Good morning. I'm Peter Crowley, an independent non-executive director of your company, and I'll be chairing today's meeting. It wasn't my intention to be running proceedings today. However, Acting Chair Barbara Chapman has contracted COVID and is unable to join us today. Just before I proceed with any more of my speeches, I want to welcome you to Ellerslie Racetrack today, and out over to my right, we have a major development being undertaken by Fletcher Living, which is The Hill property development, a housing development. So, it's an important part of our business. Because Barbara is not attending today, we've pre-recorded her address. However, she is still joining us online today and will be available to answer questions where required.
On behalf of the board, it is my pleasure to welcome you all to Fletcher Building's twenty twenty-four Annual Shareholders Meeting. Today's meeting is being held both in person and online via the Computershare online meeting platform. We therefore welcome our shareholders, proxies, and guests, both those here in the room and those joining us online. Before we start the formal business of the meeting, I'd like to ask people in the room to ensure their mobile phones are silent. In the unlikely event of an emergency, please leave the building by the nearest fire exit. Please look for Ellerslie event staff members wearing a high vis vest, who will direct you safely from the building and to the nearest fire assembly point.
The fire assembly points are located on the grass areas in front of the main entrance to the Ellerslie Stand and on the outdoor parade ring opposite the Ascot Stand entrance. As a quorum is present, and due notice of this meeting has been given, the meeting is duly constituted, and I declare it open. I will now introduce my fellow directors. On my right, your left, we have Sandra Dodds. On my left, at the far end, we have Cathy Quinn, and your Group CEO and Managing Director, Andrew Reding. Company Secretary Hayden Wong is seated to my right. Unfortunately, Director Tony Dragicevich had a long-standing commitment today to be in Sydney, which could not be changed. Tony has pre-recorded a presentation to shareholders, which we will show when we ask you to consider his election resolution.
As I mentioned, Acting Chair Barbara Chapman is joining us online. We also have in attendance members of our leadership team and our auditors, EY. Moving on to the agenda for today's meeting, we will commence with addresses from Barbara Chapman as Acting Chair and from Andrew Reding, our new CEO and Managing Director. We will then have a question and answer session on those presentations. After that, we will move on to the resolutions of the meeting. The resolutions will be decided by poll. Questions on a resolution will be dealt with before the resolution is voted on. At the conclusion of the formal business, we will then take the opportunity for any further general questions from the floor and online. For those attending online, you can start submitting questions now.
Please note that questions will be moderated to avoid repetition and to summarize lengthy questions. We won't address questions that I consider are not reasonable in the context of this meeting, that repeat questions or otherwise may restrict all shareholders having a fair chance to have their questions heard. Thank you also to the shareholders who have submitted their questions in advance. Barbara and Andrew will speak to a number of these in their addresses. Finally, if for some reason we don't have the opportunity to answer your question, we will look to answer them in due course via email. At the conclusion of the meeting, for those of us in the room, we invite you to stay and enjoy some light refreshments. We now have Barbara Chapman's address.
Thanks very much, Peter. Tena koutou katoa, and good morning. I'm Barbara Chapman, Acting Chair of your company. My apologies for not being with you today. As Peter said, I have COVID, so this presentation has been pre-recorded. I shall attend online later in the meeting to answer your questions. But in the meantime, I'd very much like to thank Peter for stepping in for me with only a couple of days' notice. As we reflect on the past financial year, I want to acknowledge that this has been a frustrating and challenging period for our shareholders. The performance of the company, as reflected in its share price and dividend payouts, is not where any of us want it to be, and shareholders have rightly expressed their concerns and disappointments. We share that concern and disappointment.
We are currently experiencing one of the deepest and most prolonged market downturns in recent history, and one that is affecting all of our businesses and industries. Although we had expected a pullback from the FY 2023 and FY 2024 activity levels, it is fair to say that the market turned down more quickly and more deeply than we, our customers, and our external economists advisors had anticipated, and the impact on our financial performance has been significant. Fletcher Building is clearly not alone in facing a difficult macro environment. However, we are particularly exposed to residential construction activity levels in our markets, as noted at the bottom of this slide, with more than 50% of our revenue weighted to residential construction across New Zealand and Australia.
These charts show the material decline of between 30% to 40% in Australia and New Zealand residential sector activity from their respective market peaks to June 2024. To give you a sense of the scale, this decline is greater than we experienced in the GFC. In addition to the volume decline in the residential sector, we're also seeing a marked slowdown in commercial and infrastructure construction in New Zealand. Based on past building cycles, we might have expected those markets to continue to provide some support at this stage in the cycle, so this is not typical. Other market factors that we're having to manage include a tough housing market in New Zealand and ongoing cost inflation. All of these factors weighed on our financial performance in FY 2024 and are continuing to put pressure on the business in the first quarter of this financial year.
Against this backdrop, earnings before interest and tax for continuing operations and before significant items for FY 2024 was NZD 509 million, down 35% from NZD 785 million in FY 2023. The group EBIT margin before significant items from continuing operations softened in FY 2024 to 6.6% from 10.2% in FY 2023. During the year, we made the decision to divest our Tradelink operations in Australia, and in August 2024, we were pleased to enter into a sale agreement with Metal Manufactures Limited. The transaction completed on 30 September. After factoring in Tradelink's discontinued operations, we recorded a net loss after tax of NZD 227 million, compared to net earnings of NZD 235 million in FY 2023.
The loss is largely attributed to the Higgins non-cash impairment and write-down, the legacy provisions, and the loss from discontinued operations with Tradelink. Our return on funds employed before significant items was 10%, compared to 17.1% in FY 2023. Given these market conditions, strong cash flow performance and tight control of working capital have been key priorities for us over the past year. Trading cash flows from continuing operations, excluding legacy and significant items, were NZD 784 million, compared to NZD 537 million in FY 2023. Overall cash flows from operational activities were NZD 398 million, compared to NZD 388 million in FY 2023. Given the current market conditions, and in line with our dividend policy and the covenant amendment arrangements agreed with our banks in June, the board did not declare a final dividend.
Many of you will be interested about our intent around returning to dividend payments. The board is not in a position to provide any guidance around this today, other than to say that this is a decision that the board will make as soon as appropriate. Turning now to our non-financial performance metrics. Importantly, we continue to drive a strong health and safety culture and risk controls in order to keep our people safe. Our injury rates are at the top quartile industry levels, and 89% of our sites were injury-free in FY24. We are working hard on this and remain determined to keep improving. On sustainability, we continue to make good progress, with 22% intensity and 19% absolute CO2 reductions compared to our baseline 2018 level, indicating that we're on track for 30% lower absolute carbon emissions by 2030.
Meanwhile, we diverted 87% of waste from landfill, well exceeding our 70% by FY 2026 target ahead of time. For customers, we're delighted to see continuous improvement in our service performance, with our net promoter score increasing to 48. NPS can be a challenging measure to improve as it takes time, resources, and continuous effort across the entire customer journey, so this is a particularly positive result. Our focus on servicing our customers continues to be critically important as we navigate the difficult environment. Finally, we also saw our overall employee engagement improve to an employee net promoter score of 35. Throughout the year, we've been engaging more with our frontline staff to drive ownership and achievement in business plans, as well as driving recognition programs. We are pleased to see our efforts in this area bearing fruit.
And overall, we're tracking well to achieving our targets across all these metrics. In addition to these tough markets, there is no doubt that legacy issues have weighed heavily on the company's financial performance. These issues are complex and have consumed a great deal of our time and resources. However, we have made meaningful progress over the course of the year in relation to the two most significant legacy issues facing the company. First, we achieved a major milestone in relation to the Western Australia plumbing failure issue with the announcement in August of an in-principle agreement with the Western Australian Government and Home Builders, known as the Joint Industry Response. From the outset, Iplex took a leadership role in bringing stakeholders together to address the issue. Our goal has been to understand the issue, try to prevent further leaks, and achieve a timely and pragmatic outcome for affected homeowners.
We believe that the Joint Industry Response, including the Western Australian Government's 30 million contribution, achieves those outcomes. All parties are working hard to reach final agreement. We will not be distracted from that goal by stakeholders with their own agendas. The agreements Iplex is making in the JIR involve cash payments over many years, which are within its capacity to pay. In addition, they will be guaranteed by the Fletcher Building Australian Group. Importantly, the Joint Industry Response avoids a product recall, which would have been far more costly and disruptive to homeowners, the Western Australian home building industry, and our own business. Meanwhile, our last remaining legacy construction projects remain on track for completion, in line with the update we provided at our FY 2024 results. We achieved full works completion on the Puhoi to Warkworth motorway, one of New Zealand's largest infrastructure projects.
We've also made real progress on the New Zealand International Convention Centre project. Through the year, the construction team completed and handed over the convention centre car parks and the Horizon Hotel, and the completion of the convention centre is still on track for this financial year. The additional provisions required to complete this project have been very disappointing, but reflect the incredibly complex and costly process of remediating the site after the fire. We're looking forward to handing over a truly world-class facility and moving on from the considerable pain and distraction this has caused the organization and our shareholders over the past few years. There has been a fair amount of commentary about our capital raise, so I want to give you the view from the board on the need for the capital and the process we went through to execute it.
A lot of good work had gone into negotiating covenant relief with our lenders, reducing costs, conserving cash, tightly managing CapEx, and divesting half of Higgins in Fiji and Tradelink. But we could see that the market conditions ahead were very tough, and those steps weren't going to be enough to reduce debt and leverage in line with our target credit metrics. So we made the call to shore up the balance sheet with an equity raise. We then had three decisions to make: how much, which structure, and with which lead manager. Firstly, how much to raise? NZD 700 million was chosen after a detailed sufficiency analysis as the right amount to give us sufficient confidence around the balance sheet, but not too much to be lazy. It still requires the company to perform in a difficult market and focus on costs, cash, and CapEx. Secondly, which structure?
We discussed several different options with our advisors and the pros and cons of the different structures. An accelerated non-renounceable entitlement offer, which is a pro rata rights offer to all eligible existing institutions and retail shareholders, and a placement structure, was chosen as the best option to give us certainty that the target amount could be raised effectively in a difficult market context, looking after our existing shareholders and providing the tightest pricing for a fully underwritten offer. Our objective was to optimize value for all shareholders, including those who weren't able to or chose not to participate. There are many ways to cut the data to see how the NREO and placement structure performed versus a theoretical accelerated renounceable entitlement offer. But even those shareholders who didn't participate in the NREO have benefited from the uplift in the share price, which has occurred post the raise.
Based on the modeling we've done, that benefit to shareholders who didn't participate is well in excess of the value they may have received from the estimated price of their rights, and the final question: Which lead manager? We chose Jarden as our lead manager for the raise. Jarden had been involved supporting the business on a number of fronts, including our considerations as to the best future structure for our resi business. They know us well, and we're not starting from scratch. We purposefully chose just one lead manager. We took the view that a leak about a capital raise would be very detrimental to the share price, so we wanted to keep it tight. I've been asked about the costs of the capital raise. Shareholders should rightly challenge such costs, as they are large.
In this case, our total costs, including advisors and other expenses, amounted to NZD 22 million. All capital raises are not equal. Raising capital in a stressed balance sheet context, such as ours, is invariably more expensive to execute than raising capital for capital expansion or growth purposes because of the different risks involved. In this case, we had good information on pricing precedents and also had our own prior experience to draw on. The result was we were able to secure an arrangement that was actually NZD 2 million cheaper than when Fletchers raised capital in 2018. It's disappointing to me that we haven't found a new chair yet. The delay weighs on the share price, and finding a permanent chair is a priority for the board. I can assure you that we are working hard to find the best person for the job.
We expect to be able to finalize this process by the first quarter of next calendar year at the latest, following which it is my intention to step down from the board to allow for further board renewal. There have been a number of disappointments and some highlights during my time on the board, and a number of very challenging decisions to make since I became acting chair. The fire at the convention center and the plumbing failures in Western Australia have been major disappointments, along with the need to write down Higgins last year. These issues have been complex for the team to manage and weighed heavily on the share price to the detriment of our very loyal shareholders. In addition, our heavy exposure to the residential building sectors in both Australia and New Zealand has weighed on the share price in more recent times.
That sector has been in the doldrums on both sides of the Tasman for a while, and the team are very much focused on cutting our cloth to meet these market conditions through cost-cutting, cash generation, and CapEx conservation initiatives. The cycle will improve, and we will be ready for it. Needing a capital raise to shore up the balance sheet was also disappointing, but in the circumstances, it was the right thing to do, and it was executed well. The share price performance post the raise has been pleasing. It's my own view that our legacy issues are now largely behind us, and the company now has the opportunity to build on our current momentum. In that regard, since March, we've found an excellent CEO and refreshed the leadership team, undertaken a refresh of the board, which, with my departure, will be ongoing.
De-risked our exposure in Western Australia, shored up the balance sheet with a successful capital raise, exited Tradelink, embarked on a strong cost-out program, taken a laser approach to CapEx allocation, conserved cash, and commenced a portfolio review to make sure we are in businesses which add real value. Of course, we've largely completed the build of the convention center. It's exciting to see this momentum, and all these things will enable our permanent chair to be in the best possible position to take the company forward. Thank you, and I'd now like to hand over to Andrew.
Thank you, Barbara. Tēnā koutou katoa. I would also like to add my welcome to those joining the meeting today, both here in the room and online. For those of you who don't know me, this isn't, in fact, my first Fletcher Building annual shareholder meeting. I spent much of the late nineties and early two thousands in senior leadership roles at Fletcher Building, including Chief Executive of Building Products and Steel and Managing Director of Fletcher Wood Panels, before departing to lead organizations in the Rank Group, including Carter Holt Harvey Pulp and Paper. I've been described in the media, perhaps somewhat unkindly, as an industry veteran, but this is a label I'm very proud of because it's an industry I've loved and worked in for more than forty years. I'm passionate about Fletcher Building, its unique heritage, its people, and its businesses.
Fletcher Building is a company with enormous potential and opportunities. It is staffed by excellent people, and I'm thrilled and humbled by the opportunity to lead them. My job will be to translate our shared vision, strong operating businesses, and committed people into high performance at a group level. Since being appointed as a director in August this year, I have been spending time reacquainting myself with the business in the lead up to formally taking over as CEO last month. In the process, I've enjoyed visiting a wide range of Fletcher Building companies and sites, and meeting people from around the business. These visits have included Waipapa Pine, Golden Bay Cement, Dimond Roofing, and the Firth Block Plant in Northland, along with Easys teel, Pacific Coilcoaters, and our amazing new Winstone Wallboards manufacturing facility in Tauranga.
And just to keep busy, I've also met all of our major shareholders at least once over the capital raise. One thing I've been particularly impressed with is the focus on safety everywhere I've visited. Everyone I asked about whether we paid enough attention to safety confirmed we do, and when further asked if they felt able to stop production on seeing an unsafe situation, everybody unhaltingly answered yes. Another thing I've observed is the commitment and dedication of our frontline people and teams, particularly their focus on delivering exceptional service to our customers. As I mentioned, I've also been out and about talking with investors, where, to be frank, the messages and feedback I've been hearing have been less positive.
As shareholders, you have every right to expect high expectations around our performance, and I want to assure you that we have a clear focus on managing through the current cycle and delivering value for our investors. Turning now to recent trading. For our materials and distribution businesses, market volumes for the first quarter of this financial year declined 10%-15% versus the comparative period. In September, revenues declined 12% year on year. This compares to a 7% decline in July and August. So pressure on gross margins continues in the current highly competitive environment, especially in New Zealand. Meanwhile, in our residential and development division, house sales have averaged 70 in a week in the first quarter of this financial year, compared to 23 a week in the comparative period.
Although we saw an improvement in house sales to 21 a week in September, compared to 14 a week in July and August. Margins were lower on the year-on-year due to the decline in New Zealand house prices in the past six months. Pleasingly, the construction division has performed strongly, with first quarter earnings and margins improved year-on-year. Now to the outlook for the remainder of the year ahead. We continue to expect FY 2025 market volumes in our materials and distribution businesses to be around 10-15% lower than FY 2024. We also expect FY 2025 EBIT before significant items to be around 60% weighted to the second half, mainly owing to three factors: firstly, cost savings of at least NZD 180 million are expected to be around 60% weighted to the second half.
Secondly, we expect seasonally higher second half house sales in the residential and development division, with approximately 170-180 more settlements expected when compared to the first half. Thirdly, we incurred some NZD 20 million of one-off costs in the first half, which relate to the outage of Golden Bay Cement transport ship, the MVAC, New Zealand electricity prices, and restructuring initiatives, which are not expected to reoccur in the second half. The key downside risks to the outlook are further deterioration in the materials and distribution market and/or lower than targeted house sales. I'll now provide an update on our near-term priorities. A key priority is costs. We are continuing to aggressively take these out, targeting at least NZD 180 million in total gross costs out in FY 2025, including both overheads and operational efficiencies.
This excludes inflation, and not all will flow through the bottom line. As we've already said, we also have a key focus on working capital and CapEx, making sure these are managed tightly to respond to current market conditions, and completing the remaining legacy issues that have been overshadowing our performance for the past few years will remove distractions and give us the clear air and confidence we need to grow this business and build value for our shareholders. Having established a good sense of the business and the opportunities ahead, and with a strong team in place, our focus now is completing a strategic review over the coming months, which will provide a clear pathway for the organization. We'll have more to say on this in twenty twenty-five at our next Investor Day.
Finally, despite all the noise and distractions, the fundamentals of the business remain sound, and we are well positioned to deliver through the cycle. Starting on the left-hand side of this slide and working our way across, the company operates in attractive markets with favorable long-term dynamics and demand tailwinds, and our ability to capitalize on these opportunities can be driven by a leading portfolio of high-quality businesses. We have well-positioned quality businesses that operate in appealing markets, and we have strengthened our balance sheet, which allows us to focus on executing operational and strategic initiatives. I'd like to wrap up by reiterating my fundamental belief in the strength and resilience of our businesses and the capability of our people and teams. Fletcher Building is a company with enormous potential and opportunities, managed and operated by people who are passionate about what they do.
Our goal is to fulfill our potential and to build a company that our people, customers, communities, and you, our shareholders, can be proud of. Ngā mihi.
. Thank you, Andrew. I'd now like to give any shareholders, both present here and online, the opportunity to ask questions based on what you've heard so far on this section of the presentation. While we wait for your questions, first in the room, we will address the pre-submitted questions received ahead of the meeting, which haven't been specifically answered through Barbara or Andrew's addresses already. The first question is from Thomas Leyland, a shareholder. The question is: "When can we expect company recovery?" The challenging market has had a negative impact on our financial performance, and we're working hard to navigate a sustainable path forward. It is difficult to say exactly when our markets will return to growth. However, we can see that long-term trends around population growth, housing shortages, and the infrastructure deficits will mean good future demand in the sectors where we operate.
The board also maintains a strong belief that the fundamentals of our businesses are solid and well-positioned to perform when the markets recover. Next question. We received a lengthy statement from John Louisson, a shareholder, noting his disappointment in the company performance, and John asks the following question: "Does your company need to split up into more profitable profit centers, where greater attention can be given to the work in hand?" Our answer is, in responding to your statement, as you will have seen through the presentations this morning, we share your disappointment in the company performance, and in answer to your question, as Andrew has noted, we have a strategic review underway which will provide a clear pathway for the organization.
The third question is from Andrew Patterson, a shareholder: "Why has Fletcher Building destroyed more than two billion in capital in the last decade?" The board continues to govern with a relentless focus on driving performance improvement on the base business, while dealing with significant legacy construction issues, competition pressures, and macroeconomic headwinds and inflation causing slowing demand. We acknowledge that the historical issues and a challenging market have had a negative impact on our financial performance and reputation. As I've already said, the work currently being undertaken to rightsize the business and to ensure it operates prudently and resiliently will provide the foundation for delivering sustainable growth for our businesses and our shareholders.
The next question, the fourth question, is from Steven Bell, and the question is: "How are you going to increase shareholder value without a decrease in headcount across the portfolio of companies?" And the answer to Steven's question is, like many companies, we're having to rightsize our businesses to the current market conditions. As Andrew and Barbara have mentioned, it is very tough and volatile out there at the moment. This, our response includes reducing our staff numbers across the business, which is something we've been doing since the activity in our market started declining about two years ago. This is one of the measures we've taken to support the business's operating margins and to preserve cash flows for our shareholders. The fifth pre-submitted question is from Dirk Hudig.
Dirk's question is: "Given the review, given the review instigated in 2018, the value of the Tradelink business has been compromised for some time before the NZD 120 million write-down taken on the 2024 accounts. What is the policy on asset values? Will goodwill, obsolete stock, IP assessment values, be adjusted annually for reasonable market value to give a fair reflection of the company position? And if not, why not?" In answer to Dirk's question, we are required to do an annual impairment test of goodwill and brand balances, excuse me, held in our businesses. And we also review these when there are other indicators of impairment.
As part of the assessment of asset values, management reviews the business units' initiatives, for example, sales growth assumptions, operating costs, and margins to determine cash flow projections for the future in determining whether any impairment of the write or a write-down is required. In our 2018 review of the Australian divisional businesses, which included Tradelink, we identified a number of strategic initiatives to improve operating performance. While we achieved many of these, for Tradelink, it has been more challenging to deliver in the current market environment. While management continued to identify opportunities to improve Tradelink performance, they acknowledged the significant time expected for these strategic initiatives to reach full potential, given our historical experience. In answer, it was just going to take too long. The next question, the final pre-submitted question, is from Tony Flett, who had three questions.
Firstly: "Is there concern that the stalling of the Digital at Fletcher's program is leading to reduced operational efficiencies and potential for sensitive data and cyber security breaches to occur?" In response to that question, we remain committed to the program, the digital transformation of our businesses, by modernizing our core ERP platforms. This is a strategic priority for the group, and we will be looking to restart Digital Fletchers as soon as and when conditions improve. On cyber, we have a dedicated team within Fletcher Tech to address the constantly evolving cybersecurity threats that the group faces. We use international experts and partners to enhance our cyber resiliency. This is a challenge and a risk for every business out there. So, I'm very confident that we have the systems, the people in place to protect our data.
Tony's second question is, there are a number of significant matters currently outstanding, including the BGC Iplex claim, and that's the West Australian pipes issue, just to be clear. The Iplex class action, a potential SkyCity claim against Fletcher Construction, and matters concerning the Puhoi to Warkworth and Winstone Wallboards. Considering the recent capital raising, is management confident sufficient capital resources are now in place, should one or more of these matters result in negative outcomes? It's quite a broad question about risks, legal risks in front of the company. As we noted in Barbara's address, we carried out a detailed sufficiency analysis to give us confidence around the balance sheet. Tony's final question is, documentation for the joint industry response, again, this relates to the Iplex pipes issue in Western Australia.
Was planned, the response was planned to be completed by September twenty twenty-four. Can you comment on the delay? Assuming the joint industry response process proceeds, what process is the company employing to ensure its implementation costs and progress is being tightly managed? We are pleased with the cooperation and constructive approach of all the parties who have chosen to work with us on this matter, including the Western Australian government. We're building consensus with a host of builders, and the government is building that consensus with a lot of builders, small builders, and the government is a complicated task. So while it might look like it's been slower to get finalized than we'd hoped, we still expect it will be done by the end of this calendar year. We'll now answer questions, starting from those in the room. Excuse me.
Please raise your hands if you have a question, and wait for a microphone to come to you. Gentlemen.
Thank you, Peter. My name is Oliver Mander from the New Zealand Shareholders Association.
Hi, Oliver. Yeah.
Just in terms of the one-offs and all the significant items that seem to have occurred with regularity-
Yeah
... over the past twelve years or so, how I mean, you, you do have a collection of businesses, and it can be expected that each of those will face different non-recurring events each year. To what extent should shareholders place reliance on your EBIT before significant items measure? Or alternatively, how can the company think about its financial disclosures and reporting in a way that incorporates a focus or creates a focus on actual earnings rather than so-called-
Yep
... underlying earnings?
Yep. It's a fair question. Look, the fact of the matter is, we actually have incurred some serious, significant items, one-off things, you know, like, for example, the long-term legacy projects that have been in place for quite some time, as we've wrapped up a whole pile of projects that go back years, that have been influenced by things like the COVID shutdowns, where the whole Puhoi to Warkworth project was just stopped on a sixpence. We had to stop. We had to go away. We had to come back to that job, re-energize, get everyone back in. That takes time, and it all costs money.
I am maybe I'm a bit of a Jonah here, but my first day on the job with Fletchers, I'm sitting in Penrose, and everyone comes running in and said, "The New Zealand International Convention Center's on fire." My first day. Now, that was a well, it was a terrible, terrible event for everyone, but it was a hugely complicated thing to recover based on what, you know, working with insurance, working with SkyCity, working to basically pull the whole place apart, put it back together again. They are genuine, significant events, if you ask me. I would look at a thing like the Western Australian pipe thing. I think that's a genuine, significant item.
I totally get it, that we seem to have a raft of significant items, that we report a number, which is a correct number, then we adjust our significant items, but it's there to be seen. There's a net profit number, which is the number reported at the end. But I think my frustration, I think every shareholder's frustration, is that we keep getting hit by these things. So I can't predict what's out there. What I can tell you is that we are very conscious of significant items. If a significant item, we're not creating significant items to give management an easy mark. If they're genuine sig items, they're genuine, but I think, as a number of the speakers have addressed today, the legacy issues in front of this company, which go back years and years and years, are significant.
We're working our way through them, and we get it, okay? We, we understand that it is important, but we are committed to work, getting these things behind us and coming out with cleaner accounts as we go forward.
Thank you, Peter. So just as a follow-up to that, in terms then of those significant items, what steps has the board taken more recently then to ensure its, how its identification of potential risks and risk management culture associated with the organization, how has that flowed through into the board, or what changes have been made?
You know, it's really interesting. Excuse me. I don't think I've got COVID, thank God, but I'm getting a bit of talking. Look, I, Oliver, I think there is a much more heightened approach to risk, understanding risk. Now, one of the ones that we've called out, that we consider, is things like installation risk, you know, where we make products that are perfectly good. You know, we've got laboratories, we test them, we've got in- you know, they're fit for purpose. They're well-made products. They go out, and then someone misuses them or does something wrong with how they install a product. It's a real risk. These are broad industry risks, risks for just about anyone in construction materials, building products, okay?
I've come from other businesses where we made toilets and plumbing products and the like, and the risks were there, too. I think they've got a much more elevated focus in our business. But I think what I would say is, when we address risks with management through the audit committee, audit and risk committees, we're taking a pretty broad view about what risks are. These are not just performance risks. They're not just some very, you know, the same list you would see year in, year out. They are very, very detailed lists, which we try and understand what the risks are, and we're very clear on how we can mitigate risks. So look, I'll just give you a really pertinent one that was very recent.
The MVAC, which is the motor vessel Aotearoa Chief, that's the 9,000-ton ship that comes from Portland down to I think it's East Port. I think this is to the terminal and does a bit of a milk run around. That ship had an engine, the cylinder head went out. It's a Wärtsilä big diesel. I'm in shipping, okay? That's my background. It's a big Wärtsilä diesel. We were able to get the spare part very fast to get that thing back up and running. We had spares, but we'd also had to find some more spares. That was done. That is a risk that is identified, and we had a plan in place to mitigate that risk, which is not as bad as we thought it would be.
So I think it's a classic example of the sort of things we've got to come to grips with, and we manage.
New Zealand Shareholders Association as well. You've had a tough year, and I think everybody recognizes that. And as part of that tough year, there's been some exits. There's been exits in senior management, there's been exits in the board.
Yep.
And the acting chair, in her address earlier, talked to the appointment of a new chair, which I think we'd all, as shareholders, welcome. But also that she was going to then look to step off the board once that process had concluded. It's not a broader question, which is about the renewal of the board, full stop, in the sense that there's obviously a renewal process occurring. There's a reduced number of directors on the board at this point in time. And obviously, when you have a reduced number of directors on a board, you have potentially a reduced level of skills and experience capability because you need a broad level, like you've just mentioned, your experience in both in the sort of the building products business, but also shipping.
My question is really around board composition, and, you know, what are the Board looking to fill out in terms of the skills and experience that they're looking to achieve in the Board going forward so that, you know, shareholders in the room and online can get some more confidence in the governance layer, having had a new MD and a new CFO put in place?
Fair question, and I'll take this one, but if Barbara, I think she's online, wants to chip in. I'll have a crack at it first, if that's all right. One of the clear areas of feedback we've received as a board is that there was a view that there was insufficient expertise or industry experience on the board, and we've been very alert to that as the board has changed. There are four directors have gone. Two new ones have come on. The most recent was Andrew and Tony Dragicevich. So Andrew has introduced himself. You know, he knows the industries in which we operate. Tony Dragicevich, I know well from the Australian context. He has great expertise in building products.
supplying the construction market, the housing market, actually through different channels. And once upon a time, it was through the likes of the PlaceMakers, those types of business in paint. He worked with me at GWA many, many years ago, and was very, very good. More recently, he was at, he is at, Capral Aluminium, which is actually a really great turnaround story that Tony has led. So he understands the type of markets we're in. As I said, Andrew, he knows it well. One of the other more recent people who joined our board about 12 months ago, Sandra Dodds, here. Now, Sandra had worked at. She's a chartered accountant.
She, but she'd worked at Fulton Hogan, so she understands the sort of, you know, the quarrying-type businesses, the roading businesses, I think Downer and a variety of other businesses. She's on also Snowy Hydro board, which is a major Australian construction project. She understands construction, accounting, these sorts of things. So, what I want to, I guess, give you the feel is that we're bringing on people with the right backgrounds, or I believe, are the right backgrounds and the right skills onto our board as we go forward. So, we are from the industry, and we are from both sides of the Tasman. You know, I've operated over here as well, with a variety of businesses. We, we get it. I don't know if Barbara would like to add something.
Hi. Thanks very much, Peter. And again, apologies that I'm not there with everybody. I think the only thing I would add, Peter, is that some of this will need to shake out as we understand the skills of the new chair and what they bring, and therefore, what the gap is. When we are looking for our new chair, we did a preliminary piece of work going around our shareholders and asking them, you know, what did they see as important for a new chair? And that came down to four key buckets or four key criteria. So one of those was good governance experience, like really senior-level governance experience. One of them was building products experience.
Another was portfolio experience, and by that I mean someone who's worked in a business like ours that has, like, twenty-eight different companies in it that are all reasonably different. And then, the final criteria was trans-Tasman experience. Now, we know that we're not going to get all of those four things in one chair, but we're going to continue to try and kind of get that kind of capability. And then, what that will shake out is the, the requirement for what's missing and the gap. And with my intended departure, then the remaining directors and the new chair can kind of figure out what that gap is and who's the best person to fill it.
Mm.
Thanks. Back to you, Peter.
Thanks, Barbara. Sorry, just... Yes.
Hello, my name is Shabir-
Hello, Shabir
... a shareholder. Now, I need to ask you certain questions about this legacy issue.
Yep.
I have been a shareholder for the couple of years now, at least four, five years. This loss from that NZ Convention Centre, every year you are providing minimum NZD 100 million-NZD 200 million for that.
Yep.
In the last one, you are providing NZD 165 million-
Yep
... for this. And you have promised in the annual report that this will be the last one. You are ending this legacy by the end of this year. Now, we are already in October. So I would like to pass a resolution saying that you commit that this will be the final thing, and there will not be any further loss in the next year.
We-
But because I have seen one thing. I have also read the report, and you have indicated that there are possibilities that for the delay and all that, you will be again charged for something. So this legacy will be continued in 2025 also. So can we pass a resolution like, you know, you people in the board, you pass the resolution like the shareholder, can we pass a resolution that we want some finality to this?
Well-
There should be an end to this.
I, I s-
And another point.
Yep
... another point is, you have provided only, you are claiming only NZD 100 million for this from your insurers, whereas you have spent already, almost, more than, NZD 500-NZD 600 million. So why this, why only claim for NZD 100 million from the insurers? Why not more?
Okay. Thank you. Look, I think the question is, are we confident that there will be no more. The first question is: Are we confident that there will be no more provisions raised against this project? I think we've got a fair degree of confidence on that one. Now, why I can say that is, that project was just three elements. There was a car park, there was a hotel, and then there's the big convention center building. The car parks have been given back, so they're down there operating. The hotel, Horizon Hotel.
Horizon.
It seems to have different, Horizon Hotel. It's available. You can check in and stay there. The big convention center building, which I went through quite recently, which is gigantic, and that was where the fire was, it is at a very advanced stage of work. So, am I confident that we're racing to a completion on that project? Yes, I am. Could I get a surprise? Yeah, but I don't think it's gonna be a very big surprise, okay? So I think we are across this thing. We've got people all over it. There was a second question. Sorry, I've-- What was the second part to your question?
Insurance.
Insurance, sorry. Very, very complicated. There's third-party liability insurance, contract work insurance. There are claims against third contractors. Really complicated. Now, what was the insurance we collected in the, it was the-
... Off.
We got a payout. We've got some insurance.
+
Don't know off the top of my head. Sorry.
Barbara, what was the insurance payment we got earlier this year?
...
was contract works insurance, and what was it?
About 6:57.
But that's not the amount we got back.
That's the total contract works.
No, but the, I think he was referring to the settlement process, the number.
What was the settlement we got?
NZD 100 million.
Yeah. Yeah.
So that's NZD 100 million we got in June, but there's hundreds and hundreds of millions of dollars still to go through to be claimed. So there'll be a legal process, there'll be, you know, lawyers and barristers that, you know, fighting for that. But we believe we have strong insurance claims for a lot more money, but we got NZD 100 million in June, I think it was. Okay. Yes, madam.
This lady.
I'm Coralie Van Camp, shareholder. I've been coming to Fletcher meetings since I think the first chairman I attended was Sir Ron Trotter, and I think Hugh Fletcher was the CEO.
Yep.
Since that time, I've seen shambles after shambles after shambles.
Yep.
But I would like to pay you one compliment today. The arrogance is missing from this board, which has been right through the years up until now.
Thanks, Coralie.
So I hope—
Thank you
... that will continue as you become more pragmatic and look for solutions, and realize the mistakes that were made, including the design flaw of the convention center with the roofing materials. A lot of the questions I wanted answered have been answered, but what I would like to raise is, going forward with your risks and trying to get back into the black, how exposed are you to cheap Chinese components coming in? Not necessarily the actual finished product, but something that makes up a component of your building materials. For example, the water pipes, they were manufactured in Australia, were they?
The pipes, yeah, they were. They were manufactured at Albury in Victoria. They were locally made.
And the material used for that, was that, now that you've tested it all, was that suitable, and where did it come from?
Yeah. The resin came from Korea. All our testing indicated that it was perfectly, perfectly suitable for making the product.
Because I've heard all kinds of things about Chinese steel and concrete failures, and unless you can really make sure that these things do not occur in the future, you will keep getting surprises.
I think first of all, I want to thank you for being understanding, and believe me, we as directors and management are very, very alert to the, you know, the unfortunate time everyone's had as a shareholder. So I just want to be really, really clear on that. If we come then, though, to part of your question is about imports, the quality of imports. It is a risk. It's less a risk for us. We make a lot of stuff, but there are always components and things. As you say, you mentioned about the resin that went into the pipes in at the Iplex factory in Albury. We're quite actually confident that it's okay.
One of the big risks of imported product is actually it competes with our well-made, properly tested, product. There's always a lot of pressure on to deregulate markets, and people talk about, you know, there's pressure, you know, talking about deregulating plasterboard and things like that. I don't think that's a place anyone in construction wants to go, and so there are risks about the quality of components and products that are brought in if markets are fully deregulated. It looks like it might sound like it's gonna be cheap, but it ain't.
I'd just like to say, as a shareholder, I would like to see you consolidate and make good things well and perhaps fewer of them, rather than trying to be everything to everyone. Thank you.
I agree. Thanks, Coralie. So, yep. Sorry.
Thank you. John McArthur, shareholder and previous employee. As a quality assurance manager in Fletcher Wood Panels, the thing that strikes me about the Western Australian pipes is that Iplex make the same pipe in the East Coast, in New Zealand, and elsewhere, and the same pipe has the same quality parameters and the same quality output, and yet it is just Western Australia where it failed. It may sound like a simple question, and I expect it has a very complex answer, but can you explain to me why we, it may be a concession to the Western Australian situation or not, financial concession, but it strikes me from a quality angle that there's something wrong with the use over in the Western Australian province.
Thanks, John. But that's quite an informed question. Look, I think it's a very, very, very rich question. The pipes that are in question in Western Australia are all made in the same factory with the same materials. It's different for you, may have different factories here, you know, different, different pipes. But in Australia, the pipes were all made in the one factory, and they went either to the west or they went to the east. Albury, which is on the border of Victoria and New South Wales. I'm getting some statistics that I'm pretty sure are right, but if not, they're within a small, small error. We believe there were 15,000 dwellings in Western Australia built with the pipes. Interestingly, there are 15,000 dwellings built in the east with the pipes.
The leak rate in Western Australia is something like 18%. The leak rate in the east is 0.5%. As part of our program of investigating houses and going through and helping to understand what the problem is and remediate the problem, we've got a really rich sample. So if you're talking statistics, it's a big sample of what work has been done and what the quality of the work is. And it is very, very clear it is a local Western Australian issue. It's an installation issue, in our view. It is not a product quality issue because we know that the causation is not product quality, but there is, there is installation. I won't go into the differences of what, why building in...
Just briefly, in Western Australia, the houses are all double brick, so there's a narrow void between bricks on the outside and bricks on the inside. It's hard to move the pipe around. When you're building a solid skin on the outside with a plaster board, it's a lot easier to move product, so to bend product. So the product's been overbent. It's under pressure, hot and cold pressure, which is a pulse. There's a pressure change, and when the bend, it leaks. So you could say, "Well, it's not your problem," but the fact of the matter is, it is our problem. So we're confident the product's fine. The issue is that there was concern. We had concerns, and there was a very real risk that a product recall would be instituted by the Western Australian government.
Now, a product recall does not just affect Western Australia, it affects the whole of Australia, and every building with our product, even if it wasn't leaking, would have to be pulled out, replaced, and we have to pay. So and I was talking, Oliver was asking the question about significant items and the like. NZD 155 million is what we're putting aside to address a problem that the risk, if we hadn't mitigated, again, this is a risk question, if we hadn't mitigated the risk, could be an altogether much, much bigger number. So the government wants to work with us. The builders want to work with us. One builder, who's half of all the buildings in Western Australia, is holding out 'cause they want to cut a better deal.
That's a negotiation we've just got to have, but that's what's holding up the joint industry response. But that's why we're doing what we're doing. It's, it's—I don't love the thought that we're gonna stump up NZD 155 million bucks, but it's better than the alternative. Yes, yes, sir. Yep.
Hi, Eden Bradford, Blackbull Research. Return on funds employed is a metric that goes throughout all of your documentation, and I agree it's a great metric, and this sort of goes back to Oliver's question. The problem with returns on funds employed is that it excludes significant items and discontinued operations, and I just did some back-of-the-envelope math-
Yep.
- and it brings it down from 10% to around 2.6%, which is fairly significant.
Yep.
So I was just wondering, Peter, if you could speak to, I guess the use of Return on Funds Employed without including significant items or discontinued operations, especially when Fletchers has a hell of a lot of significant items.
Sorry, you're asking me why we would normally focus on using ROFE as a indicator, is it?
It's an indicator that you use a lot, but the way you calculate excludes significant items-
I agree
... and discontinued operations.
Yep, yep, yep. Yep, yep. Well, I hear you. Why we use ROFE, it gives an indication of capital efficiency, and in my view, if you're allocating capital, you're looking to see, are we getting a return on the cap, the cost of capital? That's the value of it, that either we're getting very high margins through EBIT, or we're getting it off all our capital base. It's a numerator, denominator-driven calculation. That's the ideal world. I think as you get into having significant items and, you know, adjustments all around it, it is less reliable. I don't know if I can answer much more than that on the question, other than I hear you, and I get it.
I mean, I guess the thing is, if you have significant items every year, surely the calculation should be ROFE plus significant items, plus discontinued operations.
Sure. Yeah, sure. But one of the things ROFE is, if you're putting, if you're saying, "Right, we've had this, you know, we've had all these problems. Going forward, how do I allocate capital? How do I monitor the performance of the business?" That's what we're trying to cut through the noise to. But I, at a bottom line level, you're right. All right, Christian, are there any questions?
We have three questions online. First question: The board state that they believe it's not appropriate to provide shareholders with any update on the return of dividend payments, suggesting that they've forgotten who they report to. There must be something to say on this, even if it's not good news.
I'm a shareholder, too, and I like dividends very much. The issue with dividends, I think it has been covered in either by Barbara or Andrew. We got covenant relief. As the market has been falling, which I think the statistics have showed it's off 30% in Australia in terms of residential. It's off nearly 40% in New Zealand, which, and that's more than half our business. That's the high-margin half of our business, I might add. As the market's been falling, we have had to go out, and we got covenant relief while we got our house in order. That covenant relief is still in place.
At some point, we can say, "We don't need that covenant relief anymore, and we can start paying dividends." But I tell you what, I think we would be unwise at the moment, until we see where the bottom of this market's going, to make any commitment to that fact, other than, believe me, I've got seventy-two thousand shares. I'm pretty keen to see a dividend come through as well.
Next question from Stephen Mayne: When it comes to plumbing supplies, the contrast between the performance of Tradelink and Reece has been stark indeed. What is it about the Reece business model that was so much superior to Tradelink?
I'm out of the plumbing Australian plumbing industry. Twenty-five years. The Reece model was an altogether different model. So they are unparalleled returns anywhere in the world. This is a question. It's a good question, actually, but it's a complicated question. This is a question about market segmentation and where high-margin markets are and what markets you can play in. And Reece were always about not the new build market, but the renovation and replacement market, so the non-discretionary spend. So you have a toilet, it's leaking. You just fix it. It's not about what the interest rates are doing. You've got a hot water system, it's the middle of winter, and it won't work. You don't have a very long discussion. It's get someone, replace it, we move on.
It is not about the renovation. It is not about new build or renovations. It's just replacement. And I make the point of talking about renovation and replacement 'cause it's not alterations and additions. That implies discretionary spend. So Reece owned the white van, small plumber market. That is a high-service cost market, but if you've got the volumes, it is a high-margin market. Once they had that business down pat, they then expanded into more the commercial market, the larger residential projects, and I can remember when it happened. It was probably in about 2005, 2006. I remember when they did it. And because they had all their fixed costs and all their costs covered over with the small builders, on the margin, they came over to the others and killed them.
They are unique. Tradelink was always much more focused on projects and the like, which go up and go down with a lower margin, and that goes back 25 years. There was a fundamental difference. Tradelink tried to come back and pursue the small to medium enterprise plumbers. Too late and too high cost in terms of them to go for it. In the middle of it all, too, Bunnings turns up with, again, with a different model, which is actually all about builders, not DIY at all, and they then took more of the market. It is a market dynamic thing. It was a business that was doing it tough many years ago, and it just was hard. I think the right call was made.
It was going to take us, I think, something like five to eight years to turn it around. It was going to need tens and tens of millions of dollars of capital for new stores, you know, fit outs. I think we'd rather have the cash. This comes back to Coralie's point about where do you, where do you want to play? What, you know, what's the business you want to have? I think it was not the business we wanted to have.
... We have another question from Steven Bell. It's a lengthy question in several parts.
Mm.
on the capital raise.
Yep.
700 million dollar capital raising was a shocker in so many respects. The pricing was too cheap, the 282 million placement component too large, and the underwriting fees for Jarden too rich. Why did you cap the overs component for your 34,000 retail shareholders at 100% of entitlement, which contributed to the 27% retail shortfall and saw big end-of-town underwriters, arranged by Jarden, pick up the NZD 13 million in money shortfall retail shares? When you add in the retail dilution from the oversized institutional placement, you clearly owe us retail shareholders a NZD 100 million dollar plus share purchase plan to offset this needless dilution. Will the board undertake to give us serious consideration before the next year's AGM?
I understand the question. I think we've answered it in a number of presentations already. We did an exercise based on how we saw the markets, how we saw various risks in the market, that said we needed NZD 700 million. We did sufficiency tests, so we really pressure tested whether we needed the money, the quantum, and NZD 700 million was the number. The question then is: How do you get NZD 700 million in the door? It's a combination of institutional placement, and it's a combination of the entitlements offers to our shareholders. I think, you know, we can debate about NREOs, REO. Sorry, accelerated non-renounceable entitlement offers or accelerated, I forget, REO, but anyway, too many acronyms.
But the question is: Do we believe, as a board, we acted in the right interests of our shareholders and of the company? And my answer is yes. Everyone who wanted to participate, could participate. We can debate endlessly about NREOs, REOs. I just don't think there's any point. We wanted the money in the door. We wanted it fast, and Jarden delivered. And, you know, we can go round and round and round this one all day long, but I think we've answered it. I think we've given our position on why we've done what we've done, and I'd like to move on, if that's possible.
There are no further questions relating to the presentation.
Okay.
Peter, I think there was a question.
Oh, sorry. Was there a-
There's a question.
Oh, sorry, sir. Yep.
Brian Ward, shareholder. Could you explain why you had such a hefty write-down of the Higgins asset? And secondly, what was wrong with the airport parking building, considering that a building like a parking building is a fairly simple structure?
If I answer it in reverse order, you took the airport parking is with the Wellington International Airport. The parking building there, where there's a debate about whether there is sufficient or insufficient concrete cover over steel on the building. There's the... I guess the battle that's been fought is about was it a design fault or not? Is there a design fault or not? And what then the fix is, is that, you know, do you have to go and put, you know, I'm exaggerating, but do you have to go and put an inch or two inches of concrete over it, or are there seals that you can put over to protect the steel, the concrete, going forward? That's, in essence, what it's about.
We believe that there are simple, practical ways that that can be, you know, protected, so the building has a long life, the concrete is durable, the steel isn't going to spoil and deteriorate. So we believe we've got a solution. The people involved at the airport believe they prefer another solution. We're basically sorting out what that solution is, but my view is, you know, there's probably a design issue there. In terms of... Sorry, what was the other part of the question?
Higgins.
Higgins, sorry. Higgins, we're having some terrific debates here about Higgins as to what, how, what it should be and how it should operate. But I think the big thing with Higgins is that they've expanded into other areas that I'd think were probably non-core to what they do and what they should do, and we have not performed in those areas. So, the underlying performance of Higgins, we bought the business, I think in 2016. The performance, we're talking about impairments and carrying values. We've done any number of exercises on that business as to what it could be, how we can improve it. We just could never get it to justify the carrying value based on the purchase price of the business. So, the performance was not there.
Now, one of Andrew's tasks is, you know, they're thinking about Higgins and how we operate that in the future. I think it's a good business, but I think the type of contracting business we were running there was probably the wrong business model, so we've adjusted the carrying value. Okay. Now to the business at hand. Okay, here we're going. I'll now move on to the. I want to move on to the formal business of the meeting, which is the vote on the resolutions outlined in the notice of meeting sent to all shareholders in September. All resolutions are ordinary resolutions. To be passed, they require the approval of a simple majority of the votes of those shareholders entitled to vote and who vote on the resolution.
I advised at the beginning of the meeting that we will vote on the resolutions by way of a poll. Any undirected proxy votes given to the Chair of the meeting or any director will be voted in favor of the resolutions. Any directed proxies given by the shareholder will be automatically cast as directed. For eligible online attendees, voting on the resolutions is now open, and you can vote at any time until I declare the meeting, the voting closed. For shareholders and proxies in attendance in the room, I'll invite you to place your completed and signed voting or proxy form in one of the ballot boxes, which will be passed around the room after all resolutions have been introduced to the meeting.
If anyone is unsure how to complete the voting form, please go to the registration desk, where someone will be able to help you. I will now turn to the resolutions. Turning to the first resolution. It's now my pleasure to move that Cathy Quinn be reelected as a director of the company. Cathy was appointed to the board on the first of September 2018. She is considered by the board to be an independent director, and her credentials are outlined in the explanatory notes to the notice of meeting. The board unanimously, it's a big word, unanimously recommends that shareholders vote in favor of the reelection of Cathy Quinn. I now ask Cathy to speak about her reelection before we proceed to a discussion on the resolution.
Thank you, Peter. Tena koutou katoa. Good morning, everyone. I'd like to start by acknowledging the underwhelming performance of the business over the past few years. As a group, we have not met the expectations of shareholders for a variety of reasons. Responsibility for that ultimately sits with the board and senior management. I appreciate that over the past six years, while I have been on the board, the turnaround we all wanted to achieve has not happened, and shareholders have had a poor experience.
Undoubtedly, the company and the board's ability to effect the desired turnaround has been significantly impacted by the long tail of legacy construction contracts entered into prior to my joining the board, the fire at the International Convention Center, COVID, the distraction and uncertainty of the Western Australia pipes matter, and in the last twelve months, a sharp downturn in the economy, particularly in New Zealand. While I was not directly involved in decisions relating to many of the legacy matters that have created shareholder dissatisfaction, as a current board member, I take my share of accountability. Rather than make excuses and point the finger at others, my response has been to take those hard-learned lessons and work incredibly hard to help reset this organization so that it can recover and meet the expectations of shareholders.
I have continued to serve on the Audit and Risk Committee, taken over as Chair of the Safety, Health, Environment, and Sustainability Committee, become the Chair of the Disclosure Committee, continued to serve on the Western Australia Pipes Committee, continued to serve on the Construction Major Bids Committee, attended the monthly project review meetings at the International Convention Center, and led the Due Diligence Committee on the capital raising. There has also been some good progress: the investment in the new plant at Winstone Wallboards in Tauriko, the focus on health and safety to the point that Fletcher Building is market-leading, and we are freely sharing those lessons across other businesses in New Zealand and Australia. Refocusing the construction business to less risky projects. The completion of a number of legacy projects.
A focus on seeing sustainability as an opportunity, including sourcing low-emissions products, such as EcoSure Concrete, and using waste to substitute coal at Golden Bay Cement. An improvement in the performance of a number of our businesses, such as Laminex and Fletcher Insulation in Australia, which allows us to control our portfolio options. And improving our digital experience for customers and our ICT security posture while controlling our IT expenditure. In my view, sufficient accountability has been taken through board and management changes on the historical issues.... Fletcher Building now needs stability, including at board level. Andrew needs support from the current board, which includes fresh faces, as well as those with history, to get on and deal urgently with the matters in front of us.
He needs our support to take NZD 180 million out of the business fast, to deliver an acceptable return to result to shareholders in the tough environment we're in, to manage the growth projects we have within the envelope we have, and to deal with the litigation issues we face. I believe it is in shareholders' best interest to vote in favor of my re-election. You will retain someone who has deep knowledge of many of the issues, is clear-eyed and forthright about the need to deliver to shareholders. I humbly ask for your support to serve for another term, to support Andrew and my colleagues actually deliver the results you deserve. We can return Fletcher Building to be a company we should all be proud of and want to hold in our portfolio. Thank you.
Thanks, Cathy. I now invite discussion on the resolution. Are there any questions that shareholders would like to ask Cathy Quinn? While we wait for your questions, first in the room, we will address a pre-submitted question received ahead of the meeting. The question is from Andrew Erickson, shareholder. And the question is: Why is Ms. Quinn, who oversaw numerous poor decisions and a less than competent CEOs, still a director? In answering the question, in answering Mr. Erickson's question, Ms. Quinn's institutional knowledge and skills are critical for the future success of the company in a number of areas currently affecting Fletcher Building. Further, there's been significant accountability to date. The refreshed board, with four recent departures and two important and meaningful new appointments, is well-functioning and very focused on the turnaround.
The board unanimously support Cathy's re-election, and believe it would be distracting and unhelpful to the company to lose Cathy Quinn now. If you're in the room, I invite you to please raise your hand, and a microphone will be handed to you before you ask your question. Please state your name. Oliver.
Thank you, Peter. Oliver Mander again from NZSA. It is a question for Cathy. It's just simply in terms, and as you were talking, you were describing the various committees and so on, that you sat on. What should shareholders be worried by that workload, and not just within Fletcher Building, but also then the workload you have outside of the company on other company boards? How do you self-manage around that workload? Would you consider reducing the number of internal committees that you're sitting on within Fletcher Building?
Hey, thanks, Oliver. You know, thanks for the question. I guess in times of challenge, shareholders expect directors to lean in, and that's exactly what I've done. I certainly look forward to the ability to lean back, but that isn't just now. We do need to resolve these many issues. Well, I've never had anyone complain about my work ethic and ability for hard work. And I guess my way, just keep sane, is to try to go for the odd walk and be supported by, you know, fantastic colleagues. You know, the fact we've now got Andrew joining the board as a CEO and Managing Director certainly does take the pressure off, to some degree.
But as you'd expect, shareholders do expect us to continue to work hard to resolve the issues in front of us, and I will play my part in that. But, when I can reduce my workload at Fletcher Building, for many of... Most of those committees, when I was asked to do those, we originally were told we would be paid for it. It hasn't been appropriate to be paid for those things. So I'm looking forward to the opportunity to do less when the opportunity arises.
Look, I don't think anyone's questioning your work ethic. The next question I've got really comes down to, and you indicated perhaps some of that in your answer, but what is your motivation for serving another three years on the board?
Thanks, Oliver. I mean, I do think I've got relevant skills and experience, particularly around all the legal issues we face. You know, I joined Fletcher Building to be part of a turnaround team, and we haven't achieved that yet. So, I wanna finish the job that I joined the board to achieve, which is turn around Fletcher Building and to see it become the company that we should all be proud of. That job isn't finished, and so I'd like to do that. And you know, I'm not a quitter.
Thank you, Cathy.
Yes, sir. Over there.
Yeah, Cathy, I was at Eden Park in 2018 when you were elected, along with Barbara and Doug McKay. I walked out the door that day saying, "Well, we got three people, all ex-corporate types, you know, no industry background. I wonder how this is gonna go?" Sitting here today, we know how it went: very poor. To be honest, I'm really astonished that you're standing again. Isn't it time for a board renewal, which we've talked about?
Hey, thanks for the question. The answer is, you always need a mix of skills and experience on the board. So you've seen through the recent board refresh, we've brought on people with deep industry experience, which is incredibly helpful and very useful. But actually, you do need a range of skills, and the company does have a lot of litigation issues in front of it. And I do believe my legal skills and historical knowledge are relevant to that. So in my view, it's not in the best interest of shareholders not to support my re-election, but you have your opportunity to cast your vote.
If I may, I think it's relevant. Your question's, I think, a very reasonable question. As I was trying to indicate earlier, we have tried to put on industry experience, whether it be construction, infrastructure project-type experience, building products, broader manufacturing across both sides of the Tasman. My background particularly is concrete. Well, cement, actually. Cement, concrete, and quarries. So we are bringing in those skills, but with the universe of kind of risks out there, whether it be Western Australian litigation, a class action from someone in Western Australia, government Commerce Commission inquiries about Winstone Wallboards, just to name a few, I think we really do need someone with commercial legal nous, but who also is across all the facts.
So I think it's really important at this time that Cathy is around. She knows, she knows what we're trying to achieve. Is there anyone online?
We have one question relating to all the resolutions from Stephen Mayne.
Yep.
Did any of the five main proxy advisors recommend a vote against any of today's resolutions? If so, what reasons did they give, and will you disclose the proxy votes before the debate on each resolution, so shareholders can ask questions about the reasons if there have been any protest votes?
No, we don't disclose proxy votes. So, that's the end of that one. Any more questions, or I'll move on to the next resolution? Okay, it's now my pleasure to move that Tony Dragicevich be elected as a director of the company. Tony was appointed to the board on the 1st of August 2024. He is a member of the Safety, Health, Environment, and Sustainability Committee. The board has agreed that he is an independent director. His credentials are outlined in the explanatory notes to the notice of meeting, and the board unanimously recommends that shareholders vote in favor of his election. As indicated earlier, due to a prior long-standing commitment, Tony is unable to join us in person today. Instead, we have pre-recorded his address in support of his election.
Good morning, and thank you for your time today. Firstly, I'd like to apologize for not being able to attend the meeting in person. I had a long-standing prior commitment and unfortunately couldn't be changed. However, I want to assure you that this is not a reflection of my commitment to Fletcher Building. I've recorded this video so that I could share my credentials and thoughts with you. I look forward to engaging in person at future opportunities. As a Kiwi born in Auckland, Fletcher Building holds a special place for me personally, and I'm excited by the opportunity to contribute to its future success. Over the past thirty years, I've had the privilege of leading a number of major building products and distribution businesses across both New Zealand and Australia.
These roles include my current role as Managing Director and CEO at Capral, Australia's largest aluminum extrusion manufacturing and distribution business, as well as previous CEO leadership roles at Wattyl Paint, GWA Group, and Carter Holt Harvey. Each of these companies is a significant player in the sector, and the experience gained in managing them provides me with deep insight into both the operational and strategic challenges that Fletcher Building faces. I've had firsthand experience navigating tough market conditions like we're in now, including fluctuating housing construction markets. I understand the need for strategic focus on cost management and capital prudence. While the current market conditions are tough, the group's recent performance undeniably make the situation more challenging. I'm confident that by using my experience to make prudent, well-considered decisions, I can help position Fletcher Building to take advantage of the cyclical upturn when it inevitably comes.
Additionally, my current CEO role gives me direct insight into the challenges that management teams are facing on a day-to-day basis, and I'll bring this understanding to my role as an independent director. In just a couple of months on the board, I visited six Fletcher businesses and have been highly impressed with their strong safety culture. In fact, Fletcher's safety focus is among the best I have seen. As a member of the Safety, Health, Environment, and Sustainability Committee, I'll continue this focus to ensure our people have a safe place to work. I'm based in Sydney, which I see as a positive. Fletcher Building is a trans-Tasman business with a sizable proportion of its operation and shareholders in Australia.
Being based in Australia will allow me to stay connected with the business and investors in this key market, while maintaining a deep understanding of Fletcher Building's legacy and its importance in New Zealand. My aim is to leverage my experience to help the company maintain its status as an iconic New Zealand business. One that is respected by investors and shareholders, valued by its employees, and trusted by its customers. I've always run businesses with an ownership mindset, and although this is a non-executive role, I will approach it in the same manner. I'm confident that with a strong, engaged team and a clear focus on delivering value, Fletcher Building can grow its market presence and profitability. I believe in the overriding objective of driving shareholder value, and I'm committed to working closely with management and my fellow directors to help make this a reality.
Thank you for your time today. I look forward to making a positive contribution to Fletcher Building's future.
I now invite discussion on the resolution. Given Tony Dragicevich is not with us today, we will take any specific questions shareholders have for him that we are not able to address without him on notice and provide a written response. If you're in the room, please raise your hand and you'll be provided a microphone. Please state your name before you ask your question. Thank you. Anyone online?
No questions online.
Thank you. It's now my pleasure to move that Andrew Reding be elected as a director of the company. Andrew was appointed to the board on the twenty-second of August, 2024. The board has agreed that he is an executive director. His credentials are outlined on the explanatory notes to the notice of meeting. The board unanimously recommends the shareholders vote in favor of his election. I now ask Andrew to address the meeting in support of his election.
Kia ora tātou. I'm delighted to have the opportunity to speak to you again today. This time in my capacity as a member of the refreshed Fletcher Building board. Many people have asked me why I've taken on the role of both CEO and Managing Director, and that is a very fair question, especially since this dual role is more common in Australia than here in New Zealand. The answer is simple: I requested it because I believe it's the most practical and effective way to ensure there is no gap between management and the board. Going forward, it's critical that everyone, the board, management, and our people, are aligned and working towards the same goals to ensure we deliver the value Fletcher Building is capable of achieving.
Fletcher Building, our people, customers, and you, our shareholders, deserve unified leadership, and that brings me to addressing the elephant in the room. We cannot hide from the fact that Fletcher Building has underperformed for our shareholders. I recognize there have been several unexpected challenges that have impacted the business and our share price, and I don't want to dwell on the legacy issues or the Western Australian pipes again, especially as Barbara outlined earlier. I do believe these issues have been thoroughly worked through and are going to be behind us soon. And despite the economic headwinds we know we have to keep navigating, I'm confident about the future of Fletcher Building and its ability to be a business we can take a pride in.
As I previously mentioned, before officially stepping into this CEO role, I took the opportunity to get out in the business and see what is happening on the shop floor across Fletcher's various businesses. What I saw on these various visits gives me a lot of confidence for the future of Fletcher Building. Our operational businesses are running well. They have strong, capable leadership, and importantly, they are empowered to make decisions that deliver growth and drive good outcomes for customers. I was also extremely impressed with the phenomenal progress the business has made in fostering a genuine culture of safety. This shows me that when our teams are aligned and believe in a goal, they can achieve meaningful change.
As you know, this is my second time returning to Fletcher Building, and some people have asked me why I chose to come back, and I want to share this with you, too. At its core, Fletcher Building is a company I'm passionate about, and I want to see it get back on track and succeed. It has been part of the fabric of New Zealand for well over a hundred years. We've delivered infrastructure, housing, roads, tunnels, and airports, and our products are probably found in every single home, and that is a lot to be proud of. However, what really resonated with me when I first joined Fletcher Building was it was the first company I'd worked for that openly talked about culture and values and genuinely tried to live by them.
That ethos remains today, which is important to me because I believe a company with strong values has a soul, which instills pride in its people and motivates them to do their best, which is how I know our teams are as passionate as I am to see Fletcher's get back on track. To sum up, I want to assure you that creating long-term shareholder value will be my focus, and I plan to achieve this by, firstly, ensuring we complete and move up past our legacy projects while learning from them. Secondly, right-sizing our portfolio to set us up for sustained success. And thirdly, building a company that our people, our customers, the communities we live in, and shareholders can be proud of.
As a humble veteran of the industry, you can be assured I bring significant experience to the board, and this, coupled with the insights and perspective I bring to the governance table, makes me confident I can lead Fletcher Building to reach its full potential. I'm looking forward to doing this alongside an extremely hardworking group of directors, and personally, I'm excited for the future of Fletcher Building, and thank you for your consideration.
... Thanks, Andrew. Ladies and gentlemen, I now invite discussion on the resolution. Are there any questions that shareholders would like to ask Andrew Reding in relation to his election? If you're in the room, I invite you to please raise your hand, and a microphone will be handed to you. Before you ask a question, please state your name. Oliver. Is there a theme emerging?
Yeah, sorry about that. Oliver Mander, NZSA. It is a question for Andrew. And look, I noted your comments up front around both the board role and the CEO role in terms of enabling that connection between the underlying business and the board, and certainly at a time of transformation, there is a case for that. That's something that we certainly allow for in NZSA's own policies. My question is, at what point will it become appropriate to separate those roles again in the interests of holding management to account, holding the executive to account, and separating that from governance? Will there come a point, a time at which that model will change over the next three to five years?
I think it's a good question. My response would be that if it becomes apparent that it is better for me to become CEO and not a director, then we will do that. But it's not for the foreseeable future, as we have quite a lot of transformation we need to get through.
Thank you very much.
My pleasure.
Thanks, Oliver. Any other questions from the floor? Yes, sir. Gentleman just down here.
Tim Hunter.
Gentleman here.
Tim Hunter, ShareholdV. Just a question for Andrew. You talked about learning from mistakes of the past. What have you learned? I'm talking of-
Yeah. Don't, don't do big construction programs that don't work? No, so it's interesting, within Fletcher, there's actually been set up a risk assessment, a group that will do audits around the various business units and so on, and what they look at is what risks there may be there that haven't been identified or addressed. So I think the learnings are actually quite deeply embedded in the organization. The controls we have over sizable bids, what the terms they're allowed to take them on, what conditions we're prepared to accept are... We call them the golden rules. So there has been a lot of work done on that, so I think learnings are being done, and we will continue to make sure that we do understand what mistakes we've made, and we don't make them again.
Christian, are there any questions online?
We have a follow-up question from Stephen Mayne from his earlier question, which reads as follows: "I've asked questions at 860 AGMs since 1998, and that was the worst answer I have heard to a standard question inquiring about proxy advisor recommendations and proxy vote disclosure. Best practice is now to disclose the proxy position to the ASX, NZX, along with the formal addresses, to offer more timely disclosure in the market. The likes of Origin Energy, NAB, CAR Group, Viva Energy, Webjet, Xero, Myer, Brambles, and JB Hi-Fi all do this. Will you adopt this practice at next year's AGM, and will you disclose the proxy votes on Andrew Reding's election now, so we can have an informed debate about where investor sentiment is sitting at today's AGM? You've got the proxy voting data; stop hiding it from shareholders.
I appreciate Steven's question, and the answer is no. If I may, ladies and gentlemen, so enough of the-
No further questions.
Enough of the theater. We now move on to the fourth resolution. I now move that the directors be authorized to fix the fees and expenses of the auditor. EY is the company's auditor and is automatically reappointed under the Companies Act of 1993 . This resolution authorizes the board to fix the fees and expenses of the auditor. EY audit partners are present at the meeting should shareholders have any questions on of them concerning this resolution. I now invite discussion on the resolution. Are there any questions in the room? Are there any questions online?
There are no questions online.
Thank you, Christian. We will now move to the fifth resolution, that the company's remuneration report for the year ended thirtieth of June 2024, as set out in the 2024 annual report, be adopted. Before the vote, I'd like to provide some further details around the remuneration principles and framework. We've decided this year to present our remuneration report for a non-binding shareholder vote. This is to provide shareholders with an opportunity to provide us with their feedback in relation to our remuneration policies and practices. By way of background, the board believes that it is critical to align executive remuneration outcomes to driving performance and creating value for shareholders. Our executive remuneration framework is therefore focused on attracting, retaining the best people, building a strong culture of ownership and accountability within our executive team, and driving them to deliver sustainable performance and growth....
Our remuneration framework then takes these core principles and expresses them through the three main remuneration components, which are fixed remuneration, short-term incentives, and long-term incentives. The fixed remuneration component is key to attracting and retaining high-caliber employees. We are in a highly competitive talent market, and we need to compete. Our incentive schemes are designed to focus on both in-year performance through the short-term incentive component, and the long-term sustainable earnings through the long-term incentive component. For each of these components, we balance financial and non-financial goals. Having non-financial goals means we can set targets for our executives to continue to make progress on the most critical areas of the long-term health of the company. For the LTI component, we have looked to adopt performance measures that drive alignment with our shareholders.
The shareholder return measure directly aligns with shareholders' financial outcomes, and the return on funds measure drives executives to focus on profitable use of capital over the longer term, which will flow through to shareholder value. We have seen this alignment play out in practice in response to the unsatisfactory FY twenty-four financial year twenty-four performance. There was no payout in respect of the LTI for FY twenty-four, and the short-term incentive payments would have been below the potential maximums. In any event, the board applied its discretion to determine that no STI payments would be made to executives in respect to the financial year twenty-four, reflecting the board's disappointment with the outcomes. You can see in the table below how this remuneration framework operates in practice by looking at the last six years for the CEO.
Financial year 2020 was when the company was in the lockdown, and no bonuses were paid. Financial years 2021 and 2022 were very profitable years for the company, so the short-term incentives were paid. Financial year 2023 was a softer market, so earnings were down and likewise, bonuses, and given the poor performance of the share price over time, no long-term incentives have been paid over this period. This pattern is what you would expect to see when the incentives are tightly linked to company performance. Turning to the new group CEO remuneration. The board wanted the group CEO's remuneration package to have a stronger emphasis on long term and be more tightly tied to share price performance. We have therefore taken the opportunity to reset the remuneration package as part of the appointment of the new group CEO.
As shown by the chart, the size of the overall package value is reduced. More of the package is by way of performance incentive rather than fixed remuneration, and if the CEO performs strongly over half the package would be paid in equity, which would vest over time. This creates tight alignment between the CEO and the shareholders. With that background, I move Resolution Five, as set out in the notice of the meeting, that the Financial Year 2024 Remuneration Report is adopted. The board unanimously recommends that shareholders vote in favor of this resolution. I now invite discussions on the resolution. Are there any questions that shareholders would like to ask about the remuneration report? If you're in the room, I invite you to please raise your hand, and a microphone will be handed to you. Before you ask a question, again, please state your name.
Yes, sir.
Hi, Peter. Eden again. This relates to what I was talking about ROFE before. 'Cause obviously, if you have a whole lot of significant items and so on, and you're calculating your remuneration, using ROFE as a metric, surely significant items and so on should play a part. What do you think?
I agree.
Yeah, so I mean-
So no, I think-
... my humble suggestion, as a man from Oamaru, is that perhaps you could add in significant items and discontinued operations when you calculate ROFE, particularly for this resolution.
We'll take that on board.
And my second question relates to purpose. And I quote, "Purpose of the remuneration framework is improving the world around us through smart thinking, simply delivered." I'm just wondering if you have any color on that. I think the purpose would be making a profit.
I think that is a reasonable point. I think what we're trying to capture is that Fletcher Building, by being profitable, can actually improve the built environment, the markets in which we operate. And I just by way of a brief example, I think that's really quite valuable. You've seen our performance on, you know, various environmental targets and, you know, the fact that we've been able to reduce greenhouse gas production significantly. I think one of the great opportunities for the company is, you know, recycling and, you know, the circular economy through some of the businesses we've got, which I think are unique, competitive positions. I think of cement, I think of quarries, I think of concrete.
So I think there's a higher purpose is we've got to be smart, we've got to be innovative, we've got to improve the world we operate in. But I absolutely take your point. We're gonna make a quid.
Thanks, Peter.
Yep.
We have one question-
Yep
... online, from Stephen Mayne.
Yep. Here we go.
I'm writing this from Australia, where remuneration report voting is compulsory under the law. It is staggering that successive New Zealand governments have failed to legislate mandatory remuneration reporting for NZX-listed companies, and that most of your big cap companies refuse to put it up voluntarily. Well done for putting the remuneration report up for vote today. Did you have to do it? Why did you do it? And will you promise to keep doing it every year into the future, whilst also lobbying the Luxon government to get with the program and legislate so that New Zealand will stop being regarded as a governance backwater by international investors?
How to win friends and influence people. Look, as we said, it is a non-binding vote. But I think it is a really good barometer to get feedback, to get, you know, insights. We talk about, you know, targets and the like, to get a sense of, are our shareholders comfortable where we're trying to go with remuneration? So I, I hear what Stephen's saying. I'm not going down the political route, but I think there is value in doing what we do, and we will continue to do it.
No further questions online.
Sorry?
Oliver.
Oh, sorry, Oliver.
Thank you, Peter. So look, the slide previously that showed the overall reduction in the total level of remuneration, that is, that's noted and appreciated, certainly, in terms of comparing the pay scales of the current CEO compared to the previous CEO. But one thing that that does mask is the total incentives have actually increased as a percentage of the base salary to around 300%, as opposed to the previous CEO, who received about, I think, 250-260%. Both numbers are large in a New Zealand context, and I know, notwithstanding Stephen Mayne's comments around New Zealand being a governance backwater, I would argue that, in fact, there are some signs in Australia that that is becoming a governance backwater.
So we don't want really to see incentives that are paid at the level of what happens in Australia. Certainly, remuneration reporting has not stopped the excess that has occurred over there. What? How do you view that total percentage level of increase, total percentage of incentive in the context-
I, I-
... in a New Zealand context?
Yeah, fair question. Look, you know, we take advice. So it's... You know, we go out, we look at, you know, comparable roles within New Zealand and within Australia. We look at, you know, relative positionings and midpoints, lower quartiles, upper quartiles, and we take advice. But I think, Oliver, well, I guess what I think is really important, the difference between Andrew's arrangements and prior arrangements were that the... it is weighted way more to the long-term performance, okay? And share owner actually owning shares. Andrew will shoot the lights out. I've got no doubts, and that will benefit the company, and he'll get shares. I'm actually totally relaxed with that.
I think the key point is that the just turning up element of it is significantly reduced, and it's in the interest of Andrew to perform, and it's in the interest of the shareholders, and I'm comfortable with that alignment. But the numbers we arrived at, you know, we took advice. We looked at all the numbers out there, both onshore here and in Aus. So, you know, we didn't kind of arrive at these numbers or the structure in a vacuum.
So when you look at the New Zealand comparators for Fletcher Building, it's very difficult to come up with a number comprising 300% incentives.
As I said, I was comfortable with the advice we got, so.
Thank you, Peter.
Thanks, mate. Anyone online?
No further questions.
There's one here, Peter.
Uh, sorry?
Hunter.
Sorry, where? Oh, sorry, yes.
Hunter again. Just a question in relation to this remuneration report vote. I think it's a good thing that shareholders can get a chance to vote on this. I appreciate it's non-binding, but I was wondering if you'd give us an indication of how the board is likely to respond depending on how the vote turns out. Would it be some sort of formal answer to shareholders about their concerns? Will you be consulting with major shareholders about potential changes to the remuneration structure, or will you just not say anything about it?
Oh, I think. Look, I, well, we'll see how the votes go. But I, I'm. Look, we're having, I think, a pretty good conversation here. I think the structure, we've believe me, got plenty of advice, and it's good feedback. We can argue about, you know, the LTI component and things is too high to, but this is materially different to what it was, and this is materially aligned with doing a good job to grow the shareholders' wealth. So, I think we are taking on board feedback, and I hear Oliver and the NZSA's point, so we get it. But I believe, and my colleagues, we believe this is an appropriate package for Andrew to drive the results our shareholders deserve.
So, we'll go to a vote, and we'll have visibility on how it's received.
Peter.
Oh, sorry. I must have a blind spot on my, which is-
Jim Taylor, shareholder.
Hey, Jim.
Is this just for the Chief Executive?
This vote-
Or will this extend down to other levels?
It is just for the Chief Executive.
Is there an intention to have similar-
Um-
For a next level?
The key executives in Australia, it's a broader vote. In New Zealand, we're not actually in a position to expose or disclose employees' salaries. So it's a consent. There's a consent given to you know, disclose someone's salary. We have not asked other executives to disclose their payments, so we think the headline number is the CEO's, and his targets kind of flow down back through the organization. So it is only Andrew.
Can I see the light in the downstairs, please?
Okay.
No more questions.
No, no more questions. Ladies and gentlemen, I think we're chugging along here all right, but we're coming to the back end of the meeting. I now invite you to cast your votes on the five resolutions as displayed on the screen. Please now cast your votes. The voting on the five resolutions will close shortly. Please ensure that you've cast your votes on all resolutions, and we will take a few moments now to allow you time to finalize those votes. For those of you in the room, please pass your completed voting and proxy form in the ballot boxes. So we'll just have a little break here while that formalities are attended to.
Sorry, there's still some-
Still some. Just a few more moments while the boxes go around. Everyone voted? I think everyone's had access to the boxes the ladies have taken around. So, voting on the resolutions is now closed. You'll now see on the screen the results of the postal voting received ahead of the meeting for the resolutions. These postal votes do not include discretionary proxies held, and these will be voted on at the meeting. The company's auditor, EY, will act as scrutineer for the polls. The final results of the voting on the resolutions will be advised to the NZX and the ASX this afternoon. We now turn to the last part of the meeting, where shareholders have the opportunity to raise any final questions.
I would now like to give any shareholders, both present here and online, the opportunity to ask questions. Again, can I ask shareholders to avoid taking us back on matters that have been fully traversed already? I will now answer any questions, starting with the room. Coralie, if you may.
Thank you. Mr. Crowley, are you domiciled in Australia?
Yeah, I live in Brisbane.
I think you'd be a great new chair as from today.
You're very kind, Coralie. Any more questions? Do we have any online?
There are no questions online.
I think, thank you very much for your questions. Coralie, thank you. Very, very, very kind of you. The check's in the mail. But, ladies and gentlemen, that brings us to the end of the business for the company's 2024 annual shareholders meeting. Before we formally close the meeting, I want to reiterate the board's confidence in the future of Fletcher Building. There is no doubt that we are navigating through turbulent times that have tested our resilience, but we are doing so with determination. We remain connected with our purpose of improving the world around us with smart thinking, simply delivered, and profitable. We are strongly focused on our people, our customers, safety, and sustainability, with a long-term pipeline of investments that will deliver when the market turns.
In doing so, we are not just looking to weather the storm, but to emerge from it stronger and more capable of achieving our goals. As we look to the future, we remain optimistic about our long-term prospects. The foundation we have built is solid, and we are confident that the business is well-positioned to deliver sustainable growth and create value for all stakeholders. Thank you again for your support, and I now declare the meeting closed. Thank you for your attendance and participation today. We'd be pleased if you'd like to join us for some light refreshments, which are served down the back end of the room. Thank you very much.