Codan Limited Aktie

[Audio Gap] Managing Director and CEO and joining me today is our CFO, Michael Barton. As announced at our half year results, Michael will be retiring at the end of August after more than 22 years for Codan. Over this time, Mike played a pivotal role in shaping Codan's financial discipline, capital allocation framework and acquisition strategy.

On behalf of the Board and the broader team, I like to once again since be thanking for his contribution to Codan. I'm also pleased to confirm that Kayi Li, currently our Deputy CFO, will succeed, Michael, at the end of the month. Kayi has also been deeply involved in our financial strategy and operational execution, and we remain confident in our continued seamless transition. I believe Kayi's appointment is a strong demonstration of our succession planning and development processes in place at Codan. Kayi and I look forward to meeting with many of our investors at our results roadshow in the coming weeks.

Questions are welcomed throughout today's presentation and will be addressed at the close of the session. coordinated by Sam Wells and NWR. Research analysts can raise their hand by Zoom to ask a live question while all other attendees are encouraged to submit questions using the Q&A function.

Before we begin, please take a moment to review our standard notice and disclaimer. Today, we'll begin with full year performance highlights, followed by a detailed review of each of our 3 business units, DTC, Zetron and Minelab. We also highlight some select products that contributed meaningfully during the year, demonstrating how our Greegwide engineering investment is translating into commercial outcomes across business units. We'll then revisit our strategy and near-term priorities before closing with our outlook heading into FY '27.

For those newer to Codan, we are a global group of technology businesses focused on critical communications and detection. Our technologies are designed for mission-critical environments, keeping people connected, informed and safe in demanding and offer remote conditions. We operate across defense, public safety, gold detection and recreational markets, supported by global footprint and strong engineering capability. At our core, we focus on reliability, performance and long-term customer relationships, particularly in the environment where failure is not an option. Our strategy to build a stronger Codan remains consistent and disciplined. It is underpinned by sustainable organic growth, targeted and accretive acquisitions, continued engineering investment and strong operational execution.

Diversification remains a key strength and is a key part of our results this year with Minelab communications, both delivering excellent performance. Over time, this approach is building a more resilient and diversified earnings base with improved visibility and quality. At a high level, the group's FY '26 performance reflects disciplined execution of our strategic plan. The strength of our differentiated technology and product portfolio and our ability to capitalize on long-term structural growth opportunities across our target markets globally, underpinned our outstanding performance.

Our Communications segment continues to deliver high-quality growth with revenue exceeding at the top end of our FY '26 target range. Metal Detection also delivered excellent performance, driven primarily by gold detected demand globally. Our strategy to invest heavily in engineering is what enables these outstanding results. This ongoing investment maintains our product and technical leadership across our businesses and drives our organic growth strategy.

Turning to the numbers. At the group level, year-on-year revenue grew 30% to $875 million, reflecting strong organic growth driven by ongoing high demand for unmanned systems and new gold detector products as well as a full year contribution from Kägwerks. EBIT and NPAT increased by 67% and 69%, respectively, demonstrating continued improvement in operating leverage across the group with both measures slightly above the guidance provided to the market on the 29th of April 2026. This reflects both revenue growth and improved product mix, particularly within Minelab and DTC. The Board declared a fully franked final dividend of $0.29 per share taking full year dividends of $0.485 per share, up 70% year-on-year, consistent with our disciplined capital management approach.

I'll now hand over to Michael to step through the financial detail.

Thanks, Alf. As highlighted, group revenue increased 30% year-on-year versus FY '25, Strong revenue and profit contribution from both our communications and metal detection segments. Expenses increased during the year, primarily due to targeted investments in strengthening the group's go-to-market resources, product launch costs, systems, processes, and capabilities to further scale the organization and higher performance-related remuneration.

NPAT margins improved to 20%, which was up 5% versus FY '25, more than offset the increase in expenses and reflected an improved product mix and a continuing improvement in operating leverage. Overall, the financial results reflect both strong performance and continued investment in capability. Codan finished FY '26 with a very strong balance sheet. Net cash of $36 million, which was an improvement of $124 million versus the net debt position of $88 million as at 31 December '25. This reflected the accelerated growth in revenue throughout the second half and strong cash collections.

The group balance sheet is in a very strong position with substantial funding capacity including a $250 million undrawn debt facility and a further $150 million in accordion capacity available subject to bank approval. These facilities provide Codan with financial flexibility to pursue our strategic inorganic growth opportunities. Our balance sheet remains a competitive advantage in executing on our strategy. Engineering investment during the half totaled $78 million, representing approximately 9% of group revenue. This level of investment is consistent with our long-term approach and support product development pipeline across both communications and metal detection.

In communications, investment is focused on advanced tactical platforms next-generation radio wave forms and the SALUS integrated command control platform. Within Minelab, investment continues to support product refresh cycles and technology leadership globally. This sustained commitment to innovation underpins our organic growth trajectory.

Back to you, Alf, as we take a closer look at our 3 core businesses.

Thanks, Michael. We'll now move on to the business units. Communications revenue grew 22% to $506.2 million, slightly above the top end of the targeted FY '26 15% to 20% range, driven primarily by strong demand for unmanned systems. The revenue from defense customers represented 58% of total communications revenue, up from 38% in FY '25, underscoring the importance of this vertical to Codan and reflecting the global tailwinds of sovereignty and increased defense spending commitments.

Communications segment profit increased by 45% to $156 million with segment profit margins expanding to 31%, up from 26% in FY '25. This reflects strong revenue growth, product sales mix and operating leverage. Pleasingly, the Communications segment exceeded the achievement of 30% profit margin by 18 months. Order book increased by 50% year-on-year and by 29% versus December 2025 to $380 million at 30th of June, driven by a strong uplift in order intake across both DTC and Zetron and providing strong revenue visibility into FY '27.

DTC delivered another exceptional result in FY '26, underpinned by defense and unmanned systems applications demand across all geographies. Revenue from the high-growth unmanned sector more than doubled to approximately $215 million. Throughout the second half, we saw continued acceleration in unmanned revenue across both conflict regions and nonconflict defense and security programs in the U.S. and Europe. Within DTC, product innovation included ongoing development, multi-waveform radios, along with enhancements to the existing Blue SDR range, aimed at offering improved network visibility, spectrum monitoring software and alternative antenna solutions.

This innovation led to DTC securing its first orders for the sale of radios into multiple programs of records for the U.S. military initiatives to drive sovereignty. Lastly, at the end of July, Codan completed the acquisition of Adaptive Dynamics, which we'll elaborate on in a couple of slides.

We include on the next slide, an overview of the Blue SCR family of products. DTC's Blue SCR radios are suitable for a huge range of unmanned platform in all domains across air, land and sea. In the air domain, which is by far the largest volume of units sold. The Blue SCR range finds applications on platforms on small motor drones through to much larger strategic surveillance platforms. The U.S. Department of War drying categorization system consists of 5 broad groups from Group 1, the smallest and typically the lowest cost tactical drones through the Group 5 large multimillion-dollar strategic platforms often deployed at ranges of thousands of miles.

DTC sweet spot today stretches from the high end of Group 1 through to group 3. The acquisition of Adaptive Dynamics will help us to compete with very high-end and high-priced military radios, typically deployed in this space by delivering increased resistance to jamming and interference. Our Blue SCR radios have been proven to be highly effective in both conflict and nonconflict defense environments for their secure and resilient waveforms and their ability to withstand the harshest field conditions.

Turning to the acquisition of Adaptive Dynamics, which was first announced in May. ADI is a U.S.-based engineering company specializing in the development, anti-jamming and interference mitigation technologies, critical to the resilience of tactical communications. A highly strategic acquisitions for DTC. ADI meaningfully enhances DTC's U.S.-based technical capabilities in unmanned systems and strengthens its ability to compete for the next-generation U.S. and allied defense programs, which require secure communications, electronic warfare resilience and AI-enabled integration in contested electromagnetic environments. ADI also provides us with a strong team of people and capability, which will continue to be integrated into our DTC North American team.

We also anticipate the ability to cross-sell in time into public safety markets. We look forward to updating the market further as we continue to integrate this business. In the first half of FY '26, Zetron was impacted by a temporary slowdown in federal procurement and contracting cycles in the United States. Second half revenue was broadly in line with the first half as guided in the trading update we released on the ASX on the 29th of April. Positively, order intake strengthened towards the end of the second half. resulting in a 25% increase in Zetron's order book as of the 30th of June 2026 versus the 30th of June 2025.

Key wins included a $19 million contract with 1 of the largest utilities on the East Coast, $11 million mission-critical services contract with the U.K. Emergency Services Network, and an $8 million radio communications modernization contract for a major provider of the underground transport services in London. Zetron also continued to receive strong order intake from its hosted services Iowa contract, which now services more than 80% of all public safety answering points across the state. Looking forward, Product development activity remains focused on sales, which is designed to provide a unified cloud-based software and services platforms at Zetron's command control applications.

On the next slide, we include further detail regarding the features of the SALUS platform. At its core, SALUS is designed to provide a unified interface and experience for the control room personnel. We believe this will enable the most optimal responses to be made during the most stressful events and emergencies. Providing a unified control room service in the form of a modular application maintains Zetron market-leading interoperability while minimizing the time it takes to respond to a call. Customers will be able to choose when and how they move to SALUS, either on-premise, via the cloud or a hybrid approach.

Customers will be able to choose when and how they move to SALUS. either on premise, wider cloud or a hybrid solution. Customers can also receive expanded and enhanced services and support from a managed services or life cycle solutions frameworks. We believe SALUS will generate meaningful value for Zetron across multiple dimensions. These include: growing recurring revenue by hosting and managed services solutions achieving high customer lifetime value through cross-selling opportunities and margin expansion by our software-led model and scalable cost base.

Additionally, we are confident that SALUS were enabled Zetron to equally serve Tier 4 through the Tier 1 customers, leading to a substantial expansion in our obtainable market.

Turning to Minelab. Minelab's full year results were exceptional with revenue up 42% to $362 million and segment profit of $162.4 million, up 65% versus FY '25. As guided in the trading update, Minelab delivered a stronger second half with 15% revenue growth in H2 FY '26 when compared with H1 FY '26, supported by successful product releases. Segment profit margin increased to 45%, up from 39% driven by revenue growth, product mix and operating leverage. Minelab successfully launched 4 new products in FY '26 in the gold, recreational and countermine markets, including the new flagship GPZ7000 gold detector the Gold Monster 2000, the Vanquish 60 and Counter mine MDS 20 detector. These launches reflect Minelab's global technology leadership across its detection platform. Minelab's rest of the World achieved significant growth, increasing revenue by 32%, driven by the strong uptake of the GPZ8000 as well as the Gold Monster 2000.

Substantial growth in the Vanquish range and a meaningful expansion in distribution footprint and retail presence in Australia and North America with additional in-store placement across key retail channel partners. Minelab Africa delivered another outstanding performance with revenue increasing in all regions to approximately $184 million, up 60% versus FY '25. The Gold Monster 2000 was launched successfully exceeding business case expectations. A key near-term priority is driving adoption of the GPZ8000 across Africa with training and grassroots activation activities continuing in FY '27 as market awareness and adoption builds.

This slide describes the GPZ8000 in more detail, including key features and enhancements relative to the 7000 model. resounding customer feedback for the GPZ8000 is that it represents a significant advancement in performance, particularly in highly challenging ground conditions. Minelab continues to invest in product innovation and engineering to reinforce its leading position in recreational and specialist detection markets.

Now I'd like to move on to the strategy update section of today's presentation. Our strategy remains anchored in 3 core pillars: first, investing in ourselves, strengthening systems, processes, people and product innovation. Second, strengthening our core businesses, expanding addressable markets, improving revenue quality and increasing recurring revenue components. And thirdly, disciplined capital allocation, pursuing strategically aligned and accretive acquisitions that enhanced capability, scale and market penetration.

Together, these pillars support sustainable, diversified earnings growth, we made significant price press against each of these strategic pillars in FY '26 as outlined in the slide. Our near-term objectives are focused on executing key initiatives across each business. In DTC, we are focused on the integration of Adaptive Dynamics electronics warfare capabilities, ongoing investment in a dismounted soldier ecosystem and continued investment in our next-generation and multi-waveform strategy.

In Zetron, we are seeking to complete the launch of our end-to-end services-based emergency response platform, expand market share by Zetron's next-generation computer-aided dispatch solution in the U.K. and completing and advancing the development of our sales cloud-based platform. In Minelab, we are focused on accelerating market growth by the 4 new detector launches in FY '26, advancing North America and European retail expansion and targeting e-commerce and channel engagement strategies. All these initiatives support both near-term performance and long-term structural improvement.

This year, as guided by Codan's core values, we introduced quarterly value awards, a chance to formally recognize people across the business who are living our values today. It's been a great addition to our culture. On community, we've continued our long-standing support for a range of organizations, variety, youth opportunities, Kickstart for Kids, Hutch Street Center and Catherine House. These are partnerships we're generally proud of. From an education perspective, we've deepened our investment in STEM through university scholarships, student mentoring and industry engagement. And this year, we are awarded the inaugural Codan Founders PhD scholarship, which is a significant milestone for us, and we also continued our support for Ilari and indigenous education scholarships.

And on the environmental side, Minelab's Clean Sweep campaign has been a real standout using our detector community to help the environmental stewardship. It's a great example of what our products can do beyond their primary purpose. Underpinning all of this are our 4 values you see at the bottom of the slide, customer-driven, trust and integrity, high performing and can do. These aren't just words on the wall, they shape how we run the business every day.

Next, I'd like to turn to our outlook section, looking at our view into FY '27. The group continues to deliver on the strategy of building a stronger Codan. Our strategic pillars of investing in people and systems, product development, strengthening Codan's position in core markets expanding in new geographies and disciplined capital allocation will continue to guide our focus in FY '27. Market conditions remain positive across both comps and metal detection. Elevated defense spending and ongoing geopolitical tensions globally continue to generate strong demand for unmanned systems, while mine lab benefits from demand for its market-leading products and a favorable gold price.

Some constraints are emerging across certain parts of the global electronic supply chain, which we are monitoring for any impact to co-own operations. The communications business targets long-term sales growth of between 10% to 15% per annum. And as demonstrated over FY '24 to '26, this target growth range can be exceeded. As a result of unprecedented levels of demand we are experiencing, primarily in unmanned systems, we expect the first half of FY '27 to significantly exceed the first half of FY '26. Given the strong start to the year, subject to related supply chain constraints resulting from ongoing order momentum, we are currently targeting full year FY '27 revenue growth in the order of 20%.

Minelab is well positioned for FY '27 with a full 12-month contribution from recently launched products. Early first half market conditions have been positive, with strong demand, in particular for the new GPZ8000 and Gold monster 2000 detectors. As a result, both Africa and rest of the world are currently tracking broadly in line with H2 of FY '26 revenue run rates. Overall, Minelab H2 FY '26 average monthly run rate was approximately $32 million, 15% higher than H1 FY '26. With a strong balance sheet and disciplined approach to capital allocation, the group remains well positioned to continue to invest in product innovation and capability and to pursue future acquisitions that fit our product and technology road maps, enhance the quality, resilience and the diversification of our earnings.

We look forward to providing a further update at the Annual General Meeting on the 20th of October 2026 and with that, this draws us to the end of our formal presentation session. We can now move to Q&A session with Sam. Thank you very much.

Thank you very much, Alf, and thank you, Michael. As a reminder, the audience may ask questions of the management team. [Operator Instructions] Firstly, we'll start with a couple of presubmitted questions. On unmanned revenue split in the first half of '26, you stated that unmanned revenue was approximately 50-50 between conflict and non-conflict. Can you just state what the split was for the full year FY '26, please?

Yes. Thanks, Sam. I think both parts of the business have grown really strongly, both conflict nonconflict doubled over FY '26. .

Okay. Great. And just on supply constraints, you referenced a potential supply constraint from ongoing order momentum. Can you elaborate here? Excuse me...

Yes, sorry, Sam.

Sorry. And are you witnessing this already? Or what level of growth could possibly constraints kick in?

I guess when you look at businesses like Minelab and DTC, where we're fundamentally making assumptions on forecast 6, 12, 18 months ago. So the demand we've seen has really outpaced our original forecast, which have been continually updated. So the outperformance in demand, really when we're looking forward, probably into H2, we're sort of seeing that we need just to continue to upgrade our forecast. And that's always a lag in time. So we haven't seen any impact at the moment.

All we're saying is from a constrained supply -- electronic supply chain environment globally, not really specific to Codan. We're just monitoring those forward forecasts and ensuring that we've got the right supply of components.

Thank you. Next question comes from Josh Kannourakis at Barrenjoey. Josh, please unmute your line and go ahead.

Congrats on the result. First things first, just on following on from the questions on man. Can we talk a little bit in terms of markets and some of the opportunity you see in front of you now, specifically interested in U.S. and U.S. defense. I know there's quite a few hoops to start jumping through to be considered within that market. Where are you in terms of that journey? And if you can give us any more context around maybe some of the broader geographic specs in terms of how you're seeing the outlook.

Yes. So when -- as Michael mentioned, our unmanned market in conflict and nonconflict areas has limitedly doubled previous statements in the past. So DTC's performance over the last 3 years and very solid performance in market. That reputation has drifted into the U.S. into the Asian area as well. We're on blue list at the moment in the U.S. So it really positions us well with a lot of the sovereignty projects that the U.S. are currently working on in unmanned systems. So we have received first orders for some of those sovereignty projects in the U.S., which is a pretty -- it's a significant milestone for DTC. And it also backs up our investment in the U.S. with expanding our staff there and our capabilities on the ground.

So -- and secondly to that, obviously, we've entered into some R&D projects with some countries in Asia to actually also progress their sovereignty when it talks about unmanned systems.

That's perfect. Exactly what I was looking for. And then just in terms of, I guess, the Adaptive Dynamics acquisition, that certainly looks obviously, they've got a really strong research background. They've got some product and IP market. When you sort of look at what the future of unmanned looks like going forward, how -- can you maybe just talk to us a little bit more about how that plays into it? And I guess, where you think that could position you versus some of the other key competitors, for example, like Silvus in the market longer term?

Yes. When you look at the acquisition of Dated Dynamics and you look at what we fundamentally do. And I thought that the slide we had on the types of drone is powerful where we've really gravitated from a type 1 drone common supply to type 2 and type 3. And in the missions that we are performing with those unmanned systems, your fundamental reason for being is to ensure that you can transmit data and comms, ADI, Adaptive Dynamics fundamentally gives us reassurance that really contested environments like electronic welfare environments.

We will have the capability to continue to transmit I'm not a technical expert on the servers radio anti-jamming features, but I am confident that the products we have today in DTC and the inclusion of Adaptive Dynamics ensures that robustness in communications in [indiscernible].

Next question comes from Elijah Mayr at Goldman Sachs.

Congrats on the result cracker result. Just following on, I guess, from unmanned. As you sit now, how much forward visibility do you have on unmanned? And is that starting to lengthen as the industry develops?

I think you need to -- in some markets, you probably have 4- to 6-month visibility in some markets, you would have less -- I always say at a maximum, it's a 4- to 6-month visibility market. You're really backing into other people's forecast, and they may vary. So that would be my sort of time frame on it, Elijah.

Yes. And then just maybe on a margin guidance perspective for comms, you previously talked about you've reached and exceeded that. Looking forward and with the 20% comms growth guidance, what should we think about for FY '27 or maybe on a medium-term basis, just noting that we should expect some reinvestment back into the segment. How do you think about those margins expanding now? And will you put sort of some targets on a medium-term basis for that comm segment?

I think we set the target a number of years ago at 30%. So we're really pleased to get there in FY '26, Elijah. We're not resetting that target range. This is a business that is growing really strongly, and we need to keep reinvesting in it, both in our go-to-market and in our engineering resources. So -- if we keep growing at 20%, we would expect some incremental improvement, whereas we achieved a step change in improvement in FY '26. So we're probably we would hope this business is in that low 30% range.

Next question comes from Mitch Sonogan at Macquarie.

Congratulations on good results. Just on to the unmanned segment, just in terms of that revenue, $215 million, correct me if I'm wrong, that's somewhere around $140 million in the second half, but you've also seen an acceleration of revenue through that second half and talk to the first half '27, significantly exceeding that period. So -- can you give us any sense of what we should be expecting into that first half, noting you've talked about a 4- to 6-month period of visibility?

Yes. I think the best way to think about it, we have given some targets for the full year, circa 20% growth for FY '27. This is not a seasonal business that has a normal H1-H2 split. It really is driven by projects and opportunities and where they -- what quarter are they landing or what half they land in. So I think you will see some significant improvement H1 on H1 of the but I wouldn't be building in seasonality in FY '27. .

Yes. And just in terms of your visibility of the man in the order book there. You talked to 4 to 6 months of visibility. So is it fair to say in terms of your order book come from what you can see now? Just trying to understand how much growth or how much visibility of revenue in FY '27 do you currently have in that unmanned revenue?

I think it's very similar, Mitch. I think we've got a good line of sight between the 4, 6 months and were fundamentally H1. And as Michael mentioned, A lot of these are driven off forecast orders from other manufacturers. So you can get some changes there, but we do have a level of understanding what we need to supply in the half.

Yes. And sorry, just a follow up. Just on one, you've given the monthly average there $32 million through the second half. Was there a higher exit run rate in there. Can you maybe just give a little bit more color about how we should think about that business looking at FY '27, given you've had really good success on Gold Monster 2000 and GPZ8000. It feels like it started to ramp up in terms of distribution now as well.

Yes. Thanks, Mitch. Yes. The results of Mine lab were really strong throughout the second half. So that average that we called out of $32 million. That was a good representation of what we did month-on-month. And we've started FY '27 at that same level. So yes, we've got off to a good start in FY '27 for the first almost 2 trading months.

Next question comes from Tom Tweedie at Moelis.

The first 1 is, can you give us a sense of Kägwerks revenue and EBITDA or EBIT contribution for the year? And just how it's progressing against the delivered program of record or new programs a record.

Yes. When you look at Kägwerks, they have continued to deliver in the net Warrior program. both at a dock light level and orders of dock Ultra, which is the high-end product, which has been pleasing. Like everything that Codan has acquired over the period, we've always had this 10% to 15% growth range that the acquisitions had to adhere to. They have done that and FY '27 looks within those ranges. Secondly, they have still orders to be filled or Net Warrior. We're working on some adjacent programs. So for all the strategic reasons that we actually bought Kägwerks, they're holding being integrated quite well now into Codan or DTC U.S.

So -- Yes. So they're hitting the metrics that we signed up for.

Great. And just a second 1 on Mine lab. You previously -- or in the recent past called out West Africa's key performing region, while Northwest Africa, Sudan regions probably had some disruptions. Today, you've sort of said performance across all regions. I'm just trying to read into that and see if those disruptions have eased, if the SALUS momentum is sort of come back to the Sudan Northeast region. And then you weaved into that is, are these 45% EBIT margin sustainable as the sales mix goes forward with all regions performing strongly?

Yes, I'll start with the Sudan question, no, that is still not activated from other areas, it's been a bit of an interesting cycle. I would say in Africa, we probably started some journeys in some peripheral countries like Ghana and they've become a fairly decent contributor to the African store. And then when you look at the rest of the world. The gold price halo has impacted positively. Australia, Latin America, APAC. So that rest of the world has continued to flourish. The positive there is also as we do that, we really have reduced our reliance on Africa, which has been a bit of a strategic goal for the last 5 years.

So if you wrap that all together, product mix the ability that we've gained share even in recreational markets increased our retail footprints. I think a mid-40s margin is sensational, right? And I think like all our other businesses, these businesses require reinvestment. And this is why we've won over a series of years because we've invested either in marketing or engineering. So that 45, 46 number, I think it's a valid number, and it's a number that we think is suitable for Minelab.

Next question comes from Cameron Bell at Canaccord.

Just thinking about the, I guess, the evolving landscape in unmanned. And I know your products are NDAA compliant. But what are the drone tariffs that were announced they mean for your market position?

Well, at the moment, I think those tariffs, whether the product is coming out of any of our major manufacturing hubs, it's probably around 10%. So we need to review the impact of that. So the revenue going into the U.S. from an unmanned perspective is not as large at the moment as our other geographic areas. My view, and I think this is a testament to our footprint, we will start localizing that product in the U.S. over the next 12 months. So if this thing continues, we'll have the ability to make that product.

We did make the product probably 4 years ago in the U.S. for subcontractors. So we have elements of ramping that up again. So -- but that's -- it's a discussion of time.

Yes. Okay. And I guess, as an extension from that, do you think at the moment you're taking market share in unmanned, and I guess why?

I think that's a really hard question to answer because you've got an unmanned market probably at 30% CAGR globally growing. And I think what we're seeing in the unmanned market is communication products really finding their niche across the types of products. and people are really understanding the requirement for those products in market. So I believe in some areas, we have displaced probably more from our ability to supply number one. Secondly, our tech is on par or better. But we are in a market that is extensively growing and we found a niche in that Type 2, Type 3. It doesn't mean we don't play in type 1, but we are following a significant CAGR curve of a trend that's happening globally. .

Next question comes from back to Kirk at Bell Potter.

Is it possible that some of the supply chain constraints that DTC may experience could also affect some of DTC's OEM customers?

That would be 1 and the same. So the products not differentiated between an OEM customer or a DTC customer. So the range of products are identical.

Okay. Great. Thank you. I think that's all we have for questions today. If there are any questions, please feel free to follow up with the company. Then maybe with that, Alf, I'll just pass it back to you for any closing comments.

Yes. I think, firstly, on behalf of Codan, the employees, the people, the Board, the exec and a lot of the shareholders like I thank Michael for 22 years of unbelievable service and stewardship of the roles he's had really has been a pillar of the story for such a long time through the good times and the bad times. So Michael, thank you. .

Thanks.

And secondly, I'd just like to thank everyone on the line for their continued support of Codan and its story, and we look forward to providing an update at the AGM. So thank you very much, Sam.

Thank you. That concludes Codan's full year FY '26 results webinar. Thank you, and enjoy the rest of your day. Goodbye.

Thank you.

Good morning, and welcome to Codan's H1 FY '26 Results Presentation. I'm Alf Ianniello, Managing Director and CEO. And joining me today is our CFO and Company Secretary, Michael Barton.

As announced this morning, after more than 22 years with Codan, Michael has informed us of his decision to retire at the end of August following our FY '26 full year results. Over that time, Michael has played a pivotal role in shaping Codan's financial discipline, capital allocation framework and acquisition strategy. On behalf of the Board and the broader team, I'd like to sincerely thank him for his contribution.

I'm also pleased to confirm that Kayi Li, currently our Deputy CFO, will succeed Michael as our Chief Financial Officer. With nearly 19 years at the business, including senior finance roles at Codan since 2013, Kayi has played an integral role in our financial strategy and operational execution. We are confident her experience will support a smooth and seamless transition.

In addition, Daniel Widera, our General Counsel and Joint Company Secretary, will become Codan's sole Company Secretary upon Michael's retirement. Michael will remain with the business for a structured 12-month transition period from August to ensure continuity and stability.

Before we begin, please take a moment to review our standard notice and disclaimer. Today, we'll begin with our H1 FY '26 performance highlights, followed by a detailed review of each of our segments being Communications and Metal Detection. We also highlight 2 products that contributed meaningfully during the half, demonstrating how our engineering investment is translating into commercial outcomes. We'll then revisit our strategy and near-term priorities before closing with our outlook for the remainder of FY '26.

Following our remarks, we'll move on to a live Q&A session, which will be hosted by Sam Wells from NWR. While Michael and I are working through the slides, you are welcome to submit written questions at any time [Operator Instructions]

For those newer to Codan, we're a global group of technology businesses focused on critical communications and detection. Our technologies are designed for mission-critical environments, keeping people connected, informed and safe in demanding and often remote conditions. We operate across defense, public safety, gold detection and recreational markets, supported by a global footprint and strong engineering capability. At our core, we focus on reliability, performance and long-term customer relationships, particularly in environments where failure is not an option.

Our strategy to build a stronger Codan remains consistent and disciplined. It is underpinned by sustainable organic growth, targeted and accretive acquisitions and continued engineering investment and strong operational execution. Diversification remains a key strength with Minelab delivering a strong cyclical performance and Communications positioned for structural long-term expansion driven by defense and public safety demands. Over time, this approach is building a more resilient and diversified earnings base with improved visibility and quality.

At a high level, our H1 results reflect consistent delivery against our strategic plan, underpinned by disciplined execution and favorable market conditions in several key regions. Communications delivered another period of consistent and high-quality growth, supported by strong defense demand and the integration of Kagwerks. Metal Detection delivered exceptional performance, particularly in Africa, where elevated gold prices supported demand. Importantly, this performance was achieved while continuing to invest in engineering, systems and people, ensuring that our growth remains sustainable and repeatable over the longer term.

Turning to the numbers. Group revenue increased by 29% to $394 million, reflecting strong organic growth and a full first half contribution from Kagwerks. EBIT increased by 52% and NPAT increased by 55% to $71 million, demonstrating strong operating leverage across the group. This reflects both revenue growth and improved product mix, particularly within Minelab. The Board declared a fully franked interim dividend of $0.195 per share, up 56% on the prior corresponding period, consistent with our disciplined capital management approach.

I will now hand over to Michael to step through the financial detail.

Thanks, Alf, and thanks for the kind words at the start of your presentation. Also, I'd just like to thank you for your support of the succession plan to Kayi and Daniel, much appreciated. And thank you for making the time under your leadership so enjoyable and so successful.

On to the numbers. So as highlighted, group revenue increased 29% during the half and pleasingly, the growth came from both our Communications and Metal Detection businesses. Our gross margins increased 58% and all profitability metrics were increased. Operating expenses increased primarily due to a targeted investment in shared services, higher performance-linked expenses, which are reflective of our strong results, product launch costs and the integration of Kagwerks for the full period.

Tax expense was slightly higher at 25% with more of our increased Metal Detection profits taxed here in Australia. NPAT margin improved to over 18%, reflecting improved profitability and operating leverage. We continue to actively manage our foreign exchange exposure through our hedging program with contracts in place to mitigate approximately half of the expected USD exposure in the second half. Overall, the financial result reflects both strong performance and continued investment in capability.

We closed the half with net debt of $88 million, an increase of $10 million compared to June, largely reflecting working capital investment to support growth and our increased activity levels. Leverage remains conservative at 0.4x EBITDA. With an undrawn debt facility of $140 million as well as an additional $150 million accordion capacity, we retain significant financial flexibility to pursue inorganic growth opportunities.

This slide illustrates the key drivers of our net debt movement during the half, including the investment in operating cash flow into working capital to drive growth, our dividend payments and continued investment in our engineering programs. Engineering investment during the half was $36 million, representing approximately 9% of Group revenue. This level of investment is consistent with our long-term approach and supports product development pipelines across both Communications and Metal Detection.

In Communications, investment is focused on advanced tactical platforms, next-generation waveforms and public safety applications. In Minelab, investment continues to support our product refresh cycles and our technology leadership. This sustained commitment to innovation underpins our organic growth trajectory.

And back to you, Alf, to take a closer look at our business units.

Thanks, Michael. We'll now move on to the business units. Communications revenue increased by 19% to $222 million. Segment profit increased 17% to $58 million, with margins broadly stable at 26% as we integrate Kagwerks and manage the challenging trading period in Zetron Americas. The orderbook increased by 19% to $294 million at the 31st of December, providing strong revenue visibility into H2 and beyond. We remain focused on progressing Communications margins towards our 30% target by FY '27 as integration benefits and scale efficiencies materialize.

DTC delivered strong growth, supported by defense demand and increased adoption of our unmanned system solutions. Revenue from unmanned systems increased 68% to $73 million. Approximately half of this unmanned revenue during the period related to operational defense application in conflict zones with the balance being driven by adoption of our technologies across non-conflict defense and security programs in Asia, the U.S. and Europe. Importantly, growth rates across both conflict and non-conflict markets were broadly consistent, reinforcing the structural expansion of the unmanned systems market.

Kagwerks contributed in-line with expectations and continues to integrate effectively, enhancing our position within U.S. military programs and strengthening our ecosystem offering. Our presence across the U.K., U.S. and Australia positions us well to capture long-term defense program across allied markets.

The BluSDR contributed meaningfully during the half and represents a strong example of our engineering capability translating into commercial success. It is an ultra-lightweight, high-performance software-defined radio platform designed for long-range, secure connectivity across unmanned and mobile applications and has proven particularly well suited for drone-based deployments. Its technical characteristics, including high output power, mesh networking capability and low size, weight and power reinforces DTC's competitive positioning in mission-critical communications.

Trading conditions for Zetron Americas were temporarily impacted by slower procurement cycles across the state and local agencies that we serve, which extended sales cycles and deferred order timing during the half. Early indications in the second half of the year are encouraging with trading conditions showing signs of improvement as funding approvals progress. Outside the Americas, EMEA and APAC markets delivered stable performance. We continue to invest in next-generation 911 capability and the SALUS platform to enhance recurring revenue streams and strengthen long-term customer retention.

Minelab's first half results were exceptional, with revenue up 46% versus prior corresponding period to $168 million. Segment margin expanded to 45%, reflecting a higher mix of gold detector sales and improved operating leverage. Africa delivered exceptional performance, supported by elevated gold prices and strong demand across West Africa. Rest of the world delivered high teens growth, which is an excellent result, reflecting continued strength across key recreational markets. Rest of world performance was supported by product innovation, retail expansion and the ongoing development of our direct-to-consumer platforms. This performance highlights both cyclical tailwinds and structural improvements in the business model.

During H1, we launched the Gold Monster 2000. It delivers enhanced sensitivity to ultrafine gold and improved depth and accuracy in mineralized ground, critical attributes in many of our core gold markets. Early customer feedback has been positive, supporting continued momentum as distribution scales up.

Now I'd like to move on to the strategy update section of today's presentation. Our strategy remains anchored in 3 core pillars: first, investing in ourselves, strengthening systems, process, people and product innovation; secondly, strengthening our core businesses, which means expanding addressable markets, improving revenue quality and increasing reoccurring revenue components; and thirdly, disciplined capital allocation, where we pursue strategically aligned and accretive acquisitions that enhance capability, scale and market penetration. Together, these pillars support sustainable, diversified earnings growth.

In DTC, we are expanding towards a full system solution provider model, continuing investment in the next generation of waveforms and ecosystem integrations.

In Zetron, we are focused on increasing reoccurring service revenue and expanding support contracts and also advancing next-generation command and control platforms.

And in Minelab, we continue product innovation, retail footprint expansion and channel development with another new detector scheduled for release shortly. These initiatives support both near-term performance and long-term structural improvement.

Now turning to our summary and outlook on Slide 23. Tying today's presentation together, market conditions remain positive in both Communications and Metal Detection, reflecting the diversified nature of the Group's portfolio and the quality of our business. Codan's strategy is to continue to invest in engineering programs to maintain product and technology leadership and to underpin long-term growth.

In Communications, elevated defense spending and ongoing geopolitical tensions globally continue to generate strong demand for our unmanned systems products. Communications is on track to deliver FY '26 revenue growth within a 15% to 20% target range, supported by strong underlying demand and the full year contribution from Kagwerks.

Minelab revenue in the second half of FY '26 to date is tracking in line with the strong first half performance. Based on Minelab's current trading conditions, we expect the second half performance to be at least in line with the first half, supported by favorable gold market conditions and a full 6-month contribution from recent product releases.

With balance sheet capacity and a disciplined approach to capital allocation, Codan remains well-positioned to continue investment in the business and pursue future acquisitions that fit our product and technology road maps, which enhance the quality, resilience and the diversification of our earnings. The company will continue to keep shareholders updated as FY '26 progresses.

Back to you, Sam.

As a reminder, the audience may ask questions to the management team. [Operator Instructions] There are a few pre-submitted questions, so I'll kick off with those before getting to the analysts.

Firstly, just on Communications margins. You've talked about the moderating pace of margin expansion within Communications. Can you elaborate on the path from current margins to the 30% target by the end of FY '26?

Yes. Thanks, Sam. Yes, remain -- we've been very consistent that we remain focused on margin expansion. We did improve organically in the half, which was good. And we've been really consistent also on our revenue expectations for Communications, the 15% to 20% range remains the focus. As we deliver that and we see further revenue growth to be within that range in the second half, we would expect to see more improvement at the margin line as well.

And on Zetron, can you elaborate on the early encouraging signs in trading conditions in the Americas business? And are there any meaningful near-term opportunities specifically in the U.S.?

Yes. I think we posted a really pleasing increase in our order book at the half. So quite -- I think we're up 16% versus June, 19% versus last December. So we do go into the second half of this year with a stronger order book than what we entered the first half. So that's pleasing and sets us up to be within that 15% to 20% range that I mentioned. And I think we're also seeing -- while not yet in the order book, we are seeing some increased activity in the pipeline also in the U.S. market, public safety market for us.

And on Minelab Africa, an exceptional set of numbers within the Minelab business. How should we think about the sustainability of this performance, particularly in the context of 45% segment profit?

I think when you're looking at Minelab, I don't want to make it just an African discussion. We had a rest of the world high teens growth rate, really reflecting great execution from the Minelab team at a distribution, e-com level and direct-to-customer approach and new releases of great product. And then when you look at Africa, obviously, the gold price has been a tailwind for Minelab and then our great products have been a tailwind for Minelab. So the 45% is an exceptional number in its own right, and we believe it's maintainable in the future.

And just moving to unmanned. You printed some extraordinary numbers within the unmanned business. Can you help us understand how sustainable these opportunities are, particularly within the defense landscape?

Yes, it's really interesting. If you wind back 12 months, 18 months throughout these calls, we've referred to an unmanned market growing at 30% per annum globally. This is just increasing. The environment and the ecosystems in defense are very different today than they were previously. Our solutions back right into those unmanned platforms. And our ability to perform in conflicted environments well has really created a halo effect into other markets, hence, highlighting the success of the BluSDR-90, which was really born over the last 18 months through very high exposure to very conflicted environments. So we think the unmanned space over time will continue to be a significant tailwind for Codan.

Got you. And just shifting to some of those non-conflict opportunities you referenced in the presentation. Can you just elaborate on those? And where are the bulk of the revenues coming from in terms of specific applications?

Yes. So I won't talk about the specific applications. I'll talk more about the market -- the geographic markets that we are looking at. So if you look at, we did call out, we've started to see some positive work in the U.S., positive work in APAC, positive work in Europe. So if they're not in a conflicted environment at the moment, they're probably preparing for pre-conflict, I would say. So -- and again, let's take a step back and just reflect on the technology that we put in market, and that technology fundamentally is selling itself in these other markets at the moment.

Great. We'll move across to some of the analysts. First question comes from Josh Kannourakis at Barrenjoey.

First, congrats, Michael, and wishing you all the best on the transition of your new steps and congrats to Kayi as well on the step-change in role. Good to see.

Just jumping on to the first question just around regional exposure. So you did mention a bit of a step-up in terms of activity in the U.S. I know there's a lot of hoops to jump through in terms of getting into those programs and historically comms being dominated by a couple of those big local players. Is that a new incremental thing? Can you just give us some more detail on how recent that is? And maybe just specifically around the U.S., what you think the opportunity is across the broader comms space? And then obviously, specifically, unmanned as well?

Yes. I think when we look at comms in the U.S., we probably look at the dismounted soldier solution within the Kagwerks acquisitions and the unmanned solution giving us some good dialogue with potential U.S. customers. So there's a lot of -- as always, with these platforms, they're not plug-and-play. They are plug significant testing and evaluation and then you get an order. So we are comfortable that we're having the right dialogue with the right organizations, either at a defense department level or Tier 1s into the defense department. So that is positive.

The other areas that we're actually having positive traction is APAC, and I won't go into the specific countries, but also there's been an uptick in European defense spend, and there's been some sort of shadowing of that application of that funding into unmanned systems and the DTC product category itself.

Got it. That's really helpful, Alf. And just in terms of -- so just to understand it within the U.S. specifically because I guess my understanding was more that a lot of your volumes and things historically have been outside of that region. So you're sort of from a military perspective, within the sort of evaluation phase at the moment for that. So that's probably in terms of potential upside, that's significant if you can get through that. And -- but then on the other side, you're seeing traction in some of the nonmilitary sort of settings also. Is that the way to sort of read it through?

Yes, that's right. If you look at what we've seen over the last couple of months, we've been heavily involved in the border with our communications. So that's with government departments, not defense related. We are also heavily working with other sort of peripheral government departments in the U.S. that require our solution that in some ways, isn't defense related, it's more public safety related in theory, keeping the American public safe. So yes, and that's a great thing with the product categories. We can actually put it into dismounted soldier solutions, unmanned solutions, public safety solutions.

Great. And just in terms -- I know you don't want to go into specific countries for obvious regions, but there's been some very large funding packages allocated to areas like Taiwan and in that sort of region. There's also a lot more flagged in terms of progressive step-up. How early in the journey do you think you are? Are you sort of -- do you have the right connectivity in place to capture what will obviously be a significant step-up in this broader region?

I would suggest, as we've said in the U.S., we are all part of the right conversations happening in APAC and EMEA being Europe. So yes, we're definitely having the right discussions with the right levels of people.

Awesome. Final one from me. Just on M&A. I mean, obviously, it's been a pretty tumultuous environment across the software space. Defense on the other side has obviously has been a lot more favorable in terms of all the trends you've talked about. Can you maybe just talk about when you're thinking about it now the lens, how you're sort of seeing that in terms of the opportunities within both maybe comms and -- within comms within the tactical side, but also Zetron, especially with some of the potential in software, the AI-related disruption as well.

Yes. I think when you look at Codan and you look at our comms, the good thing we make products with software on it. So the -- any AI application is just an enhancements to the product and the end user, and that's how we actually see that. But we have pipelines of M&A targets. As you clearly mentioned, in the defense world, it's pretty hot at the moment. Multiples are far higher than we've seen in the past. People on the line would clearly know that we are very prudent when it comes to acquisitions about multiple and accretion levels. So we've been involved in processes. Some have worked. And then as in the past and the ones that we've been unfortunate on has been really the fact that we didn't believe we could extract the right value for it. But the process continues. We've invested heavily in structure at Codan. So we've got the right people working on it. We're looking heavily on how to enhance our technology road maps and our market positioning.

So it's definitely a space where you just need to continue to be active in and ensure that you buy well and you can extract value for the future. So that's where we're at, Josh.

Next question comes from Mitch Sonogan at Macquarie.

And yes, congratulations to you, Michael and also Kayi as well. Just echoing Josh's comments. Just the first one, just on the outlook for Metal Detection or Minelab second half revenue to be at least in line with the strong first half. Just trying to get a little bit more color on that because obviously, you had pretty strong sequential growth. You've got, as you said, good gold conditions in that market and also still benefiting from new product releases. So just trying to understand what sort of visibility you have at the moment, how we should think about the second half potential upside risks.

Yes. Well, it's interesting if we talk about Minelab, that's probably the first time we've actually ever given a forward-looking number in Minelab. So yes, we've had a strong first half, right? We've got a lot of tailwinds either from a gold perspective -- gold price perspective, new product introduction, great performance in recreational. We sit here today, and we never comment on seasonality in Africa because we don't know. So we're not going to be a fact-based about that. But we do sit here today that we're saying there's the same tailwinds that existed in H1 exist in H2. And so I guess that's what our commentary was about, so okay?

Yes. And just in terms of -- obviously, you called out Africa being quite strong. But do you mind just giving a bit more color on other regions where you might have seen some big outperformance and other areas that you are more positive on the next 6 to 12 months as well?

Yes. I think I'll call out Australia. I think our work we've done in Australia has been exceptional on repositioning the way we go to market, big tick, some great work in APAC, big tick, LatAm, big tick. And then you've got Africa and Europe. We have been consistent in our approach either at a recreational level with e-comm, the marketplaces, the distribution point increases and new product introductions. So when I look at Minelab, it's very hard to fault anything they're doing in any market at the moment. And the most important thing is I'm as excited as with the gold detection and the gold sales as I am with the rest of the world sales because that high teens growth in a fairly flat consumer market is fantastic. So it just shows that where we're spending our money away from product development, it's working.

Next question comes from Evan Karatzas at UBS.

Just can we dive into Zetron a bit here. One of your larger competitors, Motorola, I mean they've been delivering some pretty consistent strong growth over recent quarters to their command center business. Can you maybe just speak to why you think there's such a discrepancy there to what you've seen in the U.S.? And anything you can, I guess, elaborate on around that order book for Zetron explicitly and how that's changed relative to 6 months ago, how you entered the year as well?

Yes. Good question. I think when you look at Motorola in the command and control space and you look at us, I don't think we're comparing apples-to-apples consistently on product offering. There's probably a bit more rolled up in that space of Motorola.

And secondly, they're a Tier 1, Tier 2 player. We're a Tier 3, Tier 4 player. The way the funding and the grants work for Tier 3, Tier 4 are slightly different than they are in Tier 1, Tier 2. So -- and I think we also need to analyze Zetron over the last 4 years of Codan ownership, it's been well above market growth rate. So it's been an amazing acquisition for Codan.

And so looking forward, what are we seeing in January, Feb when you -- just going further to what Michael said, yes, orders are being unlocked, so that they're pushing into the order book. There's far more activity in the pipeline. So the activity levels have come up from H1. It's a financial year. I think let's have a chat at the end of H2 and where these orders have rolled through. And let's not get away from the fact that we have entered H2 with an order book that is higher than most times. So that's the marketplace that public safety, it is.

Also, let's not -- also let's understand the fact that we've been doing well in APAC and EMEA as well from a Zetron perspective, so.

Yes. Okay. No, all fair points. And just sort of coming back around to the DTC, the tactical comms, just around those investments you've been making, especially for contested environment, some of those new product releases, have they now been released into market? And then you can talk to about how early take-up or reception has been? And then also how that helps when you spoke about from a strategic sense with that expansion into your other growth regions like North America, Europe, Asia as well?

Yes. From a product perspective, I think the DTC product category is quite set. The feature content involves from market feedback. And that's the sort of the strength that we've had. We've been able to feed back those technical requirements from the field back into our product really quickly, either enhancing current product or creating new product like the SDR-90. So at the moment, we're heavily focused on feature content for the SDR range. And also we're heavily focused on feature content for the Kagwerks range as well. So probably less form factor changes, but more on feature content for the environment that these products work in.

We might just move on to the next question, please, from Tom Tweedie at Moelis.

Just the first one on Kagwerks. Are you able to give us a sense of the revenue contribution for the half for that business? And also just the color on the pipeline for program of record RFPs?

Yes. If I'd just give you the revenue range when we acquired that business, I think we were expecting high $40s million revenues into the low 50s. And I think we've commented, Tom, that it's been -- it's met our expectations. So it's been in that range over its first, what, 13 months of ownership. And Alf, do you want to talk about pipeline?

Yes. So when you look at, we've been heavily invested in supplying the Nett Warrior program, doing some international BD on other Army opportunities that we're looking at. I think what I've seen, which is very pleasing for us from a Kagwerks perspective is there's an evolution of movement from the standard DOCK Lite product, which is the base version to the DOCK Ultra product, which is the version with the radio and the AI technology and the edge computing technology. So that's what we're seeing happening in the Nett Warrior program itself. So that is significantly positive for us. And then like everything, we'll just keep doing the BD efforts with the other defense opportunities in the U.S. and internationally.

Very helpful. Just on Minelab and that side of the business, you called out detector launches. In the release, you've also mentioned one new detector to launch shortly. Just stepping back, can you remind us what the expectations are in the pipeline there over, say, the next 12-18 months for further models to come to market?

Yes. So we've released already an upgraded recreational detector, a new countermine detector and obviously, the Gold Monster 2000, great launches, great tech, keep moving forward. We've got a high, high-end gold detector coming out in the next couple of weeks, which is the GPZ, GPX range updates first time in almost a decade. So it will be -- it's probably anxiously being awaited by the users globally.

Post that, the Minelab team has a road map on enhancing detection out 12 to 18-24 months. So -- and that's across recreational and gold and countermine, which is really the key areas. So there's no shortage of ideas from our Minelab. They are very good at creating products that exceptionally -- work exceptionally well in market. So like we always say, our ability to move that IP from an idea to a product is really the Codan superpower.

Awesome. And then one final one. You made a comment earlier around the distribution for Gold Monster 2000 still expanding. Are you able to give us a sense of -- is that in terms of key markets that you've still yet to properly launch the detector in? Or is there still more distribution to go in the second half? Can you give us a sense of what that comment related to?

Yes. I think that comment relates to launching a product. When you launch a product, we launched at the back probably in middle of Q2. So you're just ramping up supply chains, you're ramping up product to get into market. So at the moment, we're just in the ramp-up stage of Gold Monster 2000. So the scale up is to -- you just scale up production over time and you get into the supply chain into your customer base as more markets. And that's what that comment is about. So we are well on the way now, and that will continue over the next 12 to 18 months, I would suggest.

Next live question comes from Cam Bell at Canaccord.

Just a couple of quick questions. So the Metal Detection comments you gave in the second half, flat revenue. Is it fair to say that with flat revenue, we can expect similar margins in the second half?

I think, Sam (sic) [ Cam ], we used the words at least rather than flat. So yes, in terms of the commentary on H2. At these revenue levels, we think 45% contribution margin out of Minelab is outstanding. We don't -- at these revenue levels, that would remain our expectation. I think it's fair to say at this level of revenue and that level of profitability, we are looking to reinvest in that business to continue the revenue growth that we've seen. So 45%, if that's what the contribution margin is in H2, that would be a fantastic result.

Yes. Okay. I might stick with just 2 quick ones for you, Michael, to continue off on those. You might not miss these style of questions in a few months' time. Last half, you had a bunch of M&A costs unallocated. Is it fair to say there were some of those semi potentially nonrecurring M&A costs in this half?

Yes, probably not to the same extent. But yes, we did have M&A activity and ongoing integration costs across the business. We don't really call them out as one-off, Cam, because the business continues to evolve, and we continue to invest in different areas of the business to improve what we do. So the costs we've incurred in the first half is a fair representation of that cost base going forward.

Okay. Sure. And then just last one for me. Is 25% tax rate the new norm?

Yes. I think with this mix of product, then yes, we're going to be in the mid-20s, whether it's 24%, 25%. But yes, I think we're in that range. Our Minelab business performing at this level, highly profitable. All that IP is generated here in Australia. We pay all of our -- majority of our Minelab taxes here in Australia at $0.30. So that caused that rate just to go up a percentage point or 2.

Okay. Great. And congratulations, Michael, on everything you've achieved over the last 22 years.

22 years, yes. Thanks, Cam.

And maybe just one last question here from James Lennon at Petra. Can we expect Codan's typical seasonal movement in working capital to repeat in FY '26, i.e., a wind down of working capital as the financial year progresses?

Yes. Historically, that has been the case, Sam. Look, we have had an increase in working capital over the first half. A lot of that was just activity related and the timing of that activity. So -- and we've had a really strong start to the year, the second half, a really strong start from a cash collection point of view. So some of that has unwound to start the second half. So yes.

And just one final question. What is DTC and Zetron revenue for the half? And would you consider disclosing DTC and Zetron revenue going forward?

I think we get asked that question a lot. And I think when we did the full year presentation for '25, we started talking about public safety ecosystems, defense ecosystems, unmanned, how it all comes together. If you see here today as Codan compared to 4 years ago, our Comms divisions are converging with the products that we have and how they work in market, right?

So I guess a short answer to that is that we probably won't because a lot of our thinking is around public safety, which is heavily linked to Zetron, but there is creeping in on DTC products for that as that ecosystem evolves and not dissimilar to the defense ecosystem where you have unmanned systems, you have dismounted soldier solutions and you've got our standard core products in HF. So I guess the answer is that I see more converging rather than diverging today than I did probably 4 years ago.

Okay. Great. Thank you. We're just going through the hour. So I think that's all the time we have for live Q&A. If there are any follow-ups or unanswered questions, please feel free to reach out to us directly. And maybe with that, I'll just pass it back to you, Alf and Michael, for any closing comments.

Yes. Thanks, Sam. First, I'd just like to thank everyone for joining us today and the continued support you have for Codan as an organization. I think today, it just continually demonstrates our consistent approach in running Codan, our consistent strategy, our investment in product development, our investment in people and processes. We've actually steered into very good markets through M&A. So we sit here today, highly confident in our strategy, highly confident on our skills and execution and delivery and above all, that consistent approach. So I'd just like to thank everybody and we'll provide updates as we see fit for the rest of H2.

Great. Thank you very much for joining today's Codan's First Half FY '26 Results Call. Enjoy the rest of your day. Thank you, and good-bye.

Good morning. Good morning, ladies and gentlemen. My name is Graeme Barclay, and I am the Chair of your company. We acknowledge the Kaurna people of the Adelaide Plains as the traditional custodians of the land we are meeting on today. We pay our respects to Elders past and present and recognized the enduring connection of Aboriginal and [ Torres trader ] Peoples to country.

As Chair of this meeting and on behalf of my fellow directors, I'm pleased to welcome you to the 2025 Annual General Meeting of Codan Limited. It's just after 11:00 a.m. and as a quorum is present, I declare the meeting open.

Today's meeting is a hybrid meeting in addition to the company representatives and shareholders present, in the room with us here at the drive, shareholders, proxy holders and guests can participate in the meeting virtually via Computershare's online virtual meeting platform. Virtual attendees can watch a live webcast of the meeting, and shareholders and proxy holders can ask questions and submit votes. As previously mentioned, my name is Graeme Barclay, and I became the Chair of your company on the first of February 2023. It's my pleasure to introduce the current Board of Directors of Codan to you, and I will ask each director to acknowledge or put their hand up as I introduce them.

Firstly, I'd like to introduce Kathy Gramp. Kathy was appointed to the Codan board in November 2015, and and as Chair of the Audit and Risk Committee and a member of the Remuneration and Nomination Committee. Next, I'd like to introduce Sarah Adam-Gedge who was appointed on first of February 2023 and and as a member of the Audit and Risk Committee. Sarah is retiring by rotation in accordance with the company's constitution and is standing for reelection.

Next, I'd like to introduce Heith MacKay-Cruise, who was appointed on the first of March 2023 and as a member of the Remuneration and Nomination Committee. Finally, our Managing Director and CEO, Alf Ianniello, who joined the Board in January 2022.

We're also joined by Michael Barton, who will act as the Company Secretary for this meeting. Michael was appointed to the position of CFO and Company Secretary in September 2009. I I've asked Michael to address some of the administrative matters in relation to voting procedures for today's meeting and to read out any shareholder questions that we received prior to or during today's meeting. And I'll ask him to do that at the appropriate time.

You will note the slide displays to those attending virtually how to ask a question and how to vote on the virtual platform. Technical difficulties could arise during the meeting. And I note that I have the discretion to determine whether and how the meeting should proceed if we experience such technical issues. If I have to exercise this discretion, I will have regard to the number of shareholders impacted and the extent to which participation in the business of the meeting is affected.

I now declare voting on all items of business to be open.

[Voting]

The vote icon will soon appear for those voting online. You may submit your votes at any time. I appoint Nigel Bulling of Computershare Investor Services to be the returning officer and to conduct the poll. As outlined in the notice of meeting, where your directors are able to express a view on resolutions, your Board strongly recommends that shareholders vote for the resolutions. The notice of meeting and explanatory memorandum was distributed to all shareholders on the 19th of September 2025, and I propose to take them as read.

The format for today's meeting is an address from myself as Chair an address from our CEO on Codan strategy, financial performance in FY '25 and year-to-date and the near-term outlook. We'll then move to the formal resolutions to be voted on at the meeting following which there will be an opportunity for shareholders to ask general questions. Proxies have been received from 415 members, representing over 75% of the company's voting shares. These will be reported to the ASX for each resolution. As we get to each of the resolutions and prior to shareholders being asked to cast their votes, the proxy votes will be displayed on the overhead screens for members information.

Before Alf address, I'd like to take a few minutes to reflect on the progress that Codan has made over the past 12 months and how the 2026 financial year is shaping up so far. As I said, I extend a warm welcome to all shareholders attending today's meeting, and I consider it a privilege to be the Chair of your company. The FY '25 year has been another successful year for Codan, achieving 22% growth in group revenues 28% growth in group EBIT and 27% growth in group NPAT, net profit after tax. Each of our businesses contributed to the improved financial performance in the past 12 months.

Our communications business comprising Zetron and DTC grew revenues to $413 million, up 26% on the prior year and grew segment profit to $108 million. Importantly, segment profit margins improved to 27%, up from 25% in the prior year as revenue scaled and cash generation also improved. Assisting the group's net leverage position at year-end. The closing order book increased to $253 million, up 28% over the prior period order book of $197 million which is a strong lead indicator of continuing growth for the current FY '26 year.

With the successful acquisition of Kagwerks in FY '25, together with the investment in sales and engineering capability, at both DTC and Kagwerks during FY '25, we continue to see significant opportunity for these businesses to grow, both organically and inorganically in FY '26.

Our Minelab business achieved a 16% increase in aggregate revenue to $254.8 million achieved organically with segment profit growing 26% to $98 million and segment margins improving to 39%, up from 35% in the prior year, reflecting the higher margins achieved on gold detectors and the operational leverage this business has as revenue scales. Supported by the high gold price, which has continued into FY '26, Minelab Africa had a strong year booking a 64% increase in revenue to $115 million, reflecting broad demand across the region other than from [ Sudan ], which remains largely disrupted. We were pleased Minelab rest of World revenues exceeded FY '24 levels in a challenging consumer market, reflecting extension in both our retail distribution and e-commerce channels. Countermine's performance was below what was achieved in FY '24 as global funding for humanitarian projects became tighter.

And this prompted us to plan to reposition our product development efforts towards military applications. We remain committed to our clearly articulated 3-pillar strategy. invest in ourselves, strengthen our core business and disciplined capital allocation. Pillar 1 is to invest in ourselves by continuing to build business development, engineering, development and operational capability around the globe so that we are well positioned to win new business in large growing addressable target markets. Pillar 2 is to strengthen our core businesses. through sustained engineering investment in product development to maintain our competitive position across all segments remains core to Codan success. And we have a pipeline of new product development projects underway in each of Minelab, DTC and Zetron. Minelab has 4 new detectors scheduled for release during the current year, which will have a positive impact on FY '26 revenues although the full year benefit of these releases will not be seen until FY '27.

Pillar 3 is to diversify earnings and create value through the allocation of capital to inorganic growth of the communications business, which has worked well to date and remains an important focus for FY '26. During FY '25, we successfully completed the Kagwerks acquisition in line with our strategy, which expanded our relevance in the U.S. defense ecosystem and enabled access to the funded net warrior program of record. We've been clear that where we identify acquisition opportunities that allow us to expand our addressable markets. Our cost effectively accelerate differentiated product development or fill technology gaps or that provide complementary technologies and capabilities we will continue to pursue these opportunities where we believe the outcome will be accretive for shareholders.

With net debt at $78.3 million at 30 June, we have a low debt-to-EBITDA ratio of less than 0.5x. Recently renewed banking facilities of $250 million plus $150 million accordion capacity subject to approval provides us with the financial flexibility to pursue small- to medium-sized on-strategy acquisition opportunities as they are identified. FY '25 has been an excellent year for Codan shareholders with EPS growing by 27% and dividends per share also growing by 27% compared to the prior year. In addition, Codan's share price has risen more than 2.5x from $12.03 at 30 June 2024 to $34 being the closing share price yesterday. And the market capitalization of your company is now approximately $6.1 billion.

So turning to executive remuneration. And there are a couple of resolutions on the resolution list today in relation to this. The remuneration structure and outcomes for FY '25 are set out in detail in the remuneration report. You will note that we have continued to make changes to the remuneration structure to motivate the executive team to achieve superior performance with an equity-based superior performance incentive scheme for our CEO and executive team, which we introduced in FY '25 to further align their remuneration to shareholder outcomes. For FY '26, we've increased the EPS compound annual growth targets by an additional 3% per annum for the LTI and SPI schemes. The SPI scheme -- superior performance incentive scheme [indiscernible] greater than 24% at the top end of the range for the FY '25 to FY '27 period. We see this very close alignment of executive reward -- executive reward with shareholder returns is an important principle that we'll continue to guide how your board structures executive remuneration. The outstanding results we have achieved in FY '25 don't just happen. They are the collective outcome of all of the excellent work done by more than 1,000 employees globally.

And on behalf of the Board and myself, I thank the Codan executive team led very effectively by Alf and all Codan employees around the world. For their efforts and contribution during FY '25 and the FY '26 year-to-date to building a stronger Codan.

Thank you to my Board colleagues for their hard work wisdom and collegiate approach. And finally, to our shareholders, we appreciate you have a choice how and where you invest. And we thank you for your continuing support of an investment in Codan.

Please now welcome your Managing Director for his address.

Good morning, ladies and gentlemen, It's a pleasure to welcome you to the 2025 Codan Annual General Meeting, my fourth as the CEO. I'm pleased to see so many familiar faces here in person, and I also extend a warm welcome for those joining us online. Thank you for your continued support and engagement with Codan. Your presence today reflects the strong interest and commitment of our shareholders in the company's future. And I appreciate the opportunity to share Codan's progress and outlook. FY '25 was another strong performance for Codan. In what remains a challenging global environment, our teams executed with discipline and focus and delivering record results.

At a group level, revenue grew 22% with net profit after tax up 27%, achieved alongside improved cash generation and disciplined capital allocation. Communication was the standout performer, delivering 26% revenue growth with segment profit up 34%. Defense is now 38% of communications revenue, reflecting our continued focus on long-term high-value markets such as unmanned systems and soldier worn technologies. Our order book grew 28%, providing a strong foundation heading into FY '20. Minelab also delivered a strong year, revenue up 16%, with segment profit margins increasing to 39%. Particularly pleasing was the growth in Africa, where revenues exceeded $115 million, up 64%, supported by strong demand and favorable conditions in key artisanal gold markets. Looking ahead, 4 new product launches are scheduled in FY '26, really positioning Mine lab for another exciting year of growth. We declared a fully franked dividend of [ $28.05 ] increase of 27% over last year, reflecting both the strength of our results and our confidence in the future. Our strategy remains clear. Building a stronger Codan through sustainable growth, disciplined acquisitions and continued investment in innovation and people. The group continues to focus on areas where Codan can differentiate and lead. Strengthening our foundations in communications, accelerating Minelab's product leadership and investing in systems, people and culture that allow us to scale sustainably.

During FY '25, Codan completed the acquisition of Kagwerks, a U.S.-based leader in operator warn soldier systems. Integration into DCC is progressing well and Kagwerks provides access to the net Warrior program of record, further strengthening our U.S. defense ecosystem. Together with DTC's tactical mesh networking and Zetron's Commander control solutions, Codan now is positioned as a full system provider in defense and public safety communications. This acquisition exemplifies Codan's disciplined approach to strategic growth -- it's targeted capability enhancing and aligned with long-term customer needs. Beyond acquisitions, Codan invested approximately $69 million in engineering across its 3 businesses. Representing around 10% of group revenues. This investment ensures that the group remains at the forefront of innovation and product development supporting long-term competitiveness. Importantly, our investment is increasingly directed towards future technologies, multi-waveform radios, AI-enabled soldier systems, next-generation commander control platforms and a new range of metal detectors.

These capabilities not only expand our addressable market opportunities, they deepen customer relationships by embedding Codan more directly into mission-critical operations. Codan also took important steps to enhance organizational scalability. The appointment of Peter [indiscernible] as group Chief Operating Officer, is strengthening operational execution across our businesses and advancing our IT and AI initiatives. These changes ensure Codan remains agile and resilient while maintaining the discipline and efficiency that underpin sustainable shareholder value growth. Codan is proud of its progress in sustainability, governance and culture during FY '25.

On the environment, Codan has established systems to measure scope 1, 2 and 3 emissions. Ensuring that future targets are both ambitious and credible. Codan is taking a measured approach, building robust data and capability before setting long-term commitments that are operationally achievable. On the social front, Codan continues to support education, innovation and community initiatives from scholarships and STEM programs to global kit cleanup efforts. Our long-standing involvement in initiatives such as the variety Bash, along with new programs such as Codan's multiyear indigenous scholarships and targeted SEM opportunities reflect our commitment to the community where we operate.

Codan success continues to be underpinned by its values, customer focus, trust, high performance and [ can do ] attitude. These values guide how our teams operate how we engage with our customers and how we deliver on our commitments. They remain central to Codan's culture and provide the foundation for sustained performance and long-term value creation. So moving to the outlook. The conditions observed at the 30th of June 2025 have largely continued into FY '26, supporting Codan's growth outlook across both Communications and Minelab elevated defense spending and ongoing geopolitical tensions continue to support demand across our Communications markets. The business remains on track to deliver 15% to 20% revenue growth for FY '26, with first half growth expected at the upper end of this range. Noting that the first half of FY '25 included Kagwerks for only one month following the acquisition. Zetron's business in the U.S. continues to be affected by government shutdown and funding delays. In September 2025, Codan received purchase orders under the Nett Warrior program the Kagwerks totaling approximately $24.5 million. With delivery scheduled across both the first and second halves of FY '26. These will contribute to overall divisional growth throughout the whole year. Sustained growth in the gold price continues to support Minelab with demand for gold detectors in Africa running above what was seen in the second half of FY '25.

As a result, Minelab's overall revenues for the first quarter of FY '26 have exceeded the monthly average achieved in FY '25 by 16%. While revenues in Africa are typically weighted to the second half, it's too early to determine whether that same seasonality were core this year. With continued balance sheet capacity, our renewed $250 million debt facility and a disciplined approach to capital allocation. Codan remains well positioned to continue investing in the business. And pursue future acquisitions that enhance the quality and predictability of our revenues.

In closing, FY '25, was a year of strong delivery for Codan underpinned by the dedication of our people. I would like to thank our employees around the world for their commitment our executive leadership team for their strategic vision and our shareholders for your continued trust and support. Together, we are building a stronger Codan, one that is diversified, innovative and well positioned for sustained growth. Thank you.

Many thanks, Alf. So let's turn to the formal business of the meeting. So before moving on to the various resolutions, I'm going to ask Michael to briefly run through the voting procedure.

Thanks, Graeme. There's 2 options available for shareholders today. Firstly, if you're voting in person, shareholders were given a blue or pink admission card when they registered for the meeting. The pink card being issued to joint shareholders, where one of the joint shareholders has already been issued with a blue admission card. For attendees who are voting in person, persons entitled to vote on the poll are all shareholders, representatives and attorneys of shareholders, proxy holders who hold a blue attendee card. On the reverse of your blue attendee card is your voting paper and the instructions.

Attached to proxy holders attendee card is a summary of proxy votes with details of the voting instructions. By completing the voting paper, you are deemed to have voted in accordance with those instructions. In respect of any open votes, a proxy holder may be entitled to cast, you need to mark a box beside the motion to indicate how you wish to cast your open votes. Shareholders need to mark a box beside the motion to indicate, how you wish to cast your votes. A Computershare representative will collect your completed voting paper at the appropriate time during the meeting. And note that it's only persons who are shareholders or holders of a blue or pink card who are entitled to address this meeting.

If you're voting online, for shareholders and proxy holders who are eligible to vote, select the vote icon and all resolutions will be activated with voting options. Cast your vote, simply select one of the options. There's no need to hit a submit or an enter button. The vote is automatically recorded. You will receive a vote confirmation notification on your screen. Voting of all items of business today will be by poll, and you can change your vote, right up to the time until the Chairman declares voting closed. Back to you, Graeme.

Okay. Thanks, Michael. So in addition to those procedures outlined by Michael, the notice of meeting provides details of the motions to be put to this meeting. And I will give shareholders the opportunity to ask questions or comment as we get to each of the motions. The first motion relates to the financial statements and reports. And it's to receive, consider and discuss the company's financial statements and the report of the directors and auditor for the year ended 30 June 2025. We're not required to formally adopt these documents by way of a resolution of shareholders.

However, I would be pleased to take comments or questions from shareholders on this item. The notice of meeting invited shareholders to submit written questions to the auditor if the questions are relevant to the conduct of the audit, the preparation and content of the auditor's report, the accounting policies adopted by the company in relation to the preparation of the financial statements and the independence of the auditor in relation to the conduct of the audit. Codan's auditors are represented by KPMG partner, Mr. Neil Edri Wira is present and available to answer questions where appropriate.

I can advise the meeting that we've not received any written questions for the auditor. So I invite shareholders and proxy holders attending if they have any questions in relation to this motion. So nothing in the room. There was one question submitted through the online system, not directly relevant to the annual report, but I will take it at this point given it was asked under this resolution.And it relates to the impact of tariffs on the company's business. And I think that's much more a forward-looking question on a backward-looking question on the 2025 annual report, but I might just get a couple of comments on the impact of tariffs from us?

Thanks, Graeme. So when you're looking at tariffs with respect to Codan, it's really the exposure sits in North America, obviously, and really in Zetron and Minelab, any of the product that we import. So with Zetron, Zetron being a public safety organization is largely exempt due to a treaty between Mexico, the U.S. and Canada. So we're not experiencing any issues with tariffs there. And with respect to Minelab, the U.S. volume represents approximately 10% of their total turnover. And when you look at the impact, the guys in Minelab have done a very good job in either making amendments into the supply chain or just adequately lifting their prices in market. So -- at this point in time, we would suggest that tariffs, we have a very -- it won't be a material impact to the performance of Codan as a group.

Thank you. Are there any other questions, Michael? In relation to that item. Okay. We'll now move on to the ordinary business of the meeting. And as set out in the Notice of Meeting and in the sample proxy form, as Chair of the meeting, all undirected proxies will be voted in favor of each of the resolutions. So resolution 1 is the adoption of the remuneration report. For the year ended 30 June 2025. Section 250 are subsection 2 of the Corporations Act requires that the remuneration report be adopted at the AGM. Please note that the vote on this resolution is advisory only and does not bind the directors or the company.

Please note that the details of the proxy votes are shown on the slide or on the online screen. Does any member wish to speak to the proposed resolution, ask a question or make a comment. Is there any questions online? So no questions or comments. You are invited to lodge your vote for Resolution 1 as an ordinary resolution. And for those voting online follow the instructions that Michael outlined earlier.

[Voting]

Resolution 2, is for the reelection of Sarah Adam-Gedge as a director. In accordance with clause 9.3 of the company's constitution it's been agreed that Sarah will retire, and being eligible, offer herself for reelection at this Annual General Meeting. Accordingly, Resolution 2 provides for the reelection of Sarah as a Director of the company. All directors unanimously support this resolution. Details of -- the proxy votes are shown on the overhead screen and on the online screen. And before you lodge your vote, I would like to invite Sarah to address the meeting regarding her reelection. Then we'll open it up for questions and comments before votes are cast.

Well, thank you, Graeme, and good morning, everyone. I appreciate the opportunity to address the meeting and to outline my background and experience. I joined the Codan Board in February 2023, almost 3 years ago, during which time the company has continued to perform well. I bring over 30 years of experience in digital and technology, operational leadership as CEO for organizations locally and globally, significant customer relationship management and sales expertise as well as governance experience to the table. From a digital and technology perspective, the last 20 years of my prior executive career was in leadership roles of global IT companies such as IBM and Publicis Sapient. This has involved helping companies improve the products and services that they offer to their customers. and improving operational performance through the use of technology. This is relevant to Codan as Codan designs, builds, integrates and delivers technology-enabled solutions to its communications and metal detection customers. I'm a chartered accountant, fellow, and have a keen interest in and currently studying cybersecurity, which, together with my early career at PwC and Arthur Anderson brings strong commercial finance and risk experience.

My commercial experience includes customer engagement with both large-scale corporate and government customers, including [ defense ], as well as in the business to consumer, retail and online channels. I'm a full-time professional nonexec director, and I currently serve on 3 ASX listed boards, which are Emeco Holdings, Bravura Solutions and Aussie Broadband. In February 2025, are retired as Deputy Chair and Non-Exec Director of the Global Defense contractor Oster Limited after 8 years on that Board. As recently announced in November, I will also transition from the Board of Emeco, which is a Perth-based mining services company to join the Board of GrainCorp.

I have extensive experience in international markets in both my executive and Board career, including the U.S., Latin America, Asia and parts of Africa. This global perspective, together with my digital and cyber experience, strong commercial finance and customer relationship management skills, and my diverse Board portfolio experience will be areas that I hope to continue to contribute to Codan to deliver shareholder value. And I look forward to continuing to contribute to the future success of the company, working alongside my Board colleagues and with the management team and thank shareholders for their support. Thank you. And I'll pass back to you, Graeme Barclay.

Can I open up this resolution to questions. Is there anything online, Michael? Any comments or questions? Questions or comments in the room Stephen?

My name is Stephen Howie. I'm a corporate proxy representative for the Australian Shareholders' Association. Representing 57 shareholders and who hold about 290,000 shares in Codan. Thank you very much, Sarah, for your address to shareholders. You have quite a depth of experience. I'd like to make a comment, if I can, Graeme. This experience has communicated to shareholders. Codan's current Board skill matrix reflects the collective skills and experience of your Board members and is included in your governance statements. The Australian Shareholders Association has a preference for the disclosure of each of the directors assessed skills and competencies.

And for this information to be included in the annual report. Will Codan reconsider the format of the Board skill matrix and included in the annual report in future. As it will assist shareholders when voting on reelection of directors.

Thank you. A good question, Stephen. And we continuously are looking to improve in the way that we're engaging with our shareholders. So thank you for that observation. We have had the opportunity to sort of liaise directly with the Australian shareholders association on a number of issues. This has been one of them. And we acknowledge that we could improve -- how we disclose the skill set of our directors to shareholders. In the past, we've taken the view that the collective metrics of the skills, and it's really the collective that's important to shareholders. Together with the quite detailed biographies that we included in our annual report sets out the individual contributions of those directors by acknowledging that we could go 1 step further. And as you've just heard from Sarah, she brings a huge number of skills to the Board that are not particularly reflected in the biography. So we thank you for your suggestion, and we will consider.

Are there any other questions or comments on this resolution? Okay. Let's move to casting -- shareholders can cast their votes on this resolution, please?

[Voting]

Given the proxy votes received, which represent roughly 75% of the company's issued shares. I have great pleasure in passing resolution to an advance of all the other votes being counted, but to reelect Sarah as a Director of the company.

Resolution 3 relates to the approval of the grant of performance rights to Alf and the proxy totals are now displayed overhead and on the online screen. You're invited to lodge your vote for resolution 3 as an ordinary resolution. This relates to the long-term incentive award to your Managing Director and CEO. It's an equity-based incentive plan focused on multiyear performance delivered for shareholders with 67% of the award linked to growth in the earnings per share and 33% linked to relative total shareholder returns measured over a 3-year period. This structure creates strong alignment with shareholder outcomes, whilst also supporting the retention of executive KMP, including Alf. In FY '24, the Board increased the required EPS compound annual growth targets from a range of 2% to 8% at entry and 13% at maximum -- sorry, from 2% to 8%. 8% to 13% at maximum. And these targets were retained for the FY '25 LTI plan. For this year's plan and the resolution that shareholders have been asked to vote on, the targets for the EPS compound annual growth rate component have increased to 11% entry and 16% at maximum, with a higher starting base level using the FY '25 EPS of [ $57.01 ] per share as the starting benchmark. As required under ASX Listing Rule 10.14, shareholder approval is sought for this issue of performance rights to a director. It is your Board's belief that this creates direct alignment with shareholders' interests and enables our CEO to participate in the significant shareholder value that will be created by performance in this range.

Further details in relation to the share plan rules, rationale, the performance hurdles and the mechanics of how the incentive scheme operates were set out in the explanatory memorandum. Does any member wish to speak on the proposed resolution. So are there any questions or comments online? Nothing online? Any shareholders or members of proxy holders in the room, any questions or comments on this resolution. So there being no questions or comments, I now move to the members to cast their votes for Resolution 3 in respect of approving the grant of performance rights to Alf for his long-term incentive.

[Voting]

Resolution 4 relates to the approval of the grant of performance rights in relation to the superior performance incentive scheme. Proxy votes are now shown on the overhead and online screen, and you're invited to lodge your vote for Resolution 4 as an ordinary resolution. So this is to approve rights to Alf in relation to the superior performance scheme that I mentioned during my address. And this is to incentivize and motivate Alf and the management team to deliver superior performance in the range of 17% to 24% in compound annual growth in earnings per share over the FY '25 to FY '27 period. The proposed superior performance incentive would result in the potential to earn up to an additional $1 million of remuneration through the issue of performance rights. So it's equity based, not cash-based, calculated in the manner described in the explanatory memorandum and requires to be fully earned. 24% increase in earnings per share each year between FY '25 to FY '27. As required under ASX Listing Rule 10.14, shareholder approval is sought for this issue of performance rights to a director.

And again, creates direct alignment with shareholders' interest by directly linking additional reward to the superior performance delivered to shareholders. Are there any questions in relation to this resolution? Okay. So there have been no questions or comments. And I move that the members cast their votes for Resolution 4 in respect of the grant of performance rights in relation to the superior performance incentive.

[Voting]

W Now that is the last of the resolutions of the formal business for the meeting. I'll pause for a few minutes to allow those online and those in the room to finalize their voting. And whilst we do that, I'm happy to open the floor to any general Q&A, so not related to the resolutions, but anything that shareholders would like to either comment on or ask the Board or the management team, general Q&A. Anything online? Anything in the room? Thank you .

I was wondering if the gold price as any material [indiscernible]

We get asked that question quite a bit. We believe there's been a link between increased gold detector sales and obviously, the gold price. We've never actually aligned that sort of -- we really never quantified it. But obviously, it's given us some significant tailwinds in Africa. And so an elevated gold price will help the sale of the current gold detectors we have in the ones that have come out in the future. So we're quite unique as an organization because as we're diversified, you have exposure to gold and you have exposure to at the moment, and those themes are quite positive for us. But to draw a direct link, I don't think we've got enough data to say that.

I think it's positive. I think that's definitely. You want to bring a microphone for you, Joseph. And everyone can hear.

[indiscernible] shareholder. I've already voted. My question is about the capital structure and in a way that we are fund the company from a debt to equity point of view. Now Codan uses debt on its balance sheet. And although it's relatively cheap, debt is always subject to some clause or bank panic attack. I was wondering, considering the company's share price, I think it's roughly 50x earnings or something like that, that it might be worthwhile funding some of our future projects using an equity capital raise if it's cheap to do so rather than being subject to a bank panic attack [indiscernible] one of the covenants for some random reason. First, second dividends. Australians really, really, really love frank dividends. But if we can retain earnings at very high rates of return, would you consider keeping the dividend where it is, and I'm sure this company can grow its earnings in the future, and retain earnings and use that as a means of funding our growth rather than asking banks for money. That's -- it's a capital management question and it's a dividend policy question. Can any of the Board or the Chairman of Managing Director, probably not Managing Director, but the Board have any comments on that sort of?

Yes, I'm happy to take this question.

Capital management and dividend policy?

Yes, happy to take it -- take the first pass at answering that. As you've observed, the level of debt that we have in the business is minimal. So I think it's under half a turn of EBITDA in terms of the sort of net debt that we're carrying in the business. So whilst we looking at future funding on an ongoing basis, we don't feel that the position today, we're exposed. The -- we've got a very -- I'm not going to say it's kind of -- we've got terms under our debt facilities that are -- don't give rise to the sort of concerns that you that you're raising. So that's the first point.

The second point is that the whole question of what our future capital structure should be will be driven a little bit by both the organic use of capital. So kind of what we're using internally. I've talked about $69 million worth of reinvested engineering capital, which we expect to continue to invest that kind of resource -- capital resource into continuing to maintain the R&D spend in engineering. But where this really will get quite a lot of board attention is for our future inorganic strategy. So for acquisitions of -- if we took a large correct. So I mean, I think we've said -- we've been very clear that the dividend policy of paying out roughly 50% of the net profits of the business is our current policy.

But we've been very clear in saying that if a large event, possibly an acquisition or some other quite significant sort of capital commitment that the company makes, we would review that. And so your point is that is capital that we could potentially retain within the business, if that make sense to help us kind of grow the business in a different way. So capital structures on the Board agenda very, very regularly. And it's in the context of how we're growing the business that we look at that. So good questions.

I'll take 1 more and then Mike close the voting. So for those that haven't voted, just let's wrap up the kind of voting piece.

Thank you. My name is Mark Greaves, I'm a shareholder from Team Invest in Sydney. And it's really pleasing to be over here in Adelaide. Can we talk about organic growth and inorganic growth? I know that your R&D spend is significant. And that keeps you in front of where you need to be to add to what you've got. But the -- this company has been extraordinarily successful in making acquisitions to the extent that 3 and 4 years ago, with the purchase of Zetron, et cetera, it really changed the look at this company forever. How confident is the Board and Alf in finding the next lot of acquisitions, to be right.

Do you want to you go.

We are confident. We've invested in structure and process. So we didn't have that a couple of years ago. So Daniel Hutchinson joined and he's put together a structure around that in the process. We've got a very clear filter on what we're looking at. We've been very, very open about our inorganic ambitions in the communications space, both for DTC and Zetron, we are confident that we will find something. We have been involved in processes and we've agreed on value or we've disagreed on value. And so some things have moved forward over the time and some things haven't. So yes, I'm quite confident that we'll continue that inorganic path. But it would never come at the expense of our organic growth targets of 10% to 15% in Comms.

So we need to keep that momentum going. But I think we've got firepower. So we think we can use it. And we've got really good global reach in our leads, Paul and Scott who reside in Northern Hemisphere. They have great exposure to what's happening in the major markets.

I echo that. There's a lot of opportunity. And the key for us is to make sure that it's on strategy and really we can acquire and integrate and then leverage the capabilities that we've acquired. As you say, I think -- the last 4 years, we've been very successful in doing that and building -- that combined Zetron and DTC, a very strong communications business that we did not have 4 years ago, and that's been a great driver and a real engine for creating shareholder value over the last 4 years. So we're continuing to be very active in looking for the right opportunities, but we're being selective.

Can I just check, have all the votes been cast.

Still collecting.

Still collecting. Okay. Well, maybe I'll -- can I declare the poll closed.

[indiscernible]

That's fine. Please collect all -- please collect and ask you to collect all the votes. So after the votes have been counted, the results of today's poll will be released to the ASX and displayed on the company's website. Okay. I'm going to close the meeting. If there's no other general Q&A.

Ladies and gentlemen, that does conclude the formal business of this AGM. Thank you again for your attendance, and thank you again for your support of Codan. I declare the meeting closed, and I invite you to stay for some refreshments and the opportunity to meet and chat with directors and the management team. Thank you very much.