Intelligent Monitoring Group Limited (IMB) Earnings Call Transcript & Summary

[Starts Abruptly] Dennison

Thank you, Shenin. Thanks very much. Everybody, welcome to the first half '26 IMG, Intelligent Monitoring Group Half Year Results. I appreciate your time, particularly in reporting season in the first week. We'll just go through a presentation today. Obviously, the financials are the key feature of the day, but also we'll have a discussion about the business. We'll go through the presentation, probably ask you to just hold your questions till the end if you can. I -- are happy to take them though. And in the event that we don't answer them today, whatever we can particularly take things offline. So kicking straight into the result. We're actually pretty happy with this result. I'd call it solid underlying EBITDA at $19.2 million for the half. Underlying operating cash flow continues to improve. For those that granularly watch us, the very last 4C we did was the first quarter, we had just slightly positive cash, as we have said consistently now that first quarter sort of is the weakest quarter of the year for us, as it tends to be a rebuild after the end of the financial year for a lot of our customers and work book. You can see therefore the second quarter being very strong cash again and tracking more, I guess, closer to the P&L, EBITDA stuff as we start to deliver on that work. Underlying earnings growth for the half, 9.3%, obviously boosted by the acquisition of BNP and Western Advance and then organic growth in Australia of 8.3%. We'll probably talk about New Zealand a little bit today, but New Zealand did suffer a disappointing first quarter, and it surprised us a little bit in that we had a very good and we have a very good pipeline there. We had the end of a large series of multiyear sort of government work roll off, as we had expected. We had got some significant work starting and we got caught with a bit of a timing mismatch in that quarter. It did extend it longer than we thought. And ultimately, we're running underutilized for a period there through, which is now normalized. And so as we go now into the second half, both the pipelines continue to lift, but the work is actually tracking back to plan. And so -- and there's a slide later on that we can get into New Zealand is back on track, which will be part of helping us through to the second half and then ultimately on to the full year guidance. I probably will park that. I'll come back to that when we talk about it exclusively. Pipeline, I mean, I think this is probably the real story. When we bought ADT 2.5 years ago, we wanted to return it to permanence. We wanted to do that through commercial and enterprise work and leadership and that pipeline just continues to build and build and build. It is a combination of existing customers doing more work, taking on more solutions and more sites through to having new customers join us new projects and new service contracts. And so up another 36% on the quarter. So I think it was $36.6 million at the third -- the end of the first quarter, $49.8 million at the end of this quarter. That pipeline is a revenue is effectively what we -- the pipeline we see turning into revenue over the next 12 months that we have today. It's not a gross pipeline of what we have won in full. Acquisition of Tyco, like as we move forward into this next year, this will be a major feature, managed to get that signed up before the end of last year. That's going to be a fantastic addition to our business. I've just come off the back of a tour of New Zealand, but also that organization. For those that don't know, we have to be a little bit cautious at the moment about using the name, but effectively, that is Wormald New Zealand that we've acquired there, which is fire services and monitoring. And that is just an outstanding business we're looking forward to having settled. We do have though to -- we've not yet got a final date on settlement. It is determined totally by our counterparty, the seller there, who has a number of sort of legal structures and things that they have to deal with to move. We are pushing as fast and hard, as we can on that. But ultimately, we're a [ price taker ] in terms of settlement. We fully expect to get it in this financial year and ideally sooner rather than later, but we can't do better at the moment than to get an expected date. We finished with good cash in the bank. Obviously, we raised some money to make sure we stay really healthily funded plus with the acquisition facility, we're in great shape financially. So summary, as we'll work through this preso, we're trading to budget. We're on track, and we're on track to deliver that greater than $0.062 per share of pro forma earnings. Obviously, pro forma is just going to be impacted a little bit by what timing -- sorry, the headline number will be impacted by the timing of when we actually get Tyco New Zealand in the books, but the underlying business is performing to plan on that. Quickly, just again to reiterate anybody new to the story, this is a very defensive, stable cash-generative business at an underlying level. We are effectively a monitoring and service business, doing what would equate to effectively repeat work. We now have on the back of a couple of years of building this business, a scaled platform. We have both the platform internally in terms of the systems we're running, but also a reach in terms of the workforce that we have to deploy into work directly across Australasia. And we're now starting to have a pretty robust financial profile. We just highlight the reach point here in the graph. Whilst it looks like there's a lot of things that's actually positive, our customers at the big end of town, who want security services and technical services want us to be able to service them in their entirety. And we're one of the few people -- very few people that can actually claim to be able to do that, and that is what is leading to our robust pipeline and growth that we are seeing come through. Structurally, really, we are simple. It probably looks more complex there than it actually is or feels to us. Effectively, we've got on the security side, one direct-to-customer business, ADT. We have that in New Zealand and Australia, both running separately with their own general managers. We have a partner business in security Signature Security, which is an old historic name in Australia, which runs stand-alone and sort of does deals with little security companies to help them grow. And we have a wholesale security monitoring provider, IMS, which is essentially the base business that this journey started from the old Threat Protect back in the days, if you trace it right back. Now with the acquisition we announced to settle shortly, Tyco New Zealand, that gives us Red Wolf security, which is a direct-to-customer, high security business in New Zealand. I make the comment high security. So it does works at the highest level in government with government, New Zealand government that is around the world, which will fit into the ADT stable businesses in New Zealand, and we have direct-to-customers in Tyco, which is as I said and acquired as Wormald and that will sort of standalone, but help us with commercial scale in New Zealand around our security side as well. I won't spend any real time today on our vision and values. For those that want to engage with me later offline, they're very important to me, particularly around the kind of business that we're trying to build. So to go to the results, I'll hand over to Jason, and he can take you through the half and I'll dovetail with him. Over to you, Jase.

Thank you, Dennison. Good morning, everybody. So as we called out in the headline number, the underlying EBITDA is $19.2 million for the half with a margin of 20% and growth on the prior half last year of 9.7%. The key callouts here are the profit before abnormal costs, amortization of $10.6 million, up again on the first half FY '25 by 36%. some abnormal costs in the EBITDA adjustment, which is the $4.6 million covering off some of the Tyco New Zealand acquisition costs, historic share-based payments and the impairment of receivables. When we look through sort of the key numbers, so revenue is strong growth on last year. Underlying gross profit up again versus the first half. Underlying EBITDA up versus the first half. Depreciation and leases there -- these are giving us an operating EBIT of $16.6 million. And then if we work back up from the reported profit and loss, adding back the amortization and the abnormals, we get to 10.6% profit after tax there, which is a good result, strong result compared to the first half last year. Dennison, we go to the next slide. Sorry. All right. So reported EBITDA, $14.7 million. Shared the impairment of receivables, something that will we will look in the new financial year to rework how we normalize that receivables sort of gap. No impairment of assets this year versus the first half of last year, which is a strong testament that our financials are working well and all of our cash-generating units are the correct configuration and goodwill. Recovery business acquisition, integration costs, $2 million for the half, largely acquisition activity and a little bit of restructuring. some of which in the New Zealand business Interest income and then share-based expenses, which is historical shares exercised there, giving us an underlying EBITDA at $19.2 million. Again, you can see that's up on the first half of last year, playing into our -- being on track for our full year EBITDA guidance. Breaking out the depreciation and amortization, so in the stat reports, we've got $11 million made up of $9 million in cost of services -- cost of services and $2 million outside, slightly up on the half as a comparative number for the half. Business depreciation, which is really just covering off all of our core PPE same business items, business as usual items. Lease depreciation is up on the half, but it's comparable to the June number. We added in motor vehicle leasing under AASB 16 allowances in the second half last year. So you will see if you compare this to June, the actual lease depreciation is not that different. It looks different to the half, but it's not different to the full year. Then that gives us $2.6 million of depreciation, important to think about for the future. And then in the intangible sort of amortization pieces, we've got the subscriber assets there, $2.8 million and customer contract-based non-cash amortization there at $5.7 million, so giving us $8.4 million there, so $11 million for the total, again, up on the half, but not -- but in line with the full year.

Right. And I'll jump in on the divisional, Jase. So again, just breaking down that core EBITDA into the components. You can see on the chart there -- sorry, $19.2 million breaks the $13 million of that comes from Australia. So that's our real driving entity or has been to this point really and underlying growth there at 8.3% half-on-half organic. So that is us with the businesses we own that we have owned for 12 months and their success and not including any -- [ lot to invest of our acquisition ]. That's pretty consistent with the full year result last year. So we're 8.2% organic growth for the FY '25, 8.3% this year. And ultimately, what we are looking to see is that number start to pick up over time, as we drive video services and that commercial book and that pipeline translates through on to what is a fairly stable base. The acquisition earnings impact there is WAPL and BNP, but also just including a full period of DVL so -- just to also make sure we cover off the full annualized effect. So that earnings. And then New Zealand, which you can see was a very poor result in the first half of this year. I'll just talk to that. So as I've said, starting the year, the book was in great -- in good shape, and it actually continues to be and in fact, improvingly good shape, but we did have the wind down on a contract. That contract is actually MSD in New Zealand, which is the largest government department. They've been doing a lot of upgrade work over a number of years. And government, the New Zealand has been very [ pause there ] across the board, not just there. So we fully expected that work to sort of come to more of a tail, more back to more sort of service levels on an ongoing basis for a period. And as a result, we had new work coming through. One of the big pieces of work just to verify for you is Auckland Airport for those that do go to New Zealand and know much about what's going on down there. And we've just suffered a slower startup there. We expected it to start come back from breaking start this year and -- sorry, from the journey that is kick off and it actually just got a bit delayed and delayed on top of a number of other things. And I kind of put that down to the economy largely like just decisions have been made, pipelines are being built, actioning and final sign-off to start delivering work is still a bit slow. In New Zealand, I think that's what you see here, not ideal in a business like ours, though, and in New Zealand, in particular, we have a fairly shallow book of major work. Australia is very different, we've got a very wide diverse book. You kind of have to ride through it if you're trying to build a business, which we've done. And now we've exited that. And the work that started is multiyear work and ultimately will go on to improve and increase the size of our service book and ultimately pull the engine through. So unfortunate, we have, though, also been going through quite the review of the New Zealand business. Red Wolf coming in on the security side is a really positive thing for the whole business in New Zealand, the whole security business. And obviously, having Warmold further in the mix will allow us to widen our commercial reach in New Zealand. Warmold has about nearly 30% of commercial business in New Zealand. That touches with its fire suppression systems, which gives us a starting run at lifting that ADT commercial business, which will have a negligible market share in New Zealand currently in commercial enterprise. And so, as part of all of those things coming together, we have done a real assessment. We have had a general manager change in New Zealand too, which has taken place, and we're about to start a new person into ADT New Zealand, who has a much -- a different skill set, much more attuned around the commercial enterprise, high security market, which would align closer to the kind of skill set that we had in Australia, which has allowed us to unlock that business. Other things going on in New Zealand. I mean. I think the economic environment is a bit is important to turn out. But on top of that, you've had the 3G transition, which is as we saw in Australia when we first took over 2 years ago, very distracting. It means on a business like ours, you spend most of your time just focused on your existing customers and keeping them signed on and up to date with the technology rather than being able to deploy your efforts to growth. That is now coming towards the back end. The first 3G networks are shutting down, which as we look forward, will be a very positive thing in Australia. We've also had our first crop of ADT Guard sales starting to become the rhythm, they're starting to pick up. And in fact, we had our first ADT Guard event in New Zealand. Archibalds, again, for anyone who knows New Zealand, Archibalds Motors on Moorhouse Avenue in Christchurch, we deterred a theft there 2 weeks ago. It's the first time in New Zealand, we stopped the crime from happening, which is a key calling card for us to be able to deploy our advanced security solution. So not a happy sort of result for the New Zealand guys to be sitting on, but actually, ironically, a lot of optimism as we move forward. And the February number, we expect to be up again on the numbers that you can see on the chart we've got here. And again, when you take the half-on-half, that will go quite some way to getting us -- it explains why we are on track to guidance and are happy with where we're at. Back to you, Jase.

Thanks, Dennison. So yes, so balance sheet, obviously, the key call out stable strong. I think that's been true realistically since we refinanced this time last year. The cash position largely from the raise, but also demonstrative of actually building cash back in the business and debt net debt to adjusted EBITDA for last year, 1.3%. Nothing really to call out sort of here. Core working capital lifted by $2.2 million, but well placed to charge on with our year this year. So the cash flow table is a bit busy, but we wanted to just demonstrate that we are in a position of continuously growing our operating cash flows. This is sort of representative of the decision that ASIC made to allow us to no longer have to present 4Cs. I think that's a good mark of healthy cash flow in our business. You can see here that we generated an underlying operating cash flow of $9.4 million before non-recurring costs, which is up on the half for last year and shows that we will be in good stead for the upcoming year. And I think I made this point at the first quarter review, this has been a cash-based half. Everything that we have done this half has been with cash. Acquisitions have been made with cash, and that certainly shows that we will have been closer to EBITDA in our cash flow this half than arguably in the other half prior. So a little bit of abnormal. So acquisition and equity raise costs around $1.5 million, a little bit of general restructuring costs of $0.5 million. The investing activities at $12 million. So we have $9.1 million, which was the acquisitions in cash, again, of Western Advance and BNP Securities and then obviously, that a little bit of tidy up of Mammoth Security, getting the non-controlling interest out and now Mammoth Security is a wholly owned subsidiary. In the CapEx space, again, you can see in the slide that half-on-half, we -- our CapEx is lower than the same half last year. And the mix is roughly the same. Stay in business CapEx is quite low. Our business doesn't have a lot of need for genuine CapEx. And then the subscriber assets piece, you can see that's actually lower than the first half last year and on average is actually lower than the full year and is scaling down, again, in line with sort of the conversations that we've had around our CapEx outlook for a 12-month period. The only other interesting thing to call out just to balance out the $12 million versus what we spent is we did receive as a one-off cash receipt, we received money back from changing our bank guarantees out of a cash held position into a NAV-based facility.

Yes. And that sits in our investing cash flow line, not our operating cash flow line, just to be super clear with people.

Yes.

Great. Thanks, Jase. So look, we'll just go quickly through the corporate strategy and then open up for questions again. I appreciate the time. So look, obviously, we present this every time. But really, what we're doing is we're looking to create the industry leader with a comparative advantage. We're doing that right back at the start of this journey for -- 5 years ago now for myself and some of the team through today is by actually investing and building a platform that's superior leading in what we do and then ultimately trying to get scale, which allows us to be the premium player and with brands that are superior and known by people like ADT. In terms of the opportunity, what's really happening here by luck, if we to be straight with you about it is that we've arrived into a business that was fragmented, unloved with a pretty modest value proposition in my opinion, certainly as you went down into -- more into resi type security systems or basic [ intrusion ] systems at a time when AI and camera technology and the underlying platforms have reached a level of maturity that they are able to be enabled, which is creating an entirely new opportunity set for us. And so today, we are able to effectively use a camera like you can use a security guard today. Because the security guard can't tackle capture people, do anything other than really verify an event, that is something that -- and that's sort of by law and the way the industry works and has been regulated in Australasia, a camera can actually effectively do that at a significantly lower price if you enable it with the Edge AI and the latest features. And so, by realizing that and acting upon that first, we have effectively trying to drive ourselves into a position of scale and advantage to really lead the deployment of that technology. The opportunity set is significant. And the effect on society is even more so. And just to pause for a second, highlight an event, we had a residential event last week in Queensland. We had a lovely property based on the east side of Brisbane, where there was an 18-year-old child [indiscernible], the parents were away. We had 2 people come and scout the property at about 12:30 in the morning. ADT Guard reacted as it is paid to do and deterred them from breaking in. They left site and actually came back 1.5 hours later and attack the property from the other perimeter out the back, ADT Guard also worked and did its job there and deterred them. And then ultimately, the police came by and was checking on the property for the rest of the night and the property was safe and secured. That would never have happened in the past. If they would have gotten, who knows what they would have done. They were clearly pretty intent on getting into that property. I'm proud sort of seeing our team do what we paid to do and actually keep it safe, which is a great result and something that you will hear more about it, and as we go forward with the events we have. So competitive advantage for us is our scale. We've got a unique reach and scale now. Further than that, though, it's actually about using our scale to invest to make sure we're trusted. We have to really invest and be the highest certified and best player -- best credential player with the most advanced technology platforms and opportunities to add value. And so, we're very focused on these things, and that is essentially our business plan so that we can build a really enduring leading business. As you know, and this really speaks to valuation here is the point we keep trying to make is it's a very attractive business model. Whilst a new customer does typically entail some labor, it would take us a little bit of time to come to your property and set up some cameras and the box with Edge AI to do it. Once you're a customer, if we do our job like that family in Brisbane, I'd expect they'll be a customer for a long time, and we'll need to service that system to make sure it works. It needs to work 24 hours a day, 365 days a year. And as technology evolves and changes, they're likely to stick with that, too. And so, it becomes a very -- given it offers a real value proposition, it becomes a very long, sticky, stable and trusted relationship, as we move forward, which implies a business of hopefully quite some value. That's certainly what we see. Talking to the pipeline, again, we called out the pipeline for the first time in the first quarter at $36.6 million. And I'll probably step back for a second and just make the point that when we bought ADT the year before we bought it had done $2 million of revenue in this space. So it wasn't just calling out a pipeline, the size of that pipeline, given it didn't have a pipeline when we took it over, was really the first point we were trying to highlight when we started to disclose this. Now what we're trying to make clear to everyone in the market is that, that pipeline is growing really significantly, and it is diversified. And so, a little bit distinct to what we've experienced in New Zealand in this first half. The actual wider group pipeline, particularly out of Australia is much more diversified, like it's much wider spread, lots of industries, lots of players, lots of partners, and it's continuing to build at a rate that is very exciting for the team. And the conversations are very serious ones with very serious counterparties. In terms of video, we also like to sort of disclose for the first time, we've now been starting to deploy our ADT Guard is what we really refer to it as video direct remote monitoring video service. If you call ask for this service, you want the service, you'd ask for ADT Guard. Here, you can see the sort of growth trajectory that we're on. For us, to this point, what we've really been focused on is the outcomes. And we've now actually made -- we've arrested 44 police, as of today -- 44 -- sorry, perpetrators with the police in action committing a crime since we started this journey only really a year ago. On average, we're deterring over 15 criminal -- likely criminal attempts and burglaries every month. And so, as these numbers build the apparentness of what we are doing, the success of what we're doing and ultimately the value of what we're doing will build to. At the moment, it is still relatively small in our base. So we're calling out -- it's less than -- it's growing up towards 1% of our total as we'll call them lines or customers at the moment, but that is accelerating. And you saw certainly in that second quarter of '26, a significant acceleration in the growth rate as we are learning, tweaking, focusing our sales and getting our message out. What I'm really pleased to see too is some of the commercial enterprises that we have started to pick up and engage with. And I suspect as they get into it, the deployment rates will pick up pretty substantially. Going, I guess, turning sort of towards guidance and then questions. We do have a skew in this business as it's turned out, I suppose when we first bought ADT, the first year, it sort of surprised a little bit. Last year, it surprised us at least and this year, it surprises us not at all. It's not a cyclical business. What it is, is just in our installation volumes, customers do tend to work to a yearly cycle. So certainly, where it's a government council, state federal or otherwise, even large business, they tend to work to a June sort of deadline on their project installation upgrade work. And so, you have a very big push through about from now through to June. And prior to that, we're building -- we're building that book. We're buying inventory. We're having to buy servers in a lot of cases and be prepared to go through to June, where the push goes on. And so for us, if you look at the average of that, it's 43%, 57%. Certainly, we see absolutely that. And again, the pipeline is really substantial. And so, we're quite comfortable with where the business is at. To help out sort of track that guidance back from our journey, we've really tried to spell that out as clearly as we can for you. So the underlying EBITDA guidance we gave at the AGM was a $43 million to $47 million EBITDA. Given we've made the announcement of the acquisition of Tyco pending settlement in December, that's -- which I should also comment is performing. And so that business itself as it's not yet in our hands is actually still performing though, is expected to contribute AUD 10 million of EBITDA. For pro forma EBITDA of $53 million to $57 million. As you track that from EBITDA to NPAT, that translates to about $26 million to $29 million, which is a $0.062 to $0.07 per share pro forma EPS, and we are happy to say that we feel like we are well on track with those numbers. And I think I'd make a wider point, and I've been, I guess, at this now for 3, 3.5 years is we are on track. We're very happy with that. But what we're actually excited about is as we continue to look forward, that's just one moment in time that we need to hit. We understand that. But as we're actually looking forward into '27 now increasingly in our planning and then thinking about '28 as well, these numbers we're expecting to continue to build. And I think the real question is around that underlying organic growth rate and when we start to see that pick up, which we'll be interested to see, too. So just in summary, we'll go to questions, solid half for us. The New Zealand result wasn't ideal. I suppose the fact that we've offset that and still maintained on track tells you that the rest of the business is going very well in the second half, I think we'll see that. I think the point is we're continuing to build our success in what we're actually doing with the customers and the work we're doing. And also I'd say the people that are joining us, we are a growing organization with new staff members joining our team, and it's been really exciting to see some of the talent come in. And so to have over now 40 criminals picked up with the police because of what we're doing is incredibly exciting at an organizational level. Pipeline, I think that is, for me, the key for us. We are winning work. It's profitable. We're very clear. You can win work, but you have to win profitable work. We understand that, too. So to see that continuing to grow largely in a lot of cases with existing customers and increasing work we can do for them is very positive. And then we're on track. And so, from our point of view, we're pretty [ rapid ] and pretty happy with where we're at, and we're very excited about the next year or 2. So look, I'll pause there. Shenin, I might ask you to come back on and maybe you can sort of help moderate for us with questions. I can see a couple of hands up there ready to go.

I have Tom come up first. Tom, can you please unmute yourself and ask your question.

Thanks, Tom.

Checking you can hear me?

Yes.

Just a couple on the New Zealand business. Firstly, on the EBITDA slide you presented, I just want to get a sense of the second half performance there. Should we be expecting to hold that exit run rate or even deliver some growth on a monthly basis for the second half FY '26?

I'm very happy, and we're not looking to set ourselves unbreakable challenges in life in the short term. I like doing this, and I'd like to be around for a while. If you use that January number and sort of use that as your run rate going forward, I'm very comfortable with that.

And just on the review of the ADT Care, New Zealand, I appreciate your comments earlier. Just want to get a sense when and if you come to a decision on that business, what sort of timing factor should we be thinking?

Yes, really good pickup actually. You have to think -- I should have -- I didn't think about including that because it is something we've called out. We largely have done that, and I think that ties into the overall piece in New Zealand around what the style of management, the way we bought the business together. The outcome to this point has been, we have had a significant price rise for new volume from our main counterparty, which is the New Zealand government. So it is also MSD, which is a different part of MSD than what our security services work is for. MSD is the largest government department in New Zealand. And so, in the first instance, the economics moving forward of that business, we've solved by honest engagement with the customer. The second thing we've done is we've -- and we are seeking to really dig into the day by day, the construct of the way we've been doing business. And to call it out, like the biggest challenge other than I don't think the pricing was set quite right, which was under contract that we inherited when we took over the business from the prior owner was also there's -- each new customer often does come essentially from a third-party distributor, and we've been paying them a lot of money for that, but they also do a lot of good work for us and deploy. And so, understanding those relationships and optimizing them for returns and results is also important to that. So we did go out like I have talked to a couple of other players and interested parties, there is absolutely would be interest in this business. And if we thought we could deploy the capital better or needed the capital, we would, but actually, at this stage, I think we've elected to run it effectively tighter in a new way. And I think that will actually get us a better result in our hands than sort of simply looking to move it on. So we just wanted to be open about it though and actually say it is something -- it's a piece of work that needed to be done and gone through, and it will also help us [ mandate ]. I think now we'll park it. We'll see how it settles for the next year. It is an area with good growth. So as long as the marginal returns on that growth are high, we're happy to have it. So we're probably now just in a business as usual sense to make sure we can actually normalize out the economics and see where they come. So sorry, a long answer, but there has been a lot of work. And look, I lead that work directly, and I'm happy to talk about it a lot more offline if people would like to engage in it

Richard, do you want to just go off mute and ask your question, please.

Thanks, Dennison and team for a very comprehensive update. I just want to ask a couple of questions around the pipeline number. So did I hear you correctly that the $50 million, that's sort of what you're expecting over the next 12 months is what you sort of expect in terms of a win rate there?

No, that's what we have won to be delivered.

Okay. So that's already won to be delivered. And --

Yes. And so just to characterize it, so a lot of these pieces of work are actually multiyear pieces of work. And so the judgment here against that number is one is it has to be -- like it's highly probable, really a matter of when does it start, and we're only booking the work that is going to impact our P&L in the next 12 months. So as I said, it's not a gross hoped for pipeline or delivered pipeline. It's actually what we realistically think it adds with confidence to our forward revenue forecast.

No, that's really clear and helpful. And do you have sort of a sense of how much of that hits in the second half of FY '26 versus first half FY '27? Or is it sort of evenly split?

I think -- yes, look, Jason, I don't know if you'd like -- if you've got thoughts on that. But look, I think a lot is going to come through. I mean, we've got a very busy -- the second half is going to be by far our biggest half [ first half ]. And with -- again, like to the point about the seasonality, like yes, a lot of that work will go through, but you'll also get the work on top. So I'd say it's probably more in the second half coming up than the first half just because of the nature. But that being said, a number of these things are projects. I mean, we're working with some data center builders, for instance, that those projects are going to take years -- many months to years actually to deliver and they'll be pretty consistent like they don't stop June, July. They only really stop for Christmas and New Year. So I don't know if it's not a great answer, but my suspicion is there's just a lot in front of us in the next few months.

That's very helpful context. And then just quickly turning to New Zealand. I think you've cashed out sort of the impact you had there. But just on the 4G transition in terms of completion as a financial impact, do you think that will be done by the end of FY '26? Or is that sort of by end of calendar year?

Look, I think based on our experience in Australia, it does tail. But just to call it out, like the impact -- like certainly, those of you that have been with us through this journey, like the Australian experience, which was not great and there was capitalization a whole lot of stuff there because we walked into it and it had a different thing The experience here is a little bit different. So the financial impact is twofold. One is there's CapEx in our subscriber medical business. So our CapEx is a little bit higher as we're going through because we are effectively -- have been now for some time. It's not just happening now. It's been going on for a better part of 18 months to 2 years, refleeting our equipment that's in the field to be able to handle 4G. So that's -- I think we've almost made our last payment now, Jason, for the updated --

Yes. We have.

With the equipment. So effectively, the CapEx effect is actually ceased as of now moving forward. The real impact is the NZ and the effort in the business. So you have a lot of people having to do a lot of work either in the medical side, updating, sending back, there's just all the work involved in effectively updating an existing base of business and it just takes away from your ability. So say, inbound sales guys, and I was sitting with them earlier this week in Auckland, they are on the phone taking 3G calls calling out, hey, you've got a 3G, you need to get on top of this, your network shutting in a couple of months rather than dealing with an inbound new customer, I'd like a new system, I've got growth. So it takes away your growth is probably the bigger impact because of the time and effort. And so in terms of when that washes out it sort of comes in waves like at the moment, so one of the networks in New Zealand has shut and they are progressively shutting across the country. I think the big network or the biggest network stops in March. So that will kick in. But then you'll have a tail of people that hasn't actually gone across that you're going to have to quickly shepherd through. So -- and they come in fits and starts. It will definitely be done by the end of this year. So I guess, working backwards. I don't -- and we will stop talking about it by the full year result in any material fashion, but it will sort of bubble in the background. But as we are now exiting it, we are now able to start to really focus our teams on growth for the first time. In Australia, that was a very positive thing to do. Once we got out of that, we could breathe a sigh of relief and actually start to move forward.

Really appreciate that color. And I'll just ask one more before I pass it on to someone else. It looked like the video guard is seeing some really positive momentum, especially big jump in the second quarter there. Previously, you've sort of called out like talking about 300 sites that you had on the program. I just want to understand sort of the right metric. Is that sort of still thinking of sites? Or is it now the right way to think about it in terms of monitoring lines?

Yes. Look, it's both. It a little bit depends on who they ask and to be really [indiscernible] in our business. But primarily sites, if you ask our ADT Guard, guarding team that we put together the ADT Guard guys, and we're not focused really probably on sites because they've got a guarding mentality. They ask the monitoring guys that are focused on lines because that's the way they kind of look at the business. I think as we move forward, though, we will probably talk about lines because that makes it consistent and comparative with what we've done in the past. So from probably a reporting point of view, we're starting the journey and we're laying the foundations a little bit today, so we can start to track that now more closely as we move forward with you. And it will probably be around line. Truthfully, internally, we're probably focused on sites. We just want -- we want to guard as any premises around Australia as we can, whether that's a house, a business, multisite business, industrial, commercial, whatever. So -- but we'll report the lines. In terms of numbers, yes, the numbers have grown from 300. I don't have an exact number in front of me, but it's consistent with that sort of growth profile that we put forward in the chart there.

Nick Rawlinson?

And so, I jumped on little bit late, so apologizes if you have covered this topic already. Well done on the performance [Technical Difficulty] the growth drivers [Technical Difficulty].

For New Zealand.

Yes.

Look, I mean the growth so -- I'll answer the question, but I'll do it by way of sort of explaining where we're at. So when we took over ADT, we -- I bought ADT is like here's ADT. I think they called it Pacific Region, Shenin, you have to remind that here you go, here's your business. And we looked at that and okay, here it is. And the first thing we -- I did was all right, well, New Zealand market conditions in Australia are different. And so, they've kind of been meshed at a management level. And so we unwound that straight away and said ADT is going to run for New Zealand and ADT Australia is going to run for Australia and they have their own GM, finance and we're going to actually hold them to account individually to their market conditions. From the IMG Group executive leadership point of view, ADT AU was the big engine and it had the most problems, if I want to call it out. Like ADT New Zealand actually looked and has been a very stable business. So this is partly why we were a bit surprised to have this crossover that we've just gone through. It's like historically, it's just a very stable good business essentially. And so we're focused on Australia. And the way we focus on Australia, consistent with what we've been saying, what we've been trying to do is all right, let's bring the ADT brand back, and we're going to do that by becoming the finest provider of security service, we're going to do that by going to the biggest customers in town with the most complex requirements and providing them the best services that are available. And then we're going to use that to repair our name out there so that you know if you doubt we can look after your house and protect you, and we should [indiscernible] can't be looking after Terminal 3 at Sydney Airport, right? Like you have to know that we know what we're doing if we can look after the Terminal 3 and data centers and some of the highly secure facilities we look after. And then we'll allow that to come through the business and use the technology stack to sell itself, which is where we're starting to get to now. In New Zealand, we didn't really do that. We had a couple of major commercial customers and we had a medical business, we had a traditional -- and we weren't able to really unlock. When I first got New Zealand, I thought it would be easy because I like, well, we're already starting with the biggest government department. We're already starting with the main airport, the largest airport. We have a couple of other major things like surely, we just take that case study out and unlock it. And we got hit with a couple of problems. One was the economy. And I do think New Zealand, it's probably hard -- I'm an Australian citizen to be clear to people. I live in Australia. I'm an Australian citizen. I've lived here. I worked in my whole life. I'm not speaking on behalf of New Zealand, but I have a lot of -- I've done a lot of business across both sides. New Zealand has had many recessions in my lifetime and Australia has had zero. So it does show what a deep sort of [ hostile ] sort of environment can do. So customers weren't necessarily moving. We also didn't have the technical base. The customers we had, even though they are big and notable weren't using actually particularly advanced security solutions. It really was largely pretty much basic access control that otherwise used. So fast forward that to today, what we've done to essentially put in place the same platform that we are seeing in Australia now with the growth we're seeing now is we've gone -- we really need to get that commercial enterprise business moving forward. How do we do that? The answer is, well, Red Wolf is part of that because it has got a much -- it's probably got the greatest share of high security work and/or security work at commercial enterprise in Wellington, which is the main -- it is the government market of New Zealand, which will allow us to use that expertise and understanding more advanced systems to help us drive those solutions across the rest of the business, and we haven't had that. And then we've also, as I've noted, had a leadership change to allow us to actually have the skills in our business, which we have had in Australia in terms of having some different characters and experiences driving the business to come in and do that. So we have moved forward, like the pipeline has grown, but it hasn't been the same type of experience as what we saw in Australia, again, for a couple of reasons. And I think as we now move forward and we are seeing that pipeline pick up. I actually had a weekly pipeline call with the New Zealand team this morning. That pipeline, they just had the best week they've actually ever had, and that's on the back of another good week. We just got caught, unfortunately, with a handover of work issue that's made it look much more vulnerable than it actually is. So again, we're not -- we suspect that pipeline move forward. As we move forward, we might start to disclose those pipelines differently. But the reality is the Australian pipeline is much bigger than the New Zealand pipeline. And so we'll work our way through it. I'm not sure if that actually answers the question, Nick, but it gives you some context and color around it.

And just [ evolving ] question, maybe for Jason, how should we think about tax coming through the second half and then [indiscernible]?

Yes. Great. Thanks, Nick. So the tax called out in the financial statements sort of roughly looks like about 21% tax. Given that the back half of the year arguably will be bigger and arguably more profitable, I think that we should be looking to sort of start to build the profile out on tax up to sort of around the 28% mark. I think we will be in the pleasant and positive situation of making enough money that we have to pay tax. this coming year and the following years. But I think sort of 28% is probably where -- 25% to 28% is probably where we should be thinking.

So I'll make a comment and it's really just for context. So the last -- the '25 result, and I mean, we're all aware of the noise that tax has created for this business. And I'd like to be clear, it actually hasn't been the company that's created the noise. It's been the advisers and auditors' opinions around it rather than that. Our view of our tax situation has strengthened a lot and that we don't see a tax problem moving forward. We're going to lodge our tax if we had the tax losses. Now that being said, we're burning them so fast. They cease to be an issue anyway is really what Jason's point claims is that we're going to have to start paying tax just because we're actually tax profitable. In this result, though, the first FY '25, the auditors applied a 60% probability of the tax losses being available. And in this result, they've also applied a 60% probability of tax being available. So first half's tax result is consistent with the '25 results that we put out. We believe they are 100% probable. So it does mean probably -- I don't know exactly how it works, but ultimately, we probably restate the tax number down in the future, as we actually lodge our returns and don't have any issues because we just don't see that there are any, but it's not our job. Our auditors are obviously our auditors, and we defer to the understanding of these things as we move forward. But moving forward, we ultimately that sort of 28% tax rate for many years because I think have rules looks like where we shake out with the profitability and the back history of the business, as we go forward.

I've got David. Go and ask your question, please.

Just a clarification on the New Zealand CapEx. So what was related to 3G shutdown? And what was the New Zealand medical fleet CapEx? And from -- if I'm hearing what you're saying correctly, we should forget about that from the first half of '27. Is that right?

So the nature of the business of the business -- of that medical business is it's a leasing business. So there's always CapEx just to sustain the business. At the moment -- what happened is over the course of about 2 years, you've had to refleet the whole fleet. So what would otherwise be about a 5-year exercise, Jason, I think that's sort of the --

Yes.

Time lines around the fleet size. You've had to rather than over 5 years, replace the fleet, you're doing it in 2 years. So it's pushed CapEx up a bunch and then it's coming down. So it's profiling down now because we've made our last payment that's essentially brought it forward. On an ongoing basis, Jason, what's the sort of underlying level of CapEx post 3G for medical?

Yes. So pre 3G, it was sort of around that $3.5 million to $4 mark, and that sort of lines up with what we've been saying that we sort of finish around the $6 million to $8 million CapEx mark for this financial year, sort of then coming down to sort of $4 million to $6 million ongoing for as long as we are in the medical business in New Zealand and bring customers on at the rates that we have been plus additional sort of stay-in business CapEx above that.

So just to be clear, $4 million to $6 million for the New Zealand medical CapEx as a maintenance CapEx --

In total. No, no, no, sorry. in total for the business. Yes. So circa $4 million for New Zealand that's sort of at the high end and max $2 million in Australia on things that we need to drive our business, but even that's on the high side.

Thanks for the clarification. And then with that Queensland residential deterrence example, I'd have thought that, that's an amazingly compelling story around the value that you offer. How are you getting that story out there effectively? And is there an insurance partnership to explore to try and use their channel to get -- because I imagine for them, it's an amazing boom.

Yes. Good -- great question. So firstly, like -- and it will sound a bit disappointing as we're not really. And what we're doing is we've got a lot of inbound demand anyway, right? What we're doing is trying to just convert that inbound demand to our higher-value services. What we're focused on doing is trying to drive it into commercial and enterprise because more cameras equals more dollars for us. And we do have a fixed fleet of utilization of fleet along with our technicians, we only have so many quality technicians, who can actually deploy. So we're still what I call yield optimizing at this stage because we don't yet -- we haven't got enough people to go past that. That being said, we are learning and targeting. And so we're going to, for instance, run some community sort of marketing around that area and really target in on it and do that just because we need to learn our lessons around it as we go and build that capacity. Ultimately, it's why we have the business model we have. So when people look at us and go, you've got these -- all the Signature, what's that IMS, [ Wormald there] is because what they will allow us to do is this technology gets better understood and we do hit that penetration point, we can deploy using our partners' labor and they will tie to us and/or our monitoring room. So we get a share of, hopefully, a really big share of the growth of these sort of services and lock them into us, but in a much less labor-intensive way. So at the minute, we are using these stores to try to just upsell our inbound customers, and we are taking all of our stories. And look there are many of them now. We the over 44 arrests. We've lot of video. We've got a lot of footage. We can't use much of it and a lot of it is subject to confidence. And I need people to know that we watch your perimeter and we don't show everybody the outside of your house, for instance. But it's an amazingly powerful thing, and our conversion rates are very high when they see it. So we'll learn it as we go a little bit too, David, like we've just got to keep building scale. And as we scale, we'll invest back more into marketing more generally. Really important, I want the ADT name to represent like the premium end of the market, right, like commercial enterprise premium. And -- but if you call us and want us to look after your property, your holiday house, your parents or whatever, yes, we absolutely do that, and we will do that.

Yes, exactly. I mean I would have thought that a testimonial would probably be reasonably easy to get from that family. And --

Does [indiscernible] perfect comment.

You blow the doors off and then use your installation partners and then you guys just keep the high ROI monitoring business.

No, exactly. But the challenge here, I mean, if I just go back to why we had the shape and why the journey is unfolding as we have is fundamentally, it's a very slow to change industry. And so when we started with IMG back in the Threat Protect IMG days, we were just a monitoring station, and we thought we could go out, link all this technology to us and all the other security companies will be so delighted and run with it and go for it. And they just -- I think structurally, but partly because of their own economic business models didn't. So really, what we're doing is we're showing the industry what good looks like with ADT, and ADT can be a huge and successful business. But ultimately, as they see it, [ it gels into, want] a piece of it, we're their partner, come and deal with us. And to your point, that will drive much more scalable ROI. But -- and we're working hard on influencing that. I should actually call out we've just signed a partnership agreement with Jim's -- Jim's Group, so Jim's Mowing, Jim's Security, and they will be starting to resell effectively our video guarding products through their network, and we have a financial model with them to try to start to do this, David. So you might hear about this type of thing more through Jim's than you may through ADT, but effectively, we're the beneficiary at the end of it.

[indiscernible], do you want to ask your question please.

Congrats on the results despite the NZ pullback. But just a quick one on -- 2 questions, if I can, please. On Tyco, has it seen any impacts given the NZ economy and what's happened recently?

They sort of -- so looking backwards, they did see -- so I'll step back. In fire services, what happens in a tough economy is there's less new project work. And so again, with a fixed pool sort of technical labor, what can happen is then everybody suddenly decides to try and lock into service contracts. So the fire business, the fire services business is very regulated around building more [indiscernible], signing off that fire system every year. Like it's a much -- it's an even higher certified industry and serious industry than, say, the security industry, as you'd expect for fire. And so in a slower economy, you get a lot more price competition for service work, and they did see that back 6 months or a year ago now they themselves have gone through -- had already prior to us obviously being involved, gone through essentially a new lease of life and new reinvestment. And they're actually exiting all that with real momentum and actually picking back up in that area. Wormald again, just to use that name, whisper that name rather than shout that name is -- and that is what the name you'll see, by the way, if you were in New Zealand trying to find Tyco New Zealand, you would never find it, you'd see Wormald. You won't see it as much as you'll see it in the future under our ownership, but it is the name you'll see. They have -- their business is really focused around service. And so yes, they've got price competitive, but that has abated and they've actually been pulling back some major work. I probably aren't able to disclose what's been going on there yet and some of the success they're having. But I'm really excited about getting them into our business, what they mean for us in terms of leveraging both our footprint in New Zealand and also their relationships. But man, we've been lucky, great timing to be picking it up, certainly coming out the back end of the recession, they ride this throughout the cycle sort of for the business, what it does. And then ultimately, again, whispering it quietly at the price that we're able to achieve, which has come about because of years of relationship work and, I guess, presetting, I think we're going to look back on that very, very favorably in the future when we look back as a major milestone for our business.

Okay. Brilliant. Good to know. That's really helpful. And on the video guarding piece, when does -- obviously, it's got great growth rates, but coming off a really low base. When does it become a really like a substantial part of the business? What sort of numbers, customer numbers or revenue you're looking at?

Yes. Look, that is sort of the key piece to the business if I'm to be straight about it and moving forward. What the situation we have is you have an intrusion base that we still sell a lot of intrusion alarms and we will. There is a value to them, but they are much lower value relative to this product. But largely, it's hard to maintain that base going forward, like people are falling away and have for some time away from intrusion alarms. They don't see the point of value, particularly when they go to Bunnings or [indiscernible] or whatever and get a camera. These solutions are much different though, right? What we are offering this solution is actually proactive security. Effectively, you're putting a security guard on your property wherever you want it 24 hours a day. The proposition for us is the value proposition is about 3x plus higher than an intrusion alarm. So effectively, what that means is we only have to sell one of these for every 3 intrusion alarms for it to be equivalent. And to your point, we need to get over the wave effectively the old intrusion alarm to get ahead of it. We're forecasting for that to happen this half, frankly. And where we see it is in monitoring revenue. And so, monitoring revenue starting to go up and then start to accelerate is sort of where you will see it at a group level. We have -- we do have months, where that happens, but we're still a little bit sporadic at the moment. At the moment, it's depends on -- it's depending on timing of bringing on some of the industrial commercial sites that we've picked up and been picking up. And so we need a bit more breadth and cadence kind of in that portfolio for us to be consistently through. But we expect that to kind of happen in the next period. It's another comment. It's another one of those ones I don't want to be overly specific only because I like my job, and I don't want to overpromise on a particular date that we may or may not be able to control precisely. But it's certainly this year. And then from there, we look to accelerate it. And then as sort of to the point that we made in David's question, we would expect to see that also accelerate out across our partners and channels too and ultimately really pull us forward. Monitoring and our partner business is actually going up, revenue is going up, albeit still modestly at the moment. So it's a really important question. Our expectation is this year, and that's why we expect to see organic growth accelerate, as we look into the future from here.

We've got a few questions in the Q&A section. So I've got Stella's question. Stella, you're welcome to go off mute and ask your question. Otherwise, I can read that out. So Stella's question is FY '25 exit EBITDA on pro forma basis was the mid-40s. FY '26 based on a higher half 2 is about the same level. What's the outlook on the organic EBITDA growth? That's the first half of the question.

Sorry, I'm not sure I totally understand the question, but underlying organic growth is sitting at a -- well, sorry, in Australia, obviously, this half the New Zealand businesses of the group level back, but it's running at about 8%. So half-on-half, that's sort of where we see. I mean that will normalize out, we think, with the second half of New Zealand back on track. So question is when does that go forward? I think last year, I won't be able to exactly remember, I think EBITDA was about $36 million for the full year around that number. So we're talking about -- we are forecasting a sort of a $43 million pre the Tyco acquisition this year with not actually that substantial. The BNP and Western Advance acquisitions were not actually that substantial at a group EBITDA level. So that is far more organic pickup than acquisition pickup. And then obviously, as we go into next year and we have Tyco and that will be a material pickup by acquisition. So I'm not sure I'm answering the question exactly. So happy to take it offline. But yes, we're expecting $43 million of which a fair chunk of that from the $36 million is organic, that 8% kind of growth rate underlying and then looking to accelerate it as we move forward is probably the best I can do, but --

Second half of Stella's question is more relating to latest acquisitions. What she's asking is if we've seen any significant national accounts growth I mean after acquisitions.

No, for sure. So look, I made the comment before, but it's consistent today. Every business that we bought actually with the exception of one, which I can call out, but I won't spend a lot of time on, has actually grown the year after we have taken control, and that's been growth in their -- largely in their existing books and us saying yes and being open to growth. Often, it's helping them in different geographies, where they weren't before or with some new sort of services or access to new products like maybe accessing our Gallagher channel partnerships and things like that, for instance. So absolutely seeing commercial national growth year-on-year, frankly, quite substantial national. We have a large customer in the mining sector, who is effectively starting to bank roll us off their own back into a geography that we've historically been strong in, but don't really have a presence today because they want us to be their preferred security partner certainly in Australasia to grow. So just as an indication that yes, growth in that -- that is where a lot of our growth is coming from.

Another question from [ Chris Garner ]. Chris, happy for you to go off mute and ask your question.

Equal to adjusted EBITDA. I can see your question, if you're happy. Yes, look, it's operating cash flow will it equal adjusted EBITDA because in operating cash flow, you've got interest and tax. So operating cash flow pre-interest and tax is actually very close to EBITDA now. Look, this is largely a cash business, and that is why we use adjusted EBITDA. Adjusted EBITDA is trying to get -- one is a sense of truly recurring, what is actually underlying this business produced consistently in a recurring fashion. And it is pre the interest and tax. And so, we haven't actually done the sort of calculation. I think we did do it a year or so ago once to make the case that adjusted EBITDA and operating cash flow, less interest tax is pretty consistent. Then obviously, the only other thing is working capital. And so in this half, we had $2.2 million increase in working capital for the half on June. And that's the investment in inventory that we expect to see at this sort of time of year as we look to deploy into the second half and that growth that we've got coming through in the pipeline. So yes, we can take it off notice. Look, our discussion, and we had this discussion actually yesterday is probably for the full year, we'll do again as we have done before, just another chart just to add -- to show the cash conversion tracking back to the P&L. We just ran out of time this half to get that done. I guess, I actually, I'd probably just second that just for the avoidance of doubt, Jason made a point [ investing about ] cash flow. This half, we bought over $8 million of acquisitions, which were completely cash funded, right? So the business generates good cash. Certainly, the first quarter doesn't feel that way and probably won't ever feel that way. But certainly, as you go through the full year, the business does. And even in this half, we've deployed over $8 million of cash into acquisitions pre the Tyco, which is when we did raise some money because we wanted to keep our balance sheet in a conservative setting. So that's probably the other way just -- I put to you just as a fair statement about the cash generation. We've deployed a lot of capital in this half and our cash did actually still hold together and go up effectively underlying.

I've got David back and David, do you want to go off mute and ask your question.

Yes, sorry. I'm sorry to harp on it. But just thinking through when you made the big acquisition, the big initial acquisition from Tyco last time, there was a bit of CapEx you didn't expect, I think, to see. I imagine that you've been much more rigorous around the -- thinking about those issues with this acquisition. But to cut to the chase, was the $6 million per annum total maintenance CapEx number that you gave, is that including the Tyco acquisitions as well?

No, it's not. So but -- I guess, just to step back again, so underlying everything in this business, if we're lucky, we've got $2 million of stay-in business capital and that even with the acquisitions we've made in the last -- since ADT has hardly shifted. -- like -- it probably has, but it's, I'd call it relatively immaterial. These are service businesses. The challenge we had with ADT was more numerous, but one was it was just -- we had no systems process insight. We're really buying a really hairy one to fix, and that was the journey we had to go on to get to where we are today. This time around, we're buying a fully service business. So there's no [ self-utilization ], capitalization, it is literally a pay-for-service business and it's very clean. So one of the things -- sorry, I'll say it for a second. It sounds like I'm halving a bit. But since we bought ADT, like everything we bought is quality. Like we're not out looking for really dirty things that we can do a lot of work on. We're now in a position, where we're really strong. And if we do something and/or it has to add value, it's opportunistic and it's quality. And so, I'll go back to why I'm so sort of, I guess, proud is a funny word to say, but so proud to be able for us to pick up and have Wormald in our business. And again, the price is something I never thought we would achieve. I didn't actually think it would be on our radar. So the underlying stay-in business CapEx will go up a bit, David. But given it's [indiscernible] $10 million EBITDA business, it might be $200,000 or $300,000 a year type of thing. It's not going to be millions of dollars, and it's a very good cash business.

Yes. Got it. No, I mean it's an amazing acquisition. It's amazing to hit the same seller twice for an amazing valuations. Next question, it relates back to that, which is the M&A landscape, it's -- forgive me, but it's probably been a primary driver of growth over the last few years. What's left out there? And it seems to me like M&A probably goes into the back seat now.

Yes. I mean, great question, much appreciated. We've used M&A to build a business, right? And just to make it very clear to those that haven't heard me say this before, like whilst we look like a roll-up, like we've been doing it to construct the business and a very clean business, and that's been the focus. And that's why I would spend a lot of time with [indiscernible] interested on our values and what we're actually trying to do. We've now built that business. So we actually have all of the pieces we really need. From here, there are things that can add really that we could do. But if I got hit by a bus today, we've really got the business we need to now go on and do. So it has very much been about building a business. We've got the business now. We've got to drive the business and prove it up. That being said, to answer your question, there's -- it's a very fragmented industry and it's also an aged one. So I think over the next couple of years, there's just going to be repeatedly and ongoingly lots of opportunities. The various shape from -- there are a couple of potential big ones out there through to ones that will be immaterial that probably don't even necessarily get fully disclosed because they just will look more like run the business. Obviously, we'll disclose everything, but they're not that material. From here, my feedback to business in Australia, particularly is we don't need anything, but there are opportunities for us to try to enable to accelerate growth. And to call it out, and I'll be very open about it, now we're in a situation, where -- and -- Shenin actually directly runs the inbound sales team at ADT in the last sort of 6 to 7 months, she had a sort of job variation. Our inbound sales guys, we are very good now if you call up to where they can quote from a desk. So if you call -- if it's a house or residence or single [ stock ], we're good at that and the guys can do that and we've come a long, long way and try and sell you up to guard level services, ADT Guard that is. If it comes through as a small business, keeps it at multisite, a little bit complex might need to see, yes, we can absolutely do that. We've got incredibly talented engineers, technicians, what have you. The problem at the moment is they're working on $3 million, $4 million, $5 million deals over a long time. So it tends to get a little bit lost in what we're doing. And so, we've actually got a bit quite a gap in our business around what I call [indiscernible] means small business and deploying, but we've got a lot of demand there. And so that ADT Guard business, so we bought BNP that was the last acquisition we made. That business has effectively evolved. Even though BNP still has its presence to be ADT Guard with David Medhurst, who is one of the founders of Southern Cross Protection runs. And they are perfectly positioned to be able to go out on the street around these multiple car dealers, whatever and pick up that work, where there's a lot of demand and a lot of value. I think if we could pick up more scale in that area, we would be able to accelerate our growth even faster. And so again, opportunistically, we may still do things, but we're not in a position of going, while we've got to do something in the next year to solve some sort of problem. We've got a really good business now. We just got to make sure we use the capital really well. I will be crystal clear too, though, we haven't paid above 3.5x multiple for a security services business. We did pay 4x for Wormald, which, by the way, last transacted the Wormald portfolio in Australia in 2016 for above 10x EBITDA. I don't know the exact number, but I know it was above 10x. So incredibly good value pick up there. I'm not intending to tip anybody just because our business has got better and the industry looks more exciting. So our criteria around valuation is non-negotiable. If people [indiscernible] want to -- are interested to sell, want to have a discussion, there's no price conversation to be had here, but there might be value propositions and things we can do. So from here, it will be interesting, David. We'll just have to sort of see how the next 6 months to year sort of progress, but we're very focused on delivering increasing growth, increasing cash and then increasing returns. That's our real focus.

And just back -- I touched on insurance. Are you guys seeing a benefit from insurance companies yet are they recognizing the value premiums.

I did forgot -- forget to take that up. I knew you asked the question, I missed it. Great question. I mean, the challenge with insurance is absolutely. So like for sure, I mean, we can show you case study and say this business did not get ripped off. It would have lost $30,000, $40,000 of product if we hadn't been deployed to site to stop that from happening. That has to come off. If you're an insurer, that is a claim not made, money not spent. It is a slam dunk economically positive proposition for insurer. Challenges the insurers are all massive, right? And even though we might be large and have large aspirations, we're still relatively small, first problem. So just getting into them is difficult. And I think you could invest a lot of energy at the moment. I have tried and it's hard to get cut through. So I think seeing is believing. We need to get ourselves in a position, where they see us and they actually go off. We should do that and come to us, and we'll keep trying to open those doors. Second problem though, I kind of heard this before, right? And the security industry variously -- I mean, early in my time here, I reached out to one of them unnamed, sat down and they said, yes, you're just the next guy. like we've all heard about this insurance thing and it should be good. But everyone always says that nothing happens. And I think fundamentally, ultimately, it broke down because there wasn't really value in the proposition. And so there wasn't that actual imperative to drive. So a little bit like your question around marketing, while we're trying to find a way like how do we open that door, who realizes, I mean, on an economic industrial logic basis, if I was the largest insurance company in the land doing property insurance, I would buy us today, right? Because you could turn around, own the service with a brand and cross-subsidize it, you will lower your claims probably by -- I don't know what the exact claim dollars are for burglary and theft and car theft for on property in Australia. If you have that, you're talking about billions of dollars of value. So are they smart enough today? I don't want to be bought, just to be clear, that's not something I'm looking for. But at this point, we haven't yet registered enough I guess, I can't see us yet to go out for the penny to drop. But we'll keep trying to open those doors. And to the extent that anybody on the call has insights into how to do that at the right level to the right people, we're totally open to do that and to make our case. Somebody and whoever picks it up first will get a real advantage, and we look forward to working with them.

Andre, do you want to ask your question, please.

Checking you guys can hear me?

Yes.

Great. My question is how much more room there is to run with growing your business with existing customers? It's been -- for me, that's been one of the themes of this call, both companies or government or whoever saying, okay, let's expand geographically with you as the national Australasian vendor. But also you've mentioned around maybe starting with install work and then going down the value chain or down the pyramid you had and getting more recurring revenue. So yes, just interested in any color you can give on how much further room there is to run with existing customers, growing with them and doing more value for them.

Good question. The -- look there's sort of 2 different existing customers. So there's the traditional ADT I'll call them security customer. Again, I'll use the word intrusion alarm customer. I'm not optimistic that there's a lot of value there. Those customers historically have been really subsidized and with cheap alarm systems. And I'm not sure they are the go to. I think the risk with those customers, if we highlight that what they have that is not necessarily as valuable as they might have thought, we probably just run the risk of increasing churn in the short term. In the commercial side, I think it's very different. I think the commercial side is where we have relationships. We absolutely can grow because it largely is a cost saving at the very least for them. I mean, if we are taking out guarding and/or control work that they might be paying for today and/or response work, at the very least, we can be a pretty decent cost saving, which in today's world is a positive. But better than that, it's a positive cost saving. It actually adds value and does a better solution for them. So I think there's a lot more we can do there. The reality is, though, this is an adoption type of exercise. And so typically, even in those customers, whilst there's very smart people, they've largely probably been in security services for a lot of their career and/or in procurement, maybe IT. And so if you've come from security and somebody comes and pitches you video, video itself has been around for a long time. Like we've all been able to put cameras in our houses and up and down the street for many years now. The change here is the Edge AI and the use of technology. Now we're in a world, where some people still run their businesses on paper and [indiscernible] and some people are using Edge AI and Claude and all these things. It's a very, very wide world we're operating in today, all of us. And very few of the people that are using Edge AI and having their cars drive them to work are actually 25-year veterans of the security industry. So their confidence and early adoption is relatively low. So there's quite a bit of trial work. And I'll call it -- I'll call it a better example. I mentioned when I talked about New Zealand, the first deterrence in New Zealand. That actual site was a trial site. So we've yet to really charge them any real dollars because we said and I said to the team, just go and find someone and put it in and show them that it works, which we've done. From now, I'd expect hopefully, over the course of this next 6 months to year, they will realize that we've probably saved them that one event more money than it will cost them to deploy that service across all the other car yards in New Zealand. And so, it's a bit of a penetration game. It will take time. Our existing customers, we can move at the rate they can move is probably the way I'd put it. And then ultimately, it's still going to be about widening. So I think in reality, the way I approach this is it's almost just a new customer. It's a new conversation we are having with the world about what electronic security can do. And we have to approach it like that. And we have to find the people that are ready to go and want to go. Not sure if that answers your question directly, but hopefully, that gives you a flavor.

That's it for all the questions, Dennison.

Great. Look, I won't -- I think we've had a chance. I really appreciate your time so that we've got run, but appreciate the questions and enjoy the questions and are thankful for your interest. Again, if anybody does have in, since I'll finish with the story. One of the people I worked with -- have worked with over the years there, Dave and Christian in their business, who had someone arrive at their house in Melbourne, ringing doorbell at 3 in the morning a couple of Sundays ago, 3 people with masks on, pretty terrifying things have happened. Pleased to say that today they have ADT Guard, and they've been able to sleep really soundly now since having that -- no sense of irony in this comment, but a week after that event, someone was actually killed in that suburb with some [ violent ] criminal activity. And so, what we've got here is a real opportunity to do some fundamental good net value and create a really great business. This half was a solid half. I know the New Zealand bit weighed us down a bit, but we're pretty confident that reverts and then moves forward. Fundamentally, this business has got the wind up. And if you come across the business, you'll see a lot of people that are excited about what we're doing, excited about the conversations we're having, and we're excited to see the financials continue to clean up, improve and ultimately drive us forward to be a really great cash generative, successful business. So thanks for your support. I'm sure I'll see some of you around over the next couple of weeks. If you do have any questions, Jason, Shenin and I are available, come through, happy to take them and look forward to the journey in the next couple of years ahead. Thank you.