Thanks, Sue, and good morning to everyone. Welcome to the 2023 Jumbo Interactive Annual General Meeting, my 25th meeting as CEO and founder. Jumbo's mission: Jumbo started with a single computer in 1995, and we patiently explored e-commerce opportunities before finding our niche in digital lotteries in 2000. Today, we provide our proprietary lottery software platform and lottery management expertise to government and charity lotteries around the world. Our mission is to create positive social impact through making lotteries easier, and we aim to be the number one choice in digital lottery and lottery services globally. Turning now to some key highlights in FY 2023. In FY 2023, our nimble operating model proved its worth.
Good cost discipline and a handful of large, powerful, Powerball jackpots, greater than or equal to AUD 100 million, offset the impact of what was relatively an unfavorable and volatile run of jackpots. The financial year also included only five jackpots greater than AUD 50 million, compared to 13 in the prior corresponding period. In response, we were able to reduce our marketing spend and optimize our cost base to deliver a class-leading underlying group EBITDA margin, excluding acquisitions of 51%, exceeding our original margin guidance of 48%-50%. Despite the unfavorable jackpot run, lottery retailing delivered a resilient performance, underpinned by a record AUD 160 million Powerball in October 2022, and an improved revenue margin due to product mix and pricing changes implemented late in the financial year.
SaaS continues to deliver reliable growth, and it was great to see Lotterywest achieve an 8% increase in total transactional value amid the weaker run of jackpots. Both Stride and StarVale performed in line with our expectations and helped drive and continue growth in overall revenue and earnings. Finally, the balance sheet remains robust and provides flexibility to drive further growth. Over the past two decades, lotteries, particular draw-based games, are an asset class that has delivered solid and consistent growth and proven to be resilient in economic downturns and recessions. The Powerball game change in April 2018, which resulted in significantly larger jackpots, led to a step-up in total ticket sales in FY 2019, which is coincidentally when we completed the rebuild of our best-in-class software platform.
Pleasingly, that momentum has continued with even stronger growth, albeit subject to jackpot volatility. Lottery's share of household spend has also remained relatively stable over the last decade. Whether it's the prospect of changing a life or a form of fun or entertainment, or just the fear of missing out, people continue to play the lottery. While the rate of digital penetration growth slowed in FY 2023 to a little over 38%, we expect this to trend higher, as it is still well below other jurisdictions around the world, and of course, still behind other industries such as online banking, music, accommodation, housing, and car sales. Initially, our focus was on developing a platform specifically to deal with the nature of lotteries. Very high volumes compressed in short time frames, for example, just before a large draw.
This extended to creating best-in-class player experience, improving the player interface, maximizing convenience, minimizing friction, and leveraging data and analytics to drive personalization at scale. Lotto Party, a convenient and engaging way for players to pool their funds with friends, family, and others, is a testament to our innovative spirit. Not only does it enhance the odds by enabling more entries for participants, but it also ensures the secure and seamless proportional distribution of winnings based on individual contributions. Lotto Party shows a player's avatar and first name, adding a touch of personality and humanizing the experience, making it evident that participants are playing with real people. Lotto Party ensures that players need not worry about managing funds or chasing friends for their share. We've got all that handled.
A testament to the effectiveness and appeal of Lotto Party came during the Super Draw on Saturday, the 31st of July. For that draw, three brothers from New South Wales combined their funds to purchase a ticket through Lotto Party and walked away with over AUD 2 million from the AUD 20 million Super Draw. Their story is both endearing and powerful. It was their first purchase with Oz Lotteries. They'd always bought individual tickets until one of them suggested trying out Lotto Party. Little did they know this decision would forever change their lives. As they joked about potential ventures like opening a pizza shop, their story resonated with many, epitomizing the joy of shared success. Since its introduction in 2018, Lotto Party has become a preferred choice for our syndicate players on Oz Lotteries.
Our data reveals that during peak jackpot periods, there's a marked surge in popularity, a trend we credit to its social and personal appeal. Feedback consistently highlights the platform's ease of use and peace of mind and offering. It offers by eliminating the often stressful task of gathering contribution from peers. As a software company, Jumbo has always been an early adopter of new technologies. We research, develop, and test new technology before deploying it to our partners. Our partners recognize the need to stay ahead of technology and look to Jumbo for guidance and leadership in this area. Artificial intelligence is no different. I've personally been fascinated by neural networks since 1995, and I've followed the development of AI ever since.
In 2020, I was fortunate enough to be part of the private beta for OpenAI's GPT-3, which developed into the ChatGPT, which we know today. Just two weeks ago, I delivered a presentation on the impact of artificial intelligence in the lottery industry at the Asia Pacific Lottery Association conference in Bangkok. Jumbo has already been using machine learning to improve the customer experience for a few years now, and new advances in generative AI provide further opportunities for us. These include further improvements to customer experience, improved support, improved fraud detection, and problem gambling protection. However, this comes with the responsibility to deploy AI with appropriate guardrails and thorough testing. The complexity, risk, and cost involved in safely deploying these new technologies is a key reason why lotteries choose to partner with Jumbo. A few words on global opportunities.
Through mergers and acquisitions, we're able to enhance our existing portfolio of assets, enable access to new markets, complementary capabilities and propositions, and to build scale. We're focused on established, profitable businesses with long-standing relationships with their charity clients, and opportunities to drive growth and scale using our technology, lottery expertise, and existing capabilities. In the U.K., for example, with Gatherwell and StarVale, we now have access to the full spectrum of charity lottery management and raffle services across grassroots, mid-market, and enterprise clients. In Canada, following the granting of a gaming service provider's license in British Columbia in late 2022, Stride was just recently granted a gaming-related supplier license in Ontario. Stride now has a great opportunity to expand into the provinces of British Columbia and Ontario, with a population size over three times that of its existing footprint.
Over the last three years, our managed services segment has grown from approximately AUD 2 million in revenue to AUD 23 million in revenue on a pro forma basis. I recently just returned from Canada and the U.K. after visiting the Stride, StarVale, and Gatherwell teams. I'm impressed with the changes that have occurred in those businesses as they become more aligned with Jumbo and are reinvigorated with new opportunities. Coming back to lottery retailing for a moment, the large jackpot environment for the first quarter of FY 2024 was solid, with 11 large jackpots and an aggregate value of AUD 410 million, equivalent to an average value of jackpot of AUD 37 million. October 2022 provided a formidable comparable period, with five large jackpots and an aggregate value of AUD 390 million, including a 100 and a 100 and 60 million dollar Powerball.
This compares to an aggregate value of only AUD 185 million in October this year, less than half that of the prior corresponding period. As expected, given the strong jackpots in the PCP, lottery retailing TTV growth was down in the first 4 months of FY 2024. Pleasingly, revenue increased 3%, underpinned by high margins as a result of the pricing changes implemented in May 2023. Any level of regression following the pricing change has been minor to date. However, we continue to closely monitor player behavior. Moving to SaaS and Managed Services. Today, we've also provided the SaaS and Managed Services TTV and revenue figures for the first quarter of FY 2024. SaaS TTV and external revenue increased 20% respectively. Pleasingly, Lotterywest TTV growth continues to outpace lottery retailing.
In the first quarter of FY 2024, managed services figures reflect contributions from Gatherwell and StarVale in the U.K. and Stride in Canada. The first quarter benefited from the contribution from StarVale, which was not in the prior corresponding period, as we only completed the acquisition on the first of November 2022. Excluding the impact of StarVale, revenue growth in the managed services segment remains in line with our expectations. Turning now to our FY 2024 outlook, which remains unchanged. We continue to target a group EBITDA margin in the range of 48%-50%, excluding the impact of employee incentives and share-based payments. We continue to target growing revenues faster than operating expenses this year. FY 2024 will also see the final step up in the service fee paid to The Lottery Corporation.
Going forward, as the service fee will remain constant, we'll be focused on generating strong operating leverage from our agreement with The Lottery Corporation, as we did in the years prior to the introduction of the service fee. Looking abroad, we remain focused on growing the business through acquisitions that drive an uplift in earnings per share and deliver synergistic benefits for the group. Before I conclude my presentation, I'd like to take the opportunity to thank our staff for their hard work, commitment, and how, as a team, we've adapted to the changing work environment and the shift to the hybrid work model. It's been great to connect with our teams in person, both here in Brisbane, but also internationally in the U.K. and Canada. I'd also take the opportunity to thank David Todd.
Dave's invaluable insights and comparable work ethic, unwavering commitment to the team are an inspiration to us all. We wish Dave the very best. Finally, I'd also like to thank you, our shareholders, for your ongoing support as we continue to grow the business and aspire to be the number one choice in digital lottery and services globally. I'll now hand back to Sue.
Thanks very much, Mike. At this point, I'd like to provide shareholders with the opportunity to ask Mike any questions in relation to his presentation or as regards to the performance of the company more generally. Do we have any questions from the room? If we do, could you please raise your hand? We'll arrange for a microphone to be brought to you. Yep, it's just coming now.
Thank you. Who are our competitors in terms of providing services to the lottery industry worldwide? Is there another Jumbo somewhere else? Are there many more? Is our model unique and means it may be operating the lotteries overseas operate in a more traditional fashion rather than so advanced like we do? Thank you.
Probably the nearest competitor to what we do would be the likes of Scientific Games and IGT, which are large, predominantly U.S.-based companies that provide, technology and lottery services, predominantly to government organizations. But as we go towards the charity area, we find like they don't operate in the charity area, which is the reason why, we're a lot more active in that area. And, there are smaller external lottery managers in the U.K. and even in Australia and Canada, that kind of compete with StarVale and, and Stride, but they're not of the same size as IGT and Scientific Games. So really, in that particular space, Jumbo is quite large in that industry.
So we're all quite well aware of how we sort of line up against our competitors, and we're always kind of improving our our offering so that we can always be one step ahead. And the one area that we always have shone quite brightly is in the technology area.
Thank you.
Do we have any further questions from the room? Yes, sir.
Hi, Glenn Risson. My question is really around the future or outlook section of the thing, where you kind of say, steady state, we're trudging along. So my question really is: is there something more? Where's the next step change that we can make, other than going and buying something else? Is there something that we're working on to make that step change that sort of hasn't been there for a few years?
Yeah, look, you kind of have to look to the M&A side of things, as to where the step change would be. The Australian lottery business is very steady, as you can see from those graphs. It sort of steadily grows. It's nothing's gonna suddenly make that shoot right up there. There may be a game change, but, you know, what we saw in 2019 with our new technology platform coming out, that was a unique, unique time because, you know, we had an older platform that we changed. You know, our platform's fine now, so there's nothing that we can do in that area. So Australia's sort of on a nice trajectory.
But the one important thing about the 2020 deal that we did with TLC was that it gave us the ability to go out and focus internationally. And, you know, we bought three businesses. We're busily looking for more, and we can do that internationally while the Australian business just keeps on growing. So, you know, it'd be nice if every year was a fantastic year and keeps on going, but that's not how the lottery industry works. The lottery industry is prized because it's just that regular type of industry. So you do get periods where, you know, we buy something, we have to work hard at integrating those businesses, and then once we've gone past that period, we buy something else, and we try to keep the growth going.
But, you know, certainly that international growth opportunity through acquisition is something that we've never had prior to 2020. So that's an area where I focus a lot of my attention and, you know, it is a bit lumpy in terms of the growth. Sometimes you get a big shoot forward, and then it's a consolidation, and then it shoots forward again, which is the right way to do it. If it just goes too quickly, then you end up, you know, not being able to keep the team up with it. So I think we're doing it at the right pace, and, you know, the opportunities are still quite significant going forward.
Can I ask another question?
Yes.
Sure.
Let me come to you. Before you do, I wouldn't mind just adding a comment to Mike's, and that is, I think we are doing far more than trudging along. It feels like that sometimes because of the pace of the lottery industry, but rest assured, we are constantly talking about those M&A opportunities. Even this morning in our board meeting, we were talking about what are we doing in there in Ontario, what are we doing in the UK? We have a strategy session lined up for December, where Michael Driver is going to be talking to us about all those opportunities. So it's not BAU, BAU, and we are quite dynamic in the way we are trying to continue that growth strategy.
I'm just talking about the image that I look at from my side-
Of course.
-not your side. Okay? So you talked about AI. And, you know, it's supposedly the next big thing in all sorts of things. So most of the stuff that you had up there on the screen, on the slide, seemed to be about checking and protecting and looking for fraud. But I'm just wondering, where's the expansionist part that comes with AI? Or is there an expansionist part that we're working on that I couldn't quite see in your comments?
Yeah, look, there certainly is. It's all centered around the player experience, the user experience. And that's something that Jumbo's been really good at. You know, it will get easier to use the app. And, you know, I kind of liken it like this: when we were a lot smaller, we could provide our players with kind of like personalized service. We'd literally get on the phone to people, talk to them, you get to know their name, you get to know what they're like, and you know, you develop that trust. As you get bigger, you can't just employ enough people to give everybody that personal experience. With the amount of tickets that we sell these days, you can't have that personal touch, so that kind of gets lost through the years.
AI gives us an opportunity to bring a lot of that back. Yes, it's not a person, it's a, you know, it's a machine talking to people, but the quality of the conversation is actually really quite good, so people at least feel that they're getting what they want. You know, the suggestions that we're making them with other products is a bit more specific to what they like, as opposed to getting, you know, a one ad for everybody, and it sometimes works, sometimes doesn't. It becomes a lot more specific. So it's not, it's not gonna be a sort of a, a big bang type of thing, but it'll be a gradual improvement, which, you know, whether you like it or not, it's happening. A lot of the big companies are implementing it. We are too.
We're not gonna be left behind. We're gonna try and lead the pack in that area. And, you know, with all this sort of good stuff, it doesn't come cheap. And the benefit to Jumbo, not only in, with the customer side of it, it does help us attract more partners. Because all of our partner lotteries out there, they're all looking at AI and other things and going, "Oh, my God, how are we going to keep up with all of this?" And a lot of them that have been doing it in-house suddenly change their opinion and say, "Look, maybe we need a specialist partner." And on that basis, Jumbo shines.
And so it does sort of, you know, we do get a lot more inbound calls saying: "Look, maybe it's time we partner with you, 'cause you guys know all about it, and we're struggling to keep up.
Do we do those inbound calls?
Working on it.
A follow-up question on the growth in the future. The TTV goal that you set some years ago, sort of, is that still under the bonnet there? An AUD 1 billion TTV, is that simmering underneath the bonnet there as part of you, or have we parked that one?
No, it's, it was an aspirational goal that we set ourself a while back, and we're not that far from it. If you analyze, you know, the addition of StarVale and Stride, you know, we're getting into the nine hundreds there once you analyze their impact. You know, at the moment, not all of their numbers are fully impacted. So it was a case like we knew we were gonna get there, and we will. It was a question of timing and everything, because we've got the ability to acquire businesses which just give you that sort of step up in TTV. So, you know, we're, we're convinced we'll get there. We're already starting to look at, you know, how long is it gonna take us to get to the next mark, you know, 2 billion after that.
Okay, that's what I was kind of asking you. Is there something beyond that? So there is, yeah-
Oh, yeah. Absolutely. There's no way it's going to just suddenly stop at AUD 1 billion and not go any further. Yeah, we're already looking beyond that and seeing, you know, where the next level is after that.
Do we have any further questions from the floor? If not, do we have any further written questions from our online attendees?
Yes, Chair. We have approximately eight questions.
Yeah.
So, just to put you on notice. So I'll the first five questions come from the ASA, Australian Shareholders Association, so I'll ask those questions. I commend the board for the required skills listed on your metrics for directors. However, I would call this a table rather than a board skills matrix, as it doesn't list individual directors' skills. Going forward, can we please list which directors have each skill at each level, so shareholders who own the remaining 80% of the company can be properly informed when voting?
Thank you for your question, the ASA. I just wanted to recap that we actually review the competencies we think we need around the board table annually, and then we review those competencies against the skills that we actually have. We do a self-assessment every 12 months, and our policy is to actually have an external assessment every three years. Given we've now done two, the next assessment will be an external assessment, so we may well get some good feedback from that. In terms of your suggestion around identifying individual directors' skills and experience in a table rather than a matrix rather than a table, we're happy to take that on board for next year's report.
Thanks, Chair. The second question we have from the ASA is: In addition, we still have a small board, so are you considering adding a director or two, especially in the areas where we are least covered at present, like lottery industry, sustainability, and I'd also guess international, given our acquisitions?
Thanks again for your question. As I said in my presentation, we are constantly reviewing the skills and experience we need around the table, including the number of directors we need around the table. Certainly, as we expand overseas, we are taking into account whether we need more international experience around the table, and we have committed to searching for another NED with appropriate skills. The skills we believe that we're looking for at present, which we will review again once we do our strategy review in December, are finance expertise complemented with sustainability, data governance, and cyber experience.
Thanks, Chair. Another question from the ASA. Directors' skin in the game. As we also raised last year, Professor Christensen and Mr. Rizzo both hold small parcels of shares in the company, but don't yet comply with your policy to hold at least one year's director's fees in shares, and are both in their fifth year on the board. Can they please advise if they plan to correct this by the end of the year?
Again, thank you for your question. I have raised this topic directly with Sharon and Giovanni at year-end, and they have both advised me of their intention to reach the minimum shareholding requirements in the required time frames, which is July 2024 for Giovanni and August 2024 for Sharon.
Thank you, Chair. Another question from the ASA. This one is in relation to cyber. Given recent direction from ASIC and the Home Affairs Office about cybersecurity and their intentions to hold boards more accountable moving forward, a couple of questions. Who is our expert on the board in all things cyber? And as examples, do we conduct internal phishing tests, delete all unnecessary customer data, et cetera, to minimize damage to our company when, rather than if, hacks occur to our business?
You will note in our annual report, in the skills assessment that we carried out, both Mike and Giovanni were identified as experts in cyber. I completed the Diligent accreditation in cyber risk this year as well, and I'm going to hand over to Mike for more detailed explanation.
Yeah, look, cyber is a key, key factor for all companies, not just e-commerce companies. And, you know, Jumbo has been an e-commerce from day one, so it, it's very, you know, it's always been an issue and always will be. So what I'm trying to say is that, you know, we've grown up with cyber. It's not something that we've just suddenly had to skill up on in the last few years because it's become topical. You know, internal phishing tests, we do them quite regularly. We try to catch out our own staff that might fall for these traps. We have an ongoing educational piece where our staff have to go through training.
Customer data, you know, where we are required to hold some customer data, but where possible, we either obfuscate them, or we just delete them, or we put them in a place where it's just offline and a lot more protected. We employ technologies like Cloudflare to reduce the ability for hackers to get into our network. You know, it's one of those technologies where it's never, it's not easy to get to complete 100%, but vigilance is the key. You know, because it's near and dear to our heart, it's in our DNA, pretty much, it's something that we look at on a daily basis. You know, I think Jumbo is one of those companies which handles the cyber threat very seriously.
Thank you. And the last question from the ASA is in relation to political donations. Did we make any political donations in the 2023 financial year? And if so, did we disclose them in the annual report? And what is our policy there?
Thank you for the question. Political donations on behalf of Jumbo is a prohibited act under our anti-bribery and corruption policy. The policy also expressly states that political contributions or donations are not permitted by Jumbo and must not be made by workplace participants on behalf of Jumbo. And to the best of my knowledge, Jumbo has not made any political donations.
Thank you, Chair. We now have a question from Mr. Stephen Mayne. The question is: The Chair uses the phrase "problem gambling" in her formal address. This industry language. Sorry, this is industry language designed to blame the gambler as opposed to the addictive product, such as poker machines. If possible, could Jumbo Interactive please switch to language which talks about gambling harm and addiction, rather than suggesting that gambling customers are the problem?
Thank you for your comment, Stephen. I think that's a very fair request that we modify less than optimal language around problem gambling, and I undertake to address that in future communications.
Thank you, Chair. We now have a question from Mark Eaglesham. He's asked: Can you advise of Lottery Retailing's revenue growth for Q1 financial year 2024? This is more useful than the four months year-to-date figure, as it will not be distorted by last October's AUD 160 million dollar jackpot.
Thank you for your question. I'm going to refer to Jatin, our CFO, to answer that.
Yeah. Thank you, Chair. So you'll see in the presentation, we gave the four months, the first four months of FY 2024, and that's really due to the tough comps that we had in October FY 2023. You'll note we had a AUD 100 million Powerball and a AUD 160 million Powerball. That's distorting that trajectory. If I look just at Q1, the TTV growth was greater than 20%, and that's really driven by the strong jackpots we saw in Q1. You'll recall Q1 PCP was a poor jackpot period. I think the average value was only AUD 25 million, whereas in Q1, FY 2024 was about AUD 37 million. And the revenue growth, the margin's similar to what you would have seen, what we disclosed today.
Thanks. Graeme?
Thank you. We have another question from Stephen Maine: Lottery taxes are still ridiculously high across Australia, especially compared with the huge reductions in taxes imposed on the racing industry over the past 20 years. What are you doing to stand up for lottery consumers who are being overtaxed by state-based legislated monopoly lottery operators? Which states have the highest lottery taxes, and is there any sign of movement on this front?
You happy to take that, Mike?
Yeah, look, I'm happy just to explain that, that's something that we would stand with the Lottery Corporation. They would really need to drive that type of an effort. You know, it's not for us to drive in that area. You know, look, the purpose of lotteries is to raise revenue for governments. You know, we could argue about what is too much and what is too little. If you know, the purpose of lotteries is to do good socially as well as provide a fun game. If you start reducing the tax, then you might also, you know, create, you know, player harm by having games that are, you know, the winning just starting to come through a bit too quickly. So there is a balance to be had there.
But in terms of standing up, you know, we've stood shoulder to shoulder with TLC on a number of issues that have come through, like the payments issue, the advertising issue. And, you know, to the comment earlier about the growth in lotteries. While lotteries kind of, you know, you might think it's slow growth, I don't think so. I think it's, you know, having a nice trajectory. That comes with, that comes from, you know, keeping the player harm to a minimum, and so that's just what lotteries are like. Hope that answers the question.
That's all the questions we have online for that particular item. Thank you.
Thanks, Graeme. I'll just check in with Graeme. We don't have any questions on the phone? It would appear not. All right. All right, moving to resolutions for today's meeting. Shareholders will be asked to consider the four resolutions set out in the notice of meeting, dated 9 October 2023. The poll for each resolution is now open and will close at the conclusion of the meeting. For each proposed resolution, I will introduce it. There will be an opportunity for shareholders to ask questions on the resolution through our online platform, in line with the process that Graeme explained.
Those persons entitled to vote on the resolution may cast a vote on it at any time before the close of the poll, and the results of the poll will be released on the ASX announcements platform and made available on our website as soon as possible after the close of this meeting. So financial statements and reports. The first item of business is to receive and consider the company's financial statements and reports for the financial year ended 30 June 2023, as set out in our 2023 annual report. This item of business does not require shareholders to vote on a resolution or to formally adopt the reports. Shareholders or their proxies may comment or ask questions about the final financial statements and reports about the management of the company.
Shareholders or their proxies may also ask questions of the company's auditor, Ernst & Young, in relation to the conduct of the audit, the preparation and content of the audit report, accounting policies adopted by the company, and the independence of the auditor carrying out the audit. I will now address any questions relating to this item of business or any general business questions. Do we have any questions from the room? If so, please raise your hand. We don't have any questions from the room. Do we have any written question from online attendees?
No, Chair. The questions were dealt with in the previous session.
Right, thank you. And no questions on the phone?
There are no questions on the phone at this time.
Thank you. As there are no further questions, we will now move to the next item of business, and that relates to my re-election. I propose handing the chairing of this item to my fellow director, Giovanni Rizzo, who is the chair of our Audit and Risk Management Committee.
Thank you, Sue, and good morning, everybody. We'll now move to resolution one, which is the re-election of Susan Forrester as a director. The resolution is as set out on the screen. Details of Sue's background and experience were set out in the Explanatory Memorandum, which accompanied the notice of meeting. So I don't propose to restate that. However, I would like to emphasize that the board considers that Sue's contribution to leading the board through a significant experience in corporate governance across a number of industry sectors, human resources, and innovation, brings significant benefit to the board and committee discussions, and as an efficient and accomplished board leader. I now invite Sue to briefly address the meeting regarding her re-election.
Thank you, Giovanni. I don't propose to set out my skills and experience. That's been well set out in the Explanatory Memorandum. So I thought I might just talk a little further about the way that I chair the board, the way our board interacts, and some of the benefits that I think come from that. I do believe I complement the board's existing skill set with my strategy, commercial, and governance expertise, which I've gained from many years of working. It's quite surprising how much cross-pollination occurs within a board portfolio, as all the organizations I serve on are grappling with cyber risk, how to harness AI, the future of work, and ESG.
At a time where there's so much additional risk for companies grappling with these emerging issues, it's really important to have a stable and cohesive board which respects each other's experience and viewpoints. We have an annual appraisal process I have spoken about, and it demonstrates that we are a well-functioning board, which is consistently trying to improve its processes to ensure we make good and prudent decisions for our shareholders. I thank my fellow board members for their support for my reappointment. Of recent times, I have developed a genuine interest in cyber, AI, and the S and G in ESG, and I have taken time to develop my knowledge through external accreditations and certifications.
In June this year, I was fortunate enough to to attend INSEAD's Role of the Chair course, which was an excellent opportunity to develop my chairing and facilitation skills in an international environment. I believe I have the capability, capacity, and commitment to continue to effectively contribute to the strategic governance and direction of Jumbo. As we have grown internationally, I have particularly enjoyed supporting Mike as he has developed his executive and management teams, which are and appreciate being part of a very diverse workforce, sharing a passion for technology, innovation, and engaging customer experiences. Excuse me. It is great pleasure, with great pleasure and enthusiasm, I put myself forward for re-election as a director of the company for another three-year term. Thank you, and over to you, Giovanni.
Thanks, Sue. The directors, with Sue abstaining, unanimously recommend shareholders vote in favor of this resolution. I will now address any questions relating to this item of business. Any on the floor? No questions on the floor. Graeme, any questions online?
Yes, we have a couple of questions online. First of all, a question from Stephen Maine, and the question is: Brisbane can be quite an insular market in terms of who serves on public company boards. Could Susan clarify what her pathway was to the chair of Jumbo? This is not to criticize her leadership in any way. I'm just curious to understand the history.
Thank you for your question, Stephen. My pathway to the Jumbo directorship and chairmanship was through an external recruiter. I can't remember the name of them now, but they conducted a national search. I believe the two final candidates, one was Sydney-based, and the other was myself. We were just coming out of COVID at the time, so there may have been some decisions around having a local chair who could support and, you know, help grow the company locally. And as for the insular Brisbane commentary, I serve on boards both locally, outside of Queensland, and internationally, and I do try very much to bring that experience to the board. I think globally, our experience around the table has increased significantly with the M&A strategies that we have, and Mike is traveling regularly. If there's any perception of being insular, we are certainly working towards, you know, being quite broad-ranging in our thinking and our horizons.
Thanks, Chair. We have another question from Mr. Stephen Maine. It has been substantially addressed by a previous question, but I will read it because it does also offer a compliment to the board, and there is a couple of questions which I can respond to as well. So the question is: A four-person board seems too small for a global business capitalized at almost AUD 900 million in the fast-moving tech space. What is the current fee cap for directors and constitutional cap on the board size? And could we please appoint one or two new directors for shareholder approval at next year's AGM? The existing four are no doubt fabulous, but we would prefer to have a super group of six directors. And I can just respond that the fee cap-
We'll just pause until that test is over. Yeah. I think we may be good to continue.
I think so.
Yeah, let's hope. Yeah.
Okay. Thanks, Graeme. Thanks, Chair. I can confirm that, at last year's AGM, the cap, the directors' fee cap was increased to AUD 1 million and approved by shareholders. Within the Constitution, there is an upper limit at the moment of nine directors.
Thank you, Graeme. All I can do, Stephen, is thank you for your question, and confirm what was in our presentation today, that we have recognized we are small. We are actively on the lookout for at least one new NED, if not two, and I believe I've answered the question in terms of the nature of the skills we will be seeking. Just remember that we're seeking people, not robots. So while you might start off with a checklist of cyber, AI, and sustainability, if we could find someone who had excellent international lottery experience, that would be terrific.
If we had someone perhaps based in Canada who had, you know, great commercial experience and great networks, that would be good, too. So we are, while we have a checklist, we are quite broad, again, in relation to the nature of the person we are seeking. We are doing an internal search to start, and Abby and her team will be assisting us with that, but if we do need to go more broadly in terms of external recruiters, we will.
Thanks, Sue. Any further questions, Graeme?
No further online questions.
All right. Thanks. Any questions on the telephone?
There are no phone questions at this time.
Fantastic. Thank you. As there are no further questions, I'll now put Resolution one to the meeting. The results of the proxies received to date are now being displayed on the screen. Thank you. For those of you online, please now select either for, against, or abstain for Resolution one on the voting screen. For those here in person, please mark your selection on the voting card in, on your person. I'll just pause for a few seconds while everybody casts their vote. Thank you. As that now concludes Resolution one, I will hand the meeting back to Chair, Sue, and congratulations, Sue, on your re-election.
Thank you. Thank you, Giovanni, and thank you for the questions. We'll now move to Resolution 2, which is a non-binding and advisory vote on the company's remuneration report for the year ended 30 June 2023. The Corporations Act requires that the section of the directors' report dealing with remuneration of directors and key management personnel of the company are put to an advisory vote of shareholders. The remuneration report detailing the company's approach to remuneration is contained within the 2023 remuneration report, which is available on our website. The resolution is set out on the slide. I'll now address any questions relating to this item of business. Do we have any questions from the room? If so, please raise your hand. With no questions from the room, do we have any written questions from online attendees?
There are no online questions, Chair.
Thank you, Graeme. Do we have any questions on the phone?
There are no phone questions at this time.
Thank you. As there are no further questions, I'll now put Resolution 2 to the meeting. The results of the proxies received are now being displayed. Thank you. For those of you online, please now select either for, against, or abstain for Resolution 2 on the voting screen. For those here in person, please mark your selection on the voting card. We'll now move to Resolution 3, which states, which relates to the issue of the STI director rights to the CEO. The resolution is set out in the slide. The details and background to this resolution are set out in the explanatory memorandum, and I'll now address any questions relating to this item of business. Do we have any questions from the room? If there's no questions from the room, do we have any written questions from online attendees?
Yes, Chair, we have one question from Stephen Maine, and the question is: "The founder CEO owns AUD 120 million worth of ordinary shares based on current prices. Does he really need STI awards to keep him motivated? James Packer used to work for free at public companies. Has Mike thought about doing the same and just relying on dividends to draw an income from the company?
I'm happy to take that. Well, I will or Sharon, would you like to take it as chair? No, okay. My response to that question would be that we have spent quite some time developing our remuneration framework for all members of our KMP, including the CEO. Noting Mike is in fact the founder and does have a significant shareholding, we still believe it is very important that the position of CEO is benchmarked appropriately when it comes to remuneration, and it's not appropriate for him to ask Mike to effectively not take STIs or LTIs.
The other reason for doing that is that if Mike were to resign or step down, and we were to recruit another CEO, we would then have, you know, an unusual position where the previous role didn't have those, and then we're moving to a new regime of STIs and LTIs. So the board feels very comfortable about the remuneration that Mike is offered, both from a fixed and from an at-risk perspective, and these are benchmarked regularly as part of our annual remuneration review. Would any other member of the board like to make any comment about that?
There are no further questions.
D o we have any questions on the phone?
There are no questions on the phone at this time.
As there are no further questions, I now put Resolution 3 to the meeting. The results of the proxies received are now being displayed. Thank you. For those of you online, would you now please select either for, against, or abstain for Resolution 3 on your voting screen? For those here in person, please mark your selection on the voting card. We'll now move to Resolution 4, which relates to the issue of LTI director rights to the CEO. The resolution is set out in the slide. The details and background to this resolution are set out in the explanatory memorandum, and I'll now address any questions relating to this item of business. Do we have any questions from the floor? If not, do we have any questions from our online attendees?
Yes, Chair. We have one question from Mr. Stephen Maine, and this is the question: "Could the CEO summarize his past LTI grants as to whether they have vested or lapsed? Also, he's been in the job a very long time. Could he briefly summarize his share buying and selling history? Please don't say, 'Look it up in the annual report and through the ASX announcements.' It's complicated over a long period, and the CEO could factually summarize the situation in 60 seconds.
I'm going to preface that. Thank you for your question, Stephen. I'm going to preface the answers to that in terms of we do in an enormous amount of detail explain both our STI and LTI setting and vesting and exercise program in our annual report, which is always quite easy to look up. However, we are in the spirit of accountability happy to explain that. I'm going to hand over to Giovanni just to explain the LTI vesting component.
Yeah, sure. Thanks, Susan. Thanks for the question. You know, with Mike being in place for over 25 years as CEO, I think we'd be here all day if we had to go through all the vestings and all the share purchases and sales. But what I would like to add is, you know, Mike has a significant amount of shares in this company, as explained, close to 9 million shares, 15% of the business, and retains that commitment to the company in terms of, you know, making sure he's a large shareholder, and being very committed to the company. In terms of his remuneration, a significant portion of Mike's remuneration is both STI and LTI, and that ensures alignment with shareholder wealth creation and maximizing the share price of the business as well.
So in terms of the vesting criteria that we have in place, every year, the board, together with the People Committee, you know, has a look at what are the key performance hurdles that need to be attained to drive this business and to drive shareholder wealth going forward. And ultimately, those performance hurdles are determined what the vesting conditions are for the business, and we obviously evaluate that on an annual basis. So to summarize, over the 25-year period, I mean, I know Stephen has asked for us not to say, "Look at the annual reports," but I would advise that we'd have to look at the annual reports, because there are numerous LTI grants that have been provided over the years.
It basically details what those performance criteria are and what the vesting conditions are around that, and whether they have actually been met or haven't been met. But to close on that one, just to say that Mike has a significant commitment to this business. He's still a very large shareholder and obviously has shareholder wealth creation, in the forefront of his mind.
Thank you, Giovanni. In relation to the question relating to Mike's buying and selling of shares, the information I have at hand is that in April 2022, he sold AUD 688,000 worth of shares. Is that, to your knowledge, Mike, the only sale?
Number of shares.
That was 688,000 shares.
Shares, that's right, which is about 1.1% of the shares. So in essence, I've held on to my shares pretty much from day one, except for small amounts, relatively speaking, over the years, which you know indicates my commitment to the business and you know my vision for the future. I still think the best years are ahead of us.
Thank you, Mike. Do we have any questions on the telephone?
There are no phone questions at this time.
Thank you. If there are no further questions, I'll now put Resolution four to the meeting. The results of the proxies are now being displayed. Thank you. For those online, would you now please select for, against, or abstain for Resolution 4 on your voting screen? And for those here in person, please mark your selection on the voting card. If you are attending here in person, a member of the Computershare team will now come around to collect your voting card. The results of the meeting will be announced on the ASX company announcements platform and will be available on our website as soon as possible after the close of this meeting. That ends the formal part of the AGM, and I now declare the meeting closed, and I now declare that the. I'll just wait one moment. Some people are just filling out their blue cards. I haven't. All right, just one moment. Are there any more cards to collect? I now declare that the poll is closed. Thank you very much for participating in our hybrid meeting today, and we look forward to your continuing support during the coming year. Thank you.