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

Good morning, everyone, and welcome to the AVA Risk Group First Half FY '26 Results Webinar. [Operator Instructions] A reminder that this call is being recorded. I will now turn the webinar over to David Cronin, Chairman of AVA Risk Group, for opening remarks.

Good morning, everyone. Thank you for your participation today and your interest in AVA Risk Group. On the call today is Neville Joyce, our acting CEO and Chief Financial Officer; and myself, David Cronin, your Chairman. We'll flick through the presentation now. Thank you, Neville. So just a quick recap. Most of you are shareholders and have been with the company for a long time, and I really thank you sincerely for your support. We have 3 divisions in AVA, Detect, Illuminate and Access. Detect is our fibre optic intrusion detection business. We look after perimeters, telecommunications networks, pipeline intrusion, condition monitoring and data network protection. Illuminate is our security and intruder detection equipment, quite complementary to detect. We're still detecting generally outdoor threats to facilities and infrastructure, but we have a lot of surveillance solutions, including world-class illuminators, which give our customers great options to actually see with their camera systems and other systems. Access is our high-security access control division. We do high-quality electromechanical locking solutions for companies like Dormakaba and ASSA ABLOY globally. We also have some very smart encrypted biometric access control readers as well. We have a world-class portfolio of complementary solutions who we sell to blue-chip customers. As you can see from our high-quality partner and end user base, we really do work with some of the biggest names in the world, spread globally. We're very proud to work with guys like Honeywell, Sydney Metro, Telstra, Dormakaba, Bosch, Santos, Shell, Woodside, MC Dean in the U.S., New York Power Authority, ADI. These give us a good breadth of customers to work with, both from a distribution perspective, but also a systems integration perspective. And as many of you will know, Detect is primarily a business that goes to market through systems integrators and Access and Illuminate through distributors. We're very pleased to have Hale Capital on board as a financial partner. Hale has very extensive experience growing and scaling businesses like AVA in the U.S. and other markets. They have very deep relationships across critical infrastructure owners and operators, telecommunications, government and defense. Really, the Hale capital investment enables us to have the capital to go after some of the growth options that we've been targeting over the last few years and that we've been building into as we build out our sales force. Neville will give you more information today around how we're actually doing that and how the second half is looking from a revenue and pipeline perspective. But we're very confident that the capital provided by Hale will be deployed for growth activities at front of house because now we've got our costs under control, and we've got our margins being very consistent, generating exceptional gross profits for a company of this size. Neville, over to you.

Yes. Thanks, David. Look, I'll spend the next few minutes talking through results through the first half of the year, a little bit about what's been accomplished, and also talk to what the outlook looks like for the second half year and beyond. So I look back on the first half of the year, first half of the year was a fairly challenging environment for us, really characterized by some delays to some key orders, which we expected to receive and fulfill in half 1, we now expect to see in the second half of the year. The result of that is that the revenue that we generated out of the business of $14 million was, in round numbers, about $3 million lower than what we otherwise would have expected, driven by the delays to those key projects. Now those delays have also impacted EBITDA. So there's a small EBITDA loss, which I'll talk to in a couple of minutes in a little more detail. And that's also translated into the decline in cash generation out of the business through the first half of the year. We still carry a solid sales order backlog, and that includes a volume of contracts, which will generate recurring revenue on the back of our Atlas offering in the Detect business as we move forward. Notwithstanding that some of those orders have been delayed, we still made some significant progress through the first half of the year in some of the key sectors that we've been targeting for some time. So transport, both rail, infrastructure, and aviation, sovereign borders still is a significant area of interest for the company, and we're seeing quite a lot of customer uptake associated with that. And I'll talk to the telecommunications sector, in particular, sort of the collaboration we've been doing with Telstra. As David mentioned, North America remains a very active and attractive market for us, both in terms of federal government projects as well as projects in the private sector. And certainly, the relationship which we've developed with Hale, we think leaves us well placed to exploit and build on some of those opportunities as we move forward. So specifically around some of the accomplishments through those sectors through the first half of the year. In the transportation sector or rail infrastructure sector, we've really got 3 key projects on the go at the moment. So Sydney Metro is the piece of work we've been doing with UGL over the past 18 months or so. And that's for corridor intrusion detection and obstacle detection on the Southwest line of the Sydney Metro, which opened about 12 months or so ago. We expect to complete that project in its entirety in calendar 2026. For practical purposes, the handover from UGL to Sydney Metro is likely to occur from June onwards, and we expect any remaining work required from us to support that to be completed as part of that handover process. During the first half year, we also picked up another contract with Siemens, which is, again, for the provision of Aura AIX to provide detection again on rail infrastructure. So the equipment associated with that order is being delivered. Commissioning will commence later this calendar year and likely complete during calendar 2027. We also have another opportunity here in Australia for transport-based infrastructure, which we expect to be awarded imminently to us. Again, it's rail-related infrastructure. It builds off what we've been able to accomplish with Sydney Metro, also builds off the certifications that we've got in the rail sector associated with what's referred to as SIL 2, and being able to drive additional orders associated with that. What we're also seeing is that beyond Australia, we're getting quite a lot of inbound queries with respect to what we've been able to do on Australian rail infrastructure and drive some international opportunities that exist in our pipeline as well. The aviation sector, yes, we've been in and around the aviation sector for some time. You may recall for those of you on the call who have followed the company for a while that we have deployed our systems to perimeter detection at Dubai Airport. We picked up a couple of other additional orders through the first half year for Morocco and Athens Airport. Both of those jobs we expect to complete within FY '26. We've also seen in the domestic sector here in Australia, a significant increase from both regulatory and airport authorities around perimeter detection. Some of you may be aware that there was an issue at Avalon Airport here in Australia around perimeter detection failing, and effectively, an intruder being able to board an airliner at Avalon. That's really driven quite a response from both regulators and airport authorities. Through the first half of the year, we've conducted a number of trials at airports on the Eastern Seaboard. We expect -- one of those trials has concluded and has been quite successful. Another 2 are currently still in progress. We expect those trials to complete, and we are expecting to see confirmed orders in the back half of FY '26 associated with deploying our units to protect airport perimeters. In addition to that, we continue to see in airports, strong interest from international airports, both in Europe as well as in North America. Sovereign borders is an area, I guess, that emerged, probably about 2 years ago, 2.5 years ago in terms of being -- our technology being critical to being able to provide detection, both buried as well as fence-mounted at borders. We did some work in a critical sort of Eastern European border. That was really driven by a number of geopolitical events, primarily around countries which share borders with Russia and Russian-related allies. We continue to see that continue to emerge in Eastern Europe. So during the half, we received another order for border protection for Latvia. That order is essentially being fulfilled, and commissioning is being undertaken as we speak. There's further opportunities along that Eastern European corridor. Interestingly, we're seeing quite a lot of opportunities outside of Europe as well. So we expect a major program to be awarded to us during the second half of FY '26 associated with border protection in the Middle East. We've also had strong interest around the application of our technology to border protection in Asia, as well as the Middle East, and obviously continuing interest in Eastern Europe as well. So we don't expect that this segment will fall away anyway anytime soon, and we continue to see quite a lot of interest from governments, really globally associated with border protection. Look, a quick update on where we've got with Telstra. I think it's fair to say that the progress that we've made with Telstra has been slower than we initially expected. But nonetheless, the relationship with them is really, really strong, and we continue to focus on our collaboration with them. We've been invited to participate in a Telstra initiative called the Telstra Together 26 Roadshow. So that's where they roadshow 8 experience hubs through each capital city in Australia across March and April. Now one of those experience hubs will be showcasing Aura AIX and what we're able to do in terms of protection of critical telecommunications infrastructure. We've done work previously at the completion of last financial year around subsea cable protection. We continue to assemble data of what was being deployed to a subsea cable in North Sydney. And we believe we'll see other opportunities associated with subsea cable protection in the not-too-distant future. The other important piece around our relationship with Telstra is that Telstra is incredibly well recognized globally as one of the leading telco providers in the world. So the collaboration and work that we've done, particularly in terms of infrastructure protection, is being recognized by other telco providers, and we have a number of opportunities in our pipeline associated with telecommunication sector beyond our direct relationship with Telstra. Yes, I'm still really excited about where we can go in the telecommunications sector with our technology. As I mentioned before, progress has been slower than what we would have liked, but the relationship is strong, as evidenced by the fact that Telstra are very keen to showcase our technology to their end users. Look, turning to the financials. I touched a little bit on this before. Revenue was down, primarily associated with those orders that have been delayed from the first half of the year. That's resulted in EBITDA also being down. A couple of key things, though, and David mentioned this in his introductory comments, our gross margins are still maintained around that 64% range. We target to land somewhere between 60% and 65%, depending on the mix of what products we're selling at any time. We're not really experiencing any significant pressure on margins in terms of being able to compete on pricing or supply chain increases. So certainly, for the foreseeable future, we continue to believe that we can sustain those margins in that 60% to 65% range. Our cost base has been very stable, right? So really, there's been virtually no movement in our cost from 1 year to the next. Again, some of you may recall that 2 years ago, we went through some restructure activity. We refreshed our commercial team in particular. That work is completed, and we expect to be able to leverage that stable cost base as we move forward. The technology development is largely completed. We do continue to invest, obviously, in our platforms, but the heavy lifting has been done in terms of our offering to go to market. So the challenge that's in front of us as we look towards the second half year at the moment is really one around execution and being able to lift top line growth in revenue. From a segment perspective, the decline in revenue was really all around detect, right? And it's primarily around those delayed orders. Both Access and Illuminate are reasonably comparable to where we -- how they performed last year. I will talk a little bit shortly around some of the catalysts that we see in both of those 2 businesses to drive growth in the near term as well. The other thing I'll call out is just recurring revenue and services revenue continues to be a focus for us, and particularly that recurring revenue element. Every Aura AIX system that we're selling has a recurring revenue stream attached to it. So we continue to see our recurring revenue base grow, and we expect to see that to continue in the future as well. Quick look at the balance sheet. Look, the key movement in the balance sheet is the decline in the cash balance, and that's really sort of the driver around the movement in net assets. That movement in cash balance is really a function of the fact that top-line growth wasn't as strong as we expected it to be, and that's clearly impacted sort of cash generation through half 1. And a quick snapshot there of the cash flow statement, which in some respects just says or restates what I just said, and that is, top-line growth is needed to improve earnings and improve cash generation in the business. I will point out that we do continue to spend money in the development of our technology. Most of that is really around the Detect business. We do have some opportunities also in the Access business to refresh a couple of our products there, which we will do. But -- that level of expenditure of roughly about $200,000 a month, so $2.4 million annually, is about where our capital investment in our technology platforms will sit moving forward. Look, a couple of quick comments before I hand back to David, just around where we are and where we're pushing the business, particularly through the second half of the year, but beyond. Yes, we're still really confident that across each of the 3 operating segments that David mentioned at the outset that we have strong catalysts for growth in each of them. So within the tech business, Aura AIX is market-leading technology and is largely recognized by our customer base as being market-leading technology. We have a strong pipeline of opportunities across multiple sectors, some of which I spoke about before. We continue to look at how we can exploit that technology to be applied to adjacent applications. The most tangible of those is the comments I made around telecommunications and being able to exploit that technology to turn existing fiber networks into a fiber sensing technology. And certainly in that transportation sector for rail certification, we are SIL 2 accredited. That's a globally recognized certification that enables us to compete in that sector, both here in Australia but also internationally as well. Within Access, Access is well placed from the point of view of having a very strong relationship with Dormakaba and being able to use their distribution network to be able to push our product, particularly in North America and to a lesser extent, in Europe. Our challenge in the Access business is really just making sure that we get traction to be able to -- with Dormakaba to be able to push that product through. But again, we're very confident in the relationship that we have with Dormakaba. There's a large trade show occurring in a month or so in Las Vegas called ISC West. Again, Dormakaba will be showcasing our products on their exhibition at that trade show. We also have some opportunities with some of our locking devices around, particularly gates and containers, and that seems to be a very strong stream of opportunity that's emerging, particularly from Europe, right? So I expect through calendar year 2026 that we see some significant traction around the ability to deploy our locks, particularly in the container space. And I mentioned before, from a development perspective, we're pushing ahead with refreshing our reader range and particularly making sure that they're Bluetooth-enabled to ensure that we can compete appropriately with existing technology in that space. In the Illuminate segment, there's really 2 critical things occurring there. One is we've lifted our rate of revenue that we're generating out of North America, and we expect to be able to continue to do that and accelerate that as we fully integrate our products with some of our partners' products in North America. The second thing which we're looking at in Illuminate is associated with Flora, ensuring that we can integrate multiple products into a seamless front end that customers are able to use with not just our products, but also their own competitive products or alternative products to provide a consistent signaling and detection piece for Illuminate. Pipeline remains strong. Look, I've mentioned before that there are a number of orders, about $3 million worth of orders from half 1 that we expected to close in half 1 have now moved into half 2. Of those $3 million, we've closed about $1.2 billion of them in the 7 weeks since the end of the first half. There's 2 opportunities in particular, one in the correction space and one in the sovereign border space, that I expect to close in the next week or 2. And that will pretty much close out most of those $3 million of opportunities that got carried over from half 1 into half 2. In addition to that, we have a number of bigger programs that we expect to close in Q2. So I mentioned before, there's a Middle East sovereign border protection program. That's in Australian dollars, that's likely to be worth somewhere between $2 million to $3 million. We've got a couple of opportunities again in the Middle East associated with oil and gas energy infrastructure protection. And the third of those transportation projects in Australia, I expect to see closed in Q3 or early Q4 for delivery of revenue in the current financial year. All of that put together says that our revenue in half 2 should be significantly stronger than what our revenue was in half 1. So our guidance range at the moment is $23 million to $26 million, depending on where we land with some -- particularly some of those larger-scale programs that we expect to close. Assuming we can get to that sort of level, our full-year revenue would be $37 million to $40 million, and that would drive a significant improvement in both earnings as well as cash through half 2. And then lastly, before I hand back to David, just a quick snapshot of what we believe are our competitive advantages in the marketplace. We have got products that are fully developed and have go-to-market strategies attached to them, and they do attract high margins. As I mentioned before, we continue to target that 60% to 65% range. And at this stage, we're not seeing a lot of downward pressure on that. We have a strong competitive advantage, really, in each of our businesses. So Aura AIX is market-leading in terms of its performance to lower nuisance alarms at the same time as maintaining detection rates. And certainly, in Access, our locking range and our refreshed read range will be very clearly at the forefront of where that market sits. There's a global opportunity. We clearly play in a number of markets in different regions around the world. We've deployed technology to those regions. We do have a focus in the near term, particularly on growing our position in the U.S., in Australia, and also in the Middle East/Eastern Europe, just given the nature of the opportunities that sit in the pipeline for us today. And then lastly, we have a highly scalable model, both from the point of view of the margins that are generated, a cost base, which is very stable, and a technology footprint, which is largely developed. We continue to invest in it, but it is developed. It's out there in the market, and it's competing effectively. So with that, I'll hand back to David, and we can open it up to Q&A.

Thanks, Neville.

[Operator Instructions] The first question is with regards to the Hale deal, which represents a potential 26% dilution to holders. What specifically about the U.S. expansion opportunity makes this worthwhile? And what concrete measurable outcomes is management expecting from this deal?

Yes, great question. And the dilution side, certainly not lost on me or the other members of the Board or company. And we looked at this very carefully, as you'd expect. One, I would say that access to capital is an important thing in a growth company like AVA. And having money is really where you get certainty in growth pathway from, particularly in a business like this where you're really trying to look out 3 years and build talent and build an executive team that can execute on that growth, you need to have some capital behind you to do that. There's no great secret there. The other part of that capital equation is, where do you get that capital from? Is it just money? Or does it come with strategic intelligence behind it? I can say from working with Hale for the last 9 months, looking at this deal, being involved in some of their portfolio companies, meeting some of the great executives that work with Hale, both internally and externally, they come with both capital and intelligence and intelligence in our markets, both in the U.S. and abroad, but certainly very strong in the U.S. They also come with connections and connections are key in this market vertical. The U.S. marketplace is the largest security-centered marketplace in the world for products like AVA producers. And we've had great success as a little Aussie company operating from far away, getting some of the most blue-chip and demanding end users who have used our products for many years now. That gives us a great launch pad to actually use that credibility to try and get into larger and more systematic deals where we have more certainty around revenue, but also where we have a broader -- much broader base of customer opportunities in the U.S. Hale and their connections and their participation in AVA will no doubt yield those sorts of results, certainly give us a much, much better chance doing it with them than without them. The other part of that capital equation, which I'm sure is not lost on shareholders, is we were able to quite uniquely attract a high-quality financial partner such as Hale, who was willing to go to that level of percentage, subject to shareholder approval. So that shows their commitment and also their belief in AVA. And trust me, they did a lot of due diligence on AVA and the industry and our products and our customers. So that gives me great confidence that they've come in as an expert in the industry, as a very knowledgeable party who have done a lot of homework and believe in AVA enough to step forward with a package of financing that could result in a major shareholding in AVA. The other part of that equation that the Board obviously look careful at is what's the cost of that capital. Certainly, the conversion at an 80% premium to the share price at the time is also a reflection on the value of AVA, the underlying value of AVA. And so when we looked at that as a package and what that gave us in terms of the growth that we see in front of us now and the expertise that we need behind us, we certainly believe that the Hale transaction was in the best interest of shareholders. What was the second part of that question, Alex, just in case I missed anything?

It was just what concrete measurable outcomes are you expecting from the deal?

Yes. Okay. So we kind of look at it in 2 aspects. One is the money. And obviously, the first tranche has landed in our bank account, and the second tranche is subject to shareholder approval, a meeting that's going to occur around about a month. The first part of the application of those funds is around supporting revenue growth activities. So we really do see -- and you'll see this in the full year result, and you've heard this in the commentary, our sales efforts in the U.S. are starting to pick up, both pipeline and actual revenue trajectory. That's off a very small team. So we want to build out that team with additional sales managers. We want to also establish a federal sales team. So that federal sales team will go after all the big agencies, DHS, CBP, TSA, FAA, DOE, DOT, DOC, CISA, all of those big agencies. And there are federal programs, which are publicly accessible today to U.S.-led businesses that are large and fit right within our space. That sales team will focus on those. We're also going to hire a U.S.-based CEO, someone that has exceptional credibility within the U.S. marketplace, has built teams before, has built organizations, has scaled revenue, and also has connections into the U.S. Department of War, the U.S. intelligence community programs. So that capital will be allocated to that drive in the U.S. Talent-led is the way we would describe that. The other thing is balance sheet strength. It's important to note that we are dealing with some of the largest companies in the world, some of the largest government programs in the world. Important we have a strong balance sheet, but also important that we can maintain gross margins by being able to optimize our inventory. And so part of the money will go to strengthening the balance sheet. This also helps when we're doing commercial, federal, SSA-style activities with longer lead-time programs. There's a little bit of product development in there, not a lot. We're very happy with where our products are at the moment. They are world-class, as Neville mentioned, that's recognized both by industry and our customers. We just need to sell more of them. And then the other part of it is really global scale. So we call this a U.S.-led strategy. And what we mean by that is we'll build out a talent-led strategy in the U.S., and then we'll replicate that probably to a smaller degree in the initial stages, but then a larger degree as we go forward in certain areas around the world where we're having good success in building out a high-quality pipeline and converting that pipeline like you heard from Neville in the transport sector in Australia and APAC. So then in terms of concrete outcomes, clearly, the first one is going to be significant growth in the U.S. pipeline, sales pipeline activity, and most importantly, in revenue, in actual revenue. The federal sales team will take 12 to 24 months to really show us how successful they can be once we put that team in place, because they are longer lead time sales. But obviously, one of the key KPIs there is actually getting into these federal sales processes, both the request for information, the request for tenders, et cetera, and then converting those bids to actual revenue. So that will be a key KPI there. Getting partner access. So Hale has a very strong track record with many other companies that mirror AVA's go-to-market from a distribution point of view. We already have some discussions going on to access those additional contacts and connections. And really, it will be up to our team to leverage those contacts and connections for the benefit of Ava to drive revenue. So that will be a KPI of our sales team, but certainly a KPI of our partnership with Hale. The other is actually forming essentially a Board in the U.S. that can provide us credibility within the U.S. government space. And we're working with Hale at the moment, and we've identified some Board members who have deep defense, federal, and hyperscale backgrounds, and we'll progress that. And in the next 6 to 12 months, that's another KPI that's on the Board of AVA to establish that capability in the U.S. to give us additional access to market. It's all about revenue, as Neville said. If we take -- we've taken this money from Hale, we'll get the right talent. We have some excellent people involved in AVA as we sit here today. We need more people like that involved to drive the top line, and then we go after the market. And that's really going to be the key KPI for the Board and the management to really show shareholders that we did the right thing by taking this money, be it at a premium. We need to make sure that giving up this much percentage of the company potentially results in a very good financial outcome for everyone.

Thanks, David. We've had a couple of questions through from Conor Ore at Canaccord. Firstly, do we expect gross margins and OpEx to be similar in H2 compared to H1? Also, how much of the H2 revenue guidance would we say is catch-up from the first half? Just keen to understand the sustainable go-forward revenue run rate.

So I'm happy to start with that, and David can jump in. But yes, look, of the second half revenue, about $3 million of that revenue is catch-up from sensibly the orders that are missed. So yes, revenue for half 1 was $14 million. We believe our underlying activity should have placed it closer to $17 million had we been able to close those opportunities. So as we look at the second half of the year, we expect to be able to again get to that sort of, call it, run rate revenue, coupled with a couple of major programs coming out of the Middle East, really to drive that growth and push it closer to 2023, depending on how those programs land. So that's how we sort of bridge, if you like, from the $14 million that we did in the first half of the year to the full year guidance of $37 million to $40 million. Now in terms of gross margin and operating costs, yes, certainly, I'd expect gross margins to be comparable in the second half of the year to what they were in the first as I mentioned before, we're not really seeing really in any of the businesses, significant downward pressure on gross margin, either coming from pricing or from the supply chain in terms of underlying cost increases in componentry and stuff like that. And our cost base is very stable, right? So the only pieces I'd really sort of expect to see move in the second half of the year from a cost base point of view is, as David mentioned before, we'll probably commence that activity around filling out the U.S.-based team in particular. Realistically, that's going to be a Q4 activity. So there's not going to be an enormous amount of that sitting in the second half result, but there might be some initial outlays associated with it. But fundamentally, our cost base, I don't expect to see move. The technology is largely developed, we're not really adding significant resources into any parts of our business. The pipeline that exists today supports that guidance range that we've provided. So we don't need additional sales resources to deliver that. Our challenge in the near term is really just one of execution and closing opportunities to convert those orders to revenue and ultimately to cash.

Another question just on the H2 outlook. In the first half of FY '25, we indicated the second half would also be significantly stronger. Can we give an explanation of what's materially different this year that gives confidence that the forecast improvement will be delivered?

Yes. Look, again, I'm happy to start with that, and David can add his comments as well. But one of the critical things from a program business perspective is we need some large-scale programs, right? So -- and by that, I mean north of $1 million, $2 million. So if I reflect on what we did a year ago in the first half of the year, we had a couple of really chunky programs associated with Eastern European border protection. And we also had a pipeline infrastructure protection project in Chile. If I compare it to the 6 months that we just experienced, the single biggest program which we delivered was the Siemens Rail infrastructure program, which delivered about $800,000 worth of revenue in the half. As I look towards the second half of the year, the second half of the year has some very significant identifiable programs, which are quite mature in terms of their tender award processes. So specifically, the Middle East and border protection, one of the carryover projects associated with corrections in the U.S. So the Middle East one is valued at around about $2.5 million. The corrections one carried over from first half of the year is worth about AUD 1 million. And I expect to receive orders associated with the next iteration of transport infrastructure protection here in Australia. And that will be -- will push somewhere up towards that $1 million mark. So part of our increased confidence around half 2 is that as we look towards half 2, we see some larger-scale programs, which are quite mature in terms of the process for awarding those, and we expect to see them awarded, if not in Q3, then very early in Q4. And as they get awarded, clearly, we'll provide an update to the market. But it's really important as we go forward and as we look to grow our revenue base that we complement our normal run rate activity with large-scale programs, right? And that was a problem for us in the first half of the year because there were some large-scale programs in the pipeline, but they drifted into the second half of the year.

Thanks, Neville. Just the last question through going back to the Hale investments. Can we provide some context as to the option on the Hale warrants and why this is deemed appropriate?

Yes. So when you look at the put option, you really need to look at the deal in its entirety. This is a package deal. This is a financing instrument. The put option 5 years' time, there's a few ways you can look at it. One from Hale's perspective, if in 5 years, we haven't exceeded the strike price, then essentially, they get $0.0315 per put option, which equals about $1.35 million worth of value in the scheme of things when you do the math. You look at the time value of money, we've had that Hale money over that period. They invested at an 80-plus percent premium to the share price at the time. You really need to look at that put option as part of the package deal when you look at the financing costs of the actual investment that Hale has made, and that's exactly how the Board of AVA calculated what the true financing cost was, including the put option and including the premium that we received.

There are no further questions. I'll hand back to you, David, for closing remarks.

That's great. Well, thank you, everyone, for your time and attendance today. Also, thank you for your patience. We are building a company here. We have been taking the right steps for many times. Unfortunately, the revenue hasn't reflected some of those steps that we've put in place, but we do have a lot of confidence in the future, as Neville discussed. We do have a high-quality portfolio of products. We have high-quality investors and financiers behind us now, and we also have a good line of sight into growth in the second half. Our costs are under control. Our margins are exceptional for a products business of this nature. And so now the challenge for us is to continue on that journey, attract more talent and really give shareholders the growth that they deserve out of this company. Thanks for your attendance.

That concludes today's webinar. Thank you for participating. You may now disconnect.