Thank you for standing by, and welcome to the Waypoint REIT Annual General Meeting. I would now like to hand over to Georgina Lynch. Please go ahead.
Good morning, ladies and gentlemen, and thank you for joining us today for Waypoint REIT's 2025 Annual General Meeting, comprising the Annual General Meeting of Shareholders in Waypoint REIT Limited and the General Meeting of Unit Holders in Waypoint REIT Trust. It is just after 10:00 A.M., and I'm informed by the Company Secretary that a quorum is present. I declare the meeting properly constituted and open. Please take a moment to ensure your mobile phones have been turned to silent. Recording devices and cameras must not be used during the meeting. In the event of an emergency, please follow the emergency exit signs and instructions of the venue staff. My name is Georgina Lynch, and I am the Chair of Waypoint REIT.
I would like to begin by acknowledging the Gadigal people of the Eora Nation, the traditional custodians, owners of the lands on which we meet today, and pay my respects to their elders past and present. Our sites touch many parts of country where Aboriginal and Torres Strait Islander peoples have been custodians for many centuries. I acknowledge their living culture and the unique role they play in the life of these regions. Joining me today are my fellow directors, Gai McGrath, Susan MacDonald, and Christopher Lawton, along with Waypoint REIT's Managing Director and CEO, Hadyn Stephens, CFO, Aditya Asawa, and our General Counsel and Company Secretary, Tina Mitas, who are all present with me in Sydney. Finally, please welcome our auditor, Jamie Wills from PricewaterhouseCoopers, and our returning officer, Reggie Harbour, from our registry provider, MUFG Corporate Markets, who are also present and in Sydney.
We are holding this Annual General Meeting today as a hybrid meeting. I would like to welcome those of you who have joined online. Before we begin, I will quickly run through some procedural matters. Voting on the items of business today will be carried out by way of a poll. Security holders had the option of casting their vote before the meeting or appointing a proxy to do so on their behalf. If you have not already done so, you can vote at today's meeting online or in person. You can do so at any time during the meeting, starting from now, as the polls are now open for voting. Voting will close shortly after the end of the meeting. If you need assistance with voting, please see the returning officer.
If you're attending in person or if you are participating online, please refer to the Virtual Meeting Online Guide provided with the notice of meeting and available on Waypoint REIT's website. For those of you who are participating via our online platform, you will be asked to submit questions by registering as a shareholder or proxy holder and selecting the Ask a Question tab. You will have the opportunity to submit an online question or a verbal question by selecting the web phone option. Please follow the prompts or refer to the online guide for instructions. I will consider the questions submitted online and by web phone after I have taken questions from the floor. You do not need to wait until we get to the formal item of business to submit your online questions. I encourage you to start submitting your questions now, and we will address these shortly.
If you are attending in person, you can raise your hand once we address the relevant item of business. The notice of meeting was distributed on the 10th of April 2025 and will be taken as read. The formal part of the meeting comprises the presentation of the financial report, director's report, and auditor's report for the year ending 31 December 2024, as detailed in the 2024 Annual Report, along with resolutions relating to the adoption of the remuneration report, the re-election of Susan MacDonald as Director, the election of Gai McGrath as Director, the grant of performance rights and restricted securities to the Managing Director and CEO, Hadyn Stephens, the amendments to the Company Constitution, and the amendments to the Trust Constitution.
Before we move to the formal business of the meeting, I will provide a short overview of Waypoint REIT's performance for the 2024 financial period before handing over to our Managing Director and CEO, Hadyn Stephens, to provide a brief business update. Waypoint REIT delivered another solid result for the year ending December 31, 2024, with a distributable EPS of AUD 0.1648 at the top end of the initial guidance range provided in February 2024 and in line with the revised guidance provided in August 2024. Rising interest rates have negatively impacted Australian REITs since 2022, with many of our peers having reported declining earnings over the period.
To date, Waypoint REIT has managed to maintain its earnings profile through a combination of prudent gearing, relatively high interest rate hedging, strong occupancy, contracted rental growth, and disciplined cost management, and we currently expect to be able to maintain this level of earnings in 2025. As of 31 December 2024, Waypoint REIT owned 401 fuel and convenience properties across Australia, including one asset held for sale , that has subsequently settled. This national portfolio consists of strategically located sites, with 91% of the portfolio by value in metropolitan or highway locations and 95% of the portfolio by book value, zoned to high-value land uses, being commercial, industrial, residential, retail, or mixed use. The weighted average lease expiry on the portfolio was 7.1 years as of 31 December 2024, with 99.9% occupancy, 89.9% of the leasing being triple net, and 94.2% of income derived from the ASX-listed Viva Energy Australia.
Rising interest rates continue to put pressure on real estate capitalisation rates in 2024, with the weighted average cap rate of Waypoint REIT's portfolio increasing by four basis points during the year. Despite this increase in weighted average cap rate, the value of Waypoint REIT's portfolio increased by AUD 28.4 million during the 2024 financial year due to net revaluation gains, which also underpinned a 1.1% increase in NTA per security to AUD 2.76 as of 31 December 2024. It's worth noting that although Waypoint REIT's weighted average cap rate has now increased by 71 basis points since June 2022, it actually contracted by two basis points in the second half of 2024, with fuel and convenience cap rates stabilising during this period as a result of a more benign outlook for interest rates and increased buy appetite for the asset class.
Waypoint REIT's balance sheet remains in good shape, with gearing of 32.6% at 31 December 2024, being at the lower end of our 30-40% target range. AUD 600 million of debt was refinanced during the year, and with the recent extension of a AUD 50 million bilateral facility, Waypoint REIT now has no debt expiring until May 2027. We have also maintained a relatively high level of protection from interest rate movements, with 93% of our debt either fixed or hedged for the 2025 financial year. 2024 was a challenging year for our key tenant, Viva Energy Australia, which recorded a 20.1% decline in net profit after tax to AUD 254.2 million, primarily due to high interest expense as a result of the debt-funded acquisition of the On The Run in March 2024.
Although Viva Energy's Convenience and Mobility Division faces various challenges in the short term, including the cost of living pressures for consumers, illicit tobacco, wage inflation, and transition costs associated with the On The Run acquisition, Waypoint REIT continues to view the intended rollout of the On The Run brand and offering across Viva's Express network as a positive medium to long-term strategic initiative for Viva, as it seeks to improve its convenience offering and diversify its earnings over time. With that, I would like now to invite Hadyn Stephens to address the meeting and provide a brief business update.
Thank you, Georgina, and welcome to everyone attending in person or virtually this morning. In terms of an update since we announced our full year results in February, there are three key things I'd like to focus on today, namely the rollout of the OTR format by Viva Energy across our portfolio, the recently launched AUD 50 million on-market buyback, and progress on non-core asset sales. Viva finalized the acquisition of the OTR Group in March last year and since then has been focused on the integration of the business and progressing plans for the rollout of the OTR brand across its network of 676 Ready Express sites nationally.
Waypoint owns 349 sites operating under the Ready Express banner, or approximately 50% of Viva's Ready Express network, and Viva's rollout of the OTR format across these sites remains a key focus for us moving forward, noting that the rollout is likely to take a number of years. To date, Waypoint has provided landlord consent to the lodgement of planning applications on 13 sites across our portfolio, with four conversions having been completed and a further two conversions currently underway. All of these conversions have been funded by Viva with no request for funding from Waypoint. Viva provided an update on the OTR conversion program in its recent quarterly operating report, noting that most of the conversions to be completed in 2025 will be relatively minor in scope and will be funded by Viva at an average cost of AUD 1.5 million per store.
Viva also noted that negotiations with landlords for funding arrangements remain focused on developments to be completed from next year, as the conversion program expands to completing approximately 100 site conversions per annum. By way of reminder, Waypoint is not obligated to provide funding for OTR conversions, but remains open to doing so provided that the returns are acceptable for our security holders. At this stage, we do not expect to provide a significant amount of funding for conversions in 2025, given the number of sites to be converted and the proposed nature of those conversions, but we look forward to progressing our discussions with Viva for 2026 and beyond. We understand that our security holders are very interested in how Waypoint may participate in the conversion program and will provide updates on discussions with Viva as and when appropriate over the coming months.
In February, we flagged to the market that we retained significant balance sheet flexibility to pursue value-accretive opportunities. Following a reassessment of the potential capital requirement for the OTR rollout in 2025, we commenced a n on-market buyback of up to AUD 50 million of securities, with AUD 3.3 million of securities purchased to date at an average price of AUD 2.56 and a total outlay of AUD 8.5 million. We believe that the buyback represents an attractive capital deployment opportunity to enhance security holder value, and with liquidity of approximately AUD 100 million post-buyback, we retain significant capacity for other investment opportunities, including potential funding of the OTR rollout if terms can be agreed with Viva. This liquidity position would be further enhanced by non-core asset sales, with purchasers currently in due diligence on three assets with a book value of approximately AUD 15 million.
We're also considering further asset sales in the current quarter and the second half of 2025 and will provide an update on our progress at our half-year results in August. Finally, our distributable EPS guidance of AUD 0.1648 for 2025 remains unchanged at this stage. Although we expect the buyback to be accretive to earnings, the exact impact cannot be quantified at this point, and we also need to factor in the impact of potential further non-core asset sales. We'll provide a further update on our 2025 guidance with our half-year results in August or earlier if there is a material change in this guidance. Once again, thank you to everyone for attending our AGM today, and I'll now hand the meeting back to Georgina.
Thank you, Hadyn. I would now like to move to the formal part of the meeting. Before we consider each item, there are a few procedural matters I would like to run through first. Firstly, this is a security holder meeting, and only security holders, proxies, powers of attorney, or authorized company representatives are entitled to vote or speak at this meeting. Eligible security holders or their duly appointed proxy or corporate representatives are entitled to vote and have been issued with a yellow voting card at the registration desk. Blue cards are for those entitled to speak but not to vote. Visitors holding a white card are not eligible to vote or speak but are most welcome to listen. If you believe you do not have the correct card, please see the staff at the registration desk now.
For those security holders participating in the meeting via the online platform, you can cast your direct vote using the electronic voting card that you received when you validated the registration. If you have any questions about casting your vote online, please refer to the online platform guide or call us on the numbers set out in the guide or on the screen in front of you. Before voting on each resolution, the results of proxy voting received at the close of voting at 10:00 A.M. on Saturday, the 10th of May 2025, will be shown on the screen behind me. When you complete your card, please indicate the manner in which the votes are to be cast by placing a mark in the for, against, or abstain box for each resolution.
I advise the meeting that I intend to vote all discretionary votes given to me in favor of the resolutions in the polls. When the floor is open for questions, if you have a question, please raise your hand and we will bring over the microphone. When called upon, please give your name and, if appropriate, who you represent and present your yellow or blue admission card. For those who are participating via our online platform, you will be asked to submit questions by registering as a shareholder or proxy holder and selecting the Ask a Question tab. You will have the opportunity to submit an online question or a verbal question by selecting the phone/web option. Please follow the prompts or refer to the online guide for instructions. I will consider the questions submitted online and by web phone after I have taken the questions from the floor.
Please place your completed voting cards inside the ballot boxes held by the share registry staff located near the exit of the room before closure of the poll. 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 shall advise you accordingly. The minutes of the previous AGM were approved by the board and signed by myself as Chair. Copies are available should any member wish to see them. We will now move on to the items of business for this meeting as set out in the notice of meeting. There are seven items of business. Details of each were set out in the notice of meeting. Before we move to the formal items of business, we received a question that is general in nature that I would like to address now.
The question was, who pays for the cost of installing on-the-run stores? Is there rent adjustment when an on-the-run store is installed? Is the installation of on-the-run stores of benefit to Waypoint REIT unit holders? How disruptive is the installation of the on-the-run stores? Who bears the costs of such disruptions? The majority of Waypoint REIT's leases with Viva Energy allow for Viva Energy to convert the sites to the on-the-run format at their own expense, with Waypoint REIT having to consent to the works, albeit such consent cannot be unreasonably withheld. Waypoint REIT has no obligation to provide funding for conversions but may choose to do so if Viva Energy requests funding from us and mutually acceptable terms can be agreed. In order for Waypoint REIT to agree to funding developments, we'd need to be happy with the returns for the Waypoint REIT security holders.
Key factors for Waypoint REIT in determining whether or not we would provide funding include lease extensions and additional rent being payable by Viva Energy. Immediate benefits potentially available to Waypoint REIT from funding developments include higher rental income and lease extensions, while the increased site profitability that Viva Energy Australia is looking to achieve from the on-the-run conversions is obviously a positive for us as a landlord as well. The level of disruption from the site conversions is dependent upon the works being carried out. For sites involving relatively minor works, such as those contemplated to date, the trading downtime is approximately one to two months. The tenant bears the cost of any disruption related to the redevelopment, and Waypoint REIT continues to be entitled to rent in full while the site is closed.
The first item of ordinary business is consideration of the combined annual financial reports for the company and the trust, including the director's report and financial statements for the year ended 31 December 2024, together with the independent auditor's report, which was sent out to security holders on the 28th of March 2025. A copy is also available on our company's website. As mentioned earlier, Jamie Willis from PricewaterhouseCoopers, our auditor for the 2024 year, is in attendance. Please direct any questions that you have of our auditor through me. As you will notice from your polling cards, there will be no vote on this item. It is a discussion item only. Security holders can ask questions and make comments upon the reports and the management of the company. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
Thank you. This concludes our consideration of the financial reports. We now move to the substantive resolutions for this meeting. The next resolution is the adoption of the remuneration report. Under the Corporations Act 2001, listed companies are required to include, as part of the directors' report, a remuneration report, which includes specified information in respect of directors and key management personnel. The directors have prepared a remuneration report for the year ended 31 December 2024, which is included in pages 45 to 60 of the annual report. The Corporations Act also requires companies to put to security holders a non-binding vote to enable security holders to voice their opinion on matters included in the remuneration report. The board will consider the feedback from security holders when reviewing the company's approach to remuneration going forward. I note that voting exclusions apply to this resolution as set out in the notice of meeting.
The board recommends the adoption of the remuneration report. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
There being no further discussion, I will now move that the remuneration report for the year ended 31 December 2024 be approved by passing an ordinary resolution as set out in the notice of meeting. The resolution and proxy position are now on the screen, and I would ask you to please now mark your voting card for item number two. We will now move to resolution three in the notice of meeting, the re-election of Susan MacDonald as a Director of Waypoint REIT Limited. Susan MacDonald is eligible to stand for election, and Susan's biographical details are set out in the notice of meeting and the annual report. The Board, with Susan MacDonald abstaining, recommends Susan MacDonald's re-election. I now move that Susan MacDonald retire under clause 8.1F of Waypoint REIT's constitution and, being eligible, is re-elected as a director of Waypoint REIT. Are there any questions?
Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
The resolution and proxy positions are now on the screen. I would ask you to please now mark your voting card for item number three. We'll now move to resolution four in the notice of meeting, the election of Gai McGrath as a Director of Waypoint REIT Limited. Gai McGrath is eligible to stand for election, and Gai's biographical details are set out in the notice of meeting and the annual report. The board, with Gai McGrath abstaining, recommends Gai McGrath's election. I now move that Gai McGrath retire under clause 8.1E of Waypoint REIT's constitution, and, being eligible, is elected as a Director of Waypoint REIT. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
The resolution and proxy position are now on the screen, and I would ask you to please now mark your voting card for item number four. The company is seeking approval to be given for the grant of performance rights and restricted securities for the Managing Director and CEO, Hadyn Stephens, as his annual long-term incentive grant for the year ended 31 December 2025, on the terms described in the explanatory memoranda to the notices of this meeting. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
There being no further discussion, I will now move that the grant of performance rights and restricted securities to the Managing Director and CEO be approved by passing an ordinary resolution as set out in the notice of meeting. The resolution and proxy position are now on the screen, and I would ask you to please now mark your voting card for item number five. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
There being no further discussion, I will now move that the grant of performance rights and restricted securities to the Managing Director and CEO be approved by passing an ordinary resolution as set out in the notice of meeting. The resolution and proxy position are now on the screen, and I would ask you to please now mark your voting card. The company is also seeking some amendments to the company's constitution. The company is seeking security holder approval to amend the existing company constitution by reinserting the proportionate takeover approval provisions in Rule 16 for the period of three years from the close of the AGM. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
There being no further discussion, I will now move that the constitution of Waypoint REIT Limited be amended in the manner set out in the explanatory memoranda accompanying the notice of meeting by passing a special resolution. The resolution and proxy position are now on the screen, and I would ask you to please now mark your voting card for item number six. Waypoint REIT Limited is also seeking security holder approval to amend the existing trust constitution by reinserting the proportionate takeover approval provisions in clause 17 for the period of three years from the close of the annual general meeting. Are there any questions? Tina, are there any online questions?
There are no online questions. Thank you.
Moderator, are there any telephone questions?
Thank you. There are no questions on the phone line.
There being no further discussion, I will now move that the constitution of the trust be amended in the manner set out in the explanatory memoranda accompanying the notice of meeting by passing a special resolution. The resolution and proxy position are now on the screen, and I would ask you to please now mark your voting card for item number seven. Please complete your polling cards now as they will be collected shortly by MUFG Corporate Markets. Security holders are reminded that they can submit their vote online until five minutes after the meeting closes. To the security holders and visitors participating online, we are pleased that our technology enabled your attendance today, and thank you for joining us. Ladies and gentlemen, that concludes the business of the meeting.
On behalf of the board, I would like to thank you for your support, and I now declare the meeting closed. The results of the poll will be announced to the ASX later today. Thank you for your attendance and participation in this meeting.