Experience Co Limited (EXP) Earnings Call Transcript & Summary

Good morning, ladies and gentlemen. Thank you for standing by, and welcome to the Experience Co Limited H1 FY '22 Results Conference Call. [Operator Instructions] I must advise you that this conference is being recorded today. I would now like to hand the conference over to your speaker today, CEO of Experience Co Limited, John O'Sullivan. Thank you, John. Please go ahead.

Thank you, Lyndon, and good morning, ladies and gentlemen, and thanks for your attendance with Owen Kemp, Experience Co's CFO, and myself to be able to present to you our financial results for the first half of FY 2022. As per usual, the structure of this morning's presentation will be as outlined on Slide 3 of your packs, which I'll give a brief update on the business. Owen will take you in a more in-depth look at our financial results. And then to close out the session prior to questions, I'll provide you with a brief trading update and outlook for the business post this half. Turning to Slide #5, to start with today's presentation. The first half of FY 2022 was undoubtedly the most challenging period for the business during the 2 years of the current pandemic. With 2 variants of COVID-19 to be dealt with, the closure of the Queensland border for most of the half and shutdowns in New South Wales and Victoria, this all led to increased disruption with the business, periods of inactivity, internal restrictions on domestic travel and temporary staff loss caused by the COVID close contact regulations. This said, as our business emerges from this half, the business does emerge with a stronger balance sheet. And as a result of our Wild Bush Luxury and Treetop Adventures (sic) [ Treetops Adventure ] acquisitions, we had improved portfolio quality. In addition to this, as we close the half, we now have a much clearer pathway on an international recovery, in addition to the fact that domestic travel as from the 3rd of March within Australia will return back to some form of normality. Turning now to Slide 6. And Owen will go through the detailed financial results of the business later in this presentation, but just to call out some key highlights. For the half, our sales revenue was $19.2 million. We recorded an underlying EBITDA loss of $3.1 million. But as I said in my opening comments, the business still maintains a very strong balance sheet with cash and cash equivalents of $27.5 million and a net cash position of $12.5 million. Turning to Slide #6 (sic) [ Slide #7 ] on international recovery. As we have maintained through the course of this pandemic, we have been preparing our business for international recovery. And in the most significant event during the course of the last 2 years, we now have a situation where the Australian international borders are open. And importantly, for our New Zealand business, we have a pathway for recovery starting from July when Australian nationals will be allowed to travel to New Zealand, and then from October, when foreign nationals will be able to travel into New Zealand as tourists. We are very encouraged to see that the strong demand for our international-facing businesses, off the back of increased aviation capacity coming into Australia, strong interest by well-working holidaymakers to obtain Australian visas, and Tourism Australia research, which demonstrates and indicates that latent demand for Australia out of our key inbound market still remains incredibly high. We're also very encouraged that adjacent to this, as I've said earlier before, we have now seen an intent by state and territory governments within Australia to adopt a more living-with-the-virus approach than one of COVID zero and associated lockdowns and interstate restrictions. Turning now to Slide #8, before I hand over to Owen. As we've said to many of you over the course of the last 2 years, we have spent much time within the business, preparing our business for the day of recovery and also with a key strategic view on improving the business. As we sit here today, the business is in very good shape. We have strong systems. We have good people. We have a good cost discipline and a strategic focus on where we want to take the company. With that back office now in place, specifically, we are starting to focus on particular product innovations and improvements across the 4 operating units of the organization. Specifically in North Queensland, we're very proud that as of tomorrow morning, we will be conducting a launch ceremony with Minister Hinchliffe for our new Reef Magic pontoon and the $7 million piece of infrastructure will soon be in position on the Great Barrier Reef in order to take advantage of the domestic recovery as it returns from April. Within the Treetops Adventure business unit, which we completed the acquisition on the 1st of December, I'm very pleased to report that the new St Ives site is open and trading very, very strongly. In addition to that, we have submitted to the Port Douglas council, the DA for the new Daintree development that will be rolled out in later this financial year in the month of June. In our legacy business of Skydive, it's very important to make the point that during the course of the half, we saw very strong latent demand despite the travel restrictions and despite some of the COVID restrictions imposed on the business. And this was certainly evidence by our 2021 Christmas promotion, which recorded record volumes and outperformed 2020 by almost 50%. We're also very excited in March of this year. Later in this -- in March, we'll be launching a dedicated brand campaign around What's Holding You Back? for our Skydiving business. And finally, with Wild Bush Luxury, with Maria Island acquisition now completed, the focus is very much on organic growth opportunities within the Arkaba conservancy and also Bamurru Plains business units of that operating division, and both businesses have strong forward bookings as we head into the rest of the calendar year. With that, I'd now like to hand over to Owen Kemp to take you through the financial results.

Thanks, John, and good morning all. So I'll pick up on Slide 10 of the presentation and run you through the financial results for the half. As John alluded to, there's no surprise to you all that the first half saw the most adverse trading conditions and results for the group since the emergence of the pandemic over 2 years ago. So what we're looking at today in terms of numbers on the page is numbers that are significantly smaller than the true earnings potential of this business that we have. That revenue of $19.2 million were clearly impacted by the protracted lockdowns and border restrictions. This swing on the prior year in EBITDA is principally down to the events of the pandemic and as that interacted with changes in government stimulus and approach over the periods. In our AGM update in October, we noted Q1 underlying EBITDA loss of approximately $3 million. And given what was to transpire in Q2, we were pleased to leave the half at around about that same result at $3.1 million loss for the period. Now I will touch on how lockdowns and borders, both domestic and international, impacted our business in the half as we run through each business segment shortly. But before we do, we're very pleased with new acquisitions, albeit highly weighted to the end of the period, are tracking well, and there are early positive validations in our strategy to not only reweight the portfolio, but also provide growth opportunities in these categories going forward. And while grateful for the government support, which you'll see on the page we continue to receive in the period, the best support that we ask for is a stimulus of confidence, confidence in our borders and confidence that we have moved beyond the lockdown lottery of recent years. So from a highly disruptive period that we've seen in the first half, we move into 2022 seeing markets reopen. This will result in a transition in our business, which goes from going through what we call pandemic operations to one that's refocused on executing and leveraging the growth opportunity as the market volumes recover. Now moving into Skydiving. The highly disruptive period is probably best evidenced in our Skydiving business and is seen in the revenue line, which is well down on pcp. Now this is a story of major metro lockdowns impacting volumes. While pricing and market position was well maintained as a market leader in both Australia and New Zealand, with Sydney, Melbourne and Auckland shut for the majority of the period, we had millions of people restricted from doing activities. And that's an experience we hope not to have happen again. The timing of the reopening from late October in Australia, we began to see a more gradual recovery than previous lockdowns, but perhaps that coincided with consumers holding back until the all-important Christmas period in Australia. However, that coincided, as we all well know, with the Omicron variant from early December and the record case numbers heading into early January across the Eastern Seaboard, which proved an operational challenge that we hadn't confronted on a day-to-day basis, including balancing a customer base that was holding back on participation despite the success of the Christmas campaign that John alluded to earlier with bookings, but also managing staffing availability as cases, isolations and health directives all interplayed to make it a game of [ pop and croc ] late in the half. If I draw your attention to the chart on the lower left, perhaps what's pleasing for us and evidence of the resilience of the model is the dark blue line in the -- dark blue column, which paints a simple picture of a recovering trajectory in a very difficult period and really demonstrates the resilience of this segment in Skydiving but also our confidence as volumes -- that volumes will return as market conditions allow. Moving on to Slide 12. So this -- we move from a metro story to the state border closure story that John had -- and the travel restrictions that John alluded to earlier that had the highest impact in the period on our Adventure Experiences segment. First of all, I'll touch on the continuing vertical, being GBR Experiences or our marine operations in Cairns and Port Douglas and in turn, I'll comment on the acquisitions. GBR on the demand side, and you'll see this best on the chart on the lower left, we saw July to be quite strong. And that was really on the back of the Q4 FY '21 momentum that we saw. Now that proved to be short-lived with the emergence of the Delta variant quickly closing off key in-state markets and the Queensland border before the Omicron version and the clumsy political resisting isolation state entry requirements that we all lived through impacting the December and January periods and ending highly disrupted. But as you see in the orange chart, we still had that recovering trajectory despite all of that, that we threw at the business in that period. On the supply side, and in particularly labor, the TNQ region saw the highest COVID case levels since the emergence of the pandemic, and that really impacted daily operations at key operating periods. So once again, the [ pop and croc ] version was well in play. But during the half, and most pleasing for us, we doubled down in improving the business. We continue to improve our online digital platform, and we've seen record sales in dollar terms on our websites. We've reached practical completion in coming days on the Reef Magic pontoon that John alluded to earlier. And we've got a well-maintained fleet and permit capacity to grow, once again, as the market recovers. And then at a micro level and on a day-to-day level, we're maintaining pricing and discipline on sales. And pleasingly, speaking from Cairns today with John, we haven't been the only ones investing through the pandemic. The hotel stock has never been better and the Cairns Esplanade development has transformed the Cairns precinct. Moving on to acquisitions on Slide 13. Just taking a step back, and I'm sure John will support this as an opening comment, we couldn't be more thrilled to have Charlie Carlow and the Wild Bush Luxury team join the business, but also [ Nick ] Dansin and Marc Flaster with Treetops Adventure late in the period. It's been a tremendous addition to the portfolio, and with shared values, the approach to the integration has been very collaborative and forward-looking. On a trading level, Wild Bush Luxury was obviously impacted by South Australian-Northern Territory border closures during its key season from July to October. And as a result, our attention quickly turned to being prepared for the coming season and investing in the portfolio. In the premium adventure category, we also welcomed Maria Island Walk from December. And as expected, it's proven a resilient performer despite the Omicron variant and its impact on Tasmania trends. In short, demand remains at record levels across each of the operations and offerings in this category, and we continue to see growth opportunities in the category. To Treetops Adventure, pleasingly, the integration is progressing well, but also the resilience of the business through the Omicron and the record caseloads of December, while impacting some of the tourism located sites in the portfolio, the resilience of this product stood up to both the pandemic but also the lining of weather conditions that we've all been living through with over 100,000 visitors in the time to date under EXP ownership. The opening of St Ives in Sydney has been incredibly successful to date, surpassing expectations and having us well placed in the Sydney market, and the Daintree site is progressing well. In the near term, we expect the half to see some short-term caution from schools and parents as risk appetites adjust to COVID and its relationship with children. But these factors will -- are expected to ease as term 1 progresses. Very simply, the portfolio is better from the addition of these 2 new categories. Moving on to balance sheet. We are well placed to grow. The successful capital raise in October has the group well capitalized and with a high-quality share register that we look forward to working with going forward. With a net cash position of $12.5 million and extended -- and extension facilities to 28 February 2023, we are well placed to revisit debt capacity as cash generation improves in the recovery period. I'll now hand back to John to talk you through the trading update and outlook.

Thank you, Owen. Now just turning to Slide 16, where we have both the trading update and outlook for the business. Turning first to the trading update. Certainly, during the summer period, it should be no surprise to anyone that we were adversely impacted by Omicron, in particular in its impact on consumer sentiment, and also given the record case levels impacting staffing availability and also customer activity. That said, we've seen in the January month, a vast improvement in our operating volumes across our business than on December trading. And that's pretty evident in so far as the country has transitioned to start living with the virus as opposed to being locked away because of it. Certainly, in -- during the month of -- from the month of December, we've been both EBITDA and also cash flow positive. And we closed at 31 December 2021 with net cash of $12.5 million and our acquisition integration progressing well. We're very optimistic about the outlook here at Experience Co. Certainly, we believe, as I said earlier, that the group is very well positioned across our operating geographies, both here in Australia and also in New Zealand as the expected market conditions improve into the second half of 2022 and into FY 2023. We certainly are very optimistic about the potential improvements for domestic and international tourism. Certainly, from a domestic point of view, we are starting to see good forward bookings in locations such as Cairns in hotels, occupancy and also an improvement in our aviation capacity into some of our key operating geographies. The strategic priorities for us as an organization in the short term for the remainder of the half, of course, will be around labor recruitment and also retention as this impacts our operations and our operational efficiency across many of our business units. And of course, we'll be also focusing on the continued integration of our acquisitions, in particular, Treetops Adventure. Due to the continued uncertainty for the rest of the FY 2022, we won't be providing any earnings guidance for Experience Co for this financial year. So with that, I'd now like to hand it back to the moderator, and we are happy to take your questions. Thank you.

[Operator Instructions] Your first question comes from John O'Shea from Ord Minnett.

John, Owen, can you hear me okay?

Yes.

Look, first question for me, when I look at the trading update, the thing that sort of I noticed here is you mentioned about monthly EBITDA and operating cash positive from December '21 onwards. Now given the Omicron variant impacted NIM and all the uncertainties around everything that's going on at that time, that sort of indicates to me that perhaps the acquisition of Trees was -- had a positive impact there. Can you kind of talk us through that? Because it would seem to me that that's obviously a -- that sort of surprised me that you're able to generate positive cash and positive EBITDA each month since then. Can you talk us through sort of the dynamics of how that all sort of worked through?

Sure. Yes, sure, John. It's a good question. And it probably does go to John's point around the portfolio quality and what we're looking to do with reweighting it. So the first thing is there is a bit of seasonality there. So is it a good season for Trees? So the acquisition was certainly helpful during that December and January period. And probably the other thing to draw out is how resilient it is in terms of its demand so -- as the pandemic has rolled on. So it's -- first of all, staffing's a bit easier. So all these things interplay, as you'd understand, John, but staffing is a lot easier.

We're talking Trees here, right?

Trees. Yes, relative to our business. So the staffing is more straightforward. You're not as reliant on the close contact or intimate experiences, such as you compare it to a skydiving where a tandem instructor will be strapped to a passenger, and that obviously comes with a lot closer activity and higher COVID risk to go through it.

Unless you want to jump that on your own, mate, which I wouldn't recommend.

Well, yes, yes, some days it's like that, isn't it, John? But I hope you don't have too many of them. No. So -- but yes, Trees has been a key element of that. But also, look, all things considered, if you don't -- when we looked at a caseload of over 100,000 cases on the Eastern Seaboard late in the half, if you'd thrown that at me in probably October and November, first of all, I probably would have told you it's crazy that we'd get 100,000 cases, John. But even Skydiving and Great Barrier Reef really did hold up reasonably well, considering that. That's pretty adverse conditions to throw at any business.

I think what we saw, John, particularly during January for the legacy parts of our business being Skydive and Great Barrier Reef was with Great Barrier Reef, we had New South Wales and Victoria able to get into Queensland, more unencumbered parts. You also had a bit more confidence returning for Queensland interstate travel. And certainly with Skydive, as Owen alluded to, there was a seasonality to that. But also we started to see the return of the workforce during January from those December impacts, so from COVID-impacted staff as well. So we saw that combination. So certainly, Treetops Adventure has done absolutely everything we wanted it to do. And if you go back to the original thesis of the investment in that business and also Wild Bush Luxury for that matter, but not at the same scale. But pleasingly, the legacy side of our business also started to flex in January. And I think we sort of sit here today also saying that February has probably gone better than expected, all things considered as well.

Look, the second question from me sort of relates more to, as we look forward, and I guess, crystal ball is obviously very difficult in the current climate. But let's assume that the -- we look forward to sort of a year or so and have a sort of a living with COVID-type scenario, how do you think we should think about the business in terms of the -- the leverage inherent in it and the, I guess, the changes you've made in the systems and all those sorts of things. So is it -- do you understand what I'm asking? Is the business in the same shape it was before? Is it in better shape? Is the earnings leverage more or less or the same?

Yes. That's a really good question. And obviously, I'll just park the timing aside for a moment of exactly when things come back, John. But maybe similar -- you'd be familiar with our approach around the time of the capital raising for the Trees acquisition, where we -- I think how we look at it is we take the FY '19 period, by no means the best period for the business, we had the continuing operations, we're able to generate $24.4 million of EBITDA, if we take that before we touch a thing. I think as a result of the work we've done, we anticipate somewhere around that $5 million to $6 million in terms of just savings around the various approaches that stuff -- that fixed cost savings, as you know, the volume-related savings, John, as a result of the pandemic. So and then you obviously had the Trees and the Wild Bush Luxury on top of that. So that's probably point number one. Around in terms of when those conditions would really occur, I think we're looking at a business today where if that were to happen FY '25 or before, we'd be very pleased. But as you say, we don't have a crystal ball exactly how that will play out. How we look at the short term and perhaps this is helpful, we think Australia and New Zealand will pick up again from that April sort of period, where we think we're just in that sort of pause period that we see in Australia as we also park and put it on our tools, send the kids back to school and go back to work in February, and then we get excited about Easter pretty quickly and from late March. So in the short term -- that's domestic. And then international, well, as you know, the borders opened the other day. John alluded to the aviation capacity coming on board. But from our perspective, we're not banking on much in the second half of this financial year. But there's obviously -- we're obviously quite excited that it's actually heading in the right direction. The intent is there to be open for business. And maybe, John, if you want to just add around any of the sort of evolution of international markets.

Yes. I mean I think what will be the key drivers to that is obviously the reopening of outbound travel from markets like Japan, particularly for the Great Barrier Reef business, obviously China for the industry within Australia and also New Zealand because of the large volumes that particularly New Zealand and China provide to the Australian industry. I think what I'm probably more confident about, though, is that whilst we -- I think that we can always be fixated on the 9 million visitors coming to Australia and generating $45 billion to $50-odd billion a year that -- numbers that I used to sort of sprout when I was at Tourism Australia, I think for us, it's more importantly, the type of customer that comes. So the way to think about the legacy parts of our business, certainly with Skydiving, it's really on that working holidaymaker market. And what's been very encouraging is that I think the government -- Australian government's already issued some 35,000-odd working holiday visas. Now that's under their subsidy program where they wait to see. But there will be strong latent demand in that segment of the market. So that is a very good thing, particularly for the Skydiving side of our business. And then the other parts of our business will naturally flex when markets like the U.S. and also the U.K. come back into the market and particularly that independent traveler, which is where the majority of our business is aimed at. Skydive's a very independent traveler even from markets like China. So we don't rely on those big volumes out of China. It's more that independent traveler and that international student. So for us, we think, certainly, we're not fixated on the 9 million. It's what parts of that 9 million are going to come back into Australia and from -- and certainly from when. And I think you'll see the return quicker of that independent traveler, particularly that high-end traveler so that's very good for our premium adventure business. And then also the working holidaymaker, which is very important for Skydiving as well as the labor force for us, the solution to the labor force issues that we currently have.

Your next question comes from Allan Franklin from Canaccord Genuity.

A handful of questions, if I may, please. Just clarity on propensity to spend, if you can sort of strip out how you're sort of finding people are actually booking in and to what extent they're spending and are taking up marketing offers. Just maybe we can step through some of the different businesses and how you're sort of finding the price points and realization?

Yes. Well, certainly, what we've seen within Skydiving, we've certainly -- when we came out of the pandemic, we kept our pricing. In fact, we increased our pricing, and that's -- that seems to have stuck very, very well. I would say the same up on the Great Barrier Reef also, albeit when borders shut, there's more of a local market and they tend to operate within the operators, including ourselves up here have local pricing for locals. But once we see the return of that interstate market, they start to again purchase as per the recommended prices that we have. Treetops Adventures, look, it's a $25 price point. So it's probably a bit different to the question you're asking. And then turning to the premium adventure side of the business. Again, we're certainly seeing price stickiness, if you want to call it that, for that -- to that higher price points. So we've certainly seen, particularly in Maria Island, an increase in the price per walker, if you like, holding very, very well. So the domestic market has shown, throughout the pandemic, really a propensity to spend, particularly on experiences. And we think that the international market, as it comes back, will also hold to that. So we're feeling very confident about the pricing and the willingness of the people to spend.

Yes. Perfect. And just sort of thinking through the pontoon. Any additional sort of costs that we should be thinking about as a result of that coming in the current period? And just in terms of how we should think about the ramp-up. And/or does that effectively sub out what would otherwise have been the case with the existing setup in the near term? And then obviously, cognizant in the sort of outer years you can balance it out.

Allan, I think the right way to think about it in the short term certainly is almost a direct substitution. So there's certainly no incremental cost of scale that we need to ramp up or anything like that in the short term. In the longer term, we will -- we are positioning as that higher-price-point product and necessarily a higher-margin product. But I wouldn't be -- that will largely be flexing with international recovery as well.

Yes, perfect. Perhaps just a little bit of detail on your COGS. So it looked like it's been broadly flat for the last 3 halves, but I guess the margin there is down given obviously revenue's down and stuff and other...

Yes, a bit of spillover, yes.

Yes, just hoping for some context there, please.

Yes, that's a challenging one at the moment. It's one thing for you to imagine, you have to sort of go through the various P&Ls to actually get a sense on it. But at a high level for the audience today, it's largely a mix effect of -- in the period. Obviously, Skydive's a higher margin and it did less. So whereas then you had the GBR business taking up a larger percentage share. So I wouldn't read too much into that. I guess the one thing we can say, there hasn't been too many -- it's structural changes in the margin potential of the business, if any, probably a little bit better now looking forward. But at the moment, I expect that trend, Allan, will bounce around a bit as we move through the mix of business as each of the markets open up.

Yes, perfect there. And last quick one, if I may. Just on CapEx, any sort of additional detail you can sort of provide in terms of where that first half spend, when -- I'm just looking -- so I mean, just cognizant CapEx is running well below, say, D&A, just as a rule of thumb. How does that sort of bounce back in the next couple of periods?

Yes. I think the CapEx for us -- well, I'll take it in turn. So the first part is a lot of the CapEx has been either around fleet and just getting things ready while the volume is a bit lower. So that can be anything from planes and bringing forward some maintenance that we do. And then you also have some bits where just the volume and the timing of things Allan, playing out. Similarly, on the reef up here with our fleet doing something very similar. And then probably the other element is some of the preparedness stuff. With the lower volumes going through the premium adventure category, it's given us the opportunity to actually get -- sort of tidy up some of the housekeeping as well with some new vehicles and some infrastructure on-site as well, which obviously is the best time to do it is when you don't have people in the site. And then I guess, looking forward, so will it sort of approximate depreciation? I think that's a good rule of thumb to have. And obviously, we have to take out the right-of-use assets from the D&A line as well, which is obviously a bit confusing with AASB 16. But looking forward, I think we still are looking at that sort of $5 million to $7 million, if I take the continuing business of the reef and Skydive. And then as we add in the Trees, and I'm talking maintenance CapEx here, Allan, as we add in the Trees and Wild Bush, I think you could probably safely put $1 million on top of that, and that will give you plenty of room in terms of a maintenance CapEx sort of budget for the combined portfolio. What we're spending a lot of time on internally at the moment, and as you'd imagine, is sort of just the growth options. So we are considering sort of how best to deploy capital. So we're also looking at that, but that will be just target on usual metrics of returns, Allan. So we'll try and split that out going forward.

Your next question comes from Cameron McDonald from E&P.

Two questions for me. You've highlighted just the organic opportunities within the portfolio and in particular, even when you acquired Treetops, there were 2 other sites that were planned. And you've highlighted that you've got some additional sites in '23. You also said that you're looking to expand the opportunities at Bamurru and Arkaba with some organic opportunities identified there. What sort of things are you looking at there? And what -- and how many sites in Treetops are you looking at in '23?

So certainly with Treetops, like I think as consistent with -- when we took the capital raise to the market, what we're looking at, I guess, over the next 2 to 3 financial years is probably another 2 sites per annum. That seems to be the best operating rhythm for that business to be able to get those sites going, planned for, approved and constructed. So the 2 for this financial year are Ku-ring-gai and also Daintree. And as I said, Daintree will be late June. And then we're thinking -- confidently thinking of 2 sites in FY '23 from that portfolio. With Bamurru and Arkaba, Cameron, what we're looking at there is how do we increase the capacity. We've just seen an amazing surge of demand, both domestically and also internationally for both of those products. And certainly, with Bamurru from -- pretty much from April of this year through to October, which is the prime season for that business, it's -- there's literally no more capacity there. So we're looking at increasing the capacity in Bamurru. And then the same with Arkaba, more so that we can get the walk in Arkaba to a daily departure. So they're the types of capital deployments we're thinking about for those 2 businesses.

And then can I just ask what's been going on or what's happening at the corporate cost line? If I look at the contribution to EBITDA, it was minus -- nearly minus $4.1 million versus minus $2.8 million in the pcp. So what was going on there? And what's the outlook for those costs, please?

So you're turning to the segment there, Cameron?

Yes.

So some of that -- so those numbers are just in terms of -- sounded a bit different to sort of how I think of them. So let me just work through them. Yes, yes, because we put the corporate through, say, the transaction costs and things like that at the statutory level, Cameron. So if you sort of go to the underlying EBITDA line there, you have about a $2.5 million for the half, if you can follow me. $2.5 million.

Yes, yes.

And then that's probably the easiest way of comparing it. So the increase then on the prior year, that corresponding line, is largely due, in the prior period, we did have some staff abatements, if you will. So the senior executive and Board took a haircut in that period at the initial stages of the pandemic. Now moving forward, I think at that line, probably as we sit here today, is sort of that $5 million to $6 million, probably, let's call it $6 million, just to give a bit of rounding there. And then I'm not anticipating a significant growth from there, but where we do have growth to be accretive growth around, we'd only look to increase the scale if we think we can increase the earnings capacity of the business.

There are no further questions at this time. Please continue, presenters.

Thank you, ladies and gentlemen, for your time for our results presentation for the first half of FY '22. We know that we'll see a number of you on individual meetings during the course of the next few weeks. Thank you again for your time and your support of the business. And thanks again for today. So thank you, and goodbye.

This concludes today's conference call. Thank you for participating. You may now disconnect.