AVA Risk Group Limited (AVA) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the AVA Risk Group FY '24 result webinar. [Operator Instructions] I will now turn the webinar over to David Cronin, Chair of AVA Risk Group.

Good morning, everyone. Welcome to the AVA webinar. I'm very pleased to have you here. On the call today is Mal Maginnis, our Group CEO; and our CFO, Neville Joyce. From the corporate snapshot, you can see that we still have a good majority of the shareholdings within the top 20, and very pleasingly, we raised $4.3 million earlier this year at $0.13 per share, and I welcome the new institutional shareholders to the register and also thank our existing shareholders for their participation in that offer; was well oversubscribed from the existing shareholders, and that was really pleasing to see. So, without further ado, we'll get into the agenda, which is strategy and highlights the FY '24 performance and the outlook. We will be taking questions. So, feel free to submit your questions on the online platform or in person when we call for them. Over to you, Mal.

Well, thank you, David, and welcome to everyone to the AVA Risk Group FY '24 results. This is my second as the CEO. I'm going to focus today first on, obviously, the numbers because that's an important part, but I'm also going to focus for you on what I call the leading indicators, that which occurred over the second half of the year into Q4 and which has driven a really strong foundation in the [ fourth ] financial year '25. So, the first thing I want to talk about is what was our aim in FY '24? And the aim of that was to complete the restructuring of the commercial group, which was sales, service and applications, and we completed that around the middle of Q3. On top of that, it was the releasing of the new technology and products, and I'll talk about that later in the presentation. So, I'm pleased to announce to everyone that our restructuring and rebuilding is complete, and we now have an extremely firm foundation for FY '25. And that is mirrored in the numbers that I'm about to talk about. So, the first thing I'd like to talk about is our group sales; the bookings were $35.3 million, which is a record for the company, up 14% on prior year. And I spoke to you in February about the critical issue of building backlog via the bookings side. This is absolutely fundamental for a program business. That $35.3 million translated into an $8.5 million of backlog, which again is the highest we've had on record. That gave us a revenue number within guidance of $30.2 million, which was very pleasing. Of course, I would always like a higher revenue, but the great thing is we achieved the guidance, and we did it with an increased bookings and an increased backlog. The gross margin remains solid at just on 60%, and that will continue to grow. Our EBITDA was positive in the second half, and that was the critical issue I spoke about in February. Now we wanted to see this foundational transformation, a change in what we were doing, and we achieved that in the second half. And as David mentioned about our rising, we have a solid cash position going forward. Now one of the issues I want to speak about is how strong that backlog is on the basis of both product, services and recurring revenue. And I'll talk more about that later. So welcome again to the new investors and for those who've been with us for some time, I just wanted to remind you of how we actually manage the business. So, we have 3 businesses: Detect, Illuminate and Access. Detect is a program business, so longer order to cash process based on fiber optics, a long linear objects protection of key and critical assets. Now Illuminate is fundamentally a distribution business with smaller sensors, particularly point sensors. Now the exciting part of financial year '24 was the release of our LoRa wireless system, which we've now integrated into Detect. This gives us the first opportunity to move Illuminate from both -- from just distribution to both distribution and project and programs, and we're seeing that in the growth in FY '25. And the Access business, the high security access and control technology, very well regarded by the whole market. And I'm pleased to say had a record year, which we'll talk about later. The positive piece across all of this is we have a very well-balanced geographical business, and we saw success in all 4 of my key markets during the year. And again, that was underpinned by the restructure of the commercial group. Now one of the things we talk a lot with our customers about, I'd like to talk to the investors about is this concept of sensing beyond security. Large obstacles or traditional static security: fences, ditches, locks, walls, windows, are basically dumb objects. They really stop honest people. They're not particularly effective at stopping those who want to gain access. What we do and focus on now is sensing beyond that object. So, for example, the fiber can give us 24/7 detection on a long object, low environmental footprint, low power consumption, but it's alive 24/7. And when we integrate that with the various parts of Illuminate and Access, we can give customers this continuous sensing capability on their core assets. And the customers have really responded well to that approach. I'm delighted to say that, that integration is occurring in multiple sites now, and we'll talk a little bit later with some of our case studies. So how do we go to market? Well, as I said, Detect is fundamentally a program business. So longer order to cash process can be 3 months, but in some cases, can be 12 months, and that gives a certain unpredictability to our revenue flows, et cetera. Now Access and Illuminate are primarily distributor-based businesses. But as I said, the exciting thing is seeing Illuminate move more or additionally into projects, which is giving us a great option to grow, particularly in critical markets such as the U.S., U.K. and Australia. Now when we look at these things, one of the issues that I'm delighted with in FY '24 was the growth in our services and recurring subscription models. Now these are almost completely in the Detect program business, but we'll show you numbers later. They show how important this is to give stability to the program flow across the business and be able to predict revenue in a more sustainable way. So, the great way that we go to market is programs. We detect some projects and programs and Illuminate plus distributors and distributors and Access. It gives us a great breadth as a business, and it gives me an ability to smooth some of these lumps out from our revenue model. So, driving growth in FY '25, I said I wanted to talk about leading indicators. So leading indicators for me were, as I said, the bookings and the backlog. The second -- or the third one is the pipeline. And we've never done pipeline before with the investors, but I wanted to share that with you today. So, with the pipeline, one of the core objectives of FY '24 was to rebuild the commercial team. Part of that rebuilding was to build a quality pipeline. Now when we look at the pipeline, it's based on our technology Aura Ai-X. Recently, we launched another version Ai-XS, for a shorter range, the Cobalt series which we launched, the LoRa long-range wireless system from Illuminate and the subscription service model, what we built this year. All of that goes into building the pipeline. Now how do we look at a pipeline? Today, we have just over -- we're just on a $100 million pipeline, quality pipeline. High probability, I define as we know we've been awarded, we're in the principal position, we're simply going through the negotiation, administration to get orders confirmed and in the backlog. In progress is we know the opportunity, we've been shaping the opportunity, we bid on the opportunity and we're managing all of that as a group. And in early stages is where we're developing, shaping and building opportunities. So, the critical ones are, of course, high probability and in progress, and then early-stage flows into the pipeline, but it has been a transformation for the business to build this high-quality pipeline. Now I'd like to also remind all the investors that this pipeline is entirely Detect. We don't include in the pipeline, the order to cash business, which is primarily Access and, to a lesser degree, Illuminate. And that works out about $12 million to $15 million additional to this $100 million opportunity in pipeline. In addition, the pipeline also includes the recurring revenue within Detect, within the Aura Ai-X deep learning platform. That has been a tremendous result of the last year and a core fundamental foundation for our growth going forward. I also talked in February about the critical nature of high-quality partners. One of the things that I've asked the commercial team to do is both, work with these high-quality partners, but also to land successful business with them and more importantly, continue to expand that business. In other words, repeat business, because we're a trusted partner. Now the last time I used to show you the [ brand ] slides of [ everyone ] very, very busy. I wanted to show you the core people who help drive our results in '24 and leading into '25. And you see we have a very strong capability in the oil and gas side. It's a very difficult environment, protecting critical assets. We have an excellent group of large system integrators such as Siemens, Honeywell, UGL, [ MCD ] in America and, of course, critical fiber clients such as Telstra, which has been fundamental to supporting parts of our growth. And an exciting area for us is the transport and metros. We already have Santiago in Chile, we, of course, have announced that we're delivering with UGL -- Western Sydney Metro, and I'm delighted to tell you that we're currently in the process of bidding at least another 3 metros on the back of the strong marketing effort of our transportation success. And the last part is our core distributor partners: Bosch, Dormakaba and ADI. So fundamentally, high-quality partners, building a relationship with them into long, sustainable backlog. I want to give you now 3 quick case studies. I won't labor these; you can happily read them on the PowerPoint. But we announced in January, February, the Telstra supply agreement. Telstra of course, one of the biggest fiber operators and one of the largest corporations in Australia. We were going through a detailed program work with them. Of course, you would all understand that Telstra went through about a 3-month restructure starting in April, which was significant. We are now well past that and working again with Telstra in detail. We've got some exciting projects that are further on, much further on that early stage. We're in the stages of contracting and executing, including the protection of the core communications pits, protection of subsea cables. And many of you would have heard the recent vandalism challenges with certain 4G and 5G towers. We're working with Telstra on systems to protect those towers. I'm extremely excited by where we're going with Telstra. We will see growth in the adjacencies of this next -- this financial year, that is next year from FY '24. So, in '25, we're already seeing actions, with that, successful ones. And I'm already working with overseas telcos on being able to expand this model into other customers. But this is a really good case study, great work by particularly the Australian commercial team. European borders, I don't need to tell anyone on this call the challenges that European countries from Finland through to Turkey on the Eastern border are facing. We announced that we were supporting one of the Eastern European countries, in reality, Poland. I'm delighted to say we've had an extension to that contract. Again, the concept of land and expand. And we are in the process of being awarded several others in that region and bidding on others. This is somewhat different to our traditional fence approach because it includes covert security, integration with various systems plus a more traditional fencing approach. But we've had tremendous results with Aura Ai-X transformational ability to identify activities plus coupled with lower loans. So European borders are going to be a major part of our business in this financial year coming in '25. Transport infrastructure. This has been completely new business for us and a real success point. As I said, San Chile, Santiago Metro, but this project here in Sydney, which I'm sure most of you who live in Sydney know about, has been a very large project, over 40 kilometers of fencing, significant challenges technically. We passed all the tests with a very short term or even though it was supposed to be a 3-month trial with excellent detection and very low alarms, a testament to the outstanding work by our technology, science and engineering group supported in the field with our application and engineering team. This has been a real delight of a project. They're normally quite hard. This has been tough, but has been extremely successful in its rollout at the moment. And we still have more to do with this over the next 3 months. So, all of that summarizes into a clear path to deliver on growth in FY '25. I know some of you will say that you've heard this before, but what I say is different today are those foundational platforms. Top-class customers, coupled with outstanding technology and science that we rebuilt this financial year, the last financial year in '24. We have built now a sustainable pipeline, which is leading to backlog, which is driven by our record bookings for the year. So overall, I am confident of FY '25 and our ability to deliver it based on those FY '24 foundations that we have built. The leading indicators from H2 and particularly Q4 is all the work we did in FY '24, which was substantial, has led to an expansion in the business and a platform for its future growth. Okay. We'll now go on to the specific numbers, which, of course, I'm going to get Neville to help me with those, but I'll just do the initial introduction on those numbers. So again, I'd just remind you of the core numbers. $35.3 million sales order intake, a record for us and up 14%, revenue within guidance of $30.2 million, up 6%. Delighted with the sales order backlog of $8.5 million. And I remind you that, that is built up of both product and services and recurring revenue from the deep learning Aura Ai-X Ai model, and a good cash balance to fundamentally support the business going forward. I can't emphasize enough how much Aura Ai-X has been transformational for the business. As many of you remember, I released it in March last year, which was a very important change for us as a business. Using the deep learning model gives us higher detection and lower alarms. And now we're linking it with the LoRa wireless. All of this is giving us those strong leading indicators. And growth, obviously, you see there in the graph on the right, the blue is the Illuminate. Illuminate has had a relatively flat year. The big issue for us was stabilizing the business, launching the new products and integrating the business much more tightly with Detect. And we've achieved that by the end of FY '24. We saw excellent growth in Access, driven by the outstanding launch of the new Cobalt 2 and our relationship with Dormakaba, which has really boosted that business tremendously. And Detect, solid, up 12%, and we're seeing a growing effort with our Aura Ai-X, which is clearly the preferred [ gas ] supplier, the preferred acoustic sensing fiber product. So, with that, I'm going to hand over and let Neville talk about the serious stuff.

Thanks, Mal. A couple of key messages just in terms of income performance or the income statement for the year just ended. As we expected, our second half of the year was much stronger than the first half. So, revenue was up, gross margin, similar to what we saw in the first half year, and that's flowed through to a significant improvement in our underlying EBITDA through half 2. Gross margin over the course of the year is a little bit lower than what we had last year, largely reflects a mix of revenue between the segments and on a subsequent slide, I'll talk to what that revenue mix looks like. But Detect is our highest margin business, and the shortfall that we had through the first half year has flowed through to that full year margin. The EBITDA loss for the full year is really a reflection of what we spoke about through the first -- at the first half result. As I said, the second half has been EBITDA positive and in the first half of the year, we had lower revenue, but we also had some significant investments associated with completing the restructure of the commercial team and the ongoing investment in our technology. We did take up an impairment charge for goodwill on the Illuminate segment. So that impairment charge reflects the fact that the Illuminate segment achieved in FY '24, around about 90% of what our previously model performance was for that segment. And as we flow that through to subsequent periods in accordance with relevant accounting and auditing standards, we have a resulting charge of $1.5 million. It's fair to say that we still have a high degree of faith in what we can achieve in the Illuminate segment as evidenced by the investments that we've made over the past year around development of LoRa, and also the fact that we're starting to see some significant traction in being able to push Illuminate products into the Americas and also into Australia. This is a bit of a dissection of revenue. Again, a couple of key callouts here. So, the revenue by segment chart, you can clearly see that notwithstanding increased bookings in the -- for the year, our revenue in Detect was down, and that's what's impacted the consolidated gross margin because that shortfall out of Detect on a full-year basis has been offset by increases in Access and Illuminate, but Access and Illuminate are lower-margin businesses relative to Detect. We're also starting to call out, as Mal did earlier, around backlog just in terms of what the competition of our revenue looks like between those 3 categories of product, services and recurring. Obviously, the vast majority of our revenue are still linked to product, but you can see that the recurring revenue in the year just ended, more than doubled from what it was in the prior year, and that reflects the uptake of Aura Ai-X. Certainly, as we move forward, we expect to see that number to continue to grow. And as Mal mentioned on an earlier slide, at the end of June, we had $2 million worth of forward contracted annual recurring revenue to be delivered in FY '25 and beyond. The last thing I'll call out just as we look around the revenues by geography, you can see that particularly for Europe, there's a -- yes, a movement, which really reflects the fact that in previous year, we had significant uptake of some orders in that jurisdiction, particularly associated with that Polish border. We have subsequently received another order for that, but that will flow into FY '25. But a quick look at the balance sheet. I'll talk to cash flow statement in a moment. Increase in receivables really reflects the timing of when we shipped the tech product through June and particularly around the UGL contract. So, the UGL contract is slightly different to some of our other contracts. It's largely been fulfilled, but the invoicing is all driven by milestone completion by UGL, and we expect that to occur particularly through the first quarter, but be virtually complete by the end of the first half. The reduction in intangibles which really reflects the fact that we did take an impairment charge against goodwill in Illuminate, and then that's partly offset by the fact that we continue to invest in our technologies across all of our businesses. And as a reminder, the borrowings that sit on our balance sheet, again, relate to the Illuminate segment and relate to some working capital and covert support facilities that were in place when we acquired that business a couple of years ago. In terms of cash flow, the main message around cash flow is obviously, we received net proceeds out of the capital raise that David spoke to earlier on. You can see quite clearly they're a significant investment that we've made in our intellectual property and development priorities across all of our businesses. So, Aura Ai-X, Cobalt and LoRa. We'll continue to invest, particularly in Aura Ai-X. The investments that we've made in Cobalt and LoRa are largely complete and I wouldn't expect to see those recur as we move into the future. And then lastly, just in terms of dividends paid, yes, we made a payment during the year of $400,000. But there's also a reclassification in the cash flow of what's effectively unclaimed dividends from prior declarations that's reflected in our cash balance. And with that, I'll hand back to you, Mal.

Thanks, Neville. So, I want to then go on to the growth, the next stage, Neville, thank you. And just go on -- the first one I want to talk about what are the strong growth catalysts going forward. I've talked about Aura Ai-X and the deep learning platform. I just want to take a little bit of time on explaining that. We launched Aura Ai-X in March last year. The nice thing with that is it's really become the core of our product. The customers also are for a shorter-range run, not everyone has a 40 or 80-kilometer asset to protect. So, we've launched a second version and based on Aura Ai-X, just with some slight changes, which is a shorter range up to 5 kilometers, and that has been very successful in all of the areas, including the borders, transportation and key critical assets. And we're in the process of launching as well a point Aura Ai-X, which is integrated with the LoRa and the Illuminate product to give us a 1.6 to 2-kilometer small site asset protection. All of that is just leveraging the technology we have built over the last year and sweating it, getting more results out of the asset that we've invested in. In Access, we continue to grow the Cobalt 2, which was launched last year, and we're seeing great growth in that with our partners such as Dormakaba plus other partners in the U.K. and Australia. In fact, Australia has been a very strong market recovery for Access as well as the U.S. and real congratulations to the commercial team in Australia for making that result. And Illuminate recovered solidly this year in its distribution center part. And most excitingly, they're in the middle of about 5 projects integrated with Detect, and we're going to see some really good results in FY '25. So, the compelling case for investment, we have shown that we made foundational changes in FY '24 to both the technology and the commercial team. And we saw that accelerating in Q3 and Q4, giving us the excellent H2 results. That's our track record of growth and results, and I stress again the importance of high bookings, leading to revenue and backlog. As I said to you in February of this year, I would like about 3 months, even if possible, up to 4 months of backlog because it allows me to cover those normal natural lumps that occur in program business. It's a highly scalable model. We told you earlier on, our cost base has now stabilized. In fact, it stabilized slightly less than what we forecast at the $19 million. I believe it will stay under that for this year. Our last 4 months have shown that to be rock solid or even slightly falling as a cost base. So, it's a highly scalable model. If you see also what we've done with Aura Ai-X, we've been able to utilize one platform to deliver additional products for adjacent markets. Very strong competitive advantages. The market is very fractured. There are multiple players in it, and we are in a very, very strong competitive advantage position. We have good locations geographically. We have an excellent product line and very, very high-quality partners across the globe. And that leads into my last point, a global opportunity. For a small business, we have done an excellent job of building a global capability rather than a single country capability. And I believe that we will continue to expand that with the commercial team and with the technology into FY '25, which I believe gives a compelling case for [ investment ]. And so that is my comments, and I'll hand back to Alexandra to manage the Q&A. Thank you, Alexandra.

Thank you, Mal. [Operator Instructions] So the first question, we've had a couple with regards to the Telstra contract. The first being, when do we anticipate contracted revenue? Is there an estimate for the dollar amount on the first booking? And then I'll just add the second question on AVA. Is it -- are there -- is the agreement for Telstra's own infrastructure protection use case? Or are they selling it to third-party customers using AVA technology on top of that infrastructure?

Thank you. So, on the first point of first revenue, we have seen the first revenue in July from Telstra, small. It was a small project that we're doing for protection. My belief, given the depth of the programs we're working for Telstra, that will continue to grow. As we forecast the adjacencies, which include Telstra this year, we're forecasting between $4 million to $5 million in this financial year. And I am confident we're going to see that type of growth. It may not all be Telstra, but it's coming from that building of those programs and capabilities with Telstra and taking it into the adjacencies. The majority at the moment of the Telstra business cases that we're working on is primarily Telstra use direct, but I should also advise you that we are working with the innovation team on future capabilities, exploiting their in-built fiber network to provide additional data and support to clients. That's a pretty exciting area. I don't like using buzzwords, people say smart cities. I would say it's using an in-place asset to get smarter sensing data to customers. So currently, mainly Telstra protection use of their own, but we are working innovation platforms with Telstra and some other partners like RMIT, et cetera, and University of Melbourne.

The next question is regarding the sales pipeline. How long does it take to go from early stage to high probability for those opportunities?

Thank you. So, in the program side, it really takes between 3 months to 12 months; the larger the deal, the longer the time, for example, it might have to go to a government competitive tender. So, you go through an expression of interest, the budgetary proposal, quotation, et cetera. There are also national differences. For example, some countries are quite fast in doing tenders, some are slow, some are painfully slow, as I think all of you would have seen multiple infrastructure projects that seem to take a long time. But my estimate is it takes between 3 and 12 months to go from in-progress into -- sorry, to go from early stage to in-progress. But there will be some, and there is several in the -- in the early stage at the moment where we're looking at that for FY '26 and even out to '27. But I would say that the vast majority would take maximum of about 12, longest, 18 months. The nice thing we saw in FY '24, which was a slight surprise but really positive, we're seeing a lot of the $200,000, $300,000 and $400,000 opportunities. And they're good because they're much faster from opportunity to commit into that final part of delivery. And we're seeing quite a few. That's also dependent on the fact that if you're working with a trusted partner who knows us and is committed to projects, we get a faster turnaround. So, in summary, I would say, between 3 and 12 months.

Thank you, Mal. We have one on how we think about seasonality in the business. How should we think about the first half to second half split in FY '25?

Right. So pretty traditionally, we find Q1 is always slow, but primarily driven by the Northern summer. A lot of our key clients and governments are slower in the July-August period. We see a similar issue in the Southern Hemisphere in Q3. So, the January -- post-Christmas, January [indiscernible] always slower. Traditionally, I would say that we are normally an H1 smaller than H2, that's fairly traditional. As I said, as I build this backlog, I am hoping that we could start to give the investor group a more balanced annual proposal or annual result. But I think at the moment, you will see a softer H1 that is less than the exactly 50% and a larger H2, but I couldn't give you an exact percentage at the moment. It could very quickly turn on a single $1.5 million or $2 million deal. And I would think traditionally, H1 for us is slightly smaller than H2. That's fairly normal.

I think just adding to that Mal, [indiscernible] demonstrates the value of the backlog, right? Because to Mal's point, order intake through Q1 is a bit slow because of Northern summer, but well, we carry a significant backlog that enables us to fulfill those orders through Q1 and Q2 to drive revenue in first half of FY '25. So, building that backlog is really important to give more predictability to around what those revenue streams look like across the year.

We've had a question on the Access division. Are the adjacencies in this business sufficient to make it profitable and more broadly, will Access and Illuminate become EPS accretive to the group?

Access, and I'll ask Neville to chime in here, but Access this year was positive, was profitable. It was the strongest year they've had. And that's on the backlog of both the new product and the Dormakaba. But I would also say that very strong result in Australia for Access this year, and we're seeing that continue in July and August of this year and also a very good results in the U.K. where we saw some traditional customers coming back with the launch of the new product. So, I think Access is in a solid profit position right now. Illuminate was soft or flat this year -- not soft, it's not the right word, it was flat, but that was really because we had to rebuild key customers, and we had to rebuild the technology, and that took about -- this year I'm delighted to say that we're seeing the first time we've ever seen a backlog in Illuminate, which is really positive. So, I'm very happy about that. And I think this year, we will see Illuminate notwithstanding the impairment, I think I will see illuminate this year, certainly get to breakeven, but I believe it will be positive this year. Neville, please chime in.

Yes. Look, we published some segment results and just understand particularly around some of those segment results in operating costs had some allocations of costs across the group, right? So, I guess, when I think about Access, and I look at what Access has done, it grew its revenue by over 30% in the past year, really on the back of being able to drive volume through a distributor channel, with Dormakaba, it's basically maintained its gross margins. As we move forward, we expect that story to continue. We think we can put significantly more volume through those channels and maintain the gross margin associated with it. Yes, Illuminate -- Illuminate had a solid year without getting exactly to where we expected it to get to, right? And really, the impairment charge we've taken is -- reflects the fact that it didn't quite get to where we wanted it to be. And as we roll forward those assumptions, the maths basically gives us an impairment charge. Our view on Illuminate is that, that business still has a number of prospects, exciting prospects in front of it in terms of being able to complement what we're doing in the Detect segment. We picked up an order for U.S. correctional facility using Illuminate product. That's our first order in that sector in the U.S., and we think there's more that can be done there for both the Detect and Illuminate. Mal mentioned before, some of the stuff that we're doing with Telstra. That's using a Illuminate product here in Australia. So, there's a number of drivers of growth in Illuminate that are in front of us, and we expect them to accelerate into the future. It's just that some of those drivers are still in their infancy, right? So -- and through FY '25 and FY '26, we expect to see significant growth coming out of that segment and again, achieving that growth while maintaining the gross margins.

[indiscernible] on Access, the Dormakaba distribution channel, are they on a more smooth ordering pattern now, having worked through some initial lumpy deliveries?

Yes. So certainly, in Australia and U.K., we're seeing a very steady monthly order to cash flow, which is really positive. I would say we're still looking at the U.S. Remember, it was the newest of our markets, and Dormakaba U.S. took a very large stocking position in September last year. I think it will take us a little bit of time in the U.S. to see the next reordering process as they move that stock into distributors. But the positive thing is that we've seen across the globe, a steadier order inflow with Access. Dormakaba is absolutely fundamental to that business, but we also have some very large clients in the U.K. and Australia which the team have done great work with this year. So, it's a nice balance across the business now.

We've had a couple of questions on capital management. So perhaps you could just touch on the Board's approach to future dividend payments and the thinking there?

Yes, sure. So, we have a stated dividend policy, which has been announced to the market, and that was something that the Board looked at in great detail and in consultation with feedback that we've received from shareholders. That's a dividend policy of paying out not less than 35% of EBITDA. And the Board's recently reviewed that, and we're more than comfortable going forward with that policy as it stands. I know that there was some commentary and questions around paying out a dividend last year, of the EBITDA result for 2023 and then raising capital thereafter. As the Board sits here today, we don't see any need to raise capital. The business, as Mal pointed out and Neville pointed out, is that now adequately funded to meet its targets that were also in the presentation. That said, if we were to get a very large lumpy order from somewhere, which would be a good thing, then yes, we would need to look at our working capital and what sources we had available for that. But other than that, which we would all see as a very good news story, we don't see any issues with our cash flow to be able to pay dividends out of EBITDA going forward.

In terms of investments this year, how much more do we need to invest in technology and sales?

At the moment, well, I have nothing more to do in the commercial side, apart from normal day-to-day business adjustments, people coming in, people going out, et cetera. I may put some additional resources in the program support as the large programs come in, but we've factored that into the fixed cost base already. So, in terms of the commercial team, I'm very comfortable that we're now in a solid foundation with no further investments required apart from the normal working effort of talking, managing and leading the team. On the technology side, I'm so delighted with what the science and engineering team across all 3 businesses have done. We now have core solid platforms that they've developed over FY '24. What we will switch to in '25 and probably into '26 is more a developmental expansion of those platforms. So, I mentioned how we've launched Aura Ai-X to give us a short platform, a shorter platform, and we're going to be launching the secure point with Illuminate and Illuminate products based on integration with LoRa over the next period. That gives us then a point protection asset. There's a lot of access, a lot of critical assets out there that need a tighter control and finer protection and also just further work on our AI and deep learning model. But I think you will see our investment flow this year be slightly smaller in the technology side than previous year because we've now done the investment in the core platforms. But of course, as a technology company investing in the technology is the critical thing that I need to do to keep us competitive in the market. And for example, one of the -- we're working on an iterative approach to Aura Ai-X in a different area where we can attack some of the adjacency markets. But that didn't require a totally new investment. It simply required some modification to the Ai-X platform. And that shows really good platform development in the technology team.

Going back to the sales pipeline, now that this is being reported, will you start reporting the win rate?

Yes. That's the next metric. We already do the metric inside, but I really wanted to have the quality pipeline done. We will have a discussion with that with the Board, and then we'll come back to you on where we see the win rates appropriate. It sometimes can be a little bit complex because the win rates, for example, in the high-value part and in the in progress and in the early stage, seems slightly different for obvious reasons. That's why it's a funnel. But yes, I'd like to see us reporting win rates going forward.

Is there any update on the outstanding India licensing contract agreement?

I'd give you a short answer, and then maybe Neville will give you an additional answer on that. Yes, that licensing agreement continues. In fact, we're in the process of delivering some additional license. It's not huge, certainly nowhere near the scale of what the original order was, but it is pleasing that we are seeing a continued expansion and development of that program. Some of it is also coming up for end-of-life type transition, which also is a good opportunity. Neville, anything you'd like to add?

Look, not really. There's still -- some of those systems are still being deployed to sites in India, right? So, many on this call will probably recollect that there's a maintenance piece associated with that contract. And those sites will roll into maintenance, will pick up income as those sites get delivered. The only real change, as Mal alluded to, is that we're working through another order for potentially some more small value licenses over there, which we're working through at the moment. And that will likely conclude late in the first half of the new financial year.

There are no further questions at this time. So, I'll hand back to Mal for closing remarks.

Thanks, Alexandra. Just for everyone, thank you very much for your time today. It's been an exciting journey, FY '24. I'd like to take this opportunity to thank in particularly the commercial team, who went through a very large restructure in development and still we're able to deliver us the backlog and the bookings that was critical to what we're doing. And also, through our technology and engineering team in all 3 businesses, fundamentally as a technology business, if we don't have market-leading technologies, we won't secure those superb partners that we've done this year. So, my thanks to them, and thanks to all of you as investors for supporting us. I am excited about our growth now. We have a great platform for this business, both technically and commercially. And I am seeing that impact already in the start of FY '25. So, thank you very much for your support, and thank you for joining today.

That concludes our webinar. Thank you for participating. You may now disconnect.

Thanks, everyone.

Thank you, everyone.

Thanks.