This week’s AGM wrap

• Largely uneventful set of AGMs, with most resolutions carried
• CHC remuneration report had 22.47% vote against the resolution
• Companies spoke about their commitments to ESG and net-zero

This week has seen multiple annual general meetings (AGMs) held. Most were uneventful with resolutions carried with more than 90% of the vote.

The only item that stood out was the Charter Hall Group (ASX: CHC) remuneration report vote, which saw total votes cast against the resolution at 22.47%, close to the 25% which would trigger a ‘first strike’.

One common thread that was evident between most companies was the focus and action on ESG (environmental, social and corporate governance) and net-zero carbon. It is particularly poignant as the focus comes with the backdrop of COP26 – the climate conference in Glasgow.

Charter Hall Retail REIT (ASX: CQR)

Chairman Roger Davis spoke about the resilience of the CQR portfolio. The company’s focus on convenience retail saw many centres remain open due to the essential role they played during lockdowns.

“With non-discretionary retailers making up the majority of our tenant customers, trading volumes remained relatively high during lockdown periods, whilst trading conditions for impacted tenants recovered quickly following the easing of COVID-19 mandated closures and trading restrictions,” said Mr Davis.

The company has been working towards extending WALE with major tenants. Mr Davis said the company expects to deliver on the objective by increasing the percentage of major tenants’ income from 51.4% of portfolio income in FY20 to 53.5% in FY21 with a major WALE of 11.4 years.

Greg Chubb, CQR CEO, spoke about the company’s strong moving annual total (MAT) growth, noting supermarkets achieved MAT growth of 4.3%. Total comparable MAT growth across the portfolio when including specialty sales was 5.4%, up from 3.9% at June 2020.

Vicinity Centres (ASX: VCX)

In his address, Vicinity Centres Chairman Trevor Gerber said “Vicinity more than honoured its obligations imposed by the SME Code of Conduct, having allocated $231 million to struggling retail tenants, 90% of which was via outright rental forgiveness.”

The financial performance of the company across the 12 months to 30 June 2021, comprised “two very different halves”, he said.

“The first half statutory net loss of $394 million primarily reflected the three-month lockdown in Victoria during the first quarter and the pandemic’s impact on valuations, particularly CBD assets. In the second half, we saw COVID-19 restrictions reduced, retailer confidence recovering, and visitation and retail sales improved. At the same time, valuations progressed towards stabilisation,” said Mr Gerber.

Net property income for the year increased by $60 million to $743 million, largely due to additional income collected in FY21 that related to the prior year.

Servcorp (ASX: SRV)

In his Chairman’s address, The Hon Mark Vaile AO said for the 2022 financial year, provided Covid impacts do not worsen, “Servcorp’s mature net profit before non-cash impairment of assets and tax will be between $33 million and $36 million.

“In line with this guidance and performance, we expect to produce more than $50 million in underlying free cash.”

REA Group (ASX: REA)

Chairman Hamish McLennan said revenues were up 13% to $928 million, EBITDA up 19% to $565 million, and net profit up 18% to $318 million. Total dividends per share also rose 19% to 131 cents, and earnings per share was up 21% to 247 cents.

GDI Property Group (ASX: GDI)

The company holds no properties in either Sydney or Melbourne, the two places in Australia that most recently endured extended and hard lockdowns. Chairman Gina Anderson also noted that beginning in FY17, the company began weighting its portfolio and assets in the funds business to Perth.

Ms Anderson also noted that WA’s hard border was a “two-edged sword for Perth and its economy.  On the one hand, Perth has managed to avoid the worst of COVID‐19.  With only a small number of days where Perth was locked down, most of our tenants were able to operate as normal.”

However, unloosening Covid restrictions in Perth could present issues.

Ingenia (ASX: INA)

Chairman Jim Hazel noted the company made a total of $215 million of acquisitions over the financial year, adding 1,800 income producing sites. Revenue was up 21% and EBIT increased 31% on FY20.

While holiday parks were impacted by the lockdowns, Mr Hazel said “… it was pleasing to see momentum build in the business as restrictions eased.”

Managing director and CEO Simon Owen said revenue grew by 21% to $296 million and cash flow was up 105% to $138 million. Underlying profit increased by 31% on the prior year and underlying earnings per security increased by 7% to 23.6 cents per security.

Charter Hall Group (ASX: CHC)

Chairman David Clarke praised the long term work of the company, which he noted as the reason behind the company’s performance throughout the pandemic.

“The resilience and success of the Group through this challenging period is not an accident. We have worked hard over many years to diversify the Group across asset classes, by equity sources and by tenant and investor customers,” said Mr Clarke.

“Concluding on the matter of remuneration, I would ask those who see our proposed remuneration levels as too high to look at the returns they and their clients have received over a long period of time and appreciate that these come from a rare combination of experience, insight and talent,” he said.