Good morning, and welcome to the Annual General Meeting of Michael Hill International Limited. At Michael Hill, we place a high value on our heritage and have deep respect for our founders, Sir Michael and Lady Christine, and the role they continue to play in shaping the future of Michael Hill. It's appropriate that I begin today by acknowledging the traditional custodians of country and First Nations people throughout Australia, New Zealand and Canada, and recognize their continuing connection to land, waters, and community.
I pay my respects to them and their cultures and to elders past, present, and future. I'm Rob Fyfe, the chair of the board of directors, and it is my pleasure to chair today's meeting. Our company secretary has confirmed that a quorum is present, so I formally declare the meeting properly constituted and open for business.
I'd like to begin this meeting with you, The Jewellers: A True Love Story. This is part of our ongoing bridal campaign and a further step in elevating the Michael Hill brand. Sharing the true love story that is the origin of MHJ not only connects customers to the heritage of our brand, but reminds customers there are real people and very human stories woven into the fabric of Michael Hill.
When is he gonna get serious? I mean, playing that damn violin. At some point, he needs to wake up and realize he's not gonna play for some fancy orchestra. He's not gonna get anywhere dreaming his entire life away.
I'm only doing this as a favor for your mother, you know.
Yes. Thank you, Uncle Arthur.
Oh, those are gonna look lovely. Beautiful.
Good afternoon.
Hello.
I think this is what you're looking for. There we are. Wow. I'm Michael.
I'm Anne, but my friends call me Christine.
Anne. Yes, that makes sense.
We have come together in the presence of God to witness and celebrate the marriage of Michael and Christine.
We could live for 1,000 years. If I hurt you, I would cry from the earth. Like what I have? If we could fly, 'cause we all have wings. [InaudibleI] .
Got no idea.
I was standing.
I'm serious.
You were there. Two worlds collided. They could never, ever tear us apart. I was standing. Two worlds collided. They could never, ever tear us apart. Hello.
Michael. You all right? Hello. Michael Hill Jeweller.
I still get goosebumps whenever I see the film. Before I get into the housekeeping matters, I'd like to welcome my fellow board members who are here virtually at this meeting. Firstly, the company's founder-president, Sir Michael Hill. Gary Smith, Chair of our Audit & Risk Management Committee. Emma Hill, Chair of our People Development & Remuneration Committee, and Jacquie Naylor. I'd also like to welcome Daniel Bracken, our Managing Director and CEO. Today, we're also joined by our Chief Financial Officer and Company Secretary, Andrew Lowe, and Kelly McKenzie, Lead External Audit Partner from Ernst & Young.
Andrew and Kelly are present to address any questions on our financial reports. On to housekeeping. I invite you to take full advantage of the technology that we're using today. The platform allows shareholders and proxies to ask questions and submit votes in real time.
To that end, if you do have any questions or comments on any item of business, then this year you are able to do so in either of two ways, in writing at any time or verbally during the dedicated question time following the presentations. If you wish to ask a verbal question, click on the Request to speak button at the bottom of the broadcast window. The Audio Questions interface will now display. You will be prompted to confirm your name and enter the topic of your question. Submit your request and follow the instructions to allow access to your microphone and connect to the queue.
You can also submit a written question at any time. To ask a written question, select the Messaging tab at the top of the Lumi platform. Type your question in the box towards the top of the page and press the arrow symbol to send. A copy of your submitted questions along with any written responses from our meeting team can be viewed by selecting My Messages. We will address your questions and comments after Daniel and I have presented. If we do not get to your question for whatever reason during the meeting, we will follow up directly with you.
Voting today will be conducted by way of a poll on all items of business. Instructions on how to vote are on the screen. In order to provide you with enough time to vote, I now declare voting open on all items of business. The polling icon will soon appear. Please submit your votes at any time by selecting the direction in which you would like to vote.
The selected option will change color, and I will give you a warning before I move to close the voting. If we experience technical issues that result in a number of shareholders being unable to reasonably participate, I will adjourn the meeting, and it will be reconvened at a later time. If this occurs, we will lodge an ASX and NZX release after the adjournment that sets out the details and the next steps. Today, I'd like to give you an overview of how we view the year that's closed. Following that, Daniel will give more detail on our 2022 results, our current and future strategic focus and current trading update.
Our financial year ending June 26, 2022, has been another remarkable year at Michael Hill as we delivered record results. I'm extremely proud of the commitment, resilience, and creativity of Daniel and the entire team as they continue to drive business performance, strategically transform operations, and progressively elevate the brand to expand our addressable market. All this has been achieved while navigating through the evolving COVID pandemic and complex economic and trading conditions. Our results over the last two years, despite these challenges of our brand, loyalty of our customers, and the agility and determination of our team.
We continue to have confidence in the momentum of the business and our ability to adapt and thrive in the face of ongoing uncertainties. As the business continues its journey to evolve and elevate our brand, the legacy of our creative founders remains extremely relevant as we showcase our artisanal craftsmanship, quality products, and innovative designs.
These core elements, along with Sir Michael Hill and Lady Christine Hill's values, insightful vision, and infectious passion, continue to be infused throughout every facet of the business, and are fundamental to the continued success of Michael Hill. At Michael Hill, we recognize that our business is our people. We continually strive to be a workplace where all team members feel valued, appreciated, and encouraged to be their brilliant selves. Our values, we care, we create outstanding experiences, we are professional, and we are inclusive and diverse, are truly embraced by all areas of the business and are key to attracting and retaining our high-performance team.
Our employee engagement survey is a key source of insights into our cultural well-being and employees' connection with our purpose and ambition at Michael Hill. Impressively, once again, Michael Hill recorded another exceptionally high global engagement score of 83%, which is a credit to the strong leadership that has inspired a collaborative and energetic culture. We're passionate about identifying opportunities to make Michael Hill more sustainable, and I'm proud of the progress we're making. In August, we published our new 2030 environmental, social, and governance vision centered around three key pillars of People, Product, and Planet. We're committed to bringing about change in how we operate in order to drive more sustainable practices that benefit our customers, our planet, and future generations.
We also want to demonstrate and share these practices with the wider jewelry industry to help all participants move toward a more sustainable, innovative, and responsible future. As part of launching our new 2030 ESG vision, we've created a short video which I'll now share with you.
It predicts catastrophic losses of wildlife and habitat, with climate change a huge driver.
Mass drought, mass disease, loss of lands and homes, increased fires, increased tropical storms, mass human displacement, and globally exhausted resources.
Places in Western Canada are being hit pretty hard by climate change.
To take the issue of climate change with the unprecedentedness that it deserves.
At Michael Hill, we are really passionate about making the world a better place. Our sustainability vision is to transform how we source and manufacture our products to have a positive impact on the planet and to improve people's lives. The broader jewelry industry towards a more sustainable, innovative, and responsible future. Because at Michael Hill, we are [Inaudible] that cares.
Reflecting the strength of the balance sheet and strong underlying operating results, the business undertook a detailed capital management review during financial year 2022. One of the outputs was the release of a new dividend distribution policy, which sets a target dividend payout range of 50%-75% of adjusted net profit after tax. We were pleased to declare a final dividend of AUD 0.04 per share, bringing our total dividend for financial year 2022 to AUD 0.075 per share, representing approximately 67% of adjusted annual net profit after tax at the higher end of our target range.
Subject to the company's ongoing trading performance and growth plans, the board's intention is for dividends to remain at the higher end of the target range. Furthermore, we announced the launch of an on-market share buyback of up to 5% of the company's issued capital, funded from existing cash reserves. The buyback commenced on September 19th, 2022, and we are happy with the progress to date. As noted by daily updates on both the ASX and NZX, the company has bought back approximately 6.1 million shares to date, representing approximately 1.5% of issued capital.
In addition to the above, the company still retains sufficient balance sheet strength and cash reserves for deployment into new earnings accretive organic growth initiatives, and to also pursue acquisition opportunities in the jewelry sector which meet our strict strategic and investment criteria. As I reflect on the last financial year and my first full year as chair, I'm honored to be surrounded by a very high caliber, stable board of directors and executive team who are all aligned on the strategic direction for Michael Hill. We look forward to continuing the positive momentum of the business and focusing on growth initiatives that will strengthen our market position and financial performance.
I'd like to close my address by acknowledging and thanking all our shareholders for their ongoing support. I now invite Managing Director and CEO, Daniel Bracken, to address the meeting and discuss the 2022 operational performance, provide an update on the company's strategy and an update on current trading performance. Daniel.
Thank you, Rob. Good morning, and thank you for joining us today. I will now take you through a review of the 2022 financial results and strategic and operational achievements. We will also provide you with some insights into key strategic initiatives for the year ahead and an update on our current trading performance. I'm absolutely delighted by our outstanding results, delivering record sales, gross margin and profit, especially with the considerable disruptions we faced across Australia and New Zealand in the first half. For the year, our revenue was up 7%, gross profit up 10%, and comparable EBIT up 11%. A key highlight was our ability to grow profit faster than sales, underpinned by continued gross margin expansion.
All facets of the business came together to drive this result, but I would particularly like to highlight the evolution of our product, the outstanding performance from our stores, the continued acceleration of our digital channels, and the key role that our loyalty program now plays in driving sales and margin growth. These results demonstrate that we have successfully shifted the emphasis from transformation to growth as we continue to elevate and modernize the Michael Hill brand. I'm particularly proud of our people and the culture that we continue to build at Michael Hill. A high-performance team across all levels with an energy and passion that underpins our growth agenda. This culture is best evidenced by the sensational performance from our Canadian team, delivering huge lifts in productivity, sales and margin.
The group reported comparable EBIT of NZD 62.9 million for the year ending June 26th, 2022, against NZD 56.6 million for the prior year. An increase of NZD 6.3 million year-on-year, driven by a combination of strong sales growth and margin expansion. For the year, the company delivered same-store sales growth of 8%, and gross margin increased by 200 basis points to 64.7% for the group. Since FY19 Q3, the company has achieved 12 quarters of same-store sales growth. These continued strong results demonstrate the success of the company's strategic transformation and the increasing strength of the brand during more than two years of significant global disruption.
During the year, the Michael Hill global store network suffered 10,020 lost store trading days against 10,447 days in the prior year, due to a combination of government-mandated lockdowns and COVID impacting our store teams. Despite these disruptions to the trading conditions and to the global store network, total revenues still grew by 7% to NZD 595 million as the company continues to elevate the brand and transform the customer journey. Prior to the key Christmas trading period, the business opened its Canadian 3PL distribution center in Ontario, creating a cost-efficient flow of inventory from vendors, improving speed of delivery to customers and stores, and ensuring reliable continuity of supply and optimal stock levels.
Supporting the company's ongoing growth agenda, our strategic increase in ATV and elevated product offerings saw the company make considered investments in core inventory, which saw year-end stock holdings of NZD 181.5 million. The company's balance sheet has benefited from strong operating cash flows, delivering a year-end cash position of NZD 95.8 million and nil debt. During the year, the company successfully sold its in-house Canadian Credit Book, delivering cash proceeds of NZD 14.2 million, while also launching a long-term partnership with Flexiti Financial Inc. to provide a new enhanced consumer credit proposition in Canada.
During the year, the company opened one new store in Australia and closed six underperforming stores across the network, resulting in 280 stores at year-end. In terms of key performance insights, it is noted that both revenue and gross margin have lifted significantly following the initial 2020 COVID disrupted trade. Even with approximately the same lost store trading days in FY21 and FY22, comparable EBIT has lifted in FY22 against FY21, and is significantly up on pre-COVID FY19. As shown on the bottom left of the slide, pleasingly, a strong lift in both revenue and EBIT has been underpinned by increased productivity, which is borne out by the lift in average revenue per store.
The company's digital businesses delivered another record year with sales of AUD 42 million, now representing 7.1% of total sales. Much of the company's strong performance can be attributed to the strategic transformation and elevation of the brand, along with an overarching emphasis on sales and margin growth.
The strategic framework underpins the future growth of the business is customer-led and continually evolving, which is best demonstrated by the introduction of a new strategy pillar dedicated to sustainability. The strategy to elevate and modernize the Michael Hill brand underpins the overarching vision for the business. Highly engaging and emotive marketing campaigns with an emphasis on product, quality, and craft are leading the transition away from price and promotion towards emotional long-term customer relationships.
The success of this strategy is best evidenced by the continued expansion of average transaction value up 15% over the last three years. A great example of a brand-led campaign is our recently launched Christmas campaign, which we will play for you now.
Looking from a window above. It's like a story of love. Can you hear me? Came back only yesterday. I'm moving further away. Want you near me. All I needed was the love you gave. All I needed for another day. All I ever knew, only you.
Simultaneously, the Brilliance by Michael Hill loyalty program is proving to be a key lever for growth and customer engagement. The program has increased by more than 600,000 members in the year and provides the business with essential data to drive more frequent and more profitable customer interactions. Pleasingly, 80% of our sales are now made by members of the Brilliance by Michael Hill loyalty program. Both brand and loyalty are key to driving medium to long-term sustainable growth in both sales and margin for the group.
Michael Hill's digital transformation continues to gather pace, delivering another record year in FY22. Strong performances on the company's direct-to-consumer websites were driven by improved customer experience, higher traffic, and increased conversion rates. Digital now represents over 7% of company sales and is our highest margin channel.
The successful deployment of click and collect and Ship from store, now available in all stores globally, enhanced our omni-channel capabilities as the company continues its customer-led digital journey. Bricks and mortar retail is at the core of the Michael Hill business, driving more than 90% of company sales. Elevating the in-store experience across visual presentation and customer engagement have delivered considerable increases in gross margin, conversion rates, and ATV. An unwavering focus on people and performance, operational excellence, and effective labor management underpin our retail productivity, which has seen significant lifts in all markets.
A new senior leadership structure is now firmly in place across all countries and delivering strong results. Additionally, the company has now ramped up its CapEx program across the store network to ensure stores are aligned to the elevated brand journey.
Product evolution is at the center of a customer-led retail strategy and is critical to achieve sales and margin growth, and maintaining our leading market position as the House of Diamonds. Laboratory-grown diamonds are gaining momentum in the business, delivering increased quality and higher margins, while providing customers with a certified, sustainable and climate neutral choice. Elevated quality and craftsmanship are essential to our aspirational brand journey, and this will be delivered through the evolution of our supply chain and further investment in the artisanal capabilities of our Australian manufacturing facility.
During the year, the business commenced a phased deployment of a new comprehensive merchandise planning platform to improve buying processes, margin optimization, product ranging, and inventory management. The company's ongoing focus on product mix continues to be a key enabler for sustained margin expansion.
As the company pivots from transformation to growth, the opportunity to stretch the brand into new territories and services is now a key focus. Through the course of the year, the company has executed its marketplace strategy across all three of its core segments, partnering with THE ICONIC in Australia and New Zealand, Westfield Direct in Australia, and The Bay in Canada. Additionally, the company is now focused on extending its Canadian website to the currently untapped Québec market, and in the near future, launching international shipping to all countries globally from our existing websites.
The business is also well underway in developing a digital ecosystem with a number of new revenue-driving service offerings across bespoke design, sustainability, and financial services. Before moving on to our current trading update, I'd like to share with you our year in review film.
Oh my God. Oh my God. This feeling's just begun. I'm saying things I've never said. Doing things I've never done. Oh my God. Oh my God. When I see you, I should run. But I'm frozen in motion and my head tells me to stop, tells me to stop. Feel things, feel things I feel about us. Try to fight it but it's never enough. My heart is turning. It's more than a crush 'cause I'm frozen in motion and my head tells me to stop. Where my heart goes. Where my heart goes. Oh my God. Oh my God, can't believe what I've become. I'm thinking things I shouldn't think. Singing songs I've never sung. Oh my God. Oh my God. When I see you, I should run. But I'm frozen in motion and my head tells me to stop, tells me to stop.
Feel things I feel about us. Try to fight it but it's never enough. My heart is turning. It's more than a crush 'cause I'm frozen in motion and my head tells me to stop. Where my heart goes. Oh my God. My head and my heart. I can't tell them apart. They're telling me to run. I can't. 'Cause my heart goes. Oh my God. This feeling's just begun. I'm saying things I've never said. Doing things I've never done. Oh my God. When I see you I should run. I'm frozen in motion and my head tells me to stop. Where my heart goes.
Now moving on to our current trading update. Pleasingly, the business has delivered strong early performance for the first 16 weeks of FY23, with group all store sales up 27.5% against FY22. As this period in FY22 was impacted by store closures in Australia and New Zealand, the more meaningful reflection of the FY23 performance is that we have increased sales by 15.8% against the same period in FY21, even with eight less stores. In addition, gross margin has also remained strong in line with FY22 and significantly up on FY21.
These results demonstrate the continuing momentum in the business and an improvement on the results previously announced for the first eight weeks of the financial year. I will now hand back to the chair to conduct the formal business of the meeting.
Thank you, Daniel. Before we move on to the formal business of the meeting, we will now take questions or comments. If you do have any question of the board on our or our external auditors, or wish to make any comments on any item of business, please either submit them in writing or use the audio function now if you haven't already done so. Our moderator for the question and answer session is Emily. Emily, have any written questions or comments been received, or are there any shareholders waiting to speak via the online platform?
Thank you, Chair. We've received a number of written questions via the online platform. We've received a few questions from Mr. Andrew Ott. His first question is in relation to lab-grown diamonds. Do customers worry about synthetic lab-grown diamonds? As in, do they differentiate between real and manufactured diamonds, or are they only interested in the look and feel of what they are after?
Thanks, Andrew. I think I'll pass that question to Daniel, if you'll have some insights to share.
Yeah, it's a great question, Andrew. I think the first thing I'd say is lab-grown diamonds are not synthetic diamonds. They have exactly the same chemical composition as a mined diamond. They, in fact, are grown from a sliver of a mined diamond. This notion of real versus manufactured actually isn't in the vocabulary of laboratory-grown or laboratory-created diamonds. The most important thing that we're seeing is attracting a new, more, I guess, sustainably aware customer to our business. Generally, a younger Gen Z or millennial customer, who is well-researched on this new emerging category within jewelry. They want to have a product that has a clear path of provenance.
They wanna have a product that is climate neutral, and that's why we've elected to partner with the grower that we've partnered with, and it actually forms part of our key sustainability products, the sustainability strategy. It's a terrific business for us. We're very proud of the relationship that we've built with the grower, and we absolutely see it as a core part of our offering, and very much what we're referring to as the 5th C, which is choice. It's really at the customer's choice if they wanna go mined or laboratory grown, and we're seeing different customers choosing those two different paths.
Thanks, Daniel. Emily, further questions?
Yes, Chair. We have another question from Mr. Andrew Ott, who asks, staff remuneration and incentive staff scheme. How do online sales impact on the remuneration of sales staff? Do team members have an ongoing relationship with customers across the omni-channel platforms, or are they only remunerated in line with in-store sales they complete?
Thanks, Andrew. This is certainly a challenging area for many businesses as they look to integrate both online and bricks and mortar sales. Again, I'll pass to Daniel, who can talk about how we both manage and remunerate performance in this regard.
Thanks, Rob. Getting close to 50% of our digital sales are now actually fulfilled through our store network. I referenced in my update, click and collect and ship from store. There's also a virtual selling capability, virtual appointment process. There are a number of omni-channel initiatives that actually blend physical and digital deliberately because of the nature of the category and the price points that we sell at. Those digital sales that are routed back through the stores, as I say, half our digital sales follow that path now, actually go into the store's performance, and the teams in the stores are remunerated or rewarded for those omni-channel sales that go through their store and that their team are involved with.
It was a key decision we made as we started the omni-channel journey to blend the two channels and ensure that the people involved in either the selling or the fulfillment of that sale were incentivized appropriately.
Thanks, Daniel. Emily, back to you.
Thank you, Chair. Mr. Andrew Ott asks, Are you able to provide any color on what organic growth and acquisition opportunities might look like?
Yes. Thank you again, Andrew. Talking firstly to organic growth opportunities. As you would have seen through Daniel's presentation, we still see significant opportunity within our existing markets as we expand into digital, as we look to elevate the brand and expand our addressable market. As you would have seen from the fabulous performance we're getting from the Brilliance by Michael Hill loyalty scheme, where we're seeing our average transaction value increase, which clearly then leads to, through the loyalty as well, to increase lifetime value of our customers. There's a lot going on in the organic growth space.
Daniel also referenced looking to move into Quebec with our online offering as well, and obviously going to a multi-language capability there. In terms of acquisition, our focus is very much looking at opportunities within our existing geographic markets. There are opportunities that are interesting to us that would be complementary to our existing position in the market. We won't be making any further comment on that at this stage, but it's an area of active interest for the business. Daniel, is there anything you wanted to add?
I think on the organic piece, also referencing international shipping to arguably the world. If you were in London and you went on our website today, you could get all the way through to the checkout, and then you'd get a horrible message saying, Sorry, we don't ship to the United Kingdom. Within a matter of weeks, we will have that capability to ship, not to every country in the world. There are obviously certain countries that we wouldn't want to be dealing with, and I think you can all imagine which ones those would be. We would be looking to be able to distribute to the majority of the world, and we'll be applying some digital marketing to test out those markets.
I think that's what I'd add on organic, Rob. On acquisition, I think we have put some guardrails, Andrew, around our thinking here. As Rob outlined, existing markets, we wanna stay within fine jewelry, so we're not drifting out of the fine jewelry category. I think I would say as we elevate the Michael Hill brand, it does create opportunities, above us, but also below us in the market for us to consider, as Rob said, complementary businesses. They'd be a couple of things like that.
Great. Thanks, Daniel. Emily, back to you.
Yeah, we have another question from Mr. Andrew Ott in relation to the New Zealand ram raids. What can Michael Hill do about this, and does this happen in Australia and Canada?
Thanks, Andrew. I mean, firstly I'd say this issue is a very distressing issue for the organization. I know we all get deeply affected by the level of frequency we've seen of these thefts in predominantly the New Zealand market. I'll talk to that in a moment. You know, myself and Daniel and our leadership team have spent time in store. I know Sir Michael you know this is an area that he worries about a lot. He's visited stores that have been affected. We are spending a lot of board and management energy on this issue. We've been investing in significantly upweighting our defenses and the deterrence that we're implementing to protect our staff, protect customers and obviously protect our premises and our stock.
We've established a very good relationship with New Zealand Police. We meet regularly with Deputy CEO of New Zealand Police and his team, deputy commissioner, and we are reassured by the level of resource and focus they have on this issue. This, the underlying drivers of this issue are deeply embedded in New Zealand societal issues. We expect we're gonna see issues for some time. I've got to acknowledge and give credit to our people. I mean, their resilience through the onslaught of these incidents has been absolutely phenomenal. Also the businesses that support Michael Hill to get our branches back up and operating as quickly as they can once we've experienced these incidents.
To your question about what we are seeing elsewhere in the world, we're not seeing anywhere near the level of incidents of store break-ins. In fact, in Australia and Canada, typically we're seeing security incidents in line with previous years. Nothing substantially more significant, so New Zealand is an outlier. I mean, I think globally we are seeing an elevation of community security and law and order issues in all countries, but they tend to manifest themselves in different ways from territory to territory. So I can reassure you know, it's an issue that has a great focus for us.
Our primary focus is how we ensure the protection of our employees as our number one priority, but obviously also the impact it has on the commercial side of the business as well. Daniel, I know this is something you're very passionate about also, so I'm sure you've got a few words to add.
Yeah, it's, you know, certainly not a situation any of us relished finding ourselves in, and we are fully committed to investing and protecting our people, our customers, our stores. We have ramped up security across certainly the North Island. We have ramped up a rollout of measures to support safety and security and partnering with the police on that. You know, we have created and been involved with a very large focus media attention on this topic deliberately so. We have actually temporarily closed one of our stores in arguably one of the wealthiest suburbs in New Zealand, which in itself is a statement around the societal issues that Rob touched on earlier. We are fully committed to getting through this. We are seeing every day improvements.
We are seeing engagement from the police continually heighten, and we will get through this, and I have no doubt about it. We will be a stronger and a better business for it. I would echo, Rob, your comments around the resilience of our people. It's quite amazing the journey they've all gone on from the beginning of this onslaught, where there was a lot of fear and trepidation to now entrenched determination from our team to get our stores open again.
They're coming in early to clean up stores. They're coming in with determination that they're not gonna let these thugs win. It's quite remarkable. It's something that you know, the whole leadership team at Michael Hill is actually blown away by our people on the ground. It's quite incredible. That's why we're so passionate about supporting and protecting them and investing in doing those things, Rob.
Great. Thanks, Daniel. Emily, back to you.
We have a final comment from Mr. Andrew Ott, who says, Congratulations. I'd like to congratulate and thank the MHJ staff, management, and directors on the continuing wonderful evolution and performance of the business. Thank you for all your ongoing work. Regards, Andrew Ott.
Thanks, Andrew.
Very nice.
We also have a question from Mrs. Hai Young Zee, who says, In the past few years, the focus of MHJ has been mainly on improving and optimizing your existing store network output. The management have done a wonderful job there. How would you see MHJ in the next five years, and do you have any store opening plans in Canada?
Thank you. I think we've touched on a number of the points you raised here, Hai . We certainly see a strong focus on expanding our addressable market, both through digital channels and through how we're elevating the brand. As Daniel mentioned, we're creating the capability to ship product anywhere in the world. Ultimately, digitally, our geographically addressable market continues to grow in real terms. We've touched on the opportunity with acquisition. We have touched on the opportunity to expand our presence into Québec through our digital offering. We don't currently have any stores in Québec. There's potential opportunities certainly in the Québec market as we look to the future. Daniel, was there anything you wanted to build on there?
I think there's three streams to answer this. As Rob said, we've answered many of these points already, but just to reiterate, there is still significant organic growth in this business driven through loyalty, driven through the metrics that matter, the team that we're employing and deploying, and the elevation of our brand. We absolutely are committed to seeing more organic growth from our core existing business. Digital growth, both organically in our existing channels. New marketplaces, we've only just started, further international marketplaces. Global shipping that I touched on earlier.
Now dual language capability that we're testing with Québécois for the French Canadian territory. Rob touched on Quebec. It is 25%-30% of Canadian retail spend. We do not operate there today. Through the Hudson's Bay marketplace collaboration, we are now starting to actually sell product to Québec customers. We will follow that with a Michael Hill dual language site to talk directly to those Québec customers. If that has the right results in it would be logical as an omni-channel business, which is heavily focused on physical retail, to consider stores or some form of physical entry into that market.
Specifically on Canada, there are four or five tier one centers that we're not in today. We are about to open one in Southgate in Edmonton, which is one of those top-tier centers that we're not in, but there are another five or six that we're not in, and we're absolutely exploring the opportunities to be in those centers, and particularly as we elevate the brand. There is plenty of growth to come both in Canada and across the business over the coming years.
Fantastic. Thanks, Daniel. Emily, back to you.
Thank you, Chair. I can confirm that there are no further questions and no shareholders waiting in the audio queue.
Great. Thanks, Emily. We'll now move to the formal items of business of the meeting as set out in the notice of meeting. The notice of meeting, including the explanatory memorandum, was sent to all shareholders. I propose that the notice of meeting be taken as read. You'll find a copy of the notice online on the Investor Centre website. Voting on all resolutions will remain open until all items of business have been put to the meeting. The first item of business is to consider the 2022 audited financial statements, directors' report and auditors' report.
These reports are contained in the company's 2022 annual report, which has been released and distributed to shareholders prior to the meeting. You can also find a copy of the annual report online on the Investor Centre website. There is no resolution on this item. I now confirm the 2022 audited financial statements, directors' report and auditors' report are now received. We now move to the next item of business. It is a non-binding resolution to adopt the 2022 remuneration report. Please note the vote on this resolution is advisory only.
Voting exclusions apply to this resolution as set out in the notice of meeting. Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution. The next item of business is the re-election to the board of a board-endorsed director Gary Smith. Apologies. Gary is retiring from the board in accordance with the ASX Listing Rules and the company's constitution, and being eligible, offers himself for re-election as a director of the company.
Gary's experience and details are set out in the explanatory memorandum which accompany the notice of meeting. The company has successfully navigated the worst pandemic in a century and the most disruptive period the business has faced since listing. The business has emerged with a strong balance sheet, exceptional operating performance and a clear strategic direction, together with a number of key growth initiatives in the pipeline. Gary is a future-focused director and has been a strong advocate at the board table for the changes that have led to this improved brand position, customer engagement and outstanding financial performance.
Gary is integral to the strategic momentum, and we have determined that stability and continuity at the board level at this time justifies Gary's re-election. Each of the directors, with Gary abstaining, recommends that shareholders vote in favor of Gary's re-election.
Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution. We will now move to the proposed approval of the company's incentive plan, as defined in the explanatory notes accompanying the notice of meeting, and the issue of securities under the incentive plan, as an exception to ASX Listing Rule 7.1. The company's incentive plan was approved by the board on the August 18th, 2016, and approved by shareholders at the company's AGM on the October 31st, 2016 and October 24th, 2019. A summary of the terms of the incentive plan and other required information are set out in the explanatory memorandum which accompanied the notice of meeting.
If approval is obtained, it will be effective for a period of three years from the date the resolution is passed. Each of the directors, with Daniel Bracken abstaining, recommends that shareholders vote in favor of approving the company's incentive plan as defined in the explanatory notes accompanying the notice of meeting, and the issue of securities under the incentive plan as an exception to ASX Listing Rule 7.1. Direct and proxy votes received are as detailed on the slide. Open proxies appointing the chair shall be voted for the resolution.
We will now move on to the proposed grant of share rights to our Managing Director and CEO, Daniel Bracken under the company's Long Term Incentive Plan. Full details of the proposed grant of share rights under the Long Term Incentive Plan are set out in the explanatory memorandum which accompanied the notice of meeting.
The purpose of this resolution is to seek your approval for Daniel to acquire share rights under Michael Hill's Long Term Incentive Plan for FY 23, and which form part of his total remuneration package. Voting exclusions apply to this resolution as set out in the notice of meeting. The board, other than Daniel Bracken, recommends that shareholders vote for resolution 4. Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution.
We now move on to the proposed grant of share rights to our Managing Director and CEO, Daniel Bracken, under the company's Short-Term Incentive Plan. Full details of the proposed grant of share rights under the Short-Term Incentive Plan are set out in the explanatory memorandum which accompany the notice of meeting.
The purpose of this resolution is to seek your approval for Daniel to acquire share rights under Michael Hill's Short-Term Incentive Plan for financial year 2022, and which form part of his total remuneration package. Voting exclusions apply to this resolution as set out in the notice of meeting. The board, other than Daniel Bracken, recommends that shareholders vote for resolution 5. Direct and proxy votes received in respect of this resolution are shown on the presentation slide on your screen. Open proxies appointing the chair shall be voted for the resolution. I'd like to remind shareholders who have not yet cast their votes on this and all other resolutions to do so now. Voting will close in approximately 30 seconds.
Now that the formal items of business have been addressed, I would like to thank you on behalf of the board of management for attending Michael Hill's 2022 AGM, and I look forward to your continuing support in the coming year. The results of this meeting will be announced on the ASX and NZX later today and will be displayed on the Investor Centre website. This concludes the official business of the meeting, and voting is now closed. I now declare the 2022 AGM closed. Thank you and may-