Alexander Forbes Group Holdings Limited (AFH) Earnings Call Transcript & Summary

Good afternoon, and welcome to the live webcast of the annual results presentation for FY 2023. I have with me today Dawie de Villiers, Chief Executive Officer; and Bruce Bydawell, Chief Financial Officer. Before we start, I would like to remind you that the webcast is being recorded. I would also like to bring your attention to the disclaimer and forward-looking statements on Slide 2. Please note that the presentation material as well as the full results announcement is available on our website. And with that, I'd like to hand over to Dawie.

Thank you, Zakira, and welcome, everyone. Thanks for joining us this afternoon. I'm delighted to present the year-end results to you this afternoon. And Bruce and I will do the majority of the discussions between the strategy, between the review and certainly the numbers. If we look at the year as a summary, very excited, very happy with the results. It feels to me like the whole strategy is coming together. The individual parts are now working together in unity in terms of delivering the results. I almost feel it is a bit of a process and a machine that is now being put together to deliver the results. It's not isolated events anymore. And that obviously pleases me a lot. Given the environment that we all know we operate in, given the fact that the markets only gave us -- the equity markets only gave us 0.8% during the year, and that is 60% of our revenue, very pleased with the strong performance in revenue, certainly strong performance in profits and the strategy coming together. A big part of the growth is the cumulative effect of new business over the years. We've -- every 6 months, we talk about the new business. It's now been 3 years in a row that we've had between ZAR 100 million and ZAR 150 million of annualized new revenue being added to the business. And then certainly, the acquisitions that we've done in the last year or 2 is aiding the results quite a bit now. It's being implemented. It's part of the strategy. It's actually elevating the strategy and the core businesses to an extent that it's adding to the top line. A big part of our growth is the individualization strategy. I'm delighted with the traction that we're seeing there. We look at it as extra bit to the main strategy. But for that to work, we needed to change the culture in the business. We had to have a mind shift focus in terms of thinking about individuals and thinking about how we service individuals, what we need in terms of digital, what we need to change and how we need to grow that. And we've put a lot of those elements that we need for that part of the machine to work fully in place, and that's really exciting. And we're starting to see it in the numbers even. And then the main part of the administration business, we know how much it has grown, and we've talked about it. And again, this year, we've added 200,000 new members to the administration. But the more important part for me is we're able to do it because of the automation, because of the automation over a number of years now and the plans to still do further automation, which makes the fund admin a lot easier, a lot less manual, obviously, but also reduces the risk, but also makes it easier for the clients to work with us and the experience are improved. So that's a highlight for me. We continuously look at sustainability, ESG through our transformation policy, we've made a big impact in the market. And I think this will be a major focus for our business going forward, both from an advisory point of view in terms of how we help funds and asset managers and the industry to look at sustainability and ESG into the future, but also for ourselves to do a better job to think about investing in areas where we can have a big impact in certainly infrastructure in South Africa and just in general, make an impact through investment. So more and more, our focus will be on sustainability. We -- at our recent hot topics, we launched the concept of a fund of the future, and that's a great concept of thinking about how we should think about the future. And we feel that we can lead this for the industry in South Africa. Very excited about our competitive investment performance. This is the area where everything comes together. This is the area where wealth is created for individuals. It's the area where we have to be competitive. It's the area where we have to be on top of our game. And certainly, it is coming through in that fashion, and we are really excited about that. We'll talk a bit about that a little bit later. And then you can do corporate transactions and you can sell businesses and buy businesses. But ultimately, it's about how you implement it, whether it actually unlocks value, firstly, and the value that you priced in. And secondly, whether it actually adds to the businesses so that 1&1 is 3. And we're very excited with how we've handled that to date. We can see it in the results. We can see it in the people that have joined through the transactions and certainly in the businesses that have joined and the clients that have joined. So very happy with the implementation of the acquisitions to date. And hopefully, we'll continue along that vein into the future. Basically making the point that we've got a base. We've got a very solid base. We're not talking about poised for growth anymore. We're not talking about we're ready for the future of growth. We are in the growth phase. We can see it. We feel it the mindset is there, and that's the exciting part. But we're building it off a solid platform, a solid base of governance, the right culture and the right intent. So the processes are in place. And that makes it a lot easier for everybody to know what they must do and to build off that. And hopefully, that is the springboard and the winning recipe for us for that growth into the future. We all know that it's a tough environment. It's a tough environment out there. I'm not going to talk about necessarily how to fix it, what to do, and we can handle that in the Q&A, and we've all got our ideas. But suffice to say that South Africa is in a dark place. It's a difficult place with regards to electricity, the growth, employment, unemployment, high interest rates, high inflation rates. And that makes it difficult for our client base. It makes it difficult for individuals. It makes it very difficult for the average South African, which is what we are concerned about. And obviously, if it's difficult for the average client, then it's difficult for us as a provider as well. But we also see that it's an opportunity to really lift our values and be that advice beacon, that strength beacon that extra service, extra element of help that we can give our clients. And that's how we approach it. It will be tough for a while longer, but the more we can help and the more we can support our clients, I think the better it will stand us and the better we will weather this storm together. There's a few blocks there, a few blocks of highlights of what happened during the year. I'm not going to go into all of those, and you can read it as I talk. But it is still important for us, and it was very important to make the shift from Alexander Forbes to Alex Forbes and not necessarily the name, but the brand, the way we perceived in the market, the way we are accessible to individuals, and we'll continue to grow that as part of our strategy and therefore, part of the brand growth. So that's -- it's done very well for us to date, and there's still a lot to do around that. I've mentioned 200,000 new members. So 200,000 new members is massive. That is contributing members. It's members that is potential clients of us into the future and also members that we had to onboard happily and service and pay -- collect contributions and pay benefits. So -- and that has all happened to date. So we're quite excited about not just having the 200,000 members, but what it says about our business and the way the business is set up. Very happy with the automation, as I spoke about. And then next to it, the evolved consulting model. We constantly talk about in the business about our essence is being advice-led, our essence of being in front of the clients, having to help the clients. Our touch point is our consultants, and we have to be the best that we can be. And we have to be the best in the market, constantly being asked to talk about difficult questions, regulatory changes, different changes in the market and clients want our advice as to how to navigate this. We've got a whole research and insights and engine behind the consultants to make them look even better and to make them perform even better. And that's, I think, part of our success. And that the rest is on there. Suffice to say that we've done good transactions. The logos are there. It's adding to the bottom line. The newest one we can talk about in the Q&A, but -- and I think Bruce will talk about it a little bit as well. TSA is an administration business. the binder space on group risk, 100% part of our core business. We've got a similar business. We'll combine it and become a force in the market again to help consultants and clients and the insurance market out there. So quite excited about our journey and what we've achieved. And then if we switch to just the highlights of -- from a financial point of view, certainly more of what we've achieved in the year. As I said, very comfortable and very happy with the 8% operating income growth, given that the markets have only given us 3% to 4%. It means that the acquisitions and the cumulative new business has really come on, and that is exciting. That is exciting. The underlying businesses really performing well. Being able to contain the expenses gave us the 9% profit growth, which, again, on a comparative basis, we're very happy with. You can see the HEPS and the dividend increase, paying most of the earnings out in dividends, and Bruce will unpack that a little bit, but a 31% increase in the total dividend for the year. Another new business number that is -- that we're excited about. And again, not just in one area, but in all the areas of the business from health care to retirements to investments. And certainly, next to it, very excited about the growth in new business in the retail side. As I said, we can see the green shoots coming through. We know the process is in place. But to add ZAR 16 billion to ZAR 20 billion of new assets every year from our individual members is exciting, and it's certainly what we look forward to as the growth into the future. And then I want to just unpack a little bit of the individual businesses to give a sense of where it comes from and where it all comes from, not all the same, obviously. If we look at retirements, as you know, retirements are the consulting piece and the administration piece. So it's a big part of the business, certainly with regards to the revenue and the number of people that work there. It's also a major part of our touch point with our corporate. And that 15% increase after 2, 3 years of very muted returns is very exciting. That means that the core of the business, the essence of the business is working and working well. Yes, there's an element of acquisitions in there. About half of the growth is acquisitions. But the rest is certainly as a result of the cumulative new business. And as I said, really adding value through value-added work with the clients. So the essence of the business coming right, adding value to the clients, giving us the extra revenue. You'll see the other numbers there very pleasing. And certainly, the growth in the number of members and the growth in the assets are very, very exciting for us. And I can tell you that the team is excited to constantly evolve. The way one consults, the way one pitches up at trustee meetings, the way we look at [indiscernible] members participating in umbrellas, the way we look at the individuals on behalf of them during this difficult time is constantly evolving, and we have to be at the forefront. And I think that's a differentiator for us and the reason why this business is doing well, and I foresee that it will continue to do well because it's a big differentiator for us. Healthcare business getting bigger and bigger, and we remember the lots of new business that we added in the previous year. And you can see because of that new business, number of members extra under broking and under advice added the revenue in this year -- in the full year. The members consolidated. There was always the fear after a great new business year that you might see a downturn in the next year. And as you can see, it's consolidated at this level, and we will see continuous growth in this business at the rate of inflation or as the broking income increases. So very exciting about this space, certainly into the future. We're constantly looking at the NHI regulations and the timing and how that's going to affect this business. And we're part of that discussions. But at this stage, it's quite a nice growing business for us. Multinational business, looking at our Botswana business, our Namibia business, our Jersey business and then certainly our advice business in the rest of Africa for our multinational clients, nice growth of 8%, very focused business. And certainly, the restructure over the number of years of Botswana and Namibia coming through very interesting opportunities in both those countries and certainly see it as some more upside given the restructures and given the work that we've done in those business. So underlying conditions very good for growth in this area. And then we have the investments part, as I said, about 60% of the revenue, Bruce will say 54%. So it's exciting. And this business is dependent on the markets. Obviously, the majority of the growth in revenue and in profits are going to come from the markets. We've seen it trends like-for-like, the increase in assets, increase in average assets is the same as the increase in the revenue. We've seen over the number of years now that we've changed the margin, reduced it a little bit with changes of products and fee structures, but it's consolidated nicely instead, in fact, a small increase in the margin. And we believe that, as I've said previously, that we've probably reached a more mature level of the margin. We don't feel that it's under pressure at this level at all and managing it very well. What we have to do in this business is grow our new assets. You can see there from the buildup that still dependent on -- there's 3 main elements. The one is new business and lost business, which is currently netting each other off a little bit. And then it's the uncontrollables. And the uncontrollables are those normal contributions. The more members we have, the more clients we have, the more normal contributions we'll have into the funds, and that's why we want to build the scale and build the businesses. So we see that as a positive element and an increasing element. But then you have to stem the withdrawal for benefit payments. So that is natural, annuity payments of annuitants, people leaving employment, people passing on. There's normal outflows, and that's why it's uncontrollable. But our retail strategy and our individualization strategy will certainly stop some of those outflows to go to the market but being retained with us. So the more we can change that around, and it's already come in a lot, but the more we can change that around the better for us. The main driver still being returns from the market. And that's how we built our assets up to ZAR 450 billion now, which is a nice number. And then we end off on the investment side to say the ultimate crux of investments is obviously the returns, the wealth creation for the clients. We are really excited about how well our -- for instance, our performer portfolio here is doing against our peers. But most of our portfolios are doing very well. This is just a proxy for our returns. We believe that the multi-manager concept is really adding value to individuals, to our clients on a risk-adjusted basis, on an absolute basis, as you can see here, and then obviously, giving the clients good extra returns alpha over time, which is part of the building of the wealth. So we're excited about bringing all of these elements together for our clients, the advice, the product and then the returns to culminate into a good experience. And then I want to end off before I hand over to Bruce on the individual side, the retail side, the new growth area, much of this business is still the business that it was, the traditional FPC business where we give advice on retirement benefits for individuals and write annuity products. And therefore, still exposed to the majority of the revenue is still exposed to the market, and we'll see that it's -- the revenue increase is in line with the market increase. The crux here is the growth in our product, our retirement product, AFRIS for the individuals. And firstly, secondly, the growth in assets, new business assets close to ZAR 17 billion now, where it was just ZAR 11 billion 2 years ago. That's strategy coming through. And certainly, the retention in assets in the business is vastly improving. And then to get this right, we're obviously doing a lot of things, which I'll talk to now. But one of the most important things is just getting more advisers. And you have to have quality advisers that stay, that gets trained. So you can't take on too many every year, but we've increased our adviser force by 14% over the past year, and that's a big win for us in terms of where we want to end up on our strategy. And then I'll end just by saying it's not just the growth in the adviser force, it's also an ecosystem. And the ecosystem is the picture there. And then the words are the things that we've actually done, the concrete stuff that we implemented to enable this ecosystem to function better. And you can read it there, but the brand is part of it. The growth in the adviser force is part of it, enabling them with tools, with advice, with support to just do much better in front of the clients, look professional and act professional, give a professional advice in front of the clients. And then some of the detail is the digital work that we're doing to engage better so that they can see their statements. Somebody told me there was -- it wasn't a number of years ago that people got an annual statement about their individual investments. Now they can see it live every day online, they can transact. And it's also much easier for the advisers to get the data to interact and to give the right advice. Important for us is obviously the exit process. When a client leaves the employment and leaves a fund that we are part of that process, make it easier for them and then obviously try and convince them to preserve the money and save it with us. So all of those things are being done. It's implemented and the experience are already improving, which will hopefully lead to more assets as well. That's just a little bit of a background on the different areas. We can unpack more of it in the Q&A, but I think it's important that Bruce takes you through the actual financial numbers and unpack that a little bit more. Thanks, Bruce.

Thank you. Thanks, Dawie, and good afternoon, everybody. Thanks for joining us. As Dawie has outlined, I think there's a lot of quality in the top line growth of 8%. And by quality, I think it talks to the sort of the underlying key drivers of that top line growth, which include the new business won, the increase in membership that we have, which will obviously drive growth into the future. The work that's been done in the health services to deliver on some of the new business that we won in FY '22 as well as the performance of our portfolios, for example, and then hitting significant new business in our individual consulting area. I think that there's a lot of good news in a lot of that top line growth for many of our different divisions. So very excited about that. Other notable items that I'll talk to you through the results. Obviously, Dawie has mentioned the acquisitive growth and separating that out from the underlying organic growth, which is in the numbers. We've also landed and concluded now our property restructure, specifically at the 115 West Street building, and that has had an impact on our cost, which I'll talk to as well. There's significant improvement in our discontinued operations performance, largely based on the losses that we incurred last year, and that's what's impacting our results quite significantly. And we continue with the same story about strong cash generation and capital position on our balance sheet, which allows us to pay a dividend, which is 31% up on the prior year. Just on the one outstanding matter in terms of our history, we have approximately ZAR 250 million insurance claim, which we are working on, waiting to receive. And ultimately, that is still going through an arbitration process, which will take some time to land in the future. Just a stack up of all the numbers, which Dawie has spoken about and culminating in our top line growth. Some of the interesting items here, obviously, the retirement consulting, 15% is a lot of where our acquisitions have landed and approximately half of that 15% relates to inorganic growth. The underlying growth is 8% organically within that area. And it also just talks to the fact that many of our acquisitions are actually fitting into the retirement consulting area and is part of the core business that we see as our strength going forward. In addition, another -- one of the items to note on this slide is the 54% market or asset-based fees, therefore, very dependent on markets going forward. And I think we have highlighted that most of the times in the past as well. And in addition to that, another 32% is reliant on employees, employment and membership in our administration area and therefore, very much dependent on the economy. On the expense side, the 8% growth in expenses has got a number of different stories in it, and I think I'll take you through some of these -- the different line items. On the personnel cost line, 2% of the 10% growth relates to acquisitions. Underlying 8% obviously reflects an increase that we -- in heads that we've had. We've had about a 5% increase in headcount over the year and inflationary pressures on that line as well. With regards to information technology, significant increases there, again, partly acquisitive, but largely in relation to investments that we are making plus exchange rate sort of variances, which have come through on the information technology line as well as increased expenses on our underlying applications. Lots of development happening in that area and lots of efforts being put into, as Dawie said, digitizing and improving our customer experience. On the property cost line, the underlying operating costs of our properties is ZAR 305 million. We have had a gain, which is relating to the restructure of our property, which gets recognized as IFRS 16 adjustment, and that has benefited our expenses for this year by ZAR 80 million. It's an indication of the structure that we have changed. And certainly, going forward, there will be a significantly reduced property expenses once we get to the end of our lease at the end of September '24. And I think we have notified on that decrease previously as well. Just another interesting point. Over the last 3 years, our compound growth rate that we've had on expenses is 6%. If you were to exclude the stranded costs that we picked up based on our disposed businesses, that would have been a 4% increase in a compound increase in our expenses over 3 years. We think that, that's a fairly credible result on managing expenses. Some other items that are in our income statement that I think are noteworthy. When you're looking at our results on the nontrading and capital items, we've got a significant increase in costs there. That's largely relating to our cell captive insurance facility. That's our self-insured layer that we have for a percentage of our insurance cover. As we've indicated in the past, there are -- the results of the cell captive will tend towards 0 over time, and it does reflect the increases and decreases in provisioning for potential claims that we identify at any point in time. Last year, we recognized a profit of ZAR 22 million. This year, it's a loss of ZAR 33 million. And so there's a significant movement year-on-year in that cell captive giving rise to that movement. Net investment income significantly up on last year, and that is largely as a result of the increase in interest rates. I think we've had almost 4% increase in interest over the last 2 years, which gives rise to that increase. And then as a continuing sort of structural change within the business, we have tried to ensure that our effective tax rate is improved, and that has borne fruit over the last couple of years, certainly a decrease of about 5%, I think, in our effective tax rate since 2020. And our effective tax rate continues to trend towards the corporate rate of 27%, currently this year at 29%. Just looking at discontinued operations in the prior year, we had -- we incurred a number of losses largely related to COVID and long COVID claims in our AF Life business that we've sold. This year, there's a very small loss in that business as we close down and run off that business. We have sold all of those policies. We indicated that last year to Sanlam. The current profit that's recognized there is relating to our linked investment service provider, which we've sold to Glacier. And that profit is the result of that business for 11 months before the sale happened at the end of February. The profit on sale that's recognized for both of those disposals, the AF Life business in the prior year and the least business in the current year is reflected on -- at the bottom and obviously has a significant impact on our earnings per share. The profit on sale is clearly excluded for headline earnings per share purposes. Just moving to the balance sheet and some of the structural changes. We have continued to do share buybacks through the year, ZAR 82 million worth of share buybacks, and we did cancel 26 million shares in the second half of the year, which has reduced our shares in issue year-on-year by 2%. That has obviously a positive impact on our earnings per share and our return on equity. Headline earnings per share is ZAR 0.477, 44% up on last year. That differs from our normalized headline earnings, which ultimately excludes the IFRS lease adjustment and the gain that we made on the property restructure. An annual dividend of ZAR 0.42 declared in line with our normalized headline earnings, 31% up. And we continue to be very cash generative. The 33% increase in cash generation from operations is largely due to cash flows last year with regards to ETV and our operating activities. And so back to normal at ZAR 1 billion for the year. And we continue with a significant regulatory surplus and available cash, which has allowed us to pay a fairly good increase in our dividend. Just looking at the return on equity analysis, very positive trends reflected in the graph, largely depending on how you look at the return on equity, we also reflect there our return on tangible net asset value, which excludes the goodwill -- the large goodwill balance that we have on our balance sheet as a result of the delisting that happened in 2007. So -- but really good trends in our return on equity as well based on our journey that we've been on for the last couple of years. Just another point of reflection around the cash return to shareholders of ZAR 2.7 billion over the last 3 years. And then lastly, from my side, just an update on M&A and the status of our acquisitions, largely completed and in the process of extracting and working on synergies that were intended within those acquisitions, including some of the integration that's happening as well as consolidating systems, for example, from an EBS perspective, ensuring that we are bringing on the clients that we have acquired from Sanlam over the last year and ensuring that those clients are well looked after within the Alexander Forbes fold. Continue to provide services to the sold AFICA business, which we sold to Glacier and ensure that we continue a very good relationship with the Glacier team as they look after our clients from an administration perspective going forward. And then very excited about the TSA acquisition, which we announced recently. It is an insurance administration business based out of KwaZulu-Natal and very well respected in the market and combining that business with our binder service, which we have internally will, I think, provide a fantastic service to our clients with regards to group risk insurance. And just to indicate that the acquisition there was a 60% acquisition with the additional 40% as an option over the next 5 years. And that's it from me. I'll hand back to Dawie. Thanks.

Thanks, Bruce. One more slide, just looking at the future, but just in reflecting about as we go through the numbers, one of my team this morning when I spoke to the staff said it's such good numbers, and I'm not looking excited enough just because I want to be as professional as possible. But we are excited. And as you can see, it's -- the reason why we're excited is that the elements are coming together. We also told ourselves as a business, and hopefully, you can see that in the actions, in the implementation and in the numbers. From day 1, I've been talking about tailwinds. So it would be great if the economy grows. It will be great if the markets run because those things are just tailwinds for us on top of what we do. But we also realize that we have to show credible numbers to our shareholders and certainly delivery to our staff and to our clients even during tough periods without the tailwind. So we see this business as a business that can grow in a tough environment now. It's now set up to be lean and mean in an environment like this. And then the tailwinds will just be on top whenever they come. And what we try to do today is to show you the elements and the reasons and therefore, why we're excited about it. Bruce has talked about -- before I go into some of the prospects, Bruce has talked about the property deal. The property deal will give us a saving of -- in total for all our properties and the rationalization that we've done will give us a saving of, say, ZAR 150 million plus per annum from next year onwards or from '24 onwards. And that's a massive number and that creates a lot of value for the shareholders and is basically making it a lot easier for us to operate. And then secondly, the tax changes that Bruce has talked about, the rationalization of the business, ensuring that we're paying closer to the corporate tax rate rather than the complicated structures that we used to have saves us quite a bit of money annually from next year on as well. So intellectual concrete changes in the business that creates that value into the future. And then on the rest of this slide, that's the numbers changes. On the rest of the slides, the strategy changes, the things that we're doing in the business to really make it a much more resilient business into the future. And firstly and foremost, it's the individualization strategy. Really, yes, it will lead to more assets. Yes, it will lead to a bigger asset base to manage. Yes, it will lead to more commission. But mainly, it will make clients want to do business with us from an institutional point of view because we're going to look after the individuals that work for them. We're going to make it -- and we're busy making it so nice for the individuals to want to get the advice from us, the help from us and the integrated advice, not just on the investments, but also on the health and the other areas. So -- and the experience through their corporate with their retirement fund, just a much better experience. So if we get that old process right, it works for the corporate and it works for the individual and then it works for us. We've really got a strong business pipeline. I -- even though we've had good new business numbers, I've never talked about the pipeline, but I can now say that we're in the market, and we're convincing businesses to partner with us and to work with us and to let us help them and service them into the future in the different areas, and that's exciting. The discussions are exciting and the willingness to partner with the Forbes is very exciting for us. We still maintain our leading position in the institutional investments. We talk about retail a lot, and that's the mindset change that we have to do in terms of how we manage individuals assets, how we give them advice, how we service them. But we'll never forget our essence of being an institutional investments business, looking after funds and funds money and making sure that according to Regulation 28, we give you the best returns that we can. And you can see that from the alpha that we've generated in the market in tough environment. And then we've got that bottom block there saying expanding our intermediated offering. Forbes has been known over years for having its own consultants, selling its own products, investing in its own investment space. But we've got such a great offering. We've got such great systems. The scale benefits of our platform and our investments makes it quite enticing for intermediaries, external intermediaries to do business with us. And that doesn't just happen by saying, please do business with us. We have to change the way we think, the way we set up the Chinese walls and the products and the servicing that we do. And we've launched a whole new division to look after intermediaries that wants to partner with Alex Forbes. That's an exciting growth area for us, firstly. But secondly, also hopefully exciting for the market, exciting for clients and exciting for those intermediaries. And that's both on a retail level and on an institutional level, where we can partner with them, offer great products, offer great services at good value. So this is a concerted effort to enter that market and play in that space, and we're excited about that. We're constantly changing and in enhancing our umbrella fund offering. We know that's where a big part of the growth is. We reckon we have the best umbrella fund in the market. We constantly will continue to evolve in it, offer better services in it and making sure that our pricing is right. So a big focus area -- as I've said a few times now, constant automation. And the automation isn't just so that we can lower our unit cost per servicing member, although that is a massive benefit and a big revenue driver into the future or lower expenses. But it also makes our E&Os, what we call mistakes that we make much less and therefore, the expenses around that less. But more importantly, I think the more automation we have, the easier it is for clients to deal with us. The easier it is for employers and for HR personnel to join -- to deal with us for those individuals to deal with us, the more everything is just digitized and automated. So we'll continue that journey. We've invested lots of hundreds of millions over the past 3, 4 years into that automation, and we'll continue that journey with a very focused in-house team to enhance that. We believe that our differentiated value, it comes from our integration, comes from our advice-led, comes from doing good for clients and holistically looking at it, and we'll continue that and make sure that everybody in the business understands the client and the clients' needs rather than what we have to offer. And that's important for us. And then I want to end off by saying we take transformation, sustainability, ESG very serious. We think that is the future not only for us as corporates and other corporates in terms of doing the right thing, being there and making a difference and making an impact, but also then leading to advising investment managers and driving the investment space in terms of how do we make this space more sustainable into the future, drive the sustainability and then even more so looking at funds and helping funds how to be a force for good into the future with how they invest and how they look after themselves and how they look after their members. At our recent hot topics, we've coined the phrase fund of the future. And we're excited about that. We're excited about talking to clients about what is possible into the future. to enhance value, to be more sustainable, to do the right thing, to have an impact on the environment and certainly to look at what type of investments one can push and make a difference in South Africa with infrastructure and certainly looking more at sustainability into the future. And those things are all very exciting for us, and we're looking forward to a long journey with our clients with regards to these things and certainly for our shareholders. And that's where I want to end with the presentation, and then we can switch to Q&A. Before we go to the Q&A, Zak, I don't know whether you've got questions already online, but we can maybe just -- we've also sent a SENS announcement this morning about our new Chair. We're excited about Kuseni Dlamini joining us as our new Group Chair and Chair of the Investment business. He's an experienced nonexec and experienced exec in many areas of the market. We're very pleased to have him. And we've been unfortunate with past chairs getting jobs at banks and the bank is almost a full-time job and us in the financial services have conflicting position. So we welcome Kuseni. I'm personally very excited about working with him. He's a man of stature that can add a lot of value to the Board and help navigate us through the growth phase that we are in, into the future. So looking forward to working with Kuseni joining us on the 1st of July. Happy to take any questions.

Thank you, Dawie. We have a question from Kedibone Mokoena from Risk Insights. How does Alex Forbes plan to incorporate ESG factors into its investment decision-making process? Furthermore, what steps does Alex Forbes plan to take in order to improve its disclosures on ESG factors, specifically renewable energy and carbon emissions in the future?

Yes. So that -- it's a great question and good question and it is a bit of detail that we'll talk to over time. We -- suffice to say that all of those is yes, and very committed to. Like we did the transformation policy, I think because we are such a big player in the market, we'll be much more forthcoming with rules and guidance and how we look at sustainability and ESG factors. We're busy developing it. We've got -- we've started a center of excellence in the middle of the holding company, which will help advise, do the research and help the investment team. But certainly, the investment team has done a lot of work with regards to risk factors, and we'll roll that out as we communicate more to asset managers.

Our next question comes from Chris Stewart at Ninety One. Please could you give a sense of the growth in headline earnings per share on continuing operations, absent the ZAR 80 million pretax benefit courtesy of the property transaction as well as the recalibration of the tax rate?

Sure. I don't -- thanks very much for the question. I don't quite have that calculation in my head, unfortunately, but I'll be happy to do it and send it to you afterwards. Just to point you, I mean, the increase in earnings per share from a continuing perspective is reflected in our results. It's ZAR 0.44 versus ZAR 0.37 last year. So I think that's about a 20% increase on continuing operations, but that obviously does include the IFRS adjustment and the sort of property deal and the tax benefits that came through. So happy to respond a bit later and give you that calculation at some stage.

We don't have any further questions at the moment.

Does he want to expand on that question on the property? Or is it okay if we come back later? Okay. There's not something specific that he wants to know. Okay. Nothing else? No other questions? All right. We're going to have a few one-on-ones, and we'll have the session on Thursday or Wednesday as well with the market. So in the meantime, thank you very much. Thanks for listening in. Thanks for all the support over the years. And hopefully, you were as pleased with the results as we were and looking forward to the engagements into the future. Thanks a lot.

Thanks very much.