Greetings. Welcome to the Pet Valu Holdings Ltd, annual General Meeting of Shareholders. At this time, all participants are in listen-only mode. Registered shareholders and validly appointed a proxy holders who logged into this meeting with their control numbers or usernames via the Lumi platform can submit questions during the meeting online. To do so, please click the Messaging tab. You can type your question in the box at the bottom of the page, then click Submit. Please include your name with your question so that you can be properly recognized. Participants by telephone are in listen-only mode and are not able to ask questions. If you are a registered shareholder or a validly appointed proxy holder in listen-only mode and you wish to submit a question during the meeting, please log on to the meeting via the Lumi platform with your control number or username.
Please note this conference is being recorded. I will now turn the conference over to your host, Chairman of Pet Valu Holdings Ltd., Anthony Truesdale. Please go ahead Mr. Truesdale.
Good afternoon. Welcome to the company's annual general meeting of shareholders for 2023. We are conducting today's meeting as a virtual meeting. Our meeting will consist of a brief agenda of formal items, including the setting of the number of directors for the ensuing year, the election of directors, the appointment of our auditor, and the advisory resolution on the company's approach to executive compensation. Following the formal business of the meeting, there will be a corporate presentation and a more general Q&A session. Catherine Johnston Secretary of the Company, will begin by describing how we will conduct the meeting. I will take us through the official business portion of the meeting.
Thank you Tony. Good afternoon everyone. As the conference operator advised at the beginning of this meeting, if you have a question or wish to make an objection at any point, click on the Messaging tab and type your question and confirm you are a registered holder of common shares of the company or a valid proxy holder. We will read questions pertaining to the business of the meeting aloud at the appropriate time, along with the name of the person submitting the question so that all attendees can hear the inquiry. Tony or I will address the question as we would during an in-person meeting. Although questions can be submitted throughout the meeting, I encourage you to submit your questions early and one at a time. They will be addressed at the appropriate time during the meeting.
Only questions on topics relating to today's subject matter will be addressed. As Tony mentioned, there will be a more general Q&A session after the formal business of the meeting is completed. If you have not already voted your shares and you intend to vote at this meeting, please note that the polls are now open and you can vote on all matters. To vote, click the Voting tab on the Lumi platform. You'll be taken to an electronic ballot that you can fill out and submit online. Please note the only attendees entitled to vote and submit questions or objections at this meeting are registered shareholders or duly appointed proxy holders who have logged in using their assigned control numbers or usernames.
We remind you that if you are a registered shareholder and you have already voted by proxy, unless you wish to change your vote, you do not need to vote again. Votes may be changed up to the time voting is closed. The poll will remain open until the chair of the meeting declares voting on all matters closed. We will provide you with preliminary voting results for all resolutions at the end of the meeting. For specific vote tabulations, please see Pet Valu's report of voting results, which will be posted to Pet Valu's SEDAR profile after the meeting. A simple majority is required to approve matters voted on at this meeting. I will now hand it back to Tony.
Thank you Catherine. I will act as Chairman of the meeting. Catherine will act as Secretary of the meeting. Also joining us remotely are directors and members of senior management. Louise Waltenbury of Computershare Investor Services, the company's transfer registrar and dividend distribution agent, will act as scrutineer of the meeting. I will now review the manner in which notice of this meeting was given. Notice of this meeting has been mailed to all registered shareholders, to the directors of the company, and to the company's auditor. A copy of the affidavit as to such mailing has been provided by Computershare Investor Services, the company's transfer agent, which oversaw the mailing. Notice of this meeting has been posted on SEDAR and included in our management information circular. Copies of the circular and other meeting materials are available under the company's profile on SEDAR.
On the company's website and on the Lumi platform, absent any objections, I will dispense with the reading of the notice of the meeting. In light of the foregoing, proper notice of the meeting has been given. I will now address whether a quorum is present today for the transaction of business. The company's articles specify that a quorum at a meeting of shareholders is one shareholder who is or who represents by proxy shareholders who in the aggregate, hold at least 25% of the issued shares entitled to be voted at the meeting. With respect to the presence of a quorum at today's meeting, the preliminary scrutineer's report indicates that there are 47 shareholders present at this meeting, either attending online or being represented by proxy, holding an aggregate of 63,000,518 common shares.
This represents approximately 89.4% of the company's issued and outstanding common shares, which as of the record date of March 27, 2023, is 71,005,585 common shares issued and outstanding. I adopt the scrutineer's report and declare that a quorum is present. With the appropriate notice of the meeting having been given and a quorum being present, I declare the meeting is duly constituted and ready for the transaction of business. In accordance with the company's articles, no motion at the meeting needs to be seconded. After preliminary voting results are announced following the conclusion of voting, the chairman will announce the results of each motion. At this time, I'd like to advise that Jeff Glassford, the representative of our auditor, has joined us remotely.
The first item of business is to receive the company's audited consolidated financial statements for the year ended December 31, 2022. A copy of the financial statements and auditor's report for the company's financial year ended December 31, 2022, was mailed to those registered and beneficial shareholders of the company who requested them. Copies of these documents are available for review on the Lumi platform. They are also available for review on the company's website and on SEDAR. These documents are now placed before the meeting. No vote is required for the reception of these documents. Accordingly, I declare that these documents have been received. As previously noted, there will be a Q&A session after the formal business of the meeting is completed, and management will be available to answer any questions.
We will now move on to the second item, which is the setting of the number of directors for the ensuing year. The circular for this meeting dated March 23rd, 2023, which is included in the meeting materials accessible on the Lumi platform, sets out the details of this motion on page 12. This vote is to approve an ordinary resolution to set the number of directors elected for the ensuing year at nine. This will be subject to any increases as may be permitted by the articles of the company and the provisions of the British Columbia's Business Corporations Act. As noted in the circular, the company is party to an investor rights agreement with certain principal shareholders.
For so long as the principal shareholders have the right to nominate at least two directors, the board may not be comprised of more than nine directors unless agreed to by the principal shareholders. I move that the number of directors to be elected for the ensuing year be set at nine, and that this be passed as an ordinary resolution of the shareholders. Are there any comments or questions on the motion?
No, there are no comments or questions on the number of directors to be elected for the ensuing year. As there are no comments or questions, we will now proceed. We will tabulate your votes as we progress through each matter to be voted on. We will announce the preliminary results of all votes immediately after we close the polls at the end of our agenda.
The next item to be voted on is the election of Directors. The circular for this meeting set out the details of 8 individuals nominated for election to the Board. The investor rights agreement also provides that the principal shareholders are entitled to nominate a set number of Directors in proportion to their collective percentage holding of the company's common shares. As a consequence therefore, pursuant to the circular, the following eight individuals are the nominees for election to the Board for the ensuing year: Anthony Truesdale, Sarah Davis, Clayton Harmon, Patrick Hillegass, Kevin Hofmann, Richard Maltsbarger, Lawrence Molloy, and Erin Young. Under the company's advance notice provisions, shareholders' nominations for Directors must be made not less than 30 days prior to the date of the annual general meeting of shareholders.
As no further nominations were made in accordance with the advance notice policy, and management has proposed 8 nominees, I declare that the nominations be closed. I move that the 8 nominees just announced be elected to the board for the ensuing year. Are there any comments or questions on the motion?
No, there are no comments or questions on the nominations. As there are no comments or questions, we will now proceed.
The next item to be voted on is the appointment of company's auditors. The company's current auditor is Ernst & Young LLP. Management proposes to appoint Ernst & Young as the auditor of the companies and to authorize the directors to fix the remuneration payable to the auditor. I now move that Ernst & Young LLP be appointed as auditor of the company until the next annual general meeting and that the directors of the company be authorized to fix the auditor's remuneration. Are there any comments or questions on this motion?
No, there are no comments or questions. There were no comments or questions, we will now proceed.
The final item of business to consider is the non-binding advisory resolution on the company's approach to executive compensation. This approach is set out starting on page 28 of the circular, along with the full text of the advisory resolution, which is set out on page 23 of the circular. This vote is advisory only and non-binding on the company and the board. However, the board will consider the outcome of the vote as part of its ongoing review of executive compensation. I move on an advisory basis and not to diminish the role and responsibilities of the board of directors that the shareholders accept the approach to executive compensation disclosed in the circular delivered in advance of this meeting. Are there any comments or questions on the advisory vote of executive compensation?
No, there are no comments or questions. As there are no comments, we will now proceed.
This completes the matters to be voted on at this meeting. The polls will close in one minute, so if you've not yet voted on a matter, please do so immediately. While we are waiting for the polls to close, let me advise you that immediately after the close, our scrutineer will provide me with a preliminary tabulation of the results on each matter voted on based on proxies received in advance of the meeting and votes cast at this meeting. I will now announce those results. Poll ballot results for each item submitted to the shareholder vote at this meeting will be posted on the company's SEDAR profile following the meeting. The polls are now closed, and I have received the scrutineer's preliminary report.
The preliminary report results are as follows: With respect to the number of directors, a majority of the common shares voting on this motion voted for setting the number of directors for the ensuing year at nine. With respect to the election of directors, for each of the nominees has received a sufficient number of four votes to be elected to the board until the next annual general meeting, and that for each nominee, the number of withheld votes is less than the number of four votes. With respect to the appointment of the company's auditor, a majority of the common shares voting on this motion voted for appointing Ernst & Young as the auditor of the company until the next annual general meeting and for authorizing the directors to fix the remuneration payable to the auditor.
With respect to the advisory resolution on the company's approach to executive compensation, a majority of the common shares voting on this motion voted for adopting the advisory resolution. I declare that each of the motions submitted to a vote of the shareholders at this meeting has been approved. We have completed the formal business for which this meeting has been called. I now ask if anyone has any other business they would like to bring before the meeting. If you wish to bring another motion or objection before this meeting, please click the messaging tab and type your question. I'll pause now to allow any attendees to submit comments. Are there any other motions or objections?
No, there are no motions or objections.
There being no other business or objection, I now declare this meeting terminated. I'll now hand the proceedings over to Richard Maltsbarger, President and Chief Executive Officer of the company.
Thank you Tony. On behalf of the board, our franchise owners, our leaders, and our ACES across Canada, I would like to thank you for attending the meeting and for your ongoing support of Pet Valu. I would like now to share with you a short presentation on Pet Valu, our accomplishments, and our plans, which will be followed by a formal Q&A session. Please take a moment to review the caution regarding forward-looking statements and non-IFRS measures provided on your screen. During this presentation, we may make forward-looking statements which may involve certain assumptions and have inherent risk and uncertainties. Actual results could differ from these statements. 2022 was another exceptional year for Pet Valu. We drove our 3rd consecutive year of double-digit same-store sales growth. We set a record for new store growth across our network. We welcomed Chico franchisees into the Pet Valu family.
Through all of this, continued to outpace already robust growth in the pet industry to continue to earn market share. In fact, we expanded our market-leading position, grabbing 300 basis points of share. We enhanced our product offering through expansion of our award-winning proprietary brand portfolio, alongside our leading selection of premium national brands. We deeply invested in the development of our people through new small animal expert courses, enhanced manager training, and broader leadership development. We and our customers raised over CAD 2 million for animal-related causes and found forever homes for over 3,000 pets. We did this all while delivering a record year in both our top and bottom line. These accomplishments aren't happenstance, but rather the culmination of well-planned and well-executed initiatives that have positioned our business to drive sustainable, profitable growth over the long term.
The most critical ingredients to this success and our growth engine are our people and our Four Paws culture. It's our people who bring a healthy balance of safety, compassion, expertise, and efficiency to work every day and deliver on our Four Paws promise. It's our people who either directly or indirectly help form meaningful and lasting connections with devoted pet lovers across Canada. It's our people that I say thank you for all that I do to be able to help to continue to build our company. While every team is integral to our success, I want to draw attention to our growing network of franchisee owners. Pet Valu is proud to support over 330 franchisees who collectively operate over 500 Pet Valu, Chico, Bosley's or Paulmac's Pets locations across Canada, comprising over 70% of our locations.
With an average tenure of almost a decade, our franchisees have enduring bonds with their devoted pet lover customers, often across the entire lives of their pets. Our franchisees' entrepreneurial fire, together with their close community connections, drive stronger long-term returns on invested capital to Pet Valu shareholders as we leverage this asset-light growth model. In order to better serve our growing network of franchised and corporate stores together with our burgeoning e-commerce offering, in 2022, we embarked on an ambitious supply chain transformation that will see us invest CAD 110 million into the Canadian economy to create what we believe will be Canada's strongest pet specialty supply chain. This transformation will optimize our aging distribution network to three modern automated facilities while doubling our capacity to support another decade of growth.
The first phase consists of the construction of our new GTA distribution center, which is progressing on schedule and on budget. As you can see, walls are up, floors are poured, and we are now readying for putting in the racking equipment and IT installation that we need to work towards a ramp-up starting in early Q3. The highly anticipated opening of this new DC will unlock substantial capacity in Central and Eastern Canada while driving greater asset efficiency as we offload from more expensive third-party storage and integrate targeted automation capabilities. As these DCs come online, they will help enhance our ability to serve our customers by offering a broader product catalog to our corporate and franchise stores. This will allow us to tap into higher potential future wholesale revenues across both existing and future stores.
We see the potential to add more than 500 locations over the next 10+ years. We are particularly excited for a continued expansion into Canada's many rural markets, which are compelling opportunities that we believe our business is uniquely positioned to serve. These are markets such as St. Marys, a town in southwest Ontario, consisting of approximately 9,000 people, who until recently did not have an easy access to pet specialty brands through existing local retail, until we opened our store in September. In examples like these, our small-scale store footprints of approximately 3,600 sq ft provide an effective entry cost and are often led by franchisees with a deep understanding and connection with the local community. Another compelling opportunity for us lies in Quebec. In February, we celebrated our first anniversary of entering Canada's second-largest pet market through our Chico acquisition.
We are successfully executing our multi-phased integration of the business. First, we scaled up the organization with strong local leadership to assist with the transition from the original founders. Second, we commenced a gradual introduction of our proprietary brand portfolio and are excited to see buy-in from 100% of our Chico franchisees. Prior to our acquisition, less than 5% of Chico sales consisted of proprietary brands, and we believe with our introductions that we can build this up over time to be more in line with our legacy network average, near 30%. We will soon embark on the third phase of our integration by offering our broader wholesale product catalog to Chico as we ramp up our new distribution center in the GTA. We believe this will unlock significant wholesale revenue opportunity while simplifying weekly order processes for our Chico franchisees.
Finally, we will look to enhance Chico's technology platform to better integrate with Pet Valu as we continue updating systems in both businesses. Throughout all of this, Chico continues to be one of the fastest-growing pet specialty chains in Quebec, having grown from 66 stores at acquisition to over 80 within our first year of ownership. We believe there is opportunity for more than 200 Chico locations in Quebec, providing us with growth runway over the next decade plus. 2022 also saw us continue to build out our full suite of e-commerce capabilities, which when combined with our over 700 store locations, enables us to offer an unmatched omni-channel experience and convenience to devoted pet lovers across Canada.
Having already enabled a full transactional website with direct-to-home or in-store pickup fulfillment, we expanded our e-commerce offering with the launch of our auto-ship subscription service, allowing customers to regularly receive essential pet food or supplies either directly to their home or for pickup at their local store. All of these investments and actions continue to position Pet Valu to deliver our mission of being Canada's preferred pet retailer as we deliver the products, care, expertise, and memorable moments in stores and online to a growing number of devoted pet lovers across Canada. With us now a third of the way through 2023, we are continuing to build out our physical presence with 40-50 new stores planned for this year across all markets. We are continuing to enhance our merchandise offering through proprietary brand extensions and exclusive partnerships with national brands.
We are continuing to enhance our in-store experience through ongoing expertise training for our ACES and expansion of our popular in-store services, especially our role as Canada's self-serve dog wash destination. We are continuing to enrich our digital presence both on our website and through our loyalty program as we align with industry best practices and capabilities. As we've noted, we continue to invest in our supply chain, our franchisees, and our Four Paws culture. Together, our ACES, our franchisees, and our leaders are always building and improving the strongest foundation for long-term profitable growth in the Canadian pet industry. Together, we will continue to be the place Canadians turn to for the most challenging and most rewarding parts of being a devoted pet lover. This is Pet Valu. We love what we do. This concludes my prepared remarks, and I'd be happy to respond to any questions.
I will pause for a moment to allow questions to be submitted. Seeing as there are no questions, this concludes our presentation. Thank you for joining us today via webcast or over the telephone and for your continued support of Pet Valu.