Cluey Ltd (CLU.AX) Earnings Call Transcript & Summary

Welcome, everyone, and thank you for joining Cluey's Half 1 FY '23 Results Presentation. Before we begin, we would like to acknowledge the Gadigal people of the Eora nation, the traditional custodians of the land we're hosting this webinar on and pay our respects to the elders, both past and present. Today's presentation will be hosted by Cluey's Executive Deputy Chair, Mark Rohald; joint CEO, Matteo Trinca and Trevor McDougall; and Cluey, CFO, Greg Fordred. [Operator Instructions] Over to you, Mark.

Thank you, and Good morning, everybody, or good afternoon. Welcome to our presentation covering the H1 FY '21 results. and we will shed some light on our recently announced capital raise. Let's kick off with some of the key investment highlights for the period and try and give you a sense of how the business is tracking. During the first half of FY '23, we delivered revenue of $20.8 million versus $15.8 million in the first half of FY '22. We continue to see strong unit economics and operating leverage with continued gains realized from our integrated and diverse service offerings across both the curriculum aligned Cluey Learning Service and the co and extra curriculum aligned Code Camp service. I've spoken extensively in the past about our product and technology investments. We continue to make those investments as a key component of driving service enhancements and cost reductions in our business. I know Greg will be talking quite extensively about that shortly because we're now starting to see a number of the benefits of our product and tech investment flowing through. We also continue to maintain and operate and enhance our enterprise platforms and our data enabling componentry because we see this as really the core to being able to scale our business and continue to drive competitive advantage. And I know many of you have spoken to me more recently about what's happening with Chat GPT and AI, et cetera. And one of the key benefits of Cluey's data-first approach from inception has been the fact that we have stored the data from over 1 million learning sessions. We know exactly what questions are asked, how they were asked, when they were asked, who solved them, how they were solved, what content was consumed in what order. Now that is all ready for us to be able to look into some of these AI engines in a more closed loop environment to be able to deliver super, super proficient, on-demand, asynchronous learning support in a way that very few of any other companies are able to do this. We've also shown that we've been able to scale both our curriculum aligned learning components of our business, Cluey learning, together with our con extra curriculum aligned component of our business, Code Camp, to deliver a range of service offerings. And we've done a lot of the integration around these businesses, particularly the back end and the sales and marketing side, where there's a real opportunity going forward is to bring the brands much closer together in a much more integrated and holistic way and Matteo will talk to that shortly. We are now focused resolutely on the clear path to profitability. It is our #1 priority, and we're going to do this by continuing to scale with the reducing cost base, and that cost base is going to be reduced by virtue all the benefits we're starting to receive from our investment in product and tech. And we remain on track with our forecast to be profitable in the fourth quarter of FY '24. I -- from an expansion point of view, geographic expansion point of view and strategic M&A, you may recall that we launched the Cleary service in New Zealand last year. That's now up live. It's doing well. It accounts for something like 13% or 14% of all our new enrollments coming from New Zealand. We also launched a pilot for Code camp in the U.K. that has way outperformed our expectations, and Matteo will be talking to that shortly. We continue to look at a range of complementary strategic M&A opportunities. They are there. They are available to us. We just need to make sure that we choose the right timing and make sure that we are able to absorb those businesses into our business, both from an operational point of view and from an affordability point of view in terms of freeing up capital to be able to do that. I'm now going to turn to Greg, our CFO, who will take you through our first half of '23 results. Over to you, Greg.

Thanks, Mark. Good afternoon. It's my pleasure to present the Cluey Group financial results for the first half of financial year 2023. In the first half of FY '23, Cluey continued to scale strongly with group revenues increasing by 32% and at the same time, delivering improvement in core unit economics. At the beginning of FY '23, the company shifted its focus to preserving cash and prioritizing a range of initiatives to achieve cash flow breakeven. These initiatives included a continued investment in product and technology as a key enabler to reducing operating expenses and a reduction of customer acquisition costs. I'll speak more about this a little later. Next slide, please. Included on this slide are the key metrics for the Cluey Group, which includes the Cluey Learning and Code Camp operating divisions. Code Camp was acquired on the 1st of October 2021 and is included in the prior corresponding period result for 3 months from that date. All metrics on this snapshot are consolidated metrics. Starting at the bottom left-hand side of this slide, variable CAC is the customer acquisition cost to acquire a new student. This includes digital media spend, brand spend and the cost of our sales team. In the first half of FY '23, a per new student reduced by 18% on the prior corresponding period to $348. -- whilst at the same time, we increased the number of new students by 47%. And -- the Cluey Group lifetime value to CAC ratio improved by 7% to 3.0x in the first half of '23. This means that on average, for every new customer we acquire at an average cost of $348, we generate over $1,000 of lifetime value after paying for tutor and teacher costs. The number of active Cluey learning tutors and code camp teachers increased by 61% to over 3,600 in total. We're often asked if we experience supply side challenges in recruiting tutors and teachers, and I'm happy to advise that at our current scale of operations, we're not experiencing any issues. In Cluey, we receive, on average, over 2,000 chia applications a month. Following the successful launch of the Cluey Learning business in New Zealand, we're also increasing our tutor recruitment efforts in New Zealand. -- recruit quality New Zealand chooses at a lower rate than our existing Australian tutors. This not only opens up additional supply, but is also driving gross profit and margin improvement. In the first half of FY '23, on a combined basis, Cluey Learning and Code Camp delivered 316,000 student sessions, an increase of 33% on the prior corresponding period. The 4 metrics on the right-hand side of the slide demonstrate the continuing growth achieved in the first half of '23 compared to the prior corresponding period. We continue to experience strong unit economics, a 47% increase in new students delivered a 33% increase in session numbers, a 32% increase in revenue and a 39% increase in gross profit -- the chart on the left illustrates the growth in active students from FY '19 onwards. In the first half of FY '23, Loui had over 34,000 active students. The lower growth rate in the first half of each financial year is reflective of the usual seasonality we experienced in the second half of the academic year. It is also noted that in this chart, the Code Camp new students were first included in half 1 FY '22 and only for 3 months from the date of acquisition. The increase in active students in the second half of FY '22 also includes the impact of an incremental 3 months of additional codon students as they are included in this metric for the full 6-month period. Since FY '19, active students have increased by a compound annual growth rate of 178%. The chart on the right illustrates the combined group student sessions made up of blue learning tutoring sessions and student attendance days at Code Cam school holiday and after-school programs. In the first half of FY '23, students completed nearly 316,000 sessions, a 35% increase on the prior corresponding period and a compound annual growth rate of 204% since FY '19. As mentioned previously, in the first half of FY '23, we deliberately reduced marketing spend in order to preserve cash, resulting in a slowing of the growth rate in new students and student sessions -- next slide, please. As you can see from the chart on the left side, Cluey achieved revenues of $20.8 million in the first half of FY '23, an increase of 32% on the prior corresponding period and a compound annual growth rate of 226% since FY '19. In terms of the breakdown of this revenue, Cluey Learning delivered $17.2 million revenue for the first half, an increase of 15% on the prior corresponding period. Code Camp delivered revenue of $3.6 million in the first half in comparison to $4.4 million for the full year in FY '22. The Code Camp result only includes $300,000 of revenue from the summer holiday cams run in December. Whilst the $1.5 million revenue from holiday camps held in January will be recognized in the current Q3 results. In the chart on the right-hand side, you can see that in the first half of FY '23, gross profit increased by 39% on the prior corresponding period to $11.8 million. This represents a compound annual growth rate of 366% since FY '19. In the first half of FY '23, we also achieved a record high gross profit margin of 37%, reflecting a 10% improvement on the prior half. This was driven by several factors: firstly, a price increase in both Cluey and Code Camp businesses. There was a deliberate strategy to increase the proportion in tutors at a lower comparable rate to Australian shooters, and there was also a reduction of overall discounts provided to customers. As mentioned earlier, variable CAC is the customer acquisition cost to acquire a new student. It includes digital media spend, our brand spend and the cost of our sales team. In the first half of '23, the group variable CAC per new student improved by 19% on FY '22 to $348. At this level, this represents an average 6-month payback period to recover the CAC after funding tutor and teacher costs -- as previously mentioned, the company is now prioritizing a range of initiatives to achieve cash flow breakeven. These include initiatives focusing on the reduction of operating expenses and CAC -- the significant targeted cost savings, which I will speak to in more detail shortly and the expected positive contribution from Code Camp result in an overall reduction of the average monthly Cluey Learning student sessions required to break even. This has reduced from around 85,000 sessions a month on average as estimated in the FY '22 full year results presentation to now around $65,000 on average per month. As you can see from this slide, Cluey Learning delivered an average of 44,000 sessions per month in the first half of FY '23. We expect to continue to grow average monthly sessions to 47,000 in the second half of the financial year and increasing to 58,000 in the second half of FY '24. It's important to note that the average sessions in each period are impacted by summer school holiday periods where we experienced a large number of students pausing for the holidays. Cluey remains on track to achieve its first quarter operating cash positive result in Q4 FY '18, at which point the projected average monthly student sessions exceed 65,000. $3.3 million in annual cost savings were implemented in the first half of FY '23. And additional $4.8 million in forecast annualized cost savings have been identified and will be implemented in the second half of FY '23. Now let's take a look at where those cost savings are derived from. Next slide, please. In order to drive profitability, a range of initial have identified and not being implemented. -- aggregate of cost savings identified to date amount to a total of $8.1 million. In the first half of FY '23, initiatives amounting to annualized cost savings of $3.3 million have been implemented and are expected to deliver $1.4 million of net cost savings in the second half of FY '23. Additional cost savings of $4.8 million have now been identified and are currently in the process of being implemented. In summary, $5.3 million of these cost savings are derived from employment costs. These savings are primarily derived technology improvements, resulting in fewer personnel required in customer support functions. $1.1 million of the savings are derived from lower customer acquisition spend and $1.7 million in savings from other operating expenses that were forecast to be incurred in FY '24 that are now eliminated. We have not reduced the investment in product and technology, which is now driving service improvements designed to improve customer retention and session frequency, this will deliver revenue growth. Secondly, these improvements will deliver automation and operating efficiencies, which will provide additional cost savings. And lastly, this investment will deliver a reduction in variable CAC via optimization of customer acquisition and go-to-market strategies. This will lower variable CAC and enable us to recruit additional new students for the same spend -- on this slide, we present a summary of the first half FY '23 financial results broken by division. As you can see, both the Cluey Learning and code camp divisions are profitable at the divisional contribution level. In the last half, Cluey Learning made a divisional contribution of $900,000 and Code Camp delivered $800,000, providing a total contribution of $1.7 million for the half year, which is a 750% increase on the prior corresponding period. The investment in technology and product resulted in a 69% increase compared to PCP. As mentioned already, this is the primary lever to deliver improvements to our service, reducing service delivery and operating expenses and delivering improvements in variable CAC. Corporate head office and other operating expenses are flat period-on-period and can support additional divisions and/or businesses at the current level of expenditure. I will now hand over to Matteo who will talk to the Code Camp business unit performance and growth opportunities.

Thank you, Greg. And good afternoon, and thank you for joining us today to discuss the half year results. In a couple of slides, this one and the next one, I'm going to provide some insight into Code Camp and the growth that we've been experiencing in this business. So, after a couple of difficult years caused by repeated cover lockdowns, as you can see from the FY '21 and '22 numbers got companies now demonstrating strong growth in the current financial year, not only in the half, but we do have positive expectations for the full year. We do have a very good understanding of the business now relative to 18 months ago when we acquired the business, and we understand its key levers and the growth strategy. So, I'm going to explain what we think the space strategy for growth is for this business. So, it is about expanding the number of school venues we run in. We do want to establish strong relationships with schools to leverage community marketing in a way that avoids us spending marketing dollars to acquire customers. And we have an ambitious content portfolio road map that we're implementing at the moment. So, all of these key levers are very much about driving growth. The investment in all of these areas now paying off, and we're driving record numbers season after season. One thing to note is that the fastest-growing segment in court camp at the moment is the after-school business, which has been growing significantly from almost a standing start since the Cluey acquisition in FY '22. The EBITDA of minus $300,000 is marginally negative in the half due to some timing between revenue and cost of the summer season. Summer season is not fully taken into account in the H1 F 3, given that most of the programs in the camps actually happen in the January calendar month as well as increased investment in sales to aggressively grow the venues in the after-school segment that we truly believe given the demand and given the product market fit that we see at the moment. Given the timing of the school oil and the running cost, the right time to look at EBITDA for cod camp is slightly off from the regular calendar periods. The best time is actually end of Jan, April, July and October. And in fact, when we look at the end of Jan results, they're not here, but we have internally already looked at the EBITDA for Code Camp is slightly positive. While there is a lot more work to do in order to extract deeper synergies between the 2 businesses, Code Camp and Cluey. We're very pleased with the progress we've made so far, and we're particularly impressed with the selling performance of the Code Camp. Moving on to the next slide. I want to spend a few -- a couple of minutes on the Code Camp in the U.K. So as you can see from the table, there is very strong growth. All of these study as a pilot test, we wanted to test the market for demand, but also, we wanted to test the market for capital requirements. How much would it take for us to grow in the U.K. with or without capital. So, what we can conclude now after up to 9 months of Palo running is that the U.K. business, the U.K. business is ready for scale up. We can achieve larger scale without major capital injections from the head office. The strategy, as I said, has been very much about can we boost truck the business in the U.K.? And what can we learn out of it. So, what we learned is that the U.K. market is unique. I've got about 17,000 primary schools in all of the United Kingdom. We do have access to more than twice the number of students. We have access to in Australia and New Zealand. And it is a market with future prospects despite the limited size in revenue that you can see now on the page. What is really interesting about the market is that most primary schools have internally organized personnel fully focused on creating club activities for students and families. This drives strong consumer demand but also a stickier relationship with schools and parents and with the venue itself, which makes it easier to grow period-on-period in terms of number of venues we're running, but also the enrollments that we can expect from it. The ultimate strategic goal for the U.K. is not very much to continue to grow the after school only. It is about scaling the after call to a point that would allow us to launch the broader CLO offering without major marketing and sales investments, which are required at the moment in the Australian business as well as building a strong operational team on the ground as we do so. I think, and we all believe we can achieve these with our major capital investment, as I mentioned earlier, and create interesting prospects for the group on a 2 to 3 years' time horizon. Finally, in the H2 trading update and outlook. Next slide, please. Our focus for the remainder of the year is very much unchanged. Cluey focus is about reduced costs, improving efficiencies in service delivery, as you've seen from the earlier slides that Mark and Greg presented Reduction of internal cost has always been our focus, but even more in the last 12 months. The investment in Product and Tech was to engineer solutions that drive down operational costs, and that has started to pay off. We can drive changes and that provides an opportunity to reshape the Cluey structure in line with the revenue line that we can see coming in. The gains made in this area of only helped reduce the size of the teams, as I previously mentioned, but also improve the customer experience, which would provide collateral benefits to our lifetime value and retention metrics. We also launched in the -- in New Zealand as Cluey -- this not only provided an opportunity to expand our targeted visible market at a lower CAC given the more limited competition in the market, but also enable us to build substantial to the base that we can now leverage for the Australian operations at a lower cost, driving up margins above the 37% that you have seen in the early slides related to the H1 FY '23. Demand for our services continue to be strong despite being in the Passover with opportunity to scale our marketing and sales efforts once our P&L gain strength and free cash flow. With regards to risk, we continue to monitor post-covid behaviors of our customer and tutors, but we don't see any major changes in consumer trends worth noting, except slightly longer holiday deposits, which internally are aware of, have margin limpet revenue, but we do have solutions that we're working on that will resolve those issues in the future quarters. Code camp, on the other hand, there's strong momentum and a clear, simple strategy to scale up. So, we continue to implement that without doubt and take any opportunity to go faster than our internal numbers suggest. Lastly, I just wanted to conclude with a few words off the back of what Mark was saying at the very beginning of the presentation about AI and language models. The most recent developments in AI are unbelievable and visible to everyone. Our services, chlorine particular, produce large data sets that could be used for training language models and unlocking unique applications to the Australian education market. We do have more than 1 million tutoring sessions fully recorded with prompts and answers in a live environment. And that alone is an involved bother base that as Cluey own and is a prime material when it comes to training language models for special applications that are not currently available or not even exist. So, I hope to have -- we hope to have more updates in the coming releases. Now I'm going to hand over to Mark, who will go through our medium- and long-term products.

Thank you, Matteo. Really wanted to kind of break up the short term from the medium and long-term priorities into the next 12 months and the periods beyond. Our #1 priority is to balance growth, improving unit economics and profitability to drive towards breakeven. And we have to manage all of those all at the same time and get the balance right in order to get the right outcome. So, to do this, we've got 3 key short-term priorities: one, scaling the corn, improving our efficiency. We're going to do this by continuing to invest in our sales and marketing, driving more student enrollments at a lower customer acquisition cost. We're going to increase the number of schools for Code Camp holiday camps and after school services, and we're going to invest in new co and extracurricular programs for Code camp to increase the uptake and reenrollment rate and lifetime value of the Code Camp students because we haven't yet completed the full portfolio of programs for them. Secondly, strong focus on using product and talk to drive improvements to the customer learn learner acute experience as the ultimate outcome being a key improvement in lifetime value. So, we're driving service changes and improvements, focusing on optimizing our customer and tutor experiences. Those have already been rolled out. To a large extent, new customer portal, tutor portal, full self-help, full automation, removing the need for us to have more people having to service these customers and our tutors. And we really are focusing on trying to bring the Code camp and Cluey businesses much closer together with a single view of customer, what I often refer to as a common customer data layer to enable us to be able to cross-sell, upsell and give parents and students a singular experience when they're engaging with the overall Cluey service offering. -- then focus on reducing overheads and cash conservation. This is the #1 thing that's on everybody's mind. We are dealing with challenging capital markets. We are dealing with a world where investor sentiment and appetite for risk has shifted significantly. In the past, it was all about grow, grow, grow, grow, grow. Don't worry about when you get to profitability as long as you've helped grow, you'll eventually get there. This has shifted. The world has shifted, and it's been a seismic shift. The focus is now on getting to breakeven and then driving profitability. So. we are using our product and tech improvements to deliver more and more automations, improve our operating leverage and continue to drive those cost efficiencies and cost savings. Then in the medium and long term, we want to really try and grow our New Zealand and U.K. business units. We think New Zealand is still at an embryonic stage. We don't even have Code Camp in New Zealand yet. So, we see Cluey scaling in New Zealand and then having that as a platform for Code Camp to come in. And the converse in the U.K., expanding Code Camp in the U.K. as a platform for Cluey come in. In terms of M&A, the -- we continue to look at opportunities on the acquisition front. We have identified p these opportunities. It's around when and having the capital -- separate capital available for us to go and acquire those businesses. So, following that, I thought I would just talk very briefly now about the capital raising that was announced yesterday. We announced an equity raising of up to $10.6 million, of which $9 million has been underwritten. And this comprises a fully underwritten $2.6 million placement to institutional, professional and sophisticated investors and a partially underwritten accelerated non-renounceable entitlement offer of up to $8 million underwritten to $6.4 million. So, of the total $10.6 million, $9 million has been underwritten. Just a reminder, as at 31 December 2022, we had $14 million of cash in our balance sheet. And the key question is why do we need to raise this capital? Why did we choose to. This $10.6 million of capital is really there to underpin our business to cash flow breakeven. -- and takes management and executives minds off where the cash is going to come from, even though we had sufficient cash in the business prices to get to breakeven technically, we have very little or no headroom. And we cannot run a business without having that headroom, particularly as opportunities come up to grow. So, we are going to use this capital to continue to invest in our targeted growth opportunities and to make sure that we underpin the balance sheet and the Cluey business to get to that profitability mark. And in particular, we want to deploy some capital to scale up the code camp business in the U.K. in a very measured and profitable way. And now that we've got this capital raising behind us, -- it's really all hands on debt. We want to just turn our attention to achieving our key priorities, which is getting to profitability and then generating returns for our shareholders so we can all go on and continue to grow and build what is really a fabulous business and he's going to -- it is already a market-leading business in our space. Just in terms of the timetable for the capital raise, the record date for the entitlement offer is 7 p.m. on the 3rd of March, and the retail entitlement offer closes on the 21st of March. And those who want to participate in the equity raising should please consult their brokers who will be able to provide all the detailed information. That brings us really to the end of today's presentation. I'm happy to take questions if there are any questions that have been submitted. I don't see them coming through. You got to select the Q&A box...

So, let's have a look. There's a question from Matt Johnson. Our employment costs are looking to be reduced by $5.3 million, with the introduction of new systems and technology to do a lot of the heavy lifting. Can we please be more specific about how the technology is actually able to do this... Do you want me to take it? That, if you wouldn't mind, that student portal, student portal support costs.

Yes. So, to be a bit more specific about how we have developed a we call the customer hub, which is a self-service environment for our customers. We have developed that over the last 12 months, but the reality is we trained a lot of our customers to just call us. So we had only -- we were only getting to sort of 30% take-up rates. So recently, what we've done is redeveloped our phone system and also are going to do the same thing for our SMS channels and essentially, we had a large, diverse range of channels we would support anyone on any channel. We're now really pushing customers back through the hub, which allows us to understand what they need help with for the self-service elements they're able to get that support straightaway. And for the elements where the hub can't deal with it, we can have route them directly through to the person that can help them. instantly. So better experience for the customer and you don't have a whole lot of customers that don't need to be in a queue waiting and then there's urgent people behind them. So, less resources and a better experience. There's also a question from Matt around the reviews, having look at the reviews. These deployments have just been put in place. We have some teething issues mainly to do with retraining customers to use the new systems and the experience there. But I mean, it's a part of deploying technology like this. We have to retrain our customers and also there's a big shift for our internal staff. So, we do believe that those issues will disappear pretty quickly. The other big changes around the tutor. So, we built a brand-new environment for the tutor. To take about 30% of our costs in terms of supporting. So, there's a lot of them, and we need to provide them support in a real immediate way. So, we've done a lot to -- in our tutor hub to help support how tutors take leave, how tutors book their availability, how we match tutors and students. So, there's a lot of changes that we have made. We are starting to see the cost benefits immediately, but the customer service changes, we've got a little bit of work to do, but we're well and truly on that path and very confident.

There is a question here 2 questions from Ed Had they're both related. I assume. The first one was how much cross-selling is there between Code Camp and Cluey? And the second part of it is, is the comp audience primary school age while the Cluey customer base is secondary school age. I'll answer the second one, and then I'll hand over to Matteo on the cross-selling, if that's come...

Yes. Sure. So Cluey's primary customer base is primary school. We have more students in primary school consuming Cluey services than we do in high school, which is actually counter to what we originally thought would happen at -- so that we've always seen now as being a great opportunity to extend our lifetime value beyond where it is today because if you get those students in young and in primary school, you can get them into the Cluey service for many, many years to come. We will be much more concerned if 95% of our students or 90% of our students were in years 11 and 12. So around 51% or 52% of our students, including our primary school. I'm going to hand over to Matteo to talk about how we have the 2 different audiences, where we see the crossover and how we plan on tapping that.

Yes. So, I think given that pre-phase an introduction to the overlapping segments between Cluey and Code Camp, the numbers when it comes to what level of cross-selling the res, the way personally and we internally measure that is through what we call customer penetration. So, what percentage of the Cluey first customer use Code camp and vice versa. And at the moment, then number is sitting very low, it's sitting 1%, around the 1%. When you isolate that number on the overlapping primary segment, it jumps up to about 2%, 2.5%. We know from research that the overlap is much greater than that. And there is reasons why we're not able to tap into the full amount. First of all, because at the moment, the only way we do have available to us to do cross-selling is through simple and basic EDMs. So, we're treating each other database almost like an external third-party database. It's very limited in what we can achieve through there. You face per years and issues like brand recognition that is not there, the feet of the proposition to the situation of the customer that is not there either. So, we do know and we're aware of those challenges, and we do have plans to fully unlock the synergies between the 2, businesses, which is really the point that I made earlier in this slide when I cover Code Camp. So, the first opportunity would be obsolete you look at the brand, what is the brand that? And how do we -- can we overcome the perceptions that Code Camp is very different from Cluey's in terms of positioning, but in terms of utility to the customer and value proposition, there is the challenge of the experience at the moment we rely on EDMs, but how can we make it more compelling and easier for the customers to access Cluey Learning and understand that we're running enough or school camp in this school that child goes to and been able to tap into a compelling cross-sell offering or simply the right value position at the right time for you as a customer to understand it. So, I think there is more than these 2 examples that I wanted to use in this answer that we can tap in shoe, we are keen and we're focused on it. And we know that it's a big opportunity to drive top line growth that goes through bottom line growth immediately because it's cross that is available to us without upfront cash investments in either marketing or sales. Mr.

A question for Greg coming in from Olivia. Are you expecting cash burn to continue at the same rate quarter-on-quarter?

Thanks, Olivia. So, I would answer is no. We do expect to see some benefits flowing into Q3 FY '23. And from Q4 FY '23, we expect the benefits to be significant and to [ re-baseline ] effectively, and that will show further improvement in FY '24.

And I'm going to take the last question from Tom, which is a 2-part question. How long on average do Clutter stay with Cluey And how many lessons on average clothes each week?

Maybe... Yes I can say that. So, we don't really look at it in terms of the average length. It's more around tutor churn, and cut churn is running at about 8%. Remembering that we have a large pool of university casual workforce. So that churn rate of 8% is quite -- is okay. It hasn't moved around a lot since the very beginning, and we managed that no problem in terms of being able to recruit to cover off that and the growth. In terms of sessions, it's around 8 a week that clearly show do, 8 sessions a week. There's often a lot more, but yes, that's the sort of average...

Great. I think that brings us to the end of the questions. I wanted to thank everybody for their participation. Thank you to Matteo Greg and Trevor for your support and for answering all the questions in your presentation. And thank you very much for your attendance. Bye -- thank you.