ACUMENTIS GROUP LIMITED — AGM Information 2018

Nov 7, 2018

Chairman & CEO’s Address

AGM 2018

8 November 2018

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LandMark White Limited ABN: 50 102 320 329 ACN: 102 320 329

Level 6, 55 Clarence Street Sydney NSW 2000 Telephone: (02) 8823 6300

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Chairman & CEO’s Address

AGM 2018

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CHAIRMAN’S ADDRESS – KEITH PERRETT

Good afternoon ladies and gentlemen and thank you for joining us for LMW’s 2018 Annual General Meeting. My name is Keith Perrett and I had the privilege of becoming a non-executive director of LMW on 1 February 2018 and Chairman from 25 May 2018.

I would like to thank Chris Coonan, Chief Executive Officer, for his commitment in leading the company, alongside John Wise our very loyal and dedicated CFO. His leadership in executing the recent acquisition of Taylor Byrne, and his work with the current board undertaking a strategic review of the company including our business systems and management structure which will see a much stronger company in the future. Chris has continued to develop and build upon the strategies that underpin the company’s growth. This recent acquisition, our new Business plan and management structure will cement our position as the largest ASX listed, independent property valuation and advisory company in Australia.

LMW has a long and proud history, providing property valuation services to many thousands of homeowners, investors, developers and lenders. We have significant experience across a number of property market cycles and provide independent property advice to our many valued clients that they can rely on.

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Financial Results

As previously announced, LMW had a successful FY18 with the acquisition and integration of MVS contributing to a 155% growth in NPAT and 8.8% increase in EPS.

In line with our Dividend Policy LMW increased its FY18 dividend to 4.6 cents which equates to a net return to shareholders of approximately 8% with full franking credits resulting in a gross return of almost 11%. A pleasing result for the company.

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Outlook for 2019

Towards the end of FY18 the Board and senior management predicted a tightening of the property market due to:

• Lending limits imposed by APRA giving rise to a sharp decline in loans to investors as well as limiting interest only lending.

• The Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry has already increased scrutiny of expenses in relation to mortgage applications, while reducing reliance on Household Expenditure Measure (HEM) benchmarks which has reduced the availability of credit and significantly slowed the application process.

• Housing affordability has also had a negative effect on the Sydney and Melbourne markets, while most, if not all, capital cities are experiencing unit oversupply.

• The tightening of lending and affordability issues are now manifested in declining prices.

This has led to a reduction in valuation instructions in metropolitan areas.

Historically reductions in valuation instructions, across Australia, have typically lasted 2-4 months with volumes returning as a result of refinancing and new entries to the market. But this downturn, appears to be different particularly because of the impact of the Royal Commission on bank lending practices and APRA consciously suppressing the market.

We also believe that elections scheduled for 2019 could extend the subdued market due to the likely caution and nervousness of potential property buyers.

However, volumes in regional Australia remain largely unaffected. The acquisition of Taylor Byrne has provided LMW with a broader exposure to the property cycle in regional Australia thereby partly offsetting the downturn being experienced in capital cities.

AGM 2018

Chairman & CEO’s Address

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Guidance

Our updated guidance for FY19, taking into account changes to the market and our recent acquisition of Taylor Byrne, is for normalised NPAT of $4.6M and normalised EPS of 5.50 cents.

As a result of one-off acquisition costs our statutory NPAT is now forecast to be $4M with resulting EPS of 4.80 cents.

Longer term outlook

As we move beyond FY19 to FY20 and beyond, we will see the full benefits of the Taylor Byrne merger without the one-off costs impacting the bottom line. We will also see the benefits of the management restructure and other strategic initiatives.

Conclusion

In conclusion, I would like to reiterate that the Board and executives continue to execute on the company’s strategy including in the short term a continued focus on costs and efficiencies and a longer-term focus on increasing revenue through strategic acquisitions, diversification (geographically and services) and increasing market share.

Lastly, I would like to offer my thanks to our loyal shareholders who continue to support the growth of LMW, to my fellow non-executive directors, our executives and all our very dedicated incredibly competent LMW staff for their contribution to the ongoing success of the business.

I will now hand over to Chris Coonan our CEO.

Chairman & CEO’s Address

AGM 2018

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CEO’S ADDRESS – CHRIS COONAN

Thanks Keith and welcome Shareholders to the 2018 LMW Annual General Meeting.

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Highlights from 2018

2018 saw LMW continue to deliver on its strategic plan to the benefit of its staff, clients and shareholders.

Gross LMW Branded Revenues increased 49% to $60.2M.

Net Profit Before Tax increased 143% to $5.8M, reflecting 2017’s acquisition.

We successfully launched our Residential Market Indicator (RMI), which quickly reached a readership of over 10,000 bi-monthly.

We exceeded our expectation of synergy savings from 2017’s acquisition.

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Acquisition of Taylor Byrne

LMW started the current financial year with the recently completed acquisition of Taylor Byrne.

The acquisition will:

• increase our revenues by 50%;

• further diversify our earnings by increasing our exposure to regional Australia;

• increase our margins via improved revenue distribution;

• enable LMW to provide our clients with larger geographical coverage; and

• increase earnings per share.

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Our Strategy & Focus

The key areas of our strategy and focus for 2019 includes:

• Revenue growth

• Integration of Taylor Byrne

• Investment in technology

• Investing in our people

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Revenue Growth

Our ongoing revenue growth will be delivered via:

• broadening of our client base (for example focussing on family law, insurance, selfmanaged super funds and the not for profit sectors);

• improving our geographical spread (Taylor Byrne cements our regional coverage in NSW and QLD and we will look further expand through regional VIC; and

• diversification of services to incorporate independent property advice based businesses (for example depreciation schedules, quantity surveying and town planning).

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Integration of Taylor Byrne

The strategic and cultural fit between LMW and Taylor Byrne, as well as the limited areas of duplication, is enabling us to quickly merge the businesses and provides us with a greater scale and depth of expertise that will make our client service delivery second to none.

Integration of our two businesses is well underway and expected to be completed by mid-2019. Our expanded coverage and increased capabilities have seen us grow to more than 400 staff across 40 offices nationwide. As well as delivering operational efficiencies and shareholder value we anticipate significant ongoing synergistic savings.

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Investment in Technology

Whilst we are a people business, in order to achieve the highest level of productivity and service that our clients expect, we continue to invest in technology.

Now and in the future the collection and analysis of data to deliver insights for our clients will be paramount.

As previously mentioned, we are already utilising our comprehensive data base to deliver our Residential Market Indicator (RMI). This provides our clients with a unique risk-management tool that represents our valuers outlook of the market based on supply and demand trends they are seeing. The heat map pin points areas of risk, hot spots and/or opportunities that the valuers see in the market. The point of difference with our RMI heat maps is that it is a forward-looking indicator not an analysis of pre-existing data that may be up to 6 months old.

Our speed of response, staff mobility solutions and flexible working arrangements, as well as comprehensive risk management will continue to drive the success of the business.

Chairman & CEO’s Address

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Investing in Our People

Professional service organisations, like LMW, are built on the strength and quality of staff they employ. We recognise our employees as a critical success factor and continue to invest in their growth.

In 2018 we have invested in a new learning and development platform as well as implementing a leading-edge human resources system. In addition, we are making investments in our leadership team and in further developing the skillsets of our valuers through specialist sector training and accreditations.

We will continue to strive to be an employer of choice, known for the opportunities we can provide to aspiring property professionals.

Thank you once again for your ongoing support of LMW.

We will now move onto the formal part of the meeting and voting on the proposed resolutions.