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

Good afternoon, and welcome, everyone, to our live webcast. This is Alexander Forbes' Interim Results Presentation for Financial Year 2024. I'm [indiscernible] and before we start today, we just like to remind you that the webcast will be recorded and please note the presentation material will be available as well as the full results announcement on our website. And I have with me today, Dawie de Villiers, our Chief Executive Officer; Bruce Bydawell, Chief Financial Officer; Zakira Amra, our Executive Head of Investor Relations. Over to you.

Thank you very much, [indiscernible] and thanks, everyone, for dialing in, looking forward to the discussion. As per normal, we'll have a few slides to go through, tell you a little bit about the results and the strategy and then allow some time for questions. And it's probably easier if we allow for the questions at the end. But if there's anything that we need to clarify through the presentation, I don't mind if you want to ask a question. And we'll also look at the questions that are posted, obviously, but you can ask as well. All right, let's jump straight into it. We'll keep it as informal as possible. Bruce and I wanted to wear T-shirts, but I didn't look good in my T-shirt, and I have a blazer on. Next time we might work towards looking more casual. All right. So I've got a question this morning on one of the TV stations where the leading question was, as normal our results are great, sustainable, stable and boring. And I didn't know to respond to that, but I take it as a compliment. I think we've been quite consistent with our strategy. We've been quite consistent with what we said we were going to do and then executing on it. And the result is actually even though the markets have been very volatile COVID has been very volatile and with regards to retrenchments for us, salary increases, businesses growing, the normal tailwinds that we as an industry have had or should have had wasn't there. So even though that was the case, our results have actually been quite sustainable and relatively predictable. I think the type of questions we're getting from the analysts these days in terms of what is like 1/10 of what it used to be 5 -- 4 year -- 5 years ago. So we like the fact that it is predictable, that it is sustainable. And that hopefully, you can see the strategy coming through. For me, the performance is not just one thing. It's a combination of things. It's the combination of the execution of the strategy. It's a combination of what the market does, but also the acquisitions that we've done, the change in, obviously, the strategy away from insurance and then ultimately, the culture of the teams delivering on that strategy. So it's definitely a combination of and Bruce will later on talk about some of the strategic things that we had to do with regards to facts and other structural changes in order to get us to this. We all know about the property to get us to this result. Certainly, the new business for me is key. We can talk about that a bit later as well. But I'll always mention new business because that's the indicator on whether a business is sound or not, in my view. And it always gives a little bit of a taste of where the business is positioned in the market and also what we look forward to. We're really excited still about our individualization strategy gaining traction. I think the one thing that we can talk about later and which I'm quite open about is that the amount of effort that we've put in, the amount of changes that's happened, the actual changes that's happened in the business and with regards to individuals has not come through in the numbers yet. It's not like suddenly half of our revenue is on retail. So that we knew was going to take a little bit of time. And secretly, I'd hope that one would see more in the numbers by now and my team knows that, but the efforts and the implementation has been there. The continuous automation improvement helps us, helps our clients and that has definitely paid off already. The ease of which clients can now interact with us on an institutional basis is just phenomenal. The drop in E&Os and mistakes made is down a lot plus then the cost coming down. You can -- you won't see it in the numbers yet, but the cost coming down on a relative basis as we progress is great given the growth that we have. So automation is a key part and will continue to be a key part on what we do into the future. Sustainability is an important part of what we stand for. You would have seen it in our integrated report that you're in the line, the golden thread that we can pull through on sustainability and ESG, the sustainability effort. But as you know, what is important for me on top of all of that is just us being a company that can be trusted there, that does what it says and that will deliver over time because of the way that we do business and the way that we account and the way that we communicate and the transparency. So the holistic sustainability is important. On top of that, if we really are successful at the end of the day, we will be the sustainability advisers for most of corporate South Africa and pension funds into the future as well, which is our goal, certainly. Investment performance stays -- is there, and we want to be certainly an investment destination for most funds and individuals. And then certainly, our growth forecast into -- on the retail side is part of our strategy. This is just something for you to look at. We're just -- not just making up the stories that members need help and need advice in that funds and corporates have actually changed 180 degrees in terms of where in the past it was, it's my members, leave my members alone. Now the biggest need from corporate South Africa and pension fund South Africa and umbrella fund members is, please help our members. There you can see the stats. That is what they want now is please help our members, 100% aligned with our strategy and certainly, we'll -- we will enjoy the fruits of our labor there. The highlights you've seen on the results presentation on the results as it's been posted. This is just 8 blocks of probably the highlights. Operating income at 13% in this environment, which included, as you know, 60% of our bottom line is market-driven and included 2 quite negative equity markets. The benefit we had is we started with a high starting value, which gives us this great return. You will see the underlying business is all doing well despite -- so not only dependent on the equity markets and 96% headline earnings, a great result for the shareholders as a result of the underlying businesses, the new business -- underlying business is growing, the new business growing, the strategic initiatives coming off plus on top of that, the few below-the-line items that Bruce will talk about, a great result for the shareholders. Hence our -- increase in our dividend, which we can also unpack a little bit. How we got to the ZAR 0.20 per share, but I think 33% increase in dividend in this environment is positive ZAR 68 million in revenue of new business, wonderful retail business and ZAR 10 billion in new business flows from our existing business as is. Some of it has been some of the new actions but this has been a focus on new business. None of the new things that we've done has basically contributed to this. This is just a bigger focus on what we have as our current business. And 2, 3 years ago, the running total of new business per annum was ZAR 10 billion. Now we're getting that in 6 months. So certainly an uptick in that and there is some of the underlying growth. 20% up year-on-year in terms of the members, some of that being the acquisitions and a lot of the new business, as we spoke about in the previous year. I think as we onboard the acquisitions from Sanlam, that will still increase in the second year, but it will certainly taper off and hopefully get us to a sustainable number into the future. And then we talk about our -- a lot of pieces that we want to fall in place. And normally, people have the picture of a puzzle. And if you put all the pictures together and all the pieces together, it gives you a great view, a great picture. We think of it as even more than that. We think of it as chess pieces. You have to have the right pieces, you have to have strategic moves. We have to move them in the right direction, at the right time and the right ones and the right time, as you all understand chess. And we think that the combination of acquisitions, the combination of new business, the combination of changes within the business with regards to the focus and the strategic intent on certain areas allows us to win in this space and allows us to be the champions with moving the right pieces in the right direction. And we couldn't really talk about this 2 years ago, although we knew and we thought we were in the right direction. But now we can see that some of the moves are panning out and we're making good progress in terms of winning at the end of the day. I'm not going to talk through each and every one of those, but those are certainly stuff that has happened already. The moves have been made. The outcome is still into the future. But certainly, this has been executed on and been delivered on like the retail changes, like advice to more individuals. And advice to more individuals is because of our AI changes, our digital changes, our data changes and certainly our acquisition of OUTvest. So all of those things panning out together to get us closer to the members, more members saving with us, more members getting help, getting advice. And that's also -- the AI adoption internally and externally making us just much more efficient. And it's not a wish we've done many, many robotic changes inside the business to make it more efficient to the effect that on our call center, it's already been implemented. In the health business, the last place, even I would have thought where the team identified AI robotic help to make service to our members better in terms of the health services. So lots of places that these things are creating a lot of value. Two-pot system, certainly an inflection point, not just for folks, but for the industry. And I think there will be many winners and losers after two-pot and not just because you can't pay or you can pay, the systems will be ready or not ready. I think it's how this enables you to become more of a retail business and engaging with those members because now it's every member looking after his own savings, element in savings pot and when he wants to withdraw on that communication with those members and the type of education that we can do, we think will make us a differentiating winner into the future. For all of you, I think it might not be the news yet, but we've heard it today that certainly the date has been moved again from 1st of March to 1st of September. So [ sanity ] has prevailed and my take on it is it shows -- amongst all the negativity in the market about South Africa, it shows the strength of our financial system and the strength of our treasury. And our Minister of Finance, despite all the pressures, doing the right thing for South Africa, for the members for the industry. So a great positive that we can certainly talk about. I'm going to go through the operating performance much quicker, and we can go back and ask questions, certainly for those of you that want to use it as modeling because the underlying growth in all revenue lines has actually been quite good. So we can unpack the hows and the wheres and how much it is -- can be projected into the future. But certainly, we are proud of all the areas. Retirement is a -- as a -- mostly as a result of the new business and the extra members. Obviously, what comes in there is salary increases as well and normal inflationary increases on some of the services, but the main driver here has been all the additional members, as you can see, they're 20% extra members, which drives the revenue. If we look at the total, if we look at profitability, then obviously, we'll have to see the efficiencies coming through in this, but this is the revenue line and very pleasing numbers throughout. One line that we have decided to put in there, which doesn't make a difference on our bottom line, but just so that everybody is aware, there are still retrenchments out there. This is just for industry sake and for completeness sake because we have such a rich amount of data, we just thought it's important that, that people see it's not 0 yet. There are still companies going through retrenchment exercises. And for the first half, we've had over 5,000 members being retrenched, which now with our size doesn't have such a big impact, but it does play a role in the industry and the biggest sense of things. Healthcare has had a smaller gain 5% year-on-year, but we understand that fully. And in fact, I think at the previous year-end, we actually talked about it a big new business gain in the previous years, which gave us a big growth, and we knew it would flatten off. This is probably a more sustainable level plus we've had the loss of 1 big client, which we've had for 10 years. We knew the turnover would come at some point. We were just holding on for as long as possible. We don't see it as a negative at all, and it's actually flattened out at the level that we thought it should. So on average, this [ book ] would increase a little bit more and less depending on new business, but mostly with the inflation gap or the gap in the commission, which is -- which would be around about inflation. The multinational business, which is Botswana, Namibia and our Arrive strategy, which we basically drive businesses, SIPs -- our businesses with all their members throughout Africa, that all 3 of those have had healthy growth some from a low base, but we certainly see the uptick in Botswana and Namibia of trust and relationships coming back and business coming back and very pleased with those results and with the inroads that we're making in those countries. Investments, which is, as Bruce will say, [ 53.210% ] of our bottom line. It's more than 50% -- sorry, just kidding. It's more than 50% of our profitability, certainly of our revenue. So it's an important driver of the underlying assets that we have under management, much in line with the operating income, much in line with the growth in average assets. Although there's been an extra bit and the extra bit has come from an increase in the blended margin. And again, we said that the margin will kind of stabilize at around this level, but even that small uptick of 28.9% from 27.8%, which was a result of some fee negotiations, some product changes, small tweaks here and there, it is kind of stabilizing around that level. And the biggest driver will be assets under management, new business and the markets. So we've had an outflow amongst all the positivity that's happening in here in this space and certainly also looking at the pipeline, a lot of positivity in the investment space of what's happening, what we're doing. For the 6 months, we had that institutional outflow. It's been something that's been on the cards forever and it is a multi-manager change underlying, which we asked for them and they moved now. So it's been on the cards. We knew it was going out and hopefully from here on, we can look forward to better flow number certainly in the investment space. We -- the one thing we can talk about on the investment side, that is key. Maybe I'll talk to 2 or 3 things on this whole page and please read as I talk, you can read much faster than I can talk. But I think this volatility and we know -- not that I think, we know that this volatility and the volatile period that we've been through, our multi-managed concept has actually worked for clients. We're quite excited about that. If you think about default solutions in retirement funds, specifically the umbrella fund and even some of our big stand-alone funds, the fact that we had a very nice balanced healthy management solution for them including the alternatives that we have including our offshore offering. The concept has worked for our clients, and we have to build on that to draw more assets and to make sure that our clients stay happy. But that concept is really working and the way we're running the fund in terms of risk-adjusted returns is really adding value, and we can see that from our clients. with alternatives, obviously, playing its role. I think the transformation is really coming through. We've talked about that a lot. And also from my side, thanks for the U.S., the whole industry, and we're talking to some of you on the call here who embrace this transformation drive in a sense that we are trying to do better over time by talking to each other rather than any other way, which legislation normally forces us. The other important part of what we're doing is intermediated strategy. We think we are mature enough now as an organization as Forbes with what we have as an offering and what we have as our internal distribution model to build on an intermediated model. And part of that intermediated model will be in the retail space. It will be in the institutional space, various forms. But most importantly, we will also be launching a DFM into the future as part of that holistic rollout. We think our systems are offering our research. Just everything we have to offer will help that, and we'll sustain that. We're late to market, but I think that also helps us to actually do the best that we can. So part of everything that we're doing in investments, we will make sure that our investment offering from a product point of view and a servicing point of view for the retail now given our expansion into the retail market will be best of breed and we'll continue to build on that. And then next one -- the next page maybe [indiscernible]. The next page is just a buildup of the total assets year-on-year and small movements, as you can say -- see the biggest benefit for us was the starting assets which was much higher than the previous year. And then small movements in the rest as we communicated and a little bit of market movement. So which gives us a closing assets of ZAR 455 billion (sic) [ ZAR 455.5 billion ]. And hopefully, the markets will be kind to us all -- in the next fall. If we think about the individual consulting, it's up 15%, most pleasing is, obviously, the new business flows up 34%, as I said, to almost ZAR 10 billion. And then how do you get there to write more business is, obviously, having more advisers, but we've always been very careful and we onboard as advisers and our process has been very slow, very detailed. We wanted a person that fits and that will stay forever, but we needed to expand that search in terms of getting advisers on board. So we are ahead of our target, and we will be, by year-end, and we set ourselves targets. And as you can see, we've added 15 and another 12 is on the cards by January '24. And if those are fully productive, then obviously, it will help the bottom line a lot and then it will help us getting further into the market. And if you add to that the outcome-based solution, certainly we'll get traction in our funds. Something else to highlight here is just the in-fund asset flows. We've talked about that since the start, which is again our benefit relative to what normal providers have, normal retail providers is the ability of our members to just stay in the in-fund when they retire to get the annuity from the fund or to preserve in-fund. And we've started to track that. We've always had the ability. We've got those and that is massive numbers. We've got to focus on it now as a business unit because we think it's the cheapest, easiest, best way for most people to save and just in the year 3.5 -- in the 6 months, ZAR 3.5 billion into that solution. So that is also great for us and for the members. And lastly, on the retail, some of the numbers, and this proves just to say that we are executing so nothing more than to say we don't want to brag with the numbers. You can unpack with 300 wellness days. There's a lot or not a lot, but all of those are a lot more than what we used to do. And it is all bearing fruit. Some of those wellness days we sit there and we get 400 leads. If we get 400 leads of people that actually says to you is like, now that I've listened to you, I actually need a bit of help and can you allocate somebody to me? So that is massive and the more we can roll out those things and the more we can do on the digital side, the better it is. AF Connect is our new digital platform. We've only just launched it, there's only 100,000 members on it. But imagine you have your full 1.5 million members on it being able to transact there, to see their values, to see their returns, to do everything very, very digital. And that rollout will happen within the next few months, never mind yet because everything is done, tested -- and tried and tested. Same with the WhatsApp. We've had teething problems initially and now it's running. And you can do almost anything on WhatsApp as a member. So certainly making massive inroads into the retail side. Sorry for taking all the time, apologies. And see Bruce is looking at me, he wants to run into the numbers. But I thought it's important that we just give you a little bit of feedback of why we did things and where we are and a bit of an update. And then I'll hand over to Bruce.

Thank you. Thanks, Dawie, and thanks for joining us, guys. Yes, as Dawie mentioned, solid performance from the results point of view. I think importantly, in line with our expectations and certainly as we've grown and as the strategy has been sort of coming to fruition, we are sort of expecting these results and continue to expect these results going forward. Acquisitions, obviously, making a significant impact as intended on the results as well. And it's important that we continue to gain the efficiencies as we integrate those acquisitions into our business. And certainly, the work -- the hard work that is required in terms of doing that is underway. We have benefited from the higher interest rate environment. And I think that, that's certainly given us some of the large increases in terms of the growth, which I'll unpack a little bit later, and we've also landed in terms of some of our structural changes, so achieving a tax rate, which is more in line with what our expectations were as we've -- as we fixed what was historically a bit of an issue in our tax rate. And then pleasing 33% growth in our dividend, I think, is very much in line with that growth in earnings. Just a summary of the total operating income, as Dawie has taken you through each one of those different divisions, very important that all divisions are ticking very well and being doing well in terms of growth rates. Overall, 13% with 4% of that coming from acquisitions. And largely the acquisitions are sitting in the retirement consulting line. 53% of our income is asset-based. So very much helped by the markets at the end of the prior financial year, as Dawie mentioned, starting the year well with assets up quite significantly. And then moving on to expenses, which I think, I'll -- obviously do need some analysis 15% is a significant growth in expenses, but there are underlying reasons for it. And again, just coming back to the fact that a lot of that was expected and planned for in terms of the increased expenses. If you break it down, the underlying BAU expenses is only 8%, 3% of the expense growth is acquisition and another 3% is as a result of the stranded costs, which were left behind from the sale of the AFICA business. And that is partially offset by the increase in other income, which essentially is where the transitional services agreement is with Sanlam in terms of some of the services we still provide to the AFICA business. So the increase on that other income line offsets our stranded costs included in other expenses is that stranded cost as well as some increases in [ DPA ], intangible assets, amortization of intangible assets from some of the acquisitions that we've done. Moving down the income statement, just -- sorry, just going back to expenses. On the top line, personnel cost is reflecting at 11% growth in underlying BAU. And as mentioned by Dawie, we have had a strategy of capacitating certain parts of our business where we are wanting to strengthen specifically in our financial advisers. So some of those strategies and some of the capacity build is built into that business as usual increase in personnel costs. Moving down the income statement. Importantly, other income, as I mentioned, increased significantly based on the transitional services, partly offsetting our stranded costs within the expense base. We have benefited on the non-trading and capital items with a lower expense there. We had a better result in our cell-captive insurance facility, which has given us some of that growth as well as the intangible asset, which we've been amortizing now since 2007 from our private equity days, has started coming to end of life, and that intangible asset amortization is starting to decrease. So benefited on that line significantly. Higher interest rates on our cash balances. As you're aware, we hold a lot of our capital in liquid investments, which is the most efficient and where it's required to be held. And as a result of that, the improved interest rates in the market have given rise to a significant increase in our net investment income. And then our effective tax rate down at 26.6% is also as a result of these structural changes and pleasing results there. We haven't done a lot on shares. So there's this marginal improvement in our normal -- in our weighted average number of shares. So not much of an impact from the shares side of things. There was a little bit of trading from our stock/share schemes. But the increase is, therefore, flowing all the way through to our headline earnings and normalized headline earnings per share at 68% and 70%. Our dividend is a 33% increase, not at the 100% of normalized earnings as we have historically. And that is just being cognizant of the fact that in the prior year -- in our second half of the prior year, we had a very strong growth in markets, and we had a number of [ once off ] positive items coming through. And we're just projecting to the end of the year, obviously, these growth rates as we continue to expect decent growth rates through the end of the year, but we are just making sure that we've got a progressive growth rate on that final dividend as well. Then on average equity and tangible net asset value. Again, not significant changes there, but we have had a significant improvement in our underlying solvency capital as we've moved from the group supervised calculation of solvency capital to a capital calculation, which is much more focused on the single linked insurance -- linked investment insurance license that we have. And that is now known as the solo plus basis, many of you might know that. And that has decreased the overall solvency capital required in the group. This is as a result of the fact that we have sold off our other insurance license businesses and are closing down AF Life underwriting provisions that we have. So increased, therefore, in our regulatory surplus and increasing our available cash, which is sitting at ZAR 863 million for the end of the year. Also moving to an increase in return on equity as a result of the improved results. And our return on tangible net asset value of 25.9% for the year, which I think is a credible position. And that's it from me. I'll hand back to Dawie to talk about our prospects.

And I thank you to summarize. Thanks, Bruce. To summarize, almost the link between where we've been, what we've done in the past 6 months and 12 months to the prospects is very easy because we've talked about most of these things. We haven't had any surprises in terms of what we've said and what we've done, as I've said previously. And it will be no surprise to you that these 8 things we're going to focus on a lot. We certainly are going to make sure that -- and it's a big focus of ours to become more of an investment destination for every man in the street. Now that doesn't mean we are going to splash advertising on TV. It means credibly people must through our communication, through our interactions become aware of the fact that it is a great place to save and to build wealth. And as you can see, that ties in 100% with our individualization, retailization kind of strategy. And almost the next logical step is to become the destination. The two-pot is not just an opportunity to kind of get our systems right and be as efficient as we can, it is an opportunity to interact with members in a totally different way and members would want to interact with us and we must be ready to help and hopefully do the right thing for them. And that can build our own pipeline in that itself. I must say our new business has been a good number but lower than the previous 6 months, if I can say that in the last 6 months of the previous year, but as you know, these things are cyclical and we've got a very nice pipeline for the next 6 months. So no worries about our new business threat continuing. Umbrella funds are the most competitive in our industry, offering or type of offering in our industry, bar property asset management. And we have to be the best if we want to get most of the new business of or -- and/or convince our clients that they are in the best. So we continuously tinker and continuously make our offering suitable for small, medium and large employers to join. And it's a testament to our growth is the fact that quite a few large employers have started to grow to join the umbrella fund offering. And that obviously says that we're on the right track. Our individualization we've talked about, but we -- the words [ Deresh ] likes to use is amplifying our efforts. Every day, there's even more and more and more being done. And as we're successful with one thing, we start to do a lot more. And I'm sure that the results will start to show that quite soon. We think of an integrated value chain, but the 1 AF which we talked about, like, 4 years ago, is still very much alive. And the more and more stuff we do, the more integrated we actually become, not just for ourselves, but also for our clients. And that's quite exciting to know. The clients know now that they can get a lot of things from us, not just basically admin or investments, they can get a lot of things from us, and that shows the integratedness of our way we operate plus the offering is there. And as I said, we think we are mature enough now and we know that our offering, whether it's investments or admin or servicing certainly is there where all intermediaries should at least want to ask, should we place our clients with Forbes. And should we -- without having a fear of us mingling with their clients and doing their job for them, we are building a very strong and have built but now expediating it into the market, a very strong intermediated offering, which includes focus on a DFM, as I said, and it's on the retail and the institutional side. So that's exciting for us. That opens up a whole new world for Forbes to grow from and it was a pipe dream a while ago and now it's a reality. So we're quite excited about that. And then certainly, sustainability, ESG, a big focus of ours. And we -- as I said, our sustainability in our integrated report can show [indiscernible] that we take it for the work that we do on it and how keen we are to make it look and be the sustainable company of the future. But to that same extent, we want to advise pension funds and corporates in terms of how to better become a sustainable fund and/or a corporate for themselves. And we're building that capacity as we speak. So certainly want to be a big player in the sustainability space. And you can see from the way we handle ourselves that hopefully, that will be an easy way to interact with clients. And then more importantly and lastly, I think we are excited about the way that we have set up. And if you can be as stable and sustainable in a market like it is now, I think we can be very successful in a more progressive South African market where the actual markets, the growth, the GDP, those type of things help. And I keep on saying that. But to me, it is just unbelievable that we can achieve these type of success. It's not the results necessarily, but these type of successes in a market like this, it shows that the opportunities are still there. And I know most of you have asked us 2, 3, 4 years ago, how can you grow in a market which is not conducive to grow -- in an environment that you play in that is not conducive to growth? And by what we've done and what the team has done and the type of businesses that we are in now, we've shown that it is possible. And you don't need to shoot the lights out. It's my last comment. You don't need to shoot the lights out by getting 30%, 40% revenue growth. You must just open the doors in the right way and make sure that your revenue grows by more than your expenses. And for us, that will give you mid-teens growth consistently, and that's what we're after. So quite excited about our opportunities, quite excited about the environment that we're in that the opportunities are there for Alexforbes. I forgot to end on the exciting part. Our previous sponsorship was the yacht race where we sponsored previously disadvantaged team. And that was great for them, great for us and just a wonderful story in terms of how it panned out and how they even podium and that was a wonderful thing to be part of. And our next part that we are quite excited about is this opportunity that came across our business, and that is to become involved with chess. And we're starting with chess for schools. And it is so exciting because this can be done online. This chess competition will all be online. It will be, I think, 1,200 schools throughout the country in those 4 provinces from the poorer schools to the wealthier schools all playing on an equal field, they just have to have a chessboard so -- and coaching. So we're very excited about being part of this upliftment across the schools. And over time, I sincerely hope that we are as Alexforbes and chess in South Africa, which I think is going to be great for specifically schools an upliftment. So -- we can talk a lot about that, but I wanted to end on that eye that aligned with what we believe is our core values of thinking ahead, strategy, competition, winning, this is all talks to that and quite excited to own a place where nobody else has been playing, specifically kids and the specifically upliftment. So our team is quite excited about this. Lets hope next year that all of you can see it without -- see it and feel it and be part of it without me having to say it at the results presentation. Thank you very much again for listening. I want to say thanks to the whole team, specifically the finance team for putting together the numbers and the whole team for delivering and executing at very difficult times. But we're very, very pleased to be here and happy to take any questions.

[indiscernible]

I think [indiscernible] back for questions. No questions online. Okay. And anybody with their hand up, just I can't see a thing. We just see ourselves. Yes, no. I was just explaining that I can't see. So if anybody has a question, just shout or through the webcast. No questions.

[indiscernible]

I would have wanted one question at least for Bruce. Okay, 1 minute. [indiscernible] probably not online, otherwise they would have a question. Okay. All right.

[ Charles ] maybe another question.

Seems good just because he is de Villiers.

Thank you, [ Charles ].

Dawie, is your DFM strategy going to be to 100% organic? Or do you plan to use some M&A?

We are -- M&A is never out of the question in the future, but our initial launch will be 100% organic. We believe we have the systems, the process, everything internal. We won't have the scale and you're 100% right. We won't have the scale on day 1. And actually, this isn't a launch. So we will still have the launch and I specifically told the team, I don't want to do the launch. I must do the launch. So we don't want to use the results for it. But then -- but certainly, I think there's a mid-tier market. Most of the big IFAs have got their book somewhere and they sort it and I hope that some of them will move over to us if we're as good as we think we are. But there's a big mid-tier grouping of IFAs that are starting to build nice books. And if we can help them start up and help them with research, that's the way to build the book over time. If we believe that we -- we've got scale already at the back end with our -- not with the DFM but with our big investment book, obviously. So it won't add costs by just starting with that way. But so we'll see how it evolves. And if there's an opportunity to do M&A, we'll certainly do that. But for now, it will be organic.

[ Yan ] says congrats on the good results.

Thanks [ Yan ]. glad to see you online. Okay. Wonderful. Thanks. Thanks a lot, everyone.

Thank you, everybody.

As -- thanks for joining us. And as always, we are available afterwards for questions. And obviously, over the next 2 or 3 days, we'll do our road show so available for more in-depth questions. Many thanks for dialing in and for listening.