All good. Thank you. I'm Glen Richards, Chairman of the Board of Directors for PeopleIn Ltd. Ladies and gentlemen, it's now just past 11:00 A.M. A quorum is present, and I therefore have the pleasure of declaring the Annual General Meeting open. I welcome each of our shareholders who are present in the room, and I also welcome our shareholders who have dialed in and are listening to the proceedings of the AGM via the live audio webcast. Before I proceed with the business of the meeting, I'd like to introduce my fellow directors. We have Thomas Reardon, Executive Director, Vu Tran, non-exec; Elizabeth Mannes and Tony Peake, both non-exec directors as well.
Also present today is Ross Thompson, our Chief Executive Officer. Adam Leake, our Chief Financial Officer. Jane Prior, Company Secretary. Luisa Di Bella in the room. Our legal advisor from Talbot Sayer. Nigel Batters, Nigel, how are you? From the company's auditors BDO. We also have representatives of Link Market Services, our share registry. Shareholders present in person will be given the opportunity to comment on and ask questions. I will hold comments and questions until the item of business has been introduced, and shareholders have been invited then to do so. In order to ensure that all shareholders have a reasonable opportunity to comment and ask questions, I request that shareholders do not ask more than two questions at a time. Before our CEO, Ross Thompson, provides an update on the company's activities, I'd like to make a few comments. This year, we know, has been a pretty tough year.
We faced significant economic headwinds that required fairly urgent action or swift action and a clear focus of this company on our sales. While our financial performance reflects these challenges, we have continued to outperform our industry peers, and we were set up well to grow when economic conditions improve. In financial year 24, Peoplein generated AUD 1.17 billion in revenue, reflecting a slight 1% decline from the previous year. Our normalized EBITDA was AUD 37 million, down 39.5%, driven by lower permanent recruitment revenue and a shift towards lower margin but operationally critical sectors like food services. Look, while these figures reflect the impact of a tough economic environment, they also underscore our ability to adapt and stabilize margins over the course of the year. Key to our performance has been our commitment to operational efficiency.
We achieved a AUD 7.8 million reduction in costs, including a 10% reduction in headcount as a part of our strategy to streamline operations. Our strong cash conversion in the second half of the financial year 2024 at 105% of EBITDA reinforced our balance sheet with a net debt to last 12 months EBITDA ratio of 2.15 times. We continue to have substantial covenant headroom at the close of the financial year, and Ross will talk a little bit more about it in his report, where we're standing now. In light of current economic conditions, we continue to position Peoplein ready for organic and inorganic growth opportunities, and we made the prudent decision to pause our full year dividend to preserve capital and ensure agility. FY 2024 marked several significant milestones that underscore our commitment to sustainable growth, responsible government, and creating shared value.
We strengthened our board with the appointment of Elizabeth Mannes, who adds more than 30 years of international expertise in business strategy, customer and operational excellence, and risk management, as well as Tony Peake, OAM, who brings more than 25 years of diverse board-level experience across several sectors, including retail, consumer, education, and government. An important achievement this year was the approval of our inaugural Reflect Reconciliation Action Plan, RAP. This RAP serves as a cornerstone of our broader strategy to foster inclusion, respect, and reconciliation within our company and the communities we serve. It reflects our ongoing dedication to building a business that not only delivers financial returns but also contributes positively to society. In addition to the RAP, we've strategically expanded our involvement in the Pacific Australia Labor Mobility Scheme, particularly in the aged care sector.
This expansion supports a critical area of need within Australia and aligns with our mission to provide innovative and impactful workforce solutions. Our leadership in this space, especially through the PALM scheme, highlights our ability to adapt in growing sectors with long-term demand. As we move forward, our goal remains clear: to be the largest and most efficient workforce solution business in Australia. We continue to payroll over 15,000 candidates every week, and our strategic focus on defensive employment sectors has positioned us to weather economic fluctuations and return to a strong growth footing when the market turns. Our long-term vision is centered on innovation, scalability, and responsiveness to needs in the marketplace. We are uniquely structured to deliver deeply specialized talent solutions across a broad range of sectors, from healthcare and community care to food services and critical infrastructure.
This diversity not only mitigates risk but also ensures we are well positioned to capture growth opportunities as they arise. I'd like to thank Ross and the Peoplein leadership team for their continuous dedication to upholding Peoplein's position as a front runner in our industry. I'm also pleased to announce the appointment of Ross, Managing Director of the company, and confirm he now takes on the full responsibilities and accountabilities as Director of the company. Thank you to my fellow directors for their guidance and support over the past year. The board and the leadership team are highly focused on delivering value for our stakeholders. I wish to thank our shareholders. I wish to thank our bank, Commonwealth Bank, for their support, and really importantly, our 4,000 plus customers and all the employees of Peoplein for their continuous support.
As a board and leadership team, we continue to robustly debate the best use of our company resources, time and money to grow shareholder value. I'd like now to hand over to Ross and give you a more recent update on the company. Thank you, Ross.
Thanks, Glen. As Glen said, FY24 was a challenging year requiring swift action and focused execution to navigate the difficult economic landscape. Despite these challenges, Peoplein demonstrated resilience, maintaining stable revenue and making strategic adjustments to ensure we remain well positioned for future growth. This has included sharpening our focus on sales, operational efficiencies, and a client-centric approach to service delivery. Operationally, we focused on key sectors such as food services, infrastructure, construction, and public health, where demand remained strong despite the challenging conditions. Throughout the year, we successfully improved on our on-hire margins by 8%, thanks to cost management and sector diversification initiatives. This progress reflects the effectiveness of our strategies in aligning operations with market demands. A significant operational achievement has been the progress of our systems transformation initiative, Program Unite.
This program, set to be completed in the coming months, is actively delivering benefits in operational efficiencies, enhanced AI functionality, and improved data analytics. These advancements have strengthened our ability to win more work. We expect tough economic conditions to continue for at least the next six months, especially while interest rates remain high and business confidence continues to be well below the long-term average. However, the quality of our team, our sector diversity, and strong cash position will enable us to trade through this challenging economic climate and ensure that as business confidence improves, we return to a strong organic growth footing. We have an experienced commercial leadership team that is focused on sales, cash collection, ensuring the business is running as efficiently as possible and is well positioned to provide long-term shareholder value.
In Q1, our earnings continued to be stable as we delivered AUD 9.2 million normalized EBITDA result. Cash conversion was strong, and we continue to pay down our debt. Our net debt to normalized EBITDA ratio has reduced from 2.1 at the end of financial year 2024 to 1.7 at the end of Q1, which is a good result. We expect our net debt to reduce further by the end of FY 2025, which will enable us to get back on an accelerated growth footing and continue to seek all opportunities. The staffing industry in Australia is poised for consolidation, driven by increased regulation and long-term skill shortages. Peoplein is well positioned to lead in this evolving landscape, particularly given our current scale and strong presence in sectors with sustained demand such as public health, community care, early learning, and food services.
Our goal for the next three years is to be the largest and most efficient staffing company in Australia. We'll achieve this through key strategic initiatives, including delivering tier one complete workforce solutions to major facilities, including hospitals. We'll continue to cross-sell across our 4,000 plus clients, and we'll significantly increase our staffing services to the defense industry. As a large, sovereign, veteran-led business, we're well positioned to support the sector as the Australian and U.S. governments increase their spending in Australia over the coming years. We'll also continue to diversify and grow our involvement in the Pacific Australia Labor Mobility Scheme and build on our recent win with the 2032 Olympic Delivery Authority. Very exciting. By driving cost efficiencies through scale and technology, we'll continue to enhance profitability, and we're excited about the long-term growth opportunities and value for staff and shareholders.
I'd like to extend my gratitude to the board and our management team for their hard work and leadership throughout the year. Their contributions have been invaluable as we navigate current economic challenges and continue to evolve Peoplein as a leader in the staffing industry. Thank you to all our 780 staff and our contractor workforce for their continued dedication and hard work for our clients. Thanks also to our clients for their support. Without you, we don't have a business. Finally, to our shareholders, thank you for your continued trust and support. We are fully committed to delivering sustainable long-term value. We look forward to updating you on our performance and operations in February upon the release of our H1 results. Thank you very much.
Thanks, Ross. We now get down to our more formal matters for consideration for the meeting today.
The notice of meeting was dated the 29th of October, 2024. Circulated to all shareholders, and I'll take the notice of meeting as read. I'll now briefly outline the meeting and voting procedures for today's meeting. When you registered your attendance this morning, you would have been issued with an attendance card. Only those with a yellow card can speak and vote at the meeting. Those with a green card can speak at the meeting. I'll put each resolution to the meeting for questions or comments and then put the resolution poll, and I appoint BNR from our registry, Link Market Services, as our returning officer. Please complete your voting card when I ask you. Please note you'll have the opportunity to ask questions or make comments in regard to the resolutions as we address each one.
I confirm that, as described in the notice of meeting, I intend to vote all undirected proxies I hold as chairman in favor of each resolution. Following the close of the meeting, the results will be released on the ASX as soon as possible. I'll now move to the business of the meeting. The 2024 annual financial report contains the financial report, the directors' report, and the independent auditor's report. A copy of the annual financial report was made available on the company's website, the ASX platform, and was sent to those shareholders who requested it. This item of business is the receipt and consideration of the reports of Peoplein Ltd. There is no voting on this item of business. Please note that Nigel Batters from BDO, who oversaw the conduct of the audit, is present.
Any shareholder may direct questions to Nigel, which are relevant to the conduct of the audit, the preparation and the content of the independent audit report, the accounting policies adopted by the company in relation to the preparation of the financial statements, and the independence of the auditors in relation to the conduct of the audit. This time, I'd like to take any general questions or comments about the report or any questions or comments for the auditors. We didn't receive any written. Are there anyone on the floor? You can state your name and.
Peter Storer, retail shareholder, self-employed retiree.
Thanks, Peter.
My first question is regarding dividends. Although I bought Peoplein partly for yield, I do applaud the bravery of the board to not declare a final dividend in 2024. After such a difficult year to preserve capital, does the board have a future dividend policy or will each dividend budget have a quality?
I think the best way to think about it is still back to strategic allocation of capital, Peter. And so our next period to think about this, obviously, is February, and we will continue to debate the smartest and best move of where we apply our capital. So at this point of time, it's suspended, but we're open. And as you can see, the balance sheet is improving pretty quickly.
Second question. Ross has said before that when economic conditions return, things will happen quickly. Growth will happen quickly. He sort of hinted at today, but it's probably more strong than last year.
Yeah.
I know the recent analyst report by Wilsons has said, "I've ignored extra capital because they don't think the company's preferred measure of normalized," which I don't like, but I've got a living voice. Normalized measures. Based on that, the FY27, two years out, the consensus forecast between those two is for AUD 19 million for normalized income and AUD 0.1825 per share of normalized EPS. Now, both of those are down 34% from last year. This is two years out, not this year. My question is, would the FY25 normalized net profit and EPS come in at around 34% below FY20?
Of course, we won't be happy. The reality is we're trading in really interesting times. Through COVID, we've come through financial stress. The government can paint it any way they like, but households are in recession, and a lot of businesses, private sector, is suffering, and we do a lot of most of our accounts at this point are with private sector. Government contracts are certainly more interesting, and we're going after them. Public sector spending is way in front of any decent taxpayer would like, but the reality is I'm not sure that we're going to see these calm or these tough economic times coming back and changing too soon. So we won't be happy, but it won't surprise us if we are still down on FY23. And I will say FY23 was an exceptional year and built on and built on.
So we thought we were ahead of the curve in FY23. We think we're behind the curve now. Somewhere back in normal range. What that looks like, we're not going to give guidance today. And where's Adam? Adam, do you want any further comment on that as CFO? Definitely not. And we don't have a crystal ball, but we are hoping, obviously, that we're starting to crawl out of these tough economic times, but we do know it's tough. Any other questions or comments on the auditor's report or the financial reports? Otherwise, we'll move on to the next item of business, which is the re-election of Elizabeth Mannes as a director of the company. Elizabeth's details are set out in the notice of meeting and in the annual report. I will not repeat those details. Elizabeth is here and is able to answer any questions you might have.
Are there any questions for me or for Elizabeth? No questions. I advise that the proxy votes that are eligible to be voted on this resolution are as displayed on the screen, so we had 48,708,827 for. Against was 2,886,115, with 35,708 abstained and 168,565 at proxy discretion. We will pause, so please cast your vote for resolution 1A if you've not already done so, and I will move on to the next item of business, and the next item of business is the re-election of Tony Peake as a director of the company. Tony's details are set out in the notice of meeting and in the annual report. I will not repeat those details. Tony is here and is able to answer any questions that you might have. Are there any questions for Tony or for the company?
I advise that the proxy votes that are eligible to be voted on this resolution are as displayed on the screen. So 48,718,678 for, 2,886,264 against, 25,706 abstained, and 168,565 as proxy discretion. If you can please cast your votes for resolution 1B if you've not already done so, and I'll move on to the next item of business. The third item of business is a non-binding resolution to adopt the company's remuneration report. The remuneration report is contained within the 2024 director's report in the annual report, which is available on the company's website. Further details about this resolution are also contained in the explanatory memorandum that accompanied the notice of meeting. This vote is advisory only and is not binding to the company. Are there any questions on the remuneration report resolution?
I advise that the proxy votes that are eligible to be voted on this resolution are as displayed on the screen. So we had 40,100,852 votes for, 4,506,179 votes against, 32,785 abstained, and 155,521 as proxy discretion. Please cast your vote for resolution 2 if you've not already done so. Fourth item of business is the approval of the company's performance rights plans pursuant to ASX Listing Rule 7.2, Exception 13B. The board considers the performance rights plan to be a key part of the company's remuneration strategy going forward and to assist in the motivation, retention, and reward of eligible participants and to align the interests of employees and shareholders. Further details about this resolution are contained in the explanatory memorandum that accompanied the notice of meeting, and a summary of the key terms of the PRP rules is set out in the annexure to the explanatory memorandum.
Are there any questions? So I advise that the proxy. Thanks, Peter. No, I wasn't.
I'm looking at the annexure. I don't know the comments on corporate governance. This one worried me a bit. There's two aspects in here that worry me a little. Eligibility. Any full-time, part-time, or casual employee of the company or a related body corporate, director of a company or related body corporate, consultant or contractor of the company, or any other person that the board determines to be eligible for their approved nominated party may go into PRP. The qualification for the nominated party is immediate family members and so on. I won't read the rest of that.
Yep, yep.
The second one is the vesting conditions. The PRP enables the board to determine the applicable vesting conditions and set a timetable for the rights in the relevant offer document. The board has the discretion to set the performance hurdles or to link vesting solely to a defined service period. The board may waive all or some of these vesting conditions in respect of some of these rights subject to applicable laws. In summary, as I read that, the board can offer rights to anything they like, all their family members, or other performance hurdles the board determines, but the board may waive those conditions. Sorry, Luisa, but apart from the fact that this is written by lawyers, why is this so opaque? To me, it doesn't seem up to snuff for modern corporate governance. It just doesn't seem transparent.
I'll get our head of Remuneration Committee to respond, but it gives us full opportunity that if there's someone passing away in the family or as an employee, we still can grant, but I'll throw it to Luisa.
No, thank you for your question, Peter. I think with all of these things, board discretion is often across multiple aspects because the business is evolving, the business is growing. We've obviously had many acquisitions in the past. So I think there is freedom within that, but I think underneath that, there's a lot of conscious thought as to what we do around incentivizing management, what's the appropriate thing to do, how do we balance that with the expectation of shareholders. And I think that's something that we're constantly looking at and we're looking at again in terms of the REM report next year, how do we give more transparency around certain elements of those aspects because they exist. We just need to make them more visible to people. So a lot of activity around that on the remuneration front at the moment.
Certainly, it can give you assurances that the board is very diligent and gives a lot of thought to their discretionary powers under this plan.
Just to get to some of those things, what sort of incentives are they? We know they're kept together.
Yeah. Yeah, next year's catch-up with KPIs and everything else that's going to go in. But good question and fair question. So let's have a look at the proxy votes. They're eligible to be voted on this resolution and they are displayed on the screen. So we had 44,088,369 in favor, 502,410 against, 22,985 abstained, and 181,573 proxy votes. So please cast your votes for resolution 3 if you have not already done so. Are there any final questions before I close the meeting? And we have Beyon in. Come and pick these up. Any general questions of any nature? Thank you. So could you please hand your yellow voting cards in? And any other yellow cards still hanging? It's all good. Thank you. So I now declare the poll closed.
Poll results will be released to the market through the company announcements platform as soon as possible, which is expected to be later this afternoon. Ladies and gentlemen, this concludes the business of the meeting. On behalf of the board, I'd like to thank you for your ongoing support. Representative of the company will be hanging in the room and open for any discussion you may want as directors and managers in the company, but I now declare the meeting closed and thank you for your attendance and participation in the meeting.