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

Good afternoon everyone, and welcome to the FY 2025 Annual Results presentation. I have with me today, Dawie de Villiers, CEO; and Bruce Bydawell, CFO. And with that, I would like to hand over to Dawie.

Thank you, Zak. And welcome, everybody online. We are excited to join you again for our twice-a-year results feedback. We'll talk a little bit about the year that's been, about our performance in the different businesses. Certainly, Bruce will unpack the detailed financial performance, talk a little bit about the outlook. But as per normal, that will be relatively quick, and then there will be enough time for questions. So please prepare. We can also go live for questions and/or if you want to type in the chat, we'll handle that. Let's jump straight into it. Just to refresh everybody's view of our vision of who we are and what we're trying to achieve on a day-to-day basis. And it's certainly about every client, whether it's institutional client, whether it's a corporate or a fund; and certainly, every individual that we want to touch and that wants to do business with us. We can change their lives through a real holistic advice framework. And as you saw in the video, it's all about advice, but it needs to be enabled by intelligent technology. More and more, we've seen in our business and certainly with individuals and funds out there that we can enable ourselves to do a lot better with technology. And then ultimately, it's about creating impactful solutions. The end goal for every funds, corporate and/or individual member is, obviously, to create a certain amount of wealth for retirement, and therefore, we aim to be seen as their investment destination of choice for our members. So that's who we are. And then, in the past year, and certainly, our strategy in terms of supporting that vision is mainly focused around the first bullet of being an employee benefits provider of choice, but then with the regulatory interaction with retail, who certainly provide retail financial services to every individual in our client base. And hopefully, their client base will grow, but also more individuals that are not part of this will want our services from an advice and a solutions point of view. We see this as major opportunity. It certainly really coming to fruition and will be the base of our next 5-year growth. I think, the -- and I said it this morning to staff. The thing that transformed us the most as a business over the last 3, 4, 5 years has certainly being the element and the drive around advice, being truly advice led. And as I call it, really helping funds and really helping them through whatever it is that they're struggling with on the financial basis, planning, regulatory change, all the areas of advice that we give. And you know that certainly differentiated us in the market and has been a great base for us to work off. And then the ability, obviously, to provide solutions for the advice. Our core business, as you know, traditional institutional business, administration, umbrella fund, consulting, health and investments and retirement consulting and certainly our multi-manager and has proven through very difficult times to actually be a good source of growth by winning market share by retaining existing clients and continuously delivering exceptional service, which leads to more clients wanting to join the fight. Very good new business in the last 5 years, continuous in north of ZAR 140 million, ZAR 150 million worth of actual new revenue annualized get added to the base, and that is the source of our revenue growth into the future. We sometimes underestimate the power of our investment management business, firstly, but also the platform that it's built on. We have more and more clients now through the DFM and large institutional clients using our investment platform to build solutions for themselves with IFA help, with the independent advice help, and certainly with our advice help the build the custom-made solutions from an investment point of view. And then, with it goes all the great reporting and the like and the soundness that goes with it. So the scale in our investment management business, providing good solutions for members. And then, we shouldn't underestimate on our side that the effect that the technological advances has made, the digital enhancements, automation we've done behind the scenes has enabled us to actually look after clients without large mistakes or even holdups through, for instance, upon. So it doesn't just -- it makes the engagement with members a lot better, but it also helps us to be a lot more efficient in what we do. And we will continue to invest in tech into the future to enable us to do better at what we do. And then something that we're very excited about and very proud of is ESG sustainability impact consulting. We feel there's a major gap there in the industry. We're perfectly positioned to fill it. And we've got the know-how, the relationships and the skills. We know how to advice. We know how to help clients through the journey. And certainly, this ESG space is something that needs to be navigated over the next 5 to 10 years in order to have a real understanding. And as we'll talk later, we've also added capabilities through the acquisition of Paragon, that certainly puts us in a great place to give this advice. This year has been certainly a year of disruption and a year of performance. And normally, disruption is seen as a negative term for us. I think, it was a positive effect. Two-pot came with a lot of demands and a lot of risk. But certainly the whole industry and certainly also member savings in -- savings in retirement funds are better for it. We've all had to do a lot in terms of programming, in terms of new tech, in terms of engagement, and in terms of actually helping members to understand their retirement funds. And all of this has left the whole industry in a much better place. So this was a positive disruptor that we certainly embraced and makes us much stronger into the future in terms of helping our clients and in terms of our own digital experience going forward. So very excited about that. It's dominated the past year or 2 years, but certainly, it's a great base for the future. And then, as I've talked about the performance, the performance are coming through, we've laid the foundation. We have a great base. We're continuously seeing revenue increase through the new business, as we spoke, and new lines of business. And therefore, the performance continues. We see what we've done for the last 3, 4, 5 years as laying the foundation. We've already seen some of the growth coming through, but we are actually very excited about the strong foundation that we've had and certainly the upside in terms of growth in the core businesses, but also in then lifting it through the retail business into the future. The last bullet point is obviously all the types of scores that you can look at, all the interviews with clients, client satisfaction measures, NPS and CSAT and all of those measures. And we have to look at it because we are a client in an advice business. And certainly, it's really heartwarming to see the positive feedback from clients. And you can only build a business of ours and add services and wanting to win clients into the future if your current client base is happy and you're giving a good service, and that keeps on increasing as we speak. So we're very excited. And then as I said, Bruce will go into the numbers, but just as an initial highlight before we go into the segmentals or the operation of the different businesses is, we're always pleased with the double-digit operating income and growth, another 13% increase year-on-year. And Bruce will unpack where it comes from, but certainly, new business and markets and retention, the underlying drivers, good profit on a normalized basis of 27%. I said to Bruce, you can mention the 14%, I'll mention the 27%. It's just basically the difference with IFRS. So -- but a good profit. And that means that we're starting to open up the doors. We've been talking about it for a while. We've got our expenses at least 2% less than our revenue growth. Those doors are opening up, giving us good double-digit profits and it has over the last bit, and obviously, it makes us excited for the future. And Bruce will unpack the dividend a little bit more. But certainly, suffice to say that our dividend growth and our normal underlying dividend growth in line with our profit growth, very excited about the cash conversion and the growth for shareholders in that space. We have a special dividend, which is just the settlement of the claim, which we believe should contaminate, obviously, our normal dividend growth, but being capital light, being on this journey, giving that cash back to the shareholders. We talked about the new business, that new business number obviously excludes retail. So it's only in the institutional space that we're adding that type of revenue every year, and that must continue into the future to give us the growth. Our growth in a very mature market plus SA Inc. that doesn't grow will be from market share gain. We must continue to have the market share gain. And in order to do that, we must differentiate ourselves. As you can see, the closing assets almost ZAR 600 billion. I can't get myself to say ZAR 599 billion, because it's too close to ZAR 600 billion. So we're very excited about that, and we also are already looking forward to get to ZAR 1 trillion of assets under management, and that's certainly the goal. Our asset -- our numerous active members continue to grow in an environment where underlying corporates are not growing their employees. So to be flat or growing year-on-year is a massive achievement, and we're quite excited to continuously look after those members to the best of our ability. Zak reminded me that I split -- that I did not talk about the retail flows, but we will have a lot of discussions on retail. Up 34%, so it kind of starts to show that our retail business is gaining momentum. We've always had a 10% to 15% kind of annual growth in retail with business as usual and our current advisers and the way we did business. We've scaled all of that up in terms of the way we engage the tech, the lead generation, the enablement of the advisers, the type of solutions we have. So everything that we've put in place is now starting to build momentum in terms of growth there. And I can promise you the targets for the next number of years. So you better add to that. And then, if we go into the different businesses, it's always worthwhile to spend a little bit of time on the businesses. And as I said, Bruce will discuss that segmentals in the numbers. But please read through the slide. I'll just highlight one or two things, whilst we're talking and whilst you read it. The standout feature for me is, obviously, in this area, it was two-pot. Two-pot did two things, it enabled us to engage with members and it brought us the tech, and it's going to be massive for retail into the future. And as I said, we developed the tech. But it also was a year where corporates had a wait-and-see approach. First get through two-pot, so that before we do movements between each other, and that stabilized our new business opportunities a little bit, because companies we were engaging with said, just hold on for two-pot. So we're actually looking forward to the post two-pot era where we can push our new business efforts, again, and hopefully, clients will -- more clients will move our way. And we live and die by advice and by the way we do advice and the way we support that advice from almost a machine at the back of Forbes in terms of putting the best foot forward and that continues. And then very excitingly, launching the Alexforbes One umbrella. And we understand that a lot of the growth in the retirement fund space will come from the umbrellas. We've had an internal umbrella and it was actually 90% of our flows and we had an external umbrella, but we're now opening up this umbrella and let me show -- let me shift it, this umbrella -- new umbrella for the whole market. Internal and external, the same pricing, the same product, the same access for intermediaries and for ourselves, which will be a much better experience for members, which is ultimately what it's about. But if you really think through it, this is now accessible to all intermediaries and their clients. And suddenly Forbes is hopefully going to be the supplier of choice in the umbrella fund space. And we're excited about this movement, and with it comes a lot of changes in umbrella funds obviously make it easier for members and employers and a lot better, driven by underlying superior returns. And certainly, when we talk sustainability, we talk of the fund of the future. And obviously, we're going to drive our fund and our umbrella to be leading in the industry in terms of being the fund of the future. So exciting times ahead for the intermediated market for Forbes and this new era that we're going in. The second part in the advice space, in the retirement advice space is around ESG, around sustainability. We've launched our Impact Advisory a year or so ago. Since then, we've now bought the Paragon business, who basically does risk assessment, but not risk assessments to just see what the inputs are, but actually to look at outputs and look at what we can do for companies, for funds and for the asset management industry. So we're really excited about the tools that we have at our ability now in order to give proper advice on this in the future. And we see this as a big growth area in terms of advisory and in terms of making the industry just a lot more sound and a lot more better and resilient for the future. The healthcare business remains a solid business, not a big growth year-on-year. And as we know, these things come in cycles. We're still very excited about this business. It's a high-margin business plus a business where we are starting to integrate with EB a lot more. The new umbrella, you'll see healthcare and EB consulting and businesses and opportunities being integrated. A lot of clients want Forbes to be their one-stop shop. And certainly, with healthcare embedded in there, it's a great future for us. And we can do it properly. We can do it properly, because we know what the clients want and we know how to do it. And the second thing is, starting to advice more on lower-cost options. And those exist in the markets. We're also working with the providers in order to build better solutions for our clients. And certainly, that is a big part of the future growth for us in advisory, but also for the members. So exciting times in healthcare. The multinational business is basically the Botswana and Namibia businesses plus our multi-management multi -- sorry, plus our multinational consulting. Exciting growth opportunities in the two countries, already coming through the growth and the profitability in those countries. And then on top of it, we have, for instance, in Botswana, launching a multi-manager similar to what we have in SA, built on the SA capability, but purpose fit for the Botswana market, lots of growth opportunities there and excited about that. And then certainly, in Namibia, launching quite a few new products, big growth in investments, new people appointed there. So we see exciting pipeline. Channel Islands continue to grow. We've bought a few small advisory businesses there, very, very small, but they continue to grow in that space and certainly a place where we'll do our international assets and as we grow better there. And then investments, second last, a big part of our business, more than 50% of our profits and revenue, something that we take very seriously. And you'll see everywhere we talk about building the investment destination of the future. And what we mean with that is basically becoming a household name investments as well and not just administration or pension funds. And more and more as people save through their umbrella funds as individuals save through annuities and save for retirement with Forbes, the brand as an investment brand are building, and we're driving that in order to just complement what we're doing on the retail side and on the institutional side. As I said, our platform provides great solutions, access to the best single managers out there and our ability to blend these, is wonderful for the members. So certainly, this business, a lot of growth potential. We've had some two-pot withdrawals of ZAR 5.5 billion out of our funds, but they've stabilized immediately. And into the future, we're just seeing the savings increase and the outflows decrease, which makes this a great future. I want to highlight infrastructure impact fund of funds. I think we've got a slide on it. So I'll just go there quickly. The rest of the numbers we can talk to, but obviously, as per usual. So this is something exciting for us. We launched the fund certainly with a real infrastructure impact goal, about ZAR 5 billion -- between ZAR 5 billion and ZAR 6 billion that we want to raise in this fund for our clients, for our solutions. And we've already invested ZAR 1 billion and ZAR 750 million being deployed and committed ZAR 1 billion. So well under way. Very nicely positioned in the market with consultants, with clients, with the large institutions and also people that are putting together solutions. And obviously, this diversified solution really fits portfolios, really diversifies portfolios and adds to the bottom line. We use infrastructure and unlisted assets as a big part of our solutions in any case. So this will just further enhance it, but we're also hoping that some clients will use it in their solutions. So very excited about this launch and really the impact it will have. That's the normal waterfall on asset buildup. We can see, we still have the uncontrollable flows as per normal, we're paying large benefits. And as we grow even more benefits, the fund values are increasing with the markets, and therefore, the benefit payments are larger. Markets helped a lot with the ZAR 64 billion increase. But what is pleasing is the positive controllable flows. If we look at product, that's a massive number into product, which is much higher margin. And then, certainly on the platform side, starting to become the platform of choice for large institutional clients and their advisers, because of the services that we can do, as we explained. And that's the statements on the investment destination. I've probably talked about it already, but you can appreciate the benefit that a view and -- if we're seen as an investment destination for individuals, everything that we're doing and leading up to getting individuals as our clients and wanting to save with us and buying our solutions and getting our advice will just complement each other in the market. And therefore, we'll continue to drive Forbes as the investment destination for individuals. And with that comes a whole change management, the way we look at investments, the type of investments we have, the way we report on it, the way we talk about it, it must become part of our DNA. And you will continuously see a lot more from us talking about investment returns, talking about our products, talking about how it is that we add value. And as you know, as a multi-manager, there's a little bit of a risk-adjusted return that we put to it. It's for pension funds for people saving, people close to retirement, people in their living annuities. We have to look at risk as well, but returns are the ultimate driver. And this performer fund on the left-hand side is the default for many big clients and certainly for our umbrella fund. And it's done exactly what it's supposed to do. Over a longer period, over the medium period, over the short-dated periods, it's delivering inflation plus 5 plus with a goal of inflation plus 5. So if anybody in any modeling gets a return of inflation plus 5 over time, the retirement sums work out. The retirement calculations work out, and that's the place we're playing and with very little volatility and very little risk. So the way we blend these portfolios are amazing and through highs and lows, it's doing what it's supposed to do, and that is quite exciting. We've quoted our AFI growth, which is another portfolio that we look at shorter time period, but certainly outperforming the benchmark and giving us the inflation plus returns accelerator the same, conserve the same and those market participants that understand our portfolios, we thought it's really worthwhile to start focusing on investments itself, a lot more giving us the long-term return that our clients want. And the way we blend those clients is really worth a lot. And then, outperforming the benchmarks where it should be 99%, 98% for the institutional funds. On the retail side, we've had the 3-year period where only 53% of our funds outperformed the benchmark. Luckily, it was a good nominal returns and gross returns for clients, but we were still under the benchmark. And that prompted us to do a whole introspection into our retail asset management space. And you've seen earlier in the year, we made the changes to have a focus on retail, retail portfolio management. There's a different view to institutional. There's nuance changes. We'll feed off the same research, the same caliber of research that we used to have and that we still have in Forbes. And we'll exercise using the same great managers that are out there. But the way we blend these retail portfolios to compete with the benchmark and the benchmark is just the peer group. We have to adjust a little bit and have focus on retail, and that's already coming through just a few months into the space. And then lastly is retail, where you can see the numbers there, really proud of the growth in assets, the growth in advice and the conversion rates into our solutions. Now all of those really going well, and we can unpack some of those numbers if you have questions. But certainly, the way that we are now engaging corporates, sending through leads, the way we engage them with those members, it's not cold calling. It is really part of their journey, saving already with force through the pension funds in terms of how we can help them. And all of this at institutional kind of rates and advice and understanding their institutional journey, their pension fund journey in order to help them into the future. So it's really coming together, and you can see that from the numbers. Building that adviser force, not just because I say we must build them, but actually because there's a massive demand from the corporates. I think the question I get from pension funds these days are more than anything else is, can we get more advisers because our members need help. And that's a really great place to be. Our DFM is certainly a solution that we've needed and that there's a massive demand and a massive pipeline and great discussions with IFAs. But even more so, you can think now a lot of IFAs are exposed to Forbes where they weren't in the past and all their individual clients are now exposed to Forbes as well. So now suddenly, Alexforbes is top of mind. So it helps the brand, the investment destination. So on top of the revenue that it generates and the new assets that it generates, it also almost begs the question for every individual out there, why, that part of the Forbes solution. So it's all about advice build, giving the best advice and putting clients solutions that actually work. Lots of focus in this space. This is our growth area. We believe that we can certainly differentiate. We can certainly do new stuff enabled by tech. But overall, the main point is we've -- advice was always aimed at the top 10%, people that can afford it, people that understand the markets. What we're doing now is making advice accessible to our client base, the whole 1.1 million members, lower LSMs. People, they just want to know if I save 12% versus 11% or if I buy ZAR 1 extra cover, what does it mean? What's the impact? And even on two-pot, if I withdraw now, what's my effect on the long term? So we can now help everybody in our client base and the more clients we have, the more people we can help. Certainly, that is our dream. And it's been our dream for a long time through Forbes and our vision is to help as many individuals as we can. And now we're getting there through tech to be able to help all our members. We talk about vertical integration, obviously, and the DFM and then certainly, we're embarking on this IFA journey through the DFM and direct IFAs lending business with us. But certainly, that is a journey. We have not serviced IFAs for 90 years and suddenly, we're starting to do that. So massive opportunity, but also something that we still have to scale in both. And so we are excited about that. But enough of me and happy to take questions a little bit later. Please send them through. But for now, I'm going to hand over to Bruce.

Thank you. Thanks, Dawie. Mostly similar to the slide Dawie showed at the beginning and talking specifically, he stole my thunder by talking to the 27% normalized profit as opposed to 14% operating profit. And that clearly, the significant difference between the two there is the accounting for our lease in terms of the finance lease as opposed to an operating lease. I'll talk to that a little bit later on our expenses. 13% on the top line, I think, is exceptionally good, and we're very pleased with the strong results. I think that's entirely, if you look at the results as a whole, there's some good positive outcomes and good shareholder metrics, which I think we're very, very pleased with those results for the year. Our dividend, ZAR 0.33, 10% up from the prior year. That's in line with our HEPS from continuing operations. And then as Dawie said, the special dividend is really associated with a one-off, sort of, gain that we've reflected in our discontinued operations, largely associated with the ETV claim, and I'll talk to that a little bit later as well. Strong cash flows as we continue to reflect that number is excluding obviously taxation and excluding capital investments, et cetera, that's just from the operations. And so very pleased with the great growth in cash flows. And we continue to manage our capital very carefully, specifically aligned to regulatory capital. So that hasn't grown significantly year-on-year and in fact, it's declined slightly year-on-year as we focus on being capital-light going forward. On the shareholder metric, I think the more impressive number is the fact that it's 29% over 5 years, reflecting the fact that it is a continual growth in our shareholder metrics that's being delivered, and I'll talk to that again and reflect that in slides coming through later on. Dawie has spoken mostly to the operations. This essentially is the consolidation of all of the operations into one, giving 13% operating income growth. Strong retirements and investments growth coming through, largely on the retirement side based on the increase in operating income from two-pot and also some acquisitive growth in that number of 17%. And as Dawie said, underlying quite a quiet year because clients mostly were focusing on the two-pot regulatory change. Investments, obviously, a key driver there is the markets, and that has delivered great results. And then the multinational consulting, also some exciting growth coming from our countries outside of South Africa. And 53% of our income being asset-based always something that we like to point out. So markets are a key driver to our results. And then, the economy being payroll increases and the number of members that we have on our books formally employed, giving us some impetus there. If you look at the disaggregation of expenses, quite importantly, reflecting this picture of 6% in our underlying operating expenses if you extract out the growth in expenses from acquisitions and also the IFRS lease adjustment. I mean, that 6% includes all of the expenses that we've incurred with regards to the two-pot changes that were made in legislation and obviously, the ramp-up of people that we've had to look after that increase in claims, those increases in claims. So the IFRS lease adjustment really is an adjustment that we reflect in this manner as a difference between the underlying cash cost or operating cost of property versus the way that you reflected in your financial accounts being a finance lease. And obviously, there's compensating adjustments within the interest cost line as well as depreciation, which is there. So that adjustment really does differentiate our growth in expenses and will continue to do so in next year as well as we come out of the significant lease premises contract that we had which we came out of at the end of September this year. Just running down some of the other items on our income statement. Other income reflects some of the sublease rental income that we had. That also will decline going forward, because we no longer actually have any leases where we are within a full lease contract, we are now only rent space that we need and don't look after the underlying properties. On the non-trading items, the significant change there is obviously from prior year where we impaired goodwill and some intangible assets from the EBS business. We disclosed that prior year. So the non-trading items for this current year include the amortization of intangible assets from 2007 as well as the results of our cell captive insurance facility, which was very small for the year. The net investment income actually has got a number of items in it. There is a decrease in our investment income, which is a result of our special dividend that we paid out in July last year and then an increase in finance costs as a result of higher borrowings through the year as we have started building into a working capital facility. And so therefore, our average borrowings over the year is higher year-on-year. There is a one-off item in there of ZAR 34 million, which is reflected as the interest that we actually were paid as part of the legal award that we had on the ETV matter. So there was an interest component to that, and that's recorded on the interest line. So one-off focusing in our net investment income. Our policy -- excluding our policyholder tax, we remain at 26.5% on our tax rate, which ultimately is marginally below the corporate tax rate, and we're happy with that level of tax. And then, on the discontinued operation, this is where we have recorded that one-off gain. We -- in 2020 and 2021, we made a provision against this claim where one of our insurers in our insurance stack essentially questioned the claim and disputed paying the claim. As a result of that, we had to make the provision, and we then went through an arbitration process. And we've won the first phase of that arbitration, which has given rise to this profit, and we continue to chase the second phase of the claim against that insurer. Coming down to some shareholder metrics and our headline earnings. As you can see, our continuing operations headline earnings at 9%. The significant impact there is a gain on the headline earnings. We don't calculate the impairment of goodwill and intangible assets in the prior year. Hence, the 9% as opposed to 15% on the operating profit line. And then reflecting just the increases as we have announced in our dividend on a year-on-year basis. Just going to financial performance over a period of time. And I think the most important number here as you look at these growth rates over time is the 15% HEPS growth over a 5-year period. And what's most pleasing is obviously the continual growth through that period as we have delivered solid results year-on-year. And certainly, going forward, it's the kind of results that we would like to continue to reflect in the future. Importantly, returning cash to shareholders over that period of ZAR 5.8 billion. Just to mention that these results don't include the discontinued operations that we have sold, which was part of the ZAR 5.8 billion return to shareholders. And then on the balance sheet side, we have reflected significant financial assets, which I think we're highlighting here that those financial assets are largely investments that we made, which are held against our shareholder capital -- sorry, our regulatory capital and then cash and cash equivalents decreasing as a result of the special dividend which was paid in July. Increase in borrowings, as we have indicated, I think we've still got a lot of scope for borrowings on our balance sheet, still at a relatively conservative level and certainly, lots of space within our covenants on those borrowings and a decrease in the lease liability as indicated, as we move through our lease contracts towards shorter term and less [ property. ] And lastly, just talking to underlying capital metrics. Our solvency capital has marginally decreased as we've become a little bit more efficient on that line. Available cash decreased after the special dividend, although still positive. And we are very cognizant of cash flows within the business, certainly with regards to the technology investments that we need to make. So therefore, looking very carefully at our cash projections before declaring dividends. Return on equity, I think, reflecting the capital-light journey that we've now delivered and certainly at a much more pleasing level, as the return on tangible net asset values if you exclude the goodwill element that still stands on our balance sheet from the 2008 private equity deal. And I think that that's it from me.

Go back to [indiscernible] I think you're going to get most of the questions. I'll get back to you. Just looking forward, keep on transforming our clients' financial journeys and thinking about investment destination. But the strategy stays the same. We've built stability in the business. We've built stability with our clients. We've built stability with people servicing our clients and certainly with our strategy. And that's probably one of the strengths of our business is just that stability. So nothing new that is in a totally different direction. We will continue to look after our employee benefit funds, our corporates and our funds and the stakeholders in that, but focusing on value add to those individuals and which we call the intersection of retail and EB. And certainly, the more value we can add to those individuals, the more it makes sense for corporates to join us as having -- as being their partners to look after jointly after their members and their employees. So that's certainly how we think about it and our big focus. The umbrella fund, Alexforbes One, we're very excited to work with external advisers whilst continuing to build a very strong advice framework of our internal for -- our internal EB consultants, retirement consultants have made a name for themselves. They are forced to be reckoned with. They've got a whole machine behind them in terms of giving a world-leading advice and certainly wowing their clients, but we think it's time to let independent advisers also get the benefit of our solution, which is the umbrella fund. And that's a big growth area for us into the future. Certainly, building the investment brand and the investment destination. And this is not a marketing campaign effort. This is a DNA. This is who we are, who we want to be and how we pitch up in the market and how people perceive us. So it's about actual delivery. As it is performs and as it has been for the past 5 years, it's about actual delivery, people must feel that difference. And then, hand-in-hand with our consulting, our advice is building out the sustainability impact advisory consulting, helping clients, the market navigate through this uncertainty around ESG, understanding it, making calls and really building a solution for their clients that is really sustainable into the future, whilst we continue to make a view. So strategy stays the same. We want changes, but they differ in terms of focus is, where we'll differentiate ourselves. And elevated focus on these different areas and on our main business to stay ahead, keep on winning market share and certainly implementing the technology solutions that gives us the automation and that gives us the better engagement into the future. So very excited about the future. And as I told people, this has not been a success story for 5 years. This has been building the base and the success story is still to come. So we are really excited looking forward into the future. Culminating into living the dream, building the legacy in order to actually be able to help and advise and consult to all the individual clients that are part of our client base and not just the top 10%, but actually helping everybody with their solutions, their need, their requests. And we are in a position now to do it. So that is really exciting. And hopefully, we can build on it. Thank you very much for listening. Thanks also, I want to say right upfront for the support over the years, a lot of how we've crafted solutions, how we thought about engaging the market has been, because of questions from analysts and market participants and our clients, and that's how we grow this economy together. And we talked about in the results presentations in the media actually about punching above our weight. And that's not meant to be bragging. It's actually meant to be that our goal and what we want to achieve over time is to help the industry grow. We don't want to grow at the expense of anybody else. We want to -- we are an enabler. We are the advice framework. We're the point of call with the clients. We want to make their lives better by growing the whole industry. And I think the interactions between us and U.S. market participants, the media, the regulator and certainly our clients help us to achieve that. And that is really satisfying. And hopefully, it will stand us good into the future as well. Zak, happy to take some questions.

We've got one question, Dawie. Can you please provide some color as to where the headcount stands for these results, what temporary hires have already rolled off or if that is still expected to come through?

So we're in the process. We've got continuous vacancies appearing, and this was actually -- it was an extra expense for a while, and we hired 50-odd temps to help with two-pot. And as you know, and that's why the question is so important, we had to hire them months before to train them and all of those. So it was a big extra expense. Some of them are really good. Some of them have really done well. So we're keeping them in different roles not as two-pot. We don't need them for two-pot anymore. Two-pot is over. We're doing everything digitally now. So we don't have the hands need anymore. But some of them have been rolled into permanent positions in other areas of the business administration and the rest have been rolled.

And also just to note, I mean, we did maintain a certain amount of two-pot readiness through the second phase, which we were trying to understand, and that is March. Essentially, people could come for a second claim in March, because it's after the tax year-end, the February tax year-end. And we anticipated a fair amount of claims within that period as well. And therefore, we just wanted that readiness to be there for the second phase. As it turned out, a lot of those claims were electronically processed. And so we're much more comfortable that now our systems can manage that loan. So we just wanted to be on standby for that.

Maybe just a little bit of seeing that you opened the door on the two-pot, a little bit of a drag. I mean, the second phase, admittedly, it was half of the claims of the previous one, but similar effect in the first 2 weeks. And we paid on average within 4 days full assessment tax, the whole process and paid out within 4 days on average. So I think we're ready and that tech enablement, not just for two-pot, but all our engagements into the future members is really. So it won't be reflected in this number yet back to your question. But in the next financial year, those people will be [indiscernible].

Thank you, Dawie. We will open the floor to questions. [Operator Instructions].

Happy to discuss anything or take questions on anything. There's no questions, so it's a good sign.

I think -- I was about to say, if there are no further questions, then we can please then bring the session to a close.