CMC Markets Plc (CMCX) Earnings Call Transcript & Summary

Ladies and gentlemen, welcome to the CMC Market H1 2021 Results Call. My name is Emma, and I will be the operator for your call this morning. [Operator Instructions] I will now hand you over to Peter Cruddas, CEO. Please go ahead.

Thank you very much. Good morning, everybody, and thank you for dialing in to our results presentation for the half year ended 30th of September 2020. We're on Slide 2, by the way. We continue to have to meet in a virtual fashion. But as far as it is, let us hope that we can all meet in personal again for the full year results. Everyone, I'm sure, would like to see an end to the coronavirus pandemic and like us all, I'm hoping that the positive developments on the vaccine continue, and we can return to living our lives in a more conventional fashion. For those that don't know me, I'm Peter Cruddas, founder and CEO of CMC Markets. And as you will no doubt be aware, we will be talking through the investor presentation, published to the CMC website this morning. With me today is David Fineberg, Deputy CEO; Euan Marshall, CFO; and Matt Lewis, our Head of APAC and Canada, and Matt is dialing in from Australia. I'm also pleased to introduce Brendan Foxen, who joined us as our CTO back in July. And Brendan will give you an overview of his initial impressions of what is obviously a very good business. We'll he better. I'd like to touch on what has been an unprecedented set of market conditions in the first half of the year. As usual, I will then pass to Euan to cover the financials, and David will cover time trading and market conditions and Matt from Australia will talk about our stockbroking business. I'll then finish on strategy before we open the lines for Q&A. If you go to Slide 3, please. So starting on Page 3. I'm delighted that we were able to, this morning, announce a record set of results for the first half of the year, with net operating income increasing 126% to GBP 231 million. Whilst COVID has clearly increased market volatility and enhanced these results, we have also seen strong underlying growth, driven by our unwavering focus on strategic delivery. The strong performance across the group has seen CFD grows client income grow by 68%, and the number of active clients grow by 42%. As you may have seen, we reported a client income retention percentage of 115% for the period. This was driven by a strong hedging performance as the benefits of the investment we have made in technology, specifically the ability to use analytics and data to make dynamic hedging decisions, were emphasized during this period of high volumes and volatility. This is not a sustainable figure, but we expect to maintain the client income retention percentage of over 80%. These factors all combined to lead the group to report a profit before tax of GBP 141 million for the period, up a remarkable 369%. Could we not have [ graded ] it up more to 370%? But anyway, on the same period last year. Coronavirus has undoubtedly helped this performance. But I'd like to take this opportunity to remind people of the strong performance in the period prior to the pandemic. And we believe we were well positioned to emerge the other side with an enhanced client base that would deliver long-term value. The strong performance we have reported today means, I'm delighted to be able to announce an interim dividend of 9.2p. This balances the need to return capital to shareholders with the investment that is required to pursue the exciting developments that will drive our future growth. Finally, at CMC, our goal is to provide a superior and unrivaled trading experience for our clients. Our continued investment in technology and personnel has allowed us to maintain a 99.7% uptime through a period of increased volatility as well as on-boarding a record number of clients. In fact, unlike some other platforms, we did not have any outages and our clients were able to continue trading when the market experienced a surge in volume, such as the result of the promising news on a potential vaccine, the Pfizer announcement. This just reinforces the point I was making about our technology giving us a market-leading edge. With that, I will pass over to Euan, who will be pleased to take you through the numbers in detail.

Thank you, Peter, and good morning to everyone. Moving on to Slide 5. As Peter said, H1 was a record period for us where we have built upon an already solid, highly profitable business and delivered improvements across all of our KPIs. If we first look at the top left chart on Slide 5, you will see growth we have seen in our active client numbers, up 19% in the last 6 months and 42% against H1 2020. The has been driven by an increase in continuous traders and new trading clients. Client acquisition has been particularly strong during the period with 14,000 new trading clients onboarded, which is well over double expectations of the normal 6-month period. Regarding the revenue for active clients, we have seen 66% rise against H1 last year, driven in part by an average of 18% increase in income per client, and the remainder is due to higher client income retention. Moving on to the second graph. Gross client income or the spreads commissioned and financing our clients paid. This increased 68% versus H1 last year. We've seen encouraging signs of the longevity and quality of the newly acquired cohort. So we see gross finance income likely to remain above H1 2020 levels, even if market conditions revert back closer towards normality. Our confidence comes from the ongoing strength of our platform offering. Client income retention at 115% was well ahead of our expectations and guidance of in excess of 80% and David will talk through the drivers of this later. Moving on to the final graph along the top. The combination of CFD net revenue of GBP 200 million, Stockbroking revenue, interest and sundry income gives us net operating income of GBP 231 million, an increase of 126% on H1 2020. Moving on to profit before tax on the bottom left. PBT increased to GBP 141 million with the improvement in net operating income demonstrating good operational leverage in the business. Profit after tax was GBP 111 million, with an effective tax rate of 21.5%. Finally, this resulted in earnings per share for 38.3p per share. Moving on to the income statement on Slide 6. As I've just mentioned, CFD and Spreadbet revenue was GBP 200 million, 135% higher than the prior period. Our 3 regions have all seen revenue and client income growth of similar magnitudes during the period. Our Stockbroking business contributed an ever more meaningful revenue for the group. It was up 82% to GBP 26 million, with significant growth in both the CMC Retail and [ ANZ Bank ] partnership businesses. Pete is excited to talk about some of these interesting things we are doing in this business and further drive value later in the presentation. For the group, operating expenses, excluding variable remuneration, are up 22% to GBP 79 million. I'll explain the drivers on the next slide. PBT margin increased from 29% to 61%, demonstrating the operational leverage in the business. Note that we've also disclosed our PBT for both the CFD and Stockbroking businesses, which were GBP 130 million and GBP 11 million, respectively. Moving on to operating expenses on Slide 7. For today's presentation, we've moved away from our usual view of operating expenses. This time, we wanted to focus on the fundamental drivers, so you can better understand the many line items. We've categorized these into 3 main areas. Firstly, we have marketing. This is our increase in spend to acquire further clients in a period where there has been increased natural interest in our products and platforms. These costs have increased by GBP 5.5 million or 84% against H1 last year and have resulted in an increase in acquisition of 186% in our CFD business and 133% in our Retail Stockbroking business. We, of course, focus our efforts on high-value clients rather than just the number of acquired clients, and David will talk about this later. Note that this also doesn't take into account the increased client numbers in our B2B business, which we incurred no marketing costs to acquire. Secondly, we have had higher variable costs which are linked to increases in client activity. These are around GBP 4.5 million higher and consists mainly of bank charges, market data and stockbroking transactional costs. Finally, our other cost increases, which have mainly been focused on our strategic initiatives. This includes heavy investment in staff, which will drive forward our products and technology department during H1 and beyond. When you also take into account the capitalization of development costs, the overall increase in cost due to investment and BAU comes in at just over GBP 4 million. Finally, note that you can find our normal view of operating expenses in the appendix. Moving on to Slide 8. Let me talk you through the liquidity and regulatory capital position as at the 30th of September. In summary, we have strengthened available liquidity, which allows us to continue investing in and growing the business. The group's balance sheet and overall regulatory capital remains strong with a capital ratio of 27% and our core equity Tier 1 capital increased by GBP 56 million as a result of our profits after tax and foreseeable dividends. Total available liquidity strengthened by just over GBP 100 million during the period to GBP 378 million, reflecting mainly profits for the period and a higher available facility less dividends paid. Net available liquidity increased by a smaller amount, GBP 59 million, as a result of broker margin requirements returning to more normal levels as clients rebuilt their equity positions as markets recovered during the period. Overall, this leaves us in a strong position to continue to invest in large strategic projects, which we have ongoing. I'll now hand over to David.

Thanks, Euan. As Euan just talked us through, the first half is very strong financially, but particularly within the CFD business, so I'll start my section by running through the CFD results in some more detail to help explain the drivers of their performance. Looking at Slide 10, the table and chart shows the client income and net CFD trading revenue by half year, comparing this year's results to last. The top line shows gross CFD client income, that is the spreads, financing and commissions clients paid to trade. This has seen a significant growth in the period as a result of continued coronavirus-related volatility, which has acted as a call to action for our clients to trade with significant numbers of new clients to on-board into the platform and also continued strong underlying performance that we first reported in FY '20. These factors led to a 68% increase in gross client income compared to the same period last year, up to GBP 174 million. Our successful business model aims to maximize the capture of price transaction costs, the majority of which is spread by minimizing the externalization cost of hedging whilst operating within the Board approved risk appetite. This is achieved by balancing internalization with hedging as an instrument level. Our approach to managing market risk is optimized with extensive back testing and the sophisticated quantum-based science analytics we use, such as [ decay ] mark-up costs and static position concentration. This ensures we have no view on the future directions of the market, but focus only on analyzing the flows that we inherit. The majority of the risk management gains seen in H1 of 2021 was derived from positive hedging net gains. CMC's exposure to offline significant positive equity market returns in H1 was matched with largely complete hedging and to static risks during that period. The profitable net hedge position resulted from the internalization of a proportion of certain high liquid instruments during the period of high volatility. Our clients maintain long and short positions across various assets and durations in order to generate net returns. While CMC makes decisions on hedging and internalization based on its instrument asset dynamics and their impact of the overall exposure to the firm. As such, certain market conditions can result in CMC's hedging activity, producing positive hedge results at the same time as positive client market returns. While the specific market conditions in H1 have been supportive of these excess net hedging returns, we would expect the risk management net result to return to more normal in H2 and we retain guidance that we expect to retain greater than 80% of client revenues going forward. Overall lease factors resulted in net CFD trading revenue increasing 135% to GBP 200 million. Moving to Slide 11 now. We have made significant investments during the period in technology and marketing, which has helped us attract new high-value clients, which has been particularly important during COVID as more people look to trade. The chart at the top of Slide 11 illustrates the spike in gross client income during March, which coincided with the first lockdown of COVID-19. Whilst these levels were not sustainable in the longer term, we are pleased that the gross line income has reverted back to the levels around 50% higher than pre-COVID levels. The increase has been generated from a combination of inactive clients reactivating their accounts and new clients trading alongside our existing high-value client base. In addition to a larger client base, illiquidity in the underlying market forced spreads to widen in the first few months of the financial year, which also contributed to the increase in client income. Whilst it's too early to read much into the longevity of new clients onboarded since COVID, the early indications are that these clients do not behave significantly different to our existing clients, with attrition rates and averages broadly in line with historical cohorts. The level of client money, which is an indicator of future trading potential, also increased during the period by 25% or GBP 85 million. We will continue to monitor the value of new clients, but we feel that we will emerge from this year with an expanded high-quality client base. Moving on to regulation. It's worth reiterating what we said before, that is that regulation is a good thing and it provides protection for those who need it and also provides a level playing field for all providers to operate within. There are a few things that's based on, but there is nothing that will materially impact the business. On the 23rd of October, ASIC released an announcement on new regulatory measures surrounding CFDs for retail clients onboarded into Australia. The regulations will come into effect on the 29th of March 2021, and we include changes to leverage ratio limits, margin closeout, negative balance protection and promotional offers, all broadly in line with those imposed by ESMA in FY '19. We are supportive of ASIC's proposed changes and welcome the opportunity to work with ASIC during the consultation period to ensure the industry acts in the best interests of the Australian consumers. In summary, we are already complying with the majority of proposed measures and the leverage when its announced to be in line with those implemented by ESMA. We are supportive of these changes. We don't believe that will have a material impact in the business and are pleased that we have clarity moving forward. We have not opened an offshore office like other providers. We choose to focus on driving the business in an industry of more closely harmonized regulations in our core markets. The U.K. on the sale of cryptocurrency CFDs to retail clients will have no real impact as it represents less than 1% of FY '20 net CFD revenue. Finally, as a reminder on Brexit, we expect our German subsidiary will be our EEA hub post the end of this year. Thank you for your time. I'll now hand you over to Matt Lewis.

Thanks, Dave, and good morning, everyone. Today, I'm going to walk you through the performance of our Stockbroking business. So if I can turn your attention to Slide 14. As you can see, Stockbroking continues to grow and be a significant part of the region and overall group, making up 11% of the group's net operating income in H1. Carrying on the momentum from last year, we've experienced growth across all key metrics in the first half of this year with net trading revenue up GBP 11.8 million or 82%. Unprecedented levels of acquisition that have not been seen since the early establishment of online share trading have underpinned the outperformance with circa 60,000 new clients onboarded and a 42% increase in actives during the period. In total terms, the Stockbroking business now has in excess of 120,000 active customers, managing over AUD 49 billion in chess holdings and over AUD 7 billion in cash holdings. The success of our ANZ white label partnership continues to deliver and drive overall performance with net trading revenue up GBP 9.2 million or 93% in the first half. This is both a reflection of the strength of our white label partnership and increased client trading activity due to volatile markets and a sharp increase in acquisition. If I turn your attention to the graph on the top left-hand side, you can see Q1 and Q2 are our best-performing quarters to date, with Q1 slightly higher than Q2 due to the higher volatility seen. Our core business, referred to as CMC Retail and Partners, also performed strongly with net trading revenue from our direct retail business, up GBP 2.6 million or 58% compared to the same period last year. Driving this is our increased value proposition combined with continuing favorable market conditions flagged earlier, benefiting our CFD business and also driving asset allocation away from cash due to the low interest rate environment. The pie chart in the bottom left-hand corner gives a breakdown of the different client channels, which make up our Stockbroking revenue. ANZ and St. George are both Tier 1 bank white label partnerships. As a reminder, this is where the counterparty is able to use our platform and technology but retain their own branding. Throughout the period, our Partners team have successfully signed a number of new intermediaries, bringing the total we service to 160 partner relationships, including the majority of Tier 2 banking relationships in the country plus a number of financial planners and advisory firms. Moving now on to Slide 15. In addition to the strong operating performance, we've maintained our position as the second largest retail stock broker in Australia, and the largest white label provider in the country. Externally, over the first half, CMC was awarded Money Magazine's Best Feature-Packed Online Broker for the second consecutive year, which highlights the strength in our overall proposition and global pedigree. Moving your attention to the graph on the left-hand side. We have continued to see growth in the value of our client base with revenue per client or RPC increasing to record levels over the half year as the existing and new client base create a wider range of products available, capturing a greater share of the investment wallet and helping to drive our best period on record. During the first half, we launched single sign-on for tighter integration with our CFD platform. We also rolled out zero brokerage across 4 of our key international markets to retail clients, and we are the first established broker in Australia to do so. Our range of international markets has also grown and is now one of the most comprehensive offerings in Australia at 15 markets in total. Despite only just implementing, we've seen international turnover increase threefold when compared to overall activity. This is an area we expect to see continued growth and opportunity. Like the CFD business, core to the strategy and driving these increases across the metrics is our technology. Looking forward, we expect to continue our growth by improving on our already award-winning offering by introducing and rolling out a suite of tools aimed at increasing customer success including algorithmic trading, which should reduce client costs and facilitate better execution and model portfolios across domestic and international equities, both of which have continued to drive client engagement and offer a wider range of products to trade. With our Stockbroking offering continuously expanding, we expect client activity to continue above pre-COVID levels. Lastly, and as flagged in our full year results, we also -- we are also excited to launch a new stockbroking app, which we're expecting to go live in the back end of this financial year. Mobile is a growing selection driver and a channel we're expecting to help drive greater acquisition, retention and further solidify our offering as best in market. I'll now hand you back to Euan to cover our financial outlook.

Thanks, Matt. Let's look at Slide 17 on the financial outlook. Current trading conditions remain good, but well off their peaks in -- of March and April. So both the CFD and Stockbroking platforms. Monthly active client numbers also remain resilient at their recent high levels. This is as encouraging signs regarding client longevity, both through the remainder of this year and also into future years, even as markets become less volatile. Client income retention is expected to be in excess of 80% in the future period, but not at the levels seen in H1, as David has explained. As a result, the Board has confidence in achieving net operating income in excess of GBP 370 million for the year. As mentioned earlier, we are also investing heavily in our platform and technology. And this will bring revenue opportunities as we look forward beyond FY '21. Peter is excited to talk to you more about this shortly. Operating costs, excluding variable remuneration, should be similar to H1 and H2. However, as I've shown, these are dependent somewhat on market activity and of the opportunities this presents to vary short-term spend to longer term benefit. Our effective tax rate should be in the region of 22% due to the U.K. and Australia being the regions of our main profit-generating entities for the group. Finally, the group continues to maintain a strong liquidity profile, evidenced by the increase of GBP 59 million in net available liquidity. As a result, the Board remains committed to paying total dividend for the year of 50% profit after tax. That continues -- that concludes the financial outlook. I'll now hand over to Peter, who will cover the strategic update.

Right. Thank you, Euan. We are on Slide 19. Don't worry, Brendan is coming up next after me. So you get the chance to meet him. So we're on Slide 19, the technology time line. So CMC is, at its core, a technology business, and we have always put investment in technology front and center. And looking at recent history, it can be seen, we have been constantly striving to develop and improve our platforms with the aim of making financial markets truly accessible to our investors. This ranges from our award-winning mobile apps to ensure clients can trade wherever they are. Our significant investment in the next-gen platform, which continues to receive ongoing improvements and win awards to this day, and to our recent investments in low latency infrastructure and other features aimed at our institutional clients. With these milestones -- whilst these milestones show our past achievements and ability to deliver highly complex technology change, we continue to invest in our technology to ensure we always provide a superior and unrivaled online trading experience for our clients. We're now on Slide 20. So this is investments across the business. So moving on to Slide 20. We have talked to you a lot in the past about our investment in the technology platform. However, investment in technology is dependent on having the right people who know what products to invest in and how to harness the technology to deliver optimal returns for the business. To that end, we have added 68 staff, representing an increase of 35% in technology function this year alongside an additional 16 staff, which is a 41% increase in quantitive analysis. We intend to continue this investment in H2 as we seek to maintain and expand our competitive advantage. The most high-profile hire during the period was the appointment of Brendan Foxen, as Chief Technology Officer. As you know, investment in technology is a key driver of value for CMC, and Brendan has a wealth of experience and expertise in helping businesses to innovate and utilize technology to accelerate growth. I'm delighted to have Brendan on board, and we are already seeing the significant benefits of having him with us. With the introduction, I'll hand over to Brendan himself who can give you a summary of these first impressions and plans for CMC. Brendan, over to you.

Thanks a lot, Peter, and good morning, everyone. I'm Brendan Foxen, CTO of CMC Markets. I have 20 years experience in IT and my background is in software development and digital transformation in highly regulated industries, such as financial services, the energy market and health care. Prior to joining CMC Markets, I was CTO of a digital transformation start-up called Contino and helped grow the business from 16 people to 400 people operating across the U.S., EMEA and APAC. Then we were acquired in October 2019. As for my first impressions of CMC Markets, I've seen a very well engineered and operated platform, and that's evidenced by the stability and performance of that platform over a high volatile period. I see a great engineering culture and capability. And what we'll be focusing in this initial period is in optimizing the time to market and speed of change. Our strategy, over the next few months and years, is around a large-scale digital transformation program. This is to really help us understand our customers even better and focusing on customer success and personalized experiences within the platform itself. This is going to be underpinned by a broad IT transformation, which is looking across the whole technology and ways of working. And this is then facilitated by an organization change, which will be supported by the adoption of a new operating model, which is focused around the scores and capabilities that have a direct line to customers and the focusing on customer outcomes. The IT transformation itself, it's helped by, obviously, by technology. And we have recently agreed -- partnership agreements with AWS, an extension to the services that Microsoft providers via GitHub operations and brands. We also have a data transformation. Some people are calling it a revolution. This is a really exciting part of the program itself because this really helps us to optimize not only the way that we work, the way that we can provide personalized experiences and risk management capabilities into our customers. We have also established CMC Labs. So CMC Labs gives the ability for us to be able to actually pioneer and get early concepts out to customers as quickly as possible, so we can then iterate with direct feedback with real working software. This is going to operate both at large-scale and at small-scale in terms of the products and how we can innovate and [ initiate ] on those particular features. So I assist with this program. We've formed a transformation scores. This is a cohort of experts as to what we have previously over the years. They come from a consulting and engineering background, and this is to help effectively upscale and have -- help the existing business adopt these new ways of workings and technology. I'm just going to finish off on some early wins that we've had in the 4 months since I've been here. So we've effectively gone live with our first product. This is also within a 6-week build period. This will take between 6 and 9 months in the existing business and we've got this actually working -- delivered and live hidden behind the [ feature plate ]. This enables us now to disaggregate the platform, to enable us to have lots of parallel work streams that are all going into the overall customer experience and also enables us to personalize that base and we know of the customer. As I mentioned, we've got a partnership with AWS and these new products that are coming out from the existing business and via our Labs division will be deployed into that environment across a hybrid solution. Just to finish off, we've also had a completely new concept that we've developed with a small set of customers. And 1 of the final questions we showcased in this spend was what would happen if we took this new product away from you, how disappointed would you be from the scale of 1 to 10? The first person said 10 and the second person said 9. So it feels like we are onto something good. We've got our ability to understand our customers' needs. On that basis, I will hand back to Peter.

He's been here 4 months. Enjoying it?

Fantastic place to work.

Yes. You like it here?

Yes.

Thanks, Brendan. We're now on Slide 21. And we will have a quick look at our institution or B2B business. And this is an area where we are really seeing the investment in technology open up new opportunities. Again, we have invested in people, growing the B2B sales team, and that has helped us bring 15 new relationships on board in H1. A testament to our technology and its ability to keep winning new business. A key area where we have seen improvements in H1 is in terms of latency. Our recent investment in infrastructure has helped to drive this down, which both improves our ability to capture a higher percentage of client income and also enhances our already competitive B2B offering through low latency pricing. We will have launched a new FX product, spot product in H2. This project was born through the feedback we've received from our clients. And they asked, and we will provide. For CMC, this is expected to increase volume from existing clients and help attract new clients to the platform. The investments we are making in our institutional business are in line with our strategy of enhancing the user experience in order to acquire and retain high-valued clients. Slide 22, please. Stockbroking. So moving on to the next slide, and the chart here really highlights the growth in active stockbroking clients, which are up sixfold from the start of the 2019 financial year. I risk of repeating myself, it is, again, our technology platform that is the springboard for this growth. It shows its scalability through the ANZ partnership, which saw us seamlessly complete the largest client migration in Australian Stock Exchange history. It is becoming a business of real scale of over $50 billion in assets under management and contributed 11% to group net operating income. This growth is extremely pleasing and demonstrates CMC's ability to deliver significant technological and operational change that makes a material contribution to shareholder returns. As part of our continued investment to build the business, we have developed a new app that will be launched in Q4, and we continue to look at other ways to enhance the platform. So now we're on Slide 23. So one slide away from Q&A, I think. And so to wrap up the presentation with the outlook. The group has a clear vision to make financial markets truly accessible for investors, and this is at the heart of everything we do. The group continues to deliver on strategic initiatives and maintains a healthy pipeline of projects that will create new revenue streams through product, channel and geographical diversification. These initiatives are all supported by our ongoing focus on and investment in technology. Through a wider application of these initiatives, we can extend our offering and deliver further profitable growth. The strong performance in the first half that we are reporting today has continued at the start of the second half. As a group, we will continue to deliver underlying growth and considerable value to shareholders through our strong results, stable dividend policy, positive outlook and strong momentum. Whilst recent events have been difficult for all, I want to finish by paying tribute to the continued hard work of the team at CMC Markets. It's through their hard work and dedication that we continue to be well positioned to deliver long-term value for shareholders. And on that note, I'd like to open the call up for Q&A.

[Operator Instructions] Your first telephone question today is from the line of Ben Bathurst with RBC.

I've got a couple of questions, if I may. Starting with 1 for Euan please on guidance. You've upgraded the net operating income guidance today to more than GBP 370 million in 2021. But I just wondered if you could perhaps give a bit more color on the assumptions for client retention in that -- in H2 to get you to that number? And also whether or not that guidance also assumes sort of a fairly rapid normalization of trading conditions? Second question would be on client income retention, probably for David. Clearly, you've surpassed the previous guidance to the upside in the first half with a positive risk management result. But I just wonder, how can you make us feel comfortable that the retention won't fall below guidance to a similar extent in the future? And how should we think about the sort of -- the symmetry of that client retention number looking forward? Is it that it's potentially more likely to be skewed to the upside than the downside?

Thanks for those questions, Ben. So on the guidance of net operating income of GBP 370 million. So you've got 2 big drivers here, that client income retention that you talked about and also client income. So on the client income side, as we're saying, we're seeing encouraging signs from our active trading client base, and we see continued good levels of trading activity from them at the start of H2, so the first 6, 7 weeks. From the client income retention perspective, as we've said in the outlook, on the H2 assumptions we're making in that guidance, we're expecting it to exceed 80%. However, we are not expecting it to be anywhere near the levels we saw in H1.

Thanks, Euan. In terms of your second question, Ben, so on the client income retention. So yes, obviously, 115%, particularly strong, very pleasing. But we have, throughout this presentation, reiterated our [ start up ] income we're more confident of greater than 80%. So the reason we had to comfort is through this year amount of data that we've had recorded on a daily basis, all available, can go back many years. And it's that robust back testing framework, which the trading team, so that's comprised of dealers, quants and data science. They're the ones that are constantly analyzing the data, so replaying events, overlaying what the market has done, client behavior, testing out different strategies. And like anything, the more data you have, the more you use it, the more you test it, you're able to have a degree of confidence going forward. So we sit there, knowing what we knew historically. No one knows what the future is going to hold, but what you can do is go forward with a degree of confidence based on the data you have available.

The next question is from the line of Portia Patel with Canaccord.