Is it 10 o'clock, is it?
Yeah.
All right. Well, good morning, ladies and gentlemen. My apologies if some of you had difficulty finding the B1, because I did. I walked up two flights of stairs and down again, and I thought I might have to go up again, but I decided to go and ask someone. But I hope everyone that made the travels in this morning are actually here and not still trying to find out where we are downstairs. But on behalf of the Steadfast Group Board, I'm pleased to welcome you to the Steadfast 2023 Hybrid Annual General Meeting. As I am in Sydney, I would like to acknowledge the Gadigal people of the Eora Nation and pay my respects to their elders, past, present, and emerging.
If we experience any technical issues today, a short recess or an adjournment may be required, depending on the number of shareholders being affected. If this occurs, I will advise you accordingly. As a quorum is present, I declare the meeting open. Next to me is the Managing Director, CEO, Robert Kelly AM. All of your non-executive directors are present today: Vicki Allen, Joan Cleary, Gai McGrath, Greg Rynenberg, and David Liddy. But David Liddy AM, is on the phone. He's not well at all and didn't want to make anyone feel ill in a couple of days' time. So, David's on the phone, and obviously, we all wish him well. Our Company Secretary, Duncan Ramsay, is also unwell today with the same course of complaint, I think. So we have Christopher Sargent acting as our Company Secretary.
Also attending the meeting is David Kells, Relationship Partner of KPMG, our auditor for the FY 2023 year. David is available to answer any questions you may have about the conduct of the audit of Steadfast's financial statements and the auditor's opinion. The meeting will proceed as follows: I will provide an opening address, and then we'll ask Robert Kelly to speak about the company's performance, strategy, and outlook. I will then deal with the items of business in the order in which they appear in the AGM notice of meeting. Shareholders will be given the opportunity to ask questions in relation to items of business being considered at this meeting. This is the Chairman's address.
Ladies and gentlemen, on behalf of my fellow board directors, I'm again pleased to report another year of outstanding earnings by Steadfast Group, with our underlying FY 2023 net profit after tax at the top end of our upgraded guidance range, which we advised to the market in February 2023. In summary, in the year ended June 30 2023, the group produced a 26.5% increase in underlying earnings before interest, tax, and amortization, which is called EBITDA, and the EBITDA was AUD 243.7 million. And we also announced a 22.5% increase in underlying net profit after tax of AUD 207 million. Pleasingly, we report an increase of 14.6% in underlying earnings per share to AUD 0.2015.
Statutory net profit, which was after non-trading losses, mainly due to actual earn-out payments for the businesses which we acquired, but which performed better than expected. So in other words, we set aside some money for earn-out payments to the sellers, and they've exceeded our expectations. So the statutory net profit was AUD 89.2 million, compared with AUD 171.6 million for FY 2022. The board declared and paid on September 21st 2023, a fully franked final dividend of AUD 0.09 per share. Total dividends for FY 2023 were AUD 0.15 per share, fully franked, up 15.4% on FY 2022.
The group's performance has continued since listing in 2013, and shareholders have experienced consistent growth in the fully franked dividends and the value of their shares. Our total shareholders' return was 22.5% for FY 2023, and since listing, it has been 497.7% as at June 30 2023. The performance has been largely achieved from the board and management's continued focus on opportunities to deliver short and long-term growth in revenue and profit within our risk appetite. We remain prudent with our capital management as we assess potential acquisition opportunities against our disciplined criteria. In FY 2023, we made a number of earnings accretive investments for a total outlay of AUD 574 million, with the largest acquisition being Insurance Brands Australia.
The current active acquisition pipeline remains strong. In FY 2024, we anticipate completing AUD 280 million of this pipeline, including the recent acquisition of ISU Group on the October 6th 2023, which was a low-risk approach to the U.S. market. These acquisitions are to be funded by debt and free cash flow. We have already made good progress towards this target since last year. That's the AUD 280 million. At June 30 2023, our group gearing ratio was 19.0%, excluding premium funding, which, as you know, is secured against receivables, which is well within the board mandated group maximum of 30%. As of today, our group gearing ratio is 25.6%. We consider a low level of gearing is prudent, given rising interest rates, inflation, and current uncertainties around the world.
Steadfast currently has unutilized facilities of AUD 189 million, plus our free cash flow for future expansion. Steadfast Group continues to adhere to the corporate governance principles as set out by the ASX Corporate Governance Council. I note another year in which there were no material departures from these principles. Our corporate governance statement outlines how these principles are applied, and both the statement and the policies that support these principles are available on our website. Steadfast recognizes that climate change continues to be a global risk, and that action is required to reduce emissions over time as adequate solutions are introduced. In recognition of the issues arising from climate change, in December 2022, Steadfast published the first phase of its Carbon Neutral Transition Plan. This plan is also available on our website.
The board regularly reviews the remuneration of our senior executives. Our remuneration policy takes into account individual performance, market condition, retention of our quality team, and encouragement to continue to outperform without increasing the risk profile of the group. Our short-term and long-term incentives are aligned to the growth in shareholder value. Independent advice is obtained on a regular basis. The strong growth in profit, earnings per share, and return on capital above the budget we set for management, meant that a large percentage of our short-term and long-term incentives were earned by our senior management team last year.
On behalf of the board, I would like to thank our Managing Director and CEO, Robert Kelly AM, all of the Steadfast team, for their significant contribution to delivering consistent, outstanding results for our shareholders, and the high quality support they provide to our network brokers and other stakeholders. Further, our continuing strong performance would not have been possible without the outstanding contributions from our Steadfast network brokers, Steadfast underwriting agencies, our complementary businesses, and our ever-expanding client base. During the year, Anne O'Driscoll retired as a director after 10 years at Steadfast as part of our succession planning. Anne has assisted with Steadfast's transition from a broker network to listing on the ASX in August 2013.
Anne was appointed as a director and chair of the Audit and Risk Committee of Steadfast Group on July 1st 2013. On behalf of my fellow directors, I would like to thank Anne for her outstanding contribution to the considerable growth in shareholder value since listing. I would also like to extend my gratitude to my fellow board directors, who continue to be focused on driving increased shareholder value, supporting the Steadfast team, and improving our already strong governance. Finally, the board appreciates the enormous support it receives from its shareholders, particularly in providing additional capital to make acquisitions, to grow revenue, and to grow profits. The group's outlook for FY 2024 will be covered by Robert in a few moments, but it is for further growth in profit and earnings per share.
I will now hand over to Robert, whose outstanding vision and leadership has been instrumental in getting Steadfast from where it was in 1996 to where it is today. Robert, over to you.
Thanks, Frank, for those kind words, and welcome everybody on my behalf as well. It's our 10th anniversary of being an ASX-listed company. Well, August 2013 was quite a daunting time for me, with my first venture into the public arena. And I had lots of advice at that particular time from our merchant bankers and from our plethora of lawyers that supported getting it off the ground. And I was asked, could I craft myself in a manner that would suit the public arena? In other words, take what I was and remake myself into something that would be properly appropriate for the public arena.
And, yeah, it was probably a time when a lot of people, many people took a risk on our initial public offering, with the business model. And our strategy, it was new to the investment community and the markets and in fact, it was unproven, okay? It was a steep learning curve for me. I was determined to conquer it. So at that stage, I had to consider the advice I was getting from everybody, the responsibility that was being handed to me in the public arena. And then I started to reflect that I'm of Irish extraction, but I reflected a little bit on Oscar Wilde, you know, the famous Irish poet, and then he said, "Always be yourself.... 'cause everybody else is taken.
I thought, "If I'm gonna be a success in this business, I must be myself, and that people will either accept me or reject me on that basis." I'd like to say thank you for the people who didn't reject me, for helping us get to where we are today. The intention of the IPO was quite clearly to provide the existing network brokers the opportunity not to have to sell, okay? And to have security that they could remain in a network that had been very strong and developed in 1996. Prior to that, the IPO, network brokers had to sell their businesses mostly outside the network because it wasn't something that people did.
And the IPO gave us the real opportunity to retain brokers inside the Steadfast network and provide a succession vehicle, alleviating the uncertainty of either not having a friendly buyer or indeed, not having a buyer at all. So when we prepared the IPO prospectus, we undertook to stay true to ourselves and to the model, and that had been successfully operating since 1996. In the prospectus, we detailed our intention to provide consistent, organic, and acquisition growth. We undertook that we would remit mostly around 75% of our profits by way of dividend. And our plan to achieve this was to continue to build the Steadfast network model as the best and most progressive available. We...
For the last 10 years, we've delivered on this strategy, and for the next 10 years, we intend to continue to build on this successful strategy. We stayed true to our network, servicing them, offering a fundamental business model, which is sustainable. We executed exactly what we said we were going to do, and that meant that we continued to follow the parameters of what has made us, a collection of small businesses, very successful, and now within the public framework and all that's required to continue to always protect shareholders' value. As Steadfast became a listed company, our focus had to broaden besides the network to include diversity, equality, inclusion, protection of our environment, gender equity within our operations, create a strong position on climate change with our proxy advisors.
The success of Steadfast is largely due to the enormous commitment and passion of our people, both the passion within the network, of all the brokers who signed on to this is a good way to work together, and secondly, the team of people that have made the success. The Steadfast team work long hours. They've driven the business. Our shareholder returns to where they are today are because of that. Our lives are driven by performance and the integrity of delivering our strategy and meeting our ex- and exceeding our forecasts, making sure that our people are rewarded for our performance, the weekends they work, the 12-hour days, the continuous attack from the war on talent, striving to induce our key people away from our business with offers of great rewards in other countries, companies. We're very successful with our people, okay?
They work for you extensively, our shareholders. It surprises me, however, sometimes when the proxy advisors look at what we have achieved over the 10 years, recognize the company's success, and yet only some of them support our remuneration hurdles. It's a funny situation when you praise the company's performance, you forget about how it gets there, and you forget about the incentivization programs that make people stay within the company and keep working in the company to make it success. I can assure you, what we do is a highly competitive industry and very difficult to make successfully, and you have to have a team that's very strong. It takes vision, a dedicated, hardworking, professional team to deliver on that vision, and a strategy that goes with it to achieve consistent success.
I'm pleased that in FY 2023, it continues our year-on-year record growth. Frank detailed this so well in his address, so I'm not gonna bore you on going back through that. In investor meetings around the world, yeah, around the world, we, we hit the tracks, and sometimes it's quite hard on us, but we... Our territory is Sydney, Victoria, up to Singapore, Hong Kong, okay, over to New York, Boston, and back, and back to London, and then home. We have to extend it very shortly to include, in that little segue, we have to include Chicago, and we have to go up to Scotland as well.
So we are congratulated when we go around the world on the success of the business, okay, and the reliable profits and the growth targets that we're able to achieve on a compounding basis. The product, Steadfast, is market-leading and well-received by the whole market in which we operate. Our results are the consequence of an enduring business model, the skills and stability of our executive team, our prudent approach to acquisitions, and the strong performance of our those equity-owned businesses that we've integrated into the public company. Our equity broking business again benefit from both acquisition and the continuation of the hard market.... premium cycle. And our underwriting agencies, again, because of their ability to be quick and to be precise, and to service the industries that they insure, have had strong organic growth.
I'd like to extend my personal thanks to our employees, definitely the board of directors, the network brokers, our underwriting agencies, our complementary businesses, our client base, our strategic partners, and for continuing to keep achieving record performance. Okay, part of our success, and integral to our success, is that we've built a full-service insurance broking back-office system, Insight. 205 brokers, 6,000 users now operate this system. It's exclusive to the Steadfast network, and we have an order book to migrate a further 30 additional brokers. It could probably be 60, but we're working to timeframes. Further, we developed and implemented something which is quite outstanding, okay? The only fully integrated, multi-insurer, competitive quoting system for network brokers. I can tell you, it's the only one around the world that does what it does, okay?
I'm not making that statement because I think it's a grand statement to make it. I'm telling you that the Steadfast Client Trading Platform quotes, binds, cancels, endorses, issues certificates of currency, produces a policy document, and does all of... and does your renewal, and does all of that again after it's renewed in 20 seconds. Groundbreaking efficiency for consumers and brokers. Pleasingly, we've got a tad over 10% now of our GWP being transacted on the Client Trading Platform, and FY 2023 looks like it will keep going at the rate it is. Brokers continue to be attracted to its efficiency, the ease of obtaining the best terms, tailored policy wordings, which are continually reviewed by our triage team, which is a team of people that looks at claims and gives feedback.
And the wide market access to insurers that the platform delivers, together with our product range, which is market leading. Steadfast continues to roll out more product and insurers, offering on an automated system, the Client Trading Platform, and to improve the integration capacity to onboard insurers and move more efficiently. During our past year, additional insurers joined. We added more onto our private motor, home, landlords, residential strata, and fleet. In 2023, Steadfast network brokers' GWP rose by 12.8% to AUD 11.6 billion. It's past the AUD 12 billion mark now. The growth was again driven by increased volumes over the year, and further premium rate increases by our strategic partners. Trapped Capital has been a phenomenal success for both our shareholders and our broker network brokers.
We've continued to deliver on our active acquisition pipeline, while seeking to increase our equity position in the incumbent network brokers we already own. Organic growth in revenues from our equity brokers more than integrated the expected expense that Stephen Humphrys put through all of our accounts over the last two years. So we've been able to sustain that growth with increasing underlying costs. Organic growth, strong acquisition growth, resulted in excellent underlying EBITDA growth from our equity brokers, just under 28%. Underwriting agencies continue to produce a strong result. Sustained organic growth, AUD 2.2 billion GWP last year, 16.7% uplift for FY 2022, and working well towards AUD 2.6 billion in the current year.
The GWP growth, combined with further premium price increases by insurers, led to an underlying EBITDA growth of 15.7%. I'm always asked about succession. That's a polite way of saying, "When are you gonna go? You're old." Okay? So I like it when people say, Can we address succession? I'm not going, okay? I'm reminded that Hank Greenberg, at 98, is still running Starr. I've got another 25 years to go. Okay. This year, we successfully expanded our executive team and deepened the strength of our succession planning process to allow expansion of the team and provide retirement pathways as they begin to occur.
Unfortunately, we've got one of our retirees here, Alan Reynolds, who worked tirelessly alongside me for over two decades, putting up with my tantrums, putting up with all my innuendo, putting up with all of the things and making me look successful. Four years ago, he said, "I want to retire." And I said, "You can't. Just keep working, get out of my office," right? Anyway, because he's a gentleman, he worked alongside me for another four years, but he did tell me 18 months ago, "I am not going to continue working." I'd like to say, it's pretty exciting to me to have somebody like Alan putting in over two decades with me, retire, and then now I'm able to put him onto some of our subsidiary boards. He has the DNA of Steadfast completely and utterly in his veins.
He knows what we want to achieve, and can now slip into a NED role, and I... And there's other people in our organization we can do that with, too. Firstly, I... Secondly, I guess I should say, in talking and reflecting about transition of succession within our business, Samantha Hollman, who worked as our COO next to me for 23 long years... managed to stay happily married and still have 3 kids and still talk to me, which I think is a big, big, big advantage. And, you know, we, we've moved her because of our international expansion, both into New Zealand, Singapore, and London, and of course, into Hamburg. These – this was building. If we were going to do something in North America, we had to have a team involved in working it.
So she stood down as COO and went in as CEO of our international operation. Twenty-three years is like a sentence to work with somebody, but I think that we've been able to still stay friends, and so I still do as I'm told, so that makes life easier when you're working with Sam. So I'm very pleased to say that that transition has been smoothly. To facilitate that, we had to bring in somebody strong into our organization, somebody who I've worked with in other iterations for probably 12 or 13 years, and Nigel Fitzgerald joined from the AIG group as our Chief Operating Officer in April this year. With him, he brings a diverse range of skills that complement our revenue streams, okay?
He makes it a big increase in our high caliber executive strength at a level that we need. And people say to me, "Has Nigel been brought in to replace you?" Nigel could replace me, okay? And I guess if it gets to a time when I have to go, he'll be one of the key assets that we'll look to to replace me. By the time that happens, he may want to retire himself, so I might have to say. Okay, so I'll understand that. Further, we needed to move alongside Sam, somebody that could step in as COO of the international operations, and we were able to to get Nick McKee to come and join us. Nick had worked 23 years in North America.
He's an Australian citizen, came back to Australia, and he's been fantastic, fantastically a help. And then, if you look at what we needed to do in terms of the international expansion, they're getting to a stage where we need to, we needed to further support our assets. And I have to be careful how I say that Stephen, for 11 years, has been developing. Unfortunately, I used to always use the word grooming, and that's become such a sad thing that you have to change your vernacular, so we've had to change it to developing. Developing a girl called Eimear McKeever. She's been a delight to work with for those 11 years.
She has a lovely personality and a twinkle in her eye, so I christened her Twinkle many years ago. So throughout Steadfast, somebody says: "Is Twinkle gonna do that?" It's a term of endearment, okay? She's agreed to step in from her Finance Director role on the public company to take on the Chief Financial Officer role of the international assets. She's sitting down here in front of you here, so you've got... Nigel's here if you want to meet him as well. Stephen's there, and so is Sam. Okay. What else? The executive bench strength has provided Steadfast the capacity to commence and execute this international expansion. We wouldn't have been-- People said to me many times "We wouldn't have been able to... What are you gonna do?
How, how are you gonna do this?" We've been planning this for five years. I mean, really, really, I, I don't get offended, but I, I think, really? You've got a successful business that we've built. It's fantastic. Are we, are we gonna just go bang and do something? This is the long-term plan. So with, with, with, with Nick coming in and, and, and the, and the bench strength of, Eimear going over there, I'm very happy to say that, we continue on. Okay. His, his 23 years experience will help dramatically. Okay, so what do I know about North America? Well, I've spent 14 years working alongside the ACORD team out of, out of the U.S. And let me explain what ACORD is.
ACORD is a non-for-profit that was started some 40-odd years ago when the American insurance industry was becoming very acutely aware of computerization. And so they built a whole lot of processes that go alongside the insurers. For instance, if you want to get a certificate of currency or a certificate of insurance in America, everybody gives you an ACORD certificate. I've been very fortunate to be able to then study in detail the way distribution and insurance and software works in North America over the last 14 years. And I was invited onto their board 10 years ago, and for my sins, I'm the chairman of ACORD out of New York. So, understanding the US insurance scene and the way technology operates there is...
After lots of analysis over the last few years, we decided that the strategy that made Steadfast successful in Asia Pac and other places could be replicated, will be replicated in North America. This was a review of the potent— Then we started to review how we would do this with potential acquisitions. In October, as Frank said before, October 6th this year, we purchased ISU. It was a low-risk enter into the, into 40-odd states. It's one of the largest and privately owned independent insurance agency networks in the U.S. It's very similar to Steadfast 15 years ago. You see, it is a family-run business. The father started it, the son and daughter continue to run it, okay?
The U.S. insurers that we spoke to about ISU before we undertook it confirmed they were reliable and ethical. ISU gives Steadfast a foothold in a very successful business in North America to expand our network services and products. Our feedback from ISU and its network is that when our systems are brought in, they will enhance ISU. They'll make their network stronger and be attractive to people who want to join. Apart from the range of services and systems that are transferable to the ISU network, we have established a strong interest in a rollout of the premium funding company. We've just done five town halls across America.
The number one thing they all said was, "We have to improve our software and our computer system." So Insight and the SCTP are very- are eagerly awaited by the ISU network, plus five of our successful, very successful MGAs in Australia will be able to slip into the American market, slowly and, and unobtrusively, but we'll get in there. ISU networks have shown also a keen interest in our Trapped Capital project. Interestingly, over the last three years, ISU has lost between 30 and 40 of their members who did not want to leave the network, but wanted to take some capital off the table. And then, mostly, they went, almost exclusively to private equity. Now, the horror stories of what happens when somebody buys you and says, "Nothing will change," okay?
Everything is changing now, and so there's a whole lot of disgruntled people in Middle, Middle America and micro America insurance that have sold into areas where they're now lame ducks. They're not wanted. In fact, last week, there was a very successful ISU business that sold outside network, and I won't tell you who they sold to, and they walked in, and they sacked everybody. Because what they've done over the last 12 months is morph all of their business into other sections of their business. That's done coldly, calculatedly, and not by the person who said nothing will change. So our proposition in North America is much more conducive to the way people would like to operate.
So overall, the Q1 , unaudited, our EBIT was up 22.4%, ahead of the same period for last year, and the underlying NPAT is 15.3% ahead of the same period last year. Since we reported our FY 2023 results, and we've still had the continuing increasing in premium rates due to a large number of the weather events and the higher claims inflation. Just on claims inflation, it hasn't hit yet. I spent 26 meetings in Monte Carlo recently. The number one thing that was coming out of the Reinsurance Rendezvous in Monte Carlo was, "We are not rating for claims inflation." So this, together with solid volume growth, has been the major contributor to our performance for the Q1 , the continuing price increases.
The outlook for FY 2024, it continues to be strong growth for growth and profitability on the back of FY 2023 acquisitions. We're gonna get the pull-through of stuff we did in 2023 will hit us in 2024. So Steadfast Group, happy to reaffirm our guidance, underlying EBITDA of between AUD 500-AUD 510 million, underlying NPAT between AUD 230-AUD 240 million, underlying NPATA, AUD 277-AUD 287 million, underlying diluted EPS NPAT, between 10%-15%. The FY 2024 guidance remains subject to assumptions that you'll see in your slide pack, but it's there. Lastly, I'll stop talking now. I've finished my... Please don't look at it as a diatribe.
Just look at it as a, as an emotional people telling you how proud he is of what happened with all the people I've worked for the last ten years to give you what you have. Thank you, shareholders. Thank you for your ongoing support. I'm very proud of my experienced, hardworking executive, all the people, coworkers with us, and indeed, our numerous businesses that continue to buy into products Steadfast and make it successful. The team we've got, the services we've got, the way we operate, the next ten years is gonna be better than the first ten years. I look forward to continue to work with our shareholders and to continue our track record. So on that, thank you for your time, thank you for your effort, and I'll hand back to Frank. Get tighter.
Thank you, Robert. There's nothing better than having a person that's passionate about the business, and it plays through the whole organization, including the board of directors. It's just wonderful to work with Robert and his team, and obviously, we do our job as directors and put our hands up and say, "Hold on a sec," every now and again. But all in all, it's an amazing relationship between the board and management and vice versa. So we will now proceed with the formal business of the meeting. I propose to take the notice of the Annual General Meeting as read. Also, I will dispense with the formality of moving or seconding resolutions, as all matters are properly before the meeting. Voting on the resolutions will be conducted by way of poll.
Please note that only shareholders, proxy advisors, or shareholder company representatives may vote. I declare the polls open. Link Market Services is the Returning Officer for this meeting. Shareholders attending the meeting online will be able to cast their vote using the electronic voting card received when online registration is validated. If you have any difficulties, please refer to the guide available in the AGM tab in the online Steadfast Investor Center. There is also an AGM helpline provided. Shareholders attending the meeting in person will have a yellow card, which you will be asked to complete and hand to the registry staff at the appropriate time. I will advise when it is time to complete your voting card. If you need assistance, please ask one of the registry staff. Shareholders who have a blue card have already voted.
There are two ways to ask a question, either by using a microphone in the room or by typing and submitting a question through the online platform. We did not receive any requests to submit questions by phone. If you are participating online through the virtual meeting website and wish to ask a question, please click on ask question, type your question, and click submit. I encourage shareholders online who have questions to send them through as soon as possible. Online questions will be read aloud by the Acting Company Secretary during the relevant item of business. Steadfast and proxy holders present in person will be holding either a blue or yellow card. There are two members of staff holding roaming microphones. Please put your hand up at the appropriate time if you wish to ask a question about a particular resolution.
Following the voting, general business questions will be taken. Shareholders' questions received prior to the meeting will be addressed after the formal business of the meeting. Each resolution set out in the notice of meeting is an ordinary resolution, and as such, must be approved by a simple majority of votes cast by shareholders entitled to vote and voting on the resolution. Shareholders should note the voting exclusion set out in the AGM notice of meeting. Please note that I intend to vote in favor of each resolution for those proxies that are open for the Chair's discretion.
The first item on the agenda is to consider and receive the financial report for the company and its controlled entities, the directors' report, and the auditor's report for the financial year ended June 30 2023, as set out in the company's 2023 annual report. These documents have been made available to shareholders. There is no vote on this item of business. Chris, Chris, are there any questions online?
Chair, there are no questions online.
Are there any questions from the floor?
Yes, Mr. Chairman. Your Client Trading Platform seems to be very successful. I'm just curious as to how many computer professionals you need to develop and maintain that platform.
I will hand that over to Mr. Kelly, who knows all this stuff at the back of his hand.
Unfortunately, Steadfast Technologies has nearly 150 employees in it, okay? So it's not a few nerds around in the back office pushing spreadsheets around and thinking they've done a good job. It's been a AUD 100 million investment over the last 15 years that we've put into it. So we're now, at this stage... People always ask me, "When are we gonna stop money on it?" But every year, we seem to get more insurers who want to join it, more brokers that want to use it. So it's not... It's a work in progress all the time, but it's fairly substantial.
If you look at our accounts, I think our cost of the, I guess, the division was around AUD 18 million this year, and we get recoveries back from that from what we charge out to do it, so it's a very substantial part of our organization. I hope that helps you on that.
It's a good question, and fortunately, fortunately, we have a huge network that give us tremendous feedback on the Client Trading Platform. So if it's not working for customers, Robert and his team hear about it pretty quickly.
Thank you. Elizabeth Fish from the Australian Shareholders' Association. I wanted to ask you, you talked quite a bit in the opening address about being authentic, and I would like to know, what is the point of having a corporate shareholder relationship manager if she doesn't engage with the Shareholders Association?
Robert, did-
I've... There's no bar on her engaging with the Shareholders' Association. In fact, if you want to be put on the... We're very happy to talk to you at any time, so-
But you haven't.
Well, I think it's your obligation to make contact with us to say, "We'd like to be on your call list." And if you do that, I'm very happy to make sure we do.
We have spoken to her. We have spoken to her a number of times.
I think Robert has addressed that.
Yeah.
We've got Shalome over here. If you have a word to her after the meeting-
Yeah, yeah
... we'll certainly make sure that-
Definitely
... the appropriate executives come down and talk to you and your shareholders and your members, if that's necessary.
I have one other question, and it's to do with the Trapped Capital pipeline acquisition. How much of the market do you consider prudent for Steadfast to acquire?
Robert?
I don't think we look at the percentage of the market. We look at assets upon what they can do to... firstly, if they're culturally aligned with the way we run the business. Secondly, if they've got a strategic reason for coming in, and if we could combine them into another business over a period of time. So we don't have a position where we want to have so much of the market. The advantage of our system, as opposed to a corporate entity that controls, is that all of our acquisitions that we make are run separately with their own P&Ls, and they have their own boards.
They make their own decisions about where they place business or how they act for an insurer in particular. So I guess volume doesn't make any difference in the Australian market anymore. It's service and how you provide the services to the consumer that attracts people to you. So we don't have a plan about getting bigger or anything like that. We control roughly about 31% of the intermediated business in Australia through the network, of which we own basically about 50% of that.
30% or 30%?
Yeah, yeah. That's the numbers.
Uh-
And of course, Robert, that doesn't include retail products like home and motor, where we've got a very small market.
Yeah, yeah. For instance, if you look at home and motor, the individual, which is dominated really by IAG and Suncorp in Australia, who have about 80% of that market that they control, we, we, we... Of our sales, 14% of our sales is in house and cars, so we have a very small percentage of the turnover in that.
All right. Just one more question. How do you ensure the overseas acquisitions retain the ethics and personal commitment of your Australian staff?
Oh, I think you look at them in advance and understand the way they're built. And indeed, it's a good question. It's a great question because it's crucial to how we think about business everywhere. And we looked, we looked at six, six probable assets over there, and we looked, we looked at from spending a lot of money to spending a small amount of money, and we looked, we looked to get a business that was aligned to the way we were. This is a business that was started by a father 40 years ago, transitioned into the son and the daughter. I mean, they're 69 and 66, so they're not exactly young kids running around.
And the whole premise about how they do business is on an ethical basis, and in fact, that's what I made a point of in my speech, was to actually say that we did a lot of inquiry about what these people operate like and how their agencies are considered in the market, and we got a really clean bill of health from all the insurers. We're well known to the U.S. insurers, and the U.S. market knows who we are quite well, so we do a lot of work on that.
Thank you.
I think, I think, Robert, there's a very good example of what, of what Steadfast has done internationally, and particularly in New Zealand, where Alan played a very significant role. And we've built a fabulous business there. And a few of the directors, including myself, were over there for the Steadfast convention in New Zealand the other day, and the feedback from the brokers is just one of admiration. And in actual fact, there's two or three brokers from one of our competitors have come to join us because of the significant amount of services that we provide that they're not available to from our competitor. And then we've also got Singapore, where we're now up to, I forget how many it is, brokers in Singapore.
Alan, you probably remember, but 28 brokers in Singapore, so that's really starting from scratch in that business. And Singapore's a difficult market to get in, but at the same point in time, through the hard work of Robert and Alan in particular, to build a network of 28 brokers in Singapore and get support that we have from the insurance carriers is quite amazing. So we've got that learning curve behind us, and we've got a formula that has worked. U.S. is a difficult market, I think most of us understand, and Robert actually mentioned Nick McKee, and Nigel has had significant experience in the U.S. market, and so have I.
Obviously, Robert's been traveling there for a long time, so, thank you for that. Those questions are very good.
Thank you. Ian Littlemore. Thanks very much, Robert, for that explanation about the agencies in the U.S. and where that business is going. I guess you realize Australian shareholders are a bit nervous about Australian companies going to the U.S. because they often drop a bundle there. Where do you see it going from here? Do you see it morphing into the broking network and acquiring brokers and building that area up as well, or just the agencies?
Now, look, I think you've got to look at... To answer that question, you've got to look at distribution in North America quite concisely, and you've got the internationals, which operate, and then you've got a range of what you would call insurance brokers, and there's not a huge amount of those in North America, okay? Then you've got a plethora of 40,000-odd multi-agents, who are, in fact, insurance brokers by a different name. They act for sometimes three, five or six insurers, and so that area has been neglected by PE, it's been neglected by the bigger guys.
We think that it's very simpatico with the way we operate, and because it's been neglected, we've got a great ability when we go there and show what we've done. I mean, it's very similar to what we did. They're our, you know, they're our people. They're similar to the way we are. They're five and six people. They're husbands and wives. They're second, third generation coming through. So what we bring to that market is we bring all the services that we've, that has made the Steadfast network very strong, and when, as Frank alluded to, we had a lot more, a lot of people coming to us in New Zealand because of the services that we provide.
So we think that transmits very quickly over into the U.S., and as I say, we've just done a town hall. Sam, do you wanna make a comment on that? Sam's the CEO of that. Have we got a-
Thank you very much. Yes, we've just done a two-week round scenario of four different regions of their members, where they operate from. It was our range of products and services that excited and enticed the opportunity, of which one of those products and service offering is the Trapped Capital scenario, where they had the option to sell a portion of their business, you know, we become a partner in growth, not a PE provider. That is where we saw the opportunity of the US market. There's a lot of networks over there, but they don't have the range of products and services that we offer to help these smaller businesses grow and develop. We are a partner of growth in them, and that's the exciting opportunity.
Yeah, and then from the board's point of view, we had options in the U.S., and the board agreed with management that the best option for the U.S., for the reasons you mentioned, is a low-risk approach to the U.S. market, not an aggressive approach. And we believe our approach is low risk because we're buying a network. We're not buying, in effect, a large brokerage business.
I guess, Frank, if I can... I guess we're not arriving and saying, "We're here from Australia. We're now here to revolutionize, and the, and we're gonna tip $50 million in and show you how to do it." I mean, the companies that have been successful in America, Reece, okay, a little Australian company that went there. Reece, another little Australian company that went there. If you go there and you bite little bites, and you've got an incredibly good product or system and take it there, you'll be successful in North America. If you arrive there and say, We're gonna change the way, say, everything happened, and we're gonna go out with a big flash, you'll get eaten.
And so we will build North America the way we've built Australia, slowly and methodically, and not stepping outside our defined paradigms of how we go about doing things.
All right. That's a very good question.
Mm-hmm.
Yeah, good question.
Any other questions? As there are no further questions for this item, we will move to the next item of business. The next item on the agenda is to adopt the remuneration report for the financial year ended June 30 2023. Noting the personal interest of the directors in this resolution, the board recommends that shareholders vote in favor of this resolution. Chris, are there any questions online?
There are no questions online.
Are there any questions from the floor? Yes, Elizabeth.
The ASA has looked very closely at your remuneration report, and we have not been very happy with it. Amongst some of the aspects we were not happy with was the details of a sign-on benefit with no performance hurdles. Share rights accruing notional dividends because the rights have not been earned yet. No STI performance measures for KPI, other than the CEO. A remarkably high level of actual STI outcomes and limited details on STEIP, S-T-E-I-P. And because of this, the ASA will vote open proxies against this resolution.
Thank you. Maybe I'll just first of all mention about the first part of your question about allocating some sign-on bonuses to a member of the team, Nigel. I have to say that in this day and age, if you are going to attract high-quality people who are experienced with the experience that Nigel has around the world, and if you want to talk to him later about his experience, you'll be as pleasantly surprised as we have been. So to attract those sort of people, you're not gonna get them by not offering just offering a pay from day one with some incentives for carried forward.
Can I add a little color on that? A sign-on bonus like that is to replace the bonuses that the person who's working at a high, an extremely high level in another company has to forego if they come to join your company.
Right.
So that's why, that's why sign-on bonuses, bonuses are retention, are crucial to attract talent.
We understand that. We think there should be some hurdles, like periods served or-
Well, they vest over three years.
Yeah, but-
Yeah
... there is no hurdle. A hurdle.
Tenure. If you're still employed at that time, then it vests. If you're not employed, it doesn't vest.
Yeah.
Okay.
They're tenure-based in the way that the hurdles that were foregone were also tenure-based.
While you're there, Vicki, I'm sorry to do this to you-
That's all right.
... but Vicki, Vicki's a, a fantastic chairman of the Remuneration and Performance Committee. So, Vicki, I'll get you to cover the rest of the question, please.
Yes, yes. And I'm conscious, Elizabeth, that there are quite a lot of questions, and I'm wondering whether it's actually better to perhaps take a lot of those offline, and we can take you through in a bit more detail, given that you, your comment on engagement. So perhaps that's something we can do.
I guess if you want to keep them employed and the business goes up 30%, you've got to give them their STIs and their LTIs.
Yeah. It's rather interesting on these long-term and short-term incentives. Every year, we get a budget from the team, and the board challenges the budget. This year, Steve and Robert were game enough to put in AUD 280 million worth of acquisitions, which is pretty game, and including the profits from those acquisitions into their budget. There were a number of other areas where they put in significant challenges. But I have to say, and shareholders may not appreciate this, most would, that Robert and the team have always found ways to not only deliver on what's in the budget, which is challenging, but to find ways to even add to what's been there.
You know, it's a difficult challenge for the board, but at the end of the day, you can't give challenges to management, which is gonna create more risk for the business and risk more risk for shareholders. So, are there any further questions? Sorry, as there are no further questions, we will proceed to the voting. Please now select for, against, or abstain for this resolution. The next item on the agenda is to approve the grant of equity to the Managing Director and CEO in relation to the FY 2023 remuneration. Robert Kelly AM was a founder of Steadfast some 27 years ago.
His position, passion for the business, and his extraordinary ability to create and drive new initiatives to enhance and grow Steadfast, has resulted in significant value creation for Steadfast shareholders and the Steadfast network brokers consistently over many years. It was interesting when Robert quoted the target for EBITDA this year of between AUD 500 million and AUD 550 million. In the first year of our listing, it was AUD 50.4 million. So that gives you a bit of an indication, what's been delivered over the past 10 years, in addition to the rise in the share price. Against this background and the outstanding performance of FY 2023, the board, with Robert abstaining, recommends that shareholders vote in favor of this resolution. Chris, are there any questions online?
Chair, there are no questions online.
Are there any questions from the floor? As there are no further questions, we will proceed to the voting. Please now select for, against, or abstain for this resolution. The next item on the agenda is to approve termination benefits generally. The board recommends that shareholders vote in favor of this resolution. Chris, are there any questions online?
No questions online, Chair.
Are there any questions from the floor? Please now select for, against, or abstain for this resolution. The next item on the agenda is the re-election of Vicki Allen as a director of the company. Vicki became a Steadfast director in 2021 as part of our succession planning, and is chair, is now chair of the Remuneration and Performance Committee and serves on the Nomination Committee. Vicki is a very independent director. Information about Vicki's skills and experience can be found in the notice of the meeting and the annual report. I now invite Vicki to say a few words.
You're happy for me to come up there, Frank?
Yeah, wherever.
Thank you, Frank, and good morning to my fellow shareholders. I've served on the board of Steadfast for two and a half years, and I was elected to the board on at the AGM on 2021. As I reflect on the last couple of years, I'm really pleased to say that the business has performed well. We've had solid organic growth, and we've executed on a strong pipeline of acquisitions. I feel very privileged to have served on this board with really committed fellow directors and a really hardworking and talented executive team that's led very well by Robert. I chair the Remuneration and Performance Committee, as Frank outlined, and I'm a member of the Nominations Committee.
As Chair of the Remuneration and Performance Committee, my focus over the last couple of years has really been on ensuring that our remuneration framework is competitive, fair, transparent, and most importantly, aligned to our strategy and the creation of shareholder value. I believe my professional experience enables me to continue to positively contribute to the board and to serve on your behalf. I'm an experienced listed company director. I've had over 30 years of relevant executive experience, and in the boardroom, I seek to bring independent thought to our decision-making, to enhance shareholder returns and, and bring positive client, broker, and community outcomes. I really welcome the opportunity to continue to contribute my skills to the board, and serve on this board of this really excellent company, and I'd be honored to have your support. Thank you.
Oops! Thank you, Vicki. The board, with Vicki abstaining, recommends that shareholders vote in favor of this resolution. Chris, are there any questions?
Chair, there are no questions.
Are there any questions from the floor? Well done, Vicki. As there are no further questions, we will proceed to the voting. Please now select for, abstain, against or abstain for this resolution. Congratulations, Vicki, on your re-election. We look forward to having you on the board for many years to come, subject to what the shareholders have to say. The next item on the agenda is the re-election of Gai McGrath as a director of the company. Gai became a Steadfast director in 2018, and is the chair of the People, Culture and Governance Committee. Gai is a very independent director, and she challenges the board and challenges management on a regular basis, and we value her skills highly on our board and very much appreciate what she does for us.
Information about Gai's skills and experience can be found in the notice of the meeting and the annual report. I now invite Gai to say a few words.
Thank you, Frank, and thank you, all, for the opportunity to address you as I seek re-election to the board of Steadfast. It has been a privilege to serve you as a director over the past five years. Over that period, the group has been able to continue its strong track record of delivering to our shareholders. At the same time, the group has delivered invaluable support to our partners, our broker network, and their clients. When I consider taking a position on a board, I'm conscious of wanting to contribute to industries that play an important role in our country. These past five years have demonstrated how important the insurance industry is, as businesses and individuals have faced challenges from bushfires, floods, storms, a global pandemic, and the insidious rise of cybercrime. The role of brokers has never been more important in this context.
This complex world means that businesses require quality, professional advice and support. Steadfast has a strong track record of supporting the delivery of that professional advice and support in an effective and efficient way that enables quality outcomes for clients. None of this can be achieved without a highly capable team, starting with the Board of Directors, so well led by Frank and Robert and his executive team. As Chair of the People, Culture and Governance Committee, it is my privilege to help the team continue to enhance the environment that allows our people to thrive and build long-term careers with the group. We have also started the important work to lower the impact of our carbon footprint on the environment and explore opportunities to support our broader stakeholders to do likewise.
I believe that I make a positive contribution as a member of the board, and I seek your support to enable me to continue to do so. Thank you.
Thank you, Gai. The board, with Gai abstaining, recommends that shareholders vote in favor of this resolution. Chris, are there any questions online?
There are no questions.
Are there any questions, from the floor? As there are no further questions... Oh, sorry, Elizabeth. Yeah.
Frank.
Sorry, I didn't-
Yeah, so I would just like, we can see that, that Ms. McGrath is a very busy lady. We would like to ensure that she has sufficient, time, capacity, to sit on the board.
I have no doubt that's the case, because our experiences with Gai on the board is she reads everything, and she picks up things that all of us have missed. She contributes to every discussion. She's always prepared to put a point of view forward, and if she's capable of doing that, we know that she's got the time to be on the Steadfast board. I don't know whether she does it for all other boards, but I'm pretty sure she does. But Gai is very thorough and hardworking.
I think it's an important question for you to ask, and I'm very happy to speak to it. I left a very busy executive career to pursue a career as a professional non-executive director, and I regard it as a full-time career. So the type of hours that I devote to this career is very similar to the hours I put into my executive career. It may not be the case in the long term that I will do that, but at this stage, I feel that I would never join a board if I didn't think I could fully contribute as a director. But thank you for asking that question.
Yeah. Sometimes we wish she'd get busier, but no, but Gai is absolutely fabulous. Are there any further questions before I make a mistake again? As there are no further questions, we will proceed to the voting. Please now select for, against, or abstain for this resolution. Gai, congratulations on your re-election, and we look forward to working with you for more years to come. We have received some general questions from shareholders, which we would like to be able to share with you. Chris, please read out the questions, and Robert or I, or the appropriate person, will respond.
Thanks, Chair. We've had a question come in from a shareholder. The charts show business has been a continuing success since 2013. What makes you confident that the business will continue to succeed into the future?
I'm very confident about it continuing to succeed, particularly with all the opportunities we've got on our plate and our risk management and our careful approach to making acquisitions in the business. But Robert's the leader of the charge, and Robert, do you wanna talk about this?
Yeah. Yes, thank you, Frank, and it's a good question, and I welcome it, welcome it. The reality of where we are at the moment is that the business, if you take it in its Australian iteration, as I said before, we control 31% of the intermediated business, and we only own basically 50% of that turnover. So in terms of the long runway of acquisitions contained within our existing network, we have a long runway to keep going on that.
You can drop that same scenario into New Zealand and into Singapore, and then if you look at the potential of what we would do in North America, we're uplifting our skills and with a small team to sit alongside a very successful team in North America, and that development over there could really be potentially in many ways bigger than what Australia could be. So we've got the Asia Pac well and truly in line to keep going with several years of development. The systems that we've got are robust. They are continually modified, and they're appropriate to what we do, either in managing general agency, underwriting agencies, or in acting as advisors in financial services. So the team's intact.
The ability for us to keep people for over long periods of time is absolutely unbelievably well. Our executive force is extremely tight and works closely together. So I think all of the fundamentals are there to continue it on the way it's going from this point of view, barring some form of international catastrophe, which let's hope we never have to address.
Any more questions, Chris?
Yes, Chair. We've got a question from a shareholder: "You've just acquired ISU in the United States, and you already have an international business in Unison Steadfast. Are there plans to link ISU and Unison together in the future?
Yeah, what are you gonna do about Unison?
Well, that's a good question, and I think it's probably a salient question from people on the outside to look at. But the two products, you know, ISU and Unison Steadfast are completely different. They fulfill different roles in terms of what they do for insurance intermediaries around the world. So linking them together would be of no value whatsoever to either of those products. What it might mean, though, is as we develop North America, is that some of the 200 and, I think, nearly 80, Sam would know that better than me, exactly, current brokers—225. 225. I always exaggerate.
Of the 225 members in over 130 countries around the world, they may see that we're interested in moving, and there could be some opportunities that come out of it. But definitely, no, the two products are completely and utterly different, not at all. There's no synergies or there's no links that would go together.
So, any more questions?
One last question, Chair. The NIBA Code of Practice is going to change on November 1. Do you have any comment on those changes?
Oh, that's a good question for you, Robert.
Gee, okay. The reality is that we were one of the drivers in the, in the, Australian, financial services market on transparency of REM. Okay, we were a forerunner on changing the way we thought that consumers should be informed about the REM that comes out. In other words, when they buy a product, they should know how much the person who delivers and advises on that product actually can give, cost and value with that. We sponsored and paid for an independent review of John Trowbridge, whose independence, I think, is renowned in the insurance industry. He's done a lot of work for most, through his actuarial and his running of APRA, that he did.
To actually review that one of the biggest consumer groups that we thought needed a review, and that was the strata industry. That report was completed, paid for by us. We had nothing to do with the report whatsoever. That was put into the market, and it showed how distribution should be transparent about who gets what in the scope of buying and advising on strata insurance. So we're a great supporter of transparency.... We operate under our code. Steadfast developed its own code of practice and put down some very firm guidelines.
Basically, our code says this simply, In if a retail client wants to know how much, then transparency should be absolutely clear and unequivocal between the intermediary that sells the product or advises on the product, and the consumer. So, we then went on what other people thought was ludicrous. We made everybody in the organization review our code. I mean, all of the brokers, the 400-odd that we have in the network, said that if you want to be part of Steadfast, you have to agree to a code that when I stand up and represent Steadfast, I can say. " This is what everybody believes in." Now, we undertook that code some three years ago, Sam and I, and they all signed.
In fact, within three days, 60% of the network signed them and sent them back to us. So we, as a group, have an innate belief in transparency. I know that NIBA then went forward with its code and decided that there would be a need of transparency. There was a lot of pushback to NIBA from some sectors of the market, not from us, not from a whole range of people, that said. "Why are you going past the legislation?" The legislation says that it's a defined product, and if it's a defined retail product, then you have to be transparent.
But if you've got a retail client, a tradie, with a you and maybe one employee, and you sell them non-retail products, then you don't have to tell them, unless they ask you, how much you're making out of it. So that point of difference stalled, in my view, this is my personal view, okay? That it stalled the NIBA code of conduct. In fact, it put pressure, I think, on what I thought was a pretty valid code, enhanced and absolutely, lifted up by the people that I knew in government and said that's a correct way to go forward. It was pushed back to revert to the legislation. So there's a good argument, okay, for on both sides. From our side, we say transparency to a retail client should be there.
On the other side, if you're a businessman operating in a financial service environment where there's legislation that's... And you abide by that dictum, why should you go past what that legislation says? So that's really the pivotal point between the two at the moment.
Correct me if I'm wrong, Robert, our code of practice covers all products, not just retail products.
Yeah. Yeah, yes.
All products.
Yes, yeah. Transparency.
Interesting. Yeah, and I, the board absolutely supports Robert on this particular subject. Shareholders... Sorry, any other questions, Chris?
No other questions, Chair.
Yeah, thank you. Duncan's probably gonna get a bit jealous about you taking over from him. So, shareholders are reminded that they can submit their vote online for a further five minutes. Results of the poll will be announced to the ASX as soon as practicable following the conclusion of the meeting. Ladies and gentlemen, the business of the meeting has been completed. However, please note that we have not only Robert, we have a number of the Steadfast senior executives here in the front row. I think they're all in the front row. And we have got Shalome over there, who's our very capable Investment Relations Manager. So if you've got any questions, please don't hesitate to ask the management team or the board, including myself.
So, on behalf of the board, I would like to thank shareholders for attending today's meeting, and I now declare the meeting closed. Thank you for all your questions. They are very much appreciated. Thank you.