GemLife Communities Group (GLF) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the GemLife Communities Group HY Results 30 June 2026. [Operator Instructions] I would now like to hand the conference over to Mr. Adrian Puljich, Founder, Managing Director and Group CEO. Please go ahead.

Good morning, everyone, and thank you for joining us for GemLife's results presentation for half year 2026. I'm Adrian Puljich, Founder, Managing Director and Group CEO of GemLife, and I am joined today by our Chief Financial Officer, Ashmit Thakral. Before we begin, I'd like to acknowledge the traditional custodians of the lands on which our communities are built across Australia. We pay our respects to elders past and present and recognize the important role of First Nations peoples in shaping vibrant and connected communities. Today, I will briefly cover the business overview before Ashmit takes you through the financial results. I will then return to provide an update on the portfolio, our growth initiatives and the outlook for the remainder of FY '26. GemLife's proven vertically integrated operating model and disciplined approach to sales and Settlements has yielded a very strong first half set of numbers against the backdrop of a turbulent start to 2026, both here in Australia and abroad. GemLife exceeded prospectus forecast across our key financial and operational metrics while also delivering significant growth compared with the first half of FY '25. Demand across the portfolio remains solid and consistent despite the broader macroeconomic environment. Average home sale prices have continued to increase, while our Home Build margin has remained within our target range of 47% to 52% for the eighth consecutive year. We settled 208 homes during the half, 89 more than in the first half of FY '25 and 16 ahead of the prospectus forecast. Importantly, underlying EPS of $0.154 for the first half has put us ahead of our previous expectations for FY '26. As a result, we have upgraded FY '26 underlying EPS guidance to $0.30 to $0.31, representing growth of approximately 27% to 31% compared with pro forma FY '25. I will come back to the outlook in more detail later in this presentation. GemLife is a vertically integrated founder-led land lease community developer, builder, owner and operator with more than 40 years of sector experience and industry knowledge. Our model has 2 complementary earnings streams. The first, we develop and sell homes, generating development earnings and recycling capital into new communities and future pipeline. And the second, we retain ownership of the land and receive recurring and growing site rental income from our homeowners. This combination gives us both development earnings today and an expanding recurring income base as communities mature. We now have 10,452 sites across 33 communities, including more than 2,300 occupied homes and a development pipeline providing more than 10 years of growth visibility. Vertical integration remains one of GemLife's key sector competitive advantages. We control all facets of the life cycle of a developing and operating community from land acquisition, civils through to residential and commercial construction, marketing and sales and ongoing community operations, which also includes the resale of established homes to future prospective purchases. Our industry-leading delivery model gives us agility to scale construction in response to demand, greater speed to market, working capital efficiency through home construction progress payments and the retention of the home building margin that would otherwise sit with a third-party builder. Importantly, it means we can throttle up productivity to respond quickly when we see demand increasing at certain developing communities and inversely temper down productivity when seasonal and/or deteriorating market conditions are in play. GemLife Moreton Bay, which Ashmit will touch on later, is a good example of GemLife's capability to throttle up productivity to respond to market forces in the Moreton Bay Queensland region. Acknowledging GemLife's 10-year development pipeline, investment across the various business units ensures that we can continue to successfully scale the portfolio across the multistate environment. During the period, we achieved Great Place to Work certification for 2026-2027, becoming Australia's first land lease community operator to achieve this classification. Investing in the ongoing professional development of our employees is an enduring commitment we make toward GemLife maintaining its sector leader status. We commenced the rollout of our bespoke structured training programs through the QA Build Construction Skills Training Center, supporting both existing employees and future apprenticeship pathways. More exciting news on how GemLife's construction arm, QA Build, intends on remaining a resilient construction workforce will be shared with you at the full year results presentation. We also launched the refreshed GemLife brand platform and the myGemLife homeowner app, which will progressively provide a central digital platform for communications, bookings and services across our communities. This app initiative fosters a more personal concierge style of relationship between GemLife and homeowners, allowing for real-time engagement and connectivity. Finally, we were pleased to see the GemLife Tweed Waters Country Club recognized with 3 Master Builders New South Wales Awards, including Commercial Builder of the Year for the New South Wales Northern Rivers region. In addition to the successes of the GemLife Tweed Waters Country Club, GemLife Rainbow Beach was Crowned New South Wales Land Lease Community of the Year by the Land Lease Living Association of New South Wales. With that overview, I will now hand over to Ashmit to take you through our financial performance.

Thank you, Adrian, and good morning, everyone. Turning to Slide 9. Overall, the Group had a really strong first half of 2026, outperforming both the prior corresponding period and the prospectus forecast across key financial metrics. In the first half of the year, revenue increased 86% to $195 million. Underlying NPAT of $58.5 million and underlying EPS of $0.154 were both more than double the pro forma first half 2025 results. These outcomes were largely driven by an increase in the number of Settlements achieved as well as a higher average sales price. As this result marks the end of our prospectus forecast period, we have also provided a pro forma P&L for the 12 months to 30 June 2026, and we are very pleased to report that we outperformed those forecasts by 13% with underlying NPAT of just under $120 million. These strong outcomes has led us to declare our inaugural distribution of $0.011, which will be paid later this week. On Slide 10, we break down the performance on our 2 main segments that drive the business, development and community operations. Development EBITDA grew 98% from last year to $78.4 million. We have improved our margins even with taking into account additional marketing expenses for several new projects that will commence Settlements in the second half of this year. Community operations has seen strong revenue growth again, driven by additional occupied homes as well as increased site fees. As previously flagged, the operating margin has moved closer to 61% off the back of several new communities incurring costs without any corresponding revenue. Margins at our mature communities have remained in line. And so as the new communities begin to add more occupied sites, we expect that margin to increase. Corporate costs increased as we have invested in scaling the platform following the IPO. Alongside the corporate initiatives that Adrian touched on earlier, we invested in technology upgrades, governance enhancements and additions to the leadership team to support future growth. Overall, Group EBITDA increased 84% over last year to $71.1 million while maintaining a stable EBITDA margin. Going a bit deeper into the development segment on Slide 11. The key financial drivers of this segment are the number of Settlements, the average home sales price and the Home Build margin. And importantly, all of those metrics were up since last year. Settlements were up 75%, sales prices were up 10%, and the Home Build margin has now been maintained at circa 50% for what is now the eighth consecutive year. Those factors combined to grow our development earnings. Our sales pipeline has also increased, which is up 50% since December. As at 30 June, we had 292 homes under contract and an additional 78 homes with Expressions of Interest, giving a total of 370 homes. This compares to 246 homes at 31 December. As we have seen across the entire land lease sector, demand has continued to gain momentum, and this is most evident at GemLife Moreton Bay, which I'll touch on more later. On Slide 12, we give more breakdown on the settlements and sales prices achieved. I won't go into too much detail on this, but the key point that we wanted to speak on this slide is this concept of the development runway that best explains the pipeline that GemLife has access to. The table on the left shows the list of projects where we either have occupied homes or we are actively building homes. The last column on the right shows the balance of lots at sites that are currently under development, which we are calling the runway of future home settlements. Across projects with homes under construction, we have 3,053 lots left to develop, which is pretty significant. We feel this really highlights the depth of our immediate runway and provides a highly visible source of future settlements, earnings and growth in the coming years. Adrian will speak more on this later as well. Turning to Slide 13; Community operations continues to build into an increasingly meaningful recurring revenue stream. Occupied homes increased to 2,324 with the portfolio occupancy remaining at 100%. The average weekly site fee increased 6.4% to $215 ex GST over the first half last year. This was driven by 3 main factors: contracted increases in the site agreements, which is typically 3.5% or CPI, whichever the greater. Secondly, new home settlements coming in at higher rents; and lastly, unwinding of discounts provided to homeowners prior to the completion of the clubhouse. The combination of those factors and the increase in occupied homes has seen the site rental income achieve a 29% compounded annual growth rate over the last 4 years. As we work through our pipeline and runway, we expect rental income to continue scaling and contribute a larger proportion of Group earnings over time. Slide 14 demonstrates both the strength of demand and the flexibility of our vertically integrated model. At the end of June, we had 382 homes either under construction or completed but not yet settled. This was up 27% from December. This reflects our deliberate decision to accelerate production in response to increased demand for our homes. Despite the increase in construction activity, we had only 10 completed homes available for sale across the entire portfolio, highlighting that demand continues to outpace supply. GemLife Moreton Bay is a very strong case study to illustrate this. Last year, a buyer looking to inspect that site was required to wait 3 weeks simply because of the elevated demand. To address this, we doubled our construction output and expanded our sales team, which allowed us to more than double our monthly inspections. The result was 71 settlements in the half compared to 88 settlements over the whole of FY '25. This was a 61% increase in our settlement velocity to almost 12 per month, which is a Group record. We did this while also increasing the average sales price by more than $30,000 half-on-half. For us, expanding inventory is not just a capital management consideration. It is a deliberate strategy to convert a growing sales pipeline into future settlements. Finally, turning to the balance sheet on Slide 15. We have maintained a strong financial position while materially increasing development activity across the portfolio. Gearing was 32.3%, which is in line with our expectations given the accelerated rollout of new communities to meet the incoming demand. As settlements commence at these new communities, we will use the incoming home sale proceeds to fund development activity at these sites. While we do expect gearing to increase slightly over the next year, we still expect this to stay within our target gearing range. To summarize our financial performance over the first year as a listed entity, we've delivered strong earnings growth, maintained margins, expanded our recurring rental income base and preserve balance sheet strength while accelerating growth across the portfolio. With that, I'll hand back to Adrian to take you through the portfolio and the growth ahead.

Thank you, Ashmit. I'll now provide a brief update on the portfolio and the development activity across the Group. Turning to the portfolio. The observation we wish to highlight is the breadth of activity now underway across the Group. Our footprint spans 4 states being Queensland, New South Wales, Victoria and South Australia and includes completed communities, active developments and future pipeline, giving us multiple sources of settlement growth as we continue to scale. Whilst we remain active assessing new organic growth opportunities that align with our strict development margin profile requirements, we continue to exercise prudent capital management to ensure that our aspirational growth objectives can be strategically timed and responsibly funded. We will now shift our focus to Slides 18 and 19, which highlight the communities and development approvals that are driving near-term production and settlements. On Slide 18, the development activity is progressing across a significant portion of the portfolio. We have recently received development approvals across several communities, while civil and earthworks activity is underway at Beachmere, Currumbin Waters and New Gisborne. Residential construction is now active across 13 communities. The breadth and scale of activity is important because it reduces our reliance on any single project and creates a broader settlement runway as additional communities move into production. These [ unhibited ] runway of activity, as Ashmit and I have previously referenced, is now crystallizing GemLife's ambition to deliver more homes to a broader cohort of customers in a range of new and undersupplied catchments. And on Slide 19, we are also progressing with the delivery of major central and communal facilities across multiple locations, which will further underpin the settlement run rate at those respective communities. From a Settlement perspective, Elimbah achieved its first settlements in June, and we expect 5 additional communities to commence settlements during second half 2026. Sales activity has also commenced across a number of recently launched communities, including New Gisborne, where demand for the first stage has been particularly encouraging. We are moving from a period where earnings were concentrated in a smaller group of maturing communities to a much broader operating base, exclusively executed by GemLife's vertically integrated operating platform, driven by people, purpose and place. The highlights shared with you on Slides 18 and 19 should provide for greater visibility into sales and settlement momentum leading into FY '27 and beyond. Coupled with our demonstrated ability to deliver best-in-class product whilst operating within a multistate environment, GemLife is poised for long-term growth supported by business-led initiatives, which we will touch on shortly, favorable market trends and compelling demographics. Looking forward, GemLife's growth and outlook seeks to keep pace with a burgeoning cohort of Australian downsizers looking to age in place, live a socially connected lifestyle and enjoy [ lived ] experiences supported by health and well-being. To keep pace with customer demand and ensure that the business continues to sustain a healthy building margin into the future, we are proud to announce the creation of GemForm Structures, a newly formed business unit positioned within the QA Build division of the Group. GemForm Structures will be mandated to create factory-built manufactured homes exclusively for GemLife customers that will increase and complement existing home construction delivery methods whilst further enhancing GemLife's sector-leading vertically integrated operating platform. As previously reported, we have already successfully trialed this construction methodology at GemLife Rainbow Beach in New South Wales. And subject to final investment scope and approvals, we believe the model has the potential to reduce build times, lower construction costs and materially increase annual production capacity. The model also has the potential to broaden the range of locations and development opportunities while giving us greater control over costs, delivery and margins through different economic cycles. We look forward to sharing further news regarding GemForm Structures in future market updates. Until then, we will continue to refine and improve upon the business case and execution strategy. In addition to solving for the need to increase home construction delivery, GemLife's Currumbin Waters development, Australia's first vertical land lease community will see the land lease model introduced within an established catchment where broad acre land opportunities no longer exist. Our multistory structures owned and operated by GemLife will deliver approximately 215 3-bedroom independent manufactured Sky Homes across 8 low-rise buildings and will target premium homebuyers offering high-end designs, elevated amenity and urban integration. The patented modular construction removal and installation methodology strictly adheres to the statutory and regulatory requirements of each state and territory in Australia and allows for the densification of scarce land more efficiently while retaining the underlying economics and customer value proposition of a traditional GemLife community. Early site works have now commenced in earnest and our sales activation is slated for 2027. First Sky Home settlements will likely occur in 2028, along with the official opening of the community clubhouse and central facilities. Turning finally to the outlook and guidance. Our key strategic focus for the business is activating additional development approved communities and building an increased yet sustainable settlement pipeline that provides visible earnings growth over the coming years. 6 new communities are expected to commence settlements during 2026 with Elimbah already settling and another 5 scheduled to begin settlements in the second half. At 30 June, we had 382 homes completed or under construction compared with 300 at the end of December 2025. We also had 292 homes under contract, together with Expressions of Interest over a further 78 homes, demonstrating continued depth of demand across the portfolio. As some of the newer communities commence settlements, we expect some moderation in average sale price during the second half due to the home product mix sold within those communities. Given the strong performance in the first half and the sales and construction momentum we are seeing in the business, we have upgraded our FY '26 underlying EPS guidance to $0.30 to $0.31 from our previous range of $0.285 to $0.30. That represents growth of approximately 27% to 31% on pro forma FY '25 underlying EPS. We entered the second half with strong demand, increasing production across the portfolio and a significant development pipeline ahead of us. Our focus remains on disciplined execution, maintaining strong margins and converting our pipeline into sustainable earnings growth. That now concludes the formal presentation. Ashmit and I are happy to take your questions.

[Operator Instructions] Your first question today comes from Connor Eldridge with JPMorgan.

Can I just clarify, is the original 420 settlement target for FY '26 still in place? And if so, I suppose, why, given you did half of that target in the first half and then you'll have the benefit of 5 new communities settling in the second half?

Connor, yes, thanks for the question. So the previous guidance we provided was over 420 homes for the year. And so yes, that is still in place. We haven't updated that as of now.

Okay. And just on the average sale price, how much are you expecting that to moderate in the second half?

Yes. So I guess we specifically didn't go into too much detail. But as previously flagged, we still expect kind of FY '26 sales prices to be in line or greater than FY '25 average sales price on a combined basis.

And just one final one maybe for Adrian. Just Adrian, on construction costs up in Queensland. Just wondering how you're expecting that to impact Group margins, just given there's obviously elevated activity up there?

Yes. Connor, look, very good question. I think in Queensland, we're going to see construction costs continue to rise anywhere from 4% to 6%. I don't think we should be surprised if it's closer to 7% leading into the Olympics. And this is why we've been very proactive in looking at alternative methods to construct homes on mass and exclusively for ourselves as well, mind you. So look, at the moment, we are extremely comfortable with how we are approaching FY '27 and how we are negotiating with our supplier and [indiscernible] network. So to-date, based on the results we've delivered today, it's business as usual for the GemLife Group, but certainly something that we continue to manage on a daily basis as we've previously discussed.

The next question comes from Solomon Zhang with UBS.

Just wanted to run through some math. I mean you did 208 settlements in the first half and then the change in contracted homes is around 90. So it implies that your first half sales was around 300 or 600 annualized. So that's well ahead of your prior settlement guidance range of 420. Is it a fair comment to say that production is the main bottleneck? And could you maybe just comment on where your annualized home production rates will get to in second half when you hit that sort of 500 level?

Thanks, Solomon. Yes, good question. So on the inventory page, we did give an idea of how many houses under construction. So that's about 382 homes. That's including the 73 completed homes as well. But in terms of, I guess, your question on sales, yes, so on a net basis, the net sales achieved would have been in sort of that 330 mark. But I think the critical part to remember is there's 5 new communities starting in the second half of this year. So we may have some sales on there. We have construction actively going on that, but just because of -- there's always nuances with the first few stages. Some people are entering into the second street or access to the site via the entry gates or sewer connection. So yes, while construction activity has stepped up and sales activity has stepped up at this point until we sort of see the settlement run rates at all those new communities. We sort of didn't want to be too aggressive with what we're looking at in the second half of the year. So very happy with what we've come out with. But effectively, yes, I guess the point is the numbers show that the construction activity has picked up. We can build more already. So it's not really -- I wouldn't say it's a bottleneck and the sales pipeline is there as well. It's just getting that overlapped and crossing the sort of initial nuances with new [indiscernible] under development and those early-stage settlements will, I guess, in my view, we'll have a good second half, but probably a stronger first half 2027.

Got you. And a quick clarify, of the 292 contracted homes, which could potentially -- which would be available for settlement in the second half, noting that could slip into first half next year?

Yes. So some of those are definitely kind of first half '27 settlements. And having said that, there are probably some homes that we're building that are still -- could be sold and settled this year. So it's not -- I guess the 382 homes under construction are complete and the 370 settlements, it's not an exact overlap. So for example, we -- of the 370, 34 Expressions of Interest are in New Gisborne. We haven't started home construction there, but that first slab is being poured in October. So yes, to your point, that number are contracted homes, but some of them will definitely be first half '27.

Sorry, Solomon, I was just going to add just so you understand the nuance of how GemLife delivered the project. So for us, obviously, to get to a pretty solid run rate for settlements, part of our IP is to deliver as much of the site as possible. So to essentially disarm any arguments that the customer may have in relation to moving into a development site. So there's heavy activity before we really start focusing on home construction itself. So -- and we've seen the fruits of that labor there in Victoria, the New Gisborne project, as Ashmit correctly highlights. There's 34 contracts there with the first slab due to go down in November. So those 5 projects that will start contributing to the settlement pipeline are undergoing significant capital investment so that when we go into FY '27, we're going to have some pretty strong visibility into a predictable run rate.

Very clear. Maybe just a final one for you, Adrian. Just on Slide 21, the GemForm Structures. I appreciate that you're still working through the detail, but presumably, this is clearly an NPV positive project. Do you have any rough parameters around rough CapEx and then your cost savings and build time savings that you might be willing to touch on at a high level?

Look, yes, that's -- look, what we can say at the moment is we are working through the fundamentals of the factory setup. There are different iterations and phases for delivery of this factory. And that's something we'll probably go into granular detail at the full year results when we report on the numbers, but also this business unit itself. So at the moment, I'll probably decline to share too much of that detail as we are still working through those numbers. But what I can tell you, there is sufficient confidence within the Group to be pressing ahead with this business unit. And whilst we navigate what sort of phases we bring on earlier or whether we sort of take a more conservative approach to what we're manufacturing, that's something that we'll determine over the coming months and report to the market at full year.

The next question comes from Lauren Berry with Morgan Stanley.

I was hoping you could give us a little bit of commentary on how your sales rates have trended over the last couple of months. I think particularly since the budget came out in May. And also if you can comment on what you're seeing in July and also into August.

So look, I'll speak to the general commentary and then Ashmit can give some more detail on the numbers. But what I can tell you is since those budget and Federal budget announcements, GemLife has been extremely proactive in going out to the marketplace, particularly going into winter. Winter is always our traditionally quieter months for this sector as people -- we call them housekeeping months. So what we have done over the last few months is gone out with different seminars, open day events, twilight events to ensure that this downsizing option that is GemLife still sits at front of mind of the customer. And I'm pleased to say that when we look back on these housekeeping months, we've been averaging consistently over 2,000 inquiries per month, which is something that we reported on at the full year results and leading into '26, where significant inquiries have been evidenced across our existing portfolio and these newly released communities. But certainly, as we go into spring, we envisage strong numbers and managing our inventory flow to ensure that the settlement pipeline can be stocked and indeed replenished for that matter is something that we're focused on at the back end of this month and certainly into September.

So Lauren, I guess, yes, just on a bit more data front. But what Adrian said is completely right. The inquiry levels are still exceptionally strong. Having over 2,000 a month is well more than what we need. We're still releasing stages in our disciplined approach. So there's no point signing up contracts or houses that are too far in advance anyways. That's why we're just locking in the price without knowing that, the cost. But effectively, no, it's -- I think I sort of touched on -- I got a question at the full year results '25 call about where sales were at. We had a good Jan and Feb. But even since then, from Feb to June, the sales pipeline probably went from 300 to 310 to 370. So it's still pretty -- it jumps up a lot. In July and August specifically, the total sales number is still at the same level it was in June. So what that means is whatever we're settling, we're replacing with sales. Again, we don't need to go too far in advance or too far ahead, but we're very happy with the pipeline we have given sort of the 12-month outlook on settlements and construction.

Okay, great. And then second one, Ashmit, on the gearing. It's been increasing. You flagged it's probably going to go a bit higher, any higher would be getting even close to the 35% upper end of your target range. How comfortable are you sitting at 34%, 35%? And how many more new projects can you, I guess, fund at this level without needing any additional capital sources?

Yes. So good question. So very comfortable, short answer. Long answer is obviously, in the second half of this year, with settlements activating all those new projects, there's significant cash coming back in from those projects that self-funds those projects effectively. We still have capacity to step up the construction across the other sites that we're looking at. So this is all part of the, I guess, the IPO model funding. I got asked the question, I guess, internally, what did we expect gearing to be at June, and I opened the IPO model, and it was something like 32.2%. So like I can wholeheartedly say this is where we expect it to be. But -- so yes, it will go up. And yes, if we're at 34% point something, for a bit because I do expect it to sort of flatline for a bit as the projects start becoming a bit more self-funding. And keep in mind, whatever we're putting into the ground adds value as well. This is -- we're bringing forward settlements, clubhouses being completed as well, discount rates coming down. It's typical for what that life cycle of evaluation and project goes through. But yes, look, I do expect to sort of be pretty plateaued at that number before it starts aggressively coming back down when we sort of cross that sort of CapEx hump, if you want to call it, and significant cash starts coming back into the business.

Great. And just last one for me. You've upgraded your guidance. What do you see as the key driver of the change in the last 6 months, even though you haven't updated the official watch settlement guidance range. Can you just comment on how things have evolved?

Yes, sure. So I think, obviously, a strong first half. I think the settlement run rate at Moreton Bay has just been exceptionally strong. Just the level of sales and demand of the new projects as well. So I think the average sales prices, I guess, for the first half and what we're achieving still on a like-for-like basis, we're still seeing sales prices growth, irrespective of whatever is happening, I guess, with the budget or macro stuff. But the sort of -- on the second half, with the new projects starting on -- being first stage in certain different areas is obviously that product mix element. So we do expect that lower sales price in the second half. But overall, though, there's enough key drivers there to sort of well support that. And really, the only thing sort of holding us back is just seeing settlements at the new projects at these 5 new projects and seeing what that settlement run rate will be. But that will give much more clarity into 2027 once we actually see that.

And Lauren, just to add to that, what's giving us further confidence is just the level of inquiry and the quality of the inquiry that we're getting across those new projects. So obviously, our established communities that are maturing are well understood and contributing significantly, but also these newly launched communities where sales are slowly starting to gain their own momentum, we're cautiously confident that as we go into the back half of the year that it will continue to be a consistent run rate for us and certainly turbocharge into FY '27.

The next question comes from Adam Calvetti with Bank of America.

Adrian and Ashmit, congrats on the result. Just your corporate costs are up on an annualized basis about 50%. I mean, if you kind of run through consensus numbers, it would have been a much stronger result this half. Can you just comment on what's driving that?

Yes, sure. So I guess the way I'm looking at it now is, obviously, first half last year, we weren't listed. If I look at half-on-half, it's more like a 20% increase over second half last year versus this half this year. But having said that, Adrian touched on a few corporate initiatives that we've done for the first half of the year with the GemLife brand update, the app rolling out as well, a lot of that is sort of upfront. Obviously, being listed now, there's a few governance enhancements that we've done, updating risk management frameworks. We had a lot of firsts, I suppose, with our first AGM, first distribution that comes with documentation and legal fees and tax fees to check advice. So there was definitely, I guess, what I would say a bit of a, I guess, a transition or that step-up. But moving forward, like, I definitely don't expect that level of growth. And obviously, as we grow and inflation and CPI and wage growth that, that will come in, but not at the level of growth that what we've seen for this half, I guess, it's still part of that transition phase right now.

Adrian here, just to add to that, obviously, those corporate costs is -- the QA Build division because we are a self-performing business, there are a lot of different sort of programs that we're running through that QA Build division to ensure that we're sufficiently supplied with workforce across these locations in that multistate environment that we referred to. So a lot of that investment in people and culture and in programs and in different sort of initiatives to attract the best quality workers, the best quality subbies and suppliers, that requires investment and consistent investment to make sure that we can go to the areas that we're going to and delivering the GemLife product to the same quality and spec level and maintaining those margins. That's what this business is about.

Are you able to comment maybe on how much of that 50% uplift is in the QA Build division? Is that going to be an ongoing cost? And will that eventually translate into the new product or is it more R&D? How do we think about that coming in and out?

No. So the QA Build costs are more in line with business as usual related costs when you're scaling to the level that we're intending on scaling to. As Ashmit said, majority of those corporate costs are one-offs or firsts when we talk about governance, and we talk about the other initiatives since becoming a listed entity. Again, don't forget the fact that in the first half of FY '25, we were still a private company. We ran a lot leaner than what we're running today because there's simply more requirement to report and obviously, we're scaling. There's 13 communities that are currently under construction that requires technological platforms to drive that margin growth for the business.

Adam, I might jump in here. So when Adrian was talking about that scaling, that's -- a lot of that's on the technology side as well and that software cost. So -- but having -- because that allows us to scale in a controlled way as well, but also on the training center. But that technology stuff, that's -- while some of that is ongoing, but it's really enhancing the team, yes, a lot of it is established.

Okay. Maybe just quickly the outlook for the second half for those corporate costs.