ASX Limited (ASX) Earnings Call Transcript & Summary

[Audio Gap] of this country. Well, it's truly great to hear so many of you joining us today. We understand there's a little under 1,000 registered to participate in today's ASX CEO Connect. And really great to see so many of you joining us from around the country. It may be a little early in Perth but -- in WA, some of you up there looking as well. And those joining us from New Zealand, it's probably getting a little closer to lunchtime for you. But thank you. And it's great to see the support that you provide to our presenters. And looking at our presenters, we have a great lineup and I'm sure you're in for another great event, as is always the case. But as usual, before we start our company presentations, we'll hear from our partner, nabtrade, who'll provide us with a little bit of a market update. But just before we get into the full-on sessions, just some reminders about troubleshooting and housekeeping. I'm guessing if you're seeing and hearing me correctly right now, all is good. If it's a little blurred, fuzzy, you may want to go back and rejoin. But here are some tips as to how you can get the most out of today's session in terms of a technical sense. In need, you can dial in using the phone number that's shown on screen there. As attendees, all your microphones and cameras are turned off, but you will see and hear each of the presenters. If I can just have the next question -- next slide on how to ask questions. You'll be able to ask questions. So you'll find as a Q&A function on your screen. What I'd suggest you do, as the presenters make their presentations, enter your questions along the way because that's helpful. We can start to build up some questions. So after they finish their 15-minute session, we've got 10 minutes -- we've got 5 minutes of Q&A, and I'll come back and ask your questions if they're already stacked up. Just a quick look at our agenda. Next slide, if you will. An apology upfront firstly from [ Ryan Gibson ] and [ Graham Katz ] who's very apologetic, but due to unforeseen circumstances, they are unable to join us today. But we do hope to have them back in the not-too-distant future at another CEO Connect. So today, we now have 5 presentations, including a nabtrade market update, which we'll start in just a moment; then Life360 and the first of our international guest joining us from the West Coast of America; followed by Future Gen, MyState and PushPay to finish off around about 11:40 this afternoon. As I mentioned, each of our sessions run for 15 minutes' formal presentation followed by 5 minutes' Q&A. So keep those questions coming in through the presenters' presentations, and we'll get back to those and get through as many as we possibly can before the end of the session. If we don't get through all of those questions, we'll pass those on to each of our presenters and they can respond to you too separately. My job is to keep us on time, and I think we're doing a pretty good job of that so far. So without further ado, I'm going to thank nabtrade for their continuing support of ASX CEO Connect and ask Gemma Dale if she can actually turn on her camera and join us so we can see you, Gemma. Up first slide, as is the usual case, we're going to get a market update from nabtrade. And in this case, it's Gemma Dale, who's the Director of Self-Managed Super Fund and Investor Behavior. Always good to hear from you, Gemma, and always good to hear the insights that you can provide from your database on investor behavior in particular. So I'll turn it over to you for the next 15 minutes.

Thanks, Ian. It's always lovely to talk to you guys. It's much nicer to talk to you in person, but it's amazing what we can do with technology these days, and that's been immensely valuable over the last 18 months, nearly 2 years now. So quick update this morning on what's been happening on the market. And I have the privilege in my role to have a look at an amazing amount of data in terms of what investors, retail investors, people like you guys, are doing every day and also just a summary of what the market itself has been doing. And sometimes, when you're watching things daily, it's nice to step back and see what's actually been happening at a broader view. And because I do this every 3 to 6 months, it's a nice little reminder. So a quick disclaimer. We always have one of these. There's no advice in this presentation. And we're most definitely not giving any tax advice or anything similar. But I will be talking about how the ASX has been performing year-to-date. It's been an incredible couple of years on markets, absolutely incredible. And we've seen an extraordinary uplift in participation, so a huge number of new investors coming to market really since the COVID crash happened late February, early March last year, just this incredible uplift in people participating. But many of you will have been investing and trading for a really long time. So taking a look at the short term and the long term, a bit of a breakdown of different sectors in the market, those ones that have been more relevant to our investors. So I won't cover everything in 15 minutes and a couple of themes to watch although frankly, at the moment, we know what that is, right? It's hard to miss with new variants around. So slide here, I've used a year-to-date slide for most of these, a couple of them. I think I made a mistake and put in a 1-year slide. But it gives you -- we're only a couple of weeks away from the end of the year. So the 1 year and year-to-date are relatively similar numbers, but it gives you a straight price performance of the ASX 200. So there's the ASX 200 and there's this price, does not include dividends. And even when I've put the yield at the bottom there, that does not include franking. So this is not your total return. But for 2021, the calendar year 2021, the ASX' annual performance has been around about 10%, which is pretty fantastic from a price perspective. And I've been able to put the yield in having done this presentation. As I said a few times over the last couple of years, I haven't been able to put in yields because, as so many of you would know, companies were cutting or deferring or just not paying dividends at all last year when they were under extreme amounts of pressure during COVID. And it was very hard to know how we were going to come out of that. There was so much uncertainty at the time. So dividends looked extremely poor last year. And putting a yield in wasn't really representative of what you would ordinarily expect on the ASX. So when you add in this year's yield plus the actual price performance, you're looking at around 15%. Now that's a lot more than we tell people to expect on an annual basis. You know with markets that you have to average over many years. Each year can be quite volatile. But it's been a good year for investors, generally speaking, if you've been invested in the market as a whole, if you held an ETF, for example. But you can also see from that chart that we are well off the highs. The market peaked around August, and it had risen really strongly through to August, done incredibly well coming back from the COVID lows from April through to December last year. And then January through August, still continuing to perform really well. And since then, it sort of traded down and then sideways a bit. The 5-year performance, around 30%; 10-year performance, around 72%. That's sort of what we tell people to expect over the long term from the ASX. But as you all know, it's been a rocky ride in there and a lot has been happening. So to give you an idea of how rocky that road has been, this is the VIX, which is the volatility index. It measures effectively how much prices jump around. And you can see after many years of very low volatility, with things not moving around very much, it spiked like nobody's business in early last year when COVID reared its ugly head. And it took quite some time to come back to what we would consider normal but relatively subdued levels. And it's been pretty subdued most of this year. You can see that tiny spark at the end there. That's now -- it's not well above average levels by any means, right? It's a little spike, it's not certainly anything like we saw last year, but there are those who are concerned that we will see a return of volatility particularly for interest rates rising around the world and so on. So having a look at some of the underlying sectors, what we've been seeing. Now the reason that I've put the sectors in this order and included the ones that I have is that they are in order of how they are held by our base of investors, many, many hundreds of thousands of investors on nabtrade, and they hold financials. So basically big 4 banks plus Macquarie and perhaps a couple of the smaller banks is by far the largest proportion of their portfolio. Now it's been shrinking over time. So if I've done this presentation 6 or 7 years ago, financials were as much as 35% to 40% of the average portfolio. Now it's somewhere between 25% and 27%. So it's much smaller. That is partly due to price performance. If you look at the 5-year number, they're dead flat or down a little bit, over 5 years from a price perspective. But the performance over the last 12 months has been amazing, so well above the market, well above the ASX 200. And it's worth noting many, many, many of our investors -- I would say the bulk of them were anticipating last year by buying more banks. When the banks got absolutely hammered during COVID, all of our investors were seeing that as an incredible buying opportunity. All of the big 4 and Macquarie were in our top 10 buys last year. And investors were participating wherever there was a capital raise if they could do it. So most of our investors have some exposure to banks and most of them have done extremely well over the last 12 months because even if they were already holding, they were buying at the lows and taking advantage of the incredible run banks have had since then. It's worth noting though they are off their highs also. So you can see there at the end, they've come away a little bit. And the reason for that is both Westpac in their annual results and CBA in their quarterly results talked about quite a bit of pressure on net interest margin and how much they're having to give away in terms of margin in order to gain market share or even hang on to it. The good news is dividend yields are looking really good again. Again, that does not include franking. So if you gross up for franking, that's a really attractive yield. And that's one of the many reasons that our investors do love to participate in this particular sector. Materials is the next big one. If you see any of the presentations we give from nabtrade or any of the ausbiz or TV appearances or radio or anything else, you'll know that we talk about Fortescue all the time. And the reason for that is Fortescue has been the most traded stock on nabtrade this year by an absolutely eye-watering margin, absolutely huge. We have never seen Fortescue in our top 10 before. This year, it was in our top 10. And there were many days where the trading and buying in Fortescue was 50% higher than any other stock on the ASX. So we've seen incredible interest in this particular sector and in Fortescue in particular because it's effectively a pure iron ore play. And the pure iron ore play was an interesting thing to do this year because the iron ore price went from a long-run average of around USD 60 a ton to USD 220 a ton earlier in the year that just was allowing the big miners to produce incredible profits. You will see that reflected in the dividend yield more than anything else. Not in the price because markets understand that, that was a short-term opportunity, but it was definitely not going to be maintained, that you can't continue pricing a commodity that far above its long-run average. But when you are getting those kinds of super profits, you can pay those back to investors. Most people would think of materials as a sector where you get no yield or very little. And yet this year, it was by far the most high, steeling sector. Investors have done incredibly well with special dividends and so on. So a 10% yield, don't expect that in the future, but it's been amazing for those who have participated and yet overall, the sector has been pretty much dead flat. So fantastic if you were in it while it was running hot in the long run, better than the banks over 5 years but not as good over 10. And it's what we learn looking at the different sectors that they perform at different times. Just moving on. Oh, we've got health care here. So health care, there isn't -- this is #3. It's very specifically CSL. I would like to say it's a broad base of health care companies, but it is CSL for our guys, Cochlear and ResMed and some of the others also. The long-term performance of this sector, again, is down to CSL and Cochlear in particular. They've had that incredible run over 10 years. At one point, it was over a 500% performance. But it's worth noting CSL is also well off its highs. It was at $350 a share just prior to the COVID crash, and it has not remade that high. So this sector has done well but not as well as the rest of the market. It's done really well over the long run, but it had the furthest of 4 because the company is on very high multiples and again relatively low yields and relatively low franking partly because of offshore earnings. So it's not as attractive for our guys unless it gets beaten up. It's get beaten up a lot for those multiples come back down to where they'd be willing to pay for them. Quickly on to energy, and I did want to cover this one because if you've been reading the headlines, you would know that the oil price has come back really strongly that in the U.S., consumers are paying over $4 a gallon for fuel, which is horrifying to them that oil prices have been skyrocketing. There's an energy crisis in Europe and another one in China. And you would assume that the energy sector has performed really well. And yet when you look at this chart, you can see there have been some periods of great performance but they're not consistent. And overall, there's been a lot of weakness in this area. So for a lot of our investors, they've done well during different periods with energy, but it's pretty difficult to pick when they're going to do consistently, yield around 3% and not as strong as the overall market. Ten most held stocks, this is terribly interesting. I've not put bought this year. I've put in held because this has changed quite a lot over the last couple of years. CSL was at the bottom of that top 10. It was in the top 10, but it's now #3. BHP has crept up a little bit. Westpac and ANZ have fallen. The one that surprises me the most is the Vanguard ASX 200 ETF. So we've been talking about ETFs for years. They were not terribly popular. And yet now we see so much buying consistently in ETFs because investors just want broad market exposure. And we also have a lot of new investors coming to market who aren't sure what to buy and just want to have some exposure that a single ETF is in the top 10. If we were able to aggregate across all of the different providers of the ASX 200 ETFs, then we might find that it's even higher. Now I pulled this data on the 5th of November, which sounds a little out of date, but the holdings don't usually change terribly frequently. The reason is the 5th of November is that the 11th most held stock on nabtrade on that date was Tesla. Tesla, as you all know, is not in the ASX 200. It's listed in the U.S. and it's illustrative of the extent to which investors are now starting to look offshore for opportunities. They love that stock, and they've been willing to hold it through the incredible volatility that it has experienced. But to see that just outside the top 10 was absolutely incredible. So things are changing a little bit and investors are looking at a lot of different places for opportunity. A few key themes for the coming year. The COVID variant, Omicron, is obviously dominating headlines at the moment and it's a real source of concern to many people. I was reading some fairly horrifying data last night. We're obviously waiting for more clarity and more data to get a feel for how much of an impact that, that will have. But it is a good reminder that we're not necessarily out of the woods with this. And I think that that's putting a lot of pressure on markets. Volumes certainly are down on our platform. And we're seeing our cash flow really, really starting to climb. A lot of investors are taking a little bit of cash off the table and starting to wait for a pullback, but they haven't seen quite as big a pullback as they're hoping for. On the right-hand side there, I've got the iron ore price. That's going to be an interesting one also. They were quite extraordinary circumstances that led to the rise in iron ore this year that will moderate, assuming that there are no other extraordinary circumstances. A lot of investors have been trading that really actively and doing really well out of it, and they will be looking elsewhere if there is a moderation. And finally, on the left-hand side, I've never managed to find a good picture for interest rates. But inflation, whether or not it's transitory, is the question for markets. And to what extent central banks will be forced to wind back extraordinary monetary policy and raise rates and what pressure that is going to put on markets is what all pundits and all investors are looking closely for. So thank you so much for your time this morning. I think I kept to time today. I hope so.

You've done tremendously well, Gemma. And as is usual, we don't have a Q&A session following your presentation. But I'd just like to thank you and the team at nabtrade for the support and partnership they've provided to these sessions over the last 12 months. It's been tremendous. It's always great to hear the insights that you bring to getting us started on a CEO Connect event, particularly so to have a look inside what's going on in nabtrade. I know for many self-directed investors or self-managed super fund trustees who don't often get a chance to find out what's in other people's minds. So your insights have been tremendous, and we greatly appreciate it.

Thanks so much. It's always fun to be here.

And I wish you and all those at nabtrade all the very best for 2022. We'll speak next year.

Thank you.

Cheers. Now it's over to our first presentation from Chris Hulls. I think Chris is on the line. Chris will get you ahead -- a slide up. Here we go, go quickly back to -- there we are. Chris, you're on the line. And I guess we're talking very, very briefly before we started. You're coming to -- it's on Monday afternoon from the West Coast of America, just north of San Francisco. So it just demonstrates the opportunities that the format that the ASX present these sessions to bring those that are listed on the ASX but located overseas to give us insights to their business. So over to you for the next 15. I'm back in about -- at the end of that with 5 minutes of Q&A.

Yes. Thank you very much for having me, and it is quite nice to be able to do these conferences from thousands of miles away instead of hopping on a plane, flying across the ocean. And a big theme of Life360, which we'll talk about, is what it is now a tailwind for the world moving digital, where we reflexively look to digital communication tools, which is a big part of what is driving our growth. So I'll hop right into it and give a bit of a high level on Life360 for people who might not know much about us. I know a lot of you have followed the story, but to start very simply, our mission is to help families live safely. When we got started over a decade ago, it was when social networks were getting huge. You had Facebook with friends. You had LinkedIn with professionals. And our view is like, wait, why haven't families gone digital? And that was -- that itself was not a new pitch. But what was new is we decided not to just build another social network but instead focus on what was then the very nascent mobile industry and also focus on safety, which is fundamental to essentially every family because if we talk to any parent, you're going to hear the same thing, "My life is stressful. It's chaotic. I just want to get through the day and keep my kids safe," and that's what Life360 does. A quick snapshot on who we are. I'll talk about the product in the next slide, but we're a freemium business, the world's largest family safety product, over 30 million active users, about $120 million of AMR, almost up 50% year-over-year, about 330 head count, and about $2 billion market cap although the last few days have obviously been a little bit difficult for stocks like us. And we recently announced the acquisition of a company called Tile, which I'll also talk about, which is going to dramatically increase the size of the business. So looking at what we are and what we do, there are a few parts to the app. The core of the app is what is the original location-sharing service out there before Find My, before anything. We launched the first version of location-sharing on smartphones, but it was always about family. So we have alerts when your kids get to school, your spouse leaves work, your battery is low, someone finishes a drive, messages back and forth, checking to say, "Here I am," SOS to get help in an emergency. That's the core free app. But then on top of that, we monetize what we call our membership, which is a whole bunch of extra features, from driving safety to digital safety and emergency assistance, so much more, which I'll also talk about a little bit more. But we basically use the app to get people to come in for free, and then we upsell via a subscription offering, which is -- takes largely products that already exist but bundles them into our app at a much lower price. And although we are accessible as an app, as I mentioned, safety is really at our core. And I'd like to just emphasize with this slide how we are so much more than just a location-sharing app. I won't read all these stats, but this is one testimonial of someone whose life we saved through our emergency services. One of the features in particular, I'm most excited about, is our automatic crash detection and emergency response service where without you having to do anything, we can detect an accident based on the sensors on your phone and send you an ambulance even if you can't ask for help. We get countless reviews and inbounds of parents literally telling us that we saved their kids' lives. And we've been around a while. As I mentioned, we were the first location-sharing app in the market, period. But what we do is so much more than that. Every year, we've expanded our technology platform, expanded our offering and, the last 5 years alone, have developed over $130 million of R&D into our platform. So what we do is something that is not easily replicable. I'll quickly also hit on our business model. This is very common in the U.S. but a little less common for companies outside of Australia -- or outside of the U.S. and some of our investors in Australia weren't as familiar with this model when we got started. But we are what is called a freemium, where you come in and you download Life360 for free before you pay us. And that brings us to our 33.8 million active users. Then most of our money comes when people upgrade to our paid memberships. That's about 4 million total users are covered by paid. That gets us our subscription revenue. That's about $22.8 million per quarter. Then we have what's indirect revenue, which right now is a little bit more nascent, but we have lead generation and our data platform where we sell de-identified third-party -- de-identified data to third parties. And that is a great model for a company like ours because, first, it's very high risk. You make a lot less money upfront because you have to build your user base. But once you build a user base, it's highly defensible because for someone to compete with you at scale, they have to really get this big user base first or they have to charge for what you're giving away for free, which was hard for obvious reasons. So fortunately, we're at scale and that's what's driving so much of our success. I also mentioned that our membership -- a lot of the features that we charge for, they are available from other competitors but they're usually point solutions. They're not other mobile-first companies. And as a result, they have to charge a lot of money for something that we can offer at 90% less because we have minimal customer acquisition. We don't pay for your smartphone. We don't pay for your data plan. We have no sales teams. We have no offices on the ground other than our HQ. And it is essentially mobile economics where we're very much part of that world where software is eating everybody else because we can do things so much more efficiently. So it literally would cost almost $200 a month or over $200 a month to get what we offer for $20. And to make it specific to Australia, I think everyone listening in, do you pay for NRMA? How much are you paying for NRMA? It's probably at least $10 a month, not even covering the whole family. On the left, here's everything you get with Life360. And while it comes to mind, please note that in Australia, you cannot access our full membership. Right now, the premium features are U.S. only, with the rollout currently underway in Canada but more coming soon. And then looking at growth. So we have been growing extremely quickly. In the previous market update, we heard a little bit about COVID. We were punched in the gut from COVID. It was not good for us. But as you can see after that first quarter, we quickly rebounded. We just shut off marketing. We still grew. We were cash flow breakeven. But once we reemerged from COVID, a lot of the headwinds became tailwinds. As we talked about, kicking off in this conference, we all look to digital tools get to connect now. And so as COVID fades, we're in a very good position because digitally native families are rapidly becoming the norm. Also to shift very quickly to talk about what, within a few weeks, will be our subsidiary, Tile. So Tile is a very big brand in the U.S. They sell physical tags, somewhat like the Apple AirTags which just launched to find lost things, so backpacks, keys, wallet, cell phones -- or sorry, not cell phones, like Kindles. People put these tags on them to find them, very complementary to Life360, about a 200-person company. They have about $103 million of revenues. We're almost doubling our revenue with this acquisition, and about 2.8 million active users with almost 7 million active devices. They are now coming into our fold. Looking a little bit about what they do. With Tile products, you can put tags in your things, as I already mentioned. They have an embedded product line, which is devices where you can track them without any new hardware. So Tile has been doing a bunch of partnerships with actual chipset manufacturers. So find your HP laptop even if the battery is dead because it works on very low voltage. Your Fitbit device, your Skullcandy headphones, they're all now part of Tile. And also a premium product which has a number of features, the biggest one being lost item reimbursement. The lost and recovery rate is so high with Tile that if your item is lost when you're a premium customer, we will pay for you to replace it. So that's Tile in a nutshell, and I want to talk about why we're so excited to bring them under the fold. So the first thing I want to talk about just more external to our synergies is the AirTags. So Apple now has entered the space, and we know the reflex might be, "Oh my goodness, Apple's competing here. Why would you start a land war with Asia?" We have a very differing view on the range of outcomes. Yes, this creates unknown and there's certainly some level of risk. But we personally have been through this before, where Life360 was looked at as a creepy weird product early on. People didn't get location. But then when Apple launched Find My, we were nervous ahead of time. Investors wouldn't touch us when that became public knowledge. But when they did launch, it was our single period of growth -- largest period of growth in the company's history ever. And we think there's a very high chance this could be a repeat by Apple bringing awareness to what -- to a category that we think should be far bigger but it's just getting started. And as one other very interesting case study, look at what has happened with AirPods. Apple did not create the Bluetooth headphone category. It's an old idea. There have been different versions of that for a while. If you really want to say who's the category creator, it's Jawbone. I had a Jawbone headphone in 2010. That was a sub-$100 million market for a decade. And then when Apple came in, went from $100 million of revenue a year, 100-ish to $37.5 billion of revenue within 5 years. So 300x plus growth just from Apple entering the space. If you look at Apple's market share, it went down year-over-year from 50% to 23%. So Apple entering this category was the single biggest piece of good news for everybody else in the space. So we think that we're getting Tile at what is an inflection point for the market. And I will say -- let's just say you don't buy any of that, you think Apple is going to dominate. Even then, doesn't matter for us because as we look to expand internationally, almost everyone in the world is on Android, not iOS, and there really is, other than Tile, no alternative to Life360. Almost half -- or over half of our users international are on Android or cross-platform. We're on Google and Alexa. We have exclusive partnerships with both of them. That's 600 million devices. There are 5 billion Bluetooth devices each year that are potential embedded partners. And these are all Tile-embedded partners on the right. And for obvious reasons, they're not going to want to be reliant on iOS. So that's sort of the market backdrop to why we're excited. But I think even more importantly, we -- what are -- why are we, as Life360, so excited about what we can bring to the table and what are the synergies? So when we called the company Life360, we had our very broad, all-encompassing membership vision, which is the first part of 360. The other part of being 360 was just people, pets and things all in one place and how do we fully own that experience. So now with our other acquisition from earlier this year, Jiobit, we have Life360, the leading family membership. We have Tile, the leading platform for things. And we also have the leading wearable for pets and kids. We are the only company that owns all this. And for anybody cross-platform, there's no other game in town. And with Tile and Jiobit, they're highly complementary because Tile is great because they're very, very low cost. They're cheap. You can kind of put them on everything, but they have to be in range of a phone or someone else's phone, whereas Jiobit is a stand-alone cell phone plus GPS, so very different product. The Jiobit is more for, "I need real-time location. I need to know down to the minute when someone leaves the house, my kid leaves school," whereas Tile's usually much more, "I'm in the house. I lost my keys. I need to buzz them." So now we own the whole thing end-to-end. And that's going to enable what I call the map to rule them all. So just think intuitively what it means to have your kids, your parents, your pet, your keys, your backpack all in one map. It's just going to be such a unique, powerful experience that nobody else in the market has. To get a little bit more practical and also what we're going to do in the short and midterm, we're pretty excited about what Tile is going to mean for our premium member offering. One challenge we have had is there's still a natural bias against products you can't touch or feel. And people are starting to say, "Why is your membership so expensive?" And as I shared earlier, it's really not. It's just this perception. So we're going to be bundling Tiles with our membership. So now you can touch it. You can feel it. It will be in your pocket, on your keys when you're walking around or your purse if that's where you keep your keys. It's going to change that whole tenor of what we do to make it feel the brick-and-mortar in a good sense so we're not just digital. And similarly, with Tile, they have their premium offering, and their road map was actually to compete with Life360. So instead of having to do all this R&D, which was for us over $130 million in just last 5 years, as I mentioned, we will be able to give them a huge leap forward in terms of the benefit that we provide of what we offer because things like identity theft protection, personal safety, driver safety will be part of the Tile bundle very soon. So if you think about it, increased conversion, increased pricing, higher retention, all things that go right to customer LTV. Also, very synergistic in terms of how we acquire users. Very short version, we dominate the app stores. We have amazing word of mouth. Tile is also a little bit more old school where they nailed brick-and-mortar, almost 30,000 stores. They have a Tile.com distribution site, so direct-to-consumer, something they know really well. And then they also have their third-party embedded channel, which is, we believe, as the category grows, something that's going to be extremely meaningful for the business, so very little overlap and extremely symbiotic. And then to wrap everything up and bring it home, we have a very long strategic vision that we're working on. It extends many years out into the future. Tile is a big part of that. And I'm not going to go through all of these, but we have a lot going into like how we build the user base, how we get people more engaged, how we go international because as I mentioned, very U.S.-centric right now, and grow that denominator, which is how we monetize. We're expanding our membership. We're very much in the early days of the product. Part of being 360 is the entire set of services you could use from being apparent with young kids up to taking care of aging parents yourself. These are all areas we can grow into. And then just expand new verticals, new products more than just the membership, moving to things like insurance. We're very excited to push on the gas, and we've been raising more money and looking forward for everything we can do and now is a much bigger business with Tile as part of the family. And with that, I'll open it up to Q&A.

Great. Thank you, Chris. Very interesting insight. Did I hear correctly or did I read correctly because I was counting the digit, 7.5 billion safe arrival notifications?

Something like that. Maybe even more honestly -- I don't know what that time period was, but there are -- it's -- people are getting like 10 a day. So 33 million actually. It's hundreds of millions a day. So that's probably more than that.

I've got kids, not young kids. I'll come back to kids in a second, but they're traveling and we're getting text messages, "We're on the plane, we're riding this, or what's the weather like," and all that sort of stuff. So it's pretty much families wanted to stay connected, as you pointed out. Also, you lump kids in with pets. So I think people, pets and things, including kids as pets and that sort of stuff, keeping track of where your kids are at.

Who do you love more, the dog or the kids?

I'm not going to answer that question. It varies from time to time. A couple of questions coming in, wanting to know about expansion. You said basically U.S.-centric, looking to go international. The irony is, of course, Australia is one of your international destinations. You don't offer full membership down here as yet. What are your plans to expand generally and particularly into Australia?

Sure. So Canada rollout is happening now. Very excited to share the early results of that at our full year earnings in under 2 months. Part of our recent acquisition, we also did do a fundraise. So we have a little bit extra cash, and one of the areas we are propping up a much bigger team is international. So our #2 market and Tile's #2 market is the U.K. So that is our likely next area of focus and also bigger, obviously. We love Australia. It's a little bit small, but we can change Z to S, essentially localized, but jokes aside, the real thing we need to do is just get the hooks in place for call centers, ambulance dispatch, all that. So it's more of a logistical thing, but we will be opening up the much bigger international team and starting with the U.K., but if we can find people to cover Australia and the EU in parallel, we'll probably try to do that either all at once or fast follow. But we are planting a firm stake in the ground and saying international is something we're absolutely doing.

Okay. And you mentioned COVID was a tough time, but you've negotiated through it, and the learnings along the way of giving you insight to the future. Can you give us a bit more perspective around that?

Sure. So to clarify tough time, we weren't like a restaurant where we lost all revenue. We actually maintained over 100% net revenue retention through the pandemic. It was more that we were just on such a great growth curve and then everyone stopped leaving the house and all our word of mouth -- and not all of it, but most of the word of mouth is parents talking to parents when they're out and about. And also, the whole point of the product is when people are going about routines not with their family. So that was just extremely frustrating. But the 2 silver linings -- I hit on some of them already, but I'll repeat them with a bit more color. One was a huge silver lining about proving the resilience of our business model. So we had always told investors we don't need to be burning cash. We can grow without spending on marketing. I think investors genuinely believed that we believed ourselves, but as an investor myself, as CEO, believing something versus proving it, even if someone's of high integrity, are 2 different things. So we showed in the absolute worst possible of times, we were able to get cash flow breakeven and still grow. So I think it gave us, quite frankly, as well as investors a lot of confidence that the model is extremely resilient. And even if something really jars us, customers stick with us. So that was kind of one thing. And the second one is what I mentioned just about digitally native families. So we know our prime demographic is millennials. That is the first generation, which I'm a part, where we grew up with technology. We reflexively look to our phones. You don't need to pitch to a millennial on why Life360 makes sense, whereas my parents, they didn't get it at first at all. That was going to take care of itself. As millennials have kids, they get older. It's also -- we have much higher penetration in areas where millennials have older kids. If you look at the South in the U.S., it's a slightly earlier time shift than the Coast. So we have a huge presence there. COVID has accelerated our adoption of digital technologies by X number of years. I don't know exactly what X is, but I think we can all just think about our own lives, about how much we're looking to the phone to be part of our lives, ordering takeout, doing conferences like this. We all now do video chats with family members. It has become much more normalized to use your phone for these intimate interactions. And we think that bodes very well for -- on our road map, which is really move much more into the communications side of things as well.

Okay. That's great, Chris. You brought us home in good time. We're right on time.

Perfect.

Very interesting story. There are a few more questions, which we'll get across to you. But on behalf of the ASX team, thank you for joining us from the West Coast of U.S. yesterday afternoon, and we'll let you get home and probably head towards dinner. Thanks again, Chris. All the best to 2022..

Well, I am home, just remote. So I'll just walk up to it.

Of course.

Perfect, yes. There we go.

Thanks again.

Thanks a lot. Take care.

Will do. Our next presenter is Caroline Gurney from Future Generation. Caroline, are you with us? Can you get your camera on? There you are. Good to see you. We'll get to...

I'm indeed. I'm here. Thank you so much, Ian.

We just might get you to move your -- take your slides and get your title slide on. There you go. Caroline's the CEO of two Future Generation funds and recently been appointed CEO of both. Congratulations.

Thank you very much. Thank you.

We look forward to hearing the continuing story about Future Gen. So over to you for the next 15 minutes. And as usual, I'll be back with some questions towards the end of that. Thanks, Caroline.

Thank you, Ian. Good morning. So before I begin, I'd like to take this opportunity to acknowledge the Gadigal people of the Eora Nation on whose lands I speak today. I pay my respects elders past, present and emerging and celebrate the diversity of Aboriginal peoples and their ongoing cultures and connections to the lands and waters of New South Wales. As Ian said, I joined 8 weeks ago to Future Generation. And basically, there are 2 listed companies, Future Generation Australia and Future Generation Global, and I'll come on to both of them later. I'm going to just click through in terms of the opening slide and then the disclaimer, which please I can take as read. I'm not going to go through all the fine print there. So this is really what we're about. This is 12 slides. I'm just going to go through the first 2 quite briefly and then go really more into sort of the investment side of what we actually do and then go into the social impact. What we're finding now is that a greater proportion of the community, they want to have more of an impact where they live and where they work. Everybody wants investment returns, and that is incredibly important, but you actually want your money to work smarter. So Geoff Wilson of Wilson Asset Management, he created in 2014 an incredibly unique model at the time. He actually got the idea from London where they've set up a very similar model, which was actually aiming more towards cancer. What this model does is it combines both needs, so that investment and the social returns which the -- sort of incredibly important now, I think, more so than perhaps in 2014 when he was gradually introducing this model to Australia. Then in 2015, he set up Future Generation Global, and that basically invests in global stocks. The unique thing here is that specially selected charity partners receive an annual investment as well, and that's equal to 1% of net tangible assets each year of the companies. And that's important because they know they have the investment over a period of time. And yes, some charities do come out and some do go in, but we're pretty consistent across both of the companies. And shareholders receive exposure to leading Australian and global fund managers, and they don't pay any management or performance fees, which then obviously allows us to give the 1%. Our fund managers now are making such a unique difference. They're managing more than $1 billion on a pro bono basis. And that really is something they really enjoy because they're making a very positive difference to Australia's use because on both of the companies, we invest in the youth side. They offer capital growth and increasing -- and I'm just going to flip to the next one as well because this will actually go through what the benefits of a listed investment company structure are. And that's what a lot of people are actually asking. What do they offer? What's different? And then long term, they also capture growth, an increasing stream of fully franked dividend and preservation of capital. They trade on the ASX. And from -- in terms of what we're actually doing here, we're actually making sure with the investments themselves that we have a very highly experienced Investment Committee. And on those 2 committees for each company, we have fund managers, we have Morningstar, we have JANA, we have Lonsec, we have Zenith, and they select the leading fund managers to structure that very diversified investment portfolio, which I will come to next. These are the critical elements of the successful LIC. And I think really what you've been seeing is consolidation of the sector is very much a bigger sort of growing shareholder base. And during 2020, where many companies were actually cutting dividends, LICs were increasing dividends. And for me, engagement is one of the really important things and treating shareholders with respect. So for example, at the end of -- when -- at the end of February, we'll be doing a webinar to our clients and as well to our shareholders. And then hopefully, we'll be able to go around and see everybody. We're probably looking around June, May, and we will be able to go travel across Australia and meet people again and talk about what we're actually doing and talk about the charities, which I think is really important as well. I'm just going to go through the performance. I'm not going to go through that slide. But I think you will see that performance of Future Generation Australia is strong. And in terms of -- since inception, the return has been very good. Then I'm just going to go to the next one, which complements the -- I hope you can all see that. It's admittedly quite small, but it's on our website and we can send it to you, if you like. So we have 18 Australian pro bono fund managers, which you can see there. I'm not going to go through each and every one of them in particular. But you can see the big names. You've got Paradice, Regal, Eley Griffiths, Sandon, obviously, Wilson Asset Management is a huge supporter of Future Gen, Vinva, Lanyon, Firetrail, Cooper. So I'm not going to read all the way through. The company offers increasing fully franked dividends -- fully franked interim dividend of $0.03 per share. That's $0.06 per share annualized. And this was a 15.4% increase on the prior year interim dividend, which has been a really powerful message. As you can see there from the chart, 31st of October 2021, NTA, $1.5494; gross assets, $629.6 million; profit reserve, $0.34. And these numbers are before payment of the $0.03 interim dividend on 26th November this year. So this gives us, which I think is incredibly important, 5.2 years of dividend coverage after the $0.03 dividend payout. In September, just before I joined, FGX issued a bonus issue of options. And there, really, the objective was to grow equitably and efficiently grow the company's assets, thereby creating more impact because as assets increase, so does the company's social investment. And the exercise price is $1.48. I'm just going to go a little bit through the portfolio construction. Obviously, you can see there what the fund manager breakdown is and in terms of what the proportion is for absolute bias, market neutral and long equities and what we hold in cash. But the performance has been strong. And I think this is really because we have some of the best fund managers, as highlighted already, to make sure we have that really diversified portfolio. The Investment Committee, which meets on a very regular basis and during COVID actually met a lot more, as you would imagine, and what they're doing is they're trying to reduce volatility and provide shareholders with downside protection via the allocation to market neutral and absolute bias managers. And that's in addition to that exposure to traditional long equities managers. Earlier this year, we engaged JANA to complete the third-party analysis of the FGX look-through investment portfolio because we really wanted to know what we actually held in that. So the portfolio has got 500 -- I think my slides have just gone off. Maybe if I could leave that to you.

Leave that with us, Caroline. I think we may have just lost your slides there for a moment.

Oh, all those lovely numbers.

No worry. We'll get back to it. But if you just want to get...

No, that's okay. That's okay because the portfolio isn't on there anyway. So that's all good. So the investment portfolio has got 533 securities and there's an active share of 60.9%, which is incredibly unique. And I remember when John Coombe of JANA went through -- he said that that's really impressive. That's great. So the historically held view, and that was very much based on the blend of investment managers, was that FGX had an exposure towards small and mid-caps. And the analysis confirmed that assumption, which is what we wanted. And then at March 2021, when compared to the All Ordinaries Accumulation Index, the investment portfolio was 43% underweight to the ASX 50 and a large majority underweight large-cap companies. And that's the result of FGX being 32% underweight to the ASX 20. I can go through more on that. But I think 14.5% looks through exposure to companies outside the ASX 300, which is also pretty unique there. From a sector-style exposure perspective, the company was underweight, financials, as you would expect; and overweight, consumer discretionary, by 9.2%. I'm just going to go through to I think to the next slide now. I think you have control of the slides. So there, you can see Future Generation Global, which is basically the company that vets with global fund managers. And that's really interesting because there -- and if you go to the next slide here, we can go through the portfolio, please. So we have 12 leading global fund managers. And you can see that -- you know the names, Cooper, Magellan, Nikko, Caledonia. I'm not going to go through all of them. And we're increasing fully franked dividends. So the fully franked dividend of $0.03 per share was a 50% increase on the prior year. Obviously, all dividends are our Board decision, but that is something that we are looking at for whether we go twice yearly next year. In terms of our profit reserve, that's $0.483. And this is going to give us -- well, it does give us 16.1 years of dividend coverage, which is a very, very good message. In terms of the portfolio, we have 350 underlying investments there. Regionally, we're 30% overweight Europe compared to the MSCI AC World Index. On a sector basis, we're overweight, communication services and consumer discretionary. And again, we're also underweight, financials. Going to the next slide. I think it's just whizzing through. This is Slide 10 on the NTA, dividend, profit reserve. This one. So realistically, what has been incredibly positive from my perspective and I think also obviously for the shareholders is because of a change in accounting policy, we've been able to significantly increase the profit reserves of both of the companies, and that very much provided additional flexibility and capacity surrounding that dividend and those capital management decisions, which ultimately are obviously up to the Board. So the next slide, which is social returns. Obviously, it's something that I think makes us all very, very happy and one that shareholders -- we've been talking about a lot because we're continually trying to work out how we improve this investment. FGX, we've just -- $5.3 million is what we've just given out to a number of charities, and that's been $26.8 million since inception. With FGG, it's basically $6.4 million that we've given out just now. We've just been telling all the charities at the moment, and that's $26.2 million since inception. So overall, Future Generation, both companies, has invested $52.9 million. And those 2 charities, as I mentioned earlier, are very much focused on children at risk and youth mental health. The impact Future Generation's social investment, I just wanted to give you a couple of examples because I think it's really important to understand where we're going and also just looking at those pro bono fund managers in terms of what they've allowed us to do. And their investment is just absolutely essential. So for example, with FGX, one example will be Act for Kids. Jared was referred to Act for Kids after suffering significant neglect up to the age of 10 years of age. As you can imagine, his life was very unpredictable. He rarely went to school. He was very angry often, and he was reunited with his father. And Act for Kids is sort of an amazing charity. They helped Jared actually get trauma therapy support. And now he's going back to school. He's enjoying learning, and his father is incredibly grateful for the support they've received. So they're really changing lives, and that's really what we're trying to do. FGG, with youth mental health, I mean one charity would be -- just to highlight would be Youth Focus. And they have a vocational support program. [ Elia ] was homeless. He was struggling to finish year 12, and he was facing a huge range of mental health challenges. And the support of Youth Focus, he became the first graduate of the program that we found, and now he is actually on a career to sort of -- to aged care. So it's made a real difference to so many young boys and girls to actually change their life. And what we're getting now from the charities is because of the lockdowns, it's impacted them, their ability to fundraise by their normal channels. And they've all had to really adapt to continue and increase their support and deliver that support online, which has been really necessary. Many of our partners, especially on FGG, have been really recognized for advancing mental health that had meant -- that had a lot of money from the federal government. And it's been really important that they've contributed at this time. For example, Sydney Brain and Mind Centre, they have this amazing technology program. And that's been used online in training seminars and has made a huge difference there as well. I think that mental health of young people has been incredibly -- has been unresolved social issue before COVID. And I think now it's become something that we all know about, we all talk about. And the fact that shareholders and pro bono fund managers and also the pro bono service providers that help us have made a huge difference to actually what we're doing here. You can see there our designated charities. There's a lot there. We're actually adding more. We're looking at what we're going to do with FGG in terms of that prevention space in the future. So I think the message is very strong that we can make a huge difference, and I think we need profit and we need that social impact as well. And I think this is very much what future generation is doing, and that's incredibly important. So I'm going to close there, and I'm very happy to take any questions, Ian. Thank you.

Yes, Caroline. Thank you. Apologies there. I think we lost Internet at some stage through the course of that, but the good news is we heard everything you had to say. And of course, our audience will get a copy of the slides so they can go back and have a look at that at their own leisure. I've often heard Future Gen referred to as win, win, win. It's a win for the charities, which is obviously the great work you're doing and the contribution that goes there. It's a win for the shareholder as well as a win for the fund manager. And I think that puts a bit of a smile on fund managers' faces. They're not renowned of being happy people, but this is a great opportunity for them to give back. You did say a lot of the names there people may recognize, but they may recognize them as names they see in the newspaper, for example, or online, not something that they'd really appreciate that they can invest in. There's a couple of questions. It's that, I didn't know I could actually get exposure to those fund managers. Can you just give us a little bit more insight as to how you select the fund managers to form part of each of the portfolios?

Yes, of course. I mean as I mentioned earlier, we do have 2 incredibly significant Investment Committees. So we have JANA. We have -- and we actually have some -- JANA sits on both, actually FGX and FGG. And we have a number of -- we have Lonsec. We have Zenith. And we have some fund managers as well that sit on the Investment Committees. And Geoff Wilson as well, who obviously is the founder, sits on both of them. And they meet on a regular basis, and they basically are looking at the portfolio to make sure it's managed properly in terms of all different conditions. And that it's actually set up so that, that sort of -- whether or not it's what -- in terms of the biases of investment is actually making sure the fund performs. So we have actually added some, and we've already taken some out. I mean some actually -- one fund manager has actually closed. So the funds were returned in August 2021. And then -- so we put them into one of the other funds. But I think on the original chart, you can see which fund manager has what percentage on the sort of time of year. So that's something they spend an awful lot of time on to make sure they actually -- the fact that the portfolio has sort of appropriately risk profile to make sure that we actually perform for the very long term. And these -- as we said, these companies are about the long term and just making sure we get that growing stream of fully franked dividends.

And just on that, there are a number of questions about -- you've mentioned profit reserves, future payments, streaming and those sorts of things. The question is, I guess this is one of the benefits of the listed investment company structure. You can retain probably from previous periods and paid out of future periods. How is that decision made? Who makes the call on whether to pay it out or not?

Okay. So that is actually the Board. The Board decides exactly what is the recommendation from the Investment Committee, and then the Board decides. We've been -- I mean I think we've been the beneficiary from a change in accounting policy because that's actually significantly increased the profit reserves. So the companies before, they previously elected to record and measure all investments at fair value through other sort of comprehensive income. And then as a result of that, the change in the underlying value of the investments was basically recorded through comprehensive income rather than the company's operating profit of each reporting period. So the Board has decided, after a lot of consideration, that it was more appropriate for the investments to be recorded and measured through the company's operating profit, which is fair value through the profit or loss. And because of that, we basically now have this sort of -- we have this sort of much larger profit reserves. So we can actually make sure that we sort of guarantee the dividends over those sort of -- that sort of long-term period. That's something that we spend a lot of time thinking about because that's what a lot of our shareholders are looking for. They want those fully franked dividends.

Comforting news for a lot of shareholders to hear you say those sorts of things. So thank you. We are actually right on time, which is great. Apologies for that, clicked you earlier on. But as I said...

Not at all. Not at all. Thank you very much, Ian, for having me.

Our pleasure. We wish you and your charitable endeavors all the very, very best for the coming year. Thanks again.

Thank you very much.

Now our next presenter, if we can just -- Melos, are you with us? Can you turn on your mic and camera? I can see you.

Hi, Ian. I'm here and ready and willing to go.

Okay. We just might progress the slides through to your session. Can you take control of the slides, Melos? There we go.

There we go.

Good to see you. Now at our opening update, we heard a lot about banks, but now we're going to hear about a slightly different variation on that. So I think there's a lot of interest. We're looking forward to your presentation. I would ask those -- a lot of the questions have been coming in fairly late in the session, which means we need to pass them on to our presenters after they finish. If you have questions, please enter those through the Q&A function as soon as you can, as Melos starts talking. That way, we can get through as many as possible at the end. Over to you, Melos. Look forward to hearing from you.

Thanks very much, Ian, and good -- everybody. Good morning, everyone. I'm Melos Sulicich, Managing Director and CEO of MyState Limited. And I'm really pleased to be here presenting to you today on what I believe is Australia's best listed bank and wealth management business. I'll just start by talking about our brief overview of MyState and our strategy, then cover some of the key highlights and achievements from our latest full year results release and just finish off with a discussion on our outlook. So MyState was formed following a number of mergers of credit unions over many years mainly in Tasmania and followed by a merger and listing of -- with Tasmanian Perpetual Trustees in 2009. It's a nonoperating holding company with 2 operating businesses: a banking business, which is the largest part of the organization; and the trustee and fund management business. The wealth management business has recently been rebranded as TPT Wealth. It's a trustee business based in Tasmania and has funds under management of about $1.1 billion. From a bank perspective, most of our assets are held in the Eastern Seaboard of Australia. Our heritage is in Tasmania. And as such, a large portion of our assets are held in Tasmania. But our growth is increasingly coming through New South Wales, Queensland and Victoria. We're an ASX 300 company. We've got a market cap of about $500 million and have around 60,000 shareholders. Now just providing a quick recap on the tremendous evolution that MyState's had over the last 5 years. In a very disciplined and deliberate manner, we've transformed the business from a branch-based credit union with a customer base that was largely concentrated in Tasmania, it's now been a digital bank with an increasingly geographic diverse customer base, including having most of our home loan portfolio now in Mainland Australia. Today, our new customer origination is increasingly done online, and our processes are much more customer-focused. We're driven to provide account opening, account service and transaction processes at the forefront of what customers are looking for in today's world and to do so online in a seamless manner. We've also simplified and digitized our processes, making them more intuitive and faster. We've got artificial intelligence-enabled customer insights that we deliver to our customers to help them to manage their financial well-being. And all of this means our customers find us easy to deal with, leading us to create deeper and longer lasting customer relationships. MyState's digital transformation has simplified our business and dramatically improved the customer experience through greater efficiency, quality and speed. We've responded to the changing needs of our customers by rationalizing product portfolios, redesigning customer journeys. And by using digital technologies, we've industrialized core processes from end to end. The payoff has been measured through improved customer experiences. We've got a Net Promoter Score of plus 47, increased efficiency, reduced cost-to-income ratio and significant balance sheet growth. We're also attracting new customer segments through new channels. Environmental, social and governance matters are also increasingly involving and becoming increasingly important to MyState, our customers, our staff and our shareholders. In our 2021 ESG snapshot, after some extensive consultation across our stakeholder groups, we developed 6 key material issues which are used in the global reporting initiative that guide our ESG efforts, the list on the left hand of this slide here: They're supporting customers, governance, conduct and culture, helping our people to be their best, digital enablement and data security, environmental sustainability and community investment. The reason that we've decided to focus on these 6 key areas is clear when you look at the why they're important column. They all serve as a guide that enables us to have better customer interactions, get the best out of our own people whilst providing them with many work and development opportunities and ensuring the foundation for operating our business responsibly, transparently and ethically, all while providing great and better sustainable outcomes, whether that be environmental or community. On the right-hand side of the slide, you can see where we've made progress on these initiatives, many of which I've already outlined today. And we'll continue to progress this part of our ESG commitments but also because they enable us to make a positive impact on our business and our stakeholders. Our 2025 strategy, which we launched earlier this year, is bold. It's focused. It builds on our already strong position, high customer advocacy to accelerate our current momentum, to take advantage of growth opportunities in the market through our enhanced digital and distribution offering. It aims to grow our share in deposits, lending and funds under management through 4 key areas: that's developing our culture and people capability, continuous improvement in customer experience and growing our customer base, continuous improvement in simplifying and making our operations more efficient and growing our distribution capacity. These priority areas will be supported by key enablers that drive innovation and process automation. And all of this comes together through our -- to life through our organizational values of creating customer wow, where we're designing and delivering exceptional customer experiences with a human touch. We can do this because we think and act in the best interest of our customers, appreciate their perspectives, and they're clear and trustworthy. Chase the better is being bold so that we can embrace the changes that's required to succeed and always drive better outcomes. We're simplifying and digitizing to deliver things faster and more accurately. And finally, collaborate to win is about openly sharing information internally with each other so that we can collectively make better and more informed decisions. It's about caring for each other. It's about caring for our customers and about caring for our other stakeholders as well. We're quickly making some quite significant progress in implementing this 2025 strategy. On top of the $55 million in capital that we raised in June, which is a major plank in the execution of our strategy, this year, we've added more business development managers, more than doubling their number so that we can reach more brokers and more customers and originate more mortgages. We've added more relationship managers in the TPT Wealth business to secure more assets into the funds we manage. We are advertising extensively in Tasmania and Melbourne to grow our brand and our customer base. We are building our brand in Tasmania through the naming rights sponsorship of MyState Bank Arena and have partnerships with Football Tasmania and the NBL Tasmanian JackJumpers. We've kicked off projects to upgrade our contact center system, upgrade our Internet and mobile banking platform. And we're on track to deliver a very new and very modern and exciting platform in the middle of next year. And we continue to automate and digitize processes to make them more efficient and more scalable. We've employed new and experienced senior executives who are capable and have the proven ability to build businesses. We've done all this while we're maintaining industry-leading service levels, as I said, a customer Net Promoter Score of plus 47, and also building significant momentum in the business. The key highlights on this page show what we delivered in 2021, which is an outstanding result for the financial year, a period where we saw considerable challenges and volatility in the operating environment. Our results underline the effectiveness of our strategy with a focus on driving strong customer acquisition through increased marketing and sales investment; deliberate, disciplined and focused investment in digital innovation; a laser light beyond managing operating expenses whilst maintaining a culture which is obsessed with delivering positive customer experiences; and a continuous eye on driving the cultural transformation required to manage a bank in a modern world. You'll see evidence of these in the presentation this morning. As you can see here, our headline KPIs continue to head in the right direction. Net profit after tax increased nearly 21% to $36.3 million, while earnings per share increased over 19% to $0.3918. Operating expenses were managed very carefully, leading to a cost-to-income ratio reduction, excluding one-off restructuring costs, of 153 basis points to 61.3%. Net interest margin increased by 10 basis points to 1.96%. Customer deposits were up 13.2% over the 12 months, helped by our award-winning MyState Bank Bonus Saver account, up 319% in 1 year. Return on equity was up 116 basis points to 10.3%. And as you can see in the graph on the bottom left, MyState's return on equity compares well with the industry and is significantly higher than other regional banks. It's important to note that all this was possible due to the trust our customers place in us because we focus on their interests and needs. In the last financial year, we welcomed 17,000 new customers. Net number is continuing to increase on a rolling 12-month basis. We continue to be one of the customer adequacy leaders in the sector, as I've said before, a customer Net Promoter Score of plus 47, with ongoing investments in new marketing initiatives to further support customer growth going forward. With a customer funding ratio of a very healthy 73.4%, we can comfortably support growth. However, it's our digitization strategy which has transformed MyState into a digital, scalable business and positioned us so well for the future. It's changed the way our customers interact with us. And the continuing growth in online banking has enabled us to expand our online services, offer more intuitive and innovative services and reduce the number of branches we operate as customers continue to move to digital service offerings. Just a few words here on TPT Wealth and our wealth management business. From a financial perspective, TPT Wealth had a disappointing year last year. Income from wealth management activities was $2.2 million or 14% lower than the prior year, driven by lower fees from trustee-related services and management fees. Significant restructuring activities have been undertaken in TPT Wealth over the last 2 years with fund administration and fund accounting outsourced, investment management of TPT Wealth's growth funds outsourced and TPT Wealth's core lending and trustee systems replaced. We've done an end-to-end rebuild of the whole business. In early '21, we enhanced our distribution capacity to drive growth in the Eastern Seaboard while maintaining focus on the strong competitive position that TPT Wealth commissions -- commands in Tasmania. And pleasingly, our TPT Wealth Fixed Term Fund, Long Term Fund and the Select Mortgage Fund were all recently awarded 4-star ratings from SQM Research. The significant change we did is now broadly complete here and will enable efficiency benefits as the business gains scale with almost 1/3 of our customers already having transitioned to our new digital portal, and we're looking further to differentiate returns across our range of funds by enabling investment in longer-term assets with the potential to generate improved yield for investors in the future years. So what's happened so far this financial year? Well, MyState remains in a fabulous position as we continue to implement our strategy. The first quarter performance shows several that key metrics, including customer growth and customer deposits, are continuing to build momentum from last year. Home loan book growth has shown a dramatic increase in the number of applications and settlements. You can see there on the bottom right-hand side. Based on the results from the first quarter of this financial year, our home loan book growth has shown an implied annualized growth of nearly 19%, almost 3x last year's growth. August and September were our 2 biggest months of loan book growth on record, and they were surpassed by October and November. Customer deposits have grown by an annualized 22.3%. And building on the trust our customers place in us as a challenger brand, we're well placed to continue simplifying financial services and making them more intuitive through our ever-developing digital capability. We've built a culture that continually innovates and improve services to deliver accelerated growth while not compromising on asset quality. Over 18,000 customers have joined MyState in the last 12 months to the end of September, and we've recently been named in the 2021 AFR BOSS list as 1 of the 10 most innovative companies in banking, super and financial services. It's an unbelievable accolade for us, and the team is very proud of it. We've continued to deploy robotics process automation and undertake other activities to improve efficiency and scalability. The team are working hard to maintain and increase the momentum that we've built over the last 2 years. The direction that we've set is the right one. The capital that we raised in June was necessary for us to do what we were doing. However, as I said at the top of the capital raising, we're expecting earnings per share and return on equity to be lower in the current financial year as the capital we raised early in the year is being deployed as the business grows. We see this as a necessary cost of growth and securing a sustainable, robust business for the long term. And we're confident that the business will be better, much better for the actions that we're taking now. And now for some closing remarks. We're currently focused on rapidly accelerating our balance sheet and improving our operating leverage in line with business growth. We're targeting ROE and earnings per share accretion over time as new capital is deployed. And in the current financial year, we expect, as I said, earnings per share and ROE to be diluted while the new capital that we've raised is deployed. And we're also expecting operating expenditure, particularly in marketing and sales investment, to grow those -- to grow the customers that we've got. That's going to rise in the current year to support that growth. We've transformed the business, and we are extremely well placed to take advantage of market conditions. We've demonstrated that the business has the skills and capabilities to build and operationalize a digital business and are now in a rapid growth phase. We've commenced the new financial year in a strong position, and the operational efficiencies that we made in recent years are enabling our growth to accelerate. Just before I finish, this is my final address of any addresses as I retire as the CEO at the end of December after 7.5 years at the organization. I've thoroughly enjoyed my time here working with a wonderful group of staff, fantastic customers and all of the other stakeholders that make up the company. I'd also like to pay tribute to my Chairman, Miles Hampton, who has been extremely supportive of our direction. He's been a solid rock for me during my time here as the CEO. As the CEO, I couldn't wish for a better chairman to work with, and I wish him all the best in his retirement at the end of March next year. In conclusion, this business is in a fabulous position and a really strong position to drive significant organic growth. And I wish the company and its shareholders all the very best of success for the future. Thank you very much. And Ian, I'll take any questions that you might have.

That's great. Thank you for your insight to MyState, and we have a number of questions. And early on -- thank you for those that handed their questions early. This is great. Just to clarify, are you a fully digital operation, in other words, no branches at all, not even in Tasmania is the question.

No. We've got 7 branches in Tasmania. We had 10, but we closed a few of those. It's down to 7. They support a really strong customer deposit base in Tasmania, and we'll continue to have those for the foreseeable future. But we are a fully digital bank on Mainland Australia, so no branches on Mainland Australia.

Right. And questions that sort of circle around that. Digitalization of how we conduct our day-to-day activities, banking included, has become more and more the way of things are done in the future. Also, there's another side of banking, which is about the relationship with the customer. How do you go about managing that relationship?

A couple of things. What we have inside our mobile banking app and our Internet banking app, we've got an artificially intelligence-enabled insights hub. And so we provide tailored insights to people on how they're spending their money, how they're saving their money, enabling people to put all those savings into place. And so if the algorithm works out that you've got extra money in your transaction account, it'll transfer automatically into your savings account. And you got access to that 24/7 if you want to get it back. But it puts money into a high interest savings account for you so you can save money better. We've also got a call center in Tasmania. So all of our staff are on shore. We don't have any staff offshore but a fabulous call center in Tasmania that will take your calls and look after any queries 24/7. The reality is there's not many people really want to go into a branch nowadays, and so not having a branch is not really an issue. It's having access to your money. As I said before, we're about to launch in the early part of next year a brand-new Internet and mobile banking app. It's next generation. It will be really fantastic. I'm sorry, I won't be around to see that. But yes, customers will really love it. And so it's just getting all of those things right that will enable us to be the bank with the human touch, which is what we call ourselves.

Right. And well, along similar lines, again, earlier question was, are you just a lender? But I do note that you are both a lender and a deposit taker, and you've got about a $1 billion difference. There's a couple of questions here. As a lender, how do you manage your credit quality? Again, I think it stems from this digital at arm's length relationship with clients. In the old days, traditional managers, bank -- the bank manager will say, "You need to look a customer in the eye." How do you do that digitally to maintain your credit quality?

We've got a centralized credit team. They level every application that comes in. Our principal focus is on owner-occupied, principal and interest lines. So we've got a very small investor book. It's about sort of 17% or 18% of the total book. And we focus on people who live in their homes, want to live in their homes and want to pay down their home loans over time. We've got an extremely good asset quality. And credit quality, we have had forever and a day. And we continue to focus on those parts of the market which have strong asset quality. And it's a little bit -- we're a little bit polarized in that thing. So a very strong focus on first home buyers, which tend to be very good credit risk as well, I might add, and also a very strong focus on less than 70% loan-to-valuation rate. So our losses are very low from all of that -- from a very low loan-to-valuation rate. And so it's quite a high focus on credit quality and looking at what comes through the application pipeline in a very detailed sense. So it's not something that I'm concerned about.

Good. Pleased to hear. One quick one before we let you go. You'd mentioned the wealth management piece, relatively small. These days, banks are traditionally getting out of their wealth management business or many of them are. What's your prospect for the future with your wealth management component?

It's quite a different wealth management component. It's mainly focused on the trustee business and also on some mortgage funds. And so it quite complements the bank in that sense. We don't have financial planning. We sold our financial planning business many years ago. And so it's really asset management. And we're very comfortable with the types of assets that we're managing, that they complement the rest of the business well. So very little in terms of equities. It's mainly in mortgages and other cash and income securities, which, as I said, complement the bank. And so that's what we're about. We're a company that's focused on credit and credit quality, both in the wealth management business and also in the bank.

That's great. Melos, we're right on time. We thank you so much, but we also wish you very well for the future for you. Retirement or wherever you are headed, we wish you all very best, you and your Chairman, for your future endeavors. Thank you for joining us this morning.

Thanks very much, Ian. Bye for now.

Cheers. And we just might progress holding slide to the next one from Pushpay. I can see Molly Matthews in the background there. Molly, you've got your mic and camera on. Good to see you. I think you, too, are joining us from the West Coast of America, a little further north from our first presenter. You're up on the Canadian border, in Seattle.

I am.

Welcome. Or good afternoon.

It's cold and wintery here in Seattle.

Well, we're starting to see a little bit of sunshine where we are, but your turn will come. Always interested to hear about Pushpay and what's occurring there. So in your 15 minutes, give us some insight into Pushpay. And I'll be back shortly thereafter with some questions. And I'll just ask the audience, please enter your questions as Molly goes through her presentation. Thank you, Molly. Over to you.

Thank you. Perfect. Well, thank you, everyone. I'm going to take just a few minutes to give a bit of an overview of Pushpay. So Pushpay is listed in both New Zealand and Australia, but our headquarters is actually here in the Seattle area. And the majority of our customers are actually based here in the U.S. as well. So Pushpay is a fantastic technology solution that has been specifically built and sold to churches in the United States, Canada, New Zealand and Australia. We also serve non-for-profit organizations and some education and other industries as well, but the vast majority of our customer base is churches here in the United States. So today, I'm going to take you through just a few areas of our business and would just invite anyone who'd like to submit questions that we'll take care of at the end. I'll take this fun legal slide as read and just hop forward to the next. So we're going to do a bit of an executive summary. I'd love to just share with you our strategy for growth both in churches and what it looks like beyond the church market; our performance, we just released our interim results about 6 weeks ago; and then also questions. So for a high-level look at our technology, Pushpay was actually built by 2 Kiwi gentlemen who were friends and had actually gone to a church service together, had the desire to be generous to their community. There was actually a natural disaster that was happening on a neighboring island. They wanted to participate in that generosity moment and give, but neither of them had a -- had cash on them or the ability to give in any other way. All they had is their mobile phone. And so a few days later, they had actually met for coffee and kind of checked in about if they had followed through on their commitment to be generous to that cause, and both of them had the sad answer of no, had the best of intentions but didn't have the ability to give in that moment when they felt the need and their desire to participate. And out of that cam the Pushpay app. The Pushpay app was a mobile-first application that was created to create a giving experience that could take place in under 30 seconds, similar to the behavior that we all experience as consumers when we want to purchase a song on iTunes or here in the U.S., shop and have something delivered via Amazon or another service. And so that's truly where the birth story of Pushpay started was in a cafe in Auckland. And since that time, so that was in 2011, the company has had a very successful journey both in its native state but also here in the U.S. We, in 2015, passed $1 million of revenue, which was an exciting moment for those 2 gentlemen. And then 1 year later, it was $15 million of revenue, and we've been on a really exciting journey since that point in time. This is a slide that just shows you the ecosystem that, at the time, Pushpay was really trying to solve for. So really wanting to have one place that was mobile-centric, that a person could donate through any mean and it could go to that local charity or that church community, and the back-office staff would be able to track that donation, follow up on that donation well. So really, the concept was to accept those donation moments as well as to share on social media, all through the comfort of someone's smartphone. So to talk a little bit about the market opportunity. These are slides that really are representative of the United States. So if you can see over on the left-hand side, that is really sharing the total market opportunity of digital giving. And that today, this is from a 2019 Dunham+Co survey, that only about 15% of all donations that are going to churches are coming through digital means. The rest are coming through cash. It could be stock or other checks or other means. And on the right-hand side, you can see our market share of the total donation amounts that are coming in. So about $131 billion is given to religious organizations in the United States, that's a number from 2020. Pushpay today is processing 5% of that amount. So still great opportunity for us to grow and expand our services to be able to serve the remainder of that 95% or spread into that other 85% that you can see over on the left-hand side. I'm not sure if I can go backwards, but I did want to just talk a little bit about our competitive landscape. So our competitive landscape is made up of several different providers, both in the ChMS and in the donation management space. If we -- I'm not sure if somebody on the ASX side can help me go back a couple of slides, but I did just want to talk a little bit about how we have been walking toward our strategy of serving the church more holistically and then we desire to step into non-for-profit more holistically. So when you think about all that it takes to run the donation side of a church, you need that front-end piece that we've really captured through Pushpay. But you also need that back-end piece that allows you to track and really effectively communicate with the donor. And so we acquired, in 2019, Church Community Builder, which is the leading ChMS. So for those of you not familiar with a church, that's the same thing as a customer management system that's just geared and guided for churches. So 2019, we had the opportunity to acquire Church Community Builder, have brought that into the Pushpay ecosystem. And that has been a very fantastic acquisition for us. It's allowed us to have an all-in-one solution, so the ability for us to be able to serve customers not only with a best-in-class donation management platform but also a best-in-class people management platform. You can think of small groups and kids check-in and room assignments, having the ability for your entire church community to interact with just one software, which is something that we had heard from our fantastic customer feedback loops as a desire. And we were able to really fulfill that and step into our strategy by acquiring that company and rounding out our ecosystem. So you can see you, thank you, on that competitive landscape slide, there are several different competitors. We have those broken out. If you look on that upper left-hand corner by giving platforms in red, we app providers in yellow, church management systems in blue. And then in the black is those that are an all-in-one solution. And you can see that the completeness or wholeness of a solution is on that bottom axes. And we have Pushpay, which -- our go-to-market name for our offering for the Protestant space is ChurchStaq. So ChurchStaq is definitely a leader when it comes to both completeness of solution but also when it comes to really innovation and being able to execute on growth for our customers. So as we head forward, I'll talk a little bit about our most recent acquisition. So we had the opportunity to expand that ecosystem even further. In 2020, I think our world really saw a change in behavior. It's shown today by how we're interacting on this call and this conference through video. Our churches and our non-for-profits had the same need. They had a deep need, being a community that had always met in person, to expand that and have the ability for a service or a auction or even a class to be facilitated through video. So Resi Media is a fantastic media solution for churches, non-for-profits and corporate customers. They are a best-in-class live streaming platform. They have live streaming. They have multisite streaming. They also have simulated live and a video-on-demand feature. So Pushpay was able to acquire Resi Media, again, walking us into our strategic view of completely serving churches, nonprofits and education environments here in the U.S. and beyond. This gives us the ability not only to have a fantastic offering of livestream but for us to collect the data from livestream and really give our church partners, our non-for-profit partners a holistic picture of data and how their community is interacting with all of the different parts of their ministry and organization. The other fantastic thing this does for us from a product standpoint is it gives us the ability to have a in-app live streaming option. So Pushpay today has an application that is custom-branded for our churches and our organizations that we serve. We will now, soon in this next quarter, have the ability to have a live stream component in that application, which is a fantastic offering as well as be able to embed the donation moment into that livestream. So that's something that is very unique to our companies coming together and definitely gives us a fantastic competitive edge when you look at the different competitors that are out there. So again, Resi Media, fantastic way for us to really step into our future of having a well-rounded solution for churches but also to ensure that we are modernizing our product suite as we move into serving even more verticals and serving outside of the United States. The other thing that we were really excited to announce at the onset of this fiscal year for us, which was in April of 2020, was the addition of the Catholic initiative. So the Protestant space has always been a place where we've seen great success but really wanted to expand our offering outside of just the Protestant space and step into serving Catholic parishes, diocese and archdiocese first here in the U.S. and then eventually beyond. The reason that this is a fantastic opportunity for us is in the U.S., there are 17,000 parishes that is heavily weighted towards medium and large parishes. And for our business, that is accepting both the opportunity, I should say, to earn revenue on the software side. But also, on the processing side, medium and large churches are really the right market fit for us or product market fit for us with the offerings that we have. The other interesting statistics just to take a look at here is that 27% of U.S. faith giving is generated from the Catholic community, totaling around $30 billion. So again, a great opportunity for us both from a software perspective but also from a total processing volume perspective. The other thing that is really interesting about the Catholic church that's quite different from the Protestant church is just how the Catholic church is organized. So it's organized in a hierarchy where the Protestant church is not. They may have an alignment with a certain group, but they all are operating and making independent decisions. The Catholic church is organized in a hierarchy where decisions are often centrally made. This is a good news story for Pushpay as we have experience in winning over both at the church level but also experience in winning at the RFP diocese and archdiocese level. So I'll take just a couple of minutes to talk through some performance highlights. We -- as I was sharing with you at the top of the call, interesting that in 2015, we just crossed $1 million of revenue, and here we are ending the second half in 2021 at $93.5 million. So fantastic output from a financial perspective. We have a very stable gross profit margin at 69%. That's just up about 1%. We were at 68% as we ended our last financial year. And the other piece that I always want to make sure that we really highlight here, which is important, is that our story for so long had been about getting to that cash flow positive point, which we did, and focusing in on EBITDAF in order for us to be able to borrow against and acquire, which we were able to do successfully, which expanded our ecosystem for our customer base, which is always what we want to do. So that really helped us to get to the place where we're able to acquire Church Community Builder, acquire Resi Media. And now we're really focused in on the next phase of growth for our company, which is going to be continuing to grow in that middle market and upper end of the Protestant space and, as I said, stepping into -- heavily into the Catholic space here in the U.S. So another number that we love to talk about, because this number doesn't just represent our company's health, but it really represents all of the generosity that's flowing through our platform and out into community that's enabling social good. So we were able to increase our total processing volume at this half year by 9%. So up to $3.5 million. Again, just a fantastic result when you think about all of those dollars flowing through our platform and out into community doing social good. And so with that, I will pass it back over to Ian, if anyone has questions.

And we do, Molly. Thank you for that insight to the business that is Pushpay. You've talked about future growth opportunities, but you mentioned beyond churches, I think, right at the outset of the presentation. Can you give us a little bit more -- it was an earlier question. Can you give us a little bit more color as to where you might go? You've talked about the flip between Catholic and Protestant churches. But beyond churches, what are the opportunities?

Absolutely. So we always try to time up those next opportunities with what's happening in the marketplace. And why Catholic made sense right now is the Catholic church in the U.S. is going through a bit of a transformation formally toward a more digital way of ministry. And so that's a great opportunity for us to partner with the Catholic church through the next 5 years to help them along on that digital transformation. But the other thing that, that is a great step or foray for us into is education. So here in the U.S., the Catholic private school is the largest private school offer here in the U.S. And so building those relationships with the diocese, archdiocese and parish level really gives us those introductions and opportunity to network and have a relationship with the people who make decisions about Parish-aligned schools, private schools. So education is definitely in our future. The other thing that we feel is a fantastic opportunity for us is stepping into other countries. So taking our services outside of the United States, Canada and Australia and New Zealand and into other countries that -- who speak a different language. So the Catholic church in America, the fastest-growing population of Catholics are actually Spanish-speaking. Also, the Catholic church is growing the fastest in Spanish-speaking countries. And so we are already transforming our product to be fully localized. So that means it can be both from the back end and an end user's perspective completely in Spanish, and that will also just give us a great kind of next step into geographies outside of the U.S.

Okay. Interesting, too. There have been a number of questions come through about, I guess if you want to put a cloak across it, of social -- ESG. You mentioned that I think the numbers you talked about, and I picked up on this one, was 15% of your activity or 15% of the activities that you undertake in the U.S. are digital, meaning there's a hell of a lot of space beyond digital. Does this mean -- well, there's 2 questions here that I see. Is that a different experience in Australia and New Zealand, where we have much greater uptake of digital experience? And secondly, has this got potential to keep paper out of letter boxes and those sorts of things?

Yes. Great question. So yes, we definitely see a different balance of digital donation compared to stock, automobiles, properties, things like that in Australia and New Zealand than we do in Canada and the U.S. So check-based giving is still the largest competitor to digital giving in Canada and in the United States. So that's something that we have addressed with some technology, and we're helping to guide people toward that digital behavior. As you can imagine, in 2020, when COVID hit and churches were forced to go fully digital and online, we did see a pretty large jump in digital penetration across our customers, which was great that they had the opportunity to continue to do ministry and not feel the impact of that. And we try to take paper out of the conversation all of the time. So here in the States, one of the drivers of generosity toward year-end is tax credit. And so we even take the paper piece out of that process, and we allow for our customers to send fully digital information through our mobile application and via e-mail to those donors for their tax returns.

Right. Tremendous. All for that. We also had -- you presented quite a stelling array of performance figures on your -- close to the end of your presentation. Good turnaround growth over recent periods. A lot of questions from -- or a number of questions from investors about dividends. Are you likely to pay dividends? We've -- obviously, it's got a digital background to it, not renowned for paying distributions or dividends. Is that on the cards?

It's not in our plans at this point in time. We definitely review those along with our strategic priorities. And at this point in time, we feel that we can get a better return for our investors over the long term by investing those profits back into the business for growth.

All righty. Well, that brings us right to the end, just a little over time but almost right on time as far as you're concerned. Molly, we really appreciate your presentation today and joining us from the West Coast of the United States in Seattle, where the weather, we hear, is a little cloudy and overcast. But that's Seattle for you, as I understand it.

Yes.

Thank you. We wish you all the very best for 2022.

Thank you so much.

Right. That brings us towards the end. I've got a couple of concluding slides. So you'll just see a few of Molly's slides once we scroll through there, all of which will be made available through the ASX at a future date. Or you can go back to the ASX website, where you'd probably registered to join today's session and look at these slides again in the very near future. It's a little sad. It's the end of the year. We've done 6 CEO Connect events through the course of 2021, but the great news is we're back again next year in March, on the 1st of March 2022. And here's a bit of a look into some of the companies that will be presenting at that event. This will be a results-oriented event. Those that are regular attendees that watch these events know twice a year, the ASX put together a results-oriented event following the announcement by companies of their half or full year results, typically spun over 2 parts. So as opposed to today where it's 4 presentations in a row, we'll split this 3 and 3 in the morning and afternoon session. So if you're a regular, you will most likely receive an e-mail from ASX promoting this event. If you're not, you can see the ways to log on and register at the bottom of that slide. As I've mentioned, you'll also be able to access all the presentations and videos from today at the ASX CEO Connect web page. And you can go back and have a look at sessions that you may not have been able to attend and see past presentations as well. I'd like to just drive forward to, I think, the last slide, and it says it all. It's all about thank you. So really, first up, thank you for joining us today. We do, the ASX team and the nabtrade teams, as well as the presenters really appreciate you tuning into these events. They get a lot of benefit in talking with you and looking and listening to your questions. Thank you for joining us today, and I wish you all the very best over the breaks. Another thank yous as well. Our presenters, as I mentioned, they're very giving of their time. I think the great -- and I've mentioned this a couple of occasions, the format of this presentation or this event is that it allows presenters from not just around the country but from overseas to come and be part of these groups. Thanks to nabtrade for their continuing partnership throughout the course of the year and to ASX for making these events possible. There truly is a lot of hard work that goes into making these digital events the success that they are. So without further ado, I mean, it's been great being with you for most of the year. Thank you for joining in. We look forward to seeing you join us next year. Until then, happy and safe travels.