EQT Holdings Limited (EQT) Earnings Call Transcript & Summary

Well, good morning, everyone. The numbers are just tolling of participants. I'll just give it another sort of 30 seconds or so. Once that number stops ticking up, I will get started. Okay. Well, I think let's get started. So good morning. Welcome to the EQT Holdings Half Year Results to 31 December 2023. I'm Michael O'Brien, I'm the Managing Director of the company. And I'm here with Philip Gentry, our Chief Financial Officer and Chief Operating Officer. Now, before we start, I just want to recognize Philip's contribution over the last 8 years. We announced late last year that he's stepping down and is going to try to do some other things over time. But we're delight we've had him for this period of time, and we'll have him for a number of months here. But this is his 17th set of results, all delivered incredibly professionally. So thank you, Philip, and I'll miss you on the road show in the future. Let's just move on to the agenda. I'm going to give you an overview of the results, and importantly, give you an update on AET. Phil's going to go through the financials in some detail, and then I'll just update you on the strategy. So let me give you an overview of the results. So at a headline level, the funds under management, administration, supervision of up to $183.5 billion. You can see there that we're comparing versus the first half of '23, that's up 18% and versus the second half of '23. So the most recent period, up 14.6%. We're doing that throughout the presentation because really in comparison to the most previous half is a like-for-like basis. When you're comparing to the first half of '23, we've got AET in these numbers for 6 months on this period. It was only for 1 month on that first half of '23, so hence the double comparisons. Revenue is up 37% to $84 million, importantly, up 8.1% on the prior half. So that's, if you like, a like-for-like. And that tells you the really strong revenue growth, and primarily organic revenue growth rate investment market growth. Net profit after tax was $12.6 million, so up 65% on the prior corresponding period, and 12.9% on the second half of '23. On an underlying basis, and Philip will go through these details a little later on, up 24.8% on prior corresponding period, and down 1.8% on the most previous -- on the previous half. That's reflecting revenue growth, but also expense growth of similar levels. And we'll give more detail at that shortly. On the dividends, the Board chose to increase to $0.01, be last final dividend, and that's $0.02 of the prior costing period. And the balance sheet remains in a very strong position. So let me just look at funds under management, administration and supervision. This is the key driver of revenue in the business. You can see that the progression is really consistent growth. It's really been quite an extraordinary half with almost $24 billion of assets being added under our supervision. The bulk of that in superannuation, which I'll show in a SEC note there that there's $5.5 billion from our U.K. Ireland operations that will open the next number of months disappear off those slides. So in the just making the point $24 billion funds growth and continues this consistent thing. If I just look at each of the business lines. I'll start with corporate consideration trustee services, the corporate side of it. And you can see it's from $99 billion, up to $106 billion, $7 billion growth. It's coming from a range of funds. I should say a good amount of that growth is coming from what I disclosed a trustee directive type of portfolio. So it's a lower margin type of. But I'm really comfortable on how this business is growing in terms of number of new funds that have come on board in the last period, and what we have set in the pipeline, which I think is about 40 new schemes being set up. I'll move over to the right-hand side consideration, you can see has now almost reached $60 billion, so $15 million growth in the half. As a result of 3 new funds coming on board of the future group at the start of the period. And then at the end of the period, guild super and clear view superannuation. And so really, there's no revenue in numbers for those last 2 appointments. So no 3 of the big changes. We also had a transfer of $3 billion into one of our existing clients at the start of the period. And also just generally, the portfolio is probably on a net funds flow basis, is quite strong. So that now puts our superannuation business in the top 10 in terms of funds under supervision. Also the top 10 in terms of number of members, I think we're overseeing about 800,000 members in those 15 funds. Move down to the bottom left block and look at Trustee Wealth Services, $1 billion of growth up to $17.3 billion. That is coming from all lines of business in trustee wealth services. So health and personal injury, our native title trust, it's coming philanthropy side as well. And also, of course, our asset management, particular on the back of some of the shifts of the AET funds. And then the right hand bottom block, I'm just showing here the asset management performance, and just showing alpha generation there. If you look with the 1-year numbers -- positive numbers across almost every asset class, really pleasingly, the 2 new asset classes, based global equities and spectrum strategic income strategy, really strong positive development in the last year. If you look at over the 3 and 5 years on Australian equities, which is the main asset class, really sound alpha generation from the team, which is so important for our clients. I should say we are going through a transformative period and there is increased regulatory scrutiny. That's a 2-edge sword for equity trustees, one that makes our services all more valuable. But of course, it's so increased workload for us. But the reality is the independent model for trusteeship has been sought more and more. The transformation we're going through is really twofold. Firstly, the AET acquisition, which happened in November of '22 is going to take us close on 2 years to be fully integrated. And part of the reason for that is because we are exiting some lines of business, and we are building a new platform at the same time to take that business on board as well as our own call services business. We're sort of 2 years into the 3 years of this technology transformation, and there's other elements to that as well. We announced 6 months ago that we're combining our supination and corporate trustee services business units. That's because they are very aligned operating models. We believe we can capitalize more on the strengths of each business by having them together under the leadership of Andrew Godfrey, and we're starting to achieve that now, and I think that this will set these businesses up for growth that can be leveraged into earnings. So really comfortable with how those 2 business units are coming together. We're well advanced on the exit of the business in the U.K. and Ireland. In Ireland, we are selling that business and weighing on the Central Bank of Ireland in to that. In the U.K., we are transferring clients to other providers, and we may also sell that as well. We expect to be out of that business by June. When we buy in AET, we picked up a platform administration business, that's not the sort of business that we'd like to be in. So we're well progressing exit out of that by transferring clients. But also AET was providing administration services to small apropos. And again, that's not a lot of business we want to be in. So we're transferring that administrating across 2 super concepts in Adelaide. And that's what well progressed, and we hope to have that done by the end of this financial year. And we continue fulfilling our purpose of trust and caring for people and enriching in the boarder community. Now, I just do want to focus a little on the technology because there's a big development going on, and we're sort of, as I said, that 2 years into a 3-year build. On the trusted wealth services side, we deploy the IFI system that's leading U.S. technology for active philanthropy, should say we now have that business. We've moved AET onto it. We have also moved the JB Weir Foundations onto it. So more than 400 accounts that we have. So active philanthropists $350 million. This is a business that we really want to grow strongly, and we're putting a lot of resource into it, and it will be a good focus over the course of the next half. The biggest development on this page is the development of the trust fee platform for trustee wealth services traditional trust business linked together with HUB24 as a custodian of those assets, and also HUB24 is a provider of our nontraditional trust in trustee well services. That development is going well. We've already had one major account on the platform from about 12 months ago, and our cash fund. We were about to put our continuing trust on the platform on the 4th of March. So all the clients, about 1500, half of them coming from AET, from the tax platform being senior, and the other half coming from the Garden platform in our environment going on to that. And once we've done that, we'll then progress through the other lines of Trustee Wealth Services business, and hope to have this project finished by November of this year, and the out of being senior platform by that stage. Salesforce, a major client management platform that we're using is being implemented for estate planning and for a safe management in this business. On corporate trustee and superannuation business, we have been deploying salesforce as the prime management platform. We're also customizing our superannuation oversight platform, that's a reporting and member outcome assessment platform, which is important that we can leverage our ability to do 140 member outcome assessment across our 15-so funds. And Zeta, we used to oversee outsourced service providers. So a big part of this business is that we outsource custodianship, administration, registry, front-broking, and the like to a range of different parties at the moment. I think we're at 50 service providers. So we need to be super-efficient at that oversight and zebra as the platform use. And then from the group perspective, we've implemented workday in the finance team. Philip and the team have done that and we've closed the last 2 months under workday. So that has gone really well for us. We're bad to implement workday also for human resources, and we've started that project, and that will be completed through the course of this year. So they've been major developments, but it really makes us fit for purpose in terms of the size and scale, and complexity of this business now at those types of platforms. We introduced a new AML system, Satori, and that's going well. And we'll continue upgrading our cybersecurity, and that will continue to do that. If you in a comfortable position with a very, if you like, diversified digital base across the whole business, which helps us in many states. If I just move on, we often talk about delivering to all stakeholders. Obviously, we're talking now to shareholders and will come to the shareholder -- the shareholder results. But for clients, we survey our clients each year with really positive results here on Net Promoter Score and net royalty sport. We're a bat to go after bids again right now, and we'll be out seeing how they are experiencing our services, of course last year. On the employee front, we sit at 75% on engagement and enablement. And we are about to survey our employees again, and we're going forward to seeing those results, but that 75 level is really at high-performing level of the market data, and really goes to the testament of the culture of the organization. And on the community front, this business can impact the community more than most distributed last year a record amount of $122 million to charities and other all-purpose organizations. We're slowly building up our volunteering days after COVID sort of really made that program difficult to do. We're really keen to do that. And of course, our trust management services to indigenous communities is now a much more significant scale across indigenous communities with more than $20 million and $5 billion of both the years there, we are protecting and growing and distributing. So very proud of what we do there. For shareholders, so if I just look here at earnings per share. You can see there on an underlying basis, it's up to $0.67 on a statutory basis, $0.54. So that's up 7.1% on a statutory basis. The underlying EPS on PCP is up 15.1%. It's down 2.8% on the much recent half, we'll go through more of that detail. But it's a strong underlying EPS result. The dividend progression, you can see there a very consistent, growing dividends, chosen again or chosen again to increase the dividend to $0.51 and well within that range of the underlying EPS.. With AET, there's really 2 major initiatives to complete the integration. First is the exit of all the platform business. We're well-progressed on that, that includes the outsourcing of administration of small APRA funds to super concepts. We expect to have that all completed by June. We're about halfway through the line based in impact is in time. And then the bottom part is building of the new trustee AV1 platform to take all of our traditional trust business as well as our nontraditional trust business at its advice and Health invest business. And we're well advanced on that, 4 March is a key date to ship across a big part of the client base, and we progressively roll out another 4 phases of that migration between now and in the end of this year, and expect to fully exit from the insignia systems by November 24. And by this stage, all expense synergies should be able to be realized in the business. Move on to the next page, it just walks through a range of different things that we've been doing on the AET front, much the same as what we showed 6 months ago. So I'm not going to run down through this slide. But I do just want to make a couple of points. We've been delighted with the people that have come on board. We've been able to retain all of the key talent across the country. We have had no material losses in this business. Our new business generation has continued for. So really comfortable with our the AET business is integrating to overlook. Now, this slide just walks through the synergies. So we start in the 10 side there with net cost synergies. You can see that $2.9 million is what we are forecasting at this point. That's a little lower than what we anticipated right at the sale of this integration. On the revenue side, we're now projecting of premier synergies of $5.8 million per annum. So that's a couple of $2.5 million higher than what we had originally anticipated when we acquired the business. So in all, aggregate synergies are $8.7 million. So a couple of million dollars higher than originally anticipated. Implementation costs $22 million. We're on track to get this complete within that envelope, and that will be extended by, basically, by the end of this calendar year. Originally, we did not expect to get any capital release from the AET business that we now think that we can get a $10 million capital release and we have a program to work aimed at achieving that release. And again, we're targeting that for the end of the calendar year. So in summary, it's been a very big half in terms of growing the size of the business and our footprint to $183 billion. Statutory EPS is well up on the peak PCP. And in the last 6 months prior reflects some of the investment that we've been making in AEC and the technology transformation. The IT integration is proceeding well. Germany, and we are very confident about the synergies. The technology build is a big build for us, but it will create a great foundation for this business. We continue deepening our community impact, and we look forward to continue delivering for all of our stakeholders. So I'll stop there and then hand over to Philip.

Thanks, mate. Let me now just turn to the financials in a bit more detail. I'll take you through the income statement. We look at the key businesses and their drivers of performance, and then touch on the balance sheet, cash flow and liquidity. So you've got a reasonably full picture. Firstly, just looking at the overall income statement here, perhaps the first point to make is that we have classified the U.K. and the Irish business as discontinued. And in this particular slide here, the top 5 lines are all effectively on the continuing businesses. You'll see the split in the detail in the financial statements around how we dealt with the discontinued businesses in more detail. But from a top line standpoint, you can see the revenue, pretty strong growth half on half. That's one of the strong half on growth we've managed to achieve. Again, I'll break that down in a bit more detail for you shortly. Expense growth reflects the one-off integration cost, the AET contribution and high levels of resourcing technology investment. Impact, up 12.9% on the prior half, and 65% on the PCP, reflecting particularly the addition of AET. Underlying NPAT, just down slightly on the second half '23 and reflecting that higher investment in people costs, in particular, historically, very low vacancies. And again, I'll talk a bit more about that shortly. Statutory EPS, $0.475 well up on the prior half of PCP and underlying EPS of $67.5, 15% up on the PCP and slightly down in the prior period. Now let's look at the revenue breakdown in a bit more detail. You can see the bridge. And if you just move from left to right there, you can see the contribution of AET, the equity market impact on FUMAS, the large mandate loss in CTS, which we previously flagged, $1.7 million of AET synergies starting to come through, and that will grow significantly over the next period, and quite strong organic growth with a certain amount of repricing, particularly with our SAP products that have contributed to a pretty strong revenue number for the first half for continuing businesses. Now, let's turn to the expense analysis. Again, a bridge here. You can see the breakdown of nonrecurring AET outlook and OpEx expenses. I won't go through each line item there. But if we look at the underlying increase in expenses, excluding the nonrecurring in the AET, it's up about 12%, primarily driven by an increase in salaries and related costs. Particularly the significant reduction in the vacancy level, which are really historic lows. We're talking sort of low single digits compared to low double digits, more typically in years gone by. Obviously, the inflationary pressures have played a role as well. And typically, replacement staff we brought on that higher salary levels than previously incumbents occupied. Let's now turn to the BUs in a bit more detail. So just before we do that, the key financial measures, just showing some sort of trend analysis here, you can see that the revenue is very strong half-on-half-on-half EBITDA. That generally got positive traction on all of these measures, dividends, particularly consistent over the half. Then now to the business units and looking first at GWS. You can see here a simple revenue bridge for the GWS business, the AET contribution, a relatively modest impact from the equity markets, the AED synergies coming through and good organic growth for GWS. And on the right-hand side, you can see the increase in as compared with the PCP. Asset Management, in particular, growing quite strongly from nearly $5 billion to just over $6 billion. And the largest chunk of that growth is represented by the take on of that debt management of a significant portfolio of health and personal injury clients. Let's look at the sub BUs and GWS in a bit more detail now. Here, you can see that AET is certainly assisting momentum across the various component pieces of TWS. The state management on the face of it looks down. Remember the value of these estates is quite volatile and will bounce around from time to time. We're quite satisfied with our ability to win business in this one. And it's going well. Perhaps worth calling out yet to flat the increase net touch on the IFR platform that's been launched and that's certainly paying dividends, and also on the community in native panel trust space with particularly good momentum following the acquisition of '18. Now turning to CTS. The combination of our corporate trustee and our superannuation businesses. Again, the revenue bridge showing the AET SaaS, the contribution they're making, a more material impact in equity markets, the large mandate loss I touched on before. Again pretty strong revenue growth, and you also reflected in the fund under provision, which you can see on the right. Michael also touch -- you can see on that bottom bullet point, we have end of period appointments with both Guild super and Clearview super really hasn't contributed during the half, but will be very helpful in the half to come. Now turning to superannuation, a bit more detail. Here you can see the pretty significant increase in funds under supervision. The key drivers on the bottom left-hand side there, future super growth and Circle superannuation fund transfer to Centre SaaS and Guild and Clearview, which came in during the December month, all leading to a 30% increase in members to around 800,000. And as Mike said, a top 10 superannuation business in Australia now. Turning to the CSGS corporate piece. So this is our traditional Corporate Trustee Services business, again, good underlying growth, equity market impact, contributing as well. Funds on the supervision or quite a few new clients here and some of the key ones we've called out. And momentum continues on a higher than usual rate. If I look back over the years, currently establishing over 40 funds, with 30 expected to be launched before the 30th of June. So continuing high levels of activity here. The increase in global asset managers continues to be evident, and a pretty strong pipeline across all of the sub businesses within this business year. A quick breakdown of some of the funds that have been opening and closed. You can see this is generally net positive new funds, up to 31 over the period, some 19 closed, and a little closer on the fund management movements there from a fund manager location standpoint. You can see Australia still dominates but a pretty substantial global footprint as well. Looking at the custody debt securitization business, growth has slightly eased a little, particularly in the debt capital markets, reflecting the higher interest rates. But in recent months, we've seen mentioned starting to rebuild as sentiment improves, and we're expecting a solid performance in the second half in this particular business unit. And finally, turning to U.K., Ireland. The exit is well underway. The Irish business has been sold, subject to certain approvals, particularly the Central Bank of Iran approval. We're still waiting on that. But we're focus that will occur shortly. The U.K. business remains in a sale process, while managed wind-down is also being considered. We do expect to be substantially out of these businesses by 30 June 24. It may be some residual activity still to close out, but I don't expect it to be significant. On the technology front, just providing a bit of an update on the outlook for the spend there in particular. Mix highlight, I think most of the key projects that are underway, the largest being the trustee implementation for the TWS business. So the OpEx and CapEx slightly changed from the -- what you've all seen in the full year, but not dramatically. The projects are all largely on track, and we're very pleased with how they're going. Now, turning to the balance sheet. It continues to be very strong. Debt equity 11.5% is quite conservative. I'll talk about the cash and liquidity position shortly. We've got substantial headroom in our covenants and plenty of flexibility to take advantage of future opportunities. On the cash flow front, operating cash flow improved from the previous half. You can see the cash flow generation is looking pretty healthy. That's been utilized to pay dividends and tax in the main. There has been some borrowings, particularly to help fund the integration costs that we've been undertaking. And I do expect the working capital to improve further in the second half. From a liquidity standpoint, also very strong. On the left-hand side here, you can see our liquid assets held which includes cash plus a percentage of accruals and debtors regulatory capital of $91.7 million, which combines the traditional regulatory capital as well as the related capital, leaving net available liquidity of $49 million and committed undrawn facilities of $34 million, so circa $83 million of financial flexibility should be required. In summary, very strong organic revenue growth, higher expenses due to the one-off integration transformation costs and higher people costs to support growth and transformation. Statutory impacted by these one-offs, but the underlying performance is pretty solid. AET is going well. Cash generation is improving. We've got a sound capital position. Mike, back to you to take us through the strategy.

Thank you, Philip. Yes. So let me just give you an update on strategy. So the reality is that strategy hasn't changed. It's holding us in good stead. Our purpose to help people take care of the future really is resonating with clients, but also resonating with employees. So we've been very successful at securing the talent that we needed to secure all underpinned by our 3 core values, which is so important to trusteeship. If I just flesh out the strategy a little more, but again, without going through the detail because this slide hasn't changed, we are aiming for consistent growth in shareholder value on return. So there's not a thing that's going to be blowing out for 1 period and not the other, right. Consistent growth in shareholder value and returns, market leadership in our specialty areas. So that's quite important. And the AET acquisition was really preventing that for us. And reputation is everything to this organization, stable 140-year during utilization could be trusted. Let us look at our market position and staying on trusted what services. So one of the key objectives of acquiring the AET business was to build our position in the health and personal injury sector where we're now clearly the leader. We were already the leader in philanthropy with the leader in estate management in Australia. A leader in the safe play, most trusted companies and also leading business on continuing trust. So AET has given us that position across all those sectors. Dropping down on the right-hand box, expanded generating capability. We obviously had a strong position here in Melbourne. AET is the clear leader, the only player really in South Australia and clearly in Western Australia as well. And we've strengthened our positions in the other 2 states in New South Wales and Queensland. On the Corporate Trustee Services side, responsible entity services to fund managers and asset owners. We've continued to build a very strong position there, and clearly lead that market. We are trying to build our businesses in custody and real assets, the DCM and securitization markets, and Superannuation, the leading independent provider of trustee services there. So it's a really strong market position across the board. And our asset management capability is absolutely designed to be fit for purpose, for the needs of our trustee clients. Our initiatives in FY '24 just some on Trustee Wealth Services. So firstly, continuing and finishing what we're doing on AET integration and the platform divestment. Capitalizing on what I just described there, the market leading position we've got to capitalize on business development across all the states and all the sectors. We'll be putting a lot more refine the public launch of our leading Palantir platform, IFI. We've got the team in place. We've got the technology in place. We would have done this earlier, but we had to ship resource to bring on the JB Weir Foundation. Also the name foundation onto this platform. Finish off the 2-year build on the technology. We want to continue developing our responsible investing capability. There's significant demand for that, and just thought we can do that and capitalizing on the high rated top for investment funds for funds for superannuation and the corporate trustee business. It's quite similar on superannuation. It's really about focusing in on the retail segment of the market where we get new start-ups coming as well as funds that are transferred around the trustee ship. We want to build operation excellence now. We've got the scale in that business. On the corporate side, again, we want to streamline and digitize a lot of our workflows is a floor now over $100 billion, something like 400 schemes and 130 clients. So we need to keep building the efficiency of our operations. And we want to accelerate the growth in those new markets, as I mentioned. And I should also say just continue building our take-on listed scheme space. So we, I think, have now about a dozen schemes that are listed another 5 in the pipeline, So the portfolio is up $3 billion, and we see that as a material growth driver over the next number of years. I can't give this presentation without talking about risk, regulatory management and governance. It's fundamental to our business. we maintain very close relationships with the key regulators. We seek to be a model regulated entity, and I think we are achieving that. Risk culture is fundamental whilst survey just in the last couple of months on risk culture at an 84% positive response rate around the understanding of risk by our employees. So that's a really high rate. And I'm pleased to say that AETs are the same, we all the employees in. So it's been an extensive pro work folding AET into our governance processes, and that's now completely gone very smoothly. We are handling the regulatory change, some of the key things, design and distribution obligations. We worked with the FSC. I think we have hundreds of target market determinations in the market, and we're well set to be updating those -- extended our member outcome assessments as required by APRA. We're in a good position on that front. We have something like 70 schemes that had some type of ESG overlay on rents to them. So we're very aware of the issues of the issues of greenwashing and ensuring our disclosure is absolutely accurate with fidelity in relation to BSG orientation. And finally, we continue putting platforms in place to handle our governance. So CAM is our risk platform. We've got a purpose-built member outcome and assessment platform. So I mentioned walkers over slide part, putting out something is our platform for PDS disclosure production. I don't know, we must have thousands of PDSs and information memorandums and a company and reference documents out on market at any point in time. So in summary, I think this strategy is on track. It's delivering great organic growth. The business is going through a major transformation at the moment. The revenue and funds continue to rise. The net profit reflects the investment that we've been putting in, in the last year or 2. We're delighted with the AET acquisition and the market leadership position that gives us and confident about the synergies coming forward. Technology development is going according to plan, and it will improve client experience for our clients. We want to continue building our newer smaller businesses to upset the balance sheet is in very good position. It gives us flexibility for growth. And we see that we've got positive momentum moving into FY '24 and beyond. And I will also just mention one of them that's just in finishing. Now, we run a shareholder strategic briefing in April, and they'll be deserved to the market very shortly. And the point of that will be just to do a deeper dive into some of these businesses, which can be a little complex to people not in the trustee space, and also to introduce more of the broader leadership team to the market, and we look forward to doing that. So I think that brings us to questions. And we had a number of questions delivered to us earlier. So I'll start with those in fairness, and then you look to the ones that have been coming. So the first one is when will we finally be out of the U.K. and Ireland? How much more is there to cost in doing that.

Sure. Thanks. Happy to talk to that. As I mentioned, we should be substantially out at 30 June. There will be some additional costs, the particular in relation to the Irish business with like to lag-down -- the value of the minimum regulatory capital in that business because that was going to be purchased certain in due course, which will be about AUD 1.1 million in relation to the U.K., we're still going to finalize the exact mechanism of exit there, but there'll probably be a smaller sum associated with this in many advisory and legal fees, potentially in sort of the order of $0.5 million or beams mortgage and running costs for as well, but not too significant.

Thanks, Phil. The next question was financial advisers are recently becoming asset managers by SMAs and similar? Is this a threat or an opportunity to -- but we're not overly concerned by that. There is a trend of that happening, but still the mainstream large-scale advisory groups are still using platforms underneath that managed investment streams. So we can provide services to SMAs, and we do that to some extent? I'd also point out that if you look at our CTS business, it's about 3 quarters institutional flow and fun, and about 0.25 retail advisory flow and fun. So a major issue for us. The next question is, would the ACCC allow you to buy perpetual trustees. I'm not going to speculate on that. We're focused on growing this business and particularly following our acquisition of AET following our strategy. So that's what we're doing. The next question is a question is a little complicated about insurance and disease states, and I'm going to take that one offline with the gentlemen we may sit. It will take a bit of time. The next question is, what is the annualized revenue run rate benefit on recent CTS and superannuation? So I'll hand over to you.

Sure. I think perhaps the best way to answer this question is to confirm that the run rate is in the same sort of ballpark as what we've had in the last 6 months. So the been relatively higher than perhaps a strong level of activity in both CGS and the superannuation business that's likely to continue at those rates without being specific around quantifying it. It's looking pretty healthy.

Thank you for one. The next one, I think is also for you, Phil. Can you tell us what the non-new cash amortization was for the first half?

Yes. For the first half, depreciation on the capitation number was about $3.6 million to half of that, not just a little less than half was associated with the management rights amortization from AET.

Thank you. We'll keep running through these. Can you talk about revenue impact from the 40 funds being established, and the run rate benefit from those established over the first half of '24? I think the best way to think about that is when funds start, there's not a lot of fun in them, and we've said purpose built to taking a large mandate at the start. So typically, you could think about it as $45,000 to $50,000 as an annual fee on funds. So we do the math on that. Next question. Any further superannuation in the pipeline has alluded to at the AGM? Well, I guess what we alluded to at the AGM was there are some wins in the pipeline that have come through. So the Guild superannuation fund and the Clearview superannuation fund. So there's still a solid pipeline there. But I don't perspective, just right at this point. Next one, is there any incremental cost to the revenue synergies being generated from AET? I'll quickly take that one. The answer to that is no, there isn't any cost to those revenue synergies. The next one, corporate once the number of funds closed and the managers exiting into the half, what you're expecting. Reason for fund manager exits? Good question. Look, the as large now as said we're 400 schemes. So there's often a schemes that just don't become successful for funds work. The distribution isn't successful performance isn't the case the case may be. So we're always going to have a little bit of that churn in the portfolio. I think is it any different in this? No, not really. I mean we commented last period that there was a lot of outflow in 4 funds, slightly the order of $9 billion, which was pretty much a one-off and indicated portfolio doesn't have any concentrated exposure that would produce that type of result again. That's where the reason for fund manager exits. We very rarely lose a fund manager to an alternative provider, but it can happen from time to time. Generally, it's because the fund manager may be closing down being bought out by another player, and that it's not particularly to comment there. Next question is the first half cost base indicative of the level going forward into the second half and beyond? Are there any one-off costs that want to appear in this half?

Sure, that's just dealing with the second part of the question. First, there will certainly be some one-off costs that continue in the second half of '24 as expected. There will be -- the integration is obviously not complete. So there will be some ongoing costs associated with that. The technology transformation is that we do the biggest part of that there's a relationship taken that on is not shut finished until November. So obviously, there'll be some costs associated with that as well. The U.K., we should be marketed of that by June. So I'm not really expecting any material costs in the half beyond that in relation to that. The first part of your question. Yes, the first half cost base is probably somewhat indicative given that we have pretty much filled almost all of our vacancies. I'm not really expecting to increase in terms of headcount maturity in the second half. And so that delta that was perhaps more evident than the first half should be quite significant in the second.

Thank you, Philip. I think your last question, also for you, can you remind us of the expected benefit of the transformation program? And is there any cost to carry through into FY '25?

Yes. As I mentioned before, there will be some costs going into FY '25, particularly in the first half as we complete trustee in particular. Also, the Workday implementation is not expected to complete until around September. So there'll be a few months of spend in the first half '25. Second half '25 should be pretty clean. In terms of benefits, there's quite a number of them. But essentially, we're taking the equity trustees to become a much more contemporary trustee company. We're modernizing our platforms. We will have customer portals to allow self-service. . They'll allow scalability. We're automating processes and platforms and workflows, which will allow scalability and ability to win clients that actually were just not been a fun historically. So we're expecting pretty significant benefits from this program activity, and pass also with college the staff are very exciting about what we're going to be able to offer our clients. And indeed, they've been asking for it for some time. Mike, I don't know if you might want to add any comments in relation.

I think that's an excellent summary. Yes. Thank you. You've answered your last question very well. So we've got no more questions. I think we're on time. And I just want to thank everyone for their attendance this morning. And thank you for your support of the company. I feel we're in an excellent position going forward. We've had a very good half where we've got a lot of work to do coming up, but we're well-positioned to do it. So again, thank you so much for your support. Look forward to seeing many of you as we get out on the road show of coming in days. And I just want to thank again, Philip, for his contribution for 8 years to the company, and also sitting beside me for 17 -- well, I've done 16 he's done 17. And that first one wasn't so good for him. Philip, I really appreciate it. And I know that our shareholders really value your ability to communicate these results in a way that's understandable. So thank you. Okay. Thank you, everyone.