you'd like to ask? All right. Okay. So, ladies and gents, that concludes the formal items of business. Happy to close the voting. Is anyone near the last call to vote? Hands up. Thank you. Okay. So, we'll now close the polls, and when voting has been collated, the results will be declared on each resolution and released on the ASX tomorrow. Tomorrow. By tomorrow. And also on the company's website. So, that concludes the formal business of today's meeting. Thank you very much. It is now 11:22 A.M. by my watch.
So, Jade will declare the AGM closed, and I'll pass over to Michael as CEO to give an update and as a formal company presentation. Do you want to swap seats?
That's right. I'll stand up. Hopefully, everybody online, I'll try and project my voice as loud as I can so everybody online can hear me clearly. So, thank you, ladies and gentlemen. Nice to see you all here as Mohamed said. Certainly, some familiar faces in the room. For those of you who don't know me, it's been mentioned a few times, but my name's Michael Sainsbury. I'm the Chief Executive Officer of the group. I joined the organization in 2013 and took over as the CEO mid-2014, and I've been in the role since. So, thanks for taking the time to be here with us today, and I'm pleased to be able to run through a presentation giving you a little bit more clarity and information about our business. Next slide, please, Jade.
So, what we'll share today, we'll talk a little bit about our strategy, the market, a little bit of a financial review looking back, and some of it we'll touch on the points that David has already touched on. So, we'll move through that fairly quickly. And then we'll talk about an FY25 update, and then some time at the end for any questions and answers. Next slide, please, Jade. So, we've moved on to the slide, which is now titled Our Strategy. At the end of the day, our business is an end-to-end solution provider in the electrical infrastructure space. As a business, we consist of Addelec, IPD, CMI, and certainly also our engineering business. Those four businesses all complement each other and have the ability to work together to be able to support our customers through the life cycle of the product or the solutions that we sell.
Our purpose, our vision, is to help build a future where sustainable electrical infrastructure creates a better life for all, and all four of those businesses are well connected to that, and our mission, more short-term, is to enhance every aspect of electrical infrastructure through energy efficiency, automation, and secure connectivity while prioritizing the safety and well-being of our people and the community. 650 people in our team, and at the end of the day, the five key areas here are really the value proposition for us as an organization. When we talk about industry scale, we are one of the largest electrical product distribution networks in the commercial and industrial sectors in Australia. We have a trusted brand. We take to market on an exclusive basis or master distribution, trusted brands, and our portfolio features some of the world's most recognized value brands.
So, we're certainly taking to market a very quality offer. Expert solutions. Our deep customer technical knowledge, application knowledge, enables us to deliver reliable, compliant electrical solutions and guide customers through complex regulatory requirements. And certainly, as an organization, we put a large investment onto engineering skills to be able to work at the front end with our customers to do design and all the time working in around the regulations. Custom solutions. We have the ability to be able to build customized solutions for our customers who don't have the capacity or don't have the manpower to be able to build those complex solutions. We have the ability to do that in-house. So, we can either sell the product as a loose product to our customer, or we can build that up in-house in our manufacturing facility to be able to provide customized solutions.
The CMI business, a large portion of their businesses comes from the Minto Plugs, which goes in underground mining applications, and a lot of the assembly, the manufacturing is done here locally as well. EX Engineering also does do assembly of complex hazardous area solutions for the electrical infrastructure in those complex environments as well. Our commitment to safety and compliance, there's a note on this later, so I won't drill into it too much, but certainly built on legacy of in regulated markets, we prioritize compliance and safety to deliver sustainable industry-leading solutions. Our results, and we don't deviate from this, our results is to provide sustainable shareholder value creation in the short, medium, and long term. Next slide, please, Jade. Chris made mention before to the four pillars of our business. Sorry, you made mention to the four companies. This is the four pillars from a strategic perspective.
Obviously, the number one there is about business growth. We are focused on customer value, market expansion, and accelerating growth. We have not been shy in the fact that we call out that our expectations over the short, medium, and long term is to grow at a rate of twice the market rate by aggressively taking market share and complementing that with accretive acquisitions that strategically and culturally fit our business. Those who think organically and inorganic growth will be part of our growth mechanism for the future, and we are committed, as I say, in the short, medium, and long term to look at both organic and inorganic growth. From an operational efficiency perspective, our aim is to build scalable operations and leverage off the synergies of emerging technologies and the synergies of the different businesses under our ownership.
We look to introduce and continuously improve a scalable operation to leverage off a shared services market that is able to support all of our businesses and streamline processes, reduce costs, and expand our industry reach. And certainly, we look to use our partnerships and emerging technologies to create innovative, adaptable solutions that drive value and growth. And a couple of examples in the last 12, 18 months of new product introductions has been UPS and high-efficiency motors, which absolutely fit smack bang in the middle of that emerging technologies play. Our third pillar is, we call it sustainability here. It's really a commitment to ESG. We're committed to being responsible, environmental, and social impact. We have an aspiration of reducing our environmental footprint. How are we going to do that? We want to reduce the electricity we're drawing down from the grid from our own organization.
It's walk the walk, talk the talk. We are going to transition our fleet from combustion engine fleet to a hybrid electric vehicle as appropriate in the coming years, and we want to emphasize on the circularity and reduce waste and maximize product and material life cycles. And really pleased to say that ABB globally has us as a showcase around sustainability in this circular type environment where we're using collapsible crates to receive our product from ABB. We unpack it out of those crates, we fold the crates back up, we send it back to ABB, and they ship it in those same crates again. So, and it's being used as a global discussion point around ABB's sustainability. And we aim to make a lasting social impact by supporting charitable causes.
Every quarter, we nominate a different charity, and the organization and the people, more importantly, the people in our organization support these charitable causes on a quarterly basis. We also do educational programs to strengthen the electrical industry. In Sri Lanka, we take a number of students, engineering students out of all of the universities and put them into our business and do on-the-job training in electrical infrastructure and electrical design as part of the university course. We are the biggest employer of electrical engineers in Sri Lanka, and Sri Lanka second to the Sri Lankan government. So, we put a high emphasis on training and certainly those industry-related initiatives. People, with our people, and I think David mentioned it earlier, we pay homage to the people that have contributed to our success.
It depends on a strong, engaged, diverse workforce, which is essential for us to be able to deliver sustainable growth. We put a massive emphasis on employee well-being and development, and I'm pleased to say a lot of the career progression in our organization in the last 12 months has really pointed to the fact that we're doing a good, strong job there, and we aim to attract strong talent and retain those we've got through developing their strengths and upholding high standards, so they're the four pillars for an organization that we will talk to on an ongoing basis. Next slide. Thank you, Jade. I mentioned it before, a connected group. IPD Group is the listed entity as the parent company. It consists of four organizations. I won't go through them. I've said it before.
This slide here is to talk about how attached we are to our customers by using the different models of those four businesses and the full life cycle of the product. It's a little complex, this wheel here, but effectively, it's everything from system and architecture, which is more product specification and design and creating demand, through to engineering and installation, maintenance, repair, and operation, and the full life cycle of the product. So, not only are we trying to sell the product to the customer at the front end, but we're able to support that product for the life cycle of the product with the EX business and with the CMI business. So, a really, really diverse touchpoint with our customers and the ability to be able to touch them on many different points. Next slide. Thank you, Jade. I spoke before about our customers.
They are the lifeblood of our business. Once a year, we do a survey of our customers where we ask them 15 different questions about our performance. I'm pleased to say in the last 12 months, in every one of those 15 questions, we have improved from customer feedback in the last 12 months. So, our efforts are certainly being recognized by our customers, and the plans we've put in place to make ourselves more relevant to our customers are certainly biting. There's one question there we ask our customers, and we hold ourselves to account with that on the Net Promoter Score is, how likely are you to recommend IPD as a supplier of choice? And our Net Promoter Score there is 32.9. That's a blended result from all of the organization. Anything over 30 is deemed to be a strong result.
So, at 32.9, it's a strong recognition from our customers, but our ambition is to improve that year on year on year, and it's one of the key metrics that we follow as an organization. Our diversified revenue comes from a number of different products, the biggest one being power distribution, which is the ability to get power around a site, whether that's a data center, a hospital, a distribution center, a mine, food and beverage, water, wastewater. It doesn't matter what it is. It's the ability to get power around that site in a safe and secure manner. Automation and communications. It's about the ability of safety, but it's also a reduction of costs through automation. Communication is something which is arising massively in our industry.
The ability now to be able to interrogate all of the electrical infrastructure, basically at every connection point, and to be able to communicate with devices, both in front of the devices and remotely, is big. Cable is 12% through the acquisition of the CMI business. Motor control is simply that, the ability to be able to turn motors on and off simply, effectively. Hazardous area equipment through the CMI business and the EX Engineering business. And then services at 7%, which is predominantly the Addelec power services business, and then power monitoring at 5%. Importantly here, and we'll make reference to this at a later slide, 37% of our revenue is derived from what we call commercial construction/buildings. 37% is not necessarily all commercial construction. We class hotels, we class shopping centers, retirement villages, distribution centers, warehouses.
There's a whole lot that fits in under that buildings, but 37% of our revenue is derived from that commercial construction environment. 23% from infrastructure, industrial mining, the likes of water treatment plants, the likes of food and beverage, and mining. Sorry, they come down further, the water treatment. Data center to 12% is growing. It grew from 7% in the previous reporting period to 12%, and we have called out that we expect that to grow at 25% year on year, and there is a future slide giving some clarity from a third party about the phenomenon with data centers. Water and wastewater is another growing aspect, and particularly security and water and wastewater, and we'll talk to that in a future slide. Utilities is a part of our business.
Food and beverage, less than 1% of our revenue is attached to residential construction, which is a good thing because it's certainly being somewhat challenged at the moment, and 7% of our revenue comes from other areas. Next slide. Thank you, Jade. Just a quick snapshot of our business there from a feedback on what we're doing, you know, how we're traveling around sustainability. We've got 664 employees in the organization on a global scale. Our Net Promoter Score from our employees, again, a blended result of the combination of the businesses, comes out at 35%, and there's a number of questions we ask our employees. The one that determines the Net Promoter Score is, you know, how do you find IPD as a place to work? Are you a promoter? Are you a detractor? And again, the same result there. Anything over 30 is classed as a strong result.
A validation of the fact that we are certainly seen as an employer of choice. The one thing I will say in the last 12 months is we have seen significant improvement in the quality of candidates applying for our role and the ability to secure higher caliber candidates. As we grow and as we scale, it is easier to attract even higher candidates and a bigger talent pool. Really pleasing to say that our lost time injury frequency rate is zero, and that's measured in lost time injury over the past 12 months for every million hours worked. A great result, and we now have gone 470 days since our lost time injury, which when you consider it, we have manufacturing, we have tradespeople working on 33,000-volt equipment, we have warehousing operations, we have assembly, salespeople on the road, a lot of people in cars.
That's an amazing result and one we're very proud of. We talk about sustainability. I mentioned it before, the circular effect of ABB, the collaborative approach where we partner with ABB to, and this is talking about that frame issue that I spoke about before. So, it gives a little bit more information. So, without going into it, and I'm sure there are, I want to leave enough time at the end for questions and answers, so we'll skip through this a little bit, not to dilute its importance, but we've already spoke about it for all intentions' purpose. Next slide. Thank you, Jade. This one here, data centers. I mentioned in the previous slide the fact that we expect it to grow 25% year on year. Question is, why?
As a household at the moment, if we talk about 2024, the average household has 24 connected devices in every house that is feeding into a cloud. 24. If you hadn't done that three years ago, I'm told someone got 24 devices in your house connected, you would have been howled down. These days, 24 devices. The forecast is by 2030, we'll have 51 devices in every house on average connected to a cloud. And it is driving massive requirements for data storage to be able to handle all that information, not only in a resi space, but in more of an industrial space as well. So, we're seeing double the volume of requirements there for data centers in residential environments.
When we talk about the megawatt capacity required for data centers, we talk about the requirement now in 24 being 1.35 megawatts is what is being consumed or being stored for data centers now. The forecast is in the next six years that will grow by a factor of 2.3 times. Now, it'll be a combination of that resi, but it'll also be every device, the internet of things, the emergence of AI, all of these things driving a massive upswing in data centers and one which we are well attached to. So, a growing demand in residential, certainly a market here, an investment of AUD 26 billion. Now, please, AUD 26 billion is not our market. It's the full data center attachment, so that includes civils and construction and all that sort of thing, but massive investment into the data center space over that period. Next slide. Thank you, Jade.
This one here talks about water infrastructure and the forecast spend on water infrastructure. The aim here, and I could have put, I could have put healthcare up here because it's another growing phenomenon, but in the interest of giving you some clarity of the diversity of our organization, in this sort of space here, we're not so much looking for power distribution and continuity of power as we were in a data center. This is the ability to control motors, to control pumps, to be able to get industrial communications, cyber threats and everything in water infrastructure. The forecast there over the next three years, four years, is 6.9% cumulative annual growth. Our motor's relationship with ABB and our drives' relationship with ABB, just to mention two, are well attached to this phenomenon. So, the aim here is to give you some clarity.
We are not a one-trick pony where data centers are the only phenomenon that we're attached to. There is a diversity. It is water wastewater here, and when we talk about it, it's in every part there. The population growth, the urbanization, climate change driving it, and the security, technology changes, aging infrastructure, and government investment. So, it is really across the full spectrum and one of the growth opportunities for us for the future, particularly in that motor control space. Next slide. Thanks, Jade. A financial review. I'll call out some headline numbers. Next slide, where we come to the boxes for those of you online that are skipping through. The boxes there for our results overview for 2024. Revenue of AUD 290 million, which was up 28% on the prior comparative period. EBITDA, EBIT, and net profit all up, similar ratios to 40, 34, and 23.3 respectively.
Our earnings per share went up to 30% to AUD 0.242. Our net assets at AUD 150.7 million, which was an increase of AUD 72.9 million. Some of that coming back to the acquisitions. We spoke about net debt. Net debt is at AUD 8.8 million. So, we look at our debt position and take off the cash position, which gives us obviously a net debt. As of the 30th of June, our net debt was AUD 8.8 million. Capital raised AUD 65 million for the CMI acquisition. Lost time injury frequency rate, we've already spoken about the 470 days and dividends at AUD 0.108, averaging or rolling out at 50% payout ratio of that net profit result. Next slide. Thank you, Jade. Financial overview. This is a replica of the slide that David showed earlier, so I won't spend a lot of time on it. Revenue growth good, gross profit strong, EBITDA up.
Strategic investment. I should spend a minute here. We have expanded our teams in the space of strategic development. What is strategic development? Our business consists of two different phenomena by and large. It's either designed by a consultant, whether it's in its full capacity or in a smaller capacity, and it comes out to the market specified what product would have to go into that facility or into that installation. The second one is called design and construct, where the electrical contractor has more autonomy in selecting the products that go into that installation. Up until recently, a lot of our, majority of our time, in fact, nearly all of our time has been put into the design and construct market. And literally, this specification approach, this prescription approach has been dominated by the largest competitor in our space, which was a company called Schneider Electric.
We have made investments into this space so we can start to build a much more robust organization and sales pipeline through that large portion that comes from specification. And it is a very different approach. The salespeople aren't getting orders. The salespeople are working with consultants to get products into the design, into the specification. So, when it comes out to a market, the market has to use the product that is written into that specification. And we put some of our cost growth has gone into this space here. Our net assets have grown, our working capital increased, and cash flow are an outstanding result for the FY24 year with, I think it was 88% conversion, which was a great result. Next slide. Thank you, Jade. Sales earnings and growth, obviously record revenue and EBITDA growth driven by organic and strategic acquisitions.
A lot of this information has been covered, so you can see here what I will highlight over the 2020 to 2024 years. Our cumulative annual growth over that period at 35% at revenue level. And in EBITDA, we've grown from AUD 9.1 million in 2020 to AUD 40 million in 2024, representing a cumulative annual growth rate over that period of 44.8%. So, a very, very strong result. Next slide. Thank you, Jade. So, the slide I'm sure everybody is looking forward to and with bated breath, our trading update. To a large extent, the information we have on this slide has already been circulated out into the market, but we are suggesting our EBITDA result. If we look at first half 2024, 16.1.
If we look at the pro forma result, which includes all of the businesses effectively for that period, for the previous period, at 24.8, our guidance is a factor of between AUD 22.5 million and AUD 23.1 million at an EBIT level between 19.2 and 19.8. The question is, I'm sure from the floor and I'll preempt it, why are we forecasting guidance in a subdued or a reduced fashion on the previous year? A couple of things that I'll call out there. If I talk about four key parameters as a business, sales revenue for the six months of this year, the first six months, we are forecasting to be up on last year, and we're forecasting it to be up by a factor of circa 3% on last year on a pro forma basis.
In the current market, we are indelibly attached to construction, and it is certainly not operating at the same level that it has been for the last three years, and it materially is going to have an impact on our business. We can't shy away from that. We are a business that is attached to it, and that environment, I guess the drop in the activity in that space is certainly having a detrimental impact to our overall results. How have we been able to achieve revenue growth considering that? We talk about these mega trends of data centers and the emergence of electric vehicle charging and the emergence of healthcare and investment into all these places, water, wastewater. Our business has shifted a lot in the last 12 months.
12 months ago, I would have stood in front of you and said, "70% of our business is day-to-day." What does that mean? I provide a price list to a customer. A customer orders off that price list. We get an order. We ship it today. They get it tomorrow. 70% of our business, what we call day-to-day. The other 30% was what I would call lumpier or bigger, higher dollar value projects. I'm going to shy away from the word projects and day-to-day because ultimately they're the same thing, just on a different scale, just a smaller order value attached to it. We're talking about a distribution center that might have one switchboard and five DBs as opposed to a data center that could have six switchboards and 100 distribution boards. So, when I talk about projects, a lot of our day-to-day business is still projects.
It's the dollar value, which we're, and as an organization in the last 12 months, because of the tough market in that commercial construction and general construction, it's no doubt our business has changed, and 50% of our revenue now would come from these bigger meatier projects as opposed to 30% previously. That's how we've been able to achieve revenue growth because the downturn in construction has been offset by this growth in these larger, more meaty projects, bigger dollar value. Second point there, and if I talk about positives, the order backlog, it would be remiss of me not to point this out because materially it's having a substantial impact on the results for the first half of the year.
When we used to sell at 70% of our equipment and it was dispatched same day, next day delivery to the customer, it was very much a transactional roll on, roll on, roll on. Our order book backlog has grown in the first four months on the prior comparative period, and this is on a pro forma basis. When I talk about the backlog, what we have in backlog, we've grown from AUD 62 million last year to AUD 93 million, an extra AUD 93 million in backlog. What is backlog? Customer places an order, and I'm not yet shipping it. I'll ship it at a later date when the customer calls on it, when there's a green day to ship that to the customer. So, this shows a 50% growth in our backlog, which will be invoiced at some point in time. We don't have risks to our business.
We don't have cancellation of orders. A customer never places an order and cancels it six months later. It may get delayed. In fact, in the bigger projects, more often than not, it gets delayed because timeframes on these major projects are something that are materially just by the sky numbers at the early stage and best guess to a large extent. But as the project evolves, dates slip, so this is certainly a validation that our shift from a day-to-day operating business model to more of a larger, meatier project business model, and this reconfirms it as well. While we're only seeing 3% revenue growth, which is what we're invoicing, for the first four months of the year, our average order book per month has grown from AUD 29 million to AUD 40 million per month.
The two good things: revenue quite strong in the current environment, pleasing result, orders an outstanding result. At the end of the day, the process we follow in our business is generally in these larger major projects. We quote a customer, they place an order, we deliver, and we can see here that again, 40% growth in our average monthly orders. What we are doing is working, but it won't necessarily be invoiced next day like it used to be when the business was as it was before. Does that mean we will forever more be a project business from here on in? No. We are not neglecting our day-to-day operations. We're putting as much time and effort in there because one thing is for sure and certain, commercial construction, construction as a whole is coming back. Population growth is driving it. Infrastructure investment has been done.
Construction will come back, and we're not neglecting it. When it comes back, we will be indelibly linked to it as much as we ever were when it was booming in the last three to five years. And these mega trends that are supporting our business and somewhat supporting a little bit of the drop in the day-to-day business will still be there because these mega trends aren't short-term focused. This augurs well for a very good, strong business model in the short, medium, and long-term business. But what it does show is a little bit of a transition of our business. Now, I spoke about the two things there that are going really well. What is contributing to an EBIT result that is down on last year considering revenue is up? Two things. Margin erosion of about 1% on our whole business.
And it is validated by the fact we're shifting to a larger project model. We're not sending as many orders where the customer orders straight off their price list. We place the order today. They get it tomorrow. More of our business is in this project space, which is negotiated. For all intentions purpose, it's like a tender, but just an informal tender process. It's more competitive. It's more visible to competitors. It comes with notoriety to pick up these big projects. I've always said that the meatier projects will come at a lower margin realization. And because more of our business has come from that space, it's had a margin erosion effect on our business. I can't shy away from that.
At the end of the day, we have done a great job in holding our revenue in challenging environment in construction by using these larger projects to be able to backfill that. The second area there that's having a negative impact on that EBIT result is the cost base. And if you've benchmarked our cost base against the sales revenue result, you would say we are over-investing. I look at it differently. We would not have achieved this sort of orders result or this sort of backlog if we weren't investing for the growth for the future. The investments we are making are working. It is giving us orders growth at 40%. It is working. These will be invoiced at some point in time. When? I can't tell you that because truly I don't have the ability to influence Lendlease or these large construction companies around their timeframe.
To a certain extent, our customers are bound by those timeframes as well. But it's fair to say if you were to benchmark my cost base against the orders result for the first half of the year, it would be a very, very, very good result. So what do I do? Do I cut our cost base to support the revenue model I've got today with the detrimental effect on the business medium and long term? My strong answer is no. We need to be investing, and we need to be investing to continue to grow our number. At the moment, this project, it is lumpy projects biased, but it will come back to a balance between day-to-day and project base. So if you benchmark our costs against our orders, it would be a very relevant result. Benchmarking it against revenue, not so.
It's having a detrimental impact on the EBIT result. Next slide. Thanks, Jay. No questions and answers. For me, the summary and the closing comment for me, we have stood in front of investors, in front of our analysts, in front of the wider community, the investment community, quite a lot over the last couple of years and presented what I believe is a very compelling story for short, medium, and long-term growth. From my perspective, nothing changes. The business is still well set up to achieve the growth that we've spoken about. The megatrends will exist for the next decade, even longer. Construction will come back. We will invoice this backlog of orders we've got, and somewhat it'll rectify itself. Can I tell you hand on heart here that the second half will close the gap between that? I can't tell you that.
I'm not Nostradamus. If I could tell you that, I'd have a very different job than I've got here. What I can tell you is that order pipeline and the activity that we're creating on a day-to-day basis will see a much stronger second half result than the first half result. Just that orders result alone will underpin that. We are committed as a management team. We don't benchmark ourselves truly on six-monthly performance. Our commitment, it was in an earlier slide, is to shareholders in a sustainable manner. If I was to cut the cost base to improve the EBIT result now, it would have improved the result in the short term, but it would not have validated the growth in the short, medium, and long term for you guys as investors. Having said that, we're not sitting on our hands.
The cost base, we have reacted where we can. We've made redundancies in our IT space to the equivalent of AUD 500,000 per year. We had an IT team which has been rolling out IT projects and has been resource-heavy. The problem with that is when you finish a project, because you've got resources full-time employed by you, you want to introduce a new project. And that comes with license costs and all sorts of costs from an IT perspective. We've moved to now a contracting model in IT where I don't have those resources as an ongoing cost in our business, and we only engage third parties to support us when it's needed. That materially AUD 500,000 benefit, cost benefit per year already acted upon. And that cost base, we'll see that in the second half of the year.
Any roles that become vacant in the second half of the year will be critically assessed by the organization as to the need and the necessity and the value that that role can add to our organization in achieving a strong result, and I'm sure you will see a difference in costs in the second half of the year. It's fair to say, though, some of the costs we've achieved, 80% of our costs comes from people, property. The next one would be IT. People, we've had to pay salaries. We're attracting much better quality people. We've had to pay those people and reward those people, but we've already made AUD 500,000 adjustment there. Properties, we had some properties coming to end of lease. Property lease values have gone up, and we had adjusted lease values, but we're talking materially not a great deal to turn the dial.
But a massive cost in CMI and EX Engineering to bring it up to the required levels from a cybersecurity and an operational, if you want to call it, compliance effectiveness. There has been a massive investment into CMI and EX Engineering, which now is business as usual. We are comparing us to a prior comparative period where those costs were not there. In CMI's case, it was not even part of our organization. We have done what we need to do to protect the organization from risks, and that is part of our responsibility as a leadership team. But that now will be ongoing costs and will be relative half on half. So the upshot for me is, while the result, I would have loved to have been standing in front of you with a different result today.
I do not shy away from the fact that not one part of me or my management team is in any way, shape, or form pessimistic about the future. We've got some challenges in front of us, no doubt. We've got a diversity in our customer base and our end markets more than we had substantially five years ago. Five years ago, commercial construction went through the challenges it did today. It's a massively different effect on our business. The diversification over the last couple of years has given us some protection where we have relatively controlled the bleed. I don't like using that word. It sounds really terrible, but it's fact. So that's it from me. Thank you very much for everybody here, for your ongoing support. There's a lot of familiar faces. Really appreciate it.
Look forward to working with you all in the future and showing some really strong results well into the future. Thank you. Any questions? Chris.
That property is all that property leased, that's correct. So ongoing as those things are used, we don't have any control over the next four. I also have a question in relation to page 75, directors' report, which shows that our intangible assets increased from AUD 10 million to AUD 78 million in the last year. Can you explain what the extra AUD 68 million is in sales?
I'll defer to Jason Boschetti, our CFO, to answer that question for you, Bruce.
Yeah, Bruce, thanks for pointing that out. That's the acquisition of CMI. We basically just paid for it. We didn't pay for any intangibles. We just paid purely for the asset. It's fine. We also bought all the assets. Correct.
Other asset value is recognised. So that will gradually come down over time. That's something that's been appreciated. It's been appreciated. It will go over time. We don't, unless there's a requirement to repair those assets, that will remain in our boxes. Okay, right. So we got these goodwill for CMI. What about all the goodwill for the other businesses? Yes, correct. That was AUD 80 million. Yes. Now, the other question, Michael, is the EV charging. Last year, many people supported the capital raise and all that on the basis that we saw IPD being a leader in that EV charging business. You didn't actually mention it as one of those things. You're right. Yeah. I think this is a bit more update on what's that. Now, how competitive are we in this space compared to, say, the Chinese and other people who are putting?
Thank you for the question. It's remiss of me not to talk about it in the presentation. When I talk about mega trends, the electrification of the economy is one of those mega trends, and it is indelibly attached to the phenomenon of EV charging. So the answer to your question is, more than ever, we are seeing revenue recognition from EV charging-related activity. When I talk about lumpier projects, in our order book, we have Kingsgrove Bus Depot, electrification of the Kingsgrove Bus Depot. It was originally a AUD 5 million project. The design is continuously changing. Transport for New South Wales are continuously changing the design. We expect it to be greater than AUD 5 million by the time we land on a finished design. But that is one of the lumpy projects that will be sitting in that order book not delivered.
There's one over in Malaga called Perth Transit Authority, which is electrification of the bus depot over there as well. That is around about the same sort of dollar value in revenue. It sits in that order book. We've just delivered University of Wollongong, the electrification, full EV charging for University of Wollongong. The pipeline in EV charging, for the last couple of years, there's been a lot of actually, we've completely flipped, Bruce. The last couple of years, there's been a lot of activity and not necessarily a lot of revenue. Actually, by the fact that I haven't spoken about it today, we've flipped 180 degrees. The revenue is starting to rise. The projects are certainly there. We're working on another bus depot here in Sydney, and the project size is AUD 12 million.
The design that we've done at Kingsgrove is being used for the design of that bus depot here in Sydney as well. It puts us in a really strong position. We don't want to get arrogant, but it puts us in a really strong position. The rubber is really hitting the road in EV charging, but it's not necessarily in destination charging. To be honest with you, what we have worked out over the last couple of years, destination charging, when we're talking about charge cycles of 10-12 hours in the home, it's more a commoditized solution. And we're talking about maybe AUD 800-AUD 1,000 per charger. You've got to sell a shitload of them to turn the dial. And to a large extent, homeowners are just going for the cheapest one, not the technology-rich. We're not really aligned so much with that destination charging.
We will get a pull-through when we do high-rise residential or commercial. The National Construction Code is out for comment at the moment. We're seeing massive changes in the National Construction Code. What happened before? A contractor had the responsibility, when a building goes up, to make that construction, that site, EV-ready. So the electrical infrastructure had to be right to support EV charging, but no expectation about putting any EV chargers in there. The new code is out for comment at the moment. We expect it to be introduced in 2025. And it now calls for not just the building to be made EV-ready, but EV chargers to be put into the site as well. So that will drive an upgrade. And when we're putting high-powered chargers into there, rule of thumb, you'll put maybe for every one high-powered charger, you'll put 10 smaller chargers.
So it will pull destination charging through for us, but it'll be more in a commercial, that construction phase, more than residential, Bruce.
So I've heard about state governments spending millions of millions of dollars on providing charging stations on the highway and that sort of stuff. That's the sort of market that we're competitive in. 100%.
Yep. A lot of when we talk about NRMA, and we've talked about a lot, a lot of NRMA's activity is government-funded, is grant-funded. They're giving the funding to NRMA to do the rollout. So the answer to your question is that is precisely what we're looking at. High-powered chargers, infrastructure-rich. 80% of the investment in those sort of phenomena is in the electrical infrastructure. Only 20% of the investment is in the hardware that you see sticking up above the ground. And that is right in our sweet spot.
So you're 100% right, mate. That's where we're looking. Councils, big one too. They're investing heavily in EV charging in car parks, in libraries, in that sort of places. But even buildings like ours. I've now got 10 chargers in at Wetherill Park. I've just put 6 in in Brisbane. There's a need. As my employees migrate more to electric vehicles, I've got to provide solutions for them to charge their cars. Would you say the revenue's growing by 10% or 15% over this? You're going to hold me to account for whatever I tell you now. So on the basis that I don't want to make any commitments to anything, that I don't want to let you down, because I know how vocal you are when I let you down, I'll just say it's going to be strong. You can make your own deduction. What's strong is, mate.
In that way, you don't get the hand mic. I won't be bleeding. No. The other question is. Let's see. You hear a lot in the media about power storage and grid stability. How are we placed to get involved in that space?
Yeah. It's a really good question, Bruce. Thank you for bringing it up. You could be my PA. You are. At the moment, we call it BESS, which is Battery Energy Storage Systems. We don't have a BESS offer at the moment. We have a couple of vendors that we're talking to that are very strong in battery energy storage. At the moment, our play is more in the infrastructure that supports the battery energy storage system. So UPSs, for all intents and purposes, are a form of battery energy storage, but on a much smaller scale.
But I will say, we actually have an agreement with an EV charging provider called Elumina. Elumina has battery energy storage built into the charger. So it's not the reliance on the grid is nowhere near as substantial as it is all of the other chargers. And we are the exclusive distributor for Elumina in Australia, which has battery energy storage built into the charger. So when the grid is powering that charger, it's charging the batteries. When the batteries get fully charged, people can charge off the batteries. When it gets down to a critical point, the grid starts charging the batteries up again. So the electrical usage in those EV chargers are certainly part of it coming from battery energy. It's an area where we could do more.
It's an area where we will continue to investigate and look at partnerships to expand, because we are well placed as an organization to be able to support it. At the moment, I'm a little bit shy too, mate. I will say. I'm a little bit I don't want to create a portfolio that is so big and so broad that my team become a little bit of everything and a lot of nothing.
Just a minor question. You've taken on one new business this past 80 months. That really made it hard for management to sort of.
Bruce, I've got a large capacity, mate. I've got a massive engine. I've got a massive heart. Yes. Did you have a heart attack then? You're right. No, no, no. I'm not going to have a heart attack.
And even if we do, there's some really good people in the organization that could do the role that I do and do it probably better than I do. And I can't believe I'm going to say that in public, but anyway. But the answer to your question is, Bruce, we haven't CMI and EX Engineering, we haven't integrated at all. They're still running in separate organizations. So realistically, the people in IPD and the traditional IPD business, not one second of imposition on their time. At a management level, yes, I get involved. But realistically, my roles changed a lot in the last three years, where I used to be intimately involved in IPD. And James Feltham down the front of the room is the Executive General Manager of our IPD business for a sales perspective. He now controls the sales operations.
I don't have to get as indelibly involved in that as I did years ago. James looks after that. That frees up some of my time to be able to spend working with EX and working with CMI to assist them to do what IPD has done over the last eight years and do it at the same scale. So the answer to your question, I'm very comfortable with the resources we got can handle the workload. I'm very confident in the capabilities of the people to do the job. And I've just put a guy called Adam Jones, who is Executive General Manager of Operations for the IPD business, into CMI. I was going to say there's no one that I trust more, but there's a few people in the room who'd get offended if I say that.
But Adam's certainly a very trusted individual for me, and I know he'll do a great job of turning the dial for CMI in the future.
So my follow-up question is, when you can't sort of commit, is it the idea that you'd be looking for more acquisitions or if something came up you'd consider it?
I paid this guy a shitload of money to look for acquisitions for me to underpin inorganic growth for the future. The answer is yes. We've got a couple of really good conversations going on with potential acquisitions as we speak. Nothing that I can materially talk about today. But our willingness, our enthusiasm to invest in acquisitions is as strong as it's ever been. And it will certainly form part of our growth strategy moving forward in organic growth. One final question. My God, Bruce, you've broken my back.
We know that ABB and Hitachi Power have got very close relationships. Do you have any relationship with Hitachi Power?
So the answer is yes. We take Hitachi power factor correction to market. We also take Hitachi medium voltage surge protection to market. So we have a strong relationship with Hitachi. We are talking to Hitachi about expanding our offer with more Hitachi products. They used to have a very strong relationship, Bruce. Hitachi and ABB, they split the transmission and the distribution to a certain extent now. There is no cooperation whatsoever. In fact, ABB have medium voltage switch gears, and Hitachi have the medium voltage transformers and that sort of thing. So they actually are now true competitors. So there's not the same collaborative spirit there once was, but we're dealing with both of those people independently. Good. Thanks, Bruce.
Yes.
I want to ask, do you involve in the grid upgrade? In the grid upgrade?
Yeah. Indirectly, yes. So being in electrical infrastructure, we provide a lot of the infrastructure, but we don't work on a transmission perspective at all. We're more on the distribution side. It's a growth opportunity, as was battery energy storage. When we're talking about remote grid locations and these sorts of things, it's using a lot of the BESS phenomenon there to be able to do off-grid technology. So it's very inextricably linked to the question Bruce asked before around battery energy storage. Massive growth opportunity for the future, but at the moment, we're more just on the infrastructure side, not necessarily the hardware side.
My second question is in relation to the orders that you have. When you have customers place orders, do they pay a deposit or is it just that?
No.
My first answer is to say no, they don't pay a deposit. But in the Addelec business, when we're doing design, we have milestone payments along the way. So it's not deposit and such, but it's paid for the services that we do in that design space. When we get to the install component, and for instance, we just ordered transformers for that Kingsgrove bus depot and they're Siemens transformers. They will pay us. They paid us a deposit for those transformers that we've ordered for them, but they're a 26-week lead time. So some items, we get a deposit. Generically, our core business, they place an order, and they don't pay anything till we ship it. The good part about these big projects are, from a working capital requirement perspective, much less.
Because I don't have to stock as much product as I used to, because they order with a six-month lead time. I can put an order on a vendor or a 12-month lead time or whatever it is. I can put an order on a vendor for that project, for all the equipment for that project, and effectively back to back. As soon as I receive it, I ship it. And sometimes our vendors actually ship directly to the customer. And so it comes with a working capital reduction for us in those major projects. But in fact, the order will increase. Your inventory actually. The answer to that question is, if I was going to change my business model and become more a project business long-term and not necessarily a day-to-day business, it would change it.
We've got to be careful about making a massive reduction in inventory, because when construction does start to come back, our customers are going to be looking to us saying, "We need your help." And if we've made, the answer is yes. You should see, and we are seeing a reduction in our inventory based on the changing model. We just have to temper that with a little bit of patience that we don't reconfigure that too much that it has a detrimental impact on our business at some stage down the future, down the track. That's your question?
Yep.
Bruce. Your suppliers, they provide you with terms like 50 days, 60 days, 100 days?
Every one of our suppliers, we have commercial trading agreements, which generally are 90 days. Rule of thumb, 90 days.
Some of them, we have 60 days, and we're putting a whole lot of pressure on to blow them out to 90. Some we get 120. So not many 120. We're pushing ABB at the moment for 100 days.
But ABB could be a situation where you can invoice the customer and get paid on the same day as paying the supplier.
Not really, because our customers pay us generally on average 60 days too. The net is that it happens similar sort of times. But remember, their invoicing on us is from the time it leaves from the plant. And if I've got six weeks' sea freight, a month and a half of that is eaten up in freight before I even get to it.
A couple of point demands and a couple of requirements.
Yes.
The other thing that we've done too in terms of we've put in an automation that we call a VLM, vertical lifting machine. From a warehousing perspective, it's our first dip into automation. That will provide a saving around headcount for us in warehouse operators and be able to do that more effectively, more efficiently. Our hope is in the next 12 months we'll sort of maybe. I've got to be careful. No one in my warehouse working here is there, mate. We think we might be able to save two heads in the warehouse just by this VLM, so. We've gone over time, but I find time for one more question because Bruce has taken up most of the time.
Yeah. Are those about price increases? Are you looking for price increases?
Yeah, absolutely.
We have one planned for February 2025 where we're going to do a 4% price increase in 2025. Ultimately, though, remember this. At the moment, our business is very project, lumpy orders, and it tends to be negotiated. So the price increase doesn't really materialize in those sorts of opportunities. On our day-to-day business, that's where it materializes. And even there, we only see half of it materialize because some of it are on contracts where we've committed to sell for a price for 12 months to a customer based on their ongoing usage. Some of them are on a quote basis. So yes, the answer to your question is, we're not doing that because we've got pressure from our vendors. I'm not seeing any massive increase from our vendors.
Partly, it's to compensate for rising salary costs and rising costs of doing business and rising rents and all that sort of thing to improve the result moving forward. It's not because we're feeling pressured from a supplier perspective around costs going up. That's fairly stable at the moment.
All right. I've gone over and I've got to jump on a plane this afternoon, so I will have to cap it there. But if you guys have got any questions, I'm going to say I'm happy for you to ring me, but I don't want to open the floor to get 1,000 calls tomorrow. So ring Jason Boschetti. So in closing for me, thank you for your time. Thank you for your ongoing support.
I know the result that we've published isn't what we would all want to be presenting, but I truly believe it's a short-term blip in what is an otherwise very exciting mid to long-term future for the organization. Thank you for your time today.