Ann: 2021 annual general meeting presentation, page-2

With the meeting opening at 1630 AEDT, CEO Alf Moufarrige said at the start of his speech (looking towards the window) 'I can jump'.

That gives the flavour of what he said, although he did not utter any epithets.

It has been SRV's 21st birthday. The prospectus is 21.5 years old.

He mentioned that SRV's opening market capitalisation was $119 million. When it listed, it had $9 million in the bank compared with $109 million today.

Analysts claim there's no barrier to entry but they should put the proviso 'for mugs'. He said building owners believe they can fit out a space and charge double the rent.

Mr Moufarrige said he hasn't seen a competitor that has built a business for its clients, which is the only thing the latter is interested in. SRV tries to help small business.

The CEO said he had decided (after originally thinking the opposite) that he wasn't 'autocratic enough'.

The business model of SRV has seen it never missing a dividend, compounding at eight per cent per annum. (He originally wanted 20 per cent!)

Building owners who enter this specialist subsector can't handle the churn, the transient nature of clients in small business or treat them with the respect SMEs need.

The CEO said at the start of the pandemic, people thought it was the end of the world but he believes now it's just the beginning.

SRV has evolved, but its thesis that small businesses need to think big hasn't changed.

He played a video shot yesterday. It tried to explain what SRV did.

SRV has 40000+ clients. It jealously guards its intellectual property, controlling the software and making sure it can monetise it.

Lockdowns in Australia adversely affected profitability. The pipeline is strong now, but competition is present.

USA losses have dropped in half. From November 2021 it should be cash positive. (This is very good news as it had to exit some expensive leases IIRC).

North Asia is running well, and Middle East is a place where SRV may or will expand.

London is a struggle, though less than a year old, but by March 2022 should be back in profit.

On a percentage basis, Australia is 'the biggest loser' from the pandemic. The CEO 'wouldn't even make a comment about Queensland'. (Very funny, but sadly totally apt). He also referred to how clients (and SRV) can't travel to states like Western Australia at present.

Getting to Japan: Alf has been there three times in the past year, but travelling is no fun. Running a little company from Sydney is difficult. Excessive corporate governance affects SRV more than overseas competitors.

SRV's head office is a lot smaller: it has dropped 20 centres in the USA.

There will be four centres opening in Japan in the next 18 months.

Office growth overall in the SRV network should be seven to 10 per cent in FY 22.

Vacancies overall are at 30 per cent but hopefully down to 20 per cent in a year.

The CEO said SRV didn't train its people all that well, so they don't always understand (completely) what it does. (I couldn't quite work out of this comment was made in jest).

Answering questions at the AGM, Chairman The Hon Mark Vaile said that in time, there could be prospective expansion

The CEO said that he needs critical mass and management. India has a franchise but it's a bureaucratic nightmare. In Philippines it's difficult to make it profitable in the short term. Tokyo has 17 or 18 centres and Ryiadh has seven or eight, these become profitable more quickly.

Re businesses changing to the SRV sort of flexible operation. The Chairman said that its products were 'in the sweet spot'. The CEO said that building owners were opening co-working spaces to fill them as 'hybrid space'. He said the desks needed to have secure wifi and operating systems. When SRV releases such a product it will allow SRV clients ('members') to have half hot desking/half co-working across the globe. The hybrid space being marketed by building owners is not 'smart space'. In contrast, SRV has '200000 (telephone) extensions in the cloud'). The CEO said he sees many advantages in FY 22.

The CEO said in relation to information technology, foreign competitor Regis has 3000 centres and 100 IT guys against SRV with 110 centres plus 100 IT guys.

SRV is the only operator that has unique password access per floor.

The software costs A$800000 per month to keep running. The jury is out as to whether it can leverage from this.

Re company morale from then pandemic, it's low in Australia with churn rates high,but in the Middle East the reverse.

Lockdowns adversely affected small businesses. In Japan, it had at least 25 COVID-19 cases. As of today, there's only 90 people in hospital out of 34 million in Tokyo. SRV has made vaccinations compulsory. 99 per cent of staff are now vaccinated.

To date, SRV has not put testing facilities in-house: in some places like Philippines, it has only two locations. In Asia, the results can be back from testing in 15 minutes but it's not acceptable for Australia. The CEO got the wrong test at JFK Airport in the USA and 'had to run across seven terminals.'

Overseas says Australia is regarded overseas (now) as a collection of six states (impliedly not a nation). The Chairman said 'nice little comment on the Federation'.

SRV avoided a second strike on its remuneration report.

In the re-election of Mr Tony McGrath as a Director, The Hon Mark Vaile (Chairman, a former Federal Minister) said of the 99.72 per cent vote in favour 'any politician would be pleased with the result). (It became 99.98 per cent at the end following votes cast during the meeting. The Chairman said of the 0.02 per cent (who voted against) 'please get their names'. (Amusing).

We had to wait a few minutes for Boardroom Pty Ltd to tally the results. Amusingly, the Chairman referred to it as the 'central Tally Room', a reference unlikely to be misunderstood by anyone enrolled to vote at Federal elections in Australia.

Overall quite an entertaining meeting with best of all, good prospects for the company despite the vagaries of politicians and unelected health officials during COVID-19.

As CEO Alf neatly and sagaciously said 'we have a worldwide pandemic but no worldwide response'.

The meeting closed at 1728 AEDT. I wish I'd been there to 'enjoy the hospitality' as the Chairman said, as this was one of the few company meetings for FY 21 that one could attend in person.

Great company!