Enero Group Limited (EGG.AX) Earnings Call Transcript & Summary

Good morning, everyone. I am your Chair, Ian Rowden and I would like to welcome you all to the 2025 Annual General Meeting of Enero Group. I've been advised that we have the necessary quorum of shareholders present, and I am pleased to declare the meeting open. Today's AGM is a hybrid meeting. Here with me today at 100 Harris Street, Sydney, are my fellow Directors, Non-Executive Director, David Brain, CEO and Executive Director, Ian Ball; joining us remotely is Non-Executive Director, Anouk Darling and Non-Executive Director, Louise Higgins, has sent her apologies and will not be in attendance today. We are also joined here at Harris Street by Company Secretary, Cathy Hoyle, and a representative from our share registry, Automic Group, who will be assisting with the conduct of the meeting. Our external auditors for 2025, EY, are in attendance, represented by Jody Inglis, and Jody is available to answer any shareholder questions on the audit of Enero Group's 2025 financial statements. For those not in attendance here in Sydney, today's meeting is also being held online via the Automic online platform. Shareholders may watch and listen to the meeting in real time, submit questions and may also cast votes by accessing a separate online voting portal. We encourage shareholders to take part in the meeting, both in person and online. Thank you to those shareholders who submitted questions prior to the meeting. We will address those questions in our prepared speeches. Shareholders in attendance will be able to ask questions during the course of the meeting itself. Shareholders online may also submit a question via the Q&A function at the bottom of the screen. Please include which resolution the question relates to so that it can be addressed at the appropriate time. Questions that relate to the general business of the company will be collected and addressed after the close of the formal business of the meeting. Online questions will be read aloud to me by the Company Secretary. The Notice of Annual General Meeting was distributed to all registered members on the 15th of September 2025 and is available on the Enero website, and I will take it as being read. Item 5 in the Notice of the Meeting, the spill resolution is a conditional ordinary resolution and is required to be put to the meeting only if at least 25% of the votes cast on item 1 are against the adoption of the remuneration report. Voting on all resolutions will be conducted by poll. For the purposes of the poll, I appoint Mathew Hunter of the Automic Group, the company's share registry, who has examined and prepared summaries of all proxy forms received to act as returning officer and to conduct the poll itself. Each shareholder in attendance here in Sydney, who is registered and entitled to vote will have received a yellow voting card. If you are in attendance online via the Automic platform you will see instructions on screen for how to register and vote using the online voting portal which you must do separately to the online meeting. Shareholders in attendance via the phone -- sorry, via the online meeting that have already submitted a vote by proxy should note that your votes will already be counted towards the poll. You do not need to lodge another vote unless you wish to change your proxy instruction. Shareholders in attendance via the online meeting who have not submitted a vote by proxy and wish to vote for the resolutions being put to the meeting today can do so by following the instructions provided in the Notice of Meeting and now on screen. Please note that the online voting portal is now open and will remain open until the poll is declared closed. Your votes must have been submitted prior to the poll being closed for them to count. The agenda for the meeting will be as follows: I will provide a short welcome address. This will be followed by a business review and trading update from our CEO, Ian Ball. We will then proceed to the formal matters to be considered at today's AGM and there will be an opportunity for questions and discussion. Now I would like to share a few remarks on the full year 2025. FY '25 has been a time of transformation for Enero with the sale of OBMedia, changes at the Board and in the executive team, while navigating a dynamic industry environment. Throughout this time, Enero has demonstrated resilience and agility with a focus on delivering value for our clients. Before I hand over to Ian, I want to thank the Enero Board, the executive leadership team and all our employees globally for their dedication and efforts over this past year and to our shareholders, thank you for your continued support, feedback and belief in our group. I will now hand over to Ian Ball to provide a more detailed summary and a trading update for the first quarter.

Thanks, Ian, and good morning, everyone. I'm pleased to provide a business update to all shareholders of my first AGM as Enero's Group CEO. In FY '25, Enero delivered solid results in a dynamic market environment with improved EBITDA and margin performance in our continuing operations despite reduction in revenue. This improved performance was driven by a continued focus on business efficiency, reducing costs in our agencies and from our leaner corporate center. All our agencies delivered strong margins in a challenging market with an improved margin for the THC practice to 16.5%. In FY '25, our continuing operations delivered net revenue of $138.7 million, EBITDA of $14.1 million and an adjusted net profit of $4.2 million. Enero has maintained a strong net cash position of $27.5 million at the 30th of June 2025. The Board declared total dividends for FY '25 of $0.028 per share fully franked, equating to a 42% dividend payout ratio, inclusive of OBMedia results. I'd now like to go into some detail of the actions that have been taken since I joined in February. We've improved the financial stability of the group by successfully divesting OBMedia at the end of the year allowing us to focus exclusively on our core agencies where we see the greatest potential for differentiation and value creation. Value creation is at the core of all the decisions that we make at Enero both for our clients and for our shareholders, relentlessly focusing on innovation and operational excellence by launching new AI products, embracing technology and automation and developing centers of excellence in lower-cost markets where we do business, elevates our craft to deliver award-winning creativity and effectiveness in each one of our 3 agencies. In addition, we've refined the role of our corporate center with consolidated leadership roles to become leaner and redefined our purpose to become in service of the agencies to help them drive value. We are also committed to improve our transparency and stakeholder engagement, which you have seen in our more detailed agency performance disclosures at year-end and in our FY '26 Q1 trading update. The global advertising and marketing landscape continues to evolve rapidly, shaped by a number of key drivers. For example, the industry is undergoing significant consolidation through holding company mergers, creating opportunities for leading agencies like Enero to win new clients. Additionally, clients are increasingly focused on improved returns on their advertising and marketing investments in a dynamic market, significantly impacted by AI. Our agencies are well placed in this space for 3 reasons. Firstly, they continue to be amongst the most awarded agencies for advertising and performance marketing effectiveness. Secondly, we invest in both external AI products and internal automation, embedding AI internally to power our delivery capabilities. Finally, our creative and strategic talent is second to none and is elevated to greater heights when augmented by our adoption of technology. AI is also transforming marketing services, and each of our agencies are responding. BMF is using a full suite of tools to drive better insights to inform the creative idea, to accelerate the test and iterate cycle; and finally, to support rapid launches across multiple formats. This allows BMF to produce better work that gets into the field faster and cheaper. Orchard has always been a digitally led agency and AI is now a powerful aid to their development process, cutting down the time it takes to code the infrastructure they build for clients. Hotwire has developed products that manage LLMs as media channels. Traditional Google search is fast being replaced by generative engine search as a source of information. Hotwire has developed a bespoke suite of tools and capabilities that help companies and brands diagnose how they show up in LLMs and how to optimize their presence leveraging our deep media relations and PR expertise. Finally, at the center, we're helping the agencies drive these distinct strategies and, of course, helping them implement process improvements that AI brings to all businesses. As we turn to FY '26 and beyond, Enero is exclusively focused on building the next chapter of growth for our 3 agencies. Our Australian agencies are well positioned to build on the momentum from FY '25 H2, evidenced by our recent significant client wins and industry-leading margins. In Hotwire, we're taking deliberate action to reset and refocus under new leadership, sharpening its focus on innovation, performance marketing and growth. Together with ROI DNA's largest ever client win, strong AI product momentum and a leaner operating model built on automation and global centers of excellence, we're building solid momentum in a dynamic market. I'd like to conclude the business review by showcasing each of our agencies and the great work that they do through a video. [Presentation]

So that concludes this morning's business review, and I would now like to turn to our FY '26 Q1 trading update. FY '26 Q1 group EBITDA growth of 13%, driven by strong Australian agency's performance and lower corporate costs. Hotwire Global continues to navigate a challenging technology sector environment with additional cost optimization measures implemented at the end of FY '26 Q1 including role reductions and selective offshoring. Qualtrics, Hotwire Global's largest client win to date was successfully onboarded during FY '26 Q1 with full period revenue -- full period of revenue from FY '26 Q2. After an extensive global search in a highly competitive field of exceptional candidates, we're pleased to confirm that Enero has appointed a new global CEO for Hotwire, commencing in January 2026. Further details will be shared in coming weeks. BMF performed strongly in FY '26 Q1, benefiting from a full quarter of recent large client wins with additional new client revenue to come in FY '26 Q2. In addition, margins have expanded from 18.8% in FY '25 Q1 to 21.6% in FY '26 Q1. BMF continues to win industry accolades for its work, crowned Effective Agency of the Year at the Effie Awards for the second year in a row. Orchard growth driven by both health care and consumer verticals driven by expanded service offerings and client wins with revenue up 17% and EBITDA up 83% in FY '26 Q1 versus last year. Our lean corporate center, including a consolidation of the executive team in FY '25 H2 delivered lower cost to increase group EBITDA margins from 9.2% in FY '25 Q1 to 10.3% in FY '26 Q1. Before I conclude my presentation this morning, I would like to thank all of our shareholders for their continued support and to the Board and our global team for welcoming me to Enero. Now I'll hand back to Ian for the more formal matters to be considered.

Thank you, Ian. I will now turn to the formal business of the meeting. More than 61 million proxies were received by the company for the meeting, that is approximately 67% of the total shares on issue. We will be displaying the text of each resolution on the screen, and I will repeat the resolution itself. We will also display the proxy votes for each resolution. The first item of business is the financial statements and reports, which are for consideration and discussion. This is not a resolution. The 2025 annual report contains the financial accounts for the group, the reports of the directors and the independent auditors and other information about the business performance of our company. I will take the financial reports as read, and I will now take questions on this item of business.

Chair, there are no questions through the online platform or in attendance at Pyrmont.

Thank you, Cathy. Moving to the resolutions. Resolution 1. Resolution 1 is the adoption of the company's remuneration report, which is set out in the annual report. The nonbinding resolution is on the screen. The way in which proxy votes have been cast is now shown on the screen as well. As indicated in the Notice of Meeting, I intend to vote validly marked undirected proxies in favor of resolution 1. I will now take questions on this item of business.

Chair, there are no questions through the online platform or in attendance at Pyrmont.

Shareholders, please now vote on this resolution if you haven't already done so. I will now hand over the chair -- hand over to the Chair of the Remuneration and Nomination Committee, David Brain to conduct Resolution 2 as it relates to my reelection.

Thanks, Ian. Shareholders the ordinary resolution is now on the screen. Resolution 2 is the reelection of Ian Rowden as a director. To refresh your memory, Ian was appointed as a Non-Exec Chair of the company in October 2024, having served as a director since 2018. As a Director, Ian has been an important contributor to our strategic direction and previously served as Chair of the Rem Committee. Ian brings extensive CEO and senior executive leadership across commercial strategy, M&A and operational leadership. He has had leadership roles in companies such as Coca-Cola, Saatchi & Saatchi, Callaway Golf and the Virgin Group. He's based in the U.S.A. and currently serves as a Non-Executive Director of multiple ASX-listed and international companies. The directors other than Ian Rowden, recommend that shareholders vote in favor of his reelection. The way in which the proxy votes have been cast is now shown on the screen. As indicated in the Notice of Meeting, as Chair for this resolution, I intend to vote validly marked undirected proxies in favor of Resolution 2. And I will now take questions on this item of business received from shareholders through the online platform, and from those here in Pyrmont.

Chair, there are no questions for the online platform or in attendance at Pyrmont.

Shareholder, please now vote on this resolution if you haven't already done so. [Voting]

Thank you, David. Resolution 3 is the approval of Enero Group Limited rights plan. The ordinary resolution is now on the screen. The way in which proxy votes have been cast is now shown on the screen as well. As indicated in the Notice of Meeting, I intend to vote validly marked undirected proxies in favor of Resolution 3. I will now take questions on this item of business received from shareholders through the online platform and then from those in attendance here in Pyrmont.

Chair, there are no questions through the online platform or in attendance at Pyrmont.

Shareholders, please now vote on this resolution if you haven't already done so. Moving to Resolution 4. Resolution 4 is the resolution to amend the Enero Constitution. The special resolution is now on the screen. The way in which proxy votes have been cast is now shown on the screen. As indicated in the Notice of Meeting, I intend to vote validly marked undirected proxies in favor of Resolution 4. I will now take questions on this item of business received from shareholders through the online platform and then from those here in attendance in Pyrmont.

Chair, we have a question here in attendance in Pyrmont.

Chair, have you had any feedback on people who have voted against what their objections were.

Cathy, would you respond?

Yes, I'm happy to answer that. No, we haven't had any feedback. We decided to make the decision to put this forward because we don't have high attendance here in the office for the physical meeting and now we do. Any further questions in attendance? No.

No? Okay.

There are no further questions, Chair.

Shareholders, please now vote on this resolution if you haven't already done so. To the final resolution, Resolution 5. Resolution 5 of the Notice of Meeting is in respect of the approval of a conditional Board's spill meeting. The terms and details of the conditional spill meeting are contained within the explanatory memorandum accompanying the Notice of Meeting. As can be seen from the votes displayed on the screen, less than 25% of votes cast are for resolution 5. Additionally, the proxies received prior to the meeting are in favor of the adoption of the remuneration report. Accordingly, it is unlikely that the condition for Resolution 5, the spill resolution, will be met. As indicated in the Notice of Meeting, I intend to vote validly marked undirected proxies against resolution 5. I will now take questions on this item of business received from the shareholders through the online platform and then from those here in attendance in Pyrmont.

Chair, there are no questions through the online platform or in attendance at Pyrmont.

Shareholders, please now vote on this resolution if you haven't already done so. That concludes the items of business for approval. Voting will remain open for 5 minutes after the close of the meeting and then our share registry will now conduct the poll count for each resolution. Results of the meeting will be lodged with the ASX as soon as available. I will now turn to questions from shareholders through the online platform or in attendance here in Pyrmont.

Chair, we have 3 questions through the online portal from shareholder, [ Dennis ] [indiscernible]. I'll read those out to you. Dennis asked my question concerns your EBITDA reporting. In your July announcement regarding the sale of OBMedia, you reported EBITDA of approximately $22 million. However, in the final report, EBITDA came in at around $15 million, a difference of about $7 million, which appears to reflect corporate overheads. My question is, are these corporate overheads, a recurring item or one-off adjustment?

I'll ask Ian Ball to respond to that.

Thank you. So first of all, context and then answering the question. So the EBITDA for FY '25 of around $22 million included the 3 continuing agencies at around $14 million or $15 million plus OBMedia's contribution for the year, bringing that up by $7 million, $7 million or $8 million or so to a total of $22 million. When we issued the annual report for FY '25, we issue on the basis of continuing business. Continuing business only includes the 3 agencies. So the 3 agencies EBITDA that we reported in the FY '25 annual report were $15 million. So the difference is not overheads. The difference is the exclusion of OBMedia as a discontinued business in FY '25. The question regarding the corporate overheads, which is, are these corporate overheads a recurring item or a one-off adjustment? The corporate overheads are a recurring item. But the result that we have reported in FY '25, and we report in Q1 is net of corporate overhead. So we take the corporate overheads from the agency profit, and we break out and we report the net results.

I'll just ask a follow-on, on that.

Yes. Sure.

So about those corporate costs, there's been some rationalization. The outlook from here, is this about the right level? Is there more rationalization of efficiency to come? What's that?

Yes. So we've reduced -- as you noted correctly, we've reduced the corporate costs quite significantly. We're pretty much at the level that they're now stable. So we wouldn't expect any major reductions in the corporate costs at this point. There was a sort of a follow-up question in here regarding the FY '26 Q1 report. And I'll read the question, then I'll answer it. In recent FY '26 Q1, you reported EBITDA of $3.5 million. Does this figure already account for corporate overheads? Or will these be applied later, resulting in a revised EBITDA figure? Yes, the $3.5 million does include corporate overheads and is a net number. So there won't be any further revision that is inclusive of corporate overheads. In the Q1 -- in the FY '26 Q1 results, you might be interested to find that the agency-only result was $5.3 million for the quarter. And then after corporate overheads, the net EBITDA was $3.5 million.

Chair, we have a third question from Dennis [indiscernible]. I'll read it out loud. If I may, I have an additional question. A significant restructuring cost item has appeared in your report for the second consecutive year. By its nature, this would typically be expected to be a one-off or at least a nonrecurring item. Do you anticipate further restructuring costs in FY '26? And if so, how significant do you expect them to be?

Thank you. I'll take that question, too. So in the narrative on Q1, for Hotwire, you might remember that we did refer to further cost reductions in Q1 and a reduction of staff. And we do anticipate that there will be some restructuring costs in FY '26 relating to the reset of Hotwire going forward.

Chair, we have no further -- sorry, I apologize. We have a question.

Can I just ask a question about the margins where the Board considers the margins to be in the suite of things. They look very strong at the moment. Is that as good as it gets? Is that where you expect the margins to be? And they might bounce high, bounce a bit lower like a 5-year average base.

It's a very topical question. It's something we discussed at our most recent Board meeting. I'll let Ian respond in terms of the executive leadership view on where margins will move to.

Given the industry dynamics and the pressure in the industry, we're actually very proud of the margins that we have in each of the agencies. I think if I can deal with an answer to your question, agency by agency, I think BMF and Orchard are approaching the kind of best margins that they will get. They're kind of -- BMF is already something with a 2 in front of it. Orchard in Q1 is approaching that level. I think those are very strong margins compared to our industry peers. Hotwire is a bit different for a couple of reasons. One, it's a very distributed business, and that's part of the strength of the agency business that it has a lot of operations in different countries. And by its nature, therefore, you have a high level of overhead. And therefore, I don't think the Hotwire will quite reach the level of margins that the other 2 agencies reach because they've got that concentration of revenue in one location, primarily Australia. The second thing to say about Hotwire is it is a business that is in the process of being reset. And the reset is that we do believe that the margins will improve in the future, given the tough environment that it's in at the moment. So we are looking for an improvement in margins in Hotwire.

But not to the level of the other agencies.

Probably not to the level of the other two agencies.

But I guess how does the Board think about [indiscernible]? So we've got operating businesses that are operating well, okay, we've got to reset going on one, but the others operating close to peak performance, [indiscernible] cables. It's all that might dip down at some stage. But the issue for the Enero shareholders is how much of that translates down to the shareholder level given it's a relatively small business in scheme of things, it's quite a sizable albeit relative to the that the portfolio of the businesses producing a huge amount of that underlying good profitability chewed up at the corporate level. I mean is that a sustainable game plan really going forward? I mean I think in the past? And that was going to be one of my subsequent questions, it seems that the board's view have been on, let's get bigger and defray those costs over a bigger base. And obviously, that's a ratification that those have been a long-term shareholders have lived through and hasn't been very pleasant at all. So that's one part that hasn't been successful to date, and I'm sure many shareholders don't shy about that approach going forward. And then what are the alternatives that the Board thinks about to reconcile that?

So firstly, great question. Thank you very much. A couple of things on the back of what Ian has said just about overheads in general. I think we've got the corporate overheads at a level now where for the size of business we are, we are able to maintain a very small but very capable resource that ensures that we are compliant and delivers what we have to deliver as a public company. So that's one aspect of the conversation. The other aspect is growth. And so the board has a view on growth, and it has a view on where we will get sustainable, profitable revenue growth. One of the reasons we bought Ian in to lead the practices the way he does is to ensure that our leadership teams understand how to not just manage their businesses and service their clients, but how to drive profitable, sustainable revenue growth with stronger margins. So that's a constant focus for us. Growth in addition to the organic transparency we're now providing business to business. And you've already asked questions about margins in Australia versus the U.S. I happen to be domiciled in the U.S. So I know the pressures that are there. I know the diversity of Hotwire very well. We will continue to improve that performance so that we can provide more shareholder value through the businesses. We have a view on growth and how to acquire when we earn the right based on performance to grow and to do so in a way that's affordable and that is, again, sustainable so that we actually get more scale. So a little bit of your sort of commentary around, hey, we had big overhead, and we've said we'd just grow into that and we defray that percentage cost, that's not the way we think about it. We think about how we maintain the central costs but create competency and capability and bench strength in our businesses so we can grow in a more profitable way. And then, of course, we wake up every day and we're a public company. So there's always the notion of what strategic alternatives come from inbound acquisitions, from changing structures, from reissuing the way in which we think about the respective component parts. So all those things are on the table for us as a board. We discuss it at every meeting. We have a constant view on the options. And for the moment, based on divesting of OB and getting our performances right, our focus is on growth and profitable sustainable growth. That gives you some...

I don't disagree with anything you say. Okay, a sustainable level of overhead, you guys are the best placed to comment on that. You made a comment that it's about as low as -- as a lean as it can get. Fine, I take that. But just when you look at the numbers that Ian just said, 5.3% for the quarter, at the agency level translates to 3.5% of the shareholder. Ian, that's an enormous percentage. If you're interested in your stock price, [indiscernible] go anywhere while that target exits the line. So it's a big challenge to that.

And a top priority for us, yes, I can assure you.

I can add a few thoughts to that. I think within, as Ian referenced, the corporate overhead, there's a high cost of compliance of being a public company. And I think that maybe you might argue that which is too small to be a public company. And you might be right. And if we weren't a public company, our corporate overheads would be a lot smaller. So indeed, that might be one avenue that might be explored in the future, who knows? I think still, we're a double-digit business in terms of margin. And in this industry environment, I think that actually that is not something to just breeze class. There are many companies out there that are really struggling and loss-making and you see the consolidations. I think that as we think about growth, Obviously, we have a very modest level of debt compared to what we had in the past. And one way forward, is to think about acquisitions, and we do discuss that at a board level. What I would say there is, I think that we're still in a phase of earning back trust with our investors and so our focus at the moment is to grow organically and really focus on the best margin performance that we can get out of the agencies. And as I said earlier on, I do think that we're looking to reset Hotwire and get more profitability out of that business. That business is currently operating, as you saw in not at a level that we would like it to operate or at a level that it has been operating in the past. So we think, and we're planning for upside in Hotwire, which will improve that relativity of the agency EBITDA versus the corporate overhead. And I think that, as we said earlier in the week in our investor meeting that we would consider small strategic tuck-in acquisitions but not going above and beyond where our trust as a leadership team is currently located. We still think we've got to deliver more, earn back more trust because of some of the things that have happened in the past. But I would love to see us grow more and I think that is in our plans but we've got to be responsible. And my view is that we've got to show that we are a really capable predictable leadership team, and we don't deliver any surprises going forward. And that's where our focus is. That's why we're focused on in the very short term, fairly modest organic growth and resetting Hotwire and then who knows where that will leave in the future.

Yes. I think one of the other complications we've got in this sector at the moment is that it's being transformed by AI. And so what center is partnering with the agencies to do which you tend not to see lots of functional people there HR and finance and that sort of thing, is partnering with those agencies to make sure that we're in the best possible position for the AI transformation because you only have to sort of look around at some of our sort of global competitors to see that their margins and their revenue is being severely eroded by that. To date, I mean, I have to say the way in which the 3 agencies in the center have adopted the best optimization from AI to make sure that they deliver a better product more quickly with less staff has been fantastic. And -- but then that, I think, for the next year or so is going to be a big focus of the Board and the management to make sure that we've got each of those 3 agencies in the best place vis-a-vis -- I just -- I mean I've been in this industry all my working life, I have never seen a change come through agencies, which there will be winners and losers on that. And at the moment, what the center has managed to do is to partner with the agencies to get us on the right side of that. And as a Board member, I will be driving that significantly, and it's taking a lot of their time. This a big sort of intellectual cognitive load to get on the right side of that.

I think it's a very interesting discussion I'd love to maybe continuing offline.

Yes, very happy to.

We are more than happy to have that.

You don't have to spend a huge amount of time.

I've got some more on other stuff from other shareholders. That's what they want. So if there's other questions, I don't want to dominate.

There is no other questions.

No other questions. Very grateful for questions.

So you've kind of answered this, but in terms of the opportunities ahead, okay, resetting incremental growth in the existing agencies. If we were to speak, frankly, and we got heads of the businesses in the operating business [indiscernible] and you guys went in the room and said, could you operate your business more efficiently independently from [indiscernible].

Do you want to go first?

Yes, sure. So are you sort of alluding to -- they will be 3 separate agencies?

Yes. Freestanding agencies.

Freestanding agencies with flexibility in [indiscernible].

So in the corporate center, there are costs that are associated with services that are provided to the agencies, as you might expect. So that you would have to reallocate those from the corporate center to their individual P&Ls. What we're benefiting from at the center in the way that we've set it up is a consolidation and a scale benefit. That's the first. The second benefit that we have is we're setting up centers of excellence offshore so that we are moving work to more lower cost countries.

Is that the -- I mean this is a new term to me, it sounds like the new buzzword for offshore based.

Yes, I think it's a little bit different for us because of the Hotwire footprint. We actually do business in a lot of different countries. And therefore, what we're finding is that we do have expertise in some of those countries that we are leveraging across the group. So it's not like we're just sending a lot of work to India. We've actually got, for instance, a creative team in Malaysia. We've got a data and analytics team in India, and we're leveraging the expertise that we have across the whole group. So I think that, that as an independent agency if they were stand-alone, that might be difficult for them to replicate. For instance, if you take BMF, it's pretty much an Australian business at this point. So they would have to set up that. They would have to find a way to do some of the things that the corporate standard does for it. And then without sounding immodest, my background is sort of technology, private equity performance management. I think the focus on margins, I think if you had looked at -- if you look at those businesses, they are, as you would expect, extremely focused on delivering value to clients, very focused on revenue. But where you see in the last 8 months, we've done a lot of work is getting that, as David said, that focus on margin and the focus on technology and bringing technology into the businesses, partly because of my background and the recognition I have of knowing how powerful technology is in enabling human-led businesses.

Just a couple of things. So you've introduced or you've changed that have helped drive that?

Yes, definitely. So for instance, we adopt in all of the agencies the combination of human talent and the best technology. So for instance, what we have in BMF, for example, is a big part of our -- one of our big clients in BMF is Audi. A big part of the work that we do for Audi is to produce the catalog. We have automated a great deal of that end-to-end process. So if you imagine producing a catalog, which is on a very regular basis, thousands of photographs, prices, editorial, lots of manual handoffs. We've automated a great deal of that process using a suite of automation technologies.

But you've introduced this?

So that we have -- so if you look at that end-to-end process in Audi retail, there's probably about 8 different technologies that we stitched together in a process. If you take the example of Orchard and their COO is sitting right behind you, they do a lot of digital marketing website build. A lot of that coding now is leveraging AI applications to write code. And that has been something that we've introduced pretty recently in the last 6 months or so. If you take Hotwire as a business, one of the areas that we're most excited about in the marketplace is introducing AI products into the marketplace. To give you one example, we have a product in the marketplace called Spark. Underway in the market is a massive macro shift between Google Search and using LLM to procure information if you're a business-to-business buyer whereas 12 months ago, you might have gone to Google Search. Now you're going to ChatGPT and code. A really big challenge for CMOs and marketers is how do they show up in LLM. They have spent years and years optimizing their presence in Google Search, but LLM is a very opaque environment. Spark is a diagnostic tool that basically shows how brands show up in LLMs and that is a tool that we've launched into the market with that...

That you've developed?

That we've developed ourselves in-house, which is where we've got a huge amount of [indiscernible]...

[indiscernible] at the center.

That's under the Hotwire brand, but we have an AI lab that was set up with the support of the center. And that AI lab actually reports into me now. So those are 3 examples in each 1 of the different agencies. So as David said, it's -- it's -- do not underestimate the impact of the technology on our business. Do not underestimate the speed at which we're adopting these to get the margins that we're producing.

Yes. I mean marketing services is turning into martech with services attached. And one of the reasons when we went out for a search for a CEO is we felt we needed to be in a position to have someone who could lead that process through the agencies. We've got fantastic leaders of our agencies who are disciplined experts. And they're working very hard to come to grips for the technology. But implementing a full stack of martech products underneath an agency like is BMF a new process for them. And we felt we needed somebody with technology expertise and background to be able to help them do that. And the results we're trying to blow his trumpet also been incredible. I mean I do feel that Ian has helped to get us to position in the centers, helped to get us to a position where we're at the right side of that AI change at the moment. You only have to look some of the global competitors that we face to see. I mean look at WPP, they've been eaten alive by the way in which they have not optimized for AI and manage their brands within that.

We've also found in the process that, as you would expect, the transfer content and knowledge between agencies has improved dramatically, which is a great point of leverage for us again.

Just to labor that last point, at the 11th hour, WPP have gone and hired a global CEO with the same sort of background as we did a while ago for Enero because they now recognize that.

Do you need me to wrap it up, is that what that is?

Yes.

Well, I've got one more thing.

Well, we can do it. I'm happy to do it.

Okay. Yes, let's do it. You've come into this role. You've obviously started the history of the company that's been -- it has had some distinct chapters. It's got a certain reputation in the market with investors, which you've alluded to. What's your diagnosis of the big mistakes that [indiscernible]? And how you stop -- what do you think the big left turns were that the company made over [indiscernible]?

Yes. I might struggle to give you the detail that you're looking for in this answer. I did look at the company before I joined. And one of the reasons why I joined was that I'm convinced that there is a big value upside and then I'm able to come and help unlock that value. I think that there's some very -- fairly obvious things in the past. I mean, obviously, the impairment on a significant acquisition destroyed a lot of shareholder value. And I would say that my response to that is, number one, we've got to get the core business organically performing at its optimum level, which I've talked a lot about. And number two, if we were to do acquisitions, and I have extensive experience in doing acquisitions, that we have to do them in a way that's maybe a little bit different to the way that we did it in the past, so that we're really focused on value creation. And everything that I do is focused on shareholder value creation. That's my job, and that's my DNA. So that if I went into an acquisition, I will be looking at that not as sort of a statement acquisition or an ego acquisition. I'm looking at it simply as does it build shareholder value.

Okay. But if we go back to those previous acquisitions, this business has made, nobody at the start of an acquisition says this is a statement acquisition on ego. We get presentations at the Boards being presented with things from consultants saying it's going to be EPS accretive, but everyone thinks they are creating value at the point of an acquisition. This company has a long history of destroying value. A long history and significant history. In fact, I would wager, the value that's been destroyed in acquisition by this company is multiples of its current market cap. And so it's a -- not you personally, but the history of the company is deployable. And this is a market in this space of small cap Aussie investors. It's a select group of professional investors. They have long memories, they talk. It's a task. To rebuild that capital allocation. Now, not your fault, not your -- it wasn't your circus, not your monkeys, but you've got a task here on the operational front. It sounds like you're making good progress, more to come, great. Don't underestimate that task, how much it's going to take to win back trust of investors on the capital allocation front to the whole. The trust is extremely low, and it's going to be a real build to you.

Absolutely.

Before you respond there. Absolutely, the Board is aware of it. We speak with all the major shareholders on a much more regular basis and a much more transparent basis today. We understand the history of both performance and therefore, the way in which this company has been viewed through that lens. And everything we are doing will be to: One, restate this business in the context of the options of growth to continue to improve shareholder value and to show and earn the respect and the right to grow the way we should be able to grow. But it's going to be a journey, and we're going to be absolutely upfront and transparent with everyone on the way through. That's the board's view, that's what we discussed.

We spent -- I mean, I don't know if we can, but we spent a lot of time this week. We did an investor reception. We've done -- we've opened -- we've had presentations from each of our agencies to investors yesterday in full detail. We are aware that part of the regrowing of trust is to show people absolutely what we've got and where we're going with those businesses. And I think that transparency will continue.

Good questions. Thank you.

Chair, there are no further questions.

Thank you, Cathy. Okay. As we've answered all the questions that have been submitted, I will now close the question time, which brings the formal part of the meeting to an end. On behalf of the Board, thank you for your continued support of the group, and thank you for your attendance at today's meeting.