1 00:00:06,040 --> 00:00:09,080 Speaker 1: Kyoda. Welcome to Sheard Lunch, brought to you by Chas's 2 00:00:09,160 --> 00:00:12,320 Speaker 1: with Business Desk. My name is Helen Madison and on 3 00:00:12,400 --> 00:00:15,560 Speaker 1: the program today I'll be talking to Jason Boys, who's 4 00:00:15,600 --> 00:00:19,560 Speaker 1: the CEO of Infrastructure Investment Company in fortil. 5 00:00:20,280 --> 00:00:24,040 Speaker 2: Investing involves risk you might lose the money you start with. 6 00:00:24,480 --> 00:00:28,280 Speaker 2: We recommend talking to a licensed financial advisor. We also 7 00:00:28,320 --> 00:00:32,200 Speaker 2: recommend reading product of sclosure documents before deciding to invest. 8 00:00:32,760 --> 00:00:35,640 Speaker 2: Everything you're about to see and here is current at 9 00:00:35,640 --> 00:00:36,639 Speaker 2: the time of recording. 10 00:00:37,240 --> 00:00:40,720 Speaker 1: Welcome Jason, thanks for hosting us at the Infantile HQ 11 00:00:40,880 --> 00:00:45,120 Speaker 1: here in Wellington. Welcome now, Infatile. You are actually in 12 00:00:45,159 --> 00:00:48,519 Speaker 1: the midst of your retail investor road show around the country. 13 00:00:48,520 --> 00:00:50,440 Speaker 1: So how's that been going good? 14 00:00:50,479 --> 00:00:52,800 Speaker 3: I think the team are in total on and today, 15 00:00:52,960 --> 00:00:54,760 Speaker 3: so I haven't had a report back on how that's gone. 16 00:00:54,800 --> 00:00:58,440 Speaker 3: But last week we had our first roadshow meeting ever 17 00:00:58,560 --> 00:01:02,320 Speaker 3: in Fun Today. Over one hundred people turned up. Our 18 00:01:02,480 --> 00:01:06,160 Speaker 3: chair Allison Gary is from Fun Today, so she presented 19 00:01:06,160 --> 00:01:08,920 Speaker 3: at that so I think it was a I mean, 20 00:01:08,920 --> 00:01:11,680 Speaker 3: are over one hundred people was a fantastic outcome. Hopefully 21 00:01:12,000 --> 00:01:13,920 Speaker 3: everybody attended got something out of it. 22 00:01:13,840 --> 00:01:15,560 Speaker 1: And then you've got a number of others around the 23 00:01:15,560 --> 00:01:16,280 Speaker 1: country coming out. 24 00:01:16,520 --> 00:01:19,120 Speaker 3: Yeah, I think we do ten or twelve around the country. 25 00:01:20,319 --> 00:01:23,080 Speaker 3: I am doing Wellington and Auckland and we sort of 26 00:01:23,080 --> 00:01:24,959 Speaker 3: split it between the team who are be going through 27 00:01:24,959 --> 00:01:27,039 Speaker 3: the South londond I think next week, I expect. 28 00:01:27,440 --> 00:01:30,319 Speaker 1: And I'm quite excited because actually there'll be one for 29 00:01:30,400 --> 00:01:33,160 Speaker 1: Cheesy's investors this year, I'm told in July. 30 00:01:33,240 --> 00:01:35,759 Speaker 3: Said so, no questions today, but questions in July are 31 00:01:35,760 --> 00:01:37,920 Speaker 3: so bitter. Be on my toes for that. You better happy, 32 00:01:37,959 --> 00:01:39,040 Speaker 3: too happy too. 33 00:01:39,720 --> 00:01:43,640 Speaker 1: Now thirty years since and for twol became about, which 34 00:01:43,760 --> 00:01:46,960 Speaker 1: is quite a milestone really for the company. There's been 35 00:01:47,000 --> 00:01:48,920 Speaker 1: a number of people at the Helm and now you're 36 00:01:48,960 --> 00:01:52,360 Speaker 1: at the helm. What would you say you've learned? But 37 00:01:52,400 --> 00:01:55,240 Speaker 1: also what lessons you've learned from them in that time? 38 00:01:55,440 --> 00:01:58,800 Speaker 3: Yeah? Thirty is is amazing, isn't it. We've had three 39 00:01:58,880 --> 00:02:06,960 Speaker 3: CEOs obviously, Marco are now me. I think what have 40 00:02:07,000 --> 00:02:09,560 Speaker 3: we learned? I mean a million things right, and a 41 00:02:09,600 --> 00:02:11,280 Speaker 3: lot of we don't have a lot of turnover here 42 00:02:11,280 --> 00:02:14,040 Speaker 3: at Morrison as well, so it's pretty hard to boil 43 00:02:14,080 --> 00:02:16,640 Speaker 3: it all down into one or two things. I think, 44 00:02:17,440 --> 00:02:20,120 Speaker 3: you know, the main lesson is it's never one or 45 00:02:20,120 --> 00:02:24,839 Speaker 3: two things. It's actually always a million things that come 46 00:02:24,880 --> 00:02:28,440 Speaker 3: together to make an investment either successful or unsuccessful, because 47 00:02:28,440 --> 00:02:32,600 Speaker 3: we've had those as well. And really, I think the 48 00:02:32,600 --> 00:02:38,200 Speaker 3: magic of the model really has been to have a 49 00:02:38,240 --> 00:02:42,239 Speaker 3: team who's not, you know, embroiled in the day to 50 00:02:42,320 --> 00:02:45,320 Speaker 3: day hand to hand combat of running an airport or 51 00:02:46,520 --> 00:02:49,600 Speaker 3: selling mobile phone plans. You can sit above that and 52 00:02:49,720 --> 00:02:52,800 Speaker 3: try and understand what are the what are the bigger 53 00:02:52,880 --> 00:02:55,799 Speaker 3: things to be thinking about here, either now or for 54 00:02:55,840 --> 00:03:00,280 Speaker 3: the future, and then trying to use our levers because 55 00:03:00,320 --> 00:03:02,560 Speaker 3: we tend to control the businesses that we invest in, 56 00:03:03,560 --> 00:03:06,840 Speaker 3: to position them well for those things over time. It 57 00:03:06,919 --> 00:03:09,240 Speaker 3: is probably when I look back at the successes what 58 00:03:09,360 --> 00:03:11,799 Speaker 3: really makes them stand out, and then when I think 59 00:03:11,840 --> 00:03:16,160 Speaker 3: about the things that haven't gone so well, almost always 60 00:03:17,360 --> 00:03:19,120 Speaker 3: I think if this as the cardinal rule now is 61 00:03:19,160 --> 00:03:21,960 Speaker 3: to not fall in love with your assets to the 62 00:03:22,000 --> 00:03:25,320 Speaker 3: extent that you hold on for too long. And everybody 63 00:03:25,360 --> 00:03:27,400 Speaker 3: loves all of our assets. They're like your children in 64 00:03:27,400 --> 00:03:31,760 Speaker 3: some ways. You know there's no favorites, but yeah, don't 65 00:03:31,800 --> 00:03:35,400 Speaker 3: hold for too long. It's like the cardinal rule I think. 66 00:03:35,320 --> 00:03:40,800 Speaker 1: Now Morrison Group actually managers or is the manager. Now 67 00:03:40,840 --> 00:03:43,160 Speaker 1: that for a lot of people seems a bit strange. 68 00:03:43,280 --> 00:03:46,000 Speaker 1: Can you can you unpack what that model is and 69 00:03:46,200 --> 00:03:47,200 Speaker 1: then how common is that? 70 00:03:47,480 --> 00:03:49,120 Speaker 3: So, yeah, it's not as common in this part of 71 00:03:49,160 --> 00:03:50,560 Speaker 3: the world as it used to be. There was kind 72 00:03:50,560 --> 00:03:52,360 Speaker 3: of a spata than when in for Too was put 73 00:03:52,400 --> 00:03:54,800 Speaker 3: in place. It still is me common in property investing. 74 00:03:55,680 --> 00:03:58,160 Speaker 3: So the model is if people don't know there is 75 00:03:58,200 --> 00:04:00,600 Speaker 3: a company with an independent board of direct is that 76 00:04:01,160 --> 00:04:04,280 Speaker 3: if you're an Infratil shaholder, you'll own shares in. But 77 00:04:04,760 --> 00:04:07,600 Speaker 3: there's no employees of Infratill like there would be of 78 00:04:07,720 --> 00:04:11,560 Speaker 3: fishrom Pocal Healthcare or some of these overreat companies. The 79 00:04:11,600 --> 00:04:14,760 Speaker 3: employees are all employed by Morrison, which is a privately 80 00:04:14,800 --> 00:04:18,279 Speaker 3: owned investment manager. It's owned by the staff and largely 81 00:04:18,279 --> 00:04:24,039 Speaker 3: Alloyd's of State actually, and we work for Morrison, and 82 00:04:24,080 --> 00:04:28,400 Speaker 3: we essentially provide the sort of executive team functions of Prattle, 83 00:04:29,160 --> 00:04:31,000 Speaker 3: which is overseen by the board on a day to 84 00:04:31,080 --> 00:04:33,480 Speaker 3: day basis actually around the board table and when we're 85 00:04:33,480 --> 00:04:36,280 Speaker 3: thinking about budgeting. It all would all look very familiar, 86 00:04:36,360 --> 00:04:40,960 Speaker 3: but essentially the management team sits outside the company. The 87 00:04:41,360 --> 00:04:44,280 Speaker 3: main difference really is that Morrison can have other clients, 88 00:04:44,600 --> 00:04:47,360 Speaker 3: whereas you know, if you're this CEO of one in 89 00:04:47,480 --> 00:04:49,560 Speaker 3: z if you're docent Paris, you reallyantly work for one 90 00:04:49,560 --> 00:04:53,000 Speaker 3: in zed C and I hope. So whereas with Morrison, 91 00:04:53,680 --> 00:04:58,000 Speaker 3: we have worked with New Zealand Supernovation Fund, Australia's Future Fund, 92 00:04:58,800 --> 00:05:01,560 Speaker 3: a number of other clients who've ended up being great 93 00:05:01,600 --> 00:05:05,760 Speaker 3: partners for infantele and investing. But that's really the difference. 94 00:05:06,120 --> 00:05:08,159 Speaker 3: That's not so common here anymore. But actually it's pretty 95 00:05:08,160 --> 00:05:10,840 Speaker 3: common in the UK. There is a class of investments 96 00:05:10,839 --> 00:05:12,960 Speaker 3: called investment trusts, which were all more or less structured 97 00:05:12,960 --> 00:05:14,760 Speaker 3: this way, and it was kind of that model that 98 00:05:14,880 --> 00:05:17,640 Speaker 3: Lloyd imported into New Zealand and for various tax reasons, 99 00:05:17,680 --> 00:05:22,039 Speaker 3: actually ended up in a company format. But yeah, so 100 00:05:22,320 --> 00:05:26,560 Speaker 3: not unique, but certainly not as common here as it is, 101 00:05:26,600 --> 00:05:27,320 Speaker 3: say in the UK. 102 00:05:27,920 --> 00:05:30,800 Speaker 1: They've mentioned Lloyd Morrison a few times. He's the late 103 00:05:30,880 --> 00:05:34,480 Speaker 1: Lloyd Morrison, and he did actually set up infratill way 104 00:05:34,480 --> 00:05:38,000 Speaker 1: back in the day. Would you say his aspirations have 105 00:05:38,120 --> 00:05:38,920 Speaker 1: been realized? 106 00:05:41,320 --> 00:05:43,960 Speaker 3: I don't know. He's quite ambitious guy, right, So that 107 00:05:44,160 --> 00:05:48,840 Speaker 3: I suspect that's a pretty high bar that we're all 108 00:05:48,839 --> 00:05:53,160 Speaker 3: continually trying to live up to he He described it 109 00:05:54,480 --> 00:05:58,000 Speaker 3: what he hoped for Infantoo before he passed away, as 110 00:05:58,600 --> 00:06:01,560 Speaker 3: as creating a great New Zealand company is what he said, 111 00:06:01,560 --> 00:06:04,960 Speaker 3: which leaves quite a bit of room for interpretation. But 112 00:06:05,040 --> 00:06:07,600 Speaker 3: I think what he is capturing there is, you know 113 00:06:07,760 --> 00:06:11,599 Speaker 3: there are it's more than a fund where you sort 114 00:06:11,600 --> 00:06:13,400 Speaker 3: of pop in a few investments, like if you're doing 115 00:06:13,400 --> 00:06:15,520 Speaker 3: your own investing and you sort of mix a match 116 00:06:15,560 --> 00:06:17,599 Speaker 3: and you come out with a financial return and that's happy. 117 00:06:17,920 --> 00:06:21,320 Speaker 3: His aspirations for Intole were much higher than that. A 118 00:06:21,400 --> 00:06:24,279 Speaker 3: company that and you sort of saw this when he 119 00:06:24,360 --> 00:06:28,240 Speaker 3: was alive, you know, was relevant to New Zealand and 120 00:06:28,480 --> 00:06:32,480 Speaker 3: other markets if possible. When he advocated for the stock 121 00:06:32,520 --> 00:06:35,960 Speaker 3: exchange not to be sold for various things that were 122 00:06:36,000 --> 00:06:38,480 Speaker 3: going on with airlines and the flag, those were the 123 00:06:38,560 --> 00:06:41,359 Speaker 3: levels of his aspirations for a tool. And I think 124 00:06:41,600 --> 00:06:44,040 Speaker 3: we're sort of still working I think on that part 125 00:06:44,080 --> 00:06:47,839 Speaker 3: of his vision. How can you have kind of a 126 00:06:47,880 --> 00:06:51,800 Speaker 3: broader place in people's hearts and minds than just like 127 00:06:51,839 --> 00:06:52,520 Speaker 3: a spreadsheet. 128 00:06:54,000 --> 00:06:57,040 Speaker 1: And also, I mean eighty percent of the business is Australasian. 129 00:06:57,200 --> 00:07:01,520 Speaker 1: Still you call yourselves a global and structure investment company, 130 00:07:01,560 --> 00:07:04,680 Speaker 1: but actually a lot of it still is based here. 131 00:07:05,200 --> 00:07:07,960 Speaker 1: But I suppose is that always? Is that always what 132 00:07:08,000 --> 00:07:09,040 Speaker 1: you're hoping to have. 133 00:07:09,160 --> 00:07:12,440 Speaker 3: Or I think that's more just where we've come from, 134 00:07:12,480 --> 00:07:15,480 Speaker 3: which is a strength. So the more mature businesses will 135 00:07:15,480 --> 00:07:17,920 Speaker 3: be at home, the things where we're willing to take 136 00:07:17,920 --> 00:07:21,880 Speaker 3: more risk will tend to still be at home. First. Really, 137 00:07:21,880 --> 00:07:25,920 Speaker 3: where we want to take the investment portfolio is a 138 00:07:26,000 --> 00:07:28,280 Speaker 3: kind of a more global version of what you see today. 139 00:07:28,440 --> 00:07:31,560 Speaker 3: So could we have larger data seend the businesses offshore. 140 00:07:31,600 --> 00:07:33,920 Speaker 3: I think that would be interesting from an investment perspective, 141 00:07:34,040 --> 00:07:37,040 Speaker 3: And certainly we have every right, I think, given what 142 00:07:37,040 --> 00:07:39,120 Speaker 3: we've achieved so far and this part of the world, 143 00:07:39,280 --> 00:07:40,680 Speaker 3: to try to do that. And you can sort of 144 00:07:40,680 --> 00:07:44,480 Speaker 3: see that in renewables as well. Right, we've had huge 145 00:07:44,520 --> 00:07:48,320 Speaker 3: history with our words TrustPower now monor energy tilt that 146 00:07:48,400 --> 00:07:51,160 Speaker 3: came out of it definitely earned the rider. I think 147 00:07:51,160 --> 00:07:53,760 Speaker 3: to try that offshore and long Road in the US 148 00:07:53,840 --> 00:07:56,200 Speaker 3: is the early sort of signs that maybe we can 149 00:07:56,240 --> 00:07:58,080 Speaker 3: translate off that offshore, and we've got a few other 150 00:07:58,080 --> 00:08:01,160 Speaker 3: ways to try and integrate that model to other jurisdictions 151 00:08:01,200 --> 00:08:01,600 Speaker 3: as well. 152 00:08:02,480 --> 00:08:04,680 Speaker 1: Jason, we'll talk about some of the successes you've had 153 00:08:04,680 --> 00:08:07,200 Speaker 1: with the impressive results that came out a couple of 154 00:08:07,200 --> 00:08:09,680 Speaker 1: weeks ago, but I think it would be quite good 155 00:08:09,720 --> 00:08:12,200 Speaker 1: to kind of set the scene. I mean, what has 156 00:08:12,280 --> 00:08:16,320 Speaker 1: been achieved has been in a climate or a world 157 00:08:16,360 --> 00:08:20,120 Speaker 1: that is quite volatile. What are some of the challenges 158 00:08:20,720 --> 00:08:23,520 Speaker 1: that you've faced and had to sort of get through 159 00:08:23,560 --> 00:08:25,280 Speaker 1: in order to, you know, have the results you have. 160 00:08:28,440 --> 00:08:33,960 Speaker 3: It's definitely been I think we say whippy in certain areas. 161 00:08:34,400 --> 00:08:38,760 Speaker 3: The definitely volatile interest rates has been incredibly challenging for 162 00:08:38,880 --> 00:08:42,760 Speaker 3: all sorts of investments, and because infrastructure is quite capital 163 00:08:42,840 --> 00:08:46,600 Speaker 3: intensive and uses a lot of debt if you can 164 00:08:46,840 --> 00:08:51,280 Speaker 3: set it up correctly, the quick changes and interest rates 165 00:08:51,679 --> 00:08:58,000 Speaker 3: really through COVID and after has been incredibly challenging for 166 00:08:58,040 --> 00:09:03,040 Speaker 3: the businesses, and by large, teams have navigated that incredibly well. 167 00:09:03,080 --> 00:09:06,000 Speaker 3: But it's always hard to really lean in with confidence 168 00:09:06,559 --> 00:09:08,960 Speaker 3: to grow businesses you think have every right to grow 169 00:09:09,000 --> 00:09:13,320 Speaker 3: when they're facing challenging cost increases. So you know, for example, 170 00:09:13,400 --> 00:09:17,120 Speaker 3: if you're building a solar farm in the US, almost 171 00:09:18,040 --> 00:09:22,040 Speaker 3: a third of the cost is interest, right, so if 172 00:09:22,040 --> 00:09:26,200 Speaker 3: that's doubled overnight, You've got a lot of work that 173 00:09:26,280 --> 00:09:30,480 Speaker 3: needs to happen on the power price effectively in order 174 00:09:30,600 --> 00:09:34,760 Speaker 3: for the maths to still work. So that has no 175 00:09:34,840 --> 00:09:37,400 Speaker 3: doubt been challenging. And now really the big debate is 176 00:09:37,440 --> 00:09:39,280 Speaker 3: what is the new two percent rod? What is the 177 00:09:39,360 --> 00:09:41,400 Speaker 3: new long term interest rate? Is it two or three? 178 00:09:41,480 --> 00:09:44,840 Speaker 3: Is at four? And we have no better view on 179 00:09:44,880 --> 00:09:46,880 Speaker 3: that than anyone, So it sort of plan for the 180 00:09:46,920 --> 00:09:49,080 Speaker 3: worst and hope for the best, I think is the 181 00:09:49,120 --> 00:09:51,920 Speaker 3: most sensible way to approach that in your investment pieces. 182 00:09:52,240 --> 00:09:55,000 Speaker 1: But a constant juggle and obviously you're doing your modeling 183 00:09:55,440 --> 00:09:56,240 Speaker 1: as you always have. 184 00:09:57,360 --> 00:09:59,640 Speaker 3: And try and be conservative in terms of hedging will 185 00:09:59,640 --> 00:10:03,040 Speaker 3: conserve I think then a lot of people although a 186 00:10:03,040 --> 00:10:04,560 Speaker 3: lot of people there are a number of people who 187 00:10:04,600 --> 00:10:06,400 Speaker 3: could say you could take more edging, but yeah, try 188 00:10:06,400 --> 00:10:09,360 Speaker 3: and head you downside as much as you can where 189 00:10:09,360 --> 00:10:11,560 Speaker 3: the cost justifies it. So that's always a bit of 190 00:10:11,640 --> 00:10:17,839 Speaker 3: an equation. And then really the other part is are 191 00:10:17,840 --> 00:10:21,920 Speaker 3: you in markets where either your business has pricing power 192 00:10:22,000 --> 00:10:24,520 Speaker 3: or the industry as a whole that you're in has power. 193 00:10:25,080 --> 00:10:28,200 Speaker 3: To say, in that electricity example I gave before, you 194 00:10:28,200 --> 00:10:30,680 Speaker 3: can go back to whoever's buying your power and say well, 195 00:10:31,120 --> 00:10:33,480 Speaker 3: do you want the project? Yes, well, then really the 196 00:10:33,520 --> 00:10:36,440 Speaker 3: price has to change, and that's always very uncertain until 197 00:10:36,440 --> 00:10:38,160 Speaker 3: you're right in those moments. You can do all the 198 00:10:38,200 --> 00:10:41,439 Speaker 3: work that you like on that and get convinced that 199 00:10:41,440 --> 00:10:43,920 Speaker 3: that ability is there, but until I actually achieve it, 200 00:10:43,920 --> 00:10:48,840 Speaker 3: it's all very much uncertain. And I think the benefit 201 00:10:48,920 --> 00:10:50,800 Speaker 3: of getting through times like this that we have is 202 00:10:51,400 --> 00:10:54,280 Speaker 3: that has proven now, particularly in the US renewables market, 203 00:10:54,320 --> 00:10:57,240 Speaker 3: the power price is quite rational. Everybody seems to have 204 00:10:57,280 --> 00:10:59,439 Speaker 3: more or less the same cost to capital, which means 205 00:10:59,520 --> 00:11:02,600 Speaker 3: that when something like interest rate happens that affects everyone, 206 00:11:04,080 --> 00:11:06,319 Speaker 3: the power price is able to be adjusted. And I 207 00:11:06,360 --> 00:11:09,520 Speaker 3: think we've been happily. You know, data seen has been 208 00:11:09,559 --> 00:11:11,520 Speaker 3: a little bit of a different story. I would say, 209 00:11:11,520 --> 00:11:14,920 Speaker 3: what's really happened there is you've had the same sort 210 00:11:14,920 --> 00:11:16,960 Speaker 3: of dynamic in terms of interest rates, but there's just 211 00:11:16,960 --> 00:11:20,520 Speaker 3: been this huge explosion of demand which has helped balance 212 00:11:20,559 --> 00:11:23,800 Speaker 3: everything in that in that industry. 213 00:11:26,600 --> 00:11:31,080 Speaker 1: Just looking briefly at the numbers for the full year result, 214 00:11:31,320 --> 00:11:34,160 Speaker 1: I think earnings is probably what we'll focus on. And 215 00:11:34,640 --> 00:11:37,599 Speaker 1: ebitt Dath is that lovely acronym which basically means that 216 00:11:37,840 --> 00:11:41,040 Speaker 1: before all the expenses come in. That was up sixty 217 00:11:41,040 --> 00:11:43,080 Speaker 1: three percent. I think it was eight hundred and sixty 218 00:11:43,080 --> 00:11:46,160 Speaker 1: four million. That said, one New Zealand had a fairly 219 00:11:46,240 --> 00:11:48,720 Speaker 1: big impact on that. So if you extrapolate that out, 220 00:11:49,080 --> 00:11:50,679 Speaker 1: what'll be looking at Yeah. 221 00:11:50,520 --> 00:11:52,720 Speaker 3: So that's the parent at surplus and so that was 222 00:11:54,400 --> 00:11:57,160 Speaker 3: that would have been reflecting the revaluation of one through 223 00:11:57,320 --> 00:12:00,000 Speaker 3: the transaction that we executed last year. Think we spoke 224 00:12:00,040 --> 00:12:04,079 Speaker 3: about that last time. The well, well, the way we 225 00:12:04,120 --> 00:12:07,760 Speaker 3: look at it is if you want to understand how 226 00:12:07,840 --> 00:12:12,240 Speaker 3: the operations of the underlying businesses are performing, we use 227 00:12:12,320 --> 00:12:16,880 Speaker 3: this metric called proportionate EBITDAV. So we would take so 228 00:12:16,960 --> 00:12:18,959 Speaker 3: if we own fifty percent of CDCAT it's actually a 229 00:12:18,960 --> 00:12:20,880 Speaker 3: little bit less, but say fifty percent, you would take 230 00:12:20,920 --> 00:12:24,920 Speaker 3: fifty percent of their earnings through, thirty seven percent of 231 00:12:25,080 --> 00:12:27,560 Speaker 3: Long Road take thirty seven percent through. So take that 232 00:12:27,640 --> 00:12:31,000 Speaker 3: through across the portfolio and then compare that to the 233 00:12:31,040 --> 00:12:33,640 Speaker 3: same period last year and say how have the underlying 234 00:12:33,679 --> 00:12:37,600 Speaker 3: operations gone. So at that level we grow grew at 235 00:12:37,600 --> 00:12:40,360 Speaker 3: about it was eleven percent, I think I want to 236 00:12:40,360 --> 00:12:43,960 Speaker 3: say last year, so above we hit a number that 237 00:12:44,040 --> 00:12:47,080 Speaker 3: was above our guidance, which was nice, and then we 238 00:12:47,080 --> 00:12:48,880 Speaker 3: were growing at that kind of double digit rate that 239 00:12:48,920 --> 00:12:50,959 Speaker 3: we like to see given that we're investing a lot 240 00:12:51,000 --> 00:12:55,079 Speaker 3: in our businesses to generate that going forward. 241 00:12:54,880 --> 00:12:58,400 Speaker 1: Down that that growth and that double digit growth is there. 242 00:12:58,480 --> 00:13:00,679 Speaker 1: It has been with imperature for a long timement. If 243 00:13:00,679 --> 00:13:03,800 Speaker 1: you look back ten years in even thirty, there's always 244 00:13:03,800 --> 00:13:06,360 Speaker 1: been double digits and the last ten twenty two percent, 245 00:13:06,400 --> 00:13:10,559 Speaker 1: which is pretty phenomenal. That said, the market wasn't that 246 00:13:10,880 --> 00:13:14,160 Speaker 1: and those were the results? Were they just expecting it 247 00:13:14,200 --> 00:13:16,560 Speaker 1: to be even better? I mean, how do you win? 248 00:13:17,000 --> 00:13:19,760 Speaker 3: Yeah, I think there were a few things going on 249 00:13:19,760 --> 00:13:21,880 Speaker 3: on the day, So I think the print for the 250 00:13:21,960 --> 00:13:25,120 Speaker 3: year everybody was happy with because nobody expected us to 251 00:13:25,120 --> 00:13:27,040 Speaker 3: be above guidence. Everybody at as below it, so that 252 00:13:27,120 --> 00:13:29,680 Speaker 3: was fine. They were more thinking about the outlook. So 253 00:13:29,720 --> 00:13:33,760 Speaker 3: then we provided one which we've always done, even through COVID, 254 00:13:33,760 --> 00:13:37,640 Speaker 3: one year forward view of that proportionate eve deaf metric 255 00:13:37,720 --> 00:13:39,800 Speaker 3: that I talked about before, and that was still up 256 00:13:39,800 --> 00:13:44,760 Speaker 3: double digits. But two of them they were disappointed, and 257 00:13:44,800 --> 00:13:48,480 Speaker 3: I think I would say one was one inzet which 258 00:13:48,520 --> 00:13:51,000 Speaker 3: we had as actually flat. So although at an aggregate 259 00:13:51,080 --> 00:13:52,920 Speaker 3: level we were showing this double digit growth. We had 260 00:13:52,920 --> 00:13:55,840 Speaker 3: one in zet As flat, which is really, as we 261 00:13:55,880 --> 00:13:59,040 Speaker 3: explained on the call, as a result of what Sparker 262 00:13:59,120 --> 00:14:02,200 Speaker 3: also seeing this market, which is the enterprises, which in 263 00:14:02,240 --> 00:14:05,280 Speaker 3: New Zealand means a lot of government as well definitely 264 00:14:05,280 --> 00:14:07,760 Speaker 3: holding back and pulling back in terms of spending on 265 00:14:08,480 --> 00:14:11,160 Speaker 3: all their needs, including the ones that we provide as well. 266 00:14:11,240 --> 00:14:14,320 Speaker 3: So I think the market was prepared for that. There 267 00:14:14,400 --> 00:14:17,360 Speaker 3: was also a little bit of confusion between some normalizations 268 00:14:17,400 --> 00:14:19,960 Speaker 3: we'd shown in June when we did the rays and 269 00:14:20,000 --> 00:14:21,480 Speaker 3: what we were showing on the day, which we were 270 00:14:21,520 --> 00:14:23,360 Speaker 3: able to clean up during the day, I think, which 271 00:14:23,400 --> 00:14:25,280 Speaker 3: tied it up to normalizations. But that was a little 272 00:14:25,280 --> 00:14:28,680 Speaker 3: bit messy on the call, so apologies if you had 273 00:14:28,720 --> 00:14:32,800 Speaker 3: to listen through that slightly painful conversation. So I think 274 00:14:32,800 --> 00:14:36,000 Speaker 3: people have got their head around that, and our message 275 00:14:36,040 --> 00:14:39,800 Speaker 3: on one really is we're soft because the market is 276 00:14:39,840 --> 00:14:42,320 Speaker 3: soft on that side of things. Nothing particularly wrong with 277 00:14:42,360 --> 00:14:45,400 Speaker 3: our investment, and we're still actually really positive about the 278 00:14:45,480 --> 00:14:48,720 Speaker 3: leavers we have within that business to continue to achieve 279 00:14:48,960 --> 00:14:53,280 Speaker 3: good growth over time. Particularly remember one end Z is 280 00:14:53,320 --> 00:14:57,800 Speaker 3: still really becoming a standalone telco having been owned by 281 00:14:57,920 --> 00:15:00,000 Speaker 3: Vodafone for all those years, so we've got plenty of 282 00:15:00,040 --> 00:15:03,680 Speaker 3: simplification we can do, which Spark's already done the good 283 00:15:03,680 --> 00:15:05,800 Speaker 3: work on, but we still have to do it to 284 00:15:05,880 --> 00:15:09,520 Speaker 3: generate above market growth we think in earnings once that 285 00:15:09,560 --> 00:15:12,440 Speaker 3: program completes over the next two or three years. So 286 00:15:12,800 --> 00:15:14,680 Speaker 3: we're still quite positive about that and people will be 287 00:15:14,720 --> 00:15:16,920 Speaker 3: waiting to see us execute. But we've executed well on 288 00:15:17,000 --> 00:15:19,600 Speaker 3: that before, so I don't think people should expect us 289 00:15:19,640 --> 00:15:22,400 Speaker 3: not to over the next two or three years. And 290 00:15:22,440 --> 00:15:24,120 Speaker 3: then there was another little bit of confusion on the 291 00:15:24,160 --> 00:15:27,840 Speaker 3: day because we had presented Long Roads operating earnings on 292 00:15:27,880 --> 00:15:30,360 Speaker 3: a slightly different way than the way the team the 293 00:15:30,400 --> 00:15:34,560 Speaker 3: Long Road team had shown it in March, which even 294 00:15:34,600 --> 00:15:37,840 Speaker 3: though it was actually labeorly labeled correctly in March, people 295 00:15:37,840 --> 00:15:40,200 Speaker 3: had taken to mean something else. So once we tied 296 00:15:40,280 --> 00:15:42,600 Speaker 3: it up that message, I think people have reset their 297 00:15:42,640 --> 00:15:46,040 Speaker 3: expectations on what Long Roads earnings should be. But the 298 00:15:46,080 --> 00:15:48,640 Speaker 3: overall message there which I gave on the day was well, 299 00:15:48,640 --> 00:15:52,160 Speaker 3: it's the same projects at the same really attractive marginal 300 00:15:52,160 --> 00:15:54,360 Speaker 3: economics that we've already been talking about. This is really 301 00:15:54,400 --> 00:15:56,800 Speaker 3: just how you present the earnings as to win their turn. 302 00:15:56,680 --> 00:16:01,360 Speaker 1: Up, and the share prices recovered pretty much, you think, 303 00:16:01,520 --> 00:16:02,600 Speaker 1: I think so. 304 00:16:02,720 --> 00:16:05,640 Speaker 3: We had run quite a bit leading into the result. Actually, 305 00:16:05,680 --> 00:16:08,640 Speaker 3: just on that last day, which is an unusual actually, 306 00:16:08,640 --> 00:16:10,480 Speaker 3: people like to just in case you're going to run 307 00:16:10,480 --> 00:16:15,280 Speaker 3: ount something bombastic, buy a few more shares, so it 308 00:16:15,280 --> 00:16:16,840 Speaker 3: would be normal for it to trade back. You can 309 00:16:16,880 --> 00:16:18,840 Speaker 3: never really win on that, and I think we are 310 00:16:18,920 --> 00:16:21,920 Speaker 3: pretty much back to kind of the normalized share price 311 00:16:21,960 --> 00:16:23,560 Speaker 3: from what the team are telling me this morning. 312 00:16:24,920 --> 00:16:28,040 Speaker 1: Looking at the portfolio, it's always good to see what 313 00:16:28,080 --> 00:16:30,240 Speaker 1: the waitings are, how it might have changed from year 314 00:16:30,280 --> 00:16:33,800 Speaker 1: to year. What appeared to me that digital infrastructure really 315 00:16:34,000 --> 00:16:37,280 Speaker 1: is the one leading the charge renewables right up there too, 316 00:16:37,920 --> 00:16:42,920 Speaker 1: but as the waiting changing somewhat with the airport's the healthcare. 317 00:16:42,760 --> 00:16:46,520 Speaker 3: Digital, yeah, I think we was trying to give ourselves 318 00:16:46,560 --> 00:16:50,760 Speaker 3: the option to up or downweight sectors over time. So 319 00:16:50,800 --> 00:16:52,840 Speaker 3: you definitely think of healthcare as one of the newer 320 00:16:52,880 --> 00:16:59,360 Speaker 3: ideas that could increase assuming our thesis plays out as 321 00:16:59,360 --> 00:17:02,240 Speaker 3: we hoped or just well, even if we didn't expect 322 00:17:02,240 --> 00:17:04,199 Speaker 3: it to go well in the particular way it chooses to. 323 00:17:04,320 --> 00:17:08,399 Speaker 3: So that's one for the future. The airport is the airport. 324 00:17:08,440 --> 00:17:10,200 Speaker 3: It's very hard for us to buy another airport. 325 00:17:10,440 --> 00:17:12,320 Speaker 1: I'm going to say you've got airports, but actually we 326 00:17:12,359 --> 00:17:16,760 Speaker 1: have won airport and it's Wellington add Wellington. The city 327 00:17:16,800 --> 00:17:19,120 Speaker 1: council are wanting to sell these shares. Does that mean 328 00:17:19,200 --> 00:17:20,200 Speaker 1: you are going to buy? 329 00:17:20,359 --> 00:17:21,879 Speaker 3: And that's all they voted that last week. Well, I 330 00:17:21,880 --> 00:17:24,600 Speaker 3: don't know exactly what they're going to do. I think 331 00:17:24,680 --> 00:17:27,200 Speaker 3: infratil shiholders, she would expect us to take a look 332 00:17:27,200 --> 00:17:29,240 Speaker 3: if that was actually what they want to do. People 333 00:17:29,320 --> 00:17:30,080 Speaker 3: like that investment. 334 00:17:30,240 --> 00:17:31,080 Speaker 1: Is that something you'd like? 335 00:17:32,040 --> 00:17:33,879 Speaker 3: I don't know until I see it really. Actually, I 336 00:17:33,920 --> 00:17:36,120 Speaker 3: think there's a price for everything, right, There's a price 337 00:17:36,119 --> 00:17:38,680 Speaker 3: at which I would sell the airport too, so I know. 338 00:17:39,680 --> 00:17:43,000 Speaker 3: So it's all it's all dependent on what people want 339 00:17:43,040 --> 00:17:44,760 Speaker 3: for things, I think. But I think as it from 340 00:17:44,760 --> 00:17:47,480 Speaker 3: a portfolio strategy perspective, it's not off base at all. 341 00:17:48,040 --> 00:17:52,400 Speaker 1: Yeah, And the runway extension is always the other thing 342 00:17:52,440 --> 00:17:54,120 Speaker 1: that people investors always. 343 00:17:53,920 --> 00:17:56,560 Speaker 3: Want to know about think about. Yeah. I think in 344 00:17:56,720 --> 00:17:59,919 Speaker 3: Matt Clark, our CEO there, spoke about it at our 345 00:18:00,160 --> 00:18:03,840 Speaker 3: vest day March. I think what he was saying there 346 00:18:03,880 --> 00:18:06,360 Speaker 3: really is that there are a number of other technological 347 00:18:06,400 --> 00:18:08,960 Speaker 3: ways of achieving a similar outcome. He was talking about 348 00:18:08,960 --> 00:18:12,800 Speaker 3: a new plane stopping distances, some technology the team have 349 00:18:12,880 --> 00:18:15,960 Speaker 3: put in on the runway itself. It's got grooves and 350 00:18:16,000 --> 00:18:20,360 Speaker 3: a few other things that they're thinking about. We don't 351 00:18:20,359 --> 00:18:22,000 Speaker 3: need a runway extension. If we don't need one, we 352 00:18:22,080 --> 00:18:25,600 Speaker 3: just want to able to fly slightly further afield directly 353 00:18:25,680 --> 00:18:27,360 Speaker 3: rather than having the lovely walk. 354 00:18:27,160 --> 00:18:29,679 Speaker 1: In Auckland because it was Surfey's. I think are worried 355 00:18:29,760 --> 00:18:32,920 Speaker 1: and Wellington that you might change many things, I mean 356 00:18:32,960 --> 00:18:33,920 Speaker 1: fear but at stake. 357 00:18:33,800 --> 00:18:37,320 Speaker 3: Yeah, yeah, exactly. It's very important, no doubt. I mean 358 00:18:37,320 --> 00:18:40,000 Speaker 3: it's interesting, isn't it. Adam per TONI along that what 359 00:18:40,040 --> 00:18:42,280 Speaker 3: they're doing there with that big sea wall. I wonder 360 00:18:42,280 --> 00:18:44,159 Speaker 3: if they'll learn anything from that. That'll be interesting. But 361 00:18:44,560 --> 00:18:46,240 Speaker 3: have a lot of heck full of stone. 362 00:18:46,560 --> 00:18:50,960 Speaker 1: Yeah, that's interesting. Double digit growth, that's something, as we 363 00:18:51,160 --> 00:18:55,800 Speaker 1: discussed before, that you've been able to achieve. How long 364 00:18:55,800 --> 00:18:57,880 Speaker 1: can it keep going eleven to fifteen percent? I think 365 00:18:57,960 --> 00:19:01,199 Speaker 1: is what you're saying to shareholders. How confident are you 366 00:19:01,240 --> 00:19:04,560 Speaker 1: that that will keep coming? And can you better that? 367 00:19:05,720 --> 00:19:07,720 Speaker 3: I think we have bettered that, haven't we in the 368 00:19:07,800 --> 00:19:11,720 Speaker 3: last few years I think, I mean, you never know, 369 00:19:12,040 --> 00:19:14,320 Speaker 3: of course on these things, but we feel like the 370 00:19:14,320 --> 00:19:17,479 Speaker 3: portfolio is set up and the right way to give 371 00:19:17,520 --> 00:19:20,679 Speaker 3: us the best chance of achieving that. And mostly that's 372 00:19:20,720 --> 00:19:26,360 Speaker 3: through having your high single digit return underwritten by Wellington 373 00:19:26,400 --> 00:19:29,560 Speaker 3: Airport and something like one which in most cycles will 374 00:19:29,600 --> 00:19:33,120 Speaker 3: generate that return and that's a good chunk of for two. 375 00:19:33,520 --> 00:19:36,520 Speaker 3: But then also having these platforms like CDC and Long 376 00:19:36,600 --> 00:19:39,440 Speaker 3: Road who have this ability to build a new data 377 00:19:39,480 --> 00:19:42,720 Speaker 3: center or a new solar farm for fifteen plus percent 378 00:19:43,160 --> 00:19:47,040 Speaker 3: type returns if you model it. But that asset out 379 00:19:47,040 --> 00:19:49,280 Speaker 3: to its end of life. Of course, if you sell 380 00:19:49,320 --> 00:19:50,920 Speaker 3: it earlier, you bring a lot of that return forward 381 00:19:50,920 --> 00:19:53,680 Speaker 3: so you can earn even more. So to me, that 382 00:19:53,800 --> 00:19:56,720 Speaker 3: balance is that's always the critical one. And it feels 383 00:19:56,760 --> 00:19:59,000 Speaker 3: like we're in a good spot now and really the 384 00:19:59,080 --> 00:20:02,480 Speaker 3: task is to make sure those proportions stand the right 385 00:20:02,520 --> 00:20:04,879 Speaker 3: balance to produce the right outcome. 386 00:20:05,320 --> 00:20:08,199 Speaker 1: So that you've got cash cows if you like, with 387 00:20:08,280 --> 00:20:13,280 Speaker 1: one New Zealand the airport's those sorts, yeah, and then 388 00:20:13,359 --> 00:20:17,680 Speaker 1: you've got the other development prospects and also obviously that's 389 00:20:17,720 --> 00:20:19,280 Speaker 1: where a lot more capital we'll have to go up 390 00:20:19,280 --> 00:20:19,720 Speaker 1: as well. 391 00:20:19,720 --> 00:20:21,720 Speaker 3: That's right, that's right. So it's that balance of how 392 00:20:21,800 --> 00:20:24,920 Speaker 3: much you've got invested in those high single digital cash 393 00:20:24,960 --> 00:20:28,399 Speaker 3: car whatever you want to call them as sets, and 394 00:20:28,440 --> 00:20:30,879 Speaker 3: then how much can you how much do you need 395 00:20:30,920 --> 00:20:33,600 Speaker 3: to put in fifteen plus to keep the kind of 396 00:20:33,640 --> 00:20:36,600 Speaker 3: returns in the right range. The other important component if 397 00:20:36,600 --> 00:20:38,840 Speaker 3: you look back over our history of the returns is 398 00:20:40,119 --> 00:20:43,680 Speaker 3: some of those ones for the future maturing. So in 399 00:20:43,800 --> 00:20:46,919 Speaker 3: the past that's been SA Long Road and now you 400 00:20:47,000 --> 00:20:49,320 Speaker 3: have sort of gur and maybe as the one to 401 00:20:49,359 --> 00:20:53,480 Speaker 3: call out there. Yeah, So what happens often is when 402 00:20:53,520 --> 00:20:59,720 Speaker 3: those investments come of age, and sometimes that's made evident 403 00:20:59,760 --> 00:21:01,760 Speaker 3: by transaction. So in the case of Long Road, it 404 00:21:01,800 --> 00:21:06,119 Speaker 3: was when our partner's Munich reinvested and the value of 405 00:21:06,119 --> 00:21:08,320 Speaker 3: that asset became clear. That's when you get these kind 406 00:21:08,359 --> 00:21:10,760 Speaker 3: of big jumps and value as well. I think it 407 00:21:10,800 --> 00:21:14,480 Speaker 3: went up. The people's valuation of that business doubled or 408 00:21:14,520 --> 00:21:18,920 Speaker 3: tripled overnight through that through that value realization phase. You've 409 00:21:18,960 --> 00:21:20,480 Speaker 3: got those as well coming through. 410 00:21:20,920 --> 00:21:23,399 Speaker 1: Just on Long Road, we probably should explain that that 411 00:21:23,560 --> 00:21:27,240 Speaker 1: is the renewables business in the US, Yeah, and gurin 412 00:21:27,359 --> 00:21:30,639 Speaker 1: is the renewables business. In Singapore and in Philippines I 413 00:21:30,640 --> 00:21:31,920 Speaker 1: think is the other Yeah. 414 00:21:31,680 --> 00:21:35,640 Speaker 3: In Thailand and Korea and Japan, but mostly in Singapore. 415 00:21:35,720 --> 00:21:38,879 Speaker 1: The thinking of that lovely wael chest you've got to 416 00:21:39,240 --> 00:21:42,320 Speaker 1: eight hundred and twenty million, I think it was, and 417 00:21:42,359 --> 00:21:46,200 Speaker 1: the guidance there's obviously an opted opportunity there. Where are 418 00:21:46,200 --> 00:21:49,040 Speaker 1: you looking in the world. I imagine it's probably not here, 419 00:21:49,200 --> 00:21:52,080 Speaker 1: it's or Australia, it's elsewhere. 420 00:21:52,640 --> 00:21:54,720 Speaker 3: Yeah, should we look everywhere? And there are some interesting 421 00:21:54,760 --> 00:21:57,760 Speaker 3: assets here, but it's really just that balance of the portfolio. Really, 422 00:21:57,760 --> 00:22:00,000 Speaker 3: your stable cashier and as will tend to be here 423 00:22:01,640 --> 00:22:03,359 Speaker 3: where you can see and touch them, and we can 424 00:22:03,400 --> 00:22:06,360 Speaker 3: denye on the exactly you do want those ones performing, 425 00:22:07,560 --> 00:22:09,560 Speaker 3: but the ones where are we looking at in the future. 426 00:22:09,600 --> 00:22:12,320 Speaker 3: So we announced a transaction last year with Hong Kong 427 00:22:12,359 --> 00:22:17,680 Speaker 3: Telecom where they wanted a partner to invest in their 428 00:22:17,720 --> 00:22:21,960 Speaker 3: international business, which we haven't closed yet. So that's really 429 00:22:22,200 --> 00:22:26,800 Speaker 3: where that a good chunk of that available capital is 430 00:22:26,880 --> 00:22:29,879 Speaker 3: earmarked for. And so their international business. What I mean 431 00:22:29,960 --> 00:22:33,520 Speaker 3: by that, it's access to their exclusive access actually to 432 00:22:33,560 --> 00:22:37,120 Speaker 3: their international network of subse cables, which is extensive built 433 00:22:37,400 --> 00:22:42,520 Speaker 3: by that business and predecessor businesses over twenty years and 434 00:22:42,560 --> 00:22:45,000 Speaker 3: it carries nearly twenty percent of the world's Internet traffic. 435 00:22:45,040 --> 00:22:47,560 Speaker 3: To give you this and a sense of the reach 436 00:22:47,680 --> 00:22:50,800 Speaker 3: of that network, very attractive asset, and then they have 437 00:22:50,840 --> 00:22:56,440 Speaker 3: a business that effectively markets that capacity to enterprise customers, 438 00:22:56,440 --> 00:23:02,479 Speaker 3: wholesale customers, and then even smaller customers. Now can access 439 00:23:02,480 --> 00:23:06,000 Speaker 3: that network through a software platform they call Console Connect, 440 00:23:06,040 --> 00:23:09,320 Speaker 3: which means you can sort of go online and using 441 00:23:09,320 --> 00:23:13,320 Speaker 3: a credit card, provision capacity for ten minutes, one hour, 442 00:23:13,440 --> 00:23:17,639 Speaker 3: three days, three months to any point on their network 443 00:23:17,640 --> 00:23:20,040 Speaker 3: in the world, which is pretty much anywhere at whatever 444 00:23:20,200 --> 00:23:22,800 Speaker 3: kind of speed you might choose within the parameters that 445 00:23:22,800 --> 00:23:25,560 Speaker 3: the network allows. And it's really that part of the 446 00:23:25,560 --> 00:23:27,560 Speaker 3: business that we think is really the future of how 447 00:23:27,640 --> 00:23:30,840 Speaker 3: people will buy connectivity, because you don't need in the 448 00:23:30,880 --> 00:23:35,320 Speaker 3: old world used to lease aligne for three years at 449 00:23:35,359 --> 00:23:37,639 Speaker 3: a fixed cost whether you are using it all or not. 450 00:23:38,320 --> 00:23:40,800 Speaker 3: This software and there are sort of two or three 451 00:23:40,840 --> 00:23:42,600 Speaker 3: others in the world that can do this, but not many. 452 00:23:43,000 --> 00:23:46,240 Speaker 3: This software allows you to say, well, actually, I'm broadcasting 453 00:23:46,320 --> 00:23:49,199 Speaker 3: from the Olympics for the next three months, and I 454 00:23:49,280 --> 00:23:53,840 Speaker 3: need provision capacity down to Africa, say for my customers there, 455 00:23:53,960 --> 00:23:57,160 Speaker 3: I can buy capacity on that line. That's incredibly high 456 00:23:57,240 --> 00:23:59,399 Speaker 3: quality because we own the network, but I only have 457 00:23:59,400 --> 00:24:01,240 Speaker 3: to pay for it for that period pare of time. 458 00:24:01,359 --> 00:24:02,800 Speaker 1: Yeah, gosh, exciting. 459 00:24:02,920 --> 00:24:03,120 Speaker 3: Yeah. 460 00:24:03,240 --> 00:24:05,800 Speaker 1: So what about Saudi Arabia and Middle East, all those 461 00:24:05,840 --> 00:24:07,840 Speaker 1: sorts of places, I mean, they seem to be going 462 00:24:07,880 --> 00:24:11,040 Speaker 1: off in terms of infrastructure and renewables. 463 00:24:11,200 --> 00:24:13,760 Speaker 3: Yeah, we haven't really looked too much there. Actually a 464 00:24:13,760 --> 00:24:16,840 Speaker 3: lot of what in our world, what we see from 465 00:24:16,960 --> 00:24:20,400 Speaker 3: that part of the world is really well funded investors 466 00:24:20,480 --> 00:24:23,639 Speaker 3: actually who are reaching out into Asia Pacific and particularly 467 00:24:24,119 --> 00:24:26,919 Speaker 3: to invest to take the money they've earned from all 468 00:24:26,960 --> 00:24:29,520 Speaker 3: of those good things and invest in Asia Pacific. But 469 00:24:29,560 --> 00:24:32,119 Speaker 3: we haven't actually spent a lot of time there yet. Anyway, 470 00:24:32,760 --> 00:24:36,560 Speaker 3: I think we're really excited about Asia Pacific actually, And 471 00:24:36,680 --> 00:24:39,840 Speaker 3: a lot of infrastructure investors. If you looked at you 472 00:24:39,880 --> 00:24:44,520 Speaker 3: know KKR who are listed or the other unlisted infrastructure 473 00:24:44,520 --> 00:24:46,680 Speaker 3: funds that are being closed around the world, a lot 474 00:24:46,720 --> 00:24:49,679 Speaker 3: of them have an Asia Pacific focus. And that's really 475 00:24:50,400 --> 00:24:53,800 Speaker 3: you know, population growth. You have quite strong GDP growth 476 00:24:53,840 --> 00:24:57,840 Speaker 3: in an emerging middle class and growing middle class, which 477 00:24:58,080 --> 00:25:01,320 Speaker 3: is important in terms of their ongoing growth. You have 478 00:25:01,359 --> 00:25:08,520 Speaker 3: electrification and because they don't really have the inflation problem 479 00:25:08,520 --> 00:25:10,240 Speaker 3: that most of the West has, which is going to 480 00:25:10,280 --> 00:25:12,240 Speaker 3: lead to higher interest rates, so you have a nicer 481 00:25:12,280 --> 00:25:14,360 Speaker 3: interest rate outlook. I think in that market that makes 482 00:25:14,400 --> 00:25:17,960 Speaker 3: it quite interesting for infrastructure investors anyway, in. 483 00:25:17,920 --> 00:25:21,280 Speaker 1: A bit of a hedge. Yeah, so India would be 484 00:25:21,680 --> 00:25:27,320 Speaker 1: among a lot I imagine, given its population and class. 485 00:25:26,880 --> 00:25:31,199 Speaker 3: It's a very interesting market from a fundamental perspective, and 486 00:25:31,240 --> 00:25:34,680 Speaker 3: we've done a bunch of work on it. We've tried 487 00:25:34,720 --> 00:25:36,760 Speaker 3: a few things and haven't landed something that we would like, 488 00:25:36,800 --> 00:25:38,280 Speaker 3: but I think it is interesting yet. 489 00:25:39,160 --> 00:25:43,000 Speaker 1: Now dayson, let's look at sustainability. You guys seem to 490 00:25:43,040 --> 00:25:45,159 Speaker 1: be leading the charge somewhat. You did put out a 491 00:25:45,200 --> 00:25:48,000 Speaker 1: sustainability of report last year, your first one, and then 492 00:25:48,160 --> 00:25:53,040 Speaker 1: obviously climate related disclosures. They are compulsory for a number 493 00:25:53,080 --> 00:25:56,080 Speaker 1: of ZiT X and ASEX listed companies, and there's a 494 00:25:56,119 --> 00:25:59,960 Speaker 1: lot of consternation about the different standards. We aren't there yet. 495 00:26:00,000 --> 00:26:04,480 Speaker 1: It's confusing, it's onerous, but surely you know is a 496 00:26:04,520 --> 00:26:08,120 Speaker 1: way to go. You've obviously thought about it prior. How 497 00:26:08,119 --> 00:26:09,120 Speaker 1: has that process been. 498 00:26:10,000 --> 00:26:14,960 Speaker 3: I don't necessarily disagree with all those conversation from my peers. 499 00:26:15,160 --> 00:26:16,720 Speaker 3: I don't know if it's a necessarily evil, but it 500 00:26:16,800 --> 00:26:18,879 Speaker 3: is it does seem like the right thing to do 501 00:26:18,960 --> 00:26:21,960 Speaker 3: because and there's just a million ways you can count 502 00:26:22,000 --> 00:26:23,880 Speaker 3: these things at the end of the day, and we're 503 00:26:23,880 --> 00:26:26,920 Speaker 3: only going to make progress if we can coalesce around 504 00:26:27,560 --> 00:26:31,360 Speaker 3: a pretty standard set of ways of counting carbon. There's 505 00:26:31,359 --> 00:26:35,880 Speaker 3: still plenty of double triple counting available, but you've kind 506 00:26:35,880 --> 00:26:37,920 Speaker 3: of just got to get started, I think. So, I mean, 507 00:26:37,920 --> 00:26:40,879 Speaker 3: we're supportive. We've invested quite a lot actually in learning 508 00:26:40,920 --> 00:26:43,879 Speaker 3: a lot about this because we have fifteen different businesses 509 00:26:44,280 --> 00:26:48,320 Speaker 3: for different sectors. You're encountering these kind of double counting 510 00:26:48,320 --> 00:26:51,120 Speaker 3: and border issues and lots of different ways. So it's 511 00:26:51,119 --> 00:26:53,040 Speaker 3: actually taken quite a bit of time for us and 512 00:26:53,240 --> 00:26:55,840 Speaker 3: our management teams to get to where we've got to. 513 00:26:55,880 --> 00:26:57,600 Speaker 3: And I would agree with the current that we're not 514 00:26:58,480 --> 00:27:02,439 Speaker 3: fully yet. Only the kind of good thing for us 515 00:27:02,800 --> 00:27:06,399 Speaker 3: is that New Zealand has pushed ahead really of the 516 00:27:06,440 --> 00:27:08,600 Speaker 3: rest of the world so in a lot of ways 517 00:27:08,640 --> 00:27:11,600 Speaker 3: in terms of making these compulsory. So Australia, yeah, so 518 00:27:11,640 --> 00:27:14,040 Speaker 3: Australia is not till next year, I think, and maybe 519 00:27:14,040 --> 00:27:16,160 Speaker 3: the year after really win it by it so it's 520 00:27:16,240 --> 00:27:18,680 Speaker 3: quite helpful for say CDC to see how we're going 521 00:27:18,720 --> 00:27:22,919 Speaker 3: through it now and then take what we've learned and 522 00:27:22,960 --> 00:27:24,960 Speaker 3: applied to them as they come. So I think that's 523 00:27:25,000 --> 00:27:28,439 Speaker 3: quite good for us because we operate everywhere anyway, But 524 00:27:28,680 --> 00:27:30,800 Speaker 3: that might not work for everyone who doesn't because. 525 00:27:30,600 --> 00:27:32,960 Speaker 1: CDC aren't they net zero here in New Zealand. But 526 00:27:33,040 --> 00:27:35,800 Speaker 1: that's what they're working toward in Australia. That's right, that's right, 527 00:27:35,880 --> 00:27:38,600 Speaker 1: because that brings me to another question. I mean we've 528 00:27:38,640 --> 00:27:42,600 Speaker 1: talked about, you know, the scale and the demand that 529 00:27:42,640 --> 00:27:45,800 Speaker 1: those data centers are having to now put out, and 530 00:27:45,840 --> 00:27:47,720 Speaker 1: you know it's going great for you, but I mean 531 00:27:47,800 --> 00:27:49,439 Speaker 1: AI is an aspect of that. 532 00:27:49,880 --> 00:27:50,359 Speaker 3: There's a lot of. 533 00:27:50,320 --> 00:27:53,760 Speaker 1: Criticism with AI in terms of the environmental impact power 534 00:27:53,760 --> 00:27:56,600 Speaker 1: and the like. Can you tak me through how that 535 00:27:56,680 --> 00:27:59,680 Speaker 1: works in terms of balancing sustainability? I think I think 536 00:27:59,760 --> 00:28:04,479 Speaker 1: some of the data centers do have some renewable powers them, 537 00:28:04,480 --> 00:28:05,800 Speaker 1: I mean, how do they work? 538 00:28:06,080 --> 00:28:12,200 Speaker 3: Yeah, So it's totally the issue I think on data 539 00:28:12,240 --> 00:28:16,640 Speaker 3: centers in this new capacity for generative AI, because it's 540 00:28:16,680 --> 00:28:21,560 Speaker 3: such a huge chunk of megawats that needs to be 541 00:28:21,640 --> 00:28:25,920 Speaker 3: generated most you know, if you're dealing and most of 542 00:28:25,960 --> 00:28:30,040 Speaker 3: this is provisioned by hyperscalars that brands everyone knows and 543 00:28:30,080 --> 00:28:33,199 Speaker 3: they buy their power. So we're a little bit on 544 00:28:33,280 --> 00:28:35,239 Speaker 3: the side of how they choose to do that, but 545 00:28:35,560 --> 00:28:39,480 Speaker 3: we're not disinterested at all and how they do it 546 00:28:39,920 --> 00:28:44,400 Speaker 3: and what's available over time. I think in Australia, where 547 00:28:44,400 --> 00:28:46,520 Speaker 3: a lot of the capacity we're talking about is going in, 548 00:28:47,200 --> 00:28:51,440 Speaker 3: there is huge resource available to them if the transmission 549 00:28:51,600 --> 00:28:55,000 Speaker 3: capacity can be brought online. So for me, I don't 550 00:28:55,040 --> 00:28:57,280 Speaker 3: worry about it so much in the medium tom because 551 00:28:57,320 --> 00:28:59,760 Speaker 3: of the fundamental structure of that market and the availability 552 00:28:59,760 --> 00:29:01,840 Speaker 3: of soul and wind. It's going to be just these 553 00:29:01,880 --> 00:29:05,000 Speaker 3: pinch points really where if it runs too far ahead 554 00:29:05,120 --> 00:29:07,120 Speaker 3: and then there are compromises that need to be made 555 00:29:07,120 --> 00:29:10,040 Speaker 3: about where the power goes, that you need to really worry. 556 00:29:10,120 --> 00:29:15,800 Speaker 3: So most of our customers will be investing in large 557 00:29:15,800 --> 00:29:18,960 Speaker 3: customers would be investing and bringing on new renewable power 558 00:29:19,040 --> 00:29:21,360 Speaker 3: in order to power their data centers, but getting the 559 00:29:21,440 --> 00:29:24,280 Speaker 3: timing to line up, I think that'll be a real challenge. 560 00:29:24,320 --> 00:29:26,520 Speaker 3: So there will be an issue that will need to 561 00:29:26,560 --> 00:29:29,480 Speaker 3: be worked through and mostly driven by our customers who 562 00:29:29,520 --> 00:29:33,320 Speaker 3: actually dictate the pace of rollout of their equipment, but 563 00:29:33,400 --> 00:29:36,640 Speaker 3: also have all the levers that can pull to procure 564 00:29:36,680 --> 00:29:40,240 Speaker 3: the renewable energy. And then I think there are still 565 00:29:40,280 --> 00:29:44,240 Speaker 3: many other areas where data center sustainability needs to be examined. 566 00:29:44,240 --> 00:29:47,040 Speaker 3: One would be the use of water is becoming an 567 00:29:47,080 --> 00:29:51,160 Speaker 3: increasingly big focus where actually our data centers are really 568 00:29:51,200 --> 00:29:53,760 Speaker 3: well placed. But then also there's this tricky issue of 569 00:29:53,760 --> 00:29:58,840 Speaker 3: embodied carbon, so using concrete and steel, which no one's 570 00:29:58,920 --> 00:30:02,160 Speaker 3: really on top of yet, and that but actually going 571 00:30:02,200 --> 00:30:04,880 Speaker 3: back to where you started these CIDs, because you'll figure 572 00:30:04,880 --> 00:30:06,840 Speaker 3: out a way to start counting them is totally how 573 00:30:07,200 --> 00:30:09,880 Speaker 3: you'll end up figuring out what the trade offs are 574 00:30:10,560 --> 00:30:12,920 Speaker 3: in order to bring in more sustainable versions of both 575 00:30:12,920 --> 00:30:16,400 Speaker 3: of those things concrete and steel into the construction. 576 00:30:16,640 --> 00:30:21,240 Speaker 1: Speaking of AI, it's something that obviously is changing rapidly 577 00:30:21,400 --> 00:30:25,680 Speaker 1: and is everywhere. As you know, in terms of your 578 00:30:25,720 --> 00:30:29,520 Speaker 1: company in modeling and what you foresee, you've always done 579 00:30:29,560 --> 00:30:32,600 Speaker 1: pretty well in that regard. Did you see it coming 580 00:30:33,080 --> 00:30:35,720 Speaker 1: in the way that it's manifested and where do you 581 00:30:35,760 --> 00:30:37,960 Speaker 1: see the potential and where it goes? Yeah? 582 00:30:38,160 --> 00:30:41,680 Speaker 3: No, I mean definitely not. But we had been doing 583 00:30:42,720 --> 00:30:46,600 Speaker 3: work on disruptive technologies for infrastructure for quite a few years. 584 00:30:46,600 --> 00:30:49,320 Speaker 3: We invested in a Finch Capital firm. This isn't for two, 585 00:30:50,520 --> 00:30:53,280 Speaker 3: maybe six or seven years ago now based in San Francisco, 586 00:30:53,360 --> 00:30:55,360 Speaker 3: and the idea is a very small investment. I think 587 00:30:55,400 --> 00:30:57,920 Speaker 3: it was twenty five million US and we don't talk 588 00:30:57,960 --> 00:31:00,840 Speaker 3: about it a lot, although it's clear and the accounts 589 00:31:00,840 --> 00:31:03,040 Speaker 3: that it's there. But really the purpose of that was 590 00:31:03,040 --> 00:31:05,120 Speaker 3: to keep an eye on developments like this, and it's 591 00:31:05,160 --> 00:31:08,640 Speaker 3: always had a big machine learning an AI component to 592 00:31:10,000 --> 00:31:14,280 Speaker 3: this sort of big bangs definitely not definitely not envisaged, 593 00:31:14,320 --> 00:31:17,360 Speaker 3: but that's how we try and get it least conversant 594 00:31:17,480 --> 00:31:20,080 Speaker 3: with what the issues could be with these new technologies. 595 00:31:20,120 --> 00:31:24,520 Speaker 3: So you know, optimization and utilization of infrastructure would definitely 596 00:31:24,560 --> 00:31:26,400 Speaker 3: be quite familiar with that theme, which I think is 597 00:31:26,440 --> 00:31:30,400 Speaker 3: definitely an early application for generative AI that's relevant to us. 598 00:31:32,120 --> 00:31:34,880 Speaker 3: And then you know from here that businesses themselves learn 599 00:31:34,960 --> 00:31:37,000 Speaker 3: a lot as well. So you know, one en z 600 00:31:37,360 --> 00:31:40,800 Speaker 3: or the healthcare businesses which are all now using forms 601 00:31:40,800 --> 00:31:44,440 Speaker 3: of AI, need to be conversing in the kind of 602 00:31:44,440 --> 00:31:47,240 Speaker 3: guardrails and security elements of all those things as well, 603 00:31:47,280 --> 00:31:52,040 Speaker 3: which we learned from. 604 00:31:50,000 --> 00:31:53,200 Speaker 1: Just looking at outlock. Then you did give some guidance. 605 00:31:53,960 --> 00:31:56,640 Speaker 1: I think earnings looking at nine hundred and eighty million 606 00:31:56,720 --> 00:32:01,680 Speaker 1: to one point zero three more billion actually, which will 607 00:32:01,720 --> 00:32:04,800 Speaker 1: be the first time in the Big BS. You're pretty 608 00:32:04,800 --> 00:32:06,000 Speaker 1: confident of getting there. 609 00:32:06,280 --> 00:32:09,960 Speaker 3: Yeah. Yeah, we always stress test that guidance. We've got 610 00:32:09,960 --> 00:32:12,600 Speaker 3: a really good history of heading our guidance well last 611 00:32:12,680 --> 00:32:15,240 Speaker 3: year getting above it and we're still early days, so 612 00:32:15,560 --> 00:32:18,880 Speaker 3: we update so thankfully, still looking good. We update those 613 00:32:19,000 --> 00:32:21,160 Speaker 3: usually we get a little update at the AGM then 614 00:32:21,240 --> 00:32:23,200 Speaker 3: and a half year so people can track it as 615 00:32:23,200 --> 00:32:24,200 Speaker 3: we go along as that going on? 616 00:32:24,400 --> 00:32:27,720 Speaker 1: Right, Okay, and Jason, what excites you about the future. 617 00:32:29,000 --> 00:32:31,360 Speaker 3: I think trying to become that great New Zealand company 618 00:32:31,400 --> 00:32:34,320 Speaker 3: is pretty exciting. Actually, a global version of what we've 619 00:32:34,360 --> 00:32:38,560 Speaker 3: got would be really exciting I think for cheerholders, which 620 00:32:38,560 --> 00:32:44,080 Speaker 3: includes me and actually a company that's known for I 621 00:32:44,120 --> 00:32:46,840 Speaker 3: think being relevant, as I said, that looks after its staff, 622 00:32:46,880 --> 00:32:49,480 Speaker 3: that looks up to its neighbors, that would be a 623 00:32:49,560 --> 00:32:50,280 Speaker 3: very happy place. 624 00:32:50,640 --> 00:32:53,480 Speaker 1: That's been a great chat, Jason, thanks for your insights 625 00:32:53,600 --> 00:32:54,800 Speaker 1: and for hosting us today. 626 00:32:55,000 --> 00:32:56,440 Speaker 3: Thank you for having me. Let's see you again.