Good afternoon, everyone, and a warm welcome to the Move Logistics 2024 Annual Shareholder Meeting. I'm Julia Raue, the Chair of your Board of Directors. On behalf of your directors, our leadership team, and all our team members, thank you. We appreciate you taking the time to attend today, either in person or online, and your continued support for Move Logistics. The notice of meeting, which includes the explanatory notes, has been circulated to all shareholders, and I intend to take it as read. I declare that a quorum is present, and as such, I'm pleased to declare that the meeting is open. Welcome. Lots of chairs down the front, if you dare. The audited financial statements for the year ended thirty June 2024 were included in the annual report, which was released on seventeenth September.
You can always find information about the company, financial accounts, notice of meeting, releases, and so on, on our website in the investor section. Shareholders and proxies may ask questions and vote at today's meeting. For our online participants, you can do this by using the meeting portal and the orange buttons on your screen. To get a voting card, you will need your shareholder number, which has been sent to you on your proxy form or in the meeting emails sent to you by Link. I'll provide you with further prompts as we progress through the meeting. If you do encounter any issues, please refer to the online portal guide, or you can phone the helpline. Please note that to ask a question online, you must first register to vote. I'd like to outline the order of business for the meeting today.
We'll start with presentations from myself and from Move's Interim CEO, Paul Millward. There will then be an opportunity for shareholder questions and discussion. We will then move to the resolutions. The voting on all resolutions will be by way of a poll. There will be an opportunity for you to ask questions on each resolution before it is put to the vote. Following the resolutions, we will open the meeting for any other business that you may wish to discuss. Following the close of the meeting, you are all invited to join your board and the management team for refreshments. I'm joined today by many of our key people. With me here today are our directors, Greg Whitham, Lachie Johnstone, Mark Newman, and Grant Davenport.
We have been continuing the board refresh started last year, and in line with this, Grant and Mark will be stepping down at the end of this meeting. Greg Kern also joined our board for seven months to assist with the organizational reset and stood down last month. We also recently farewelled Lorraine Witten, who joined the board when it first listed and was chair from 2020 until June this year, at which time I was elected chair. On behalf of the board, management, and shareholders, I'd like to acknowledge the contribution that all directors have made and thank them for their service. We were pleased to welcome Greg Whitham and Lachie Johnstone at the start of this year, and they are both standing for election today, and you'll have an opportunity to hear from them later.
We are currently seeking up to two new directors to join our board, and a recruitment process is underway. I'd like to recognize the effort that our leaders have put into our business over the last year, with a particular thank you to Lee Banks, Move's CFO, who has worked tirelessly to get things across the line. I've been told not to ad-lib today, but I just want to take this opportunity to thank Lee personally. Lee, your service to us has been exemplary. Thank you. Several of our leaders are here today. Could you please stand when I call your name? Lee, sorry, Lee. Ricky Clark, our GM of Sales, and Anthony Brown, our GM of Oceans. Thanks, team. And please feel free to approach any of them after the meeting for a chat. We were also pleased to welcome Paul Millward in September this year.
Paul has taken on the role of Interim CEO as we move at pace to recalibrate and strengthen our business under our Accelerate program. Both Paul and I will talk to this in more detail today. Paul has a proven ability to successfully lead businesses through periods of change and an impressive track record of delivering results. He will provide strong leadership for Move as we accelerate our turnaround plans. Recruitment of a permanent CEO has been paused while this is underway. I'd like to take this opportunity to acknowledge Craig Evans, who was CEO from early 2023 and led Move through a tough economic period. We believe every single person in the Move team is a key driver of our success. By looking after our customers and our business, they will, in turn, help deliver an improved financial performance.
On behalf of the board, we would like to acknowledge and thank everyone in the Move team for their continued commitment to our customers through more challenging times and acknowledge all they have done for our business over the past year. The FY 2024 year delivered some of the most challenging trading conditions seen in the industry in recent times. Cost inflation continued to rise. Margins were under pressure, and customer demand reduced significantly as businesses cut costs, public spending was put on hold, and large projects were paused. We acknowledge the tough conditions that our customers were operating in, and we thank them for their loyalty and support. The freight industry is a bellwether for the economy, and this was even more evident over the year, with Move's performance reflecting the wider economic downturn. However, as a company, our own actions exacerbated the issue.
We invested and grew to meet demand that did not materialize due to the recession, and then we moved too slowly to adjust to the conditions, pause our growth investments, cut spending, and rightsize our company. This, along with non-cash impairments, had a significant impact on our performance and results. We are now moving urgently to make change and rightsize the organization, with a priority focus on cash flow generation and profitable operating earnings. We appointed independent advisors from a top four accounting firm to validate our assumptions and support development of our accelerated change plan. Our FY twenty-four results were disappointing and well below what our shareholders expect. As a board, we are owning the mistakes we have made, and we are 100% focused on improvement.
Sales were down due to the soft market conditions and reduced demand, as well as the loss of some customers as a result of insourcing, increased competition, and pricing pressure. Our cost base was higher, partly due to inflation, but also as we invested into our business in anticipation of an economic recovery and predicted customer volume, which has not yet occurred. Together, this impacted our earnings and our profit. This year's results also included non-cash impairments of NZD 17.3 million. These included a write-down on the carrying value of the Atlas Wind vessel, which was plagued by mechanical issues and has now been sold for $1.1 million, and a write-down of the goodwill in our warehousing business, which had a very difficult year.
We have good relationships with our banking partner and recently renewed our funding arrangements, extending the tenure of our bank facility by a further twelve months and signing a new agreement with Pacific Invoice Finance for up to NZD 25 million. We are currently able to access NZD 21 million of that. With shareholder approval, which we are seeking today, we will be able to access up to the full amount, and this will provide us with additional flexibility to execute our Accelerate program and to drive business change. Our poor performance in recent times is not acceptable, and we are moving at pace to turn it around. This is not a quick or simple task, but we have a clear plan and are laser-focused on ensuring we drive change.
In recent months, we have developed the Accelerate program, appointed a new CEO, established new funding arrangements, and are divesting unprofitable or surplus assets. We are refreshing our board and looking to recruit new directors with skills and experience that will help us drive our company forward. We are engaging with shareholders on a regular basis and are committed to keeping you updated on our progress. We are instilling a culture and mindset that ensures we are fighting fit with an appropriate operating model and a cost base to support this. The Accelerate program is focused on three pathways, which Paul will talk to in more detail. We believe these will help us create a stronger, streamlined business that is future-fit. Our goals are to improve financial performance, build positive cash flow, and deliver value to you, our shareholders, while continuing to provide great service to Move's customers.
FY twenty-five is the turnaround year, and we are targeting a return to positive adjusted net operating cash flow and a significant improvement in normalized earnings before tax. In FY twenty-six, we expect normalized earnings to return to profit. I'd like to take this opportunity to remind shareholders that while recent performance has been disappointing, Move has inherent value, some of which uniquely sets us apart from our competitors. We have an extensive nationwide network with strength in both metro and regional areas. We offer multimodal, end-to-end supply chain solutions across freight, warehousing, and logistics, as well as specialized services. We are customer-focused with a culture of service excellence. Our customers are at the core of all we do. Our team are experienced and passionate. We believe everyone can make a difference, and we have asked every member in our team to stand up and to be counted.
We have a strong brand and a strong market position. The work we are doing now to rightsize and streamline our business will help drive operating leverage when demand and revenue return. I'll now pass to Paul to talk more on the Accelerate program and our progress. Thanks, Paul.
Thanks, Julia. I'm pleased to be here today for my first annual meeting for Move. It's great to see so many shareholders joining us, and I look forward to meeting and talking with you after the meeting.... I've been in the seat for seven weeks now, and I've loved getting in the business to understand our operations, our people, and the partnerships we have with customers. It has reinforced to me the strength of the Move business and the potential, but clearly, there are some critical areas where we need to significantly step up to realize the commercial potential of our company. While the results have been poor, there are many individuals who have worked tirelessly, and I do want to acknowledge and thank them.
It is their efforts and passion, along with a disciplined plan of action and a stronger culture of accountability, that will bring our company back to a far healthier footing. Now, one of Move's biggest assets is the size, scope, and breadth of our company. We transport, warehouse, and deliver goods across New Zealand and also offer services such as fuel transport, specialized lifting and transport, and our trans-Tasman shipping service. This broad offering is fit for purpose and is very relevant to one. A lot of work has been done over the last two years to ensure that we have some strong basic fundamentals in place. Our end-to-end supply chain has been strengthened with enhanced metro delivery services and the trans-Tasman shipping service.
We're increasingly multimodal, using rail and coastal shipping to make sure we provide the right options for customers, often at competitive rates and with carbon reduction opportunities. The Move brand positioning is strong, and our customers love it. At the right time, we do have an opportunity to create a far stronger connection to our brand by further leveraging it. However, execution is everything, and there are some areas where we need to accelerate. We're moving at pace, at pace to right-size our organizations for the conditions, still retaining the ability to win commercially and to be flexible for customers. We are stepping up in how we use data to deliver insights and support the right decisions so that our model is efficient and that we utilize all our assets better. This is critical in ensuring we tighten our operating model.
For me, commercial assertiveness and a step-change in culture go together. I'm focused on building a high-performance culture where people are connected, they work together, they hold each other to account, and they deliver every day. Part of this is instilling a real stand-up-and-fight spirit to be assertive in the market. We also need to instill a sense of ownership across the business and encourage our team to make sure that every dollar spent counts. We are making progress, but clearly, as last year's financial results show, we've got a lot of work ahead of us to make sure we deliver on our true potential. The Accelerate program provides the framework for our transformation over the coming two years. As Julia noted, FY twenty-five is our turnaround year, with a return to profitable earnings targeted for FY twenty-six.
Now, the Accelerate program kicked off several months ago, and work is well underway to turn things around. I'd like to talk through some of the things we've done in each of the pathways and what our progress is over the first quarter of FY twenty-five. To recalibrate the business, our focus is on reducing costs, right-sizing our business, and continuing to deliver excellent customer service, and still retaining that ability to meet demands when the economy picks up. In some cases, we've had to unwind positions that were built up in anticipation of economic recovery and growth. We have accelerated the sale of old and excess fleet to release cash, and we've also entered sale and lease-back agreements for some of our fleet. Our metro delivery operations used to operate as part of our warehouse business.
We've now transferred that into our freight division, which allows us to maximize efficiencies and reduce costs. Now, the warehouse business had a very difficult year last year, and customer losses resulted in excess capacity that exists today. We've been reviewing our network and are making changes where it makes logical sense. For example, in Christchurch, we've moved our Seymour Street operation into our larger Rolleston facility. Firstly, it reduces costs, and secondly, allows us to then look at options for Seymour, such as potentially subleasing that facility. Unfortunately, some of our right-sizing is impacting our team. We're providing as much support as possible to people through the process. We do not make these decisions easily, but we're well aware that we can't tinker around the edges. Our second priority is to drive profitable growth.
This will primarily come from either offering more of our services to existing customers or bringing new customers on board. We are seen as a credible alternative to other large providers in the market. Our team culture, our partnership approach, and our focus on delivering end-to-end solutions is seen as valuable and is why we have some marquee-scale customers. Our trans-Tasman shipping offer is opening up new revenue opportunities, both for shipping and landside. The new Brio Faith vessel is faster, it's more fuel-efficient, and has 80% more capacity than the Atlas Wind. We also need to make sure that we're pricing jobs fully and properly, making sure we're generating appropriate margins and capturing the value that we are offering customers. Warehousing, we do need to recover increasing property costs where relevant.
Now, the sales team is reasonably new, but doing a great job under Ricky Clark, our GM of sales. This is one area where we will invest, both in capability but also in people and how we go to market. We will not grow a healthy business by purely cutting costs. Our third priority is to improve our financial performance, and so while cash conversion remains stable in FY 2024, our adjusted net operating cash flows was negative NZD 5.1 million. This is a really important metric for the board, and in FY 2025, our target is to return to positive adjusted net operating cash flow. Now, this is operating cash flow, less lease and rent payments, and excludes loan interest, tax, insurance claims, and gains on asset sales. We will do this through focused financial management, reducing our costs, and increasing our revenue.
New funding arrangements and a reset of covenants are now in place and will provide the support to make sure we deliver on the Accelerate program. We do have a very clear and simple plan in place. It now comes down to culture and capability to execute that plan. Now, people will drive our success, and we have tasked them with a focus on four things to ensure that we deliver: cost obsession, customers first, leadership, and quality decisions. We are seeing great engagement from the team. We've recently launched a group-wide initiative called Every Dollar Counts, where we've gone out to the team and asked them for their ideas on cost and productivity, and we've been overwhelmed with responses.
So I'm still pretty new, but I've been really heartened by the calls and chats with the team, who do wanna stand up and fight for this organization, and that's the spirit that we need. The economy does remain challenging, particularly across the retail and FMCG sectors where we are strong. Building products, aquaculture, and infrastructure have also retracted, although long-term macro trends are positive. With interest rates now heading lower and monetary conditions starting to ease, we believe demand will recover over twenty twenty-five, although this will be gradual and more so in H2. Demand for freight and logistics services will increase as end customers once again start spending and large projects come back online. Sustainability and carbon emissions are becoming of increasing importance to our customers, and our multi-modal solution using rail and shipping will open up new opportunities.
There is increasing investment in renewable energy, and our specialist division is actually a leader in this sector, so we're positioned well. This year, we are making sure our business is as streamlined as possible and improving our financial performance. So how are we progressing in FY 2025? So market conditions are still soft, as I touched on. Volume and revenue is still challenging. However, we are seeing good traction in expanding gross margin. So gross margin dollars for Q1 of FY 2025 were well up on any quarter last year, and gross margin percentage has grown four points compared to last quarter and is ahead of last year. So this is encouraging, shows we've got the right plan and that we're executing on what is needed to create the value. I'm confident we can return move back to a success story, and I'm optimistic about our future.
There will be challenges, particularly until the economy improves, but we can't sit around and wait for this to happen. We know we have work to do, and we know we have work to do at pace to restore Move into a strong, profitable company. I'm committed to improving financial performance and growing shareholder value. Thank you for listening, and I look forward to chatting to you after the meeting.
Thank you, Paul. Before we move to the discussion, I'd like to reiterate the key themes of today's presentation. We have a clear plan in place focused on getting the fundamentals right, streamlining our organization, reducing costs, growing profitable revenue, building a high-performance culture, and customer delivery. We are moving at pace, and everyone at Move is leaning into this process from the board down. Execution is critical to our success, and we are committed to delivering for our shareholders. I would now like to invite shareholder questions in relation to the FY twenty-four annual report or today's presentation. We will answer questions about the resolutions as they are put to shareholders in the next section. So if your questions are with regard to the resolutions, please hold them.
For our online shareholders, if you would like to ask a question, click on the Ask a Question box, either at the top or bottom of the webpage. I'm gonna start with questions in the room, but can I, can I please ask that if you do have a question, that you wait for the microphone? Thank you. Do we have any questions? Thank you. One minute.
Thank you very much, Chair and CEO. My name is Xiao Yu. I'm an individual shareholder. There are several things I would like to discuss related to this book and the presentation. First is, I haven't heard much about the utilization of AI and robotics to cut the costs and increase productivity. The other thing I would like to discuss is the page 54 of the book, annual report.
Report.
Correct. Uh...
I don't have it-
I think-
in front of me. Sorry, so you might just-
That's fine.
Okay.
I will try to explain.
Thank you.
It's very concerning regarding the huge increase of the goodwill impairment of-
Mm-hmm
... NZD 12 million, and then also the asset impairment of NZD 4.8 million may be related to the mechanical issue you discussed before. But correct me if I'm wrong. And also about the 2.3 million of the restructuring and settlement costs, that's also a large increase compared to the FY 2023.
Mm-hmm.
I will leave it here.
Thank you, so let me start with the AI and robotics question, and then I might just hand to you, Lee, if you don't mind, to talk about the financial question. In terms of AI and robotics, look, I have to be honest, we're not sophisticated enough yet to deploy any AI robotics into our business. Our focus on turnaround is purely on process rather than systems, so while there is some system change that is required, we're not looking to do heavy investment in areas like AI, AI and robotics yet. But, you know, certainly, we have a technology head, and I'm sure he would welcome having a conversation with you at a point in time when we do consider that.
I've got a technology background myself, so I'm absolutely aware of the benefits, but we need to get our fundamentals right before we start going into those advanced technology areas. Lee, did you have any-
Good afternoon, everyone. So in regards to the goodwill impairment, so that relates to our warehousing division. So every asset has to be supportable, and so when we bought the division back in 2017, it had a goodwill component. The earnings and the forward-looking cash flows of that business at present, as Paul touched on, you know, we're in a work in progress, and we've got some excess capacity. We lost some customers that insourced, and so through that analysis, the impairment was required. In terms of the asset impairment, that directly relates to the Atlas Wind, which Julia touched on, that vessel has now been sold. And then, of course, to execute the plan, it has involved costs.
You know, cost out, there are costs to execute the plan, and so that's part of the restructuring.
Thanks, Lee. We've got a question, sorry, at the back of the room. Thank you.
Thank you. Malcolm Wade, shareholder.
Hi, Malcolm.
When you put the snapshot up about some of the metrics, income, and all of those, that's fine, but I would like to see something like a five-year chart of metrics. So, you know, if we look through this income, normalized a bit, et cetera, et cetera, and EPS or lack thereof, and even DPS maybe one day. It's just a really useful way of looking at how the company's actually progressing, as opposed to just looking at figures maybe this year, last year.
Okay.
So I would request you consider that. Thank you.
Thank you, Malcolm. We will do. Do we have any... Oh, thank you, over here.
David, David Snow.
Hi, David. Welcome.
I think it's fair to say that the shareholders have seen a number of plans that look quite good on paper over the years, and unfortunately, not a lot of them have actually been turned into results. And, you've now got your Accelerate plan that you're going to, say, turn the company around, and I think as shareholders, we'd like a little assurance-
Mm-hmm
... that this time the plan will work, that you will carry it out, and we will see some results on the board.
Yeah, look, absolutely, David. Very fair comment and question. A couple of things. One, I would say that this turnaround program has been validated externally and also has a significant amount more rigor and robustness to it than our previous turnaround programs. I sit in on, personally, on up to two to three, sometimes four meetings a week on the Accelerate program. We've got an internal change manager managing it. The whole management team and extended leadership team are part of that. Everyone is being held to account. So I can only speak, you know, from what I'm seeing, but certainly, the rigor, the robustness, and the reporting is absolutely there.
In terms of how do we get that message across to you, I think there's two things: One, we just need to execute, and two, we need to tell you how that's going. And so one of the things that we are taking away is, how do we increase investor communications? I mean, it's early days, right? So, you know, I've just got to tell you what's happening right now, and we are very acutely aware of the requirement on us to execute. So, you know, please don't believe that is lost on us. We are all leaning in heavily to do exactly that. And David, you sent me quite a long email recently. Thank you. I just wanted to acknowledge that. Hopefully, you got my response, by the way.
Thank you. I was just going to also ask, there were four quite significant customers lost recorded in the annual account- in the annual return. and I just wondered, could we have a little more detail as why such a large amount of business was lost and why we can be confident that we're not gonna lose more business of that sort of magnitude?
Yeah, look, it's challenging in a competitive market, so that's the first thing. But, you know, I'm not gonna make excuses. We've. As I said, we've had some own goals, and we need to own those. Ricky's here, and maybe Ricky could talk to you in the break, you know, about the work that we're doing to ensure that we are wrapping our arms around customers and making sure that we keep them. But, you know, there's also some customers that if we can't ensure that they are profitable, you know, we need to sit back and understand what that looks like. And so, you know, I'm certainly not gonna suggest that I wanna lose customers, but if they're incredibly unprofitable, we're not a charity. So, you know, we are a business, and we have to run like a business.
But, you know, obviously, we're not in the business of losing customers. I just wanna invite... If any of the board wanna chip into any of these questions in, please feel free. So,
I'd like to do a build on the,
Thank you
... I guess winning in market. Yeah, there's been some own goals where we've lost some big-scale customers, and there were two in particular that were a big impact. We have a very robust planning process where we go and say: "Right, who do we want to go out and win?" So how we can change the top line. The other bit is really, we've got some customers that we need to retain, so we're very focused on that. We look at it weekly. You know, I touched on that we need to get the right sales structure. There's a few areas that we need to strengthen to make sure it becomes more than a transactional relationship, which is, you know, being new to the sector, is often what it is.
And so if you can add a further dimension to then have a far more valuable relationship, then it's not about beating up partners for 1% or 2% on price. You actually get a far more healthier, profitable relationship. And we're, you know, we've got a bit of work to do, but we're definitely focused on . . . And, you know, I'm well aware I don't wanna lose any big customers because we're just in no position to do that.
We've also had some great customer wins, so, I'm, again, I'm not making excuses, David. Your question is absolutely valid.
Can you give us a few of the customer wins?
Yeah, absolutely. The Warehouse has been a really fundamental win for us. Sparkling Spring, am I saying that correctly, Ricky?
Sparkling Springs.
Sparkling Spring, thank you. Yeah, we've had some good ones, and we've got some more in the pipeline, and I would prefer not to name those just now, if that's okay.
One final question.
Sure.
You've sold the Atlas Wind.
Mm-hmm.
I see it's in the books at NZD 1.97 million. You said, I think, you'd sold it for $1.1 million-
US
... US.
Mm-hmm.
So is that book value?
Lee?
Yes. Yeah.
That's-
Thanks.
Thank you. Thanks. I think we've got a question over here.
with the-
Oh. Thank you. Sorry. It's just so that the online... The reason that we ask you to wait for the microphone is so that online can hear you. Thank you.
John White from Century Group.
John.
With your trucking fleet-
Mm
... what's your capacity utilization at the moment?
Yep, please.
Do you want, I'd probably not rather share that.
Mm-hmm.
What I would say is, we've got some opportunities, so we can sweat it harder, but in terms of the exact numbers, I'd probably, you know, it's not to share.
Given your reluctance-
Um
... to sort of discuss that, have you turned your mind to reducing your fleet numbers?
Yeah, we've already made good progress on that.
Mm-hmm.
Yeah, that's one of the big initiatives that we've got in the Accelerate program is that, and one is, you know, we're very much in initiative to move from employee drivers to owner-drivers so that they have skin in the game and that they're making sure they're productive in driving their own businesses. So we've made really good progress on that, and with still a few more moves to do in there.
Um-
That's what we mean when we talk about right-sizing.
Yeah. The other thing is that the balance sheet is extremely highly leveraged.
Mm-hmm.
I see you've moved to an invoice discounting-type funding methodology.
Mm-hmm.
What is the annual percentage rate on that facility?
That's in the notice of meeting. Did you-
Could you... Well, well, just refresh my memory.
Yep. Sure. Lee?
It's eleven point nine five.
Yeah.
Eleven point nine five?
Mm-hmm.
Okay, so do you think you've got sufficient equity to see you through for this financial year?
Absolutely.
Okay, that's reassuring.
Mm-hmm. Mm-hmm. Yep. And, sorry, John, our auditor's here, so, he's in the front row. So, yeah, hit him up. But he, yeah, he absolutely, and he is here.
Thank you.
Any more questions from the floor? No. Jackie, do we have any questions online? Okay, there are no questions online. Thank you. Thank you for your questions. I'd now like to move to the resolutions before the meeting, and these were notified in the notice of meeting, and explanatory notes have been provided. Only shareholders, proxy holders, or corporate representatives of a shareholder may vote on today's resolutions. Voting on each of the resolutions in the notice of meeting will be by way of poll. Please cast your vote under the Vote tab on the meeting platform, or complete your voting form. Once you have completed your selection, please click Submit Vote on the bottom of the card to lodge your vote.
If you have any difficulties online, please contact the helpline number displayed in the top right of your screen, and we will, as I said earlier, take questions on each resolution as they are put to you. So I'll move to resolution one. The first resolution is to authorize the directors to fix the fees and expenses of PwC, the company's auditor. Are there any questions from the floor? Are there any questions on... Oh, sorry, David, you've got a question-
On PwC?
Mm-hmm.
Patricia Schnauer. No disrespect to the representative from PwC, but just looking at the fees that are involved with that particular auditor, given the financial circumstances of the company, it just seems a little bit high. So in terms of resetting any fee with them, let's hope that it's not higher still. Thank you.
Thank you. Noted. Thank you, Patricia. Jackie, are there any questions online? No questions online. Thank you. Resolution two asks shareholders to approve an increase in the Pacific Invoice Finance facility limit from NZD 21 million to NZD 25 million, as I discussed earlier. The key benefit of this facility is the ability for Move to access cash when it is invoiced rather than paid, which benefits our cash flow. Explanatory notes, again, have been provided in your notice of meeting. Are there any questions from the floor?
Yes.
Okay. Might be a moment. Oh, sorry. Yep.
Malcolm Wade here.
Malcolm, yes.
Sorry, I'm just a bit puzzled by this 'cause it looks like a one-off sugar hit. Because, of course, if the, if the outstandings are not paid, that's brought back anyway, so it's a one-off benefit to increase the, the fund. Is it actually worth the costs involved?
Do you wanna take that one?
Yeah, so in terms of, you know, part of entering this arrangement, part of it was obviously analyzing our debtor book. And we have a very low rate of overdue, so we don't see much exposure to that. And, I mean, we're a business that deals with cash up front, you know, racks paid in advance, wages and that sort of thing. So this facility actually sort of suits the cash flows of our industry. Does that?
Yeah. Does that answer your question, Malcolm? Wait, I-
I think he-
Yeah, okay. Thank you. Question up the front.
Thank you, Chair.
I certainly wouldn't call it, sorry, a sugar hit, but, I appreciate that it's where you see it.
Thank you, Chair. Regarding, for example, the drop of OCR, for example, if there is a large drop of OCR or even any large change of OCR, how does it affect the lending of from the creditor in terms of their change of interest rate and then, you know, related to the financing cost? So the different ones, for example, is there enough comparing, you know, you know, you shop, when you shop, you compare different ones and then look at the different creditors and then look at how much they will drop their interest rate to the company?
Yeah. Does-
The facility has a base rate plus a margin.
Yeah.
Yes, the base rate is reviewable based on what you're talking about in terms of what's going on within the interest rate market.
Margin is fixed.
Yep.
Yes, Patricia?
Just a point. Just a point of clarification, I guess, rather than a question. But Pacific Invoice Finance is. Do we use ANZ as well, or is that in place of ANZ?
Both. So we're using ANZ as a bank and Pacific Invoice Finance for our creditors.
Is that a commercial necessity to use both?
Yes.
Is there a benefit in using both?
Yes. Yes, there is. Yeah.
Thank you.
Sorry, I said creditors, didn't I? I meant debtors, obviously. Apologies. All right. Apologies for that. Any other questions from the floor?
Well, uh-
Yep, David?
What sort of terms are you offering your customers? Are they on sort of 30-day or are they longer than that? I mean, I imagine there's a range, but-
Mm-hmm
... I'd be interested to know what sort of credit you're offering the customers in a tough market and how that reflects on this financing.
Yeah. Our standard terms are twenty days. We do have a reasonable amount on thirty days, and then there are some in the larger commercial space that are over thirty but under sixty.
Okay, no questions online. So I'm going to move to the next resolution, which is regarding the election of Lachie Johnstone. Lachie was appointed to the board in March as an independent director. He has significant governance experience, including as chair of Farmlands for 16 years. He is a valued contributor, and the board unanimously supports his election, and I'm now gonna ask Lachie to say a few words. Lachie?
Thank you, Julia. I think that between Julia and Paul, they've covered off how the organization has got to where it's got to and, more importantly, what it's got to do to become a success into the future. Acknowledging that, I've only been in this role for about four months of the reporting period that we're talking of today to the thirtieth of June. I would suggest that while we've been operating in a pretty tough commercial environment, there's lots of businesses that operate in very low margin, very competitive sectors, and this organization needs to get match fit, and it is doing so as we speak.
And, the changes that have been made over the last three to four months, I think, will certainly make a big difference in terms of being match fit. Without laboring my own experiences across the agriculture, horticulture, logistics, and port sectors, I've been involved in businesses that don't find it easy to make money. There's a lot of capital employed, margins are very low, and the key to all of this is to be very close to your customers, and to execute with absolute ruthless efficiency, and that's something that this organization needs to continue to do. I suppose in closing, I would appreciate your support.
I think I can continue to add value in this space, and I have a lot of confidence that if we continue to do the things that we've done over the last few months, we will start to make progress. Albeit, you know, it is a tough market, but you can be assured we'll be doing our absolute best on your behalf as shareholders. Thank you.
Thank you, Lachie. Are there any questions for Lachie from the floor? Yes, at the front, please.
Thank you, Chair. Regarding the contributions of the relatively recent directors, including yourself, are shareholders able to get proper record of, for example, board meeting or, and things like this to examine the contributions of the different directors?
Thanks for your question. Short answer is no. Sorry. But thank you. Any other questions from the floor? All right, thank you. I will say, sorry, that internally we do do director performance analysis, and, you can rest assured that if directors are not performing, then those conversations will be occurring. And, you know, we also look at ensuring that we have a very balanced skills matrix. The reason that we're looking for one director at the moment is, largely to chair our Audit and Risk Committee, which Lachie will perform for us in the short term. And once we understand what skills and experience that individual brings, we'll consider whether or not we bring on that fifth role, and that will help us understand what skills and experience the next individual needs. Hopefully, that helps you with your... Yeah.
Obviously, because we're listed, we have disclosure elements that we need to consider, and we can't discuss with one shareholder something that we haven't disclosed to the market or to others, so. Right, our final resolution today is the election of Greg Whitham. Greg was one of the original founding partners of the Move Group and our CFO. He was appointed in March this year following a request from the founding shareholders. Greg is a substantial shareholder in Move, with around 7% of issued capital. The board has determined that he is a non-executive, non-independent director and unanimously supports his election, and I'll now ask Greg to say a few words.
Thanks, Julia. Good afternoon, everyone. Thanks for the opportunity to tell you a little bit about myself. I'm born and bred in New Plymouth, New Zealand, and lucky enough to have a beautiful wife, four children, three grandchildren, and more coming. My working career has been in the accounting field. I had about eight years in Australia, mostly Melbourne, working in the health insurance and manufacturing business, and a year in Tasmania, working in the mining field. Back to New Zealand, I started with Hookers, which has morphed into Move Logistics, and I spent 35 years with that company. During that time, we grew the business substantially. We made 23 acquisitions and grew to a stage in 2017 that we were able to publicly list the company.
I retired in 2019 as CFO. Subsequent to that, I've been privileged to be back on the board now, and being able to work alongside our excellent executive team, and like them, I'll be making every post a winner as far as restoring our profit and positioning the group into a situation where we can grow. Other interests, I'm trustee on three charitable trusts in the Taranaki, Taranaki Air Ambulance, Regenerative Agricultural Trust, and also MediFlight Taranaki. Apart from that, my time is spent farming. I've got do some dry stock farming, play around with a bit of horse breeding, beekeeping, lots of gardening. That's about my lot. Thanks for the opportunity. Thanks for your support. All the best.
... Thank you, Greg. I'll just invite questions from the floor for Greg. Jackie, do we have any? Thank you. No questions online. All right, thank you. That concludes the resolutions for today's meeting. All resolutions are ordinary resolutions which will be passed, if approved, by simple majority, which is more than 50% of the votes of shareholders entitled to vote and voting in person or by proxy or representative. Please complete your voting now. Please ensure that you have cast your vote on all resolutions. Link will collect voting forms from shareholders here. My fellow directors and I intend to vote all discretionary proxies we have received in favor of the resolutions as set out in the notice of meeting. So thank you. Are we all done, Link? Yep. Okay. Voting is now closed. I wanna thank shareholders for your participation in today's meeting.
The results of voting will be posted to the NZX and our company website as soon as practicable. Is there any other business that anyone would like to raise? Again, we'll start with questions from within the room. Anything that we haven't covered over. Let's start over here. Sorry, we might have lost our microphone person, have we? Apologies. Jackie, thank you. Just over here first, and then-
Yeah. Thank you. Is it going?
If you don't mind just stating your name.
Yeah. Yeah, Graham Finch. So I'm a long-term shareholder.
Thank you.
I share with David's comments really, that we have been before board meetings before and had very eloquent and nice plans put together.
Mm-hmm.
When we did the capital raise, and we bought in our shares at NZD 1.40, and we're now looking at under NZD 0.20.
Mm-hmm
... we are not happy.
No, I.
It's been a roller coaster ride with this company, and I'm hoping that it's gonna now go on the up, and then we can return to the level of value and profitability that we expected when we bought in with that capital raise.
Mm.
It's just a comment. Thank you.
No, thank you, and, hopefully... Look, as I said earlier, we just need to execute, right? We can keep telling you, of our plans, but we need to prove that by execution, and that is our absolute intention.
I just want to-
Wait a moment, David.
I just wanted to say thank you for your presentation and, yeah, to bring people up to date, and we obviously all look forward to probably being here next year and seeing brighter times, so thank you.
Thank you. Thank you so much. And David, Jackie, sorry.
Just one question. I could you just clarify, we've had one quarter of the-
Mm-hmm
... since the balance date. Were the results in accordance with your accelerate plan? Were they better? Were they behind? Can you give us any indication on that?
Sure.
They were slightly ahead, actually.
Mm.
So slightly ahead of where we need to be. So it was encouraging, and last month was the best of the last few months. So-
Mm
... it shows the plan we've got is the right plan. Although, you know, if we look at our plans ahead, we've still got to ramp up, so there's still work to do, but it's encouraging.
Could you just give a bit of an indication what sort of a drop in costs you're hoping to achieve overall and as a percentage?
Can I just say, David, significant for now, aggressive?
Uh, aggressive.
I'd rather not put numbers on it, if that's okay. Look, we have numbers, but we're doing our best to keep them internally held at the moment. But as I said, FY 2026, FY 2025 turnaround, FY 2026 return to profit, and that's absolutely our intention.
I'd just say, Madam Chair, I've asked you one or two pointed questions, but the very best of luck to all of you. You've got a big job ahead of you. It's a tough environment already, and you know, the bank's pulling back and leaving you with more pressure in the finance area and whatever. Our future is in your hands, but the very best of luck.
Yeah, look, thank you so much. Thank you. Appreciate that. Yes? Sorry, up the front. Jackie's trying to keep out of the way of the camera. Sorry, Jackie.
Lee Burridge. It's just a-
Yes
... a comment. Throughout wherever I drive in Auckland, I always see Move trucks. They're everywhere, and they look good. I just hope that there's more of them.
Thank you so much. In fact, just to show you how dedicated I am to Move, I flew in recently, and I took a photo, and I sent it to Paul of me coming across the Move plane, and I had a Move truck in front of me this week, and I took a photo of that, too. Like you, I see our trucks out and about, and I definitely look at how we're turning up. And Paul and I have talked about, in the new year, doing a roadshow with, some of our branch managers, but also some of our truck drivers around, you know, our standards and what we expect and how we want to turn up.
So we are heavily leaning in and very engaged, and we appreciate that our team are absolutely going to get us there, so it's incredibly important. Thank you. Jackie, sorry, we didn't have any questions online? No. Okay. Thank you. Okay, I'm going to call the meeting closed. And again, I wanted to acknowledge all of you as our shareholders, and thank you for your continued support and investment in our company. And for those of you here today, apologies online, I invite you to join the management and your directors for afternoon tea. Ngā mihi nui katoa. Thank you.