Flowtech Fluidpower (LSE:FLO) — Annual General Meeting

0:00 Good morning, ladies and gentlemen, and welcome to the FLOWTECH FLOWPOWER PLC Annual General Meeting. Throughout this meeting, attendees will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Just please simply type in your question at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. I'd now like to hand over to nonexecutive chair, Roger McDowell. Good good morning, sir. Thank you, Mark. Look. Let me begin by welcoming all shareholders. I understand we've got 17 or 18 out there in in cyberspace.

0:45 So I'm really, really pleased you can you can join, and that's obviously one of the benefits of conducting an annual general meeting in this way. We don't have anybody physically present, any other shareholders other than board members and employees physically present here in Wilmslow. So,

1:02 let me just begin by introducing the board. I'm Roger McDowell, our executive chair. I have with me Bryce Brooks, who is the chief exec. I have with me Russell Cash, who is the CFO and company secretary. Nigel Richins, who is a non executive director. Elsa Webb, a non executive director, and Jamie Brooke, nonexecutive director, both recently appoint appointed. Under article 45.1 of the company's articles of association acting as nonexec chair, I'm appointing myself as chair of the meeting. But I'm asking my colleague, Nigel, to remind me when we get to resolution eight, which is part of my own reappointment to stand in. So, look, during the at this point, if you have any questions that relate to the to the resolution specifically, please pop them up.

1:59 We would be happy to take more general questions, but we'll deal with them at the end of the formal business where we just have a few slides, not that we intend to talk to them, but with some background information on the company that you might find interesting. So I would stress this is your opportunity to ask some questions, and we're generally very pleased to receive them. So moving swiftly on. In addition, with me here, I have Lorraine Leaky from Link Group who keeps us on the straight and narrow and understands all the rules. Link are the company's and I also have James Kerrigan from DLA Piper, who are the company's lawyers, who, who can stop any foul play. So if you have any questions, relating specifically to the resolutions today, now is your chance.

2:49 I have a Q and A panel here. So if you want to submit them, I will endeavor to deal with them or I will put them to the appropriate executive.

3:04 Nothing is coming in at this stage. Let's just take a minute in case it's typing speed out there in cyberspace. Okay. So look. I will move on to the formal business of the meeting. What I can I just remind you when it comes to voting on resolutions, shareholders here in person and proxies here in person who have been properly appointed by a member entitled to vote and those who are here as corporate representatives are all able to vote on a show of hands or on a poll? Those attending through the IMC platform, unfortunately, are not able to vote, by such means, but if you do have a proxy voting on your behalf who is present, such proxy will vote on your behalf.

4:02 This year we're asking you to approve 13 resolutions. Resolutions one through to Resolution 11 will be proposed as ordinary resolutions. This means that for each of those resolutions to be passed, more than 50% of the votes cast must be in favor of said resolution. Resolutions 12 to 13 are proposed as special resolutions. This means that for each of those resolutions to be passed, at least 75% of the votes cast must be in favor of each resolution. May I also remind you that while you are free to abstain from voting, abstention is not a vote in law and will not be counted in the calculation of the votes for and against any particular resolution.

4:47 So resolution number one, the first resolution is to authorize the company's annual report and accounts, strategic report, and directors' and auditors' reports for the year ended 12/31/2021. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? As you probably can see at home, the, the resolution was carried on a show of hands. For the information of shareholders, I advise that proxies were received in respect and there is a table in fact, look, we've got it on the screen now. Proxies were received in respect of 31,145,259 shares comprising 30,976,241 shares in favour of the resolution and 169,018 voted a, rather withheld.

5:48 On the basis of the show of the house of proxy voting, received, I declare the resolution carried. Moving on to resolution two. The second resolution provides or rather approves the final dividend. You don't usually get too many votes against this particular resolution for the year ended 2021 with two pence per ordinary share. Such dividend to be paid on the 07/22/2020 to shareholders whose names appear on the register at the close of business on the 07/01/2022 with an ex dividend date of the 06/30/2022. So, with those in the room, please raise your hand to vote. Those in favor?

6:32 Those against? No votes against. Those abstaining? Nobody abstaining. The information of shareholders, I advise proxies were received in respect of 31,145,259 shares comprising 30,980,961 shares in favour of resolution, No no shares against and 164,298 shares in respect of which votes were withheld. Slightly puzzling that, but never mind. Moving swiftly on to resolution three. Third resolution approves the reappointment of Webster Webb.

7:19 She was appointed as new director since the last AGM pursuant to the company's articles of association must retire a appointment to this meeting being the next AGM. Brief biographical details for Ilsa are set out in pages 38 to 40 of the annual report 2021. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? Those abstaining?

7:52 For the information of shareholders, I advise that the proxies were received in respect of 31,145,259 shares, comprising 31,145,259 shares in favour of the resolution, zero shares against the resolution and zero shares in respect of votes withheld. I should be so popular.

8:16 Resolution four. The fourth resolution approves the reappointment of Jamie Brook as he was appointed as a new director since the last AGM and pursuant to the company's articles of association must retire and seek reappointment at this meeting being the next AGM. Brief biographical details for Jamie are set out on pages 38 to 40 of the annual report twenty twenty twenty one. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor?

8:51 Those against? Those abstaining? And for the information of shareholders, I advise that proxies were received in respect of 31,145,259 shares, comprising 31,145,259 shares in favour of the resolution, resolution, and zero shares in respect of which votes were withheld. On the base of the show of hands and proxy voting received, I declare the resolution carried. Moving on to resolution five. The fifth resolution approves the reappointment of Russell Cash as a director of the company. The company has made the decision to, in accordance with the principles of the QCA corporate governance code, request that every AGM, all directors of the company must retire and stand for reelection. That's very brave of us.

9:45 Unless already doing so in accordance with the articles association of the company, and therefore myself, Bryce, Russell, and Nigel will also seek reelection at this AGM. Brief biographical details for Russell are set out in pages 38 to 40 of the annual report 2020 now 2021. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor?

10:11 Those against? Those abstaining?

10:17 For the information of shareholders, advise the proxies were received in respect of 31,145,259 shares comprising zero shares Sorry. In favor. I think my my script is wrong here. I hope so. Yes. I certainly hope so.

10:37 All in favor of the resolution, zero shares against and zero shares in respect of which votes were withheld. Yes. The script is wrong. On the basis of the show of hands and, of the proxy voting received, I declare the resolution carried. Just gonna take a sip of water. This is thirsty work.

11:01 The sixth resolution approves the reappoint of Bryce Brooks as the director of the company in accordance with the principles of the QCA Corporate Governance Code. Brief biographical details Bryce has set out in pages thirty eight forty of the annual report twenty twenty one. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor?

11:25 Those against? Those abstaining. For the information of shareholders, I advise that proxies were received in respect of 31,145,259 shares comprising 31,145,259 shares in favor of the resolution, zero shares against the resolution and zero shares in respect of which votes were withheld. On the basis of the short hands vote and the proxy voting received, I declare the resolution carried. Moving on to resolution seven, which strangely enough here says the eighth resolution. So some script errors again, but never mind. Resolution seven approves the reappointment of Nigel Richins as a director of the company in accordance with the principles of the QCA Corporate Governance Code. Brief biographical details for Nigel are set out on pages 38 to 40 of the annual report 2021.

12:25 I now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? Those abstaining? The information of shareholders, I advise that proxies were received in respect to 31,145,259 shares, comprising 25,270,165 shares in favour of the resolution of 5,875,094 shares against and zero shares in respect to which votes were withheld. On the basis of the show of hands and the proxy voting received, I declare the resolution carried.

13:08 Moving on to resolution eight. I'm just passing this over now to my colleague who's off yeah. You are off screen. Resolution eight is regarding the appointment of Roger McDowell as the director of the company

13:26 in accordance with the principles of the QCA corporate governance code. His brief biographical details are set out on pages 38 to 40 of the annual report 2021. And now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? Those outstanding? For the information of shareholders, I advise that proxies were received in respect to 31,145,259 shares comprising 30,968,607 shares in favor of the resolution and 1 and

14:14 76,652 shares against the resolution and no shares in respect to which votes were withheld. On the basis of the show of hands vote and the proxy voting received, I declare the resolution carried. I'll get back to you. Well done. Thank you, Nigel. Moving on to resolution nine, ninth resolution approving a reappointing Grant Thornton UK LLP as auditors, and I'll put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? Those abstaining? For the information of shareholders, I advise that proxies were received in respect to 31,145,259.

14:59 It's a number that keeps repeating, comprising 31,126,394 shares in favour of the resolution, 18,865 shares against the resolution and zero shares in respect to which votes were withheld. On the basis of the show of hands and the proxy voting received, I declare the resolution carried. Resolution 10. Tenth resolution authorizes the directors to determine the remuneration of the auditors. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against?

15:45 Those abstaining? For the information of shareholders, I advise that proxies were received in respect of 31,145,259 shares comprising 31,145,259 shares in favor of the resolution, zero shares against the resolution, and zero shares in respect of which votes were withheld.

16:12 On the base of the show of hands of proxy voting received, I declare the resolution carried. Moving on now to, resolution 11. The eleventh resolution authorizes the directors to allot shares up to an aggregate nominal value of £10,245,778 In line with current institutional shareholder guidelines, this represents approximately one third of the current's

16:43 current issued share capital together with an additional one third being £10,248,778 to be used for rights issue only. The authority will expire at the next AGM of the company or on the 09/01/2023, whichever is the earlier. I now put this resolution to meeting. Please raise your hand to vote. Those in favor? Those against? Those abstaining? For the information of shareholders, I advise that proxies received in respect of 31,145,259 shares comprising 19,871,611 shares in favour of the resolution, 11,270,148 shares against the resolution and 3,500 shares in respect of which votes were withheld.

17:44 On the base of the show's hands of the proxy voting received, I declare the resolution carried. Moving swiftly on to resolution 12.

17:54 The twelfth resolution empowers the directors to allot shares of cash without first offering them to existing shareholders on a pro rata basis. The power is limited to allotments up to an aggregate nominal value of £20,497,557 in connection with a rights issue of £10,248,778 in connection with an open offer or other preemptive offer. Additionally, in any other case, in line with current institutional guidelines, the power is limited to a nominal amount of £3,074,663 which represents approximately 10% of the company's current issued share capital.

18:43 This authority is higher than previously given by the Director. The Directors consider this increased authority will provide the company with greater flexibility and is more appropriate given the current stage of its development. This authority will expire at the next AGM or on the 09/01/2023, whichever is the earlier. I now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? Those abstaining? For the information of shareholders, I would advise that proxies were received in respect of 31,145,259 shares, comprising 25,048,780 shares in favour of the resolution 6,092,979 shares against the resolution and 3,500 shares in respect of which votes were withheld.

19:42 On the basis of the show of hands, vote and proxy voting received, I declare the resolution

19:48 carried. Moving on now to resolution 13 and just to give me a small break, I would remind you that we've got a few slides with some company information at the conclusion of the formal business. And the executive team are waiting with bated breath for interesting questions for them. So I would encourage those shareholders that haven't fallen asleep to drop us using the Q and A, drop us a few questions that we can hopefully respond to. It is your opportunity. So Resolution 13. Thirteenth resolution authorizes the company to make market purchases of its own shares should the directors consider this to be appropriate and in the best interest of shareholders generally.

20:42 In line with current institutional shareholder guidelines, the maximum number of shares which may be purchased is 6,149,267 ordinary shares, representing approximately 10% of the current issued share capital of the company. This authority will expire at the next AGM of the company or on the 09/01/2023, whichever is the earlier. And will now put this resolution to the meeting. Please raise your hand to vote. Those in favor? Those against? Those abstaining? Again, for the information of shareholders, I advise that proxies were received in respect to 31,145,259 shares, comprising 31,122,034 shares in favour of the resolution 19,725 shares against the resolution and 3,500 shares in respect of which votes were withheld.

21:43 On the basis of the show of hands vote and proxy voting received, I declare the resolution carried. So that concludes the formal business of the meeting. There was a table here which summarizes the voting, which we've already gone through on an individual resolution by resolution basis. So as I said, we would be we would be pleased to take any questions that that you may have that are perhaps as a more of a more general nature. Roger, may I I'll give you a minute minute or two.

22:29 Perfect. Let me just remind, ladies and gentlemen, that you can submit questions. Just open the q and a tab that's situated on the right hand corner of your screen, type in your question at the bottom, press send. Those questions will come straight through to Roger and the rest of the board, and they will address those questions as appropriate. But as you say, Roger, if we leave a a minute or two, maybe we just let those questions come through and then hand back to you, sir, to read out where it's appropriate to do so. Sure. Well, we just had one pop in. This is from Scott m. Hope you don't mind me revealing your identity, Scott. But Scott's question is, can we update on supply chain supply chain challenges, in particular, the impact of current performance in particular, the impact on the current performance of the Services division?

23:20 That was probably one, Bryce, that you might like to comment on. Could you please pick up on that? All the supply chain challenges remain the same, both in the length of lead times and the volatility of the eventual sort of supply. We've dealt with that over the last sort of twelve months by increasing buffer stocks. And therefore, that has a working capital impact. But, ultimately, we're quite happy with the way that we're we're actually trading currently. With specifics to the services division, maybe not as pronounced as your question is inferring that the services division itself has several different aspects to it, one which is on-site activities.

24:06 So that's a labor driven element. You know, that that's training again satisfactorily. Hydraulic power unit manufacturer, yes, does have elements of it that are slightly delayed compared to the original date of the order and an original expected delivery dates. But in essence, that's now fitting its own pattern. So we're quite comfortable with the way that the services division per se is performance. Little bit in Ireland is a truck business. That's got slightly different challenges. And then finally, you've got a sort of one off project work. You know? So for example, the Thames Tideway project is now sort of in play finally after sort of four years later than it was originally intended by the the main contractor. We don't see any major disruption in that particular project during the course of this year. So whilst perfect supply change would undoubtedly assist us in improving performance, there's nothing currently that I would say is materially a a negative influence.

25:14 Scott, hopefully, that that covers your question. I mean, I can just add to that. I think we were without wishing to blow our own trumpet, I think we anticipated some of these supply chain challenges that got ahead of the curve in terms of our ordering patterns. But as Bryce said, that has resulted in us having inventory that might be higher than we would ideally like, but it does mean we've got good availability for our clients. Scott has also now posed another question, which is one that I'll take, which is can you comment on why the company changed broker? I ask as he was disappointed to see that the change of broker is to one that doesn't make its research available to retail investors.

26:00 I'm puzzled by the last part of that statement, Scott, but I'll have to take your word for it. The reason for the for the broker change was, I guess, in no small measure driven by me personally, where one finds that one's broker becomes a bit complacent after an extended period of time. So we did a formal beauty parade and chose Liberum. Let me deal with the retail investor piece separately, if I may, and come back to you on that. Because it is important, I think, that such research is available as widely as possible. Have we got any other questions from any other shareholders who are with us?

26:50 There are no other questions online at this point, Roger. Okay. So Scott, as I say, happy to take that matter offline and talk to you about it separately. Just pause for a minute or two to see if we do get any other questions. It just remains for me then to say thank you for attending. We do appreciate it. And rest assured your board, and in particular, the executive directors are working hard to continue to develop shareholder value. So on that note, we will sign off. That's great. Thanks, Roger. Roger, and the rest of the board, thank you very much indeed for your time this morning. Expectations.

27:42 This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the board of FLOWTECH FLUIDPOWER PLC, we'd like to thank you for attending this morning's annual general meeting. That concludes the session, and I wish you all a very pleasant morning.