Good morning everyone and welcome to the JB Hi-Fi 2025 Annual General Meeting. My name is Stephen Goddard. I'm Chair of the JB Hi-Fi Group and I'm your Chair for today's meeting. We have a quorum and I'm pleased to declare the meeting open. Can everyone hear me there? Do you want just a bit more volume? How does that sound? Do you want my name again? Stephen. As in recent years, we are holding a hybrid AGM and I'm delighted to be able to extend a warm welcome to our shareholders, proxies, and guests who are attending either in person or through our online meeting platform. Our meeting is being held on the lands of the Wurundjeri people of the Kulin Nation and I wish to acknowledge them as the traditional custodians. I would also like to pay my respects to their elders, past and present.
I would like to introduce my fellow directors Beth Laughton , Christy Boyce, Sheila Lines, Mark Powell, Geoff Roberts, Melanie Wilson, Richard Uechtritz , and our Executive Director, Nick Wells. Our Company Secretary, Doug Smith, is also in attendance, as is Suzana Vlahovic of Deloitte Touche Tohmatsu. Obviously, as some attendees are attending online, there's a risk of technical difficulties. If this happens, it will be at my discretion whether we continue the meeting or postpone or adjourn. You may have seen in the news this morning we are aware of some global problems with Microsoft's Azure software. We understand that this may intermittently be affecting Computershare's online system, although it does appear to be up at the moment.
Noting that there is a quorum of shareholders in the room and we've had 73% of available votes already cast, we will continue with the meeting and we apologize for any inconvenience that has occurred. The agenda for today's meeting is as follows: Procedural issues, summary of items of business and voting opens, Chair's Address, Group CEO Address, further information on each item of business including hearing from the directors standing for election and re-election, and disclosure of proxy votes already received on each item, questions, voting closes, and close of meeting. The notice of meeting dated 12th September 2025 has been made available to all shareholders and I'll take it as read. I'll start by briefly setting out how the meeting will work.
All shareholders and proxies attending the meeting, whether in person or online, have the ability to ask questions and submit votes, noting that questions may be submitted at different times by online participants and participants in person. We'll answer questions on all items of business later in the meeting. For those attending the meeting online who wish to submit a written question, you may do so at any time during the meeting via the Q&A icon on your screen. Type the question in the text and then press the Send button. I will then address your question at the relevant time. If you are attending in person or attending online but wish to ask a question verbally, please wait until that time to ask your question.
Voting today will be conducted by way of a poll on all items of business and Computershare will act as the independent Returning Officer. In order to provide you with enough time to vote, I will shortly open voting for all resolutions for those attending the meeting online and who are eligible to vote. When the poll opens, a voting icon will be available on your screen. Selecting this icon will bring up a list of resolutions and present you with voting options. To cast your vote, simply select one of those options. There is no need to hit submit as the vote is automatically recorded. Please ensure you cast a vote for all resolutions. You will receive a vote confirmation notification on your screen. To change or cancel your vote, click the link. Click here to change your vote at any time until the poll is closed.
Votes may be changed up until the time that I declare voting is closed. For shareholders, proxies and corporate representatives attending in person, you vote by completing the yellow voting card that was provided to you upon admission. White cards are for visitors who cannot vote or ask questions today. Shareholders with a green card are not entitled to vote on the items of business. You can vote at any time after voting opens and I will warn you before I close voting at the end of the meeting. Results of voting will be released to the ASX after the meeting. If you have any difficulties voting or submitting questions, please consult the online Meeting Guide which can be accessed within the online platform or on the JB Hi-Fi Investors website if you are attending online, or raise your hand if you're attending in person.
The items of business for the meeting are set out in the Notice of Meeting and are as follows. Number one, to receive and consider the financial and other reports for the financial year ending 30 June 2025. Number two, to vote on the re-election and election of directors. Number three, to adopt the remuneration report, and number four, to approve the allocation of restricted shares to the Executive Director. I will provide more detail on each of those items later in the meeting. I now declare voting open on all items of business. The voting tab will soon appear. Please submit your votes at any time, and I'll give you a warning before we close voting. We now move to my Chair's address.
The financial year ended 30 June 2025 was another strong year for JB Hi-Fi and its subsidiaries as we built on the momentum of the previous year, with the Group staying focused on its core proposition of driving great value and delivering consistently high levels of customer service to resonate with our customers. We are thankful to our over 16,000 team members across Australia and New Zealand whose support and commitment ensure the ongoing success of the business. Our motivated, passionate, knowledgeable, and highly trained staff continue to be our most important asset. As previously announced, Group Chief Executive Terry Smart retired from the Group on the 3rd of October 2025 and has been succeeded by Nick Wells. We would like to recognize and thank Terry for his significant contribution to the Group made over many years since joining in 2000.
Since his reappointment as Group CEO in 2021, the Group has seen significant growth in sales and profit and its share price rise to record levels. We wish him all the best for the future. Thank you. The Board was delighted in having a candidate of the caliber of Nick within our ranks, and we look forward to him applying his considerable talents to the role and putting his own stamp on the Group while continuing with the current strategy. We would also like to recognize and thank Beth Laughton, who will retire from the Board today. Beth has made a significant contribution to the Group's success over the past 14 years, particularly in her role as Chair of the Audit and Risk Committee. Thank you, Beth. Geoff Roberts will take over from Beth as Chair of the Group's Audit and Risk Management Committee.
We're also delighted to welcome Sheila Lines to the Board following her appointment as a Non-Executive Director on 15 August 2025. Sheila has also joined the Group's Audit and Risk Management Committee. Sheila brings both retail experience and financial acumen, and her skills will complement those of our existing Directors. The Board is very much looking forward to working with her. Turning to the Group's operating model, our Group comprises three iconic retail brands: JB Hi-Fi with a focus on technology and consumer electronics, The Good Guys with a focus on home appliances and consumer electronics, and e&s with a focus on premium home appliances and bathroom products. The value proposition for each brand centers around ranging the best brands at low prices, supported by exceptional customer service across our store network, our online and over-the-phone channels, and through our commercial business.
The multi-branded retail approach continues to be underpinned by four key competitive advantages: scale and diversification, a low-cost operating model, multi-channel capability, and people and culture. An integral part of the Group's ongoing strategy is to encourage innovation and diversification in our product range, merchandise formats, advertising, supply chain, property locations, and our online offer in a controlled and responsible manner to ensure we remain current and relevant to our customers. We have a culture of embracing change, which is seen as a natural part of the business, and this approach provides opportunities to increase revenue, margin, and productivity. The Group's FY 2025 Sustainability Report, which can be found on the Group's investor website, outlines our commitment to having a positive impact on our people, our community, and our environment.
As set out in the report, we are committed to supporting our people and ensuring a safe, inclusive, and respectful workplace while always looking for ways to provide our team members with flexibility and opportunities to grow and develop, making a positive impact in the communities in which our team members live and work, and working with our supply partners to protect and further human rights and minimizing the impact that our operations may have on the natural environment and proactively reducing our waste and emissions. In closing, the Board remains focused on building long-term shareholder value. Since JB Hi-Fi listed in October 2003, the share price compound annual growth rate is 21.1% compared to 4.7% on the ASX 200 Index over this period to 28 October 2025.
The earnings per share compound annual growth rate is 17.9% and the ordinary dividend per share fully franked compound annual growth rate is 18.9%. More recently, over the last five years, the JB Hi-Fi share price compound annual growth rate is 17.9% at 28 October 2025 compared to 8.3% on the ASX 200 Index. The earnings per share compound annual growth rate is 10%, the ordinary dividend per share fully franked compound annual growth rate is 7.8%, and the Group has returned an additional $196.8 million in special dividends to shareholders. I would like to take this opportunity to thank my fellow Directors, the executive team, and our store, warehouse, and support teams for their unwavering commitment to the ongoing prosperity of your company and its shareholders. I now invite Nick to address the meeting on the Group's operations.
Thank you, Stephen, and good morning, ladies and gentlemen. First, I would like to acknowledge the confidence that Stephen and the Board have shown in me in appointing me Group CEO, and I'd also like to acknowledge Terry. I'm fortunate to have worked with him for many years and thank him for his outstanding leadership. I'm excited to take on the Group CEO role, having been part of this great business for more than 16 years, and believe that in JB Hi-Fi, The Good Guys, and e&s, we have three of Australia's most loved, respected, and successful retail brands overseen by an incredibly experienced and talented team. Some are here today. Our businesses are in great shape and are well positioned to maximize the opportunities ahead of them. Retailing is a dynamic and exciting industry, and JB Hi-Fi, The Good Guys, and e&s are market leaders in their respective sectors.
As we've said before, the core of our proposition has always been and will always remain our unwavering focus on our customers, who continue to turn to us for their technology and home appliance needs, and our over 16,000 team members who across Australia and New Zealand continue to respond and adapt to meet these needs. As Stephen highlighted, we are committed to having a positive impact on our people, our community, and our environment. In our FY 2025 Sustainability Report, we outlined the progress made in our key areas of focus, which included 40% of the Group's energy now coming from renewable sources and a 32% decrease in Scope 1 and 2 emissions from our FY 2020 baseline year as we continue to work towards net zero direct Scope 1 and 2 emissions by 2030.
Continued investment in our teams with 1,333 leaders completing a leadership development course and 129 managers completing the Women in Leadership training program. Recycling 9,632 tonnes of e-waste collected through recycling kiosks in JB Hi-Fi and The Good Guys stores and scrap metal from appliances collected from customers' homes. Launch of a waste diversion target as we work towards achieving 80% waste diversion by 2030 and workplace giving donations totaling $4.6 million in FY 2025 and $44 million since inception. We are pleased with the progress we are making on our sustainability plan and commitments and, importantly, are receiving an overwhelmingly positive response from our team members.
Now turning to our FY 2025 results, FY 2025 was another strong year for the group with total sales up 10% to $10.55 billion, EBIT up 7.3% to $694.1 million, NPAT up 5.4% to $462.4 million, and earnings per share up 5.4% to $4.23 per share on an underlying basis excluding the one-off $13.7 million expense in FY 2025 relating to the resolution of the ACCC proceedings against The Good Guys. EBIT was up 9.4% to $707.8 million, NPAT was up 8.5% to $476.1 million, and EPS was up 8.5% to $4.355 per share. The total dividend for FY 2025 was $2.75 per share, up 5.4% and representing 65% of NPAT.
In addition to the total ordinary dividend, the group declared and paid a special dividend of $0.10 per share fully franked, or $109.3 million, and announced an increase of the dividend payout ratio from 65% to a range of 70%- 80% of NPAT from FY 2026. The group's balance sheet continued to be strong with low financial and operating leverage and closing net cash of $284.1 million at 30 June 2025. Now turning to FY 2026, the group will remain focused on the following key areas. Number one, Retail Execution. In a competitive retail environment, our strong retail execution remains essential. We will continue to actively demonstrate improved value to our customers, especially during key sales events such as Black Friday and Boxing Day.
We will keep our operating model simple and efficient, focusing on the metrics that matter, driving operational improvements, and reinvesting those efficiencies into customer-facing roles while enhancing customer engagement and evolving our in-store experience. Number two is multi-channel. We'll continue to strengthen our multi-channel capability by leveraging our significant online traffic and expanding our marketplace offer. Our membership programs will remain a focus, delivering personalization at scale and enhancing our sales channels. At the same time, we will ensure consistent customer experiences across all touch points and stay connected with shoppers however their shopping journeys evolve. Third, Brand Reach. We will continue to expand our store network across the group. In FY 2026, we will open three new JB Hi-Fi New Zealand stores, one new e&s store, and five new JB Hi-Fi Australia stores.
We'll also close one JB Hi-Fi Australia store and complete two major store relocations in The Good Guys. Our commercial businesses will continue to grow as we expand our customer base and strengthen our position across the market. Lastly, supply chain. Our investment in building and maintaining a fit-for-purpose supply chain network is ongoing. We will continue to focus on delivering best-in-class delivery options for our customers across all of our channels, optimizing inventory flow to ensure strong stock availability, particularly during peak trading periods, and improving the flow of bulky products. Now turning to recent trading, the Group has today provided a sales update for the period 1 July 2025 to 30 September 2025. Q1 FY 2026 total sales growth for JB Hi-Fi Australia was 6% with comparable sales growth of 5%. Total sales growth for JB Hi-Fi New Zealand was 39.3% with comparable sales growth of 24.3%.
Total sales growth for The Good Guys was 2.5% with comparable sales growth of 2.4%, and total sales growth for e&s was 4.1% with comparable sales growth of 0.7%. Our Q1 FY 2026 sales are in line with the Group's expectations as we enter the important Q2 trading period. In closing, we remain committed to offering great value and exceptional customer service to maximize our brand sales opportunities. As always, our team's unwavering focus on our customer, combined with our ability to adapt and innovate, will ensure our brands remain the destination for shoppers into the future. I look forward to another exciting and successful year in FY 2026. Thank you.
Thanks, Nick. Turning back to the items of business, Item 1 relates to the receipt and consideration of the financial and other reports for the financial year ended 30 June 2025. The company's annual report, which includes the Financial Report, Directors Report, and Auditors Report, as well as the Company's Corporate Governance Statement, has been made available to shareholders. No formal resolution will be put to the meeting on this item, and I'll take the reports as read. Shareholders and proxies may ask questions in relation to the reports later in the meeting. Item 2 on the agenda relates to the re-election of Mark Powell and me as Directors and the election of Sheila Lines as a Director. As I am one of the Directors standing, I will hand the Chair over to my colleague Beth Laughton at this point.
Good morning, everyone. Can you hear me? Thank you. T hank you, Stephen. Item 2A relates to the re-election of Stephen Goddard. Stephen was appointed to the Board in August 2016 and became Chair of the Board on the 1st of July 2020. Stephen is also the Chair of the company's Remuneration and Nominations Committee and was a member of the Audit and Risk Management Committee until the 30th of June 2020. Stephen has more than 30 years retail experience, having held Senior Executive positions with some of Australia's best known retailers. These include as Finance Director and Operations Director of David Jones, founding Managing Director of Officeworks, and various Senior Management roles with Myer. Stephen was previously a Non-Executive Director and Chair of the Audit and Risk Management Committees of Accent Group, Nick Scali Limited, and GWA Limited. The Board considers Stephen to be an independent Director.
I will now ask Stephen to say a few words.
Thanks, Beth. I've worked in many different areas in a number of retail businesses over 30 years, which has given me a good sense of the competitive environment in which we operate and what a retail business needs to do well to be successful. As Beth said, I was on the board of David Jones for nearly 10 years as Finance Director, and along with my other public company board experience, I feel this equips me well for my role as Chair of the company. I have great respect for the business and its achievements over a long period and the high quality of its management team led by Nick, David, our CFO, Doug, our Company Secretary, Cameron Trainor, the Head of JB who's in the back row, and many, many others. I look forward to supporting the company as it grows and prospers.
Thank you, Stephen. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time. Before voting closes, the proxy votes received in advance of the meeting on this resolution should be shown on the screen. There we are. I'll now hand the Chair back to Stephen.
Thanks, Beth. Item 2B relates to the re-election of Mark Powell. Mark was appointed to the Board in March 2017, having been an advisor to the Board of The Good Guys for 18 months prior to its acquisition by the Company. He's currently a member of the Remuneration and Nominations Committee and was a member of the Audit and Risk Management Committee from 2017- 2023. Mark has over 30 years' executive experience in retail, logistics, and wholesale distribution in the UK, Spain, North America, Australia, and New Zealand. This includes being UK Logistics Operations Director for Tesco plc, running Walmart Canada's logistics operations, and as CEO of the Warehouse Stationery retail chain in New Zealand. Mark also spent five years as Group CEO for The Warehouse Group, a New Zealand listed retail group which includes technology and appliances retailer Noel Leeming.
Mark's currently a Non-Executive Director and Lead Independent Director of Bapcor Limited, a Non-Executive Director of My Food Bag Group Limited and Chair of its Nomination and Remuneration Committee, and a Non-Executive Director of Stihl Pty Limited. Mark was previously a Non-Executive Director of Kiwi Property Group and Chair of its ESG Committee, and a Non-Executive Director and member of the Strategy and Audit, Compliance and Risk Committees of 7-Eleven Australia. The Board considers Mark to be an independent Director and I'll hand over to Mark to say a few words.
Thank you, Stephen, and yes, a privilege to be here today. Stephen summarized a lot of my executive career there, which I think enables me to bring that to this role as a retail CEO across multiple retail sectors: general merchandise, apparel, technology, office products, and outdoor sports equipment. It gives me a wide range of retail experience, and I've been able and privileged to see the inside of some of the world's best retailers such as Tesco and Walmart. With that, I also have a deep supply chain logistics background as well. I've been a non-executive director now for 10 years. I first came on this board, I wouldn't have considered myself experienced. I do consider myself an experienced director now. I've been able to serve on the board of property companies that own retail property.
I've been able to serve on the board of other retailers such as 7-Eleven and on pure play online businesses as well, and also on some challenging businesses both in the not-for-profit space as well. Sometimes it's in those challenging ones you learn the most. I would now consider myself an experienced director, which I wouldn't, as I said, have done in 2017 when I first came on this board. It's a privilege to put myself forward, and it will be a privilege to serve on this board again, which is an outstanding board but also an outstanding executive team. I don't mean to embarrass Nick, who picks up the mantle, but also Terry, Richard, you before him, and the team under them. As you said, we've got Cam here today.
Having seen the inside of some of the world's best retailers, these guys are up there with the best, if not better than them, and it's a privilege to be able to support them as they move forward.
Thanks, Mark. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before I declare voting closed. The proxy votes received in advance of the meeting on this resolution are as follows. Item 2C relates to the election of Sheila Lines. Sheila was appointed to the Board with effect from 15th August 2025 and also joined the company's Audit and Risk Management Committee at that time. Sheila is a Chartered Accountant with over 28 years' experience as CFO, CEO and Director across multiple industries including retail, media, telecoms and technology, with over 20 years of these being in public companies in Australia and overseas. Sheila's experience includes roles as CFO and Company Secretary of Nick Scali Limited, as CFO of oOh!media Limited, Cabcharge Australia and BPAY, and also as Chief Executive Officer of Bermuda-based KeyTech Limited.
Sheila is a member of Chartered Accountants Australia and New Zealand and holds a Bachelor of Laws with Honours from University College London. Prior to her appointment, the company conducted appropriate checks into Sheila's background and experience and those checks revealed no information of concern. The Board considers Sheila to be an Independent Director and I'll now hand over to her to say a few words.
Thank you, Stephen. I'm excited to join JB Hi-Fi with its iconic brands, impressive management team, and strong organizational culture. As Stephen outlined, I bring to the role a professional qualification as a Chartered Accountant and nearly three decades of executive experience across a wide range of industries and most recently in retail. I'm looking forward to working with the team at JB Hi-Fi to continue to grow stakeholder value, and I confirm that I have the time to commit to the affairs of the business as a Director. Thank you.
Thanks, Sheila. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before I declare voting closed. The proxy votes received in advance of the meeting on this resolution are as follows. Item 3 relates to the adoption of the Remuneration Report, which is contained within the Company's annual report. Further information, including information regarding voting on this resolution and the Two Strikes Rule, is set out in the Notice of Meeting. Please note that a vote on this resolution is advisory only and does not bind the directors or the company. Again, I will take the report as read. Shareholders and proxies may ask questions in relation to the report later in the meeting and can vote at any time before I declare voting closed.
The proxy votes received in advance of the meeting on this resolution are as follows. Item 4 relates to the allocation of restricted shares to the Executive Director, Nick Wells. Further information, including the terms of the allocation and the associated KPIs, is set out in the explanatory notes in the Notice of Meeting. I'll take that information as read. Shareholders and proxies may ask questions in relation to this item later in the meeting and can vote at any time before I declare voting closed. The proxy votes received in advance of the meeting on Item 4 are as follows. We'll now take questions from shareholders. Questions submitted online in writing will be read out by our Company Secretary. To ask a question verbally online, please follow the instructions shown below the broadcast window on the online platform.
Our Company Secretary will say your name and then direct you to ask your question. If you have questions from the floor, please raise your hand and wait for the microphone to arrive before stating your name or organization and asking your questions. Questions will be answered by the relevant director or executive or by Suzana Vlahovic from our auditors. While time constraints may prevent us from answering all the questions, we'll do our best to address all the concerns that you have and questions during the meeting. After the questions, I'll close voting. Let's go to questions from the floor. I think first, Chris.
Good morning, Mr. Chairman, Board, ladies and gentlemen. My name, I'll introduce myself. My name is Chris Lobb. I'm representing the Australian Shareholders Association this morning. Thank you for the opportunity to come along. Just in terms of that, I'm representing 109 shareholders with over 120,000 shares and I know some of our members are in the room this morning. I had a couple of questions just to put to you. The first was in relation to New Zealand. Those sales figures that you've just released this morning, maybe Mark's been in a better position to comment on those, but they're knockout figures I'm not over familiar with. I don't know if they're coming off a low base, that would be one question. The second would be in relation to your external audit arrangements.
We noted through your annual report that your current auditor firm has been in the position since the floating which goes back over 20 years. Now, it's the policy of the ASA that we believe that after a 10 year period a competitive tender should be held. I'd just be interested in your comments, Mr. Chairman, in relation to that. Thank you.
Thanks, Chris. We always respect and enjoy our dialogue with the Australian Shareholders Association. It's good to meet you as the new representative. We had a meeting recently and just mentioned Mike Robey who's sitting next to you, who's been the representative previously. Good to see you here. Mike, a couple of questions. Firstly, I'll get Nick to just talk a little bit about New Zealand. In principle, we feel there's a significant opportunity. We've had to rebuild the business and we've had to grow it and expand it. I think the signs are very encouraging from what we've seen. Nick, why don't you talk a little bit about New Zealand?
New Zealand? As Stephen said, we've been investing in New Zealand for the last few years. We have been underrepresented in that market, but we know the brand does resonate well there. We've been rolling out stores. If you go back a number of years, we were at 14 stores. We're now at mid 20 stores. That is definitely helping with that. Total sales growth at 39%. What's really pleasing for us is the comparable store sales growth. We're opening new stores, but our existing stores are growing strongly. It's too early to call it because we've still got plenty of work to do in New Zealand, but I think we're starting to see that point where our investment is starting to resonate. Our offer is resonating with our customers. We're starting to get that recognition in the market and that is coming through in our sales figures.
We would say we're definitely outperforming the market. It's still not an easy market in New Zealand. That is largely market share driven.
Thanks, Nick. With audit firms, I mean, two schools of thought, I guess. One is that you should change audit firms. The regulations within this country, I think, reflect our view, which is every five years, the partner must change. It's an independent partner who hasn't been involved in the business. In this case, Suzana has now been with us for two years signing off our accounts. When a new partner joins, you get a completely fresh approach, you get a completely new set of eyes, and you get independent perspective on the business without the disruption of necessarily changing firms. We think that works well. We've got a good relationship with Deloitte. It's pretty frank and open, to be honest. We think we get good value, could always be a little better. That will put the fee discussion to one side. Suzana's got a good team working for her.
We haven't. That's the reason, as I say, two schools of thought. We respect your opinion on that, Chris. S orry, second back row there. Do you want to come to the microphone?
Good morning, Mr. Chairman and other executives there. Ladies and gentlemen, John Joyce is my name. I'm a longtime shareholder of JB Hi-Fi. Thank you very much for all the cash flow and the growth that I had over that time. In the press recently, we noticed that there's problems with some people with the situation in direct e-commerce with China and so on. It's brought several apparel dealers undone, it seems, and so on. Is there any comment on whether that's affecting us in any way?
Sure. Thanks, John. Good to see you here as well. Look, we are a branded organization. We sell branded products largely. I think what you're seeing is a lot of private label comparison competition in the market. We've always had a lot of competition in the electrical market from entrants such as Amazon and the like. We will take any competition head on and do our best to fight for our customers and offer them the best possible value we can.
Good. Our growth is still continuing, according to the statement there?
We've put out.
We relax regarding that matter.
We put out a trading update this morning. I might get Nick to just talk a little bit about that. We think the sales figures are pretty solid.
Yeah, you can see that momentum there continuing through the quarter. Obviously, we're entering an important period now with the Q2 promotional period, but we've come in with some good momentum. We've got some really strong promotions planned, we're in a good stock position, and we're optimistic about the next quarter.
Good. Thank you, Nick and Mr. Chairman.
Thank you, John.
Mr. Chairman. Greg Hoffman, proxy holder. I've got two questions. I'll just shoot with the first one, maybe for Nick, but I'll ask it through you. e&s, how's it going? Sort of roughly a bit more than 12 months on. Any new ideas emerged, strategic options that are emerging that, you know, weren't on the table last year? Just any comment around that business?
Happy to hand that straight to Nick.
Yeah, it's going well from our perspective. You know, e&s is only a small business today, but we do have good growth ambitions for that business. The last 12 months we've been really just focused on trying to get the foundations right and set that business up for future success. It is, you know, when you see that slide before, positioned in that premium home appliance and bathroom space. It's very complementary to our existing brands. We've just recently, in terms of developments, took a store in Hobart, so we've gone into Tasmania for the first time. That's very early days, but showing promising signs. We just got a bit more work to do on those systems and processes and people, and then once we get that right, we'll start to look to roll out that brand more broadly.
This one is for you, Mr. Chairman. Regarding Nick's incentive package, there was quite the no vote there through the proxies. Did you get any feedback? Where did those no votes come from? Was it one proxy advisor? What feedback did they give? Whatever you can share with us would be helpful.
Sure, happy to. As you know, we have the VRP. We have this discussion every year. The VRP is a little different for us because we're a trading business. We set the next year's target for the team as a challenging but achievable target, and they run from July 1, hard to get those results. I think that's been really important in our capacity to get results continually, year on year, over time. It doesn't have a long-term assessment. It works for retention because if the team gets their targets in one year, they get a cash bonus. The 75% of shares are allocated across years two, three, and four, so the team need to be with us over that period.
It actually provides incentives to perform quickly and urgently in that financial year, but also gives them a sense of what they need to do to retain those shares, which is actually be with our company. We've had a really good lack of turnover, if you like. We've been able to retain our people. Having said that, it doesn't fit the mold of what all proxy advisers look for. One in particular has said, look, we understand it's fit for purpose and has recommended a vote for the REM report, in fact, for a number of years now, but as an acknowledgment that it doesn't fit their mold, has said, please vote against the share. That's one proxy adviser. We've been at 75% now for, I think, several years, so it's sort of where we've landed. I think we're acknowledged that we're a little different.
It's fit for purpose, we're unusual, but it works for us. We appreciate the flexibility that shareholders have shown in supporting that vote, at least more than 50%.
OK, can I just say that, I mean, with regard to that you're saying you're taking. You realize it's an exceptional choice to the status quo. I'm sure the proxy advisors aren't going to listen to me, but just word for the Board from an appreciative shareholder. This company's performance and culture and corporate governance is exceptional, and therefore the proxy advisors, in my view, exceptional in a good way, you know, so anything that this company is doing that's out of the ordinary and exceptional should perhaps be a case study for other companies, rather than be criticized and drag you back to what is status quo. This is an exceptional company, and exceptional companies do things differently to the status quo. You've got my wholehearted support. The results seem to be on the Board as far as anyone who's looked at this company since its inception.
Look, I really appreciate those comments. Thank you. Sometimes the Board feels we need to make decisions that are not easy but are in the best interests of the company and the shareholders. You rely on us to do that into the future. When we meet with proxy advisors, when we meet with the ASA, we just explain what we do. By and large, we get a pretty good hearing. I take your comments and really appreciate them. Thanks very much. Other questions from the floor.
Morning, Chairman and Board. I've been a JB customer since it was a single shop in the Centreway. My question is, where are you seeing the competitive risks coming forward over the next 12- 18 months, given you're probably the market leader in the places you play, but when you're the market leader, somebody's going to be trying to hunt you down.
They always have. Thanks for being a shopper since 1974. Nick, do you want to talk to that?
It's no different to what we've talked about over the last year. We operate in a competitive category. We sell branded product that you can buy at multiple different retailers. Just making sure that we stay very focused on our customer, making sure we stay very focused on providing value, having stock in store in range, exceptional customer service, that's what we just stay focused on doing. That'll help us compete in what is a competitive environment. I wouldn't say there's any sort of new or emerging risks that are different to what we've encountered previously.
Thanks, Nick. All I'd add from the Board's perspective is that it is a people business. You know, we need the best management team and the best team within our stores. Our role, we feel, is to give the management team the capacity and the resources to get the job done, to look after our people. That's what we try and do. Thank you for your question and for shopping.
Good morning. Board, Chairman, Daniel Coss, shareholder for a number of years. I'm a jaded millennial with a short attention span. I love technology. When I walk into a JB Hi-Fi store, my expectation is to maybe see some new, new piece of technology that wows or amazes me that I might think about after I go home and maybe think about buying, coming back to purchase. It's been a few years since I've actually walked into a JB Hi-Fi store and seen something that genuinely amazed me and wasn't just something that I'd seen for years on end. Although your sales figures are really great, I worry that I might be the canary in the coal mine.
How would you appeal to someone like me who is probably a very tough kind of demographic who might be looking for something new and exciting that I might have seen on tech YouTube or something and I might be excited to see it in a store.
Okay, Daniel, thank you for your question. We're always refreshing our stores. We're relying on innovation from our suppliers. I'll get Nick to add a little bit to this. Of course, with what's going to happen with AI in the PC market and everywhere else, I think there's plenty of scope. Why don't you talk in a bit more.
We're really optimistic on the product innovation cycle. Like to Stephen's point, AI PCs, and I appreciate it may not be for everyone at this point, but AI in devices I think is a really interesting dynamic that's going to come out over the next few years. If you've been in stores recently, some products like wearable products that are coming, the Meta glasses, the Ray-Ban Meta glasses, the Oakley Meta glasses. We're selling, you know, the Oura rings now that monitor your health. There's a lot of new product that's just coming now that we think over the next few years will continue to evolve and hopefully excite you in a JB Hi-Fi store.
Okay, let me think for a moment. In the hi-fi space, if I look on, like, say, tech YouTube, the things that hi-fi enthusiasts are excited about, it's not really things like sound bars. I already have a turntable. Sound bars are more for people who hate technology rather than live technology. I personally probably like to see, you know, brands like Marantz and Nakamichi and things like that. I won't comment on the AI Windows 11 PCs. It's interesting to note that the market share for Windows 11 has actually fallen since they dropped support for Windows 10. I'd like to ask you what do you think might be some emerging trends which are not necessarily popular in stores yet, which you might be looking at going forward in the future years?
We take your point on audio, and we are looking at our audio range and whether we can trial some expanded ranging in some particular audio stores. I would say that the benefit of the JB Hi-Fi model is the breadth of the product that we sell. Not everything needs to be brand new in a particular year because we sell across so many different categories. There is always something that is new, and it may not be in audio this year; it may be in a different category, but there is always a new product. In terms of the evolution, it's just what we talked about. I think the wearable space is a really interesting space.
If you look at what Meta is doing in that space in terms of what they think will evolve, how those glasses, for example, and whether you believe it or not, their ambition for those glasses taking over from what you would ordinarily do on a PC or on a mobile phone, I think over the coming years that will be really interesting to see how that evolves.
Do you have any other things that you might be quietly looking at, which consumers might not necessarily be ready for?
We are always looking. Always looking.
Thanks, Daniel. Our team visit regularly. We heard from them yesterday that they've been visiting all the major players on the west coast of America in the last couple of weeks. Any other questions from the floor?
Alex Carradis. I'm a shareholder of JB Hi-Fi. Very much enjoy your products. JB Hi-Fi dominates the sectors that it plays in currently, obviously Australia. There's really only a small amount of growth that you can get out of New Zealand being a smaller market. Really, where is the growth that's going to drive the share price in the future for this company overseas? I'm not really sure. I mean, you're looking at adjacencies with The Good Guys and e&s. Where is the growth going to come that's really going to drive the share price for the benefit, obviously, of the company and all the shareholders present?
Yep, good question. Thank you for that. When you say where is the growth? I suspect you're talking about store growth because that's a traditional mechanism for retailers to grow. You start with a model and frankly, JB Hi-Fi did that from its inception as a public company in 2003. For a number of years, we've had limited store growth, although we've got several stores that we have opened recently that have been successful. There are gaps in the market for us to grow. The opportunity for us is immense in terms of our product range and our categories in which we trade. Not that long ago we were a record shop. We've changed.
If you look at the ability for us to bring innovative product that Nick's talked about into our business, we think we can get real productivity growth through our stores by having better product, by servicing better than our competition. I think we've got enormous opportunities just within our current footprints. Of course, New Zealand is an opportunity for us and you've seen the growth we're getting there. e&s Nick's talked about. We've got lots of other things we're doing in commercial. JB business and commercial is an avenue for growing into that SME market as well. Of course, behind closed doors, we're doing lots of thinking about what we might do. You would expect us to do things that are sensible and related to our customer and our business. If we do that, we feel we can offer really significant growth over the medium to longer term. Thank you.
Maybe we should take one from the— Oh, sorry, please.
Good morning. My name's Fred Kalindis and mine's more a comment, actually. I've been a customer with JB Hi-Fi from the time he started operating out of his backyard. Over the years I've spent a lot of money there. I thought on principle I should own shares. A nyway to get back to the.
We're happy with both, by the way.
I'm sorry.
We're happy if you do both.
Absolutely. I felt that I bought so much of it, I already owned half the company. A nyway, m y comment is to congratulate the Board on the service that you have in the environment that you've created to give us good service. I had the occasion a few weeks ago to go to the DFO JB Hi-Fi. I wanted a particular product, and while it was on display, they didn't have any in stock. However, they didn't abandon me. They guided me across to The Good Guys, and sure enough, I got it there. The reason I'm saying this is because there was a gentleman of Indian origin, and he gave me the most wonderful service you could ever get. I came in with a wonderful product at a very good price. I want to congratulate you guys on the environment you've created for good service.
We really appreciate those comments. Thank you. Thank you. Anything from the floor? Maybe from the—got some questions online, Doug.
Thanks, Stephen. Yes. Question from Stephen Mane. Thank you t o Beth Laughton. For 14 years of service on the Board, it is always helpful for investors to have access to some exit perspectives from retiring independent directors. In her final contribution as a JB Hi-Fi director, could Beth please comment on what she regards as the best three decisions made during her time on the Board, and does she have any regrets?
Thanks. How long do I have, Stephen?
You've got as long as you like, Beth.
Stephen, thank you for your question. I think that's a good question because obviously as I come to the end of my term, which is today, I have thought long and hard about the experience that I've had. Firstly, just a little bit about me which might put this in perspective. I'm a 40 year chartered accountant. Even my husband says you're just a chartered accountant. That means I'm a bit boring and I'm very serious. I have a bit of a sense of humor but I take life quite seriously and I'm quite conservative. My experience on this Board has been to ask questions at the right time and to respond and consider the answers to those questions. I should say I've had a 20 year experience also as a non-executive director, so I think my BS signal is pretty good.
This experience that I've had on this Board, I have had the utmost respect for the management team, my fellow directors. I think the three most significant things, and one would be succession planning and the transition over that time between Terry Smart to Richard Murray to buying The Good Guys and Terry Smart coming back to help us position The Good Guys to where it is now. That's more than double the earnings. Bringing Terry back in when Richard left as the CEO and then now having the opportunity to encourage and support Nick in his journey through the CFO role into the Chief Operating role and then as now our new CEO, and I have utmost confidence in his ability to continue to grow the business.
The acquisition strategy that we've had with firstly The Good Guys and the way the team focused on getting first off, securing that opportunity and then ensuring that we get The Good Guys in the best possible shape has been outstanding. e&s is another example of the diligence and the approach that we've taken to make a determination around investing in a business with the major shareholder, sorry, the shareholder, Rob's an exceptional person and that business is going to provide all sorts of wonderful opportunities. The other thing I would just want to comment on is the culture of the organization. The number of times I have heard various parts of the management team never, never, never say the market's tough, the economy's tough, we have nothing that we can do to respond.
It has always been a whole list of opportunities to drive the business, to support the team, to empower the people on the floor and to grow that online sales business. I've never heard we can't do anything, so that's an absolute positive. I have never seen or heard that anywhere else in my experience. The other thing that is a constant is let's get back to basics, good quality retailing. I have learned so much about what good quality retailing looks like. Whenever things start to go a little bit around the edges, the theme is let's get back to basics, let's get back to customer service, quality, product in-store systems, process, and ongoing business improvement. In summary, it has been an amazing experience for me. I've learned a huge amount and I'm very, very comfortable that the business is in great shape for this, the future.
Thanks, Beth. Well spoken. I'll answer the second half of the question. The only regret is on our behalf that we'll miss Beth's sense of humor in the boardroom and everything else about her too. Doug, other questions.
Thanks, Stephen. Another question from Stephen Mane. What constraints are there on Terry Smart in terms of joining other listed retailers? His predecessor, Richard Murray, has been highly promiscuous, taking roles at Premier Investments, Metcash, and now Sigma. Could Nick please detail his plans in terms of remaining in touch with the three previous JB Hi-Fi CEOs, all of whom have been highly successful and contributed enormously to our remarkable success. Please do everything you can to keep them all in the tent.
Thanks, Stephen. They're nice comments. In terms of non-competes, we talked a little bit about our incentive plan which has shares in years two, three, and four. That's a strong incentive for any person who leaves the organization to behave respectfully. We do have a non-compete. You saw that with Richard Murray. He left us and people said, you know, is he going to pinch any of the team? None joined Richard because of those circumstances. I don't see any issues going forward. We wish Terry all the best. Terry is beyond reproach. He's a very fine executive and a very fine person. Clearly, we'll keep in touch with him and look forward to whatever happens in the future with him.
Thanks, Stephen. Another question from Stephen Mane. Whilst it is great you're offering a hybrid AGM with both online voting and questions, you are still deficient in four areas in terms of AGM best practice. The annual report was released too late on the same day as the notice of meeting. It should be out in August with the full year results. You are not following the agenda, instead dealing with questions in one job lot. This takes away focus from key individual items. You also failed to disclose the proxy position to the ASX along with the formal addresses to allow for a more fully informed AGM debate. Have there been any protest votes? Finally, will you get with the disclosure program and release headcount voting data in the poll results?
Like with a scheme of arrangement to make public retail shareholder sentiment and stimulate higher levels of retail voting, which has crashed to below 3% since the move away from paper. If the likes of Suncorp, Myer, Stockland, and Tabcorp can do all these things, why can't JB Hi-Fi?
Thanks, Stephen. In terms of the annual report, when we release our results in the middle of August, that's some time ago, you get just about everything. The only thing I think that's added to the formal yellow document you see are the Chairman's letters, the CEO's letter, and some shareholder information at the end. I'm not sure that's material. We'll take on board questions on timing on that, but I don't think that's material in terms of questions. It's just impractical to have questions throughout this session. We allow plenty of time. You can ask about everything. I don't think it's helpful to say you can only ask about the remuneration report and then for online people who miss that, come back and then we say you can't ask about the remuneration report because that was a little earlier in the meeting.
This is just not practical for a hybrid meeting. In terms of proxies, we're just following what's required by the ASX, so we release them during the meeting. Shareholders, the same thing. We don't release shareholder voting by numbers because that's not required. We're a simple company. We follow what the ASX tells us to do and we believe we have our governance pretty well in place. Any more?
Thanks, Stephen. Another question from Stephen Mane. After closing at $113.52 last night, the share price went down to $105.09 this morning after investors responded to the sales update. This is not a great look for the departing CEO who only left 27 days ago, but our stock was arguably priced to perfection and we all remember the 2003 IPO price was just $1. That said, are the Chair and CEO surprised by today's drop in the share price and what specific data point in the sales update do they believe triggered it?
Thanks, Stephen. Look, we don't look at the share price day by day. We look to run our business, get the results, and over time things will happen that are in the best interest of shareholders. Sometimes it pops up, sometimes it pops down. We don't control that. What we can control is how we go to market with our performance. Nick talked to you about the sales result. You know, it's pretty solid, to be honest, and in line with what we thought. We're very happy with how things are going. Any more from Stephen?
That's a question from someone else from Jeff Rogers. Jeff says, there's a new store in my regional centre of Wonthaggi that's just opened. I haven't entered it yet. Well done for bringing JB Hi-Fi to South Gippsland, a growing region with the only competitor Harvey Norman having a good, but not as good, location for many years. Is regional areas an ongoing growth strategy?
Yes, I think I talked to that earlier. We see that as an opportunity. One thing Geoff Roberts gave us a review of yesterday. It started with a bang, so that's good news for us. Did you want to talk about any other regional?
Yeah, look, regionals is a strategy for us. We historically struggled to get to those smaller catchments, but as our range has got broader, as tech's got more important in people's life, you know, we can get to what are smaller catchments now. We're open. Warrnambool, opened, Wonthaggi, Mount Barker in South Australia, Albany in WA, and they're all going well. We'll continue to look for regional opportunities.
Okay, another question from Stephen Mane. Now that CEO succession has been completed, could Chair Stephen Goddard please comment on his Chair succession plan? Stephen first joined the Board in 2016 and became Chairman in July 2020. Is he planning to serve as Chair for a full three year term until 2028? Is this his last term?
All I'd say is I just got voted in, so I'm looking forward to the future. Maybe we'll deal with that in a year or two. A year or two's time and I'm not going anywhere. Thanks, Stephen. Any other questions, Doug?
Yes, we have another question from Jeff Rogers. Has the resale of Telstra Internet services been successful to date? Jeff says his own experience could have been better.
Okay, do you want to handle it?
Yes, Telstra is a really important partner for us. It has been very successful in mobile phone and Internet services, and we'll continue to support Telstra as a partner, and they'll continue to support us. No, sorry if it hasn't, if your experience wasn't as great as it should have been. Overall, it has been very successful.
Thank you.
Another question from Stephen Mane. You have covered the 15% proxy protest vote against the REM report and the 24% against the CEO's LTI grant. There was also a modest 5% proxy protest vote against the Chair's re-election, compared with less than 2% with the other directors. What was the issue with the Chair's re-election? Did a proxy adviser recommend against and is it a tenure issue?
95% or right. A couple of shareholders advised us that if they have an issue with the REM report, they will vote against the Chair of the REM Committee, which I am. We've had letters from others, someone from overseas actually, who said in line with your comments about audit, they feel that if we don't change our audit, they'll vote against the Chair as well. There's a little bit of these things going on. You know, 95% is pretty good. I'm OK with that as long as you will ask. Thank you.
No more questions online. Thanks, Stephen.
Okay. Any more from the floor? Yep. Please.
Just one more. I don't want to know the name of the company, but is JB Hi-Fi looking around for any more acquisitions?
We are continually looking at growth opportunities, so we look at everything, to be honest. We've got in Nick's old team now, Dave's team. We've got people who scour the market. It's easy to buy something. It's not as easy to buy something that's going to be really good for the business over the longer term. When you see The Good Guys, that was a great acquisition. e&s, we think, will be a terrific acquisition over time as well. You've got to be out there looking. You've got to be judicious in what you actually do and make sure that it's forever. That's what we're doing.
Thank you.
Pleasure. Any others? Okay. Thank you. Ladies and gentlemen, if you haven't voted already, please cast your votes now. A reminder, for those that are attending the meeting online, you can vote by selecting the voting icon. For those attending in person, if you can hold up your yellow card, we'll collect them. If it's okay, please raise your hand if it hasn't been collected. We're all good, I think, online. I've given plenty of notice. Thanks, everyone. Voting is now closed. The voting results from the meeting will be released to the ASX later today. On behalf of the Board, I'd like to thank you for participating in today's AGM. I now declare the meeting closed and I invite you to join the Directors of the company for refreshments in the next room. Thanks, everyone.