Freightways Group Limited (FRW) Earnings Call Transcript & Summary

Good morning, and thank you for joining the Freightways FY '26 announcement. We will begin with a presentation by the Freightways management team, followed by a Q&A session. [Operator Instructions] Now, I'll hand across to the Freightways management team. Mark, over to you.

Thanks, Kara, and welcome, everybody, to the Freightways FY '26 full year presentation. Around the table, you've got some familiar faces that you've seen at most of the other full year and half year presentations. Stephan Deschamps, our CFO; Neil Wilson, who looks after the Australian portfolio and Big Chill; and Aaron Stubbing, who looks after the New Zealand Express businesses. Just to make the point, largely the same executive team of Freightways has had for many years and has overseen almost a doubling of Freightways over the last 7 years. So really nice to see that continuity, but great success in the business over that period of time. I'll cover off an overview and just a few of the key points we see upfront and then hand over to Stephan to talk you through the numbers in terms of P&L performance and balance sheet. The businesses over the past year have done rather well in a pretty complex economic environment. And when we talk about a complex economic environment, I guess, what we had at the start of '26 was still the tail end of a 3-year recession. We had the start of a recovery as we came in post Christmas around November, December. And quarter 3 actually looked relatively promising, and it was probably that little sweet spot of economic activity in New Zealand in particular. And then, we had that abruptly halted by the war in the Middle East, rapid escalation of fuel prices, diesel prices, which nudged around $4 a liter here in New Zealand, and that really put a damper on consumer behavior and the number of items ultimately flowing through the networks. The focus for our businesses regardless of the economic environment had been on improving margins. It's pleasing to see that we've made progress across most businesses. There's a number where we still have a bit of work to do. But a little bit of organic growth, along with our pricing strategies, has enabled us to keep our margins intact and improve them to some degree in many of the businesses. Similar story to half year. Economy services had higher demand. So these are road-based services as opposed to overnight air freight. They're local hub-and-spoke services as opposed to point-to-point across town. And generally, if customers move from a premium overnight service, generally, we've been able to capture that in another brand with the road freight express service. The Aussie businesses and Allied Express, in particular, continue to shoot the lights out. Really impressive contribution from Allied. A lot of same customer growth, so a lot of growth out of that existing base that they have, and then, welcoming the VTFE business into Freightways from the start of February. Pleasingly, I guess, through the course of the year, balance sheet still in mid-range of policy after the acquisition of VT Express. I'll hand over to Stephan to talk through the highlights and talk through the financials.

Thank you, Mark, and good morning, everyone. If you look at the summary of FY '26, most of the indicators seem really good. Pretty much every line of the P&L has increased double digit: revenues 13.5%, NPAT 17%, driven by lower interest spend on top of the economic recovery we had in the first half of the year. So the story looks really good. As we are going to see the -- what's happening behind that is a little bit more complex and contrasted. One thing which is clear though is that Australia is becoming a more significant part of our activity. It was about 1/3 of our revenue and profit a couple of years ago. We are now increasing to 40%, and we're expecting that trend to continue. So the center of gravity keeps moving slowly from New Zealand to Australia. If we look at the key numbers, our revenue now is almost $1.5 billion. As Mark mentioned, we acquired VTFE in Australia from February. So, that was a small contributor to that revenue increase. But even without that, we would have a double-digit increase. The main drivers behind that are price increases, market share gain and a level of organic growth. The EBIT margin, which is our focus, has seen some limited improvement. But again, the story behind that is quite contrasted. And I'll come back to that, but we have 2 groups of businesses with very different results. I think overall, we were hoping that FY '26 was going to be a normal year without pandemic, without recession, and it didn't quite turn out like that. If I were going to use a sport analogy that Mark really enjoys, I would probably walk away from Rugby and talk about American football. So it's not quite a game of 2 halves, but it's a game of 3 good quarters and 1 bad one. If we look at some of the drivers on the following slide, you can see what Mark alluded to. In New Zealand, the first 3 quarters of the year saw a reasonably solid economic recovery and good activity that was building up. When the war in Iran started and fuel prices drove to a significant high, we've seen a significant impact on economic activity in New Zealand, and all that recovery pretty much ground to a halt. Even though fuel prices have come back down since the peak of the war, we haven't seen a resumption of that economic growth in New Zealand. In Australia, the slowdown took a little bit more time to appear. But as we looked at all our businesses by the end of the year, that was becoming more significant. On the next slide, we'll talk about margins, which we've mentioned over the last 3 years as a key focus of ours. Behind the reasonably flat headline, as I mentioned, you really have 2 groups of businesses. Our most premium businesses in New Zealand continue to be impacted by the economic environment. And NZC and Big Chill, in particular, have seen a decline in margin last year. In Australia, we saw the same thing with TIMG, which is driven largely by a slowdown of digitization activity. On the more pleasing side, all the other businesses have seen a level of improvement of margins, as price increases and stronger activity, combined with a controlled cost base, allowed them to deliver significant gains. Some of the names you can see on this slide. Post Haste, DX and Allied had very solid margin improvement. These margins remain a focus of ours this year and in the coming years. In terms of balance sheet, our debt was slightly higher, reflecting the acquisition of VTFE in February for slightly more than AUD 70 million. But the measure we use for our gearing, which is net debt over EBITDA, was stable at 2.4x. I should stress that we're using post-IFRS 16 numbers. If you use pre-IFRS 16, we're standing at about 1.5x. Mark mentioned our capital management policy. So maybe to remind everyone of that very quickly. We want to keep our net debt to EBITDA between 2 and 3x post IFRS 16. We're at 2.4x now. So we have a significant headroom from a debt point of view. If we were to consider an acquisition that is significantly larger than the debt headroom we have, we would use a combination of debt and equity to fulfill that acquisition. So, on the basis of a strong balance sheet, we decided to increase our dividend by $0.05 for the full year, which is a 12.5% increase. So we'll be paying $0.45 for the entire year, which is a final dividend of $0.24. We are fully imputed in New Zealand, and we are about 49% franked in Australia. I'll hand back to Mark to look at some of the details of the activity by segment.

Thanks, Stephan. So I'll talk through the numbers, and Aaron and Neil will come in with a bit of color in and around the NZ and the Aussie landscape. So in terms of Express, as Stephan mentioned, reflective of the overall result, really strong revenue growth here, same customer growth, particularly in the Q2, Q3 and through most of the year for Allied Express as well. All businesses managed to pick up market share gains. Each brand is very focused on a niche. We know the types of customers that are attracted to that niche and that suit that particular service. And as a result of that focus, we've had really good results really for quite a number of years in terms of winning new -- either new business market or business off competitors. The price increases are well executed at the start of the year and have been again in FY '27. And the 5 months contribution of VTFE was around about NZD 40 million to the revenue line. As Stephan mentioned, the growth in Allied Express and Post Haste, DX, in particular, has been really strong top line and bottom line. So they've all, I guess, lived in niches where there is good demand for their services. Allied Express is benefiting from tailwinds that come with big and bulky purchases, so a lot of e-com emerging businesses that are selling flat-packed furniture, sporting goods, some of the larger items that we transport through the Allied network. Post Haste is really benefiting from being experts in that express 2-day interisland road service and next day North Island and have attracted a reasonable amount of the e-commerce volumes that have come through cross-border as well. And DX Mail, who have not only picked up market share, but have also made their operation a lot more efficient through the use of AI and technology to improve the way they sort mail to make postie runs more efficient and are getting really good leverage out of those initiatives. Big Chill had positive Q2 and Q3. So we just started to see a little bit of lift there. Big Chill quite exposed to what's happening in the hospitality markets, generally handling more premium food through those channels into hospo, into QSRs and supermarkets. But you really did see the impact. As soon as the price of fuel went up and took money out of the pockets of consumers, you saw that fall down again. The fuel costs through that quarter had a one-off impact on earnings. So, as the fuel price went up, and I'll talk later, we have adjusted the way we run our fuel surcharge mechanisms. But you do get a one-off impact, and we did have this year as the fuel price went up and our surcharge lagged and came in a little bit later. So, that affected margins in April -- March and April slightly. I'll hand over to Aaron to talk a bit about just what's happened with that New Zealand Express landscape.

Yes. Good morning, everyone. So for New Zealand EP, the volume grew by 5.1% for the year. The same customer volume had 3 positive quarters. And as Mark alluded to earlier, the fourth quarter was quite tough, and we saw some softening. The economy services continued to outperform the premium offerings, and that's just reflective of that cost-conscious marketplace that we are operating in. We had strong contributions from e-commerce and health care. And it should be noted, though, that e-commerce growth has flattened over the last couple of months. And we think primarily this is down to the fuel increase and some movement between the channels.

Good morning, all. Just from a Big Chill perspective, up until February, as Mark talked about, we did see a gradual improvement in customer volumes across the Transport division. Unfortunately, when the war started in February, that kind of came to an abrupt halt. And you can actually see a direct correlation between the fuel prices that we were charging and also the lower customer volumes coming through. So to offset that, new business wins have been particularly important. The team has done a really good job both protecting existing customers, as well as securing a number of good business wins, particularly on selected routes. So, as you see on the slide, overall item growth of 3%. Most of that was through net market share gains, which was quite pleasing to see. 3PL continues to deliver well and slightly ahead of where we expected, sitting at 87% nationwide. We've got a small amount of capacity at Ruakura. However, Auckland and Christchurch are pretty well full. The Big Chill team are still actively engaged with customers having to think about where the next best option might be to position a new 3PL location with a number of strategic locations being considered. The next point I want to talk about is the fact that the transport industry generally has a north-south volume bias, and Big Chill traditionally have also suffered from that so that they have less volume coming from the South Island back to Auckland. So the team are really focused on managing utilization levels and margins and using better data analytics to target new business efforts on improving yield on those low-utilization routes, and that's been quite successful. And the last point I had on Big Chill was that during the year, Big Chill opened a new branch in New Plymouth, which has been really successful, both in terms of on-time performance improvement stats, but also they've secured a couple of decent new business wins out of that. As a result, we're now having a thinking about where we can expand to next with the logical options being most likely Nelson, Tauranga or Invercargill. As Mark talked about, Allied Express performed really well with a 20% lift in volume year-on-year. In the last couple of years, we've invested in much larger sales teams than what Allied have traditionally offered, and that has paid some really good dividends, both in terms of new business wins, but also increasing the share of wallet that we receive from existing customers. Allied are another business that have developed much stronger margin reporting, and this has allowed them to reposition themselves in certain market segments. And as a result, extra volumes have been realized. An example of that would be that in FY '26, Allied realigned pricing and services in the 22 to 50 kg parcel market, and that generated really solid growth from our existing customers, which was pleasing to see. That volume has necessitated the need for some extra facilities. In Campbellfield and Victoria, for example, we've added a 12,000 square meter facility. However, apart from that, the extra volume that we've carried was largely handled within the existing infrastructure. And as a result, as has been talked about, Allied produced a really good result in FY '26. And then, the last point was that in the last couple of months, we have seen some softening of volumes in Express Package, both across Allied and VT. And when I look at that sector by sector, probably the most notable sectors are building and construction, car parts and some key e-commerce customers. Their volumes seem to have dropped a little bit in the last 6 weeks. Just an update around the air freight. I think as we talked about at our last update, Airwork, our JV partner in Parcelair, was placed into receivership in July 2025. Since then, the business has operated as a going concern with -- under the control of the receivers, while they try and work through a potential sale process. During that time, both of our Airwork suppliers, Airwork and Texel Air, have performed really well in the year with some quite high on-time performance reliability, which has been pleasing. We expect that by the end of the year, we will transition away from the 737-400 fleet that we operate to one where we're using 737-800 instead. The advantage of that offer us is that 300s are newer. They are more fuel efficient, and they have a higher payload capacity. For example, a 737-800 can take 21 tonne of product, whereas a 400 takes 18 tonnes. So you're getting a better payload in each aircraft. There's a few one-off costs to transition to that newer fleet. However, that's already been allowed for in the FY '26 result. Other than that, the ongoing cost of operating 800s are pretty much in line with what we're currently incurring.

Thanks, Neil. In terms of information management and waste renewal, a pretty flat result here, really revenue is flat. There were improvements in some of the revenue streams within the division. So pricing in particular, through waste renewal, the document destruction revenues grew 4%. Medical waste was up another 7% and e-waste up by 10%. E-waste generally is taking devices which have data on them, laptops, servers, hard drives, et cetera, and either recommissioning those that can be sold or completely destroying them and selling the commodity part. So it's certainly a growth part of the waste renewal sector. Document storage volumes grew slightly, mainly pricing offsetting pretty flat volume. And the decrease was really around that digitization piece. So we'll talk a little bit more about that later, but really, that was the one piece that declined from where we have been in FY '25. Paper price is a little bit lower, 8% lower. Paper pricing impacts our business far less than it used to many years ago, where we were heavily reliant on paper sales to prop up revenue. So it's a much smaller part of our revenue base these days. Pleasingly, the Shred-X reset that we've talked about is largely complete. And again, Neil will talk about some of the margin improvement that we're getting through Shred-X as a result of those initiatives.

Yes. So, as Mark said, it's been a year of reset, if you like, for Shred-X. There's been a number of key initiatives, which the team have implemented, aimed at improving overall returns. And as you can see from that graph, which shows the sort of the 6-month rolling EBITA margin, that has been delivered successful growth, both in terms of EBITA percentage, as well as overall perform. The business is mainly focused on productivity improvements with the key wins being around improving run density. So there's been a network project looking at the way that we service customers, and that's resulted in a much improved run density, which in turn has lowered the number of drivers that we need to service our customers. And they've also automated a number of manual labor processes, which have reduced staff numbers. Revenue, they've also looked at. There's been an increased focus on margin improvement, both through pricing and also exiting some low-margin work. An example of that would be that during the year, we removed paper rebates, which have been paid to printers. So traditionally, in the Australian market, where there was rebates offered to Australian printing industries, which were not -- were very low and negative margin for us. So we've removed those in July 2026. And the team have also grown e-waste and IT volumes. The introduction of the fuel surcharge in January this year has been really important. It was new for Shred-X, and the timing was good. So it's been quite important in terms of protecting their margins. And lastly, and pleasingly, Shred-X have had an absolute focus on improving reporting and around the health and safety. And the performance has improved in that area. And as a result, they've managed to reduce the cost of wok here cover the premiums that they have been paying. Horizon Three approach we operate across Freightways is particularly relevant for TIMG, both in Australia and New Zealand. And that's largely because that industry or the information management industry is going through quite a period of changing dynamics. So I think it's important to note that overall, we are still seeing growth in our core archive and media business, which is our Horizon One opportunity, obviously. But it has slowed, hence why developing faster-growing Horizon Two and Three opportunities is really important. The focus therefore around our traditional core archive and media business is running as lean and efficient as business as possible and taking a yield management approach to each warehouse individually. So where warehouses are full, as organic growth requires, we're pulling pricing and document structure levers to make sure that the utilization overall remains high. And where warehouse utilization is lower than what we like, that's where we're focusing our new business efforts to try and fill spare capacity. So with that lean approach in mind, TIMG Australia just undertaken a restructure in July 2026, which has rationalized a further 17 positions, which we'll see the benefit of in FY '27. So, that running lean approach is an ongoing thing that we have. So yes, running lean on our core business, but then investing cash into our Horizon Two and Three business opportunities. As that little graph there shows, digital earnings, particularly in Australia, have continued to scale. The slight dip you see there in FY '26 is the finishing of a multiyear digitization project for a very, very large government department in Australia. They still have a fairly full list of digitalization opportunities, which we are looking to realize. An example of how much the business has changed, if you look at digital and Lit Support together for TIMG Australia, that's just under 40% of their revenue now. So, as you can see, the Horizon Two business is scaling, and it is changing the overall mix of revenue for our Information Management division. So the current focus for digital is around consultative selling, around -- we have a team now engaging with customers to understand what they are holding in physical archived boxes. The privacy laws in particular are opening up new opportunities around that because it's a requirement that businesses understand the personal information that they're holding around individuals. And often, when they've had archived boxes in storage for a long period of time, there's a bit of a knowledge gap there. So there's an opportunity for us to digitize information to give customers better visibility around what they are storing. From a Horizon Three perspective, Stocka in New Zealand has continued to scale nicely. And as a result, we'll launch that in Australia in FY '27. And lastly, we're market testing a number of new H3 products, which utilize AI tools to assist with data storage and extraction. That's at the market test stage where we're engaging with customers. We have a few interesting concepts around AI, what we can do with data, and it's just a matter of validating that with the market to make sure that they are products that we can scale.

Thanks, Neil. Just in terms of future investments, there's a couple of key facilities that we wanted to talk to. Aaron will cover off those. And then, we'll talk a little bit about Australia and the M&A opportunities we see there.

Right. Our Christchurch Airport extension is well advanced. It's an extension of the building and our automation. It will reunite our EP brands back under one roof and provide about 50% operational capacity, which is approximately 10 years of growth for us. The automation equipment arrives next week, so that's quite exciting. And we have targeted to be fully operational by quarter 2 of 2027. It allows us a little bit of time in that process to pause the automation construction and ensure we focus on our service delivery during that peak season. And then, we have Palmerston North, which is a new-build. So the EP brands are currently based near [ CBD ], but we'll move them out to the airport to cohabitate with Parceline, our linehaul operator. The new site will provide operational facilities and faster transit times, while providing about another 10 years of capacity in terms of Palmerston North growth. The completion is due prior to Christmas. But we will move in, in quarter 1 in 2027, once again just to avoid any compromise of service during the peak season.

Thanks, Aaron. And in terms of Australia, really, as Stephan talked about, the size of Aussie in comparison to Freightways has really accelerated through the period that we've had Allied Express and then VTFE and the organic growth that we've managed to get out of Allied over that period as well. Reality is, within Australia, the express market is probably 6 to 7x as big as the New Zealand express market and below the top sort of 3 Tier 1 players that cover the entire country with massive fleets and tend to provide air and road services. It really is a pretty fragmented landscape. We've spent a long time over the last 3 to 4 years looking around about 70-odd opportunities and businesses. Some good, some bad, some ugly. There's a real mix there. But I think it's given us a really good institutional knowledge of the way that the Australian express industry operates. We've got a really good feel for the niches that the various players operate within. Those niches can be a geography. They can be a freight size. They could be a speed in terms of overnight, 2-day or longer and interstate. It could be certain verticals. It could be certain industry verticals, medical, construction, et cetera. So getting a good grip on the range of opportunity there and understanding which of those are complementary or fit really well to an Allied Express or VTFE has been really valuable learning for us. I think the reality is, given the market shares we have in some of the niches we operate in New Zealand, we know that acquiring further in New Zealand in express, for example, is highly unlikely. So we do expect to deploy more capital over time into Australia, but manage that within the capital management policy that Stephan outlined earlier. In terms of M&A, I think from that screening of around 70 businesses, we've got ourselves down to a relatively tight short list. There's about a dozen companies that we think could be a good fit, either as bolt-ons or as close adjacencies for Allied Express or VTFE. And so, that's really where we'll focus our attention over the next year or so. In terms of outlook, it's been interesting 7 years, I think, when we reflect back over the growth that Freightways has had over that period of time, and you think about the number of world events and macro events that have impacted businesses, from COVID, labor shortages, 3 years of recession and fuel crisis. And I think last year and, in fact, through much of that period, our businesses have proven to be really resilient. We are diversified across 2 different countries. We're diversified through information management and waste renewal and express. And in particular, over the last 3 years of soft economic activity, we've still been able to play our own game. Market share wins have been really important for us. I think this year, we just started to see a little bit of that same customer activity become positive, which was a nice tailwind, albeit for a fairly short period of time. We think those same customer volumes will remain soft as long as fuel prices remain elevated. So I think the evidence we have seen over the last 4 months or so is that the money coming out of the pockets of consumers and going into the fuel pump has meant that they are spending less and they're buying less of the products that we might move around our networks. And so, we think that will probably remain until fuel prices come down and then really remain at a sustained lower level than they are today. The pace of recovery will also be dependent just on how the relative economies are going in Australia and New Zealand. Stephan pointed earlier to the higher interest rates in Aussie in particular, and slowly moving up in New Zealand. So, that will have an impact, particularly on the New Zealand businesses where we are pretty road-based and sit across most of the industries that you find operating in the New Zealand economy. So we think it will be softer for longer again until fuel prices drop and maybe slightly more positive economic conditions over in Australia. The capacity we get in Christchurch and Palmerston, those are key hubs for us. Everything that goes in and out of the South Island fundamentally travels through Christchurch. Everything in and out of the lower North Island travels through Palmerston North. So they're quite strategic investments in capacity and the optimism, I guess, we see around the growth through the NZ EP businesses. Evolve is still trucking along. So we expect to spend around about another $5 million this year, which should largely complete that project. Margin improvement is still a focus, as Neil talked about. TIMG Aussie is a key area in terms of having the Horizon One operations as lean as we can make them and putting our investment into scaling Horizon Two and discovering Horizon Three. We'll keep growing the EP presence in Australia. So we're represented in B2B and B2C now, presents really good opportunities for us to keep expanding both organically through having new business sales teams that are going out and winning market share, as well as having a proactive approach to M&A, where we can look for the right kind of business that has the right fit that can complement 2 very good businesses we have in Allied Express and VTFE. That brings the presentation to a close. So we'll hand back to Kara, who can manage any questions that you may have.

[Operator Instructions] Our first question comes from Andy Bowley.

A few questions from me, really focusing on the volume backdrop across the NZ and Australian parcels businesses, the first of which, and it's really, I guess, a clarification question. Allied Express, you talked about 20% volume growth network items through the course of FY '26. The chart on Figure 17 looks like it's 20% in the first half. But at the first half presentation, we were only talking about 14% growth. So just curious as to which one is right and whether there's any explanation for the differential?

Yes. The 20% is correct for the full year, Andy. So there's a number of initiatives we've had through business just in terms of analytics and the way we're measuring that. Allied get a lot of multipart consignment items that go through the business as well. So as we've refined that, yes, the 20% for the full year piece is accurate.

That is great. And then, in the context of the comments that you make about both Allied and VTFE over the last 6 weeks in terms of a softening of demand, can you tell us what that means? Are we talking a material softening versus what you saw in Q4, which was clearly slower from an Allied point of view? Are we seeing negative same customer volumes? Or please clarify.

Yes. The biggest piece probably for Allied, one of the very large customers is taking a slightly different approach to the market. And what we're seeing in that market is quite heavy discounting from a number of their competitors, and they just decided not to play that game. So they're doing less in the way of promotions, pushing out a bit less volume. They're a pretty big part of the Allied base. So we've seen their volumes slightly lower than they would have been in the prior corresponding period. For other customers as a whole, there's still positive trading but at a far lower level of growth than we had seen previously. But one very large customer does make quite an impact there. And effectively, they will ride out, I guess, some of the discounting that's going on by competitors. With VTFE and the B2B -- sorry, yes?

Sorry, you carry on, Mark.

Yes. I just want to talk about VTFE in the B2B space. So they have seen impacts, particularly in that construction sector with volumes coming off quite a bit. So, that part of it has dropped a lot from the prior comparative quarter where we didn't own the business, but if you look at their trading through that period. So same customer volumes for VTFE are negative, just like they are in New Zealand for the NZ EP businesses through that last quarter and over the last 6 weeks.

The drop is quite comparable to what we saw in New Zealand a few years back in construction.

Okay. So VTFE, just focusing in on that, in terms of the 5 months that you've owned it, we've seen volumes fall overall versus the prior year?

Yes, particularly in Q4, yes.

Yes. Okay. And then, if we package all of that up for both VTFE and Allied in terms of current run rate, are we up or are we down?

Allied up slightly. VTFE down. We haven't combined them. They're quite different revenue items and quite different profiles of freight. So we haven't done a combination of those 2.

Great. And just on VTFE, can you talk about New South Wales and the solution there, please?

Yes. We'll talk about Queensland and New South Wales, Queensland very quickly. What we've done in Queensland is, established a start-up delivery network using the Allied Express facility. So Allied Express own a big facility in Brisbane. VTFE are establishing their own fleet in a portion of that building, and that's enabling them to deliver the volumes that they pick up in Melbourne and transport interstate into Queensland through the Brisbane Metro area and then use an agent for the balance of Queensland. In terms of sort of a start-up, Queensland operation lost a bit of money in the first couple of months as we got established, and then operated at breakeven in June, and we expect to grow from there. We've put some sales resource into Queensland. In terms of New South Wales, as we've talked about with VTFE,'s it's the 1 state that they don't have a partner for. So they don't pick up any volume out of Melbourne and deliver that into New South Wales because they have not had a partner there. And the job that we have been focused on is either, a, finding the right partner or finding an acquisition opportunity in New South Wales that allows us to get up and running. There's a couple of opportunities there. We're actively talking to them. And I'd like to think that during the course of FY '27, VTFE would have added New South Wales into the lanes that they can deliver to.

Our next question comes from Wade Gardiner.

Sorry, can you just clarify what you said at the end there about New South Wales and the timing of when you'd expect to find a partner or some sort of channel?

Yes. We'd like to think that we'll have a channel either that we own or that we can partner with during FY '27, so during this year.

Right. But nothing imminent, you wouldn't expect it with in the first half necessarily?

Not necessarily in the first half.

Okay. So the other question I had was just around the fuel surcharge impact. Can you just confirm what the impact was in the New Zealand business? And I know in Australia -- the Australian business, it's not -- it's a different system. Has that been sort of an ongoing impact in Australia? Or is it -- has it sort of reset and you're happy that there is no ongoing impact there?