Freightways Stock

Good morning, and thank you for joining the Freightways FY '26 announcement. We will begin with a presentation by the Freightways management team, followed by a Q&A session. [Operator Instructions]

Now, I'll hand across to the Freightways management team. Mark, over to you.

Thanks, Kara, and welcome, everybody, to the Freightways FY '26 full year presentation. Around the table, you've got some familiar faces that you've seen at most of the other full year and half year presentations. Stephan Deschamps, our CFO; Neil Wilson, who looks after the Australian portfolio and Big Chill; and Aaron Stubbing, who looks after the New Zealand Express businesses. Just to make the point, largely the same executive team of Freightways has had for many years and has overseen almost a doubling of Freightways over the last 7 years. So really nice to see that continuity, but great success in the business over that period of time.

I'll cover off an overview and just a few of the key points we see upfront and then hand over to Stephan to talk you through the numbers in terms of P&L performance and balance sheet. The businesses over the past year have done rather well in a pretty complex economic environment. And when we talk about a complex economic environment, I guess, what we had at the start of '26 was still the tail end of a 3-year recession. We had the start of a recovery as we came in post Christmas around November, December. And quarter 3 actually looked relatively promising, and it was probably that little sweet spot of economic activity in New Zealand in particular. And then, we had that abruptly halted by the war in the Middle East, rapid escalation of fuel prices, diesel prices, which nudged around $4 a liter here in New Zealand, and that really put a damper on consumer behavior and the number of items ultimately flowing through the networks.

The focus for our businesses regardless of the economic environment had been on improving margins. It's pleasing to see that we've made progress across most businesses. There's a number where we still have a bit of work to do. But a little bit of organic growth, along with our pricing strategies, has enabled us to keep our margins intact and improve them to some degree in many of the businesses.

Similar story to half year. Economy services had higher demand. So these are road-based services as opposed to overnight air freight. They're local hub-and-spoke services as opposed to point-to-point across town. And generally, if customers move from a premium overnight service, generally, we've been able to capture that in another brand with the road freight express service. The Aussie businesses and Allied Express, in particular, continue to shoot the lights out. Really impressive contribution from Allied. A lot of same customer growth, so a lot of growth out of that existing base that they have, and then, welcoming the VTFE business into Freightways from the start of February. Pleasingly, I guess, through the course of the year, balance sheet still in mid-range of policy after the acquisition of VT Express.

I'll hand over to Stephan to talk through the highlights and talk through the financials.

Thank you, Mark, and good morning, everyone. If you look at the summary of FY '26, most of the indicators seem really good. Pretty much every line of the P&L has increased double digit: revenues 13.5%, NPAT 17%, driven by lower interest spend on top of the economic recovery we had in the first half of the year. So the story looks really good. As we are going to see the -- what's happening behind that is a little bit more complex and contrasted.

One thing which is clear though is that Australia is becoming a more significant part of our activity. It was about 1/3 of our revenue and profit a couple of years ago. We are now increasing to 40%, and we're expecting that trend to continue. So the center of gravity keeps moving slowly from New Zealand to Australia.

If we look at the key numbers, our revenue now is almost $1.5 billion. As Mark mentioned, we acquired VTFE in Australia from February. So, that was a small contributor to that revenue increase. But even without that, we would have a double-digit increase. The main drivers behind that are price increases, market share gain and a level of organic growth. The EBIT margin, which is our focus, has seen some limited improvement. But again, the story behind that is quite contrasted. And I'll come back to that, but we have 2 groups of businesses with very different results.

I think overall, we were hoping that FY '26 was going to be a normal year without pandemic, without recession, and it didn't quite turn out like that. If I were going to use a sport analogy that Mark really enjoys, I would probably walk away from Rugby and talk about American football. So it's not quite a game of 2 halves, but it's a game of 3 good quarters and 1 bad one.

If we look at some of the drivers on the following slide, you can see what Mark alluded to. In New Zealand, the first 3 quarters of the year saw a reasonably solid economic recovery and good activity that was building up. When the war in Iran started and fuel prices drove to a significant high, we've seen a significant impact on economic activity in New Zealand, and all that recovery pretty much ground to a halt. Even though fuel prices have come back down since the peak of the war, we haven't seen a resumption of that economic growth in New Zealand. In Australia, the slowdown took a little bit more time to appear. But as we looked at all our businesses by the end of the year, that was becoming more significant.

On the next slide, we'll talk about margins, which we've mentioned over the last 3 years as a key focus of ours. Behind the reasonably flat headline, as I mentioned, you really have 2 groups of businesses. Our most premium businesses in New Zealand continue to be impacted by the economic environment. And NZC and Big Chill, in particular, have seen a decline in margin last year. In Australia, we saw the same thing with TIMG, which is driven largely by a slowdown of digitization activity.

On the more pleasing side, all the other businesses have seen a level of improvement of margins, as price increases and stronger activity, combined with a controlled cost base, allowed them to deliver significant gains. Some of the names you can see on this slide. Post Haste, DX and Allied had very solid margin improvement. These margins remain a focus of ours this year and in the coming years.

In terms of balance sheet, our debt was slightly higher, reflecting the acquisition of VTFE in February for slightly more than AUD 70 million. But the measure we use for our gearing, which is net debt over EBITDA, was stable at 2.4x. I should stress that we're using post-IFRS 16 numbers. If you use pre-IFRS 16, we're standing at about 1.5x. Mark mentioned our capital management policy. So maybe to remind everyone of that very quickly. We want to keep our net debt to EBITDA between 2 and 3x post IFRS 16. We're at 2.4x now. So we have a significant headroom from a debt point of view. If we were to consider an acquisition that is significantly larger than the debt headroom we have, we would use a combination of debt and equity to fulfill that acquisition.

So, on the basis of a strong balance sheet, we decided to increase our dividend by $0.05 for the full year, which is a 12.5% increase. So we'll be paying $0.45 for the entire year, which is a final dividend of $0.24. We are fully imputed in New Zealand, and we are about 49% franked in Australia.

I'll hand back to Mark to look at some of the details of the activity by segment.

Thanks, Stephan. So I'll talk through the numbers, and Aaron and Neil will come in with a bit of color in and around the NZ and the Aussie landscape. So in terms of Express, as Stephan mentioned, reflective of the overall result, really strong revenue growth here, same customer growth, particularly in the Q2, Q3 and through most of the year for Allied Express as well. All businesses managed to pick up market share gains. Each brand is very focused on a niche. We know the types of customers that are attracted to that niche and that suit that particular service. And as a result of that focus, we've had really good results really for quite a number of years in terms of winning new -- either new business market or business off competitors.

The price increases are well executed at the start of the year and have been again in FY '27. And the 5 months contribution of VTFE was around about NZD 40 million to the revenue line. As Stephan mentioned, the growth in Allied Express and Post Haste, DX, in particular, has been really strong top line and bottom line. So they've all, I guess, lived in niches where there is good demand for their services. Allied Express is benefiting from tailwinds that come with big and bulky purchases, so a lot of e-com emerging businesses that are selling flat-packed furniture, sporting goods, some of the larger items that we transport through the Allied network.

Post Haste is really benefiting from being experts in that express 2-day interisland road service and next day North Island and have attracted a reasonable amount of the e-commerce volumes that have come through cross-border as well. And DX Mail, who have not only picked up market share, but have also made their operation a lot more efficient through the use of AI and technology to improve the way they sort mail to make postie runs more efficient and are getting really good leverage out of those initiatives.

Big Chill had positive Q2 and Q3. So we just started to see a little bit of lift there. Big Chill quite exposed to what's happening in the hospitality markets, generally handling more premium food through those channels into hospo, into QSRs and supermarkets. But you really did see the impact. As soon as the price of fuel went up and took money out of the pockets of consumers, you saw that fall down again. The fuel costs through that quarter had a one-off impact on earnings. So, as the fuel price went up, and I'll talk later, we have adjusted the way we run our fuel surcharge mechanisms. But you do get a one-off impact, and we did have this year as the fuel price went up and our surcharge lagged and came in a little bit later. So, that affected margins in April -- March and April slightly.

I'll hand over to Aaron to talk a bit about just what's happened with that New Zealand Express landscape.

Yes. Good morning, everyone. So for New Zealand EP, the volume grew by 5.1% for the year. The same customer volume had 3 positive quarters. And as Mark alluded to earlier, the fourth quarter was quite tough, and we saw some softening. The economy services continued to outperform the premium offerings, and that's just reflective of that cost-conscious marketplace that we are operating in. We had strong contributions from e-commerce and health care. And it should be noted, though, that e-commerce growth has flattened over the last couple of months. And we think primarily this is down to the fuel increase and some movement between the channels.

Good morning, all. Just from a Big Chill perspective, up until February, as Mark talked about, we did see a gradual improvement in customer volumes across the Transport division. Unfortunately, when the war started in February, that kind of came to an abrupt halt. And you can actually see a direct correlation between the fuel prices that we were charging and also the lower customer volumes coming through. So to offset that, new business wins have been particularly important. The team has done a really good job both protecting existing customers, as well as securing a number of good business wins, particularly on selected routes. So, as you see on the slide, overall item growth of 3%. Most of that was through net market share gains, which was quite pleasing to see.

3PL continues to deliver well and slightly ahead of where we expected, sitting at 87% nationwide. We've got a small amount of capacity at Ruakura. However, Auckland and Christchurch are pretty well full. The Big Chill team are still actively engaged with customers having to think about where the next best option might be to position a new 3PL location with a number of strategic locations being considered.

The next point I want to talk about is the fact that the transport industry generally has a north-south volume bias, and Big Chill traditionally have also suffered from that so that they have less volume coming from the South Island back to Auckland. So the team are really focused on managing utilization levels and margins and using better data analytics to target new business efforts on improving yield on those low-utilization routes, and that's been quite successful.

And the last point I had on Big Chill was that during the year, Big Chill opened a new branch in New Plymouth, which has been really successful, both in terms of on-time performance improvement stats, but also they've secured a couple of decent new business wins out of that. As a result, we're now having a thinking about where we can expand to next with the logical options being most likely Nelson, Tauranga or Invercargill.

As Mark talked about, Allied Express performed really well with a 20% lift in volume year-on-year. In the last couple of years, we've invested in much larger sales teams than what Allied have traditionally offered, and that has paid some really good dividends, both in terms of new business wins, but also increasing the share of wallet that we receive from existing customers. Allied are another business that have developed much stronger margin reporting, and this has allowed them to reposition themselves in certain market segments. And as a result, extra volumes have been realized.

An example of that would be that in FY '26, Allied realigned pricing and services in the 22 to 50 kg parcel market, and that generated really solid growth from our existing customers, which was pleasing to see. That volume has necessitated the need for some extra facilities. In Campbellfield and Victoria, for example, we've added a 12,000 square meter facility. However, apart from that, the extra volume that we've carried was largely handled within the existing infrastructure. And as a result, as has been talked about, Allied produced a really good result in FY '26.

And then, the last point was that in the last couple of months, we have seen some softening of volumes in Express Package, both across Allied and VT. And when I look at that sector by sector, probably the most notable sectors are building and construction, car parts and some key e-commerce customers. Their volumes seem to have dropped a little bit in the last 6 weeks.

Just an update around the air freight. I think as we talked about at our last update, Airwork, our JV partner in Parcelair, was placed into receivership in July 2025. Since then, the business has operated as a going concern with -- under the control of the receivers, while they try and work through a potential sale process. During that time, both of our Airwork suppliers, Airwork and Texel Air, have performed really well in the year with some quite high on-time performance reliability, which has been pleasing.

We expect that by the end of the year, we will transition away from the 737-400 fleet that we operate to one where we're using 737-800 instead. The advantage of that offer us is that 300s are newer. They are more fuel efficient, and they have a higher payload capacity. For example, a 737-800 can take 21 tonne of product, whereas a 400 takes 18 tonnes. So you're getting a better payload in each aircraft. There's a few one-off costs to transition to that newer fleet. However, that's already been allowed for in the FY '26 result. Other than that, the ongoing cost of operating 800s are pretty much in line with what we're currently incurring.

Thanks, Neil. In terms of information management and waste renewal, a pretty flat result here, really revenue is flat. There were improvements in some of the revenue streams within the division. So pricing in particular, through waste renewal, the document destruction revenues grew 4%. Medical waste was up another 7% and e-waste up by 10%. E-waste generally is taking devices which have data on them, laptops, servers, hard drives, et cetera, and either recommissioning those that can be sold or completely destroying them and selling the commodity part. So it's certainly a growth part of the waste renewal sector.

Document storage volumes grew slightly, mainly pricing offsetting pretty flat volume. And the decrease was really around that digitization piece. So we'll talk a little bit more about that later, but really, that was the one piece that declined from where we have been in FY '25. Paper price is a little bit lower, 8% lower. Paper pricing impacts our business far less than it used to many years ago, where we were heavily reliant on paper sales to prop up revenue. So it's a much smaller part of our revenue base these days.

Pleasingly, the Shred-X reset that we've talked about is largely complete. And again, Neil will talk about some of the margin improvement that we're getting through Shred-X as a result of those initiatives.

Yes. So, as Mark said, it's been a year of reset, if you like, for Shred-X. There's been a number of key initiatives, which the team have implemented, aimed at improving overall returns. And as you can see from that graph, which shows the sort of the 6-month rolling EBITA margin, that has been delivered successful growth, both in terms of EBITA percentage, as well as overall perform. The business is mainly focused on productivity improvements with the key wins being around improving run density. So there's been a network project looking at the way that we service customers, and that's resulted in a much improved run density, which in turn has lowered the number of drivers that we need to service our customers. And they've also automated a number of manual labor processes, which have reduced staff numbers.

Revenue, they've also looked at. There's been an increased focus on margin improvement, both through pricing and also exiting some low-margin work. An example of that would be that during the year, we removed paper rebates, which have been paid to printers. So traditionally, in the Australian market, where there was rebates offered to Australian printing industries, which were not -- were very low and negative margin for us. So we've removed those in July 2026. And the team have also grown e-waste and IT volumes.

The introduction of the fuel surcharge in January this year has been really important. It was new for Shred-X, and the timing was good. So it's been quite important in terms of protecting their margins. And lastly, and pleasingly, Shred-X have had an absolute focus on improving reporting and around the health and safety. And the performance has improved in that area. And as a result, they've managed to reduce the cost of wok here cover the premiums that they have been paying.

Horizon Three approach we operate across Freightways is particularly relevant for TIMG, both in Australia and New Zealand. And that's largely because that industry or the information management industry is going through quite a period of changing dynamics. So I think it's important to note that overall, we are still seeing growth in our core archive and media business, which is our Horizon One opportunity, obviously. But it has slowed, hence why developing faster-growing Horizon Two and Three opportunities is really important.

The focus therefore around our traditional core archive and media business is running as lean and efficient as business as possible and taking a yield management approach to each warehouse individually. So where warehouses are full, as organic growth requires, we're pulling pricing and document structure levers to make sure that the utilization overall remains high. And where warehouse utilization is lower than what we like, that's where we're focusing our new business efforts to try and fill spare capacity.

So with that lean approach in mind, TIMG Australia just undertaken a restructure in July 2026, which has rationalized a further 17 positions, which we'll see the benefit of in FY '27. So, that running lean approach is an ongoing thing that we have. So yes, running lean on our core business, but then investing cash into our Horizon Two and Three business opportunities. As that little graph there shows, digital earnings, particularly in Australia, have continued to scale. The slight dip you see there in FY '26 is the finishing of a multiyear digitization project for a very, very large government department in Australia. They still have a fairly full list of digitalization opportunities, which we are looking to realize.

An example of how much the business has changed, if you look at digital and Lit Support together for TIMG Australia, that's just under 40% of their revenue now. So, as you can see, the Horizon Two business is scaling, and it is changing the overall mix of revenue for our Information Management division. So the current focus for digital is around consultative selling, around -- we have a team now engaging with customers to understand what they are holding in physical archived boxes. The privacy laws in particular are opening up new opportunities around that because it's a requirement that businesses understand the personal information that they're holding around individuals. And often, when they've had archived boxes in storage for a long period of time, there's a bit of a knowledge gap there. So there's an opportunity for us to digitize information to give customers better visibility around what they are storing.

From a Horizon Three perspective, Stocka in New Zealand has continued to scale nicely. And as a result, we'll launch that in Australia in FY '27. And lastly, we're market testing a number of new H3 products, which utilize AI tools to assist with data storage and extraction. That's at the market test stage where we're engaging with customers. We have a few interesting concepts around AI, what we can do with data, and it's just a matter of validating that with the market to make sure that they are products that we can scale.

Thanks, Neil. Just in terms of future investments, there's a couple of key facilities that we wanted to talk to. Aaron will cover off those. And then, we'll talk a little bit about Australia and the M&A opportunities we see there.

Right. Our Christchurch Airport extension is well advanced. It's an extension of the building and our automation. It will reunite our EP brands back under one roof and provide about 50% operational capacity, which is approximately 10 years of growth for us. The automation equipment arrives next week, so that's quite exciting. And we have targeted to be fully operational by quarter 2 of 2027. It allows us a little bit of time in that process to pause the automation construction and ensure we focus on our service delivery during that peak season.

And then, we have Palmerston North, which is a new-build. So the EP brands are currently based near [ CBD ], but we'll move them out to the airport to cohabitate with Parceline, our linehaul operator. The new site will provide operational facilities and faster transit times, while providing about another 10 years of capacity in terms of Palmerston North growth. The completion is due prior to Christmas. But we will move in, in quarter 1 in 2027, once again just to avoid any compromise of service during the peak season.

Thanks, Aaron. And in terms of Australia, really, as Stephan talked about, the size of Aussie in comparison to Freightways has really accelerated through the period that we've had Allied Express and then VTFE and the organic growth that we've managed to get out of Allied over that period as well. Reality is, within Australia, the express market is probably 6 to 7x as big as the New Zealand express market and below the top sort of 3 Tier 1 players that cover the entire country with massive fleets and tend to provide air and road services. It really is a pretty fragmented landscape.

We've spent a long time over the last 3 to 4 years looking around about 70-odd opportunities and businesses. Some good, some bad, some ugly. There's a real mix there. But I think it's given us a really good institutional knowledge of the way that the Australian express industry operates. We've got a really good feel for the niches that the various players operate within. Those niches can be a geography. They can be a freight size. They could be a speed in terms of overnight, 2-day or longer and interstate. It could be certain verticals. It could be certain industry verticals, medical, construction, et cetera. So getting a good grip on the range of opportunity there and understanding which of those are complementary or fit really well to an Allied Express or VTFE has been really valuable learning for us.

I think the reality is, given the market shares we have in some of the niches we operate in New Zealand, we know that acquiring further in New Zealand in express, for example, is highly unlikely. So we do expect to deploy more capital over time into Australia, but manage that within the capital management policy that Stephan outlined earlier.

In terms of M&A, I think from that screening of around 70 businesses, we've got ourselves down to a relatively tight short list. There's about a dozen companies that we think could be a good fit, either as bolt-ons or as close adjacencies for Allied Express or VTFE. And so, that's really where we'll focus our attention over the next year or so.

In terms of outlook, it's been interesting 7 years, I think, when we reflect back over the growth that Freightways has had over that period of time, and you think about the number of world events and macro events that have impacted businesses, from COVID, labor shortages, 3 years of recession and fuel crisis. And I think last year and, in fact, through much of that period, our businesses have proven to be really resilient. We are diversified across 2 different countries. We're diversified through information management and waste renewal and express. And in particular, over the last 3 years of soft economic activity, we've still been able to play our own game. Market share wins have been really important for us.

I think this year, we just started to see a little bit of that same customer activity become positive, which was a nice tailwind, albeit for a fairly short period of time. We think those same customer volumes will remain soft as long as fuel prices remain elevated. So I think the evidence we have seen over the last 4 months or so is that the money coming out of the pockets of consumers and going into the fuel pump has meant that they are spending less and they're buying less of the products that we might move around our networks. And so, we think that will probably remain until fuel prices come down and then really remain at a sustained lower level than they are today.

The pace of recovery will also be dependent just on how the relative economies are going in Australia and New Zealand. Stephan pointed earlier to the higher interest rates in Aussie in particular, and slowly moving up in New Zealand. So, that will have an impact, particularly on the New Zealand businesses where we are pretty road-based and sit across most of the industries that you find operating in the New Zealand economy. So we think it will be softer for longer again until fuel prices drop and maybe slightly more positive economic conditions over in Australia.

The capacity we get in Christchurch and Palmerston, those are key hubs for us. Everything that goes in and out of the South Island fundamentally travels through Christchurch. Everything in and out of the lower North Island travels through Palmerston North. So they're quite strategic investments in capacity and the optimism, I guess, we see around the growth through the NZ EP businesses. Evolve is still trucking along. So we expect to spend around about another $5 million this year, which should largely complete that project.

Margin improvement is still a focus, as Neil talked about. TIMG Aussie is a key area in terms of having the Horizon One operations as lean as we can make them and putting our investment into scaling Horizon Two and discovering Horizon Three. We'll keep growing the EP presence in Australia. So we're represented in B2B and B2C now, presents really good opportunities for us to keep expanding both organically through having new business sales teams that are going out and winning market share, as well as having a proactive approach to M&A, where we can look for the right kind of business that has the right fit that can complement 2 very good businesses we have in Allied Express and VTFE.

That brings the presentation to a close. So we'll hand back to Kara, who can manage any questions that you may have.

[Operator Instructions] Our first question comes from Andy Bowley.

A few questions from me, really focusing on the volume backdrop across the NZ and Australian parcels businesses, the first of which, and it's really, I guess, a clarification question. Allied Express, you talked about 20% volume growth network items through the course of FY '26. The chart on Figure 17 looks like it's 20% in the first half. But at the first half presentation, we were only talking about 14% growth. So just curious as to which one is right and whether there's any explanation for the differential?

Yes. The 20% is correct for the full year, Andy. So there's a number of initiatives we've had through business just in terms of analytics and the way we're measuring that. Allied get a lot of multipart consignment items that go through the business as well. So as we've refined that, yes, the 20% for the full year piece is accurate.

That is great. And then, in the context of the comments that you make about both Allied and VTFE over the last 6 weeks in terms of a softening of demand, can you tell us what that means? Are we talking a material softening versus what you saw in Q4, which was clearly slower from an Allied point of view? Are we seeing negative same customer volumes? Or please clarify.

Yes. The biggest piece probably for Allied, one of the very large customers is taking a slightly different approach to the market. And what we're seeing in that market is quite heavy discounting from a number of their competitors, and they just decided not to play that game. So they're doing less in the way of promotions, pushing out a bit less volume. They're a pretty big part of the Allied base. So we've seen their volumes slightly lower than they would have been in the prior corresponding period. For other customers as a whole, there's still positive trading but at a far lower level of growth than we had seen previously. But one very large customer does make quite an impact there. And effectively, they will ride out, I guess, some of the discounting that's going on by competitors.

With VTFE and the B2B -- sorry, yes?

Sorry, you carry on, Mark.

Yes. I just want to talk about VTFE in the B2B space. So they have seen impacts, particularly in that construction sector with volumes coming off quite a bit. So, that part of it has dropped a lot from the prior comparative quarter where we didn't own the business, but if you look at their trading through that period. So same customer volumes for VTFE are negative, just like they are in New Zealand for the NZ EP businesses through that last quarter and over the last 6 weeks.

The drop is quite comparable to what we saw in New Zealand a few years back in construction.

Okay. So VTFE, just focusing in on that, in terms of the 5 months that you've owned it, we've seen volumes fall overall versus the prior year?

Yes, particularly in Q4, yes.

Yes. Okay. And then, if we package all of that up for both VTFE and Allied in terms of current run rate, are we up or are we down?

Allied up slightly. VTFE down. We haven't combined them. They're quite different revenue items and quite different profiles of freight. So we haven't done a combination of those 2.

Great. And just on VTFE, can you talk about New South Wales and the solution there, please?

Yes. We'll talk about Queensland and New South Wales, Queensland very quickly. What we've done in Queensland is, established a start-up delivery network using the Allied Express facility. So Allied Express own a big facility in Brisbane. VTFE are establishing their own fleet in a portion of that building, and that's enabling them to deliver the volumes that they pick up in Melbourne and transport interstate into Queensland through the Brisbane Metro area and then use an agent for the balance of Queensland. In terms of sort of a start-up, Queensland operation lost a bit of money in the first couple of months as we got established, and then operated at breakeven in June, and we expect to grow from there. We've put some sales resource into Queensland.

In terms of New South Wales, as we've talked about with VTFE,'s it's the 1 state that they don't have a partner for. So they don't pick up any volume out of Melbourne and deliver that into New South Wales because they have not had a partner there. And the job that we have been focused on is either, a, finding the right partner or finding an acquisition opportunity in New South Wales that allows us to get up and running. There's a couple of opportunities there. We're actively talking to them. And I'd like to think that during the course of FY '27, VTFE would have added New South Wales into the lanes that they can deliver to.

Our next question comes from Wade Gardiner.

Sorry, can you just clarify what you said at the end there about New South Wales and the timing of when you'd expect to find a partner or some sort of channel?

Yes. We'd like to think that we'll have a channel either that we own or that we can partner with during FY '27, so during this year.

Right. But nothing imminent, you wouldn't expect it with in the first half necessarily?

Not necessarily in the first half.

Okay. So the other question I had was just around the fuel surcharge impact. Can you just confirm what the impact was in the New Zealand business? And I know in Australia -- the Australian business, it's not -- it's a different system. Has that been sort of an ongoing impact in Australia? Or is it -- has it sort of reset and you're happy that there is no ongoing impact there?

Yes. No ongoing impact in Australia. Again, depending on the customer and the contracts, a little bit of impact early on March, April, but that's largely been caught up now. In New Zealand, look, we estimated around a couple of million impact in terms of margin. And that was at the point where fuel went up and then our surcharge came in on a lag. And then, what we have done is, shortened that lag now to a week. So in the future, any sudden movements in fuel price, our pricing will follow within a week rather than the 2-month lag that we've had for about 20-odd years.

Our next question comes from Marcus Curley.

I just wondered if we could start with the transport margin outcome for the year, which was relatively flat. But could you give us any color in terms of what was happening in New Zealand versus Australia from a margin perspective?

Sure. I tried to mention that. But roughly -- in New Zealand, the biggest impact would be NZC -- on the negative side would be NZC and Big Chill. So the premium end of the market remains under a lot of pressure, and we've seen drops of margins. And that's -- because of the size of NZC and Big Chill, that's probably why the overall number doesn't look better. If you look at some of the other businesses in New Zealand, Post Haste, DX, we've seen margin increase of 50 to 150 basis points roughly.

In Australia, Allied grew significantly, contrasting that -- and so did Shred-X and Med-X. Contrasting that, TIMG because of the lack of digitization work, was lower than it was the previous year. So quite a contrasted picture, depending on where you look.

Yes. The one other point, Marcus, is small, but the VTFE margin sits at a fundamentally lower margin than Allied Express.

And as we expand into New South Wales, there's investment going into that. So, that margin will probably continue to reduce a bit until we're in a more BAU state of the market.

And sorry, could you give any specifics in terms of what the Allied margin movement was in the year? Was it up?

It was up, yes, by about 100 basis points, from memory.

Okay. Great. And then, in the guidance, just staying on the margin topic.

We don't give guidance.

Yes, lack of guidance maybe. Is that a better description? Would you -- what's your sort of -- I know that there's a bullet on margins, but can you be a little bit more specific in terms of whether you're anticipating, excluding fuel for the core businesses, any noticeable improvement in margin this year?

I'll go first and then let Stephan fill in. I think had we not seen the dampening of consumer demand and the higher fuel prices, yes, we would have expected further margin accretion. I think that was part of the plan we've had. We've had a good price increase. I think the impact of those underlying volumes, that will be the piece for us to watch and how long that goes for.

Yes, I would have said the same thing. Before the war in the Middle East, I would have been positive about the year. What we've seen in the last quarter makes me a bit nervous about what this year is going to look like.

Okay. Understood. On VT, it looked like, on an EBITA basis, it contributed just over a couple of million dollars for the period you owned it. Could you give us an updated view -- sorry?

About $4 million, I think, EBITA level.

EBITA was $4 million. Okay. Sorry. So there was a bit of interest in that division?

Yes.

Okay. And so, how would -- you still feel comfortable with what you guided at the time of the result? I think it sort of was implying about sort of 10-ish -- $10 million, $11 million on a run rate basis.

Yes, it was around about $10 million on a run rate basis. I think it will end up being a little bit softer than that possibly, Marcus. Again, it's a bit how long is a piece of string in terms of that pressure with fuel prices. But we are investing a little bit just in Queensland. So in Queensland, as I said, kind of breakeven where we've been making a little bit of money with agents only, breakeven with our cost of operating, but that should grow as we start to pick up some new business up in that Queensland market.

And construction and building is quite a significant share of the portfolio of customer of VTFE. And as Mark mentioned earlier, it's been impacted by the economic conditions in Australia. So I think the best way to think about it is to look at what happened in New Zealand probably 2, 3 years back, and you've got probably about the same magnitude.

Okay. And then, just finally, you mentioned Evolve at $5 million for the year. Could you just sort of update us, is that the end of Evolve this year? And then, what is the -- just an updated view on the ongoing cost for '28?

No, there's probably another year of investment in FY '28 for Evolve, which is also when we should start seeing the benefits flowing through. In terms of ongoing cost, it's probably around a couple of million, but that will be FY '29. I think this year and next year, we'll still see implementation spend, which then would be gone. It's just the ongoing -- roughly a couple of million, I think. Yes.

And so, that project is taking a little bit longer or the scope is a little bit bigger? How are you thinking about it?

Yes, it's a combination. It's quite a complex project to implement because we are doing that across a number of businesses that have different practices. So there's a lot of work to make that effective. So we've been a bit more cautious in rolling out the new system to the businesses than what we were originally planning, and that's what you're seeing in the probably extended time line at slightly higher cost.

Our next question comes from Ian Munro.

Just with respect to New Zealand Express, I guess, post balance date performance, are we right in thinking that kind of resembling the fourth quarter performance into July and August? Or is there a reason to believe that maybe the comps have trended a little bit more negative based on your commentary?

And then, secondly, how did the conditions in the fourth quarter sort of impact your attitude towards pricing in Express in New Zealand on a sort of weighted basis? Can you perhaps give us a little bit of color as to whether, I guess, the pricing mechanisms have been set?

Yes, absolutely. I think a little bit weaker than the fourth quarter on the chart, so over these last sort of 6 weeks. July not too bad. Winter is always a quieter period, but yes, slightly lower than you would have seen in Q4 in terms of the volumes. In terms of pricing, no, we're really stuck to our guns on that, Ian. So we communicated the price increase around about May. We implemented as of 1st of July. And in terms of where we're sitting today, we think probably bang on track in terms of achieving the 75% of the headline rate, which is what we normally seek to achieve. So yes, in terms of pricing, we pushed it. Certainly, the guys are cautious of keeping hold of volume where there is good margin. So those kind of things we have done for many, many years. But yes, I think the team has done a particularly good job of pushing through and executing that price increase.

And just maybe focusing on the Allied business, noting your capacity investment in Campbellfield. Just how are you kind of feeling about the capacity in the business at the moment, ability to chase market share growth? I'm just kind of assuming that the comp sales are around that sort of 10% to 20% to maintain that elevated position, kind of how you're seeing about market share opportunities, just generally competitive intensity I think [indiscernible].

Yes. I think in FY '26 and probably the tail end of FY '25, we picked up quite a bit of share of wallet because of the expanded facilities and because of the systems we had also because we simplified our pricing in some places. We had so many surcharges prior. The team simplified that, and that helped them win business ironically without actually lowering the price, just making it easier for platforms to accommodate. So we won't get the same level of that share of wallet type gain that we got out of the existing base because that's largely been achieved. But in terms of capacity, look, we're pretty happy with where we are, Ian. Sorry, in Queensland, we have plenty of space in that facility. It's a large one that we rented with the idea that it would last us a good 10 years. Campbellfield and Vic has given us the opportunity, you could probably double the amount of volume through the combined depots. In New South Wales, we had about 20% of the depot, which was just racked and holding product for some customers really just to pay a bit of rent. We've taken that racking out to free up that part of the depot. So, that frees up about 20% of the floor space in Sydney. And the reality is that we keep getting the volume either through new business or same customer growth. In Sydney, the natural thing for us to do would just be to take on a satellite depot of [indiscernible] square meters at an incremental cost just to situate couriers and help us get through. So similar thing to what we do over here in New Zealand as we're growing, open up another satellite. It's a marginal cost on the existing cost base and use that to grow. So we're pretty happy with the capacity we have in the Allied footprint, and we're pretty focused on the niches that we know we can go out and win.

[Operator Instructions] As there are no additional questions, Mark, I'll hand back to you for the closing remarks.

Thanks very much, everyone, for dialing in. Just like to finish by thanking all of our teams across Australia and New Zealand. It's a big team now, just over 6,000 employees and contractors that work as part of the Freightways family. And really, it's down to the service that those people have provided across all of our businesses that has helped us have the year that we've had to win business, take market share in periods of fluctuating economic performance from a macro sense. So yes, to all of those people out there, thank you, and to all of those that support us, thank you, too. Cheers.

Good morning, and thank you for joining the Freightways Half Year Announcement. We will begin with a presentation by Freightways management team followed by a Q&A session. [Operator Instructions]

Now I'll hand across to the Freightways management team. Over to you, Mark.

Thanks very much, and welcome, everybody, to the Freightways Half Year 2026 Results. Here in the room with me is, as usual, Aaron Stubbing, who heads up Express Package in New Zealand; Stephan Deschamps, CFO; and Neil Wilson, who looks after our Australian businesses and the Information Management division.

First thing we just mentioned is just a terrible weather down the Lower North Island Wellington area, be affecting a lot of people. Certainly, we have people off the roads down in those areas, particularly DX Mail and our Express businesses that are affected by the wind and the weather conditions down there. So we wish them well today. And I think by this afternoon, things are looking a little more positive, and we'll be back on the road down there.

Big thank you also to all of our teams across New Zealand and Australia. Really, every business has put in a pretty meritable performance over the half year. And so ,I'd just like to thank all of those staff and contractors throughout all of those businesses. And a big welcome to the VTFE team as of 2 weeks ago in Melbourne, who joined the Freightways family.

In terms of just high-level overview, as I said, a pretty consistent set of performances across all our business divisions, Express Package, temperature controlled, information management, a little less so in waste renewal, but we're seeing some promising signs there. So we're happy that from a performance point of view, while there's always areas we can improve, and there's a couple of areas in particular that we'll keep working away at, it has been a pretty all-round result from the Freightways companies.

There's a slight lift in the second quarter from what we reported in Q1 for the NZ Express and Temperature Controlled volumes. So as those economic conditions start to improve, we're just seeing that volume starting to ease up a little bit. And I'd emphasize a little bit, it is really pretty slow and steady. And I think that's what we talked about at the end of the full year last year that it would be a slow, steady gradual increase.

The other trend we're seeing, and Aaron will talk a bit more about this, but still high demand for economy over premium services. So our businesses that perform 1-hour deliveries across town, point-to-point deliveries, that is still pretty soft demand. And then greater demand for the Economy Express services we provide through our brands. So that's certainly a feature.

Fantastic to add VTFE into the Freightways fold. So we announced that just prior to Christmas. I'll talk a little bit more about that near the end of the presentation, just give people a reminder of the nature of the business and then talk a bit more broadly around M&A and what it is that we're hoping to achieve there.

And really happy with how our balance sheet has been managed. Stephan will talk about that as well. But sitting midrange of the policy, acquiring VTFE puts Freightways in a pretty strong position, I think, when you look at the performance of the business in terms of picking up share, an economy, which is slowly and steadily improving and a balance sheet, which is in good shape.

I won't go through and steal Stephan's thunder talking about all the numbers because that will leave nothing to talk about. But the important thing to note here is the arrows are going in the right direction. So there's a series of pretty impressive numbers there across the board, all going up other than debt, which is the one you want to see going down.

So nice to see as a result of the strategy, our objective of owning niches and having a series of brands that sit in a niche with an objective of being #1 or a fast charging #2 of garnering competitive advantage through the service, which gives us a little bit of pricing power and gives our salespeople something to go out and sell and to win new business. that strategy is yielding results.

And as conditions improve in New Zealand, and I'd have to say conditions for us in Australia have been pretty steady all the way through, and we are a bit less exposed to the Australian economy by virtue of the size of our business in Australia. Pretty happy again with the direction of those numbers.

I'll hand over to Stephan to talk you through the consolidated numbers and balance sheet impact, and then we'll come back and talk about the divisional results.

Thank you, Mark. I'm not talking too much on the previous slide.

You're welcome.

The first half of FY '26 is really a continuation of and a confirmation of what we discussed at the ASM, the economic environment remains difficult, especially in New Zealand, but we are seeing some improvement, and that allows us to generate a level of same customer growth that adds to the market share gains.

In Australia, Allied is doing extremely well, double-digit top line growth, even stronger bottom line growth. The 2 businesses that are in Australia balancing that are TIMG and Shred-X. TIMG because we are seeing a bit less digitization work in the first half of the year. And Shred-X, I will talk a bit more about that because we are still ongoing through a significant restructuring of the business, which means that the top line is not growing at the moment.

So overall, our revenue is up 8.5% to almost $720 million. Consistent with the last couple of periods, also our bottom line is increasing faster than the top line. So EBITA, which is the measure we use internally, up 12.7% to $96.5 million and NPAT up 17% to $52 million.

We've talked repeatedly about our focus on margin, which has really been what Aaron and Neil have been focusing on in the last 18 months. The cost base has remained generally quite stable. So the work of the businesses has allowed us to increase the margin across the group.

Some businesses that I wanted to spotlight because they've done really well, Post Haste in New Zealand, DX in New Zealand and TIMG in New Zealand. And Allied also has seen really significant growth from significantly below the EP average when we acquired them to now pretty much the same level as Post Haste in New Zealand. So really good progress.

Some of our businesses, though, remain quite exposed to the slower economic environment in New Zealand. And the fact that, as Mark mentioned, premium services are not rewarded in the same way in that more difficult environment. NZC and Big Chill are the 2 businesses that suffer more from that type of economy, and they will need to see a level of economic recovery to start seeing a significant improvement in margin.

As I mentioned also in Australia, we are restructuring the Shred-X business. So there's a number of one-off costs that are still flowing through as we are reshaping activity, closing some depot, reducing head count, and this is impacting the margin in the first half. But overall, the trend is quite positive and going where we want it to be.

As Mark mentioned, in the absence of M&A in the first half of the year, we've generated quite strong cash flow. And we've used that to repay debt to a large extent, both pre and post IFRS 16. And that means, if you look at the next slide, that our gearing is coming down. Excluding the acquisition of VTFE, we would expect our gearing at the end of the year to be in the bottom half of our target range. VTFE will add about 0.2 to our net debt over EBITDA multiple. It's AUD 71 million price tag. We've raised AUD 50 million through a bridge facility, whilst we assess other opportunities and decide what the final funding will be.

On the back of that strong balance sheet and slightly better economic environment, we decided to increase our first half dividend by $0.02. So we would be paying $0.21 compared to $0.19 last year. As Mark mentioned, that dividend will be fully imputed in New Zealand. In Australia, we do not generate enough profit yet to fully impute the dividend. So it will be around 46% imputed.

I'll hand back to Mark.

Very good. So we'll talk about the EP and Business Mail performance, then Aaron will give a bit more color around the New Zealand aspect of that. Neil will then talk a little bit more around Australia, give you a bit more detail, particularly around the volume profile and then cover information management.

So for EP and Business Mail, good increase in revenue, 10.4% and a bit of that leverage coming through a 14% increase in EBITA and NPAT. And again, as I said earlier, the benefit of a little bit of an upswing in the economy, giving us some same customer growth that Aaron will talk more about, net market share gains generated from superior services, better account management, local people on the ground in all of the areas, where we compete.

And then price increases, where we just have a little bit of pricing power and the ability to recover the costs that we have through the cost base as well and in some cases, get a slight increment on that.

The economy services, Allied and Post Haste. So when I talk about economy, these are predominantly road-based services rather than using overnight air freight. The delta between the 2 is pretty significant. So for an average parcel sending in air freight will cost you at least twice as much as the equivalent service on road freight.

So when we talk about premium and economy, that is one of the key differentiations. Are we putting it on a plane, putting it in the air to land it? Or are we putting it over the road across the ferries and between the islands on road-based services. So still more customers using road-based than air-based.

What we tend to see is as customers get busier and they become time poor, they shift back to the premium services again. So that's a pretty common trend that we would have seen in most of the recessions that we have worked through at Freightways.

Pleasing uplift in margin. We have Evolve costs in here. So Evolve, just to remind you, is the billing and courier pay transformation project we have that will give us a modern state-of-the-art billing and courier pay system. And other than the efficiencies we get out of that, one of the key attributes of that system when it's complete will be the ability to price individual items at a much more micro level so that we can get the right pricing for the effort that we are putting in.

So that program remains on budget. It was $10 million all up. We had $1.8 million extra cost on that in this half year than we did in the PCP. So I'll leave you to do the math if you added that in for the underlying margin of the business, but it's a nice improvement.

DX Mail, again, continued their momentum, done an awful lot of local government work, particularly with local body elections. That's first for DX, did a particularly good job with that, and that's helped boost their momentum through the half.

Big Chill revenue and earnings are both up. So Big Chill revenue up, not by as much as we would like, but you can just start to see a little turnaround coming through there. In December, Big Chill had a really good result. And I guess that is the impact where you have higher volume coming through a fairly fixed cost base, and you can see the margins start to increase.

Hand over to Aaron to talk about Express Package volume and just a little bit more color in and around the New Zealand division.

Yes. Thanks, Mark. Good morning, everyone. So Express Package volumes were up 5.5% in H1, and we had positive contributions from net market share gains and same customer growth. The international e-commerce volume has certainly been a meaningful contributor to the same customer growth.

And as the gents both mentioned, we are seeing that our customers are showing a preference for the economy services as opposed to the premium options. And that's just giving us a little bit more scope to review how we operate those services and gear up for when the economy starts to change into a bit more of a positive light.

So industries that we're seeing improvements from relate to health care and 3PL. We're seeing a little bit of an increase in manufacturing. It's just starting to move forward. But industries that are still struggling for us, retail, accommodation and food services and education and training. So those areas are still very much doing it tough in the current market climate.

Right. Freightways Global. Freightways Global is our facilitator of international and e-commerce freight into the EP brands and provides about 5% of our total volume. And we've been advised as of last year that given all this extra volume, the New Zealand customs need to recoup some of those costs that they are having to incur and have decided to increase -- or sorry, implement a levy-based system.

And whilst we don't have a problem with the levy-based system, what we do have a problem with is there's 2 mechanisms, one for the national postal provider and one for everybody else. So at this stage, we're unsure as to what the impact these pricing differences will have on future volumes and how easily our customers will be able to pass it on to their base.

But we haven't sat idly. We since becoming aware of this issue, we have lobbied customs, MB and the government to address this inequality. And our mitigation strategy or strategies is to have access to own postal channel, and we'll continue to explore this option as well as other alternatives to protect our current volume in the future. Thank you.

Neil will just give a bit of an update on the air network, which we have talked about a little bit over the last couple of announcements that is now coming to conclusion, which is a pretty good outcome for us. Then we'll move into Australia and information management.

Good morning, everyone. Yes, the Air Network just background again. It comprise at the moment of 1, 800 aircraft, 1, 737-800 and 3, 737-400s. It's performed really well during the period, and both operators are giving us on-time performance around about 98% or higher, which has been good. So sort of despite being a receivership, Airwork continue to operate as a going concern, while the receivers for caliber partners work through a sale process. The receivers have given us regular updates around that process, and we kind of expect the sale to happen in the next few months.

On the back of that, we've got quite well developed plans to modernize the fleet by transitioning to 3, 737-800 aircraft backed up with a spare 400 aircraft around about August this year. The spare 400 aircraft will be used during peak periods or when the 800s are in maintenance.

So moving to that new fleet configuration will be quite good from a -- both uplift capacity because 800s take 21 tonnes versus the 400, which takes -- sorry, 800s take 21 tonnes versus the 400, which takes 18 tonnes. And also, 800s are better from an ESG perspective because they generate around about 15% less emissions.

Yes, sorry, the last point on that slide is that there are some one-off costs associated with transition to that newer fleet configuration, which we've actually provisioned for the last couple of years. Other than that, we expect the change to the new aircraft fleet to be cost neutral, give us better service and be more resilient.

Allied, as Stephan talked about and Mark, they performed really well in the first half of the year. We've got really solid growth from existing customers, as well as a number of key new business wins, and that kind of resulted in volume growth of just under 14% compared to the prior year.

The team has done a really good job in terms of improving the overall network performance, and that resulted in improved service levels during the period, particularly in the lead up to Christmas, which is a really important time of the year for Christmas, and we received positive feedback from a number of customers for the service that we delivered during that time.

A key part of that success has been the investment that we made in larger depots and automation, which largely enabled the additional volumes to be handled through our existing infrastructure with the one exception being Melbourne, where we've actually added a 9,000 square meter satellite depot to enable us to meet the volumes that were coming through.

Allied business is focused around B2C, B2C bigger items. So therefore, Black Friday and Cyber Monday are particularly major events for the business. During that week, which is the last week in November, volumes can peak by about 50% above what we would consider in a normal week. And it's a real credit to the team that we manage that volume with minimal impact to overall service levels.

On the next few slides, I'll just quickly talk through some of the relevant points for TIMG New Zealand and TIMG Australia and Shred-X. The Information Management division delivered a flat year-on-year revenue performance. From a TIMG perspective, the biggest drag on performance was the finishing of a major scanning project in Australia that was a government project, which finished at the end of the first quarter.

In both countries, TIMG has a really good pipeline of digital opportunities. However, unfortunately, those projects were not time to commence in the first half of this year. And as a result, digital revenues were down by about 14%.

As Stephan touched on, Shred-X has implemented a performance improvement plan over the last year, which has impacted the first half result with a focus on improved margins, they have exited a number of low margin or unprofitable work, and that was predominantly across ITAD and some high-value waste products such as some vape construction work and coffee cup recycling.

Both businesses, TIMG and Shred-X implemented really solid price increases of around 5% to 7% depending on the service, which resulted in improved margins. But given the less digital work and the Shred-X restructuring that we've done, the EBITA result overall was relatively flat.

Just wanted to touch on LitSupport also where the performance has improved. The business has added legal legislative and commercial print sectors to their business. Traditionally, they've always been a legal print business, but that strategy of diversification has seen revenue grow by 7%.

As it's worth noting in WA, they were successful in resecuring a major legislative print contract, which will go for another further 3 years, which will help underpin that performance.

As you saw on the last slide, there was about $1.6 million in one-off restructuring incurred for the period at Shred-X. While that was a drag on first half result, the initiatives implemented will ensure that there is an improved performance in the Shred-X business in the second half of the year and beyond.

Just broadly, the key initiatives are implemented, we're rationalizing the number of driver runs given the low volume work that we exited. They've used -- using automation to reduce admin and back office functions and exiting non-profitable locations. An example of that would be they've exited Canberra and Newcastle and instead, we're transporting volumes to centralized sites for processing, where we get better efficiencies. During the period, Shred-X have also increased their textile processing capabilities, which will benefit future periods.

And lastly, on medical waste, medical waste has continued to scale over the last 3 years, and this trend continued in the first half of the year, as you can see in the graph, where medical waste volumes grew by 8%.

Thanks, Neil. And we talk about mergers and acquisitions, I guess, nice to be able to talk about an acquisition we executed, really the first meaningful one since we acquired Allied Express back in October '22.

So just a reminder about the criteria and I guess, a bit of an update around M&A for Freightways. The primary focus, not exclusive, but the primary focus for us is really targeting proactively businesses, where we think they're closely adjacent or very complementary for Allied or VTFE.

So having established Allied and put a bit of investment into that business over the last 3 years, we're pretty clear about how we want to carry on growing that business. There's opportunities for geographical expansion for taking more volume and market share in the key markets we are in.

And then there are some very adjacent services, for example, 2-man white glove handling. We have a number of customers that would love us to be able to take some of the larger items they have that are beyond a one-man delivery.

Likewise for VTFE, VTFE on the next slide, I will give a bit of a reminder around that business. But again, an expansion of the geographic footprint for our B2B entry into Australia will be a key point of focus for us in looking at those targets.

It'd be fair to say over the last year or so, Neil, we've looked at 40 to 50 businesses in Australia in the transport sector. It's a really fragmented market. Because it is so big, you have a lot of operators, who operate in particular niches, and that can be a size of item. It can be a geography, a service standard, air freight, road freight, all of those types of things.

That has given us really good knowledge of the industry, I would have to say, we've learned a huge amount over that period. And so, now what we're doing is narrowing the gun on those key targets that we think are highly complementary to VTFE or Allied Express.

That approach will see us continue to remain disciplined. As we have done over these 3 years, we haven't sort of jumped out and backed with every passing car. It really has been a matter of looking for businesses that have a good cultural fit, really good service ethic and the potential for us to grow them.

And then as Stephan had talked about earlier, the balance sheet supports that capacity to go out and make further acquisitions. There's still a range there. There are smaller businesses with a check of maybe $20 million. There are larger businesses with a check in the many hundreds of millions. So still quite a range of targets, who would meet the criteria that we have.

A little reminder about VTFE, VT Freight Express and largely because we announced this 1 week prior to Christmas when many people would have had a lot of other things on their mind.

B2B, I talked about it at the time we announced it as being very, very similar to Post Haste Group here in New Zealand. So it provides a very similar set of services and predominantly express road-based services. And in fact, many of VTFE's large customers are customers of Post Haste Castle parcels over here in New Zealand.

So as we work through the final stages of due diligence, it was really nice to talk to a whole lot of companies, where we were quite familiar with the way they operated their needs, who their customers were. And I would have to say the feedback from those customers on the service that VT provided was nothing short of excellent.

So it's an entry into B2B, these particular verticals that VTFE specialize in, the numbers down the bottom in terms of purchase price and what we expect to get out of the business. And those key benefits really, it's a very close, almost exact fit with the type of work that we do over here in New Zealand with the likes of Post Haste, as I mentioned. It's complementary to Allied.

So when faced with the choice of do you diversify Allied into B2B as well as that oversized B2C, I think the operating model that we have here in New Zealand, which has worked so well for Freightways for so many years, clearly said that a brand per niche going out and trying to win, but working in the background, where it makes sense.

And so, good examples of that will be where we can share facilities in the future, we will do, where we share line haul and leverage better rates, we will do. If we can share IT capability and some of the overhead capability, where it makes sense, we will do. And that's exactly what we do here in New Zealand with NZC and Post Haste as an example.

VTFE, good, strong committed leadership team. So that team will continue to grow the business for us. And the early alignment really, it's been 2 weeks since we completed the deal. So the early alignment is really around some of the system, safety reporting, some of those commercial aspects.

One of the initial projects for us is having a look at New South Wales. So VTFE picks up and delivers within Melbourne and Victoria, but has a reasonable amount of freight, which goes into state and is delivered by partners around Australia.

The notable gap in that network is New South Wales. And the challenge there has been finding a partner, who lives up to the same service standards, data standards that VTFE require. So that really is the key focus point for us. Customers are very keen to give VTFE more freight going interstate from Melbourne to New South Wales.

And we'll be looking at how we can either startup, acquire or partner to fill in that part of the network. But an obvious opportunity for us to keep growing the VTFE business around Australia and fill out what is a very big footprint opportunity.

The other thing I wanted to do is just give a little reminder around Allied Express. Allied really have performed exceptionally well as some of those numbers there on screen tell you, compounding revenue growth of just under 11% over that 3-year period. EBITA growth, quite a notch up on that, which gives you a feel on the margin improvement that we've achieved through that business. Great cash flow and a really good return on investment that we have generated.

The business has grown. The fundamentals of the business were a really strong service culture for their customers. And as Neil said, that was augmented by about $20 million that was spent on a couple of automated sorting systems in Vic and Sydney, but also the implementation of a very Freightways style of new business sales teams to go out and win either a greater share of wallet or win new customers.

The margins have improved as that scale has built and plenty of opportunity for that business to keep growing. We must remind ourselves that really we're domiciled in the capitals of each of those states. And Australia is a very big country with some very big cities that sit outside those capitals. So again, a key point of focus for the Allied team in the near future.

Finally, the outlook. And I guess we debated these words pretty heavily. But look, we do expect to see a steady improvement in same customer volumes. The same customer volumes that we saw in the NZ business that Aaron talked about 2.5%, the lion's share of that has come from international cross-border volume coming through.

So New Zealand domestic customers are positive, which is great, but still have an awful lot of improvement left to go in our opinion. But we think that improvement will be steady. We think it will be slow and steady through the second half of the year and then beyond.

Our efforts will be maintaining and growing margins in all of our businesses. So every business has a margin opportunity. Shred-X's margin opportunity and waste renewal will be a little bit bigger than others. Big Chill have a great margin opportunity as those volumes come in through the network. But every business has initiatives just to keep improving margins steadily over these coming years.

Service quality is still paramount. We measure NPS in all of our businesses to understand where we sit at a macro level with customers. But we're a very accessible business. Every one of us, every one of our teams can hear from customers at any point and our job when things go wrong is to put it right. And that's one of the things that really sets us apart from our competition. So that focus on service will remain.

That is the competitive advantage that allows us to pick up business usually at a bit of a premium on the competition, who I think is still struggling how to price things properly out there, particularly in New Zealand. And that's yielded positive results across our network.

And then M&A, I think what we can say is that focus just narrowing from a really good learning for us, looking at many, many targets, just closing that down and having a much closer focus now on the ones that are complementary to VTFE and Allied Express.

That is the presentation from the team here. And I think we've got a reasonable amount of time for questions. So I'll hand back to Kiara to manage that.

[Operator Instructions] Our first question comes from Andy Bowley.

Well done on another good result. A couple of questions from me to kick things off here. Firstly, just stemming from the slide on Allied, you've generated pretty impressive growth since that acquisition. Can you just give us a little bit more detail with regards to where that growth is coming from regionally, industry sectors, same customer sales versus new customers?

I recognize that you've well cycled the removal of the volume caps at peak. But if you could just provide some illustrations of where that growth is coming from. And then, I guess that the question for us is to determine what the sustainability of that growth is.

So the growth predominantly out of the existing base. There's certainly contribution from new business. You're dead right, Andy, we removed the caps as we got the 2 automated sorting machines into Sydney and Melbourne. So that enabled us to remove caps that have often been placed on customers in those peak periods.

The second piece that's really driving that is a lot of those customers are riding a bit of wave, probably taking a bite out of bricks-and-mortar retailers in Australia. So a lot of online providers. And these are customers like Temple & Webster, who are improving their penetration of the market selling from an online model. So those operators are growing as well. So we're winning a bit of share that might have gone in some cases to a competitor. We're riding the growth that they have in that niche.

And then the new business, which would be the smaller part of it has come on top. Melbourne is the real standout geographically. So Melbourne has had by far and away the greatest growth.

And I think that really is down to the fact that a lot of those e-commerce operators domiciled themselves in Melbourne quite a number of years ago, probably at a point, where rents were a lot cheaper than setting up warehouses in New South Wales. And as their volumes have grown, the geographic output from Victoria has been far, far greater.

Having said that, areas like Queensland are still growing well. There's still really good growth coming out of that Queensland market. We're well resourced up there in terms of share. We're not at a point yet we put automation in, but as those volumes grow, we know the pivot point at which time we would.

We haven't done a huge amount with pricing. So the game for us really has been to keep growing scale. So we haven't pushed pricing particularly hard really. It's just been an effort to [ pour in ] and around the 2%, 2.5%, maybe up to 3% to cover the cost of inflation.

Anything to add to that, Neil?

Yes. I mean the only other thing I'd add to that, Andy, will be the introduction of a margin model that we know a lot more about their costs and their margins. And because of that, they've introduced some different rate cards to target specific sectors, where we traditionally haven't moved volume, and then that's kind of knowing the margins has allowed us to do that. So -- and that's helped volume growth as well.

Sustainability of it, I mean, forecasting these things is hard. There's plenty of market share out there. It is -- because the market is so fragmented, almost every operator will do a little bit of oversize, but it's not their core. And so, they won't necessarily do it that well. They don't necessarily like it in some cases. Sometimes it just won't fit with their network, the fleet configuration and the depots. So plenty of opportunity there.

There's a couple of competitors that are a kind of a smaller version of an Allied that we would keep looking at. And then there's market share to be taken off of any number of other operators there, not to mention the geographic piece.

So when we look at a place like Canberra, capital of Australia is still a reasonably sized city, and we don't operate directly there ourselves. So those types of opportunities we have in front of us, too.

And I guess, there's no immediate capacity constraints in terms of continuing to grow at this type of low double-digit volume growth.

Yes. No, there's not. I mean, as Neil mentioned briefly, we have added another building in Melbourne, which helped us deal with the volume growth. I can't quite recall the total volume growth we've had over the 3 years there, but it's really significant. So there's another building there, which has just taken the heat out and allowed us to keep growing, but we still use that centralized sort system for all of your inbound and outbound freight.

But no, very similar model over here in New Zealand, Andy, that we're not capacity constrained. We can add a bit more capacity in the areas that we need to. Usually, that has benefits, too, I'd say. So as we add a depot, usually, what it means is the contractors servicing out of that new depot get more time on the road and can complete more deliveries in a day.

Second question for me is just around Shred-X. There's been a couple of periods now where we've had those restructuring costs that have been well flagged. Now given the previous commentary, is it fair to now assume that there will be, one, no more restructuring costs? And then 2, could you kind of give us a sense of the phasing of the strategic initiatives in terms of the uplift in profitability from here, i.e., what can we expect through the second half and then what annualized through FY '27? And is there more to come beyond then?

In the second half of this year, we should roughly double the EBIT from the first half of the year for Shred-X. So the majority of those initiatives are well entrained, the costs have been incurred. Those costs are anything from writing off some of the equipment that we might have had for certain product streams through to restructuring, changing the way we operate in a couple of those depots.

So yes, that is largely done with. And I'd be disappointed if we didn't double the EBIT from the first half year and then that should give us a run rate to still keep growing off FY '27.

What does that mean in dollar numbers, Mark?

We should -- we don't tend to break those out in too much detail, Andy, but...

It's twice the number of the first half.

Twice the number of the first half. How is that?

The next question comes from Wade Gardiner.

A few questions from me. Start out with the postal revenue, which is up about 26%, which you sort of alluded to a lot of that being local body elections. If we strip out that sort of one-off revenue from local bodies, what was the sort of underlying growth rate?

Oh, it's a very good question, but not one I could answer right off the cuff way. But what I can say is the business has continued to grow. They're still taking market share. They have customers that are choosing to use them because of the service standard that they offer and the level of account management and closeness. So I'm not -- I couldn't tell you off the top of my head if I stripped out local body, but it still had positive revenue growth if you exclude that.

What about the general election next year? Have you got that work? Or is that still out for tender?

Really. The elections are typically run -- there's a couple of companies that tend to coordinate and run the elections. So certainly for local body, there were 2 of them, but the local bodies tended to choose one or the other. Look, that's not decided yet, but I would expect we have a very strong chance to be doing some work for the general election.

I think reality is New Zealand post's capability, that will just be shrinking a little bit as their volumes come down. And the reality is national elections, that is a big -- it's a massive liquor volume in a very short period of time. So I would expect DX, to some extent, participate in the national election next year.

Is that a similar size to local body when you add all the local bodies up?

It would be our mass, yes.

With your net market share gains, are you able to strip out how much of that is sort of still fallout from the Peter Baker deal? Or is there still an element there? Or is that wearing off?

What do you think gut feeling.

It's a tough one. We don't -- we haven't really made it a specific example...

I think there were a couple we picked up at the start of the half year that were sort of larger PBT customers, but probably stuck with Post for a year, gave them a year and then moved over. So there were a couple right at the start of that last year.

And since then, look, it's just been a steady stream. I think the team have kind of focused on particular vertical. So supplements is a good example of vertical.

Yes. From supplements side, a little bit of pharmaceutical. But yes, I wouldn't say we actually specifically measure it on its own. It's just very much a -- it was very much a business as usual sort of one-off. And quite a few of those customers had been -- had some Freightways involvement previously anyway. So it were all new to us per se.

Still really good prospect lists. So when I look at the prospect lists for all the businesses, really solid. So plenty of activity. Generally, the reasons service related, can we get a better service, can we get a better account management, how do we have local contact when things go wrong. All of those types of things are the reasons that customers will entertain our new business sales reps going in the door. And then we just have to work our way through price.

We're still pretty picky. We still want to make sure we maintain margins. So we're rating things correctly. If you wanted to go mad, you could pick up a whole heap of volume at really low margin, but that's not us. So yes, still pretty happy with the size of the prospect list that we have across the businesses.

With Project Evolve costs, I mean, you've outlined the increase on last year. Can you just sort of remind us where we are at in terms of the total spend and how much to come in the second half and into FY '27.

Sure. We've spent about $2.8 million in the first half, if I'm not mistaken, and total spend for the year should be roughly $5.5 million.

[indiscernible] in FY '20 -- so there's -- once the $10 million is spent, there's a residual, which is part of the $10 million, we're paying some licensing costs now for the first of those products we are using for the billing platform. The ongoing cost will be $2 million per annum pretty much in licensing cost weigh. And you could have -- maybe you have $1 million, maybe $1.5 million in FY '27, just depending on timing. We'll give an update on that as we get a bit further through the second half of the year.

And finally, any guidance around the full year CapEx, including VTFE?

Excluding VTFE, pretty much in line with what we had last year. So from memory, we spent a bit more than $15 million in the first half, should be consistent in the second half. VTFE, there's probably a bit more work to get a better sense of CapEx. It will depend also on what we do with the location of the depot. But I wouldn't expect much in the next 6 months. I think there might be more coming in the next year.

Yes. VTFE is asset-light, again, very similar to Post Haste, where contractors bring their vehicles. We operate out of one large depot in Dandenong. We will certainly have a look at how we facilitate the type of growth that we would have aspirations for out of VTFE. And so, at a certain point, that will mean a bigger depot.

And then what we do with all of our businesses, Wade, is just look at the volumes and look at where a bit of automation or mechanization at what point does that make sense and give us a return on investment. So there's all those types of things to go. But as Stephan had said, nothing material from a CapEx point of view in this first 6 months of ownership.

Our next question comes from Grant Lowe.

Firstly, just around the core Express Package business in NZ. Can you just talk to the price increases that you're achieving and how those sort of match against your expectations from the start of the year?

And then just sort of partly linked to that, just around the trend between the economy and premium services, are we saying that the premium services are growing, but just to a lesser extent? Or are they sort of -- is there still sort of a bit of a trade-off shift towards economy?

Yes. Okay. So I guess, second question first, the premium services are still growing. It's just the economy side of the business is growing faster, which is understandable given where the market is at currently. As we see more organic growth and pressure comes on time, as Mark alluded to before, I think we will see the shift come back. And in some instances, where we have busier periods, you see that nature occur.

So from an EP perspective, having the segmented businesses helps us understand exactly where the challenges are or where the opportunities are, and that's how we have sort of isolate them individually.

From a price increase point of view, we are still looking at what our costs are, what we need to do to increase our margin and then put that out to market. And whilst it is getting a little bit tougher to get us higher numbers previously, we're still achieving probably around about 80% of our guidance. And obviously, that has to rate a little bit to the CPI side of things.

So fundamentally, it's business as usual as we -- in terms of our approach. But yes, we are having to think about where the value is for some of our customers. And at the same time, looking at the -- how the business complements their service and how that relates to pricing.

I will give a slight CFO twist to that answer. So if we look at the premium services for EP in New Zealand, they are growing from a top line point of view. They are not growing from a bottom line point of view.

And then just around Big Chill, so still pretty subdued, but you did allude to a good December result. Just wondering how sort of January, February have gone?

And then second part of that question relates to thoughts on expansion. Obviously, we're still waiting for a meaningful recovery in that business. But just where you see the trigger point for looking at expansion in that business around the 3PL side?

Yes. Big Chill, revenue growth in January, probably just on par with what we had for all of the first half, so very similar in January. December seasonally picks up a bit. I think Christmas hands going out to butchers and supermarkets and gift boxes and all those types of things. So think about that seasonal uplift.

So what we saw in the December period, where you had the uplift, quite a meaningful expansion of margin for that month with that extra volume coming through. January pretty much reverted to the mean, to the norm for the 6-month period from a revenue and earnings point of view. The team have got some good new business that will come on around about March, April. So that will be nice just to see a bit of a kick in our volume to help fill up that utilization.

In terms of future facilities, we're still assessing that. We're very mindful of -- in temperature controlled, because the facilities are so specialized, you can get a really good look at capacity around the country. You can look at who's added capacity in which areas and feed that into your thinking around where you go next. So there's been a few moves there. by a number of operators who we wouldn't necessarily say were competitors, but it is extra capacity in a couple of places. So still refining our view on where that is.

What I can say though is that the team are very focused on filling out the branch transport network. So we added new Plymouth last year to the network, and there's a number of other branch locations from a transport point of view that we will assess and look at over this half.

And then just finally, around the M&A side of things. Like you've previously spoken about the size of acquisitions and sort of alluded to that again today. Just -- I mean, what would be -- you're obviously looking at everything, but if you're sort of picking where that might land, what sort of size do you think would be likely -- most likely for the next acquisition?

As per my hypothetical calling grant, look, we actually have -- there's 2 pretty clear alternatives or you could either go with -- there's a number of larger sort of full network operators out there in different sort of stages of health, you could probably say. So there's a couple of those that we are looking at.

And then there are a number of state-based operations that typically operate within a state and then we'll have a bit of outbound freight that they will give others. That's a really common way of operating over in Australia. We have these agents in other states. We could do one or the other or potentially both, but more likely one or the other.

And that's really what we're focused on now, looking at some of those state-based operations, looking at a couple of the larger national operations. And we'll work through and do our numbers, but also just think strategically around which gives us the better outcome.

So a bit of a toss of a coin at this stage because still early days on some of those parts to that puzzle, but nice to have sort of 2 clear alternatives. And as I said, having gone through 40 or 50 that we've had a look at, we're probably focused on a list of 10-ish from here on out.

Our next question comes from Ian Munro.

Just relating to Allied Express, perhaps are you able to comment on the competitive intensity of the oversized segment with respect to new supply, also the pricing environment and noting the cost pressures that we're seeing across Australian industry at the moment, how you're thinking about price negotiations into next financial year?

So Allied operate in the oversized niche. Where that niche is quite nice is that your mainstream Express Package companies don't really want that work. They doesn't -- the oversized nature of what they move, CKD furniture, larger items doesn't work on the automated sortation system that your major carriers in Australia operate.

So in terms of the competition, they've got one key competitor that also operates in the oversized niche. But apart from that, it's not highly competitive. And that does allow you to maintain really good margins.

And as Mark said, the customers are gaining market share. It seems to gaining market share on bricks-and-mortar retail. So you've got B2C online platforms, which are growing oversized capability and Allied is riding that wave.

And from what we can see, there's no signs of that stopping, plus we've also invested quite heavily in a larger new sales team, and that seems to be delivering good gains in terms of new business. That said, we're quite selective in terms of making sure that the new business we bring on is at good margins, and that's where implementing that better margin models and understanding the utilization on different routes has become quite important for us.

Well, the team have also simplified pricing. So there's an element of transport revenue in Australia, more so than New Zealand that goes through brokers. And it'd be fair to say brokers have always found it a little bit hard with Allied because they've had so many different search like a lot of different surcharges that will apply, and it becomes really hard to actually feed into broker models.

So one of the things the team has done is simplified the pricing model so that for that volume we might have coming through brokers, and it's not a massive proportion. It's made it a hell of a lot easier for the brokers customers to choose Allied.

So I think from the pricing point of view, our approach probably won't change in the very short term, Ian. I think we're happy to still keep sort of attracting volume, don't need to hike pricing too much, but simplifying pricing and having a really good view on the margin from a pricing point of view, that's our key focus at the moment.

And just in terms of the capacity levels in Allied, you noted a new warehouse sort of pending or active already. Outside of that, how are you seeing the kind of availability of line haul contractors other more variable capacity constraints. Is that remaining unconstrained to growth for Allied? And are we kind of looking at any larger major sort of CapEx items to support that future growth?

The answer is probably no. They're not really constrained. The line haul is done through a contractor model. So -- and in most cases, we're paying a one-way rate. So it's just a matter of adding more contractors and as we do more -- as we add volume growth.

We added say Victoria, which was 9,000 square meters last year, but apart from that, no, it's largely been -- I mean, it benefits from volume, Allied. The more volume you pump through the network, the better the margins are. So it's a pretty resilient model.

Yes. We -- the Allied team, one of their strategic objectives for this year was just to review the line haul carriers that they had. So they're working through that and just looking at where are the opportunities there to get better service, better timing, better price, those types of things. And we can explore that along with VTFE as well.

The reality is now we have a greater volume coming at -- certainly coming out of Melbourne than we had previously. So just opportunities just to keep exploring the various line haul providers are out there. But, yet, again, very fragmented space and a lot of choice, I would say.

Just one final one with respect to Shred-X. Apologies if I missed it. Just we've been talking more recently in the last couple of reporting periods around renegotiating price, trying to drive better margin, are we sort of saying that, that top line sort of penetration of better rates maybe hasn't worked in the short term? Or have you had sort of -- there's been a level of deliberate contract losses, but how should we think about kind of that customer resistance to rate rises? Is that likely to support or kind of hold back top line growth?

I think it's a little bit of a mix in reality. So if you looked at the coffee cup collections, they started geez, probably back around COVID times. Team really enthusiastic around it because of the sheer volume and if it could be done at a margin and the product actually be recycled. It was quite an exciting waste stream for us to have a look at.

But the reality was when we came back and reviewed it pretty clinically, you went -- there's quite a bit more you need in price to maintain a collection network for that. And that waste stream just could not support a higher price. So that was one that we were happy to let go, and I'm not sure it would -- it ever would have been realistic for the companies managing their recycling side to pay those rates.

In other areas, we're getting a better price for what we do. So yes, there's a combination of both. But there's certainly a couple of waste streams that we have pushed away and said, yes, we're better off without that particular volume. And that relieves a little bit of capacity in a building and allows us to carry on targeting some of the ones that are good financial earners for us.

So the answer is a bit of a mix, but they've all been done pretty deliberately by us knowing that, geez, if you can't stand a 20%, 30%, 40% increase in rate, it will likely go, and we're okay with that.

Thank you very much. That brings our Q&A session to a close. Mark, I'll hand it back to you for closing remarks.

Very good. Well, look, thanks, everyone, for your attention. And as I said, from a half year point of view, I think we're pretty happy that the business has performed well, that economy is just slowly starting to tick up and your company is really well positioned from a balance sheet point of view.

So these are nice periods. It's nice to get out of probably 5 years of COVID and labor market shortages and pretty deep recession, long recession here in New Zealand. Yes, plenty for us to do across all of our brands. We look forward to getting stuck into it in the second half of the year. Thank you.

[Foreign Language] Good morning, ladies and gentlemen. I'm Mark Cairns, Freightways Chair, and it's my pleasure to welcome you to our 2025 Annual Shareholders Meeting. It's great to see you again, and welcome also to those people joining us online, hopefully. We'll talk some more about that shortly.

On the stage are my fellow directors, Peter Kean; Abby Foote; David Gibson; Fiona Oliver and Grant Devonport. David is standing for reelection, and Grant is standing for election following his appointment by the Board in November last year. They'll both address the meeting later today prior to the vote.

We'll shortly hear from our Chief Executive, Mark Troughear. Also on the stage, we have our Chief Financial Officer, Stephan Deschamps; and our General Counsel and Company Secretary, Nicola Silke. Other members of our executive are also present in the room today and happy to chat with you over morning tea after the conclusion of the formal business.

Also here today are the company's auditors, PricewaterhouseCoopers and the company's legal advisers, Mayne Wetherall.

We have a quorum of shareholders, so I declare the meeting open.

Firstly, a few housekeeping matters. The bathrooms are located on the first floor atrium. In the event of an emergency, please evacuate immediately through the fire exit doors and gather at the assembly point in the car park behind this building. Could I please request that you switch your mobile phones off or on to silent, please. Lastly, we'll be making an audio recording of the meeting, which will be made available on the Freightways website.

I'll now run through the structure of the meeting. I'll begin with procedural matters and then summarize some of the company's highlights over the last financial year. I'll then ask our Chief Executive, Mark Troughear, to give an overview of the company, an update on strategy and current trading performance and provide commentary on our outlook for the remainder of the financial year.

Following Mark's presentation and any questions relating to the management of the company, I will then introduce the formal resolutions as outlined in the Notice of Meeting. The financial statements for the year ended 30 June 2025 are set out in the company's annual report released to shareholders in August. The company also released its climate-related disclosures last month.

Now we are having a few issues with the Microsoft platform globally, and there are some issues with the online platform and being able to ask questions. Mark, do you just want to give any details? It's sort of up and running, but unstable at the moment.

Yes. So Microsoft have had a massive outage. That means you can't play Minecraft or if you're online, you can't vote. So for those who haven't voted online, the many thousands of you, What we'll ask you to do is to e-mail Computershare. So the e-mail addresses [email protected]. That will be up on the NZX, the ASX and the Freightways website, and you can indicate your voting intentions by e-mailing Computershare directly and indicating whether you're voting for or against the various resolutions. So that's only for people who are voting online because that platform is down at the moment.

Okay. So questions will be moderated by Nicola Silke, our Company Secretary. If we receive multiple questions on one topic, these will be amalgamated together. Any questions not answered in time will receive an e-mail response after the meeting. Voting today will be conducted by way of a poll on all items of business, and I now declare the voting open for all resolutions.

Okay. So before I turn to the group's financial and strategic performance, I want to pause and acknowledge the tragic loss of one of our Shred-X team members in Victoria, Australia in December 2024. On behalf of the Board, I extend our deepest sympathies to their family, friends and colleagues. Any loss of life in the workplace is deeply distressing, and it reminds us that safety must remain at the heart of everything we do. We're determined to learn from this tragedy and to strengthen our commitment to ensuring that every person who comes to work within the Freightways Group returns home safely to their loved ones at the end of each work shift.

I will now speak briefly to some of the highlights of our 2025 financial year. The macroeconomic environment has remained difficult for a third consecutive year. But despite these headwinds, the company achieved another year of revenue and earnings growth.

Allied Express in Australia again performed strongly, where the economy has proved more resilient than in New Zealand. Our New Zealand business has also continued to increase market share from competitors backed by a superior service proposition. Cost pressures on our business abated somewhat, allowing us to recover margins across most of our Express Package businesses.

Despite the economic headwinds in New Zealand, we achieved a 7% growth in revenue to $1.3 billion and an impressive 13% growth in net profit to $80.1 million. With our interest expense reducing, strong cash flow generation has allowed us to pay down debt, bringing gearing to the bottom half of our target range.

With a stronger balance sheet and perhaps some positive thinking that the New Zealand economy was starting to turn the corner, the Board resolved to increase the dividend by $0.03 or 8% to $0.40 per share, remaining within our normal dividend policy settings.

This slide shows the dividend trajectory over the last 20 years. With exceptions during the global financial crisis and COVID, Freightways has endeavored to maintain or increase the dividend every year as we know how important this is to many of our shareholders.

To conclude, I thought it would be useful to illustrate Freightways' impressive growth story over the last 20 years, with revenue increasing fivefold and growth accelerating since 2021, reflecting the successful integration of business acquisitions in both New Zealand and Australia.

Over the past several years, Freightways has delivered an upper quartile total shareholder return, supported by a reliable dividend stream and steady share price appreciation. This reflects the consistent earnings growth and disciplined capital management, outperforming many peers in the transport and logistics sector.

In the 2025 financial year, Freightways' total shareholder return was an impressive 49.7%, assuming that dividends were reinvested. This ranks Freightways in the upper decile of the NZX50 constituents, demonstrating the company's sustained ability to create shareholder value whilst navigating challenging periods of economic volatility.

In closing, I'd like to thank my fellow directors, our Chief Executive, Mark Troughear and his management team, who have continued to lead our team of 6,100 employees and contractors with an unwavering focus of moving you to a better place. But particularly, I'd like to thank you, our shareholders, for your belief and support of our company.

I'll now hand over to our Chief Executive, Mark Troughear. [Foreign Language]

Good morning, everyone, and welcome to the AGM on behalf of the management team here and the many people around the Freightways network across New Zealand and Australia. Firstly, I'd like to thank the team for the FY '25 performance. It hasn't been easy times, particularly in New Zealand. We've been through probably 2.5 years of recessionary impact. But the performance of many of the people that you'll meet here over morning tea and that you can see in the room has been exemplary in driving the businesses, winning market share and moving each of their businesses to a better place. So a big thank you to the team here, and they will go on, in fact, they have various teams across New Zealand and Australia.

I'll give a bit of a trading update on Q1. But firstly, just talk a little bit about Freightways' strategy. In Q1, in particular, we've had pleasing revenue and profit increase. That's been driven by really continuing to win new customers in every line of business that we have. That's been really important while we've gone through the headwinds of the New Zealand economy.

And what's nice to see is that because of the service quality of each of our businesses, we're able to win new customers off the competition and help buffer the effect of economic conditions. We've had a really strong focus on efficiency. So what we try to do is build density and build efficiency within all the runs we have, no matter whether it's a document destruction run over in Australia or a courier run here in Auckland. What we aim to do is get more items into that run that bolsters courier incomes, but it helps the efficiency of the business as well.

And generally, in this year, we have managed to get pricing, which is in line or maybe slightly above the level of inflation. That's enabled us to pay our people more and cover those various costs we have within the business.

I think where we stand today, we can say the New Zealand economy is no longer a headwind. It does feel like we've ridden into that wind for around 2.5 years. I wouldn't say we have the wind at our back yet, but we're sitting in that nice neutral territory where it's no longer hard to make progress.

In Australia, I think the economy has slowed slightly, but the nature of our businesses mean we are much less tied to economic performance in Australia. The reality is in Australia, we occupy a number of niches where those niches are going well despite the state of the economy. And we're a much smaller business in Australia in terms of overall market share. In New Zealand, because of our market share, we naturally feel the impact of the economy on our companies.

Another highlight for us in September was releasing the climate statement, and that talks about the group's emissions across New Zealand and Australia and as well as our focus on transition planning for the years ahead.

Just want to talk a little bit about the blueprint. This is really the piece that makes us tick and links all of the brands and businesses we have together. Fundamentally, what we're involved in is picking up, processing and delivering over 100 million items every year. They might be letters, packages, bins of destruction or medical waste, archives, could be data we're picking up, processing and delivering to customers through businesses like data, print or TIMG. So that is the common link through express package, temperature controlled, information management and waste renewal.

There's 4 key things that if we can do well, we can be successful. So the first one is really being efficient. The reality is when you're handling over 100 million items, if you take or held up a little bit at each stage of that network, you lose your efficiency and you lose your profits. And our teams are very good at maintaining that level of efficiency through the business.

Second thing is that everything we move matters, whether it be a medical file that's sitting in an archived warehouse that needs to be delivered to a hospital within 2 hours, whether it be a package, urgent medical supplies, et cetera.

Everything we do really matters in terms of timeliness. And so that's critical to maintain service levels, keep the customers we have and attract new ones to us. Loving our customers. It kind of sounds tight, but reality is for many of us that have been in this business for around 30 years, we still see the same customers that we had 30 years ago. We still have a relationship with those same businesses that we might have called on as a courier or a sales rep or as a manager 30-odd years ago.

So loving your customers and really making sure that they feel part of the family is a really important part in our business. Customers judge you by your last delivery. If you don't do it well and if you don't recover well, you run the risk of losing a customer. So really looking after them and loving them as we talk about, is critical to our business.

And then the last one is just being a little bit entrepreneurial, having a bit of innovation and thinking about different ways of doing things every day. And I think that's one of the things that the team of people here really thrive on is every day having a new challenge and thinking about how do we solve that particular problem.

The common principles, I think, apply across all the Freightways businesses if I travel around branches and companies, I see these same 3 traits everywhere I go. It's a really high level of ownership. People take ownership for the business, for their people, for their performance, for maintaining customers. There's really high levels of ownership that go all the way down through each company.

We think commercially, there are many customers that we will walk away from and say, "Hey, that is not profitable. It doesn't work for our business, and so we won't be serving you." An example of that fairly recently was Temu, where we tried that for 6 months. And at the end of that period, really came away and said, "Hey, that's not doing as much for our business as it really should do. When they're prepared to pay the right price, we're happy to serve you." And then working as a family. Our teams where they can work as families really well and individual branches and brands and departments tend to perform really well. And so we do push that philosophy.

If we can do all those things, we can move you to a better place. And the people we're moving to a better place are the customers that stay with us and ride on that service journey. They are our team members, many of which we grow up from the ground floor to become general managers and many of those people are in the room here today.

It's moving shareholders to a better place that if you invested in Freightways 22 years ago, it was $1.60 and your share price has moved you to a better place. Your dividend, what Mark showed you previously around dividends and performance of the company, that's our attempt is to move you to a better place from that point of view.

And then finally, for our community and that community these days is really heavily around the environment. How do we play our part in moving our community to a better place in the areas that we can take action around decarbonization.

Just a few of the strategic initiatives across those 4 divisions. On Express Package, really, the key initiatives for us are to continue driving profitable market share growth in B2B, business-to-business deliveries and B2C, business-to-consumer deliveries. B2B is about 80% of what we do still. Think auto parts from Toyota being delivered to a mechanic before 8:00, sometimes about 5 in the morning, so they can start work. B2C are the items that you might have bought online when you don't have an Internet outage and are delivered to your door.

We're expanding a couple of key hubs. We have key air freight and road freight hubs in Palmerston North and Christchurch. So those 2 centers are going through more than a doubling of capacity to cope with the volumes we have today and the growth we expect tomorrow.

And then thirdly, continuing to scale up our oversize, the big and bulky, the ugly freight, as we used to call it, 25 to 60-odd kilos. A real big part of the Allied Express business in Australia that Betty and the team have grown really well and a burgeoning part of Carl Day's business here in New Zealand, where we're following the same blueprint and growing that here in Allied Australia.

In Temperature Control, we're targeting opportunities to build out the network. There's a number of locations that we can build out and continue expanding into. But doing that profitably, doing it with customers that support us where we can take hold in another center like we have this year in New Plymouth. We have a number of other branches that we'll look at establishing over the coming years. We're also assessing future 3PL opportunities. So these are the large cool store warehouses that hold food products on behalf of customers where we pick and pack it and then dispatch it out when it's ready at a restaurant, a cafe or a supermarket.

In Information Management, improving the utilization of the warehouses we have, so the sites we have around New Zealand and Australia. Our objective is to keep pushing the utilization of those facilities higher and also target high-value digitization activity. And that's where we have customers who ask us to digitize their paper records and provide it back to them electronically, pick up the data, process it and deliver it back to them.

And then finally, in terms of waste renewal, our objective there is to optimize the network, assess the depots, find efficiencies through the fleet that we're running, doing medical waste, document destruction and high-value waste collection and then continue making gains in those markets like medical waste and high-value waste.

Some really interesting stories around what that business does. Fundamentally, again, it's pickup-process-deliver. We pick up tons of textiles, we shred them and we deliver them to someone who can recycle them and keep them out of landfill. So if you want to know more about that business, going to have a chat to the big chap over there at morning tea time, and he'll be happy to avail you with plenty of stories about how that business is going.

Turning to trading update for Q1. So this is the consolidated unaudited performance for the company from the management accounts. You can see that revenue and earnings growth have been achieved through quarter 1. That's been led in particular by a very strong performance in the Express Package and Business Mail sector with really good revenue growth.

That revenue growth is from market share, and there is a bit of modest same customer growth now, which we haven't really had much of over the last 2.5 years. And then there's an element of pricing to cover those costs. We have had stronger growth in economy services than overnight air freight as an example. So more customers that are saying, hey, we will use a 2-day service, North Island, South Island rather than a more expensive overnight air freight service, Auckland to Christchurch. So we're certainly seeing that trend, which often happens in recessionary times. But nonetheless, that growth is contributing to good revenue and earnings across the business.

Really effective cost control. And as I said, those price increases that we have levied generally are helping offset inflation in most businesses, not in every case, but in most cases. Slightly higher corporate costs. We will have an air fleet transition near the end of this financial year, and we will start to shift from 737-400s to more fuel-efficient 737-800s.

So in terms of operating revenue, up 8.6%, EBITA up 11.9% and NPAT up 22.5% for the quarter. For the Express Package Business Mail sector, revenue growth of on 10% EBITDA and EBITA 14%, 14.7%, respectively. The Allied Express, Post Haste and DX Mail brands have had really strong growth. They're market-leading in their niches. What we do is have brands that aim to own a niche. So each of those brands are there to own a particular part of the market, specialize in that market and do that job particularly well. And those brands there are niches, which probably go a little bit better in these economic times, and they're winning. They're #1 in their niches. And that's why we're getting that really strong growth out of those businesses.

Same customer growth in this quarter was 1.8%. That might not mean much to a lot of you, but for many, many years or for the last couple of years, it's either been negative or flat. So actually having our same customers just growing slightly, I think, is a signal that those headwinds that we've been writing into for so long have now turned around and it's a little more neutral.

The increase in margins is particularly pleasing, so from 12.7% up to 13.3%. And in fact, that would have been a bit higher had we not invested around $1.5 million extra this year in an IT system that will enable us to bill more efficiently and effectively price to a greater deal of granularity and introduce different ways of paying couriers. So the investment much needed in that billing and courier pay system, and had it not been for that one-off cost of $1.5 million in the quarter, which we expect to be around $5 million for the full year, those margins would have been higher still.

The slide here just talks a little bit to the volume growth we have in the network courier business. So this is New Zealand Couriers Post Haste, Castle Parcels, Now Couriers, if you think about those brands that you'll see out on the road, the average daily volume growth was 4.5%. So again, quite a quantum up on what we've had in previous years, where it's effectively being pretty flat. That has come from a combination of 3.1% growth coming out of new customers.

Many of those are cross-border customers. It's volume that we're bringing in through our freight forwarding business often out of China or other places overseas and then injecting into our courier networks for last mile delivery. The customers we've lost or in some cases, have closed down in these times was negative 0.4%. And then same customer growth around 1.8%. So the existing customers 100 items last year. This year, sent 101.8, just send a little bit more.

Information Management, slightly more muted revenue growth here of 3.4%. EBITDA was up 3% and EBITA up 2.6%. The revenue here, growth influenced by medical waste growing at 9% per annum. So good strides made in winning market share, typically smaller customers to the medical waste facilities that we have across Australia.

Document revenues up 4%, a bit of price, a bit of volume in there. Slightly lower digitization in Australia, and that's just because we had a project that finished during the quarter, and we'll have a new pipeline coming through, but not quite as much digitization in Australia in that particular quarter.

We've had a number of initiatives at Shred-X in terms of improving its performance, improving its efficiency, getting the right price for the work we do, and we expect to see the benefit of that coming through in the second quarter this year. Also improved performance for our Lit Support business, which is part of TIMG in Australia and involved in servicing the legal fraternity with information management needs.

So finally, just in terms of outlook and how we see things, it's slow improvement in New Zealand volume, but pleasing to see. In the second half of FY '25, we had about a 0.6% improvement in same customer volume. So it's nice to see that momentum building, but still relatively modest levels compared to what we would have had in historic times when GDP was humming along.

Any positive economic momentum we can get really helps boost our efficiency and combined with pricing initiatives and some of the other things that the team are doing in the business to intensify the network should help expand margins in the year ahead. In the meantime, outside of what the economy does, our focus is really on improving service quality, making sure we are the choice in each of our niches for each of our brands that customers choose to come to even if we are a bit darer, and we typically are darer than our opposition.

There's also a range of organic and inorganic opportunities. Those are flash words apparently for stuff we can do with our own resources and there may be businesses or merger and acquisition activity that we could get involved in. Most of our attention is focused in Australia. Most of it is focused in and around the transport sector. And we look at any number of opportunities every year to see if we can find a business that will fit with the Freightways way of doing things.

That brings to an end of my presentation. I'll ask Mark to come back up, and you'll have the opportunity to ask questions.

Thank you, Mark. Are there any questions, comments or discussion in relation to the financial statements or presentation so far? Yes.

[ Ricky Marangi ] just on behalf of the New Zealand Shareholders' Association. So I've just got some questions which relate to some of the shareholdings and some of the questions you probably have gone through with them Oliver more recently, but I'll say them anyway for the sake of everybody else. Will Freightways explicitly disclose that director share ownership is not compulsory?

Ricky, so I've met with Oliver. We don't actually explicitly state it, but the policy is it's encouraged for directors to own a shareholding similar to a year's director fees, but it's not mandatory. And depending on the type of director we're looking to fill, we don't make it mandatory. But I think we probably should be stating that, and we will do so in our next annual report.

Thank you, Mark. Just another question. The annual report includes a collective skills matrix. Will Freightways enhance the skills matrix to show individual directors' skills?

Again, I discussed that with Oliver, and I can't see any reason personally, but I plan to talk to the Board. So I don't see an issue with presenting in the next annual report, the individual skills matrix.

Thank you, Mark. You probably talked also about the IoD Future Director program and whether you might participate or not?

I do -- we do discuss it regularly with the Board. I participate on other boards where we do it. It's probably something that we discuss from time to time. At the moment, we decided not to do it this year, but it's something that's on the agenda regularly.

What's the total tenure of the audit firm PwC?

So we recently went out to market. So Stephan, what's the total tenure? So we did go out to the market and call for bids, but PwC were successful and we've had a change in lead order partner as is required. But sorry, I can't tell you exactly.

I think it's more than 20 years.

22 years, I think.

And last but not least, any indication on when Freightways will set defined emissions reduction targets?

We are working on that at the moment. So I would expect that within the next 2 years, we will have targets.

Freightways operates with a number of brands as a result of the growth over time and the niches that they occupy alluded to in his presentation. So is there a case now for amalgamating under one brand, the Freightways entity or overall overriding umbrella?

Mark, I'll get you to comment on that.

Yes, it's a good question and one that we consider from time to time. I think the reality is we have such equity in brands like New Zealand Couriers and Post Haste. These are really household names that are known so well. And it will be the same for Allied Express in Australia and Shred-X over in Australia. So there's so much equity in those individual brands. But probably more importantly for us, we do see the world in niches. And so what we do is sort of the opposite of our main competitor, New Zealand Post, who rumble everything up under one brand. In our opinion, maybe don't do any of those things well.

What we really aim to do is to win each and every one of those niches. So New Zealand Courier's job is to win that race to get those items in your hand to start your business day. That's a different niche to Post Haste, which occupies more of a wholesale retail, and it's to replenish goods that you've sold the day or 2 days before. The niches may seem subtle, but actually, our customers fall quite naturally into those categories.

And so we think it's important that we're attacking each niche with a laser focus. if I look at our profitability by niche and compare it to some operators in our industries, which take a complete one-brand approach to it, gee, I'd rather have our margins and our focus any day of the week. But it's a good question. We do consider it from time to time.

Thank you. Any other questions from the floor? It's on the presentation so far. So we've got the formal business, and then I was going to open again, but I'm happy for general questions now as well.

[ Gordon Wallace ], shareholder. You're talking about on the planes that you're going to upgrade. Do you have any problem getting them? And does it take long for you to -- how should I say -- could you just explain that a bit more?

Mark, can you answer that?

We will more than likely just enter -- we'll enter an agreement with an aviation company to provide those aircraft to us. Availability of 737-800s is pretty good at the moment. If you've ever flown on Qantas from Australia to New Zealand, I reckon those 800s should be freight planes by now rather than passenger planes, terrible bloody things. So look, the availability of those aircraft is pretty good. Yes, conversion is, gee, probably about 6 months, I think been. So to convert a passenger plane to freight, it takes around 6 months, yes. So look, we're not concerned about the availability of those aircraft.

And I just want to also say fantastic report and amazing. That's all bloody amazing.

Thank you very much. Great question. Are there any further questions from the floor? One at the back.

[ Lindsay Rowntree ], shareholder. I'm just asking about Trump tariffs. Are they going to have any direct or indirect effect on the business?

Look, I don't think so. There's -- it's a very, very small amount of freight we have going out of the country. So there's very little we're doing where we're supporting an exporter selling into America. So I don't expect any material impact from that other than if it dampened overall economic growth for the global economy, that obviously will have some effect on New Zealand. But in terms of us directly, look, 99% of what we do, we pick up and deliver within the country. And then we have a lot of product coming in, in particular, from Asia into New Zealand that shouldn't be affected by any of Trump's tariffs. So yes, I sort of watch that with interest, but I don't -- it doesn't keep me up at night.

Any other questions from the floor?

Yes. [ Neil Hart ], minor shareholder. This is a general business question, but you mentioned the New Zealand Post and how inefficient they are, would freight rates be interested in buying their parcels if it was sold off by the government in due course?

I think we wouldn't be able to, in terms of defined markets, we would have too dominant position to actually acquire that business. Mark, do you want to add anything further?

I'd love to get my hands on it and fix it. But I think Mark is quite right. I mean the Commerce Commission wouldn't allow that in terms of concentration of market share. But yes, those rosters, I don't think it's too hard to fix what they've got. They just need to sort of open their eyes up to reading a P&L.

Just going to ask you, what is the split between New Zealand Post and New Zealand Couriers in that market?

NZ Post probably 50% at the moment. So they acquired a -- your taxpayer dollars were used to acquire another freight company, about the 10th one, I think they bought. So they acquired PBT around about a year ago. That was about 5% market share. So push them to, we think, about 50%. The Freightways business is probably early 40%. So their market share will be slightly higher, but I'll take our profit any day of the week.

Any further questions? Nicola, is there anything coming from online?

No, there's none.

Okay. No online questions. So if there are no further questions, I'll now move to the formal resolutions to be considered at the meeting.

As mentioned earlier, all voting on resolutions will be conducted by way of poll, and the results will be advised to the stock exchanges later today. Proxies have been appointed for the purpose of this meeting in respect of 96 million ordinary shares. As we indicated on the proxy form, directors standing for election or reelection will abstain from voting discretionary proxies in respect of their own appointment. As requested by the New Zealand Shareholders' Association, we will not disclose the voting of proxies received ahead of the shareholders voting on them today.

So the first ordinary business resolution is the reelection of David Gibson. David was appointed as a Director of the company in 2022 and is retiring by rotation and offering himself for reelection. The Board unanimously recommends that shareholders vote in favor of David's reelection. He's considered by the Board to be an independent Nonexecutive Director. I'd now like to invite David to address the meeting.

Good morning, everyone. It's lovely to see so many familiar faces from the Freightways family. I've been on the Board now for just over 3 years. It's been an absolute privilege to work with the current Board and management team.

As both Marks have outlined in their speeches, the company is performing very strongly. Much of this is due to the hard work and dedication of our very capable management team supported by a very high-quality Board. It's our job to keep it going and on track and to make the most of the tremendous opportunities in front of us. If reelected, my continued focus will be on maximizing shareholder value.

My career background is in corporate finance and strategy with over 25 years of capital markets and M&A transaction experience. I also bring strong governance experience over the last 8 years. I'm currently Deputy Chair of Goodman New Zealand and a Director of Contact Energy. With your support, it would be a privilege to continue to serve Freightways and be reelected as a director for a further term.

Thank you, David. Are there any questions or matters for discussion concerning this resolution to reelect David Gibson as a director? As there are no questions on this matter from shareholders, I put the resolution to a vote. If you could please mark your vote.

So the second resolution is the election of Grant Devonport. Grant was appointed as a Director of the company in November 2024 and is retiring and offering himself for election. The Board unanimously recommends that shareholders vote in favor of Grant's election. He's considered by the Board to be an independent Nonexecutive Director. I'll now invite Grant to address the meeting.

Thanks, Mark, and good morning, everyone. I stand before you today, both very excited but also humbled in seeking your support for my election to the Board of Freightways. I believe I'm very well qualified to add value to both the Board and in supporting management through both my industry experience and from over 25 years as a Chief Financial Officer for listed and unlisted corporates across Australia, New Zealand and the U.K.

My industry experience with nearly 10 years at Toll Holdings in both New Zealand and Australia gives me not only expertise across both countries, but also significant understanding and working with the major industry players, both competitors and potential targets in both markets. My CFO experience provides expertise and leadership across both traditional CFO functions like financial control, performance management and reporting, treasury, taxation and Investor Relations, but even more importantly, through a wider CFO portfolio leadership in health and safety, which is a major personal passion of mine, business strategy, mergers and acquisitions, risk management, technology and large balance sheet financing transactions.

While I have lived in Melbourne for 25 years, I remain a passionate Kiwi and certainly enjoy coming back across the Tasman regularly as I'm a Director of Auckland Airport as it moves through a generational capital investment program for both Auckland and New Zealand. Freightways has been an iconic New Zealand business since its inception in 1964, has a clear strategy for growth and is investing in technology, enhanced health and safety, sustainability and most of all, investing in its team.

In summary, I'm very excited to offer the experience, expertise and leadership required to support management to continue to drive the stellar performance for shareholders and other stakeholders that you've heard from both Mark this morning. Thank you so much for your support.

Thank you, Grant. Are there any questions or matters for discussion concerning the resolution to elect Grant Devonport as a director? Okay. As there are no questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote.

Okay. This brings us to the next resolution on director fees. This resolution proposes that the total quantum of annual directors' fee pool be increased by $85,000 from an aggregate of $965,000 to an aggregate of $1,050,000, such aggregate amount to be divided amongst the directors as they deem appropriate. The directors review fees annually to ensure the aggregate amount is available for directors' remuneration is adequate to allow directors' fees to remain aligned with market levels. Directors did not apply for any annual incremental adjustment to the aggregate pool of director fees last year. So the current fee levels have not been adjusted for 2 years.

This year, the directors obtained independent market advice from Ernst & Young. A summary of Ernst & Young's benchmarking report is attached, including an independence declaration from the Ernst & Young engagement partner. The directors propose to apply an increase this year, which allows nonexecutive directors to be paid at approximately the median level of the peer group market data presented in the EY report and to increase the headroom in the directors' fee pool to give Freightways the flexibility to attract an additional Australian-based director if required by further expansion of the business in Australia.

The increase in the aggregate fee pool requested of shareholders is 8.8%. In accordance with the NZX Main Board Listing Rule 6.3.1, the directors and their associated persons are restricted from voting on this resolution. The Board unanimously recommends that shareholders vote in favor of this increase. Are there any questions or matters for discussions concerning this resolution to increase the total quantum of the annual directors' fee pool?

Okay. As there are no questions on this matter from shareholders, I'll put the resolution to a vote. Please mark your vote.

And this then brings me to the last resolution on auditor's remuneration, which is largely procedural to authorize the directors to fix the auditor's remuneration. The present auditors, PricewaterhouseCoopers will continue in office under the Companies Act 1993. Are there any questions or matters for discussion concerning this resolution? As there are no questions on this matter from shareholders, I put the resolution to a vote. Please mark your vote.

Thank you, ladies and gentlemen. That concludes our discussion on the resolutions presented, and I'll close the voting very shortly, and Computershare will collect the voting cards from within the room. The votes will then be counted under the scrutiny of Computershare and the results released to both stock exchanges later today.

So now just a last call if any shareholders wish to raise any other questions, comments or discussion, whether related to the presentations, the annual report, financial statements or any other topics concerning the governance and management of the company or any other matters that may be lawfully considered at this meeting?

Okay. Well, that brings us to the end of this year's annual meeting. I now declare the meeting closed and invite those present to share some refreshments with the Board and executive. [Foreign Language] Thank you, ladies and gentlemen.