Credit Clear Limited (CCR) Earnings Call Transcript & Summary

[Audio Gap] Presentation for Credit Clear. I have with me Victor Peplow, the CFO; and Jason Serafino, the Chief Technology and Operations Officer. So welcome, everyone. We're all very proud of the results that we've put out today. Although we did do an early release, so many of you might be already privy to the fantastic result that we delivered in FY '25. So under the theme of transforming the debt collection industry, so let's progress and provide some oversight into Credit Clear, what we do, what we stand for. And for those who have been with us, be patient, but those who are new to the story, I look forward to informing you what we're all about. So Credit Clear is an early-stage white-labeled commercially driven AI technology platform, supported by a third-party contingent business, and it leverages AI technology to deliver better outcomes for our clients and their customers involved in accounts receivable and debt recovery. We work with some of the Australia's largest companies, including telecommunications, banking and finance, insurance and large business-to-business organizations as well. There's a strong trading conditions currently with lots and lots of debt out there, very high debt levels due to cost of living pressures, relatively high interest rates and certainly fiscal pressure. So I think that's all underpinned by what is a Net Promoter Score of plus 40, showing that not only do we deliver better outcomes for our clients and their customers. It's done in a way that's in a more collaborative way that is customer-centric, and that's over 550,000 respondents have given credit clear a Net Promoter Score average above 40, which for those who aren't aware of what Net Promoter Score is, that's an exceptional score considering Apple have something like 50, and a lot of the major banks are in their teens. So a very, very strong endorsement from the users of the platform as to how much they value it. Now I'll throw it to Victor to sort of give the highlights page financials.

Thanks, Andrew. Look, as we can see on this slide, all indicators continue to head in the right direction. And it's been consistent for the last 5 years. So we're quite pleased with that past performance and expect that to continue going forward. If we go to the left, we can see revenues increased 12%, but what's pleasing is that the growth has come from both new clients as well as existing clients where we continue to increase share of wallet. We move to underlying EBITDA which is up a significant 76% on the prior year. So again, an excellent result there. And we've spoken about operational leverage in the past, and we can see that really coming through with growing revenue flowing through to underlying EBITDA. But I'll go into a little more detail further into the presentation. on that point. And to the right, cash at bank of $15.6 million. And you can see cash from operations continuing to improve as well. So the important point here is obviously that business is performing, but we are converting that to cash. So all in all, business fundamentals are performing very well. Next slide here, we've got underlying EBITDA as a margin of revenue, has improved from 10% to 16%, which is again a significant improvement. And I'd like to think with the clients we've currently got on board and the health of the pipeline. We can get that up into the high teens moving into FY '26. So that would be coming from a long way there 10% FY '24, 16%, '25. And then high teens for FY '26. In terms of cash generated, touched on that earlier. With $15 million in the bank, what is particularly comforting is that we've got the flexibility, the ability and the ability to invest in growth, be it organic or inorganic without the need to raise capital. That's an important point there. And we've also received quite a bit of interest from a couple of the banks who are very interested in providing debt financing there. So that's something that refused to do in years past, but very interested at the moment with the state of the company, the performance and where we're heading. So that's quite pleasing as well. Gross profit margin. Look, that did remain flat year-on-year, and that's mainly due to the onboarding of major clients that we've put on. And look, we've put on some blue-chip clients there. It's always a little more challenging to bring them on. Remembering, as I've mentioned in the past, the system integration is a lot more complex. Their reporting is a lot more detailed and extensive. And their data security is much more stringent for good reason. But all in all, we're happy to invest in all of those elements, gives these larger clients are quite lucrative going forward. So all good numbers on this slide as well, heading in the right direction. With that, I'll hand back to Andrew.

Yes. Just move to Slide 4, just for a moment. I think that I just wanted to really reinforce just how far Credit Clear has come certainly in the last 4 years since ARMA was acquired by Credit Clear. The market really made demands of us to bring about really good fiscal discipline, focus on organic growth and profitable organic growth. And to look back at that consistent improvement that we've made across in financial area of the business that we assessed on, whether it be growth, strong organic growth, improving the cash flow generation or improving EBITDA or gross profit margin, I think the business is completely transformed from where it was to where it is today, and it's really set us up for an incredible FY '26 and beyond. And I think that, that should give a lot of those long-term investors confidence that they're being rewarded for sticking with us. And I think that there's a lot of upside in the future, especially considering when you overlay the share price against these charts. I don't think it's a true reflection of where the business is at today or where it's going to be out in the future. All right. So a little bit more about the company. The company has really carved out an image for itself as an innovator in debt resolution, and that's done through 3 different service offerings. The first is through the Credit Clear Software-as-a-Service digital solution, which is once again proprietary to Credit Clear. It's powered by our own AI engine that delivers better outcomes through things like, next best actions, which delivers higher collection rates, faster recovery. We've seen up to 22% improvement in overall collections through that software. And it also helps streamline and deliver high profit margin to our clients through reducing call centers and moving a lot of that work through to an AI automated agent. A second stream of work is through the ARMA debt resolution business. Now that previously being a traditional debt collector having now moved to a very much digitally led hybrid offering, where we operate as a third party. So for those organizations that can't integrate and deploy software but still want to use cutting-edge accounts receivable technology they can outsource that work to ARMA as part of a third-party solution, where we leverage the Credit Clear technology and support that through call center operators both here and in the Philippines to allow organizations to get the best of both worlds, not just digital treatment only but supported by people. And the third line of business that we offer is through the Oakbridge legal services. Now whilst this isn't necessarily the most sexy part of what we do, it is still very much a critical component of any debt recovery strategy where if someone doesn't pay, let's think a large commercial account that's with a concrete or counsel, for example, and they need to enforce that debt through litigation, being able to do that seamlessly through automation and leveraging the legal process, that's where Oakbridge lawyers fits in. So three, distinct clear offerings usually moving from early stage through the late stage. All right. I'll pass to Jason who can talk to the more exciting stuff around what's happening in our wells from a digital perspective.

Yes. Thanks, Andrew. So yes, digital, very close to my heart. And it's digital that underpins a lot of the results that Victor took you through because it drives out both improved sales because our clients are very excited about what we're doing with digital and the results that we can get and improved margin because it has a big impact on our bottom line. So digital is really proving to be very transformative. We see increased collections. We see faster collections. We see reduced load on our call center because through our digital platform, we automate engagement with customers, and we provide very sophisticated self-service tools for our customers so that they can set up a payment plan and resolve their debt in the comfort of their own home or on their phone without the embarrassment of a phone call, and that leaves our teams to deal with the more challenging circumstances. So this chart shows payments taken digitally across the group, and you can see this shift to digital quite dramatically, with sustained growth of 55% year-on-year. You can also see the shift in the figures there in the bullet points because there's been an 11% increase in active debt files referred year-on-year, but we've seen a 20% growth in digital payments as more and more of that business shifts over to digital. Next screen. Another way of looking at things, and we have a very sophisticated approach to data a very sophisticated data platform. We have a team of data scientists that are constantly trawling through the data to get insights from it. And one of the things that we do is we look at every payment we receive and the actions that have taken to trigger that payment. So if we've only sent a digital communications to a customer before they paid or called that a digital payment, if we only made a phone call, that's a traditional payment. And if it's a mix of the two, we'll attribute the payment based on the most recent contact getting priority, but we'll give some weighting to the other contracts as well. On that basis, then what we're presenting here is a case study around our consumer portfolio. So this is our largest portfolio. Consumer is our business to consumer, so it comprises utility debt like [indiscernible] energy utilities, et cetera finance, personal finance, yes, buy now pay later, et cetera, tolls, et cetera. So this portfolio is the best portfolio really for digital. It's very well suited to digital. And using that attribution, you can see very, very strong growth over the years with digital accounting for over 80% of all payments that are made today. To provide you a bit of context, though, if you look back at FY '21, this is ARMA before we rolled through the full Credit Clear digital platform. And ARMA was pretty progressive. ARMA sends SMS and e-mail reminders, had an online payment form for people to make a payment in full. And probably more progressive than any of our clients are even today. ARMA was getting a bit less than 50% of payments through digital. We rolled out in FY '22 in March. We had 3 months in March. We already saw a significant uplift in the impact of digital. But if you look in FY '23 there, you can see a full year of impact of the critically digital approach and a very significant increase, resulting 75% increase by FY '24 and '25. So what does that mean to us? What it means is we can leverage this digital arbitrage between where our customers will be before they come on board and the capabilities we have on the platform, they might be at 30%. We know we're going to get the 80%. And using that competitive advantage means that we can go in very competitively into this market, knowing that we are going to be able to deliver a high-quality outcome in a very cost-efficient way. Back to you Andrew.

Yes. Thanks, Jason. This sort of talks to our organic growth and the fact that the organization is winning lots of new customers. And some of the key reasons around that is the fact that we've got the most innovative solution out there in the market. I think that we've got a very strong reputation now across multiple sectors on by higher recovery rates, great Net Promoter Scores and very good service from our team. So what we've seen is 182 new clients on board in FY '25. Some of which I highlighted [indiscernible], Alinta Energy and a raft of new other accounts. So that's underpinned our growth from an organic perspective. And what we saw, despite a reduction in our Tier 1 customers from '20 to '19, that wasn't a lost customer. That's a decline that hasn't generated the same amount as what they did in FY '24, mainly because of a data migration system issue, what we've seen is still some really great growth. So for those who can remember, Q3 wasn't a great quarter for us. That saw us wind back our guidance, but we've come through extremely strong in Q4 and delivered an exceptional result off the back of new client acquisitions and expansion of clients work they give us already. So 52 Tier 2 clients, up from 44 in FY '24. Once again, that's our future growth that we're going to be relying upon for FY '26. So some really, really good results, I think, from a client acquisition perspective, which sets us up for fantastic growth in FY '26 and beyond. Now this is a case study, which looks at one of our large clients within the insurance space. And whilst Jason highlighted that the business-to-consumer space is where we have the greatest success in terms of digital transformation, I think the insurance sector is one that is probably ahead in terms of its adoption of digital technology. It's where we've had the most success in deploying our Software-as-a-Service, where our clients use that software internally to solve problems. And what we've seen with this case study is from when we were first awarded the contract in 2023, August 2023, what we've seen is that a real life example as we onboard a client, then we started to get some early work. We put ourselves during that early work. We start to determine how much can be solved through that AI software internally, and then we get awarded a greater share of the wallet. And what you've seen is the onboarding phase yields very little in terms of revenue. That's where our costs are very high. In the following 6 months, what we've seen is doubling the business. The prior 12 -- the next 12 months, we've seen an increase of 90% of the business and look to generate ongoing [indiscernible] revenue of something like $150,000 per month from this client. So that's a really good example of how you can win a client, outperform your competition, increase the share of the wallet and then develop a client up to is really sort of a major Tier 1 client. So a very, very clear illustration, I think, of what we've tried to do [indiscernible] by taking it the onboarding, the ramp-up, the expansion of wallet. So it's a very good example. I think back to you, Victor, to go in a little bit more deeper from a financial perspective.

Thanks, Andrew. So this is the same layout I've used in previous years where we show the bridge between underlying EBITDA and statutory EBITDA. I think it's worthwhile going row by row on this particular slide. Revenue, we've mentioned up 12%, a combination of existing and new clients there, assisting with that growth. Employee Benefits up 8%. And what we report a few months ago, the cost outs, which has significantly helped this expense category, although only through Q4 '25. So with that, we expect to see full year benefit rolling into FY '26. And that's come about by -- from an improvement in efficiencies and system consolidation, which I'll touch on earlier when I get to non-BAU expenses. But we're always looking at to run as lean as possible on the employee front, particularly with digital starting to carry a lot more weight in the business, as Jason mentioned earlier. Tech development OpEx, we report this as a separate item. We find that a lot of investors are interested to see how much we're investing in that digital platform. And although we've continued to invest in digital collections, the system that is, we did reduce headcount in Q3. But that said, we'll continue to enhance, analyze data and invest in this part of our business because we consider that to be our point of difference relative to competitors. Other expenses increased only 5%. And again, I think we've managed expenses in a very disciplined manner for a number of years, and we'll continue to do that. Notwithstanding we're going through a growth phase, and we continue to invest. But we always look at the cost/benefit of the expenses that we incurred to ensure we are getting a return. All that leads to the underlying EBITDA result there, which is the second green row. And again, I've already mentioned that that's increased 76% year-on-year, which is exceptional. So I think one of the key numbers on this slide is the 65% of additional revenue, which has flowed through to underlying EBITDA, which surpasses the prior year by 57%. Over the last couple of years, we've been talking about digital and how that leads to operational leverage. We are now starting to execute on that, and it's really coming through. So if you keep that in mind and consider the growth that's still to come, whether it's organic or inorganic, that's where you can visualize that underlying EBITDA really starting to take off, okay? So -- and again, I've mentioned the benefits of digital. And as we grow, we achieve the economies of scale, and I've touched on the larger clients that we've been onboarding. And with that, comes a higher profit margin per client as well. Moving through the other items there. We've got some revenue from the government training grant, which has since been phased out. We've never included that as part of our core business. So always below underlying EBITDA over the last 3 or so years. Expenses BAU. You can see that has increased year-on-year. And the reasons are due to FY '25 and '24, to an extent, being a year of transition. For those that followed our story, you're aware that we've made 3 acquisitions over the last 5 years. That led to multiple systems being carried. And with that, comes cost and process efficiencies. We have largely completed now the consolidation of systems from multiple to a primary system. That required the migration of clients from old systems to new systems, very large task, considerable time, effort and cost, which has been charged to this line. That expense row also includes the redundancies, the cost-outs I referred to earlier, as well as some risk and compliance enhancements, which are a one-off system development-type expense that we've had to incur in order to accommodate and prepare for more large major clients coming onboard. So although large for FY '25, we expect that to reduce significantly going into '26. Shared-based expense expenses, I always like to show that separately, because that can be volatile from year-to-year depending on what vest and what does not vest. What I will say, though, is that there are conditions based, based on earnings and aligned to shareholder interest. And that all leads us so it brings us to EBITDA as per the data counts there. So very transparent in terms of reconciling the 2 EBITDA lines there. Then we move to depreciation, which relates to tech development, which is capitalized this time as opposed to OpEx as well as right-of-use office leases. We've got some interest in cash reserves and then tax. You can see that there's a $5.5 million benefit. This represents the tax losses that have accumulated since we started business 7 years ago. We've finally got to the point where the Board, the executive are very confident that these losses can be utilized going forward, and we expect to do that within 3 years. So hopefully, that recognize and demonstrates the confidence that the executive has in future earnings. So $5.5 million has come out of the balance sheet as a tax asset and correspondingly as a tax benefit. That gives us an NPATA of 6.8%, again, significantly higher than prior year. Amortization of acquisitions there, $3.2 million, mainly relating to the ARMA acquisition, which will fully amortize in January '27 to another 18 months to go. After that, we'll see around $3 million a year. drop off the P&L. And lastly, net profit after tax of $3.5 million, again, a way in the prior year, 4.4 million loss. So year-on-year results looking extremely good. Overall, just to finish up on this slide, though, and I've said it 12 months ago, 6 months ago, the business model is working effectively. I think we validated it well in truly 12 or 18 months ago. And importantly, that model is translating to very strong financial results. So a good set of numbers on this slide, and we expect that to continue going forward as offset. I'll now pass back to Andrew.

I'll go that slide for 1 minute, please. Yes. Look, I think that this slide really highlights a couple of key items for me personally. One is it's a real inflection point for the business. The fact that we're now really confident that we can start to eat into those tax losses that we've accumulated over the last 10 years is a real message to the market that we're a fundamentally strong business financially. I think that's really critical to note. I think the second thing that's really important is that 65% of additional revenue flowing through to the underlying EBITDA number highlights the connection between what Jason was talking about, the adoption of digital, the use of software, the growth of software sales and how that's contributing to the overall gross profit margin in the business. I think there are really 2 key points that I've seen from this slide that I wanted to highlight again. So I know Victor put them out, but I just thought those are the 2 for me that really were fundamental. All right. Let's look forward to FY '26. Hopefully, some exciting pieces of information on here for those investors. I think trading conditions are very supportive. There's still a lesser amount of debt being sold into 5 years ago pre-COVID. We're seeing growth in the partnership space. We're also seeing a significant growth in those organizations looking to harness technology. Now what I mean by that is I think AI is here now to stay. People are looking for ways in which they can harness the capability of accounts receivable technology. I think it's very early adopters were in sales and using AI in sales, but now we're really focused on how we can convert technology into a SaaS solution internally and how we can use that to collect debt, collects accounts receivable. So we've seen a big shift to that over the last couple of years, and Credit Clear really poised to take advantage of that. I think it's a huge tailwind for us. I think the average amount of personal debt in Australia, it continues to be on the rise. So more debt. And if we go into a rate cutting cycle in the next couple of years, what we'll see is people being able to pay that debt down. So being that a large chunk of Credit Clear's revenue is through commission when debt is collected, that means that we're really well positioned to take advantage of that. I always like to point out the H as the large example of debt levels within that sort of business community and they're sort of over $100 billion of the debt sitting in the ATO at the moment. So think about that from a smaller level with organizations in telco, ANZ, the banking and finance and Credit Clear, I think being at the very point in terms of innovation and performance that they're looking to partner with to sort of drive down those debt levels. Look, organic growth is certainly supported by a very strong sales pipeline. I think we've only scratched the surface of government there really being late to move in terms of addressing very high debt levels. So critically, once again, very strongly positioned there from a pipeline perspective. We continue to integrate and develop the AI technology and the SaaS platform across the company's debt resolution teams, and that's driving performance and also increasing underlying EBITDA profit margin. We've got really high potential for margin growth across controlled cost base. As Victor mentioned, in Q3 or 4 last year or FY '25, we made some significant cuts across the business, consolidating management teams, technology and also operational teams, which has really positioned us strongly for FY '26. That's when we'll see the real benefit because we'll have 4 quarters of those cost savings. And we've got obviously a strong cash position, which means that we're no longer dependent on the market to raise money. And I think that unless we're trading at a share valuation that makes it substantially accretive for us to go and raise money or acquire assets, then I think that our focus is going to be what we can do internally organically or utilize our cash reserves to do other initiatives. One of which I'll talk about in a minute. So FY '26 guidance. Our revenue guidance for FY '26 is going to be $50 million to $52 million in terms of revenue, with an underlying EBITDA guidance of $9 million to $10 million. All right? So I think once again, we want to really set those targets to be achievable. And given our momentum in Q4 and the beginning of FY '26, I think that those are certainly targets that are very achievable for FY '26. We've made the decision to do an on-market share buyback of up to 10% of the company's issued capital as part of the company's capital management strategy. Once again, I think that really ratifies the fact that we think that the company is trading at a share price, which is undervalued, and we're prepared to buy at least 10% of the stock back in order to use our capital in the best use for the shareholders. So lots to look forward to. And I think that given the company's position, I think the Board and the management team are very, very happy and proud of not only the FY '25 results, but moving forward, I think we're in the best position we've ever been starting a financial year.

We have a few questions online. So I might just start with them. Victor, you had mentioned this, but when do you anticipate the depreciation and amortization of ARMA will conclude?

Yes. That will fully amortize in January of 2027, so another 18 months to go, which will mean $3.3 million will come off the P&L there favorably.

And regarding company acquisitions, if there are significant costs associated with system integration, would it be more beneficial to prioritize organic growth instead?

Well, I think we've done that over the last couple of years for sure. I mean we've only made a very small acquisition, I think in FY '23 was our last acquisition. We did that with cash and scrip, and it was not hugely costly in terms of the integration of those systems. And I think we've prioritized organic growth, and that's been demonstrated through the high number of new clients that we've acquired and sets us up for, I think, more profitable growth in the future.

Thanks, Andrew. And then Credit Clear have plans to develop more AI technology beyond debt collection in the future, particularly once the current AI becomes profitable?

Look, I'll answer that, although it's Jason's area. I think the Board and the exec are focused on doing one thing really, really, really well rather than try to do too many things. We were fortunate enough that someone had a really great vision to invest in AI long before it was a really popular thing. Hence, we've won a couple of awards over the years. And that's meant that it's given us a really good advantage. And I think that what we're trying to do is invest in that advantage rather than use it across other areas that might be a bit sexier than accounts receivable or debt recovery. But I think the competition that we've got in this sector gives us an even better advantage as well.

We just actually have Larry from on the line who would like to ask some questions. So I'll let Larry ask those questions.

Excellent. Can we take him on mute?

Larry are you there? He was mute.

Shaw and Partners analyst that covers...

We'll come back to Larry. So we've had a few other questions. Andrew, can you tell us how does Credit Clear fit into the debt collection industry compared to traditional debt collectors like Credit Corp? Are you competing for the same customers? Or do customers see Credit Clear as a different type of option?

Well, I suppose there's 2 fundamental difference between us and Credit Corp. One is that we don't buy books. So we don't buy books Therefore, we don't collect money for ourselves. We also don't lend to our customers either. So we're effectively an organization that assists our clients resolve debt with their customers through various methods, as I said, whether it be early-stage software that we deploy within our clients' environment where they can engage with their customers or doing it as a third party either by the ARMA brand or the Oakbridge brand. So effectively, we're just trying to assist our clients getting paid or resolving overdue debt where Credit Corp is -- the majority of their business is in debt acquisition or lending. They do have a large component of their business, which they report obviously as other business within their annual reports. And that's where we compete. So they've got a number of brands that have been either acquired over many years. NCML is an example, Baycorp is an example, Collection House is an example, which is a former stand-alone listed business. We do compete against Credit Corp in that area, typically as a third-party collections business under the ARMA brand, right?

Thanks, Andrew. Let's try Larry again. Larry, are you there? Larry, just...

Can you hear me now? I just want to let you know, I asked the 20 something how to unmute and they couldn't figure it out. Anyway, I don't feel too embarrassed. Andrew, Victor, well done on the results. Just a question with regards to the acquisitions that you were exploring, maybe you can give us an update as to where those are? Do they fall away, and that's why you announced the buyback? Or are they still work in process?

Yes. Look, certainly, one of the opportunities we're looking at in New Zealand has fallen away. Probably a couple of key factors there. One was the performance of that business in the 4 months that we've been looking at it hadn't been at the level of which that we felt it was accretive enough for Credit Clear from 2 perspectives, one, that it wasn't delivering what we expected to deliver from an annualized basis. Secondly, the share price is at a level where for us to go to the market and raise money, it would need to be substantially accretive. And I think there's much better things we can do internally driving organic growth or focusing on other uses of capital, which is a buyback or identifying assets where we are not relying on the market to go and raise money as well. Look, we've got lots of cash in the bank. We've got a business that is generating free cash every month now given the tax losses that we've got. And I think that it wouldn't be long before we're in a position where we can deploy that capital in a way that doesn't require any or much dilution of the shares.

Yes. Andrew, I'll just add, as I mentioned earlier, there's a couple of banks that have a strong willingness to provide financing as well, very comfortable with cash flows, future earnings, which is a contrast to where we were '12, '19 prior.

Yes. I think it does really reinforce that inflection point that we're at. We've got big 4 banks willing to lend us money to support acquisitions of profitable businesses.

That's a good point, actually, big 4 banks, so we're not going to these mezzanine type funders, second tiers. So quite attractive cost of funding.

Yes, that's a real credit to Credit Clear's development. And just on the acquisitions, again, I know one of your sort of competitors, adjacent peers bought a business in New Zealand. I'm just wondering, is there a risk -- is the acquisition that you were perhaps eyeing still available? And is there a risk that you miss out in securing a market position in a geography that's fairly close to Australia?

Look, there's always risk and reward. I mean we do have a business in New Zealand. It was -- it's a business that supports a lot of clients from Australia that have operations in New Zealand. So we can always deploy capital to grow that market organically, leveraging our relationships with ANZ for a great example. Vodafone is another great example and lots of other utility companies or insurance companies that we have relationships across 2 borders. So that's always an opportunity. And unless nonorganic growth makes sense from an accretive perspective, then we won't be pursuing it just for growth's sake or pushing into a new market. We're still a business that's focused on our financial metrics and ensuring that if we're going to add something that has a risk associated with acquiring it, and it's got to be accretive.

Okay. Great. That's really good, Andrew. I just had one other question, if I can. With regards to the sort of macroeconomic environment, Andrew, can you kind of go through what you're seeing with your collections, whether you're seeing customers push payments out, making smaller payments or perhaps that trend has kind of stopped now and things are improving.

Yes. Look, I think that 6 months ago or 12 months ago, we saw an increase in the time it was taken to pay down an overdue account, both externally and internally. And what we've seen is that probably flat line. So it's not increased too much beyond that sort of 16-week average time. And I think as we see that interest rate cycle, hopefully continue to come down, we should see people's available cash be able to deploy to pay down debt in a quicker manner now that the total debt on average debt that we look at as well has sort of remained a bit stable as well. So we certainly watch those factors closely. And as I said earlier, the debt levels are very high the payment average is remaining pretty stable and the average debt that we're managing are remaining pretty stable as well. So overall, I think it does really position us well for FY '26 and beyond.

Yes. Thanks, Larry. So Andrew, the next question from Darryl is why share buyback and not pay a dividend?

Well, I think that's we still want to preserve cash in case there's an opportunity to make an acquisition. We feel like the return on investment for our shareholders is best placed by investing in Credit Clear as a company, and that's through a buyback. I think we've still got some ways to go over for we become a company that sort of pays dividends. And we don't want to go through the process of starting to pay a dividend and then not paying it if we're going to go through maybe some nonorganic growth strategies in the future should those share price recover to a level that we think is appropriate to either raise money or to issue capital is proposition.

The other point I'll make there, Andrew, is a buyback can be executed over a period of time, so we can manage the outflow of cash stock. Therefore, in the event of an acquisition or an opportunity arising, we will seize buyback. However, a dividend once it's declared and paid, it's done, it's gone at one point in time. So buyback provides more flexibility there.

Yes.

So we've got a few questions here on FY '26 guidance and just trading. So one, could you provide a trading update in terms of new clients on board in FY '22 today?

Are we talking about in the last month and 3 quarters?

I believe so in the last 6 weeks.

Yes, okay. Well, look, we certainly signed some really great customers. But probably more excitingly is that some of the customers who signed late in FY '25 have gone live and have started to generate really significant revenue, a large telco, a large energy company and certainly another insurer. So we sort of hit those 3 major customer segments in that first 6 weeks. And without sharing too much, it's started the year very strongly for us from a revenue perspective and an EBITDA perspective.

Thanks, Andrew. And just on FY '26 guidance. Simon says it seems conservative. Have you assumed no new clients to get to the FY '26 revenue guidance, and he expects that the development of the existing clients should account for a $50 million revenue target?