Morning, ladies and gentlemen. I'm Declan Moylan, I'm the Chairman and Independent Non-Executive Director of the company. I'd like to welcome you to the 2023 annual general meeting of Irish Residential Properties REIT plc. It's just gone 11:30 A.M., I've been informed that we do have a quorum, I'm now declaring the meeting open. Before proceeding with the formalities of the meeting, I'd like to begin by introducing the people who are seated at the table beside me and certain other personnel who are in the room. Seated at the table are Margaret Sweeney, our CEO and Executive Director of the company. Aidan O'Hogan, Independent Non-Executive Director and Senior Independent Director. Brian Fagan, Chief Financial Officer and Executive Director of the company. Joan Garahy, Independent Non-Executive Director, Chair of the Audit Committee, and incoming Senior Independent Director. Hugh Scott-Barrett, Independent Non-Executive Director.
Tom Kavanagh, Independent Non-Executive Director. Stefanie Frensch, Independent Non-Executive Director. Philip Burns, Non-Executive Director. Anne-Marie Curry, Company Secretary and General Counsel. I'd also like to introduce Denise Turner, who has been nominated by the board as a new Independent Non-Executive Director. I think Denise is in the body of the room. Perhaps, Denise, you might just raise your hand. There we go. Just to identify yourself. You're very welcome. Also present in the room are David Moran, Audit Partner from KPMG, the company's auditors for the financial year 2022, as well as Conor O'Dwyer and David Byers as Partners at McCann FitzGerald, the company's legal advisors. We greatly value shareholder engagement and the opportunity the AGM provides each year to meet and communicate with our shareholders. We've provided conference call facilities and a live webcast facility for any shareholder who's unable to be with us in person.
As well as the ability of shareholders to vote and ask questions at the AGM in person today, shareholders were given the opportunity to submit any questions relating to items on the agenda in advance of this meeting. We've encouraged shareholders to exercise their rights by voting in advance of the AGM through the appointment of proxies. The annual report and notice of annual general meeting were sent to shareholders and published on the company's website on the 3rd of April, 2023, and so I propose taking the notice of the meeting as read. Before I hand over to the CEO, I'd like to make some preliminary remarks myself. 2022 was a year of progress and delivery for IRES. We delivered a strong performance and successfully completed the internalization of the management company.
This strong performance has continued into the first quarter of 2023, on which Margaret will touch shortly. The board has seen some important changes during the year and has been engaged in extensive shareholder engagement. As outlined in the annual report and in our notice of AGM, having served 9 years on the board as a non-executive director, as well as being the current Senior Independent Director and Chair of the Remuneration Committee, our colleague Aidan O'Hogan is stepping down from the board with effect from the end of this AGM and is not seeking re-election today. On behalf of the board, I want to thank Aidan for his support as Senior Independent Director and his significant contribution to IRES over the past 9 years.
Joan Garahy is proposed to succeed Aidan as senior independent director. As such, Joan will oversee my announced transition as chairman over the coming year. Following formal search processes with external consultants, in March 2023, we announced the proposed appointment with effect from today of Denise Turner, who has a wealth of real estate experience in Ireland and the wider European real estate sector. While in September last year, we appointed Hugh Scott-Barrett as an additional board member. Hugh brings over 20 years real estate asset management and banking experience to the board. Following the internalization of the company in 2022, we have refreshed the board to ensure that it has all the requisite skills to meet the needs of the company. We have a board which I am confident has the skills and experience to navigate the challenges that we face.
I'm particularly delighted to say that in a sector that has some way to progress with gender diversity, the IRES board proposed today has 44% female representation. I should also note that we're one of only 2 Irish-listed companies with a female CEO. In addition, 40% of our leadership team is female. As chairman, I'm delighted with this progress, and in particular in this sector, and I know that diversity is a matter that is central to policy for you, our shareholders. Now, it's frustrating that despite the strong performance of management and the wider team, the current share price does not reflect the value of the business. Challenging macroeconomic conditions, including higher interest rates and inflation, have impacted the whole of the real estate sector.
Whilst IRES has outperformed the sector, we understand that is of small comfort to investors and to the board. In addition, specifically in Ireland, the current rent cap has impacted the growth outlook. Against this backdrop, the board has continued to focus on all options to create value for shareholders and to ensure that we continue to build a sustainable business, creating long-term value for all our stakeholders. In the run-up to this AGM, there has been a series of public letters issued by Vision Capital to IRES shareholders, highlighting views on some of the resolutions to be voted on today. The board has carefully considered the matters raised and published responses available for all shareholders through several updates to the market and on our corporate website.
As I mentioned, the Board has sought to engage constructively with all shareholders over the course of the year and has at all times acted in the interests of all stakeholders. The Board has been encouraged by the feedback and the responses of the majority of shareholders and recommends that shareholders vote in favor of all the resolutions proposed. Where there is dissent, the Board will continue to engage and to listen and to address the concerns constructively, but in the interest of all shareholders. Despite the macro challenges we face, with our modern, sustainable, and diverse portfolio, our strong operations, and the fundamentals underpinning the business, the Board has confidence in the strategy and in the management of this business. We believe that this will be reflected by the market in due course.
With that, I'll now turn over to our CEO, Margaret Sweeney, to give a short presentation on the performance of the business, including the recent update we made to the market over the past couple of days. Margaret.
To everyone. Thank you all for coming. I know some of you have traveled a good distance, so thank you for making that effort and for coming to the AGM today. I'm one of these. I have to take my glasses off to read rather than put them on. Just on the slides, you will see that our key performance indicators for 2022, which was another year of progress and delivery for IRES REIT. We delivered a strong performance across all of the key metrics and also completed the internalization of the management of the company, and that included transition of functions, as well as putting new technology right across the whole business. As you can see from our trading update issued yesterday, we continue with that strong momentum on performance into 2023, and I'll touch on that later.
We also, you know, have to ensure that in terms of our good performance, where we stack up against our peers who are also running residential rental businesses. We look at that across other companies similar to ours in U.K. and across Europe. The graphs on this slide actually demonstrate, you know, the delivery of a sector-leading performance by IRES. Our occupancy levels reached an all-time high of 99.4% in December last year. While you expect that from the demand in the market is significant, our leasing and operations teams are still faced with many challenges, both during COVID, during the pandemic, and also through into this year. It does take quite a bit of work to achieve that full occupancy and to optimize it at a level of 99.4%, which you can see is very much market-leading.
We've also consistently grown our net rental income year on year, and our NRI margin, that's the net rental income margin, has also outperformed our peers over the last number of years, achieving 77.5% in 2022. This was despite the environment Declan mentioned of inflationary pressures and also in Ireland, local property taxes, which apply to apartments from last year. The last three years has also seen us putting in significant change across the company, as I mentioned, transitioning from an externally managed REIT to being fully internally managed. This was planned and completed from the initial termination notice of the external manager in April 2021, over the following 12 months into 2022.
One of the matters that does actually create a challenge for the business, we operate all of our business under the Rent Pressure Zones, and we're subject to the current rent cap of 2%, which was introduced in December 2021. That is challenging in the current environment of inflationary pressures, increasing interest rates. Also, as a leading provider of private rented residential accommodation in Ireland, we believe the company does have a meaningful role to play in discussion and formulation of the regulatory framework that supports development in the sector. Just to assure you, as shareholders, we are actively engaged as a board and management team with the industry and with government, to try and help frame a more supportive and appropriate policy that meets the needs of all stakeholders in the sector.
In looking at some of the developments during 2022, we do focus on portfolio optimization, capital allocation, and also asset management. That's never more important than with the current macro environment that actually started emerging post-COVID. There's a very close focus on that by the management team. We did add 238 new apartments to the portfolio in 2022. The one on the top, your top left-hand side is actually The School Yard that's on the North Circular Road, which is not too far from here. That was actually developed as Ireland's first LEED Gold residential building, which we're very proud of. We also took delivery of Tara View, which is the building on the top right, and that's on the Merrion Road, which is an outstanding location for residential.
We took delivery of that in August of last year. We decided we would actually progress with the sale of five luxury townhouses that come with that development, as we believe that's much more accretive for shareholders. We also sold Hampton Wood in August 2022 at a 3.5% net initial yield, which realized a significant profit on cost and also an uplift on the preceding valuation. We had entered into a long lease on that property first and then saw better value for shareholders in disposing of the assets with the lease in place. That as we felt we could add limited further value into that asset. It's worth also noting that the environment for viable development of large scale apartment buildings became very challenging post-COVID and as 2022 evolved, particularly with the macro dynamics that were at play.
We determined that the most optimal way to realize value from Rockbrook site was actually, which had planning permission in place, was rather than add development risk into the business itself, that we would actually sell it on. We completed that sale in Q1 of this year, achieving a very good price for it. I mentioned earlier that we applied new technology right across the business. That's market-leading technology for residential property. This gives the company a clear competitive advantage as well as an additional asset.
We have a very outstanding platform now for running this company and also opportunities to use that further to add other opportunities for service efficiencies, unlocking operational capability with residents, and also allowing us systems flexibility to offer that platform to third-party opportunities, which hopefully will add additional revenue and deliver shareholder returns into the future. Just moving as well, I know close to lots of our shareholders' own strategies and policies is actually sustainability and operating responsible businesses. I should assure you that focusing on sustainability remains very much at the forefront of our business. IRES's vision is to be the provider of choice for the Irish living sector, known for excellent service, for operating responsibly, and also protecting the environment by ensuring we minimize our environmental impact and also by ensuring we also contribute to the local communities that we engage with.
I think that's really central to the type of business. We actually provide homes to a lot of people every night. So that whole community integration is a very core part of our team's work on the ground. You can see from the slide in front of you that we're delivering across a whole range of initiatives in support of our ESG strategy, which we also have aligned with the UN's Sustainable Development Goals. In particular, I should pull it, talk about two key stakeholders for us, our residents in our apartments and houses, and also our employees. They're very much central to our strategy and also delivering value for you, our shareholders. I'm delighted to say we achieved a 92% satisfaction score in our first employee survey post-internalization that we carried out in December of last year.
We also seek feedback from our residents. We actually get a very big significant response to regular customer surveys that we do, and it gives us a very good sense of their satisfaction and things that we can improve on. That will be further enabled by the I•RES Living app that we actually are launching as well this month. We've also been working on decarbonizing our portfolio. We aim to reduce our Scope 1 carbon emissions by 30% in 2023. We reduced our Scope 2 greenhouse gas emissions by 26% last year. We have a range of measures in place to try and continue progress here. Our target is to keep reducing that further in 2023. We've also 100% renewable energy sourced for all common areas in our apartment properties and also across our offices.
We have a range of other biodiversity initiatives and other sustainability objectives, including engaging with local communities, which is very important to our team in IRES on the ground and our employees. We have many examples of work we do in partnership with local hospitals, community, and sporting groups. Just looking in terms of looking at coming into this year and looking forward. You'll see on this slide that the fundamentals for this business remain strong, as do the market fundamentals in which we operate. Like in Ireland, we have strong population growth, very strong, actually unique in Europe, continuing strong economic growth and also continued job creation.
We have a clear competitive advantage in the market, and as a result of the strategic decisions taken over the last few years, we actually believe that this provides a good base for the company in terms of moving forward. We do recognize that the current rent cap structure is a challenge, and that's something, as I mentioned, that we are very actively working on. The macroeconomic backdrop in 2022 and continuing into 2023 is still uncertain. Declan mentioned some of the challenges in relation to that and how it impacts on the share price, and that's also very much a focus by the company and the board. We've focused very much now on a number of business drivers to ensure the business continues to perform, and that the value inherent in the business is recognized by the market.
These include maintaining our focus on operational excellence, disciplined capital allocation, including disposal of assets. You would have seen that we're seeking to dispose of non-core assets in excess of EUR 100 million in the short term. We're also very focused on prudent balance sheet management in these times. Also, as I mentioned, we engage with government and key industry stakeholders to support delivery of housing objectives and a more effective regulatory framework. I've gone through some of the initiatives on sustainability, and we're also, I should say, we actually, the quality of our properties and the credentials in terms of building energy ratings that were up on the slide previously, they're actually probably unmatched. We continue to target reductions and bring those in line with the climate and environmental strategies and also those set out by the government.
I should say we're continuing to evaluate options and opportunities for scaling the business accretively and also in terms of looking at the long term for this business. As I referenced earlier, and you can see from the figures on the right-hand side, we continue that momentum on our strong performance into Q1 2023. Increasing revenue by 4.9% year-on-year and maintaining occupancy and collection rates above 99%. The company does maintain its focus on a prudent balance sheet management, and we extended the maturity of our RCF facility. That's with a syndicate of four banks in 2022. We extended that out on the same terms as we put in place in 2019. So that actually the earliest maturity on that is 2026.
Also, we added in greater flexibility for alternative sources of finance for the company as well as part of the flexibility with that RCF. At the end of Q1 of this year, that's the end of March, our LTV is 43.1%, and we have no debt maturities before 2026, and our debt is staggered out to 2032. What's important as well for shareholders, and the board is very mindful of it. The board will seek to return excess capital to shareholders where appropriate and in an efficient manner. We recognize the dividend continues to be an important part of the IRES investment case, and IRES with status offers a predictable income stream, which we recognize is attractive to many of our shareholders.
I suppose to conclude, I'd like to assure you, our shareholders, that the management of the board's continuous focus is to look at all the options to create value for shareholders and ensure we continue to build a sustainable business creating long-term value for all our stakeholders. Thank you very much.
Thanks, Margaret, for that update. As I noted earlier, to facilitate shareholder communication, shareholders who wished to do so in advance, were invited to submit questions relating to items on the agenda of the AGM by emailing the Company Secretary. The Company Secretary informs me that no questions were submitted by email. I'd now like to proceed by dealing with questions from shareholders on items on the agenda of the AGM. I propose dealing with questions on any matter relevant to the business of this meeting at the outset before we move on to the voting process. If you have a question, please raise your hand. I'd ask you to state your name and confirm you're a shareholder. If you're a proxy or a corporate representative, please tell me which shareholder you represent.
All questions should be directed to me as chairman of the meeting, and I'll either answer them myself or I'll redirect them to one of my colleagues on the board as appropriate. Any questions, please. Yes, sir. Yes, Mr. O'Sullivan. The microphone is.
Have you any more acquisitions in the pipeline after selling the site there that you mentioned for...
Have we any more acquisitions immediately in the pipeline?
Yeah. Thank you. Any more acquisitions in the pipeline after selling the site, the land site?
Okay. Well, we're always on the alert, Mr. O'Sullivan, for investment opportunities. We have nothing to announce at the moment. We survey the market with care, if opportunities of a suitable type come up, we will of course participate if value is to be got. We have nothing to announce just at this time. This gentleman on the left wants to speak.
Thank you. Good morning.
Just for process.
Sorry, could you just indicate your name and who you represent?
I'm sorry. Thank you. My name is Jeffrey Olin. I'm the president of CEO Vision Capital Corporation, the funds that we manage are a 5% shareholder, we commenced being a shareholder at the time of the IPO in 2014. Thank you for hosting my questions this morning. As a matter of process, I just want to understand, are you taking all questions now, or would you prefer to address questions related to resolutions as they come forward?
My preference, Mr. Olin, is that I would take questions now, and that people will have the benefit of the responses to those questions when the time comes to vote.
Thank you. I have a number of questions. I will try to be pertinent and respectful of your time, and thank you in that regard. My first question is, in your press release dated April 17, 2023, you noted that you were seeking to sell $100 million approximately. Sorry, EUR 100 million. I come from Canada for this meeting. My apologies. EUR 100 million of non-core assets. Now, non-core typically refers to assets that are either of lesser quality or properties in smaller markets or assets in which you have a small holding as a percentage of the total assets or assets not within your strategic asset class focus.
For example, office or industrial properties within the context of a residential portfolio, be non-core, or owning just one apartment building in Spain when the balance of the portfolio is concentrated in Ireland. Several media sources reported the proposed sale of The Marker, which we are located nearby, and involving exclusive negotiations with Irish Life Investment Managers. Since The Marker is amongst the most premier apartment buildings in Ireland and a linchpin of any public or private multifamily rental portfolio, and since IRES operates in a few markets within Ireland, how is it that Marker can be described in any manner as non-core?
Thank you very much, Mr. Olin. I'll deal with that question first.
Thank you.
Obviously, if you, if you have further questions, we can come to them.
Please.
At the beginning of your remarks there, you sought to define what non-core meant. I wouldn't actually concur with your definition. IRES's market position or the position of its assets is largely mid-market. The strength of this portfolio and its focus, and I think its success, largely derives from the fact that it has a very significant market position in the middle of the market. Not at the top end, not at the bottom end, but in the middle. If you talk about disposing of core assets, you would look either upwards towards the top or downwards towards the bottom, where the focus of the company is along the middle of the market. It's possible that you could define The Marker apartments as non-core because they are slightly out of alignment with the rest of the portfolio.
Likewise, if there were an apartment block of lesser quality or less performing, or as you say, an apartment block where we didn't have a major holding within all the units, that would also be defined as non-core. The fact, however, that apartments are non-core doesn't necessarily make them a target for disposal. They would only become a target for disposal if the economic case justified that. The Marker, I would think, probably would sit in a definition of non-core. As you know, and as we have made clear, there was no arrangement or deal made on The Marker, so there was nothing to announce.
The Marker is a premier property and a material asset that comprises a significant percentage of the company's overall asset base. If the media reports regarding these exclusive negotiations are true, why have you determined that no disclosure regarding this planned sale is appropriate in the context of a highly contested election of directors and other resolution for today's meetings? If the reports are not true, why is it that the company continues to fail to update the market on this issue, which is likely to mislead the public and continue to represent an unknown overhang on the price of IRES ordinary shares?
The company can't bear any responsibility for media reports, particularly inaccurate media reports. Let me make that clear. We can't respond to inaccurate media reports. The fact of the matter is that there is nothing to announce with regards to The Marker. No deal has been done. No deal was done. There were approaches with regard to The Marker. There were approaches with regard to other apartment buildings, all of which would be considered on their merits. There was no deal done on The Marker. It's not our practice to speculate in the course of any negotiation or in the hope that something might happen. It's our practice to announce when something has happened.
You mentioned the recent, not so recent any longer, spike in interest rates. The recent spike in interest rates are in the context of the persistence of inflationary pressures, which you mentioned. This is one of the most well-telegraphed cycles of interest rates in history, beginning in early 2022. Accordingly, a research analyst from Davy, Colin Grant, highlighted the significant amount of exposure to interest rate risk due to the REIT's very high level of variable rate debt in the first half 2022 earnings conference call. As of June 30th, 2022, the REIT had EUR 473 million of unhedged variable rate debt.
As a result of the company's failure to act to even hedge a portion of this exposure until December 14th, and the increase of 2.2%, 220 basis points in the Euribor from June 30th to December 31st, and I would note over 320 basis points till today. The annual increase in interest expense as a result of this failure to hedge would be approximately EUR 10 million over a 5-year period, EUR 50 million. Based on your 3-year average FFO or funds from operations cash flow multiple of 17 times. The result of IRES mismanagement of the balance sheet led to destruction of approximately EUR 170 million in value, which we would note is approximately 30% of the REIT's current equity market cap.
Why was the REIT so slow to manage this risk and reduce this exposure, particularly when it was so well telegraphed and highlighted by stakeholders?
First of all, we don't accept that the timing of the hedging transaction was late. I'll hand over to the Chief Financial Officer to make his remarks on that.
Thanks, Jeff. Jeff, as part of internalization, there was a long list of things to do. Obviously, an early focus was to manage financial risk. Initially, we concentrated on extension of our RCF facility to ensure that we had no near-term repayments or refinancings. We negotiated an extension out to 2026 on the same terms as the 2019 facility. At the same time, we negotiated with our banks for an option to put in place alternative financing to give us future flexibility around repaying and or refinancing the RCF. This would enable us to do perhaps another notes program to repay part of the existing RCF. Once we transitioned the treasury function, we started looking at the most optimal way to achieve future cost certainty for finance expenses. We engaged with our banks. This was a technically difficult and complex exercise.
In the first instance, we had to amend the RCF to enable hedging of that facility. There were a number of ISDA to negotiate. We needed to avoid daily collateralization. We sought to execute this process as efficiently and expeditiously as possible. We have achieved that. We have hedging in place which provides certainty over medium-term financing costs. 72% of our drawn debt is fully fixed.
Yet 28% is not. I mean, based on the letter IRES sent to Vision and a select number of other shareholders in March 31, 2023, you noted that Mr. Fagan was given a raise to fully incentivize him to drive, quote, and I quote, "Financial, operational, and strategy performance." Respectfully to your answer, sir, this has clearly not worked, as the balance sheet mismanagement has led to the noted destruction of EUR 170 million of shareholder value. Strategically, the only thing that appears to have been done is to further use this REIT's cherished funds to deflect and defend the board from considering and taking action on bona fide strategic issues that might result in surfacing value. In light of this fact, we ask you, sir, what financial and strategic performance by the CFO are you talking about?
As the management of the company's finances and balance sheet is the core responsibility of the CFO, sorry. How does this destruction of long-term shareholder value warrant a material increase in salary for the CFO who was just recently hired?
CFO has given you the history of the restructuring of the arrangements in question. We don't accept that the CFO is not performing in accordance with his brief.
Okay. As an explanation, or I should say rationalization for increasing the salary of the CFO, the annual report noted that it was a result of an unanticipated material increase in the CFO's responsibility related to the internalization of the management of the company. Since this internalization of the manager was contemplated, negotiated, and known at the time of Mr. Fagan's initial hire, and in light of the balance sheet issues I've already highlighted, can you please disclose to shareholders what were the real factors to rationalize this increase in his salary?
This company has gone through a significant transformation. Up until last year, it was externally managed by a subsidiary of a Canadian company called CAPREIT. We paid a fee to CAPREIT in relation to that management function. A year ago, the management arrangements were internalized, and we took the entire structure in-house ourselves. CAPREIT served a notice of termination on us with regard to their management function, and we took responsibility for the entire management of the business from that point onwards. The level of responsibility falling on the Chief Financial Officer to whom you're referring, obviously increased to a massive extent due to the fact that all of the responsibility now rested within the internalized management structure, which was not before that the case.
I'm aware of the history, your answer isn't really responsive to my question in terms of this was all known at the time Mr. Fagan's hire. You know. Anyhow, we will move on. In your press release dated April 17th, 2023, management suggested that it was not a good time to look to sell the company. This was the same reply given to Vision in 2021 when the concerns that were set out in our letter of April 12th were first presented to the company. Since 2021 was objectively speaking, a great time to sell assets, isn't it a reasonable conclusion that the board and management suggest that there is never a good time to consider the sale of this lame duck REIT?
The answer to that question, Mr. Olin, is no. The board has a fiduciary responsibility at all times to read the market as the market stands at all times and to reach a responsible conclusion as to what to do with this business. What you're now asking me is whether this is the right time to sell the company. Maybe you are throwing doubt on our capability to do that, but I don't think you should do so, because an objective analysis of current market conditions shows, in our view, that there could not be a worse time to sell this company than at a time of high interest rates, high inflation, and the rental cap in Ireland. It would be an unwise thing to do, in our view, to put the company up for sale in these circumstances, particularly where the share price sits.
We believe rather that to continue trading in a proper and organized fashion and to wait until the cyclical, the inevitable cyclical change comes in the European real estate market and to keep it steady as she goes until conditions improve is the right thing to do. It may be that in due course, a time will come for the sale of this company that might be in the judgment of the board to be correct. That time is not now.
In that context, in the letters Vision sent in 2021 and on April 12th, 2023, Vision set out a number of fundamental issues related to the inefficiency of the REIT structure as a vehicle for growth for IRES, the overall lack of trading liquidity, the limited investor universe, and challenges in raising capital. These are extremely critical factors to operate effectively as a public entity in any jurisdiction. To this moment, while IRES has significant commentary on many matters, Vision nor shareholders have received any responses to these concerns. Why have you refused to discuss these most fundamental considerations, which, at their core, are the only reasons for a company such as IRES to be public in the first place? Why have you refused to consider, notwithstanding your protestation, other paths to service value for shareholders?
This company has been a REIT since the IPO, since its inception. The case put to investors at that time, the case which continues to be put to investors, is that the Irish market is the logical and correct place to have this company listed. This is where the company is based. This is where the company's assets are. This is the location which the board is familiar with. The investors in this company were invited to come into a REIT structure, a great number of them came into the REIT structure because of the obligation of this company to distribute at least 85% of its profits by way of annual dividends. The board is dedicated to the REIT structure because of the commitment which has been made to investors in order to release dividends in an orderly fashion.
We're obliged by law to release 85% of our profits. We try to do better. That is what our investors joined for. That is what we deliver. We don't think that relocating the listing to another market is going to improve the situation. If you're implying that the company should be sold out of public ownership, that may indeed, as I said in the answer to my last question, be a rational thing to look at if market conditions appeared correct. Market conditions in the view of the board couldn't be worse at the moment for that.
As IRES asset base shrinks, and it has limitations on its ability to effectively and profitably generate growth, the burden of its excessive General and Administrative expense due to what we respectfully say are bloated board and executive management salaries and costs will increasingly usurp value from shareholders. Are you complacent in accepting this reality, or are you pre-prepared to reduce your G&A overhead costs? Is this not a further reason to service value from your premier real estate portfolio to cease the future erosion of shareholder value?
In answering that question, I'd like to give you a slightly different context. First of all, the major strategic move made by this company over the last year was the internalization of the management. That internalization did not increase costs, such as you may suggest. That internalization, in fact, saved money, and that was one of the drivers behind the decision towards internalization as we communicated to shareholders. We don't accept that this is a bloated company. There's an implication in some of your communications that this is a sort of a closed company which is entrenched in its own self-perpetuation. That couldn't be further from the truth. This is an open company with an advanced sense of its own fiduciary and an open board with an advanced sense of its own fiduciary responsibility to deliver value for shareholders.
We reject any suggestion that the overheads are excessive. We say that if in the future a time comes to release value by delisting in some fashion, we would look at that with an open mind. Now is not the time.
IRES is one of the largest housing platforms in Ireland. We would suggest has some corporate and community responsibility to provide much needed housing to the supply-constrained markets in Ireland. Maintaining your existing publicly traded REIT structure is clearly not supportive of this objective. You need look no further than the Rockbrook development site, which you acquired in 2015, and you sold last month to a developer group here in Dublin. How is it that this group was miraculously able to prime this site for construction a mere few months after they purchased it from you?
Is it because your REIT structure requires you to distribute the majority of your cash flow as you described, or is it because you traded a 40% discount to net asset value and an equity raise would be dilutive, or is it because you levered up your company so much that you would now be unable to take additional debt and risk losing REIT status? We believe it's all of the above, but we'd love to hear your thoughts.
The answer is none of the above. In these conditions, it would be too risky to enter on a large scale development for a company of this size. In these conditions, when the asset which you describe was acquired, there was certainly a good prospect that a development could have occurred in a sensible, organized fashion. With the rise in interest rates and with the change in economic conditions, it's not just because of the REIT structure. Any entity heading into a very significant development of over 400 units would be facing a very risky related situation, and we couldn't countenance that in the current circumstances.
Thank you. I'm almost done here. Vision is but one shareholder, we've incurred many thousands of EUR of legal and other expenses as well as our time to, frankly, the benefit of all shareholders. Vision's ownership at 5% of the company is 25 x the total of the nine IRES board of directors combined. You have what appears to be an unlimited budget, where you spent millions of EUR of shareholders' money to defend what we would respectively say is the entrenchment of this board, essentially guaranteeing your jobs at shareholder expense. Can you please disclose to us how much money has been spent with Rothschild, other financial advisors, PR consultants, legal and other consultants over the last 2 years on non-day-to-day strategic matters?
The answer to that question is any public limited company needs advisors. We need advisors like any PLC does. I reject the idea or the concept or the allegation that our spend is unusual or excessive. We've gone through a very significant period of transition in this company, particularly with regard to the internalization. We've also gone through various requirements for communication with the public, communication with the media regarding the changed status and the changed development of this company. It's our duty to communicate our developing situation. It is not an indulgence. I reject the idea that this board is self-perpetuating or that it wishes to remain in receipt of fees for its own sake. This is a board with a high sense of fiduciary duty. I reject any suggestion to the contrary.
Just to summarize, my last question, respectfully to your rejection. IRES, you can't raise equity capital due to your massive share discount to net asset value, which is further exacerbated by the complete lack of trading liquidity on the Irish Stock Exchange. It can't raise additional debt without risking its REIT status. It can't retain cash flow to fund growth initiative because of the REIT status. It can't develop housing for the Irish market, which is critically undersupplied. We ask this board, please, why does IRES need to continue to exist as a publicly traded REIT, if not to continue to pay this board and management's bloated compensation at the expense of literally every other stakeholder involved? Thank you.
Thank you very much, Mr. Olin. Just to say in conclusion that I reject the idea that this board is self-perpetuating or closed to suggestion or is motivated in some way by self-enrichment. That could not be further from the truth. Look at the qualifications of this board. You'll see them in the annual report. You'll see the quality of the individuals involved. I say to you that this board is, in fact, in difficult conditions, producing a steady and respectable and a return with tremendous potential. I believe that if we continue to trade in an organized fashion. We will in due course when the market turns and real estate is cyclical. When the market turns, it will be to the benefit, the great benefit of shareholders. That is the view of this board.
I know you want us to sell the company in the meantime. We don't want to do that because we don't believe it's the correct time. We believe there could not be a worse time. I've said that before. I don't like to repeat myself, but I have to make my views clear. I thank you very much for your contribution. Yes, sir. This gentleman, I think. I'll be with you in a sec. Yes, sir.
Thank you. David McCabe is my name. I've been a shareholder from the very beginning.
Yeah.
I've two questions, one for you, Chairman, and one for Brian Fagan. The one for you is, I'm quoting from your Chairman's statement. "We delivered a strong performance across all key metrics." I turn back a few pages to page 5, and I see the interim dividend was reduced. The final dividend was reduced. The group gearing went from 40% to 43%. The market capitalization was down about 30%, and earnings were down marginally too. My question is very simple: what or where is the strong performance that you congratulate yourself on? It's certainly not on the financials that shareholders are interested in.
Thank you, Mr. McCabe. It's nice to see you again, and I know you're a loyal shareholder.
I'm older and doggier every year, but bear with me.
Mr. McCabe, you don't look it. The strong performance, I think, is the steady performance right through the internalization process. That has been a crucial transition for this company. It's really something which was strategically thought out extremely well and enforced extremely well, and we've come out the other side of it. There was a drop in the dividend, certainly, but that was largely due to a series of one-off expenses around the internalization process. The board is totally dedicated to the dividend, to dividend maintenance and dividend increase where possible. We understand that on the motivation of a lot of our shareholders, particularly small shareholders, relates to the dividend and the board is really sensitive to that.
We would hope, and we expect that matters will improve significantly due to the careful stewardship that our management team is showing with regard to the assets. Just to say, in case it's necessary to say it, that this board has total confidence in the management of this company, in the executive management of this company and believes that its confidence is being repaid and will continue to be repaid. Your concerns about the dividend are noted, and the board is really conscious of that going forward. I hope when you come to see us next year that you'll have something better to say to us about the dividend. I hope that.
It's not just the dividend I was talking about, I mentioned 4 financials and let it pass. My second question is for Brian Fagan. I'm a banker and many syndicated loan I put together in my heyday in the 1980s and 1990s. When I read the details of the syndicated loan arrangements set out on page 167, I think. I have to ask you a few questions. Why did you go a secured lending route? All I can say is the costs, the legal costs and the stamp duty must have been EUR millions and EUR millions. In all the lending I did, we only took security in syndicated loans if there was a real risk, if there was a worry the company was in trouble. I'm not gonna mention names, if I did, you would know these names.
Semi-states, government public companies. My first question is: Why did you not go unsecured? Here you are, you're paying a margin of 1.75% over DIBOR. You have to restructure that during the year. I can only imagine the costs that you've incurred on the restructuring. The loan-to-value... Well, I won't go into all the details, but that's my message. Why did you give security to the lenders rather than have a syndicated arrangement of unsecured loans?
Brian Fagan, would you care to deal with that?
David, thank you for all your questions. Okay. First off, what I would say is that the syndicated facilities with the banking syndicate were originally put in place in 2018. They were then extended in 2019, and then following internalization, they were extended further now out to 2026. Right. In relation to the requirements of the banks back in 2018 and their requirement like for a secured facility that was subject to negotiation at the time. I wasn't part of those negotiations. Right. I have been part of other negotiations since. I would imagine if we were putting in place a new facility now that the banks would require a secured facility. I appreciate all the experience you have had in terms of
Lots of syndicated loans over the years. I also have many years experience of dealing with banks and dealing with syndicates, right? In my experience, right, in the property industry, right, banks always look for security over the fixed assets, right? Like banks always look for lots and lots and lots of security, and your job is to try and, you know, reduce or mitigate the amount of security. All I'm saying is, you know, the past is the past, the past is the past and live with it. Don't give security to anybody next time there is a refinancing event.
We will take that on board, David. Look, what I would say, and I think the important thing is, the really important thing for the group is that we do not have any near-term repayments or refinancings before 2026. That is the key thing for this group at the moment.
Thank you very much, Brian. This gentleman here I think is waiting.
I'm waiting on age, Mr. Chairman. My name is Phil Duggan, a small disillusioned shareholder, because my holding in IRES has decreased by 28%. I look for some comfort in the outlook statements in the annual report. There were three, yours, CEO, CFO, I thought they were very bland and unsupportive, if you like. To, in fairness, the CEO made herself available before the meeting during coffee, I expressed my frustrations to her, I appreciate that because it doesn't always happen at AGMs. The presentation which you made, I think, overcame the disillusionment I had with the rather bland statement in the annual report. In relation to the price, the 28% that I don't sleep at night over, you might...
I'm sure you know it, the share prices as I recall them, 21st to 23rd of October 2021, EUR 1.62. A year ago, 4th of May 2022, EUR 1.46. Two days ago, EUR 1.03. You mentioned in the report the policy of aligning bonuses with the movement of shares up or down. That doesn't seem to have happened from the eye-watering bonuses I've seen awarded to the CEO and the CFO. As I say, I can't align those jaw-dropping figures with your statement that you align bonuses with share prices up or down.
Like the one of the previous speakers, I know you'll answer this question. I did have concerns about the future of IRES and felt that maybe you should get off the pitch like Hibernia, IRES and some other one as well, an earlier one that I can't recall. You're the last remaining player on the trust or property trust platform. I take your point that you'll make a decision when the time is right, and I appreciate that. Thank you.
Well, thank you very much for those remarks. I'm going to pass one of those questions to the chairman of the remuneration company in a minute, or the remuneration committee, I should say, in a minute. Before I do that, the board shares your frustration about the share price. I mean, The board is deeply unhappy about this. We believe that a large portion of the difficulty arises because of the very poor condition of the European real estate market. We believe that IRES' share price, whilst depressed, is not as badly damaged as many other players in the European real estate market.
However, we do believe that by sticking to our mission and by being extremely careful in the day-to-day administration and running of the company, that we can keep matters together to take advantage of the coming upturn, the cyclical upturn in the European real estate and the Irish real estate market, which will undoubtedly, we believe, enhance the share price. We understand it's frustrating. We share those frustrations. Would Aidan like to have a very brief comment on bonuses?
Just on the bonuses, the metrics by which the bonuses are decided are set out in the report and are followed rigorously.
I read those.
Yeah.
95 and [audio distortion]
Yeah.
They're beyond me to grasp them. Having given due thought to the why you are paying the level of the bonuses, that a lot of the unquantifiable basis for contributing to the bonus, that they should be covered by the salary, not by the bonus. As such, I saw the bonus, maybe naively because of my frustrations, as linked to the poor share price.
They're clearly set out. I think also in relation to the long-term performance, I think it's worth noting that the ones that were awarded in 2020 have paid out nothing.
Yeah. I know. I paid that much. Yeah.
you know, it's easy to look at the numbers and see large numbers.
Yeah. I looked at the numbers.
The eventual delivery has to be
I looked at the numbers that suited my statement. Thank you.
That's all right. Thank you very much for your contribution. Yes, sir.
Chairman, Hello, can you hear me?
Just give me your name, if you would.
Chairman, my name is Peter Malbasha.
Okay.
I have a few questions here that I'd like to go through in relation to the report. I'd like to start off, One of the main points and one of the main concerns, I think is for me in relation is to banked indebtedness, banked debt, page 167. The requirement is a 50% LTV in terms of the loan covenant. As of the end of the year, was 43%. This morning, interest rates rose, as you may be aware, by 0.25%. I wonder what impact that will have on the investment portfolio and in terms of valuation.
Sorry. First of all, I can't answer that question because I don't know. You're correct in pointing out that there is a limit of 50% on the LTV, and it's the board's job to manage that as part of its balance sheet management. The board really takes very careful note of that LTV limit, and it's the board's job to make sure that it's not breached. There are various steps the board takes in that regard, such as the prudent disposal of assets that we discussed earlier to make sure that matters are kept within the limits. You can be assured that that matter receives very close attention. I can't apply an individual interest rate increase and give you a financial result of that.
All I can say to you in general terms is, one of the primary responsibilities of the board is to make sure that the LTV is very closely monitored, and that, I assure you, happens. It's a matter of great responsibility for Irish Residential that we keep under genuine constant review.
Thank you, Chairman. Are you not saying to the valuers, "Listen, you know, what happens if interest rates go up a 0.25%, 0.5%, 0.75%?" You know, at what stage... You know, think back to 1992, 1993. Interest rates, overnight rates, and I know there were particular reasons for it, moved to 18%, 18. Okay? We're way, lot of way from that. What I'm asking you, at what particular rate are you worried? At what particular rate? Surely, you must have said to the valuers, "Tell us, at what rate are we concerned?
I have two things to say about that. The valuers' function, what they would say to me is, the valuers' function is simply one of valuation. The valuers' function doesn't in any way relate to interest rates. They simply value the property objectively and give the result. It's not really a matter for them. What I would say to comfort you is, I refer you back to what the Chief Financial Officer said earlier on. What I would say to comfort you is that the hedging program, which has been undertaken, in fact, removes a lot of the risks that you're worried about. Also, please bear in mind what the Chief Financial Officer said about the staggering out until I think 2032 of the repayments.
There is no immediate crisis in view. There is no major repayment date, in fact, until 2026, and it's laddered out until 2020 or 2032. I would not be too concerned about that. It's a matter that the board keeps under close review.
I'm not concerned about, too much about the actual interest rate and in terms of the cover, interest cover. It's more the LTV that I'm concerned about. I suppose my question is, on the banks, how, in terms of the covenants, are they looking at these, you know, what, by agreement on a quarterly basis, half-yearly, yearly basis? I mean, at what stage do the banks say to you, "Listen, you're breached and, you know, please repay the loans.
Well, happily, that just hasn't arisen. The banks have had no need to communicate anything of the sort to us. In fact, the type of arrangements we've negotiated with the banks, in fact minimize the risk that that type of even-eventuality should arise. What you can do is make the best policy decisions you can and minimize risk to the best extent you can.
I-
I think the Board has done that, and I think the Chief Financial Officer has done a great job in that respect.
Well, I mean, maybe I'm not articulating this very well, but I mean, at some stage, if, for example, as I said, overnight rates, if they increase suddenly, there's a problem with the LTV. I'm not saying there's a problem related to loan, the interest cover. Problem with the LTV. Do the banks, are they looking at that on a quarterly basis, half-yearly or yearly? Is there a contingency plan? I mean, you know, in terms of how long do you have to fix the problem if the problem arises?
First of all, there is no imminent problem because there's no repayment date due to the banks for so many years. That's the first point I'd make. There's no imminent concern about that. I imagine that the banks keep it under constant review. I also imagine that the banks would communicate constantly with their customers, as we would with them. I wouldn't be concerned about that because the repayment dates are not imminent.
Okay.
Thank you.
Right. Chairman, I have a few other questions here, if I may.
Sure.
On page 12 of the annual report, you state that there's a low resident turnover, on page 26, it states that there are 14% of units were turned. Is 14% low?
Can I ask the Chief Executive Officer to comment on that question, please, as to the level of turnover that we experience of our apartments vacancy-wise. What's the correct reading of that insofar as you can?
Yes. You know. Thank you, Peter, for the question. In relation to the turnover, there would have been in 2022 particularly, a bit of a pickup because of COVID. We had a lot of lockdowns. There were some people due to move out to go to other places, and they didn't. They stayed. We saw in the early part of 2022 a bit more of move out. What we generally see for turnovers, which is people leaving and then we let, is actually now we're seeing it's more people who've bought their first-time home. There would have been actually a build-up of that, of people waiting to go into those with COVID. Actually, we're seeing a very, very low level of turnover. The average tenure for our tenants is about three and a half to four years.
It tends to be a certain cohort. Most people take mortgages and first-time homes at around mid-30s years of age. Actually, 14% actually looks fine. We actually have a very high satisfaction rate from tenants, and also they value the fact that we provide a full service offering as well.
14% is low?
Yep. It did have a pickup. There was an element of that in the early part of 2022 for a carryover from 2021 and 2020 of lockdowns.
Can I ask you, what's the average number of days between tenants leaving and new tenants arriving?
A good way to measure that is actually the occupancy rates. We achieved fairly well above 99% all the time. We had 99.4% at the end of December. Fairly well in our business, that's probably the highest you will get anywhere. It's considered full occupancy. We actually are able to turn over people in a matter of days now, I think it is. Alan's here, who's our head of operations. I have to say that all of our counterparts in this city cannot believe that we actually have tenants who move out, and then we can actually do a full cleaning, full internal painting, and get tenants in so quickly. Yeah.
Okay. What is the cost of average cost of cleanup stroke refurb when somebody leaves?
That's probably not information I'd have to hand. We'll have to see if we can come back to you on that.
Because if we look at the property operating costs of EUR 18 million. I worked out roughly, it seems to me that the service fee or the management fee is in or around EUR 8 million for that. That kind of question. Leaving a balance of EUR 10 million. I'm just wondering, what is that EUR 10 million made up of?
I don't have the specific details of the numbers for you here, but I would say across our property operating costs, it covers both our employees on the ground. It also covers utility costs, you know, electricity, water, waste, repairs and maintenance. We actually, under regulation, have to provide beds and mattresses, and if somebody moves out, we have to replace mattresses. There's a whole myriad of costs. It's a very operational business, and we pay-
I'm not familiar with the business myself, so I'm just wondering what actually are the average costs?
I wouldn't have the details here to hand.
To be honest.
Yeah.
-it seems extraordinarily high at EUR 10 million, but, you know. page 23. 9 units provided to Ukrainian refugees. Was that free of charge, chairman?
I can deal with that, yes. Initially, actually, with the reach out by government and the Red Cross to support the initial Ukraine refugees coming in, we did as a company actually provide a number of apartments free of charge, fully serviced for the Ukraine refugees. Actually, this year now, the Red Cross actually would like to hold those and actually are moving to remunerating the company for them. Yeah.
There are still nine.
No, they're now actually paying.
They're not.
-paying rent for those. Yeah.
Not paying rent?
They are paying.
Oh, they are paying rent now.
Yeah.
Okay.
Through the Red Cross. Yeah.
Okay. Thank you. page 23, non-recurring costs. This, I mean, I think this was referred to earlier. It's about EUR 5.8 million, and it related to the whole internalization process or whatever. From my reading of the accounts, it seems like they're non-recurring. Does that mean there's gonna be an extra EUR 5 million to the bottom line next year?
I think it means the opposite.
Yeah. They're one-off, actually. They don't recur.
They're one-off costs.
They won't, they.
They won't recur next year.
I think non-recurring means it won't happen again.
No, sorry. I know. Does that mean next year will be better off by EUR 5 million?
Well, I don't think we can anticipate every single cost is going to arise.
Well, look, Chairman.
I think a lot of those costs, insofar as I can define it, must relate to the internalization. I would imagine that it's unlikely that those type of costs would recur. I can't give you a guarantee there won't be other costs. It's just too fluid a situation. I can tell you that there is a very significant concentration on cost management and cost reduction, your concerns in that regard, we will take on board, I think the Chief Financial Officer will take that on board with great seriousness.
Yeah. I mean, can I just follow up on, yeah, David asked a question there. You know, what was the amount paid in legal and professional costs and all that kind of stuff? What actually is the amount that's being paid?
Well, I think Oliver are in a position to answer at the moment is what you see before you. The costs which appear before you. I can't really break it down for you any further. I'm just not prepared. I'm just not sufficiently prepared to give that, I haven't done sufficient preparation to give that answer.
Just a few other points, Chairman.
Yeah. I'd also like to know if anybody else has a question. This is becoming a conversation rather than a question and answer session. I'm not shutting you down.
I can come back.
Yeah.
No problem.
Does anybody else have any questions, or can I continue with this gentleman? I think we're reaching the end of the road. Please just continue. I'd like you to feel that.
So-
an answer to everything.
Chairman, can I just say page 104. I mean, a lot has been said about salary and bonuses, but can I just point out EUR 459,000, EUR 348,000, 2021 and 2022 seems very high when the value of the company has fallen by EUR 300 million in 12 months and property values have fallen by EUR 46 million. We've talked about that, but I just want to reiterate that point. Again, page 112, the interests of the directors. I have to say, I was astonished to read that there was such low shareholding by the directors. I mean, I myself, personally have more shares than every director apart from the Chief Executive. Page 114, Chairman, in relation to incentives. This is just for clarification.
Yeah. I,
It's, um-
Could I just say.
Yeah.
That we're actually beginning to come under a little bit of time pressure. If you could maybe limit to maybe 2 more questions.
I've just got a few more. This one is, Chairman, in relation to incentives, and it says, "Incentives, operational success in achieving rental growth." Is that net rental growth after bad debts?
CFO, can you give some answer to that?
Yeah. It would be, but yeah.
After bad debts?
Yeah.
Okay. Income from sales. The sales income, is it profit from sales? I'm reading on page 114, which is the bonus of 70% that can go to the CEO and the CFO, and we're talking about income from sales and reduction in operational and finance costs. My question is, the income from the sales, is that whether you make a profit or whether you make a loss or whatever? Is it just the cash that comes in?
Sorry, Peter, can you just direct us to the...
Page 114 under CEO and CFO remuneration for 2023. We have EPRA earnings 35%, net rental income 35%. My first question, you've already answered when you've said that the income is net income after bad debts. My second question relates to income from sales, of which the bonus is calculated on income from sales. That's money received from sales or profit from sales?
It's earnings, Peter, right? It's profit.
It's like if you make a loss on a sale, you would-
I'm sorry.
There'd be no bonus.
Sales there, Peter refers to, you know, it's effectively, you know, gross turnover, less expenses, right? Okay. It's not necessarily talking about, you know, disposal of properties. Right. Okay.
Yeah. No, I, no, I get that. I mean, if you sell a prop... Are you comparing it to what it was in bought for in the books originally, or is it just cash coming in?
It's the net revenues.
Net revenue after taking into account. If you, if you've got a loss on it, there's no bonus being paid on that amount.
Yes.
Okay. Thank you.
Okay. I think, I hope you're, we're nearly finished now.
I am nearly finished. I suppose we're just really talking also about cost control here. Like I say, on page 115, EUR 88,000 paid to Deloitte for remuneration in relation to the executive remuneration report. EUR 88,000. That's just, like, staggering. I don't know. It's like, you know, Vision mentioned earlier about, you know, that it was, you know, fattened, I suppose, in terms of, you know, the amount of money that's available. To me, that's just crazy money. I've a few other questions, Chairman, I just, I'll leave it at that.
Thank you very much for your contribution. We appreciate your interest. We hope that you feel that you've got the responses you want. Mr. Olin.
One brief, final question. In light of Peter's question, which was a follow on to mine, you noted you're not prepared here today to give the detail. Will you commit to follow up to shareholders to answer the question as what the total costs of financial, legal, PR, other strategic advisors are that have been spent by this company so that shareholders have the answer to these questions, which are clearly a subject of interest?
I don't think that's appropriate. I think that the internal running of the professional advisory sector is really a matter for the company. I don't think it's appropriate to break it down. I think that's it, ladies and gentlemen. That's been a very interesting dialogue. I really enjoyed it, and I hope that you feel that you've got a good and transparent meeting and that you got the answers to your questions. Thank you so much for attending. Now, we move on to the next portion of our business. This is the formal part of the meeting. The voting procedure. Let me outline the voting procedure for you. To accurately reflect the views of the shareholders of the company, voting will be done by way of a poll on each of the resolutions put to the meeting.
Voting by poll allows shareholders the opportunity to participate in the decision-making of the company by having their votes recorded in proportion to the number of shares they hold. I'll be with you in a sec. We have appointed Computershare, the company's registrars, to act as scrutineers. I now direct that the poll on all the resolutions should be held at the end of this annual general meeting. Your poll form can be located on the reverse of your attendance card, or you will have been provided with one at the registration desk. We will now proceed to vote on the resolutions, each of which I now formally put to the meeting.
Mr. Chairman?
Yes. Computershare will collect that from you in a moment. You'll hand it to the person who comes round in just a couple of minutes. Just give me a couple of minutes while I finish this. What I need to do is propose the resolution. I'm now formally proposing the resolutions to the meeting. The full text of each resolution is set out in the notice of the meeting. Resolutions 1 and 2 A to I and 4 to 7 are proposed as ordinary resolutions and require a simple majority to be passed. Resolutions 3, 8 A and B, 9 and 10 are proposed as special resolutions requiring a majority of 75% of the votes cast to be passed. I'm now directing Computershare to conduct the poll on each of the resolutions.
As I mentioned, your poll form can be located on the reverse of your attendance card, or you'll have been provided with one at reception at the registration desk. You have three options for each resolution: you can vote for, you can vote against, or you can withhold your vote. A vote withheld is not a vote in law and won't be counted in the calculation of the proportion of the votes for or against the resolution. Please sign your polling card before returning it to the registrars. When you have completed your polling cards, you should pass them to the Computershare representative who are going to circulate in the room in a second. Please remain seated for a few minutes while the polling cards are collected. Can we have the polling cards collected now, please? Now, sir, the lady is coming in your direction.
The votes cast will now be examined and verified under the scrutiny of Computershare by reference to the register of members and the list of authenticated proxies received by the company. Computershare will report the totals of the votes cast for and against each resolution and the number of withheld votes. The results of the poll will take a little time to be calculated. I'm now closing the meeting. Following which, the results of the poll on all resolutions will be announced on the company's website as soon as possible today. Ladies and gentlemen, subject to the poll results, that concludes the business. There's no other business, I'm now bringing the formal business of the AGM to a close, and I thank you for attending.