1 00:00:01,960 --> 00:00:04,800 Speaker 1: Jodder and welcome to Shared Lunch, brought to you by Chasea's. 2 00:00:05,080 --> 00:00:08,840 Speaker 1: I'm Helen Madison and today we're at Wellington Airport, which 3 00:00:08,880 --> 00:00:12,160 Speaker 1: is one of the oldest assets for infrastructure investment company 4 00:00:12,320 --> 00:00:16,439 Speaker 1: infratil now Vertill is super popular on Cheza's And in 5 00:00:16,480 --> 00:00:19,360 Speaker 1: a moment I'll be speak with Jason Boys, the CEO, 6 00:00:19,640 --> 00:00:23,040 Speaker 1: about the full year results, the challenges and the outlook. 7 00:00:23,560 --> 00:00:27,200 Speaker 1: Well also look at what's happening to Wellington Airport now 8 00:00:27,400 --> 00:00:28,360 Speaker 1: the eagles have gone. 9 00:00:28,560 --> 00:00:31,159 Speaker 2: Investing involves a risk you might lose the money you 10 00:00:31,200 --> 00:00:34,479 Speaker 2: start with. We recommend talking to a licensed financial advisor. 11 00:00:35,200 --> 00:00:39,040 Speaker 2: We also recommend reading product disclosure documents before deciding to invest. 12 00:00:39,280 --> 00:00:40,320 Speaker 3: Everything you're about. 13 00:00:40,120 --> 00:00:42,519 Speaker 2: To see and here is current at the time of recording. 14 00:00:42,720 --> 00:00:45,720 Speaker 1: Hi Jason, thank you for having us here at Wellington. 15 00:00:45,920 --> 00:00:47,720 Speaker 4: Thanks you for coming Now. 16 00:00:47,760 --> 00:00:53,600 Speaker 1: Wellington Airport is an iconic infrastructure piece for Wellington. That said, 17 00:00:53,640 --> 00:00:57,600 Speaker 1: poor old Wellington hasn't had the easiest time public service 18 00:00:58,080 --> 00:01:01,200 Speaker 1: cuts and the like, and yeah, it's been an adulgen 19 00:01:01,360 --> 00:01:05,440 Speaker 1: So what hecet does Wellington Airport play in that recovery? 20 00:01:05,680 --> 00:01:09,880 Speaker 4: Yeah, yeah, I agree with both. Live in Wellington, we 21 00:01:09,880 --> 00:01:12,560 Speaker 4: we feel how the city has changed over the last 22 00:01:12,640 --> 00:01:16,160 Speaker 4: year or so. From our perspective in Wellington Airports, this 23 00:01:16,200 --> 00:01:18,520 Speaker 4: is the front door to the city and we take 24 00:01:18,560 --> 00:01:21,520 Speaker 4: that really seriously. And even though we've got a lot 25 00:01:21,520 --> 00:01:23,000 Speaker 4: of construction going on, which we'll go and have a 26 00:01:23,040 --> 00:01:26,080 Speaker 4: look at in a second, you know, we do stuff 27 00:01:26,120 --> 00:01:28,959 Speaker 4: like this to make it feel like, you know, this 28 00:01:29,040 --> 00:01:31,280 Speaker 4: is you've arrived in Wellington. I think we're going to 29 00:01:31,360 --> 00:01:33,399 Speaker 4: keep investing though. One thing that has been quite good. 30 00:01:33,440 --> 00:01:35,840 Speaker 4: I know domestic has been tough with what's been going 31 00:01:35,920 --> 00:01:38,120 Speaker 4: on with the government, but actually international has been an 32 00:01:38,160 --> 00:01:41,360 Speaker 4: incredible success story over the last years. So the team's 33 00:01:41,360 --> 00:01:44,240 Speaker 4: done incredibly well and there's more good stuff there to come, 34 00:01:45,160 --> 00:01:48,240 Speaker 4: and so we're continuing to invest to give us the 35 00:01:48,240 --> 00:01:51,200 Speaker 4: best of options for international growth, which we can talk 36 00:01:51,200 --> 00:01:53,480 Speaker 4: about in a minute and sort of get ready for 37 00:01:53,520 --> 00:01:55,120 Speaker 4: when domestic returns. 38 00:01:55,560 --> 00:02:00,200 Speaker 1: So quantus they decided they will increase their three you're 39 00:02:00,240 --> 00:02:01,960 Speaker 1: like thirty one percent for summer. 40 00:02:02,040 --> 00:02:04,560 Speaker 3: Yeah, so that will be quite a boon for the airport. 41 00:02:04,760 --> 00:02:06,520 Speaker 4: Pretty exciting. So at the moment, if you want to 42 00:02:06,560 --> 00:02:08,640 Speaker 4: fly to Sydney from here, right, everybody's got up at 43 00:02:08,680 --> 00:02:10,520 Speaker 4: three thirty in the morning and slipped their way down 44 00:02:10,560 --> 00:02:12,919 Speaker 4: here and all that sort of stuff. But now they 45 00:02:13,080 --> 00:02:15,040 Speaker 4: are talking about putting on or they are going to 46 00:02:15,040 --> 00:02:16,799 Speaker 4: put on one that I think they live around nine 47 00:02:16,880 --> 00:02:19,480 Speaker 4: or something in the morning, like much more civilized and 48 00:02:19,600 --> 00:02:21,880 Speaker 4: civilized times. And you can fly back in the afternoon 49 00:02:21,919 --> 00:02:23,359 Speaker 4: from Sydney as well. I think you leave at one 50 00:02:23,360 --> 00:02:24,239 Speaker 4: and you'll get back at. 51 00:02:24,160 --> 00:02:26,720 Speaker 3: Six or something like that, not the midnight. 52 00:02:26,400 --> 00:02:28,280 Speaker 4: Not even the midnight one if you don't want to 53 00:02:28,520 --> 00:02:30,840 Speaker 4: so or you know, come back on the morning flight. 54 00:02:30,880 --> 00:02:33,680 Speaker 4: But your whole day's gone, yes as well. So that's 55 00:02:33,720 --> 00:02:35,680 Speaker 4: pretty exciting I think for the city. 56 00:02:36,600 --> 00:02:39,440 Speaker 1: In terms of Lloyd Morrison's vision that he was the 57 00:02:39,520 --> 00:02:42,720 Speaker 1: founder of Infantil and way back thirty plus years ago 58 00:02:43,080 --> 00:02:47,000 Speaker 1: he always liked the es sat but although it was 59 00:02:47,040 --> 00:02:49,400 Speaker 1: always not the Crown and the Jewel, but it was 60 00:02:50,560 --> 00:02:54,800 Speaker 1: kind of nostalgic. It was one that he couldn't see selling. 61 00:02:55,400 --> 00:02:59,200 Speaker 1: Things have changed though, the world is different. Where does 62 00:02:59,280 --> 00:03:03,919 Speaker 1: in patrol position Wellington Airport longer term? 63 00:03:04,520 --> 00:03:07,560 Speaker 4: So airports are a great asset to own and it's 64 00:03:07,639 --> 00:03:10,320 Speaker 4: in the stable cashlow generating part of our portfolio that 65 00:03:10,440 --> 00:03:13,720 Speaker 4: we talk about and does a great job. So if 66 00:03:13,760 --> 00:03:16,320 Speaker 4: we could have more airports and good value. You know, 67 00:03:16,360 --> 00:03:17,840 Speaker 4: I think there would be a great place to be 68 00:03:17,919 --> 00:03:21,840 Speaker 4: putting all our money frankly. But also we talked to 69 00:03:21,919 --> 00:03:24,760 Speaker 4: the full year results a couple of weeks ago about 70 00:03:24,760 --> 00:03:27,040 Speaker 4: the fact that as the portfolio grows, the cash flow 71 00:03:27,080 --> 00:03:29,280 Speaker 4: generating parts of the portfolio need to grow with it. 72 00:03:29,400 --> 00:03:32,359 Speaker 4: So that would need to happen in around the airport 73 00:03:32,400 --> 00:03:34,120 Speaker 4: and we have a few ideas about how that can happen. 74 00:03:34,440 --> 00:03:37,160 Speaker 4: But eventually you can sort of outgrow some of the 75 00:03:37,200 --> 00:03:40,080 Speaker 4: assets over time. It's not the case for Wellington Airport today, 76 00:03:40,120 --> 00:03:41,520 Speaker 4: but it could be in the future. Agree. 77 00:03:41,960 --> 00:03:43,640 Speaker 1: One thing a lot of people want to know though, 78 00:03:43,760 --> 00:03:46,600 Speaker 1: is that Eagles are gone, small is still here? 79 00:03:48,040 --> 00:03:49,200 Speaker 3: Is there anything else coming? 80 00:03:49,360 --> 00:03:52,720 Speaker 4: There is and it's pretty exciting actually, but Macluk CEO 81 00:03:52,800 --> 00:03:55,880 Speaker 4: has swam media secrecy, so can't tell you just now. 82 00:03:58,320 --> 00:04:02,080 Speaker 1: So, Jason, the airport has a five hundred million dollar 83 00:04:02,280 --> 00:04:06,480 Speaker 1: five year infrastructure project that's underway. Can you tell us 84 00:04:06,480 --> 00:04:09,680 Speaker 1: a bit about what that means, particularly for the runway 85 00:04:09,720 --> 00:04:13,200 Speaker 1: that was always a bit of bone of contention because 86 00:04:13,240 --> 00:04:17,400 Speaker 1: it wasn't long enough and it did prevent some overseas 87 00:04:18,240 --> 00:04:19,160 Speaker 1: carriers coming. 88 00:04:20,640 --> 00:04:23,320 Speaker 4: It was pretty exciting actually of that five hundred, the 89 00:04:23,400 --> 00:04:26,920 Speaker 4: team has already invested over one hundred of that in 90 00:04:27,040 --> 00:04:32,400 Speaker 4: just the last year. The big bulk of the capital 91 00:04:32,480 --> 00:04:36,440 Speaker 4: program is kind of getting Wellington Airport set for that 92 00:04:36,480 --> 00:04:39,679 Speaker 4: future international growth that you mentioned. So the first stuff 93 00:04:39,720 --> 00:04:41,719 Speaker 4: that's happened a little bit boring is the car parks 94 00:04:41,760 --> 00:04:44,800 Speaker 4: been moved across the back, which then creates room for 95 00:04:45,000 --> 00:04:48,279 Speaker 4: the taxiway where the planes are to move wider, and 96 00:04:48,320 --> 00:04:51,960 Speaker 4: that means we can move more domestic round that way 97 00:04:52,040 --> 00:04:55,240 Speaker 4: and international in the future. And then there's a big 98 00:04:55,279 --> 00:04:59,320 Speaker 4: baggage facility investment that needs to happen in our baggage 99 00:04:59,320 --> 00:05:04,480 Speaker 4: belt sometimes break down sadly, so finally having the opportunity 100 00:05:04,520 --> 00:05:06,680 Speaker 4: to get that in the plan and replaced with our 101 00:05:07,320 --> 00:05:09,960 Speaker 4: airline partners who ultimately end up paying for all of this, 102 00:05:10,000 --> 00:05:12,000 Speaker 4: which is what we've agreed is a fantastic I think 103 00:05:12,000 --> 00:05:14,880 Speaker 4: development for the city. And then the last pieces you 104 00:05:14,920 --> 00:05:19,200 Speaker 4: mentioned is the runway length and that was a big 105 00:05:19,240 --> 00:05:23,240 Speaker 4: project and what the team are installing is what is 106 00:05:23,279 --> 00:05:26,760 Speaker 4: called EMASS, which is a way of slowing down planes 107 00:05:26,800 --> 00:05:29,679 Speaker 4: if they need to be slowed down in the runoff 108 00:05:29,720 --> 00:05:32,760 Speaker 4: areas of the runway, and that means you actually get 109 00:05:32,760 --> 00:05:34,760 Speaker 4: more operating link out of the runway than we currently have, 110 00:05:35,400 --> 00:05:39,360 Speaker 4: but also that you effectively get more operating length for 111 00:05:39,600 --> 00:05:42,880 Speaker 4: these long range aircraft. So I think when it's done, 112 00:05:42,920 --> 00:05:44,920 Speaker 4: we'll be able to take aircraft, some of the new 113 00:05:44,960 --> 00:05:47,800 Speaker 4: aircraft that can fly from Asia or even from the 114 00:05:47,839 --> 00:05:51,360 Speaker 4: States and land and depart fully loaded from here, which 115 00:05:51,360 --> 00:05:53,640 Speaker 4: will be finally kind of the vision for the airport 116 00:05:53,680 --> 00:05:56,360 Speaker 4: really with a lot less investment and a lot less 117 00:05:56,360 --> 00:05:57,520 Speaker 4: intrusive on the bay of. 118 00:05:57,560 --> 00:06:02,000 Speaker 1: Listening in terms of the actual land around the airport 119 00:06:02,160 --> 00:06:05,400 Speaker 1: that's also in development. I know that the city council 120 00:06:05,480 --> 00:06:09,400 Speaker 1: have sold you for properties on the Lyle Bay Parade 121 00:06:09,400 --> 00:06:11,920 Speaker 1: if you like, near the surf beach. 122 00:06:11,720 --> 00:06:12,880 Speaker 3: And there's all sorts of things. 123 00:06:13,040 --> 00:06:17,719 Speaker 1: I think it's a surfing hub, other recreational aspects, hospitality, 124 00:06:17,920 --> 00:06:18,479 Speaker 1: you name it. 125 00:06:18,960 --> 00:06:22,640 Speaker 3: How does that work in with what fatils vision. It's 126 00:06:22,839 --> 00:06:23,679 Speaker 3: for the airport. 127 00:06:24,640 --> 00:06:27,359 Speaker 4: So within the airport, and this goes back to Lloyd, 128 00:06:27,360 --> 00:06:30,160 Speaker 4: our founder and his philosophy around the airport's. His idea 129 00:06:30,279 --> 00:06:33,719 Speaker 4: really was that as the airport owner, we're the best 130 00:06:33,720 --> 00:06:36,719 Speaker 4: developer of the land around it. And that is both 131 00:06:36,839 --> 00:06:39,000 Speaker 4: in terms of things that serve the airport, but also 132 00:06:40,560 --> 00:06:43,320 Speaker 4: building in flexibility so if the airport needs to expand 133 00:06:43,320 --> 00:06:45,400 Speaker 4: like we're doing now, you can have that land bag 134 00:06:45,480 --> 00:06:48,800 Speaker 4: later on. So that's not unusue for us to invest 135 00:06:48,800 --> 00:06:50,880 Speaker 4: in the land around the airport, be the developer, but 136 00:06:50,920 --> 00:06:52,680 Speaker 4: do it in a way that we know is not 137 00:06:52,680 --> 00:06:55,159 Speaker 4: going to affect the airport's operations, but enables us that 138 00:06:55,200 --> 00:06:56,440 Speaker 4: flexibility later on. 139 00:06:56,839 --> 00:06:59,159 Speaker 1: That's a nice sad way into thinking about the full 140 00:06:59,200 --> 00:07:00,920 Speaker 1: year results which came out, you know. 141 00:07:01,120 --> 00:07:02,880 Speaker 3: A few days ago. 142 00:07:04,480 --> 00:07:06,760 Speaker 1: From one I could see it was quite a challenging 143 00:07:06,800 --> 00:07:11,440 Speaker 1: time optically and particularly for the understanding of retail investors, 144 00:07:11,840 --> 00:07:14,240 Speaker 1: which is our audience, and that you know, there was 145 00:07:14,280 --> 00:07:19,760 Speaker 1: a net loss, there was a big management fee, there 146 00:07:19,840 --> 00:07:23,760 Speaker 1: was a concern about cash flow, a number of things 147 00:07:23,880 --> 00:07:27,760 Speaker 1: which even though underlying earnings you know, were quite a robust, 148 00:07:28,640 --> 00:07:32,040 Speaker 1: that's quite a hard story to tell. So what was 149 00:07:32,120 --> 00:07:33,560 Speaker 1: your sort of strategy with that. 150 00:07:34,400 --> 00:07:36,040 Speaker 4: We always look at it in two ways. One is 151 00:07:36,080 --> 00:07:38,960 Speaker 4: the underlying operating performance of the businesses, which always needs 152 00:07:38,960 --> 00:07:42,800 Speaker 4: to be strong, and then there's this strategic kind of 153 00:07:42,800 --> 00:07:45,120 Speaker 4: initiatives around the portfolio, how it's made up and what 154 00:07:45,160 --> 00:07:47,760 Speaker 4: you're doing with the bits and pieces. So always on 155 00:07:47,800 --> 00:07:51,160 Speaker 4: the first part, you're looking to see that underlying earnings 156 00:07:51,200 --> 00:07:55,240 Speaker 4: grow on the basis that we calculated, on the basis 157 00:07:55,240 --> 00:07:57,679 Speaker 4: that people use it to value those businesses. And actually 158 00:07:57,720 --> 00:07:59,600 Speaker 4: over the period, as you say, the performance was pretty 159 00:07:59,640 --> 00:08:03,520 Speaker 4: good across the business. I think pretty much everyone got 160 00:08:03,520 --> 00:08:05,600 Speaker 4: on guide and succept Manawa, who was tied up in 161 00:08:05,640 --> 00:08:09,520 Speaker 4: a transaction. So I think I think most people that 162 00:08:09,600 --> 00:08:13,000 Speaker 4: I've talked to anyway since then thought that actually, when 163 00:08:13,040 --> 00:08:15,920 Speaker 4: you look around the economy, a lot of double digit 164 00:08:16,000 --> 00:08:18,800 Speaker 4: growth in the portfolio on an underlying earning spasis was 165 00:08:18,800 --> 00:08:21,000 Speaker 4: a pretty good outcome. So that was the first part. 166 00:08:21,440 --> 00:08:23,520 Speaker 4: Then a lot of strategic indisties that we talked about 167 00:08:23,520 --> 00:08:25,800 Speaker 4: which was showing good progress in the portfolio. 168 00:08:26,680 --> 00:08:29,480 Speaker 1: If we look at the loss, though, that's an accounting loss, 169 00:08:29,960 --> 00:08:32,840 Speaker 1: so how does that But I mean, are we going 170 00:08:32,880 --> 00:08:34,719 Speaker 1: to see more of those or is it just one 171 00:08:34,760 --> 00:08:36,439 Speaker 1: of those things with business. 172 00:08:37,120 --> 00:08:41,520 Speaker 4: For us all the way down to the bottom the 173 00:08:41,600 --> 00:08:44,720 Speaker 4: net profit or loss that's often influenced now by whether 174 00:08:44,800 --> 00:08:48,000 Speaker 4: or not you're selling something in a given year, and 175 00:08:49,280 --> 00:08:51,079 Speaker 4: that is what was the case, I think two or 176 00:08:51,080 --> 00:08:53,880 Speaker 4: three years in a row beforehand, there really wasn't something 177 00:08:53,920 --> 00:08:58,280 Speaker 4: turning up there. I think as we get the operating 178 00:08:58,320 --> 00:09:00,920 Speaker 4: cash flow back end balance, which is what we've talked about, 179 00:09:00,960 --> 00:09:04,240 Speaker 4: you should see that more naturally even out I think 180 00:09:04,240 --> 00:09:06,199 Speaker 4: over time, and that sort of goes to that strategic 181 00:09:06,200 --> 00:09:08,079 Speaker 4: initiatives I mentioned just on. 182 00:09:08,080 --> 00:09:10,520 Speaker 1: That cash flow, because that has been a concern that 183 00:09:10,600 --> 00:09:14,240 Speaker 1: has been talked about. At the moment, you're unable to 184 00:09:14,480 --> 00:09:20,160 Speaker 1: maybe fulfill the dividend promise and other things too, and 185 00:09:20,240 --> 00:09:24,480 Speaker 1: cash flow is pretty important. Yeah, So it's out of 186 00:09:24,559 --> 00:09:26,640 Speaker 1: kilter at the moment. You're not being able to live 187 00:09:26,679 --> 00:09:29,800 Speaker 1: within your means if you like, how long before you 188 00:09:29,880 --> 00:09:31,160 Speaker 1: can get it back in balance. 189 00:09:31,640 --> 00:09:33,520 Speaker 4: So we've said a ticket for that of the next 190 00:09:33,600 --> 00:09:35,960 Speaker 4: two or three years in a medium term, we have 191 00:09:36,000 --> 00:09:38,040 Speaker 4: pretty strong set of plans in order to get that 192 00:09:38,160 --> 00:09:41,600 Speaker 4: in place. Actually, we could have done that in multiple 193 00:09:41,640 --> 00:09:43,840 Speaker 4: times in my time here. Anyway. I don't think the 194 00:09:44,040 --> 00:09:48,360 Speaker 4: operating cash flow has covered the dividend. Certainly wasn't covering 195 00:09:48,400 --> 00:09:51,280 Speaker 4: it when I became the CEOs. Really, since we invested 196 00:09:51,320 --> 00:09:54,280 Speaker 4: in one end Z, I think that we've been finding 197 00:09:54,320 --> 00:09:57,719 Speaker 4: our way back to that position. Really, we've kind of 198 00:09:57,800 --> 00:09:59,760 Speaker 4: drawn a lot in the sand this year saying actually 199 00:10:00,040 --> 00:10:02,520 Speaker 4: are going to do this. What you effectively do is 200 00:10:02,520 --> 00:10:06,440 Speaker 4: you trade off reinvesting that cash for future growth versus 201 00:10:07,960 --> 00:10:10,920 Speaker 4: something like making sure you're covering your dividend on an 202 00:10:10,960 --> 00:10:14,600 Speaker 4: annual basis out of your operating earning. So we've been 203 00:10:14,640 --> 00:10:17,319 Speaker 4: able to do it a number of ways over my time, 204 00:10:17,360 --> 00:10:19,120 Speaker 4: and we've just sort of drawn along the sound saying 205 00:10:19,320 --> 00:10:21,360 Speaker 4: let's do that. We will forego a little bit of 206 00:10:21,400 --> 00:10:24,200 Speaker 4: future earnings. But I don't think future growth is really 207 00:10:24,280 --> 00:10:27,080 Speaker 4: our problem where the portfolio is configured. I think it's 208 00:10:27,160 --> 00:10:31,000 Speaker 4: more making it more sustainable and more kind of this 209 00:10:31,120 --> 00:10:33,480 Speaker 4: long term growth engine, which is where we've made our 210 00:10:33,559 --> 00:10:34,959 Speaker 4: kind of best returns over time. 211 00:10:35,320 --> 00:10:41,400 Speaker 1: So what is the longer term or the dividend approach 212 00:10:41,559 --> 00:10:44,320 Speaker 1: then for we used to come is it? Will we 213 00:10:44,400 --> 00:10:47,160 Speaker 1: have a difference next year? I mean, how we'll retail 214 00:10:47,200 --> 00:10:49,320 Speaker 1: investors sort of be guided in that. 215 00:10:49,760 --> 00:10:52,240 Speaker 4: Yeah, I think they should take a lot of comfort 216 00:10:52,240 --> 00:10:54,600 Speaker 4: from the fact that we're openly saying now that we 217 00:10:54,679 --> 00:10:57,680 Speaker 4: believe the dividend is important for the business going into 218 00:10:57,679 --> 00:11:01,320 Speaker 4: the future. We think we tell shareholders for whom that 219 00:11:01,400 --> 00:11:03,880 Speaker 4: is most valuable, are an important mix in our shareholder 220 00:11:03,920 --> 00:11:08,880 Speaker 4: base as we continue to grow. So reaffirming that commitment 221 00:11:08,880 --> 00:11:13,200 Speaker 4: to the dividend. You should see it continue to at 222 00:11:13,280 --> 00:11:16,679 Speaker 4: least cover inflation, I would say, in terms of its 223 00:11:16,720 --> 00:11:19,480 Speaker 4: growth in the years ahead, and then we'll get it 224 00:11:19,520 --> 00:11:21,000 Speaker 4: back in balance and we can kind of give some 225 00:11:21,040 --> 00:11:21,959 Speaker 4: more messages from there. 226 00:11:22,000 --> 00:11:25,240 Speaker 1: I think so this year we had I think you 227 00:11:25,280 --> 00:11:29,600 Speaker 1: announced fifteen point five cents was the interim, and then 228 00:11:29,880 --> 00:11:31,600 Speaker 1: the full year's twenty five plus. 229 00:11:31,760 --> 00:11:32,319 Speaker 4: Is that mar right? 230 00:11:32,480 --> 00:11:34,040 Speaker 3: So it's slightly up, yeah, exactly. 231 00:11:34,080 --> 00:11:36,000 Speaker 4: I think it's about two percent. I think it's sort 232 00:11:36,000 --> 00:11:38,800 Speaker 4: of what we're trying to aim for to at least 233 00:11:38,800 --> 00:11:42,760 Speaker 4: give an inflation coverage, which investing in infrastructure asset should 234 00:11:42,760 --> 00:11:44,960 Speaker 4: give you. Yes, but we're not trying to get the 235 00:11:45,000 --> 00:11:47,880 Speaker 4: percentage yield on the share price, for example, back into 236 00:11:47,880 --> 00:11:50,080 Speaker 4: a range. That's not something we were aiming to do. 237 00:11:50,559 --> 00:11:54,440 Speaker 1: The good old share price every CEOs read when somebody 238 00:11:54,520 --> 00:11:57,240 Speaker 1: asks them. It's fair to say that it had a 239 00:11:57,240 --> 00:12:01,720 Speaker 1: bit of a beating when you did release your consolidated earnings. 240 00:12:02,440 --> 00:12:05,440 Speaker 1: I think it was down nearly six percent on the day. 241 00:12:05,480 --> 00:12:08,920 Speaker 1: I think it's recovered somewhat since. If we do look 242 00:12:08,960 --> 00:12:11,800 Speaker 1: at that, though, the shareholder return is minus two point 243 00:12:11,920 --> 00:12:12,520 Speaker 1: six percent. 244 00:12:12,600 --> 00:12:15,560 Speaker 3: I think is what I saw. I think it was 245 00:12:15,600 --> 00:12:16,760 Speaker 3: in the annual report. 246 00:12:17,120 --> 00:12:18,880 Speaker 4: I think was the twelve months to thirty or March. 247 00:12:19,160 --> 00:12:23,200 Speaker 1: Yeah, Now that does seem to be a discount, and 248 00:12:23,240 --> 00:12:25,640 Speaker 1: you do talk about this in the annual report, between 249 00:12:25,679 --> 00:12:31,400 Speaker 1: the share price and the assets values. What can be 250 00:12:31,440 --> 00:12:32,120 Speaker 1: done about that. 251 00:12:33,800 --> 00:12:37,079 Speaker 4: Discount? And there is an interesting topic I'd talk to 252 00:12:37,880 --> 00:12:39,520 Speaker 4: at least a third of people I'd talk to. So 253 00:12:39,600 --> 00:12:41,920 Speaker 4: there's no discount because the market's always rome, which there's 254 00:12:41,960 --> 00:12:44,960 Speaker 4: some truth to that rome. And there's definitely a difference 255 00:12:44,960 --> 00:12:49,439 Speaker 4: between the value for one share today versus a majority 256 00:12:49,600 --> 00:12:52,840 Speaker 4: or the whole business in five years time. Really the 257 00:12:52,880 --> 00:12:56,120 Speaker 4: listed price is the price today for any given volume 258 00:12:56,160 --> 00:12:58,600 Speaker 4: of shares, right, So it's not really the long term 259 00:12:58,679 --> 00:13:00,400 Speaker 4: value of the assets, and it's the different between that 260 00:13:00,440 --> 00:13:03,800 Speaker 4: long term value and the current value that people talk 261 00:13:03,840 --> 00:13:07,440 Speaker 4: about the discount. For us, it's really a signal for 262 00:13:07,559 --> 00:13:10,840 Speaker 4: us to think about, is there something about our business 263 00:13:10,840 --> 00:13:15,199 Speaker 4: that's not understood well and should we therefore be issuing 264 00:13:15,200 --> 00:13:18,720 Speaker 4: some communications or bringing people into c our assets so 265 00:13:18,760 --> 00:13:21,640 Speaker 4: that we can take that stuff off the table and over. 266 00:13:22,200 --> 00:13:24,040 Speaker 4: I think the start of this year there was a 267 00:13:24,080 --> 00:13:26,920 Speaker 4: lot of worries about AI and deep seek and the 268 00:13:26,920 --> 00:13:31,000 Speaker 4: implications for CDC, which we thought was what was going 269 00:13:31,040 --> 00:13:33,280 Speaker 4: on with a number of share prices in our sector 270 00:13:33,320 --> 00:13:35,679 Speaker 4: at the time, and so through April we had a 271 00:13:35,800 --> 00:13:39,280 Speaker 4: number of we had to site visit to our big 272 00:13:39,320 --> 00:13:42,719 Speaker 4: development in Melbourne for CDC and a few other communications 273 00:13:42,720 --> 00:13:45,719 Speaker 4: with the team to try and make sure people understood 274 00:13:46,280 --> 00:13:49,280 Speaker 4: how CDC was placed and actually you saw actually I 275 00:13:49,280 --> 00:13:52,640 Speaker 4: think the market react quite nicely to that and the 276 00:13:52,679 --> 00:13:54,680 Speaker 4: share pers kind of move up. So really it is 277 00:13:54,760 --> 00:13:56,959 Speaker 4: for us it's where we should focus our communications and 278 00:13:57,040 --> 00:13:59,720 Speaker 4: tensions where we first go to. Obviously, every day, like 279 00:13:59,760 --> 00:14:01,920 Speaker 4: any normal human, you re examine every decision you made 280 00:14:01,920 --> 00:14:04,920 Speaker 4: the day before, so you do a bit of that 281 00:14:04,960 --> 00:14:08,040 Speaker 4: as well, but mostly it's for communications. 282 00:14:07,600 --> 00:14:10,960 Speaker 1: Thinking of a CDC, though I did think endless this 283 00:14:11,120 --> 00:14:15,080 Speaker 1: time with the release of the four year results, we're 284 00:14:15,120 --> 00:14:17,920 Speaker 1: a little bit worried about the RePhase praising of the 285 00:14:20,200 --> 00:14:23,920 Speaker 1: contracts and the revenue coming in it not being linear, 286 00:14:24,120 --> 00:14:25,960 Speaker 1: I think is what some of them had expected, and 287 00:14:26,000 --> 00:14:27,480 Speaker 1: there was a bit of disappointment there. 288 00:14:28,120 --> 00:14:29,160 Speaker 3: What do you say to that. 289 00:14:29,840 --> 00:14:32,240 Speaker 4: I think we've been pretty clear even actually since the 290 00:14:32,280 --> 00:14:36,960 Speaker 4: half year last year so November that customer demand for 291 00:14:37,040 --> 00:14:43,200 Speaker 4: these particularly AI related workloads was changing very quickly day 292 00:14:43,240 --> 00:14:45,560 Speaker 4: to day, month to month, and a lot of it 293 00:14:45,640 --> 00:14:50,480 Speaker 4: was to do with how the customers were kind of 294 00:14:50,480 --> 00:14:53,520 Speaker 4: equipping themselves and growing to understand the new technology and 295 00:14:53,520 --> 00:14:56,160 Speaker 4: how the infrastructure needed to be built around it. And 296 00:14:56,200 --> 00:15:02,080 Speaker 4: so the result that we we released last week really 297 00:15:02,120 --> 00:15:05,160 Speaker 4: just was a continuation of the same message from November. 298 00:15:05,440 --> 00:15:07,440 Speaker 4: And I can understand it. As an investor, You'd hope 299 00:15:07,480 --> 00:15:10,760 Speaker 4: that had changed in the meantime, but I'm here telling 300 00:15:10,760 --> 00:15:13,960 Speaker 4: everybody now, no, it hasn't changed. We've made some really 301 00:15:14,000 --> 00:15:17,720 Speaker 4: good progress. We signed like a ton of contracts in January, 302 00:15:17,760 --> 00:15:21,560 Speaker 4: which no one else in the market has sign on 303 00:15:21,560 --> 00:15:24,800 Speaker 4: one hundred megawats of contracts in January like we have, 304 00:15:25,560 --> 00:15:28,920 Speaker 4: and all the messages that we were trying to get 305 00:15:28,960 --> 00:15:31,520 Speaker 4: out earlier this year and in the last week around 306 00:15:31,520 --> 00:15:35,640 Speaker 4: CDC's point of difference, it's very strong position in the 307 00:15:35,640 --> 00:15:39,600 Speaker 4: Australian market and being really well placed to when I 308 00:15:39,640 --> 00:15:41,800 Speaker 4: would say more than it's fair share of contracts when 309 00:15:41,840 --> 00:15:45,360 Speaker 4: our customers decide they need them, is actually still very strong. 310 00:15:45,480 --> 00:15:50,280 Speaker 4: So everybody wants their Christmas presents opened earlier, don't they, 311 00:15:50,960 --> 00:15:53,000 Speaker 4: But it's always better if you wait a bit, I think. 312 00:15:53,040 --> 00:15:54,760 Speaker 4: So we're in that mode at the moment. 313 00:15:54,680 --> 00:15:57,240 Speaker 1: Right and see kind of thing day Well, CDC is 314 00:15:57,320 --> 00:16:00,000 Speaker 1: now forty percent of the portfolio. 315 00:16:00,720 --> 00:16:02,320 Speaker 3: Is a concentration risk. 316 00:16:03,360 --> 00:16:05,760 Speaker 4: It is a big part of the portfolio. We've had 317 00:16:05,800 --> 00:16:08,440 Speaker 4: assets that have been a bigger proportion in the past. 318 00:16:08,480 --> 00:16:11,640 Speaker 4: So TrustPower is over fifty percent for a lot of 319 00:16:11,840 --> 00:16:15,440 Speaker 4: the early history of fort till I would say it's 320 00:16:15,440 --> 00:16:18,120 Speaker 4: about as big as you'd want it to be. If 321 00:16:18,120 --> 00:16:20,560 Speaker 4: you stood back over a long term period of time 322 00:16:21,080 --> 00:16:24,000 Speaker 4: we talked about the results. We try and manage the 323 00:16:24,000 --> 00:16:27,280 Speaker 4: stuff over you know, the medium term, rather than really 324 00:16:27,280 --> 00:16:30,680 Speaker 4: reacting really quickly to these things. And what we do 325 00:16:30,760 --> 00:16:34,600 Speaker 4: see is other opportunities within the business growing, having the 326 00:16:34,640 --> 00:16:36,680 Speaker 4: potential to grow quite quickly I think over the next 327 00:16:36,720 --> 00:16:41,520 Speaker 4: two or three years, which should balance CDC's weight in 328 00:16:41,560 --> 00:16:44,080 Speaker 4: the portfolio, if you like. But if I stand back, 329 00:16:45,160 --> 00:16:48,120 Speaker 4: you know, having a big proportion of your portfolio and 330 00:16:49,040 --> 00:16:51,680 Speaker 4: literally the most exciting investment sector in the world at 331 00:16:51,680 --> 00:16:55,080 Speaker 4: the moment is actually a pretty good place to be. 332 00:16:56,000 --> 00:16:58,920 Speaker 4: And you know, you just have to ask yourself, is 333 00:16:58,960 --> 00:17:01,080 Speaker 4: there going to be more or less AI tomorrow? And 334 00:17:01,120 --> 00:17:03,760 Speaker 4: you kind of know the answer right, And so I 335 00:17:03,760 --> 00:17:06,119 Speaker 4: think being right there in a business which, as I 336 00:17:06,119 --> 00:17:08,520 Speaker 4: said before, is incredibly well placed to just pick up 337 00:17:08,560 --> 00:17:12,480 Speaker 4: these contracts as and when they come, I'd still do 338 00:17:12,560 --> 00:17:14,000 Speaker 4: it every day of the week. 339 00:17:14,280 --> 00:17:19,600 Speaker 1: But I is volatile and risky and rapidly changing, as 340 00:17:19,640 --> 00:17:23,040 Speaker 1: you know, So there are surely there are risks there, 341 00:17:23,119 --> 00:17:25,920 Speaker 1: but it's what you're prepared to trade off. 342 00:17:26,160 --> 00:17:29,000 Speaker 4: Yeah, I think the risk is more timing, and even 343 00:17:29,040 --> 00:17:32,240 Speaker 4: then the risk is not very high, and that we 344 00:17:32,359 --> 00:17:34,879 Speaker 4: know where capacity is at with our clients. We know 345 00:17:34,960 --> 00:17:40,440 Speaker 4: that demand is growing incredibly strongly. Therefore there will be contracts, 346 00:17:40,560 --> 00:17:43,520 Speaker 4: and so really the question for us is we're doing 347 00:17:43,560 --> 00:17:47,000 Speaker 4: my weather contracts today, end of the year, early next year. No, 348 00:17:47,119 --> 00:17:49,439 Speaker 4: if you put that in a thirty year valuation model, 349 00:17:49,760 --> 00:17:53,080 Speaker 4: that it moves the valuation literally not at all. So as 350 00:17:53,080 --> 00:17:55,840 Speaker 4: long as you fundamentally believe AI is going to be 351 00:17:55,880 --> 00:17:58,679 Speaker 4: a thing and that CDC will pick up more thanutes 352 00:17:58,720 --> 00:18:01,959 Speaker 4: for his share, we're in an incredibly great spot. You know, 353 00:18:02,359 --> 00:18:03,800 Speaker 4: I would be patient personally. 354 00:18:04,760 --> 00:18:08,000 Speaker 1: That brings me to the Morrison fee, which did create 355 00:18:08,040 --> 00:18:11,040 Speaker 1: a little bit of a flutter four hundred and fifty 356 00:18:11,040 --> 00:18:17,359 Speaker 1: six million, which actually is larger than the net loss. 357 00:18:18,920 --> 00:18:20,800 Speaker 1: It seems a little bit unfortunate that it came out 358 00:18:20,840 --> 00:18:22,919 Speaker 1: when it did, but it is what it is, and 359 00:18:22,960 --> 00:18:28,040 Speaker 1: it was due to CDC having a greater valuation. What 360 00:18:28,119 --> 00:18:30,760 Speaker 1: do you say to retail investors trying to get their 361 00:18:30,760 --> 00:18:31,359 Speaker 1: head around that? 362 00:18:32,200 --> 00:18:34,560 Speaker 4: Yeah, so your four hundred and fifty six million, I 363 00:18:34,600 --> 00:18:36,840 Speaker 4: think is the three hundred and fifty million that was 364 00:18:36,880 --> 00:18:40,600 Speaker 4: accrued in performance fees, which is paid over three years, 365 00:18:41,240 --> 00:18:43,399 Speaker 4: and the one hundred of base fees, I'm guessing is 366 00:18:43,440 --> 00:18:45,480 Speaker 4: how you get that? MAT's. Yeah, So the base fees 367 00:18:45,520 --> 00:18:48,520 Speaker 4: are payable every quarter and that's for running the show. 368 00:18:49,320 --> 00:18:52,960 Speaker 4: The performance fees is really only due to good performance, 369 00:18:53,000 --> 00:18:58,080 Speaker 4: so we have to beat twelve percent returns in order 370 00:18:58,119 --> 00:19:01,080 Speaker 4: to get paid any incentive fee, and it's paid in 371 00:19:01,119 --> 00:19:05,159 Speaker 4: three installments, so that you can't earn fees for a 372 00:19:05,160 --> 00:19:09,280 Speaker 4: blip because if the valuation went up one year and 373 00:19:09,280 --> 00:19:12,000 Speaker 4: you got paid a fee a third of the fee, 374 00:19:12,320 --> 00:19:16,520 Speaker 4: it's very unlikely to stay there for three years, And 375 00:19:16,640 --> 00:19:18,800 Speaker 4: assuming it then came off the year after or the 376 00:19:18,880 --> 00:19:21,800 Speaker 4: year after that, the second two charges would never become 377 00:19:21,840 --> 00:19:27,439 Speaker 4: payable effectively. So the mechanism has a bunch of different safeguards. 378 00:19:27,440 --> 00:19:30,520 Speaker 4: And to make sure that for shareholders that Morrison's only 379 00:19:30,520 --> 00:19:33,040 Speaker 4: getting paid for performance that actually sticks around and turns 380 00:19:33,119 --> 00:19:37,639 Speaker 4: up in the portfolio. So we're only getting paid for performance. 381 00:19:37,720 --> 00:19:40,040 Speaker 4: And there are a number of structural elements to the 382 00:19:40,080 --> 00:19:42,320 Speaker 4: way the fee is paid to ensure it's only paid 383 00:19:42,320 --> 00:19:43,200 Speaker 4: for enduring value. 384 00:19:43,240 --> 00:19:47,639 Speaker 1: If you like, let's look at future growth beyond the 385 00:19:47,640 --> 00:19:51,960 Speaker 1: current portfolio, if you like all the exciting stuff. Your 386 00:19:52,000 --> 00:19:55,639 Speaker 1: guidance was just over a billion, I think, and a 387 00:19:55,640 --> 00:20:01,320 Speaker 1: little bit more. Yeah, I know, exciting. What are we 388 00:20:01,359 --> 00:20:04,960 Speaker 1: looking at in terms of potential and what jurisdictions. 389 00:20:05,200 --> 00:20:07,320 Speaker 4: So the one we're most excited about in the near 390 00:20:07,480 --> 00:20:11,200 Speaker 4: term is a business called guron Energy, which we established 391 00:20:11,280 --> 00:20:14,920 Speaker 4: in Southeast Asia. Singapore is the head office two or 392 00:20:14,920 --> 00:20:17,960 Speaker 4: three years ago. They have this huge project that they're 393 00:20:18,000 --> 00:20:24,959 Speaker 4: working on to export solar power effectively from Indonesia and 394 00:20:25,119 --> 00:20:28,360 Speaker 4: imported to Singapore. And what the Singapore government has done 395 00:20:28,480 --> 00:20:31,520 Speaker 4: is they've looked at their power system, which is all 396 00:20:31,600 --> 00:20:35,240 Speaker 4: based on gas that they import and burn, and they're 397 00:20:35,280 --> 00:20:38,480 Speaker 4: trying to support ways for more renewable power to get 398 00:20:38,480 --> 00:20:42,560 Speaker 4: into Singapore. They're incredibly land constrained, so they've asked for 399 00:20:42,720 --> 00:20:46,560 Speaker 4: people to effectively pitch these projects from Indonesia and other 400 00:20:46,600 --> 00:20:49,520 Speaker 4: countries to input power into Singapore. And we are one 401 00:20:49,560 --> 00:20:54,080 Speaker 4: of nine projects that were conditionally awarded, and since we 402 00:20:54,080 --> 00:20:57,480 Speaker 4: were awarded that kind of nod from the Singapore government, 403 00:20:57,840 --> 00:20:59,919 Speaker 4: where then one of only two projects that have advanced 404 00:20:59,920 --> 00:21:02,439 Speaker 4: the next stage of the Singapore project. So it's a 405 00:21:02,760 --> 00:21:05,840 Speaker 4: it's a proper thing. We've got seventy percent of the 406 00:21:05,920 --> 00:21:10,480 Speaker 4: land now under control in Indonesia where we're going to 407 00:21:10,520 --> 00:21:12,920 Speaker 4: build this thing, and that's partly why we've been progressed 408 00:21:13,200 --> 00:21:16,520 Speaker 4: through with this one other project. It's going to take 409 00:21:16,520 --> 00:21:19,400 Speaker 4: three years to build. We'll reach a final investment decision 410 00:21:19,440 --> 00:21:23,080 Speaker 4: on that on that in the next twelve months. But 411 00:21:23,240 --> 00:21:25,480 Speaker 4: because it's such a significant project, you're talking about a 412 00:21:25,520 --> 00:21:29,439 Speaker 4: three billion dollar US total capital cost and makes our 413 00:21:29,480 --> 00:21:33,160 Speaker 4: five hundred million New Zealand here look pretty reasonable, right, 414 00:21:34,520 --> 00:21:37,439 Speaker 4: And for that amount of capital we would expect to 415 00:21:37,480 --> 00:21:40,960 Speaker 4: be creating, you know, five hundred million dollars plus that's 416 00:21:41,080 --> 00:21:45,280 Speaker 4: US dollar terms of present value for the capital that 417 00:21:45,320 --> 00:21:47,359 Speaker 4: we put to work in that. So you know, it's 418 00:21:47,400 --> 00:21:50,600 Speaker 4: a dollar a share on a good day for us, 419 00:21:50,640 --> 00:21:52,760 Speaker 4: and significant. It's exciting. 420 00:21:53,400 --> 00:21:57,320 Speaker 1: Does that mean there's going to be putting your hand 421 00:21:57,400 --> 00:22:03,359 Speaker 1: out for more funder and I assume more institutional shareholders 422 00:22:03,400 --> 00:22:04,200 Speaker 1: from overseas. 423 00:22:04,400 --> 00:22:08,160 Speaker 4: Yeah, not for that project in particular, I don't think so. 424 00:22:08,720 --> 00:22:12,240 Speaker 4: One thing we talked about at the result is selling 425 00:22:12,600 --> 00:22:15,000 Speaker 4: more of our businesses that aren't able to scale in 426 00:22:15,040 --> 00:22:19,119 Speaker 4: our portfolio. And you know, there are a number of 427 00:22:19,119 --> 00:22:20,760 Speaker 4: ones that have been in the portfolio for a long 428 00:22:20,800 --> 00:22:22,840 Speaker 4: time that we could talk about that are kind of 429 00:22:22,960 --> 00:22:25,119 Speaker 4: obvious ones to go on that list. We would expect 430 00:22:25,160 --> 00:22:27,480 Speaker 4: to be reinvesting that money in a project like growing 431 00:22:27,600 --> 00:22:30,520 Speaker 4: rather than needing to do another equity raise anytime soon. 432 00:22:30,920 --> 00:22:33,440 Speaker 1: So those that's a billion dollar question there and those 433 00:22:33,480 --> 00:22:36,920 Speaker 1: those business exactly, So. 434 00:22:36,880 --> 00:22:38,840 Speaker 3: It's a billion dollars of essence. You said you will 435 00:22:38,880 --> 00:22:44,959 Speaker 3: divest over a period of three years. Yeah, so what 436 00:22:45,000 --> 00:22:45,680 Speaker 3: are we talking? 437 00:22:46,480 --> 00:22:48,439 Speaker 4: So what we're the lens we were running over the 438 00:22:48,480 --> 00:22:52,199 Speaker 4: portfolio was really what can scale our own and our 439 00:22:52,240 --> 00:22:55,080 Speaker 4: ownership to be meaningful at a sort of ten billion 440 00:22:55,080 --> 00:22:59,040 Speaker 4: dollar market cap, things need to be quite big in 441 00:22:59,119 --> 00:23:02,240 Speaker 4: order to move the dark and the more small things 442 00:23:02,280 --> 00:23:04,800 Speaker 4: you have, the more complexity it makes for new investors 443 00:23:04,840 --> 00:23:06,639 Speaker 4: who are trying to figure out what's going on in 444 00:23:06,720 --> 00:23:08,919 Speaker 4: in for tool. Yeah, so you can sort of run 445 00:23:08,960 --> 00:23:12,080 Speaker 4: down the portfolio pretty easily and say, well, okay, that's clear. 446 00:23:12,119 --> 00:23:14,159 Speaker 4: That's been in the portfolio for a while, you've not 447 00:23:14,200 --> 00:23:17,959 Speaker 4: been allocating capital to it. That's probably something in a cycle. 448 00:23:18,160 --> 00:23:21,280 Speaker 4: We didn't actually name exactly which ones, because obviously there 449 00:23:21,280 --> 00:23:23,440 Speaker 4: are teams in those businesses. They have customers and things 450 00:23:23,440 --> 00:23:25,240 Speaker 4: like that, and all that needs to be work through 451 00:23:25,240 --> 00:23:27,919 Speaker 4: in a normal professional way like we do. But you 452 00:23:27,920 --> 00:23:30,879 Speaker 4: could probably figure out where we're thinking just by running 453 00:23:30,880 --> 00:23:31,639 Speaker 4: that lens over it. 454 00:23:32,480 --> 00:23:34,720 Speaker 1: One thing I wanted to ask you about is healthcare. 455 00:23:35,400 --> 00:23:37,560 Speaker 1: We've talked a lot about energy. We've talked a lot 456 00:23:37,560 --> 00:23:39,560 Speaker 1: about data centers and the like, and some of the 457 00:23:39,600 --> 00:23:43,159 Speaker 1: old resets like Wellington you put here. We are the 458 00:23:43,520 --> 00:23:47,800 Speaker 1: imaging businesses both here and in Australia. Where do you 459 00:23:47,920 --> 00:23:49,200 Speaker 1: see the potential there? 460 00:23:49,600 --> 00:23:53,120 Speaker 4: It's pretty high asually, I think those are a couple 461 00:23:53,200 --> 00:23:55,840 Speaker 4: of businesses that perform really well from an operating perspective. 462 00:23:55,880 --> 00:23:58,520 Speaker 4: As I said before, so you have fourteen percent growth 463 00:23:58,680 --> 00:24:01,800 Speaker 4: out of q scan and Australia. I've done forty or 464 00:24:01,800 --> 00:24:06,280 Speaker 4: fifty meetings since the result, and half of them would 465 00:24:06,280 --> 00:24:08,679 Speaker 4: have said that is an incredible outcome. How did you 466 00:24:08,760 --> 00:24:11,919 Speaker 4: do that because the other listed comps have not been 467 00:24:11,920 --> 00:24:14,359 Speaker 4: able to perform as well in that market. So it's 468 00:24:14,359 --> 00:24:17,119 Speaker 4: getting a lot of attension, which is really good. And 469 00:24:17,119 --> 00:24:18,919 Speaker 4: in New Zealand they went that far behind and then 470 00:24:19,240 --> 00:24:21,120 Speaker 4: nearly did ten percent and that was in a year 471 00:24:21,359 --> 00:24:23,320 Speaker 4: as we know living in New Zealand where Health and 472 00:24:23,400 --> 00:24:28,120 Speaker 4: Z was going through a lot of change. So it's 473 00:24:28,160 --> 00:24:30,240 Speaker 4: a very interesting part of the portfolio, and that it's 474 00:24:30,240 --> 00:24:33,159 Speaker 4: not correlated with anything else you're talking about concentration before. 475 00:24:33,200 --> 00:24:37,600 Speaker 4: It's actually quite provides quite a nice balance in the portfolio. 476 00:24:38,119 --> 00:24:41,159 Speaker 4: But how can it scale, as I said before, is 477 00:24:41,200 --> 00:24:43,320 Speaker 4: a bit of a question. One of our little plays 478 00:24:43,640 --> 00:24:47,240 Speaker 4: is this tally radiology idea, which is really where the 479 00:24:47,280 --> 00:24:49,680 Speaker 4: scan is read remotely from where it's taken. And that's 480 00:24:49,720 --> 00:24:51,040 Speaker 4: really good. If you go to a hospital at two 481 00:24:51,040 --> 00:24:53,520 Speaker 4: in the morning, you need a scan that will likely 482 00:24:53,560 --> 00:24:55,880 Speaker 4: be read off site. So it's things like that, and 483 00:24:56,240 --> 00:24:59,040 Speaker 4: because we have a big footprint, we have radiologists in 484 00:24:59,040 --> 00:25:01,119 Speaker 4: the UK for example, can read that stuff during their 485 00:25:01,200 --> 00:25:03,919 Speaker 4: day and they can do the reverse here. So and 486 00:25:04,000 --> 00:25:08,399 Speaker 4: that segment of radiology is growing really really fast. I 487 00:25:08,560 --> 00:25:11,320 Speaker 4: suspect to you get it really discover you're probably going 488 00:25:11,320 --> 00:25:13,120 Speaker 4: to have to merge it with something else and create 489 00:25:13,160 --> 00:25:17,320 Speaker 4: a bit of a more diversified healthcare portfolio. And we've 490 00:25:17,359 --> 00:25:20,440 Speaker 4: got a few ideas there as well. So yeah, I 491 00:25:20,480 --> 00:25:22,280 Speaker 4: think there is a few parts there that could make 492 00:25:22,320 --> 00:25:24,399 Speaker 4: it even more interesting and create a kind of nice 493 00:25:24,560 --> 00:25:28,280 Speaker 4: non digital, non power leg to the portfolio. 494 00:25:29,119 --> 00:25:33,560 Speaker 1: Any airports that you could buy into around the world, Yeah, there. 495 00:25:33,440 --> 00:25:36,760 Speaker 4: Are, actually, yeah, there are, and there's been quite a 496 00:25:36,800 --> 00:25:38,200 Speaker 4: few trading at the moment, So we have a few 497 00:25:38,240 --> 00:25:39,800 Speaker 4: airport investment ideas. 498 00:25:40,440 --> 00:25:42,679 Speaker 3: So this may not be one of the ones on 499 00:25:42,720 --> 00:25:43,600 Speaker 3: the block, who. 500 00:25:43,440 --> 00:25:48,840 Speaker 4: Knows, but the instruction and the direction should be clear. 501 00:25:49,000 --> 00:25:51,840 Speaker 4: Things need to scale, So our teams that are on 502 00:25:51,880 --> 00:25:54,960 Speaker 4: those assets, the teams that work here, it's clear what 503 00:25:55,640 --> 00:25:58,720 Speaker 4: the job is in order to continue to grow with 504 00:25:58,800 --> 00:26:00,919 Speaker 4: Infertile and that was really are objective on the day. 505 00:26:01,000 --> 00:26:03,920 Speaker 4: Lots of people listening on the for those things, those messages. 506 00:26:04,080 --> 00:26:07,399 Speaker 1: Yeah, on Outlier, does seem to be retire Australia, I 507 00:26:07,440 --> 00:26:08,000 Speaker 1: mean it is. 508 00:26:08,080 --> 00:26:10,560 Speaker 3: You looked at selling it a while back. We've talked 509 00:26:10,600 --> 00:26:10,960 Speaker 3: about that. 510 00:26:12,840 --> 00:26:16,119 Speaker 1: It seems to be doing okay, but yeah, it does 511 00:26:16,160 --> 00:26:17,120 Speaker 1: seem a bit of an outline. 512 00:26:17,240 --> 00:26:19,439 Speaker 4: I agree, and we did announce a strategic review on 513 00:26:19,440 --> 00:26:21,320 Speaker 4: that a couple of years ago and the timing didn't 514 00:26:21,320 --> 00:26:23,240 Speaker 4: work out very well. So I think that would be 515 00:26:23,280 --> 00:26:26,359 Speaker 4: in my it's pretty clear that area is that we 516 00:26:26,400 --> 00:26:28,640 Speaker 4: don't see ourselves in long term. That would definitely still 517 00:26:28,640 --> 00:26:30,680 Speaker 4: be one of the mere But the performance is good. 518 00:26:31,440 --> 00:26:35,560 Speaker 4: They provide a great service to their customers their residents, 519 00:26:35,640 --> 00:26:39,639 Speaker 4: So yeah, there's this is never or hardly ever about 520 00:26:39,720 --> 00:26:42,040 Speaker 4: bad performance in the businesses. It's really fit in the 521 00:26:42,080 --> 00:26:44,240 Speaker 4: portfolio and best long term owner. 522 00:26:44,560 --> 00:26:44,800 Speaker 3: Yeah. 523 00:26:44,880 --> 00:26:52,239 Speaker 1: Right, let's talk about shareholders. This year in Frattilla's now 524 00:26:52,280 --> 00:26:55,719 Speaker 1: included in the Global standard and x c I and 525 00:26:55,760 --> 00:27:00,000 Speaker 1: also in Australia the AX three hundred, so that gives 526 00:27:00,000 --> 00:27:03,840 Speaker 1: a broader scope or reach. If you're like four shareholders, 527 00:27:04,240 --> 00:27:06,760 Speaker 1: what are you hoping to have in terms of the 528 00:27:06,800 --> 00:27:09,080 Speaker 1: mix with retail and institutional. 529 00:27:09,359 --> 00:27:13,159 Speaker 4: Yeah, we've spent a lot of time working on this 530 00:27:13,359 --> 00:27:16,000 Speaker 4: because we are an investment company. Actually the capital market 531 00:27:16,080 --> 00:27:20,080 Speaker 4: side of the business gets a lot of focus. Yeah. So, 532 00:27:20,359 --> 00:27:22,840 Speaker 4: as I said before, having done all of that work 533 00:27:23,040 --> 00:27:25,640 Speaker 4: with a lot of advisors, we still see retail as 534 00:27:25,680 --> 00:27:27,960 Speaker 4: being a really big part of the shareholder base. For 535 00:27:28,000 --> 00:27:32,080 Speaker 4: the foreseeable future. So I think I'm not sure of 536 00:27:32,160 --> 00:27:34,320 Speaker 4: the exact numbers now, but we would never see them 537 00:27:34,359 --> 00:27:37,720 Speaker 4: really getting below twenty percent, and more realistically, somewhere between 538 00:27:37,720 --> 00:27:40,439 Speaker 4: twenty and thirty is always really going to be in 539 00:27:40,440 --> 00:27:43,399 Speaker 4: New Zealand retail, So that you know, recommitting to the 540 00:27:43,400 --> 00:27:45,840 Speaker 4: dividend and finding a way to sustain it is all 541 00:27:45,880 --> 00:27:48,520 Speaker 4: comes out of that work. In fact, at the moment 542 00:27:49,520 --> 00:27:53,159 Speaker 4: half my team is in farm array at the Retail 543 00:27:53,200 --> 00:27:56,600 Speaker 4: Investor Show show YEP, and they'll be flying down to 544 00:27:56,680 --> 00:27:58,960 Speaker 4: christ Church for Wednesday and we're here in Wellington on 545 00:27:58,960 --> 00:28:02,240 Speaker 4: Thursday night. So a big part of the business right 546 00:28:02,640 --> 00:28:07,960 Speaker 4: is still making sure we're understandable to a retail investor base. 547 00:28:08,480 --> 00:28:11,400 Speaker 4: Having said that, we do know as the business grows 548 00:28:12,240 --> 00:28:14,520 Speaker 4: and if we just continue our historic performance, I think 549 00:28:14,520 --> 00:28:16,800 Speaker 4: our five year performance is over twenty percent per anum. 550 00:28:17,359 --> 00:28:21,159 Speaker 4: You just continue even fifteen percent, our target return for 551 00:28:21,200 --> 00:28:24,520 Speaker 4: five years will be a twenty billion dollar business and 552 00:28:24,560 --> 00:28:27,160 Speaker 4: in order to support that scale of register we will 553 00:28:27,200 --> 00:28:30,960 Speaker 4: need more international investors. So these in the ex editions 554 00:28:30,960 --> 00:28:33,679 Speaker 4: are really important for us and for retail shareholders so 555 00:28:33,760 --> 00:28:35,719 Speaker 4: that there is a buyer for their shares. Whenever they 556 00:28:35,800 --> 00:28:38,239 Speaker 4: choose to move in and out of them, right, So 557 00:28:38,280 --> 00:28:41,920 Speaker 4: we actively work on that. These index editions are meaningful. 558 00:28:42,200 --> 00:28:44,800 Speaker 4: And I said, I've had fifty meetings since the result. 559 00:28:45,520 --> 00:28:48,280 Speaker 4: Over half of them would have been in Australia. Now 560 00:28:48,400 --> 00:28:51,080 Speaker 4: talk to Australian investors and we'll be on the road 561 00:28:51,120 --> 00:28:54,680 Speaker 4: internationally later on in the year in Asia and the 562 00:28:54,800 --> 00:28:57,400 Speaker 4: UK and the US, just to build up that base. 563 00:28:57,560 --> 00:28:59,920 Speaker 4: But still we'll have a massive waiting here to New 564 00:29:00,040 --> 00:29:00,720 Speaker 4: Zealand forever. 565 00:29:00,800 --> 00:29:04,000 Speaker 1: I think one thing we haven't talked about, Jason is 566 00:29:04,280 --> 00:29:08,200 Speaker 1: challenges and obviously the US and the sort of changes 567 00:29:08,280 --> 00:29:12,080 Speaker 1: there with the political situation and geopolitics around the world 568 00:29:12,160 --> 00:29:14,440 Speaker 1: as well, because you're in Europe as well as the US. 569 00:29:14,520 --> 00:29:18,640 Speaker 1: You know, you're many many jurisdictions. Yeah, what do you 570 00:29:18,720 --> 00:29:22,240 Speaker 1: see there? I mean, Long Road Energy seems to have 571 00:29:22,320 --> 00:29:27,600 Speaker 1: got it south together in terms of avoiding some of 572 00:29:25,640 --> 00:29:31,440 Speaker 1: the fallout from I don't know, it's a big beautiful bill. 573 00:29:31,720 --> 00:29:36,960 Speaker 1: It's now called instead of the Inflation Reduction Act. Yeah, 574 00:29:37,000 --> 00:29:39,440 Speaker 1: can you tell us what you're seeing there in terms 575 00:29:39,440 --> 00:29:40,760 Speaker 1: of the headwinds. 576 00:29:40,760 --> 00:29:43,840 Speaker 4: Phenomenal volatility all year right for all investors. And that 577 00:29:44,000 --> 00:29:46,840 Speaker 4: was just the latest one four days before our result, 578 00:29:46,920 --> 00:29:50,640 Speaker 4: I think, to be honest, the share price reaction on 579 00:29:50,720 --> 00:29:53,720 Speaker 4: the day that came out surprised me. It barely barely 580 00:29:53,720 --> 00:29:55,719 Speaker 4: moved the dill at all. I think it caught up 581 00:29:55,760 --> 00:29:57,360 Speaker 4: after the result, to be honest, I think it was 582 00:29:57,400 --> 00:30:00,600 Speaker 4: people waiting for the result to move the shap to where. 583 00:30:01,040 --> 00:30:03,040 Speaker 4: To be honest, I thought it would be on the Friday, 584 00:30:03,360 --> 00:30:05,280 Speaker 4: not for any valuation reason, but I think it just 585 00:30:05,360 --> 00:30:08,200 Speaker 4: deserves it. Right, There's clearly a lot of volatility and uncertainty. 586 00:30:09,520 --> 00:30:11,480 Speaker 4: We're a long way away from there. How would you know, 587 00:30:12,160 --> 00:30:14,720 Speaker 4: as an investor sitting here in New Zealand what's really 588 00:30:14,760 --> 00:30:17,680 Speaker 4: going to happen. Of course, I'm there all the time, 589 00:30:18,160 --> 00:30:19,840 Speaker 4: and so I should know, and I do have a 590 00:30:19,880 --> 00:30:23,040 Speaker 4: really good, strong feel for it. The technical stuff we 591 00:30:23,080 --> 00:30:24,840 Speaker 4: talked about on the day is kind of getting done 592 00:30:24,840 --> 00:30:27,480 Speaker 4: in the weeds. But I think, really from my perspective 593 00:30:27,640 --> 00:30:30,080 Speaker 4: for shareholders, the most important thing to understand is that 594 00:30:30,120 --> 00:30:35,080 Speaker 4: the US is short of energy. When we took, for example, 595 00:30:35,120 --> 00:30:37,960 Speaker 4: in data centers, all the data center investments, so much 596 00:30:38,000 --> 00:30:40,320 Speaker 4: of it in fact is happening in the US now, 597 00:30:41,000 --> 00:30:43,440 Speaker 4: a lot of chips being absorbed there that all requires 598 00:30:43,480 --> 00:30:47,040 Speaker 4: power and it cannot be fulfilled with gas. All that 599 00:30:47,080 --> 00:30:49,640 Speaker 4: work has been done, everyone knows is not enough gas 600 00:30:49,720 --> 00:30:52,280 Speaker 4: and it can't be got to enough. Places in California 601 00:30:52,320 --> 00:30:55,440 Speaker 4: won't take another electron generator from gas. In normal Arizona. 602 00:30:55,440 --> 00:30:59,400 Speaker 4: There are plenty of states that absolutely want renewable energy 603 00:30:59,440 --> 00:31:02,440 Speaker 4: power and solar, which is mostly what we do, is 604 00:31:02,440 --> 00:31:06,760 Speaker 4: the cheapest and fastest. So we are well set through 605 00:31:06,800 --> 00:31:11,280 Speaker 4: this to be an incredibly good position to meet that demand. 606 00:31:12,560 --> 00:31:15,000 Speaker 4: And so you know, you've just got to get through this. 607 00:31:15,040 --> 00:31:17,479 Speaker 4: As we said our and your report, the theme this 608 00:31:17,560 --> 00:31:20,719 Speaker 4: year is navigating beyond the noise, and this is a 609 00:31:20,760 --> 00:31:23,520 Speaker 4: really prime example of an area where we're very high 610 00:31:23,520 --> 00:31:26,480 Speaker 4: convictions the states will need the power and that businesses 611 00:31:26,560 --> 00:31:29,360 Speaker 4: like these will be more valuable through this vit polatility 612 00:31:29,800 --> 00:31:32,400 Speaker 4: than less. Be careful on the way through. We've got 613 00:31:32,400 --> 00:31:35,800 Speaker 4: a great team. A lot of our money is protected 614 00:31:35,840 --> 00:31:38,280 Speaker 4: through the safe harboring and things like that that we've 615 00:31:38,320 --> 00:31:40,840 Speaker 4: talked about. So again, it's another area where I think 616 00:31:40,840 --> 00:31:44,080 Speaker 4: we just need to be patient and open our Christmas presents. 617 00:31:44,160 --> 00:31:47,960 Speaker 1: Later on on that note, then, Jason, what excites you 618 00:31:48,240 --> 00:31:49,360 Speaker 1: about the year ahead? 619 00:31:51,400 --> 00:31:52,480 Speaker 3: Not a late Christmas? 620 00:31:52,520 --> 00:31:55,840 Speaker 4: Well, yeah, it comes when it comes, and there's only 621 00:31:55,880 --> 00:31:57,959 Speaker 4: so much you can control on a given day. I 622 00:31:57,960 --> 00:32:01,160 Speaker 4: do think that how AI rolls out is still incredibly 623 00:32:01,200 --> 00:32:03,920 Speaker 4: fascinating to me. Where it's going to go next. The 624 00:32:03,960 --> 00:32:09,040 Speaker 4: geopolitical angles now I feel a lot like energy always 625 00:32:09,120 --> 00:32:11,720 Speaker 4: used to feel. Energy has always been political and geopolitical, 626 00:32:11,760 --> 00:32:14,560 Speaker 4: and now it's now it's in chips as well, so 627 00:32:14,600 --> 00:32:17,240 Speaker 4: it doesn't feel unfamiliar. But I think that's really fascinating. 628 00:32:18,120 --> 00:32:20,160 Speaker 4: I do believe the trend is only one way, though, 629 00:32:20,280 --> 00:32:22,880 Speaker 4: and the genius out of the bottle. Countries have to 630 00:32:22,880 --> 00:32:26,280 Speaker 4: have this, Companies have to have it, and I do 631 00:32:26,400 --> 00:32:29,400 Speaker 4: believe that being in the infrastructure that delivers it is 632 00:32:29,440 --> 00:32:31,560 Speaker 4: one of the most attractive areas to be in. Doesn't 633 00:32:31,560 --> 00:32:34,360 Speaker 4: matter who's serving it, who's got the customer, they will 634 00:32:34,400 --> 00:32:37,440 Speaker 4: all have to have the type of infrastructure that we build, 635 00:32:37,480 --> 00:32:40,000 Speaker 4: and it's not easy to build it. So I still 636 00:32:40,000 --> 00:32:42,760 Speaker 4: think that is super fascinating. And then actually some of 637 00:32:42,800 --> 00:32:44,800 Speaker 4: the stuff that we talked about at the half year 638 00:32:44,880 --> 00:32:47,880 Speaker 4: around kind of getting our house in order, if you like, 639 00:32:47,960 --> 00:32:50,480 Speaker 4: or it's some tidy out of the portfolio. Actually that's 640 00:32:50,480 --> 00:32:52,640 Speaker 4: really exciting to finally have a clear plan We've done 641 00:32:52,640 --> 00:32:56,160 Speaker 4: a lot of thinking about that scale that we're at now, 642 00:32:56,240 --> 00:32:58,960 Speaker 4: what is the most meaningful next step from here? Where 643 00:32:59,040 --> 00:33:02,120 Speaker 4: is retail holds in our future? Right? And all that 644 00:33:02,200 --> 00:33:03,880 Speaker 4: work's been done now, so I think we've got a 645 00:33:03,880 --> 00:33:06,480 Speaker 4: clear set of principles. So getting through some of that 646 00:33:06,600 --> 00:33:09,160 Speaker 4: is actually quite exciting because when we get going on 647 00:33:09,200 --> 00:33:12,160 Speaker 4: some of that portfolio stuff, we're really good at it 648 00:33:12,200 --> 00:33:14,040 Speaker 4: and we tend to create a lot of value. 649 00:33:14,320 --> 00:33:16,400 Speaker 1: Just one last question I've got for you, and we 650 00:33:16,560 --> 00:33:19,080 Speaker 1: talked about data centers. A lot of yours are in 651 00:33:19,080 --> 00:33:22,440 Speaker 1: Australia that there is movement in Auckland. Do you see 652 00:33:22,520 --> 00:33:24,680 Speaker 1: more data centers being built here? 653 00:33:25,240 --> 00:33:27,920 Speaker 4: Yeah, we're building a very big one at the moment. Actually, 654 00:33:28,000 --> 00:33:31,000 Speaker 4: one of the biggest infrastructure projects in New Zealand is 655 00:33:31,040 --> 00:33:35,920 Speaker 4: being built by CDC. And actually, you know, the demand 656 00:33:35,960 --> 00:33:38,800 Speaker 4: outlook for in New Zealand in particular has been one 657 00:33:38,800 --> 00:33:42,400 Speaker 4: of the more stable areas of demand from our customers 658 00:33:42,920 --> 00:33:44,920 Speaker 4: over this whole since the half of you when I 659 00:33:44,960 --> 00:33:48,520 Speaker 4: started talking about this volatility, So that feels quite good 660 00:33:48,560 --> 00:33:53,480 Speaker 4: actually for the country. It's a really important issue. You've 661 00:33:53,480 --> 00:33:55,880 Speaker 4: seen over the last week or so big announcements out 662 00:33:55,920 --> 00:34:00,120 Speaker 4: of the Middle East UAE, and then there's an the 663 00:34:00,160 --> 00:34:05,120 Speaker 4: one coming. We understand big sovereign AI centers. You know, 664 00:34:05,240 --> 00:34:08,799 Speaker 4: billions of dollars of investment, and there are only so 665 00:34:08,840 --> 00:34:11,040 Speaker 4: many chips available in the world, and they're going to 666 00:34:11,080 --> 00:34:15,920 Speaker 4: go to countries that do make those investments thoughtfully and 667 00:34:16,000 --> 00:34:20,280 Speaker 4: get into the supply chain. So I think we're lucky 668 00:34:20,280 --> 00:34:22,640 Speaker 4: in New Zealand so far, but we should never take 669 00:34:22,680 --> 00:34:24,880 Speaker 4: any of that for granted, right, I think as a country. 670 00:34:24,920 --> 00:34:27,359 Speaker 4: So the more we can do to attract this really 671 00:34:27,360 --> 00:34:30,799 Speaker 4: important technology here and have it on our shore, on 672 00:34:30,800 --> 00:34:33,919 Speaker 4: our terms, rather than relying on somewhere else, I would 673 00:34:33,960 --> 00:34:36,640 Speaker 4: definitely encourage. In Australia, I think we'll be having the 674 00:34:36,680 --> 00:34:39,160 Speaker 4: same kind of discussions. I've seen stuff in the Afar. 675 00:34:39,600 --> 00:34:41,560 Speaker 4: I'm around this already. Yeah, it's really important. 676 00:34:43,080 --> 00:34:45,600 Speaker 1: Well we should leave it there, Jason. We could talk forever. 677 00:34:45,719 --> 00:34:48,799 Speaker 1: In a way, I need to let you get your 678 00:34:48,840 --> 00:34:50,319 Speaker 1: flight so that you're not late. 679 00:34:50,400 --> 00:34:50,719 Speaker 4: Thank you. 680 00:34:51,440 --> 00:34:52,880 Speaker 3: That's so thanks for joining us today. 681 00:34:52,960 --> 00:34:54,440 Speaker 4: Thanks so much for having it here as well at 682 00:34:54,440 --> 00:34:54,840 Speaker 4: wellty to. 683 00:34:54,800 --> 00:34:57,239 Speaker 1: Newport and thanks everyone for joining in. You can watch 684 00:34:57,280 --> 00:35:00,520 Speaker 1: Shared Lunch on YouTube or listen to us on your 685 00:35:00,680 --> 00:35:03,759 Speaker 1: favorite podcast app. Leave us a rating and tell us 686 00:35:03,800 --> 00:35:07,080 Speaker 1: what you'd like to hear next. Until next time, Marto 687 00:35:07,160 --> 00:35:07,319 Speaker 1: wa