Infomedia Ltd (BGLOBAL.BO) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Infomedia Limited full year results. [Operator Instructions] I would now like to hand the conference over to Jens Monsees, Chief Executive Officer. Please go ahead.

Thank you, Fari. Good morning, everyone, and welcome to Infomedia's 2022 Full Year Results. My name is Jens Monsees, I'm the CEO and Managing Director of Infomedia. And I'm joined today by my friends and colleague, Infomedia CFO, Gareth Turner. If you have joined through the web link, you will see the presentation attached, and I will refer to the slide numbers as we move through the results. On Slide #2, as customary, please see the disclaimer and then we start with the agenda on Slide #3. We welcome your questions after Gareth and I have gone through the presentation. We will be covering 3 sections today. I will first guide you through a high-level business overview and FY '22 highlights, followed by a more detailed review of the FY '22 financial performance by Gareth. And I will then finish with a discussion of Infomedia's next chapter of growth and the outlook for FY '23. I would also like to share with you the areas of focus during my first 3 months in the CEO role and to summarize for you my early thoughts on Infomedia's opportunities for revenue and earnings growth. Slide #4. First, I want to take this opportunity to say thank you to all my new colleagues at Infomedia, our clients around the world and the Board for the warm welcome and the dedicated support over the last 90 days. It's an honor to present the full year results to you, our shareholders, together with Gareth. You may have noticed from my accent that I'm from Germany. I have called Australia my home since 2019 when I moved here with my family. So that I could lead to successful transformation of ASX-listed company WPP AUNZ. It is exciting for me to now be back in the automotive software industry, where I spent most of my executive career. In between 2 roads at BMW Group headquarter in Germany, I spent almost 8 years at the global automotive fleet at Google. My colleague, Gareth, who joined Infomedia as the CFO a year ago, also has a background in both technology and ASX-listed companies. And I'm very pleased to be working closely with him. He has done an amazing job with increasing transparency and context to Infomedia's financial reporting. On Slide #5, for those of you who follow Infomedia closely, you will be familiar with these snapshots of our suite of solutions, global presence in terms of customers and our most valuable assets, our people and talent. For those investors on the call that are new to the company, I would like to highlight a few features of our mission-critical solution portfolio. In general, Infomedia helps our clients who are some of the world's leading automakers, which we refer to OEMs and also national sales companies and dealership networks to drive efficient customer engagement and profit from vehicle servicing and the sale of genuine parts collectively described as after sales. Our 4 solution groups form the foundation of a growing SaaS and DaaS ecosystem. The first solution line is Microcat, a powerful and comprehensive suite of electronic parts catalog that drives original manufacturers, part sales and dealership profitability. Superservice is a VIN-precise data-driven solution for managing the service line and dealerships with online appointment tools, real-time quoting and enhanced vehicle inspection tools. SimplePart is the leading e-commerce solution in the U.S. for parts and accessories. We acquired SimplePart approximately 15 months ago, enabling a new and growing channel for automakers and dealerships. Infodrive is a pure SaaS solution built on data, analytics, predictive marketing and connected car solutions for [ VI ] and customer retention. With around 95% of our revenue being recurring and our global revenue split across Asia Pacific, EMEA and the Americas regions, we are empowering the data-driven automotive ecosystem. In the last 4 years, Infomedia has recorded double-digit and annualized average top line revenue growth. Slide #6, due to our innovative solutions and our partnerships approach to working with our customers, Infomedia has been highly successful in establishing deep and long-term relations with our global clients. Some of our OEM relationships span well over 2 decades and continue to go from strength to strength. Infomedia scalable solutions empower automakers to offer a consistent brand experience in every dealer regardless of size or location around the world. At the regional level, data-driven solutions provide critical parts and service information to run effective parts distribution, operation and drive customer experience programs across the dealer network. Locally, Infomedia provides dealerships with integrated technology powered by genuine OEM data, to boost aftersales productivity and sales. Dealer teams can deliver digital-first customer care that promotes trust, pricing transparency and consistency, brand loyalty in the dealerships and online. In addition, we are increasingly partnering with approved third-party solution providers to improve speed and accuracy of sales processes in the wider retail automotive ecosystem. And if you move to Slide #7, Infomedia operates across 3 primary regions, being the Americas, EMEA and APAC. This slide provides a snapshot highlighting the revenue diversification across the 3 regions. Also shown here are our key solutions in each region. I see personally significant cross and upsell opportunities, especially for our data solutions such as Infodrive and SimplePart. We are ready to expand globally in all the 3 regions based on our strong OEM partnerships. I'm very pleased to have already been able to visit all of our regional offices and to have met with various global teams across the organization. On Slide 8, you see my first 90 days impressions. During my first 90 days at Infomedia as the new CEO, it was great to meet and listen to our key clients. I very much enjoyed discussing their future strategic road maps and to identify areas where we can best support them to achieve their goals. Based on these insightful dialogues, we have identified a range of growth opportunities and operational excellence initiatives. I'm excited to share some of my immediate actions, and I will provide more color later in the Section 3 of the presentation. I would also like to mention that I learned a lot about our company through the ongoing engagement and interactions with our various bidders who expressed interest in Infomedia. And I continue to support the current process. On Slide #9, Infomedia finishes FY '22 on a high note with our full year total revenue, up by 23% to AUD 120 million. This includes the full 12-month contribution from SimplePart, which we acquired at the end of May 2021. Underlying cash EBITDA for FY '22 was $25 million, a pleasing increase of 29% over the previous year. Excluding the impact of SimplePart, it was encouraging to see that our organic revenue grew by 8% and even better was delivering on organic underlying cash EBITDA growth of 13% year-over-year. Growing earnings from then -- growing earnings more than revenue demonstrates the operating leverage inherent in the business. Our revenue base is balanced across all the 3 regions. Based on the market penetration and the success that we have achieved in Australia, it is clear to me that we can further push our global expansion in particular, in the U.S. and also in EMEA. In FY '22, we achieved 25% organic growth with our Infodrive solutions, and momentum continues to build as we expand further into the key growth regions. The acquisition of SimplePart has further enhanced our solution portfolio in the growing e-commerce segment, which many of our customers are now leveraging as an additional channel to drive sales and profitability. While SimplePart is still in early days of integration, into the Infomedia family, we are seeing take-up of this solution by our customers in Australia and in Europe with the first signed contracts. Our free cash flow rose by 79% to $22 million, and we have declared a $0.03 per share final dividend taking the full year dividend to $0.056 per share, which is a nice increase of 26% over 2021. To wrap up the highlights of a strong FY '22, we continue to see strong growth momentum going into FY '23. With an exit ARR at 30th of June 2022 of over $119 million. Slide #10. Having an international background, it is very pleasing for me to see our regional revenue growth continues organically as well as through successful M&A. This slide illustrates some highlights, and I'd like to single out the strong growth rates achieved by our SaaS solutions. Infodrive in EMEA, of 157% and in the Americas of 82%. We will continue to focus on this high growth solutions, and I will touch on some growth initiatives later in the presentation. I'm very encouraged by our newest member of the Infomedia family, SimplePart, and how our people are working together to drive up and cross-sell leveraging of our large global client base. For example, our first SimplePart, APAC client RAM trucks and first EMEA client, Hyundai Ireland were contracted in FY '22. Moving on to Slide #11. As a trusted global partner to our clients, we drive our revenue growth from long-term contracts. We believe in adding value to our clients is the best way to keep our clients happy and more profitable. This can be seen in the growth of ARR and its continuing momentum in FY '22. Slide #12, Infomedia today is accumulation of nearly 30 years of organic growth and strategic acquisitions of businesses that enhance our solution suite, and we intend to continue to pursue, refine the successful formula. Our category-leading Microcat and Superservice product lines grew steadily in FY '22 while our SaaS solution, Infodrive and SimplePart continue to deliver strong growth in ARR. Slide #13. We are dedicated to driving our business in all areas. And I can assure you whatever the future brings, we are 100% focused on our business. The recent interest we received from several bidders is a testament of the value we are generating every day with and for our clients. Infomedia will keep shareholders updated on material developments in accordance with continuous disclosure obligations. I do like to say a big thank you to our hard-working staff who remains focused on delivering in their various roles and taking on additional tasks in this engagement. I'm proud to lead the team of high performers. And speaking about high performers, now I would like to hand over to our CFO, Gareth Turner, who will take you through a more detailed review of our financial performance. Over to you, Gareth.

Thank you, Jens, and good morning, everyone. I'm very pleased to add my warm welcome to Jens in his first intermediate results briefing. Although he is only 90 days in, I know I speak for my colleagues when I say that we are very excited and energized by what Jens has already started to bring to the business as our new CEO. Turning to Slide 15, Infomedia's FY '22 financial highlights. Infomedia has continued to record strong revenue growth with FY '22 total revenue of $120 million, in line with our guidance, and up 23% on last year. This reflects ongoing positive momentum in annual recurring revenue, or ARR, which was just over $119 million at the end of June 2022. 95% of Infomedia's revenue is recurring, and this provides a strong platform for our revenue momentum to continue into FY '23. FY '22 demonstrated good operating leverage with underlying cash EBITDA up 29% and exceeding the corresponding increase in revenue of 23%. This positive operating leverage is also evident on an organic basis, that is excluding the simplified acquisition, and I'll talk more about that in a later slide. Reported net profit after tax of $8 million was heavily impacted by $14 million of higher noncash and nonoperating items during the year. Again, I'll go into more detail about these items impacting reported NPAT in a subsequent slide. Infomedia's balance sheet is very robust with net assets of $147 million, cash on hand of $69 million and no debt. Infomedia has continued to show very strong cash generation with free cash flow, that is cash generated from operating activities after CapEx and after capitalized development spend, up 79% on last year. Our directors have declared a final dividend of $0.03 per share, franked to 14%, taking FY '22 total dividends to $0.056 per share, which is up 26% on last year. In summary, the key message for Infomedia's FY '22 financial results is that a very strong operating performance has lifted year-on-year free cash flow by 79% and listed dividends to our shareholders by 26% year-on-year. Turning to Slide 16. This highlights Infomedia's diversity globally and the strong ARR contribution from each region. The inclusion of SimplePart into the Americas has added further scale and opportunity in that region, and Infomedia's ARR is split approximately 1/3 between each of the 3 regions. This global diversity is a key strength of the business, showing Infomedia's global reach and reduced regional concentration risk. Slide 17 shows the diversity of Infomedia's ARR across customer cohorts. It illustrates that Infomedia supports customers right across the spectrum of industry participants globally, from the very large OE relationships through to large national sales companies, dealer groups and down to individual dealers. In percentage terms, the mix of ARR between customer cohorts has been stable over many years, highlighting the strength in Infomedia's market position and coverage. Slide 18 visually encapsulates Infomedia's strong revenue growth over the past 6 years, continuing into FY '22 reported today. Revenue for FY '22 of $120 million was up 23% on prior year. Net currency movements were more subdued during FY '22 with revenue of $121 million when calculated on a constant currency basis. Slide 19 depicts Infomedia's operating performance as detailed in our segment notes in the accounts. We've also shown a pro forma for Infomedia without SimplePart to the right. This has been provided as it is useful for investors to see the organic performance of the group without SimplePart. We only expect to provide this pro forma during FY '22, after which the results inclusive of SimplePart will become the baseline for comparison in FY '23 and beyond as SimplePart becomes increasingly integrated into the group. Underlying cash EBITDA growth of 29% on last year exceeded revenue growth of 23%. This performance reflects the inclusion of SimplePart for 12 months of the financial year. And on an organic basis, excluding SimplePart, underlying cash EBITDA grew 13%, whilst revenue grew 8% on last year. Positive operating leverage has been achieved both organically and in total. This is evident in the underlying cash EBITDA percentage to revenue increasing at the same rate for both the total group and organically, excluding SimplePart. Moving to Slide 20. This table is taken from the lower half of our operating segment notes and works from underlying cash EBITDA to reported statutory net profit after tax. This highlights several noncash nonoperating items that have a significant impact on our reported NPAT. Capitalized development expenditure was $3 million lower this year as a result of the development focus changing post next-gen towards product road map and customer project delivery. Depreciation and amortization increased by $9 million from FY '21 almost all of which was due to increases in amortization of next-gen capitalized development expenditure and higher amortization of new intangible assets from the SimplePart acquisition. The net increase in nonoperating items of $5 million was almost all driven by the expensing of earn-outs on the Nidasu and SimplePart acquisition. Both of the acquisitions have been highly successful purchases for Infomedia, and paradoxically, as these businesses have performed better and the earnouts have increased, so has the charge against reported NPAT under the accounting rules. It is worth noting that altogether, these items have a significantly negative impact on reported NPAT despite the positive operating performance in the business. Moving to Slide 21. Infomedia has a very robust balance sheet. At the end of June 2022, net assets were $147 million with $69 million of cash on hand, improved cash collections and lower days sales outstanding, although DSO has kept receivables relatively flat to slight higher sales. The completion of NextGen with lower capitalization and higher amortization has driven the reduction in the intangible asset balance. The significant increase in accruals for earnouts on a highly successful Nidasu and SimplePart acquisitions, as discussed in the previous slides, are captured with the employee benefits -- within the employee benefits liabilities shown on the balance sheet. Infomedia has no debt. And with a very robust balance sheet, very strong cash generation and no debt, Infomedia continues to have significant capacity to pursue accretive M&A opportunities and this remains a key strategy of the business. Moving to Slide 22. This highlights Infomedia's very cash generation with free cash flow that is cash generated from operating activities after CapEx and after capitalized development expenditure up to significant 79% this year. Directors have declared a final dividend of $0.03 per share, franked to 14%, taking FY '22's total dividends to $0.056 per share, which is up 26% on last year. The increased dividend declared this year reflects the improved revenue momentum, underlying cash EBITDA and free cash flow performance of the business. I'll now hand back to Jens. Thank you.

Thank you, Gareth. We are moving to Slide 23 now. But first, thank you for your detailed analysis. After this deep view into the rear mirror, I would like to provide an update on where we see our next chapter of growth in the exciting and evolving global automotive sector and share our outlook for FY '23. On Slide 24, as thought leaders in our industry, we have identified 5 key trends. These megatrends did not emerge overnight. Back in my role as Global Chief Digital Officer at the BMW Group, I mapped out the data-driven opportunities for OEMs and paid close attention to the forces of the digital transformation of the automotive industry. The first trend, electric vehicles are here to stay, and they are growing. By the way, the European Union decided that no non-electric vehicle can be sold in 2030. The EV companies sell amazing products and capture vast amount of data about cars and their drivers to continuously enhance customer experience. The growing EV segment offers an opportunity for Infomedia to expand our DaaS solutions and support the OEMs and third-party stakeholders to better harvest a tremendous opportunity. As the OEM fleets on our roads are getting more connected, and I'm talking now about the second trend Connected Car, Infomedia is already partnering with OEMs like BMW in Australia, to leverage the data-driven one-to-one communication to foster long-term customer loyalty. There is naturally opportunity to build on our existing partnerships with OEMs and globally scale our innovative solutions. With 5G kicking in, the car data volume continues to rapidly increase. I envision our solutions becoming more and more embedded with our clients. And together, we are delivering superior customer experience throughout the life cycle. The customer and vehicle life cycle are centerpiece for dealerships in the fast-emerging agency model. With our solutions increasingly integrated into various dealer management systems, we are the go-to solution for over 30,000 unique rooftops across our 3 regions. We are in an ideal position to support our clients transitioning to the agency model and to work with both the OEMs and their dealership partners to gain a better insight in the entire customer journey. Moving to the next trend, which is data-driven solutions. In my early slides, you probably detected a pattern in my analysis of data-driven solutions, including Infodrive and SimplePart. The driving force in our industry is data-driven customer experience. It underpins the one-to-one direct communication at all stages of the customer life cycle and also even in car. That's an exciting part. This is an exciting and fast-growing segment of the industry and Infomedia is well positioned to capture these exciting new opportunities. Finally, the global market of B2B software solution providers for the automotive industry is still highly fragmented, and we expect further consolidation. With our global footprint, our innovative solution ecosystem as well as our existing OEM partnerships, we are in a unique position to continue our successful journey of acquisitions. We have already generated critical mass and huge data assets in our systems, combined with our deep domain knowledge, we are well positioned at these future one-stop solution provider. Slide #25. We are very fortunate to be at the forefront of the market segment in which we are operating. Our genetic code was always to operate and manage massive amount of data. The predicted CAGR underpins that there was never a more exciting time to be in the digital and data era of automotive. Across the global automotive software market, auto big data market and the connected car solution market, the total addressable market is expected to grow at double digits to over USD 80 billion in 2026. Moving to Slide #26. We have identified in our recent strategy review these mega trends and opportunities for our next chapter of growth. Based on our in-depth understanding and domain knowledge, we inspire personalized customer experience and enable a seamless and convenient vehicle and customer journey driven by data. By pollinating data across our existing solution groups, we offer our clients a unique opportunity to capture more sales opportunities and increase customer loyalty. I'm very confident that we hold all the ingredients in our hands to roll out a solution road map and work closely with our clients to drive growth and profitability for them and for us. On Slide 27, together with the leadership team, we have defined our new North Star, how to navigate and prioritize our future growth ambitions. At Infomedia today, we have over 1 billion wins in our rich data asset that continues to grow. As a successful tech company, we have one foot firmly in the presence of our core products, and with the other, we are confidently striding forward into the future. I'm excited to share with you that we have ticket picked these both boxes, we are ready for the future. On Slide #28. Earlier in the presentation, I shared with you some of the highlights from my first 90 days as CEO, and I would now like to expand on my priorities to deliver continued growth and enhanced profitability. We have developed a clear plan for our future and now it is all about fast and diligent execution. And as a German, I know what I'm talking about here. In the left column, you can see a snapshot of key growth acceleration initiatives driven by our new vision. We are targeting global expansion focusing on the Americas and EMEA and to further grow SimplePart and Infodrive outside their current home regions. We will increasingly leverage our large existing data assets across our solution ecosystem and capture more data opportunities. And we will continue to drive opportunities in timely and disciplined future acquisitions to strengthen and broaden our solution ecosystem. If we look at the right column of this slide, I'm confident that we can boost our margin through the various operational excellence initiative we have identified at our leadership offsite. Making investments that deliver sustainable annual cost savings and efficiency will lead to margin expansion, improve operational leverage and ultimately drive a higher value creation over time. This approach has been aligned with the entire organization to foster a more accountable performance-driven culture. A guiding theme of our business is agile like a startup and deliver like a grownup. We will carefully balance cost efficiency with operational efficiency. Our operational excellence is measured in both margin expansion and continuous improvement in solution development and delivery for our customers. Moving to Slide #29. Infomedia has a positive outlook heading into FY '23, and we expect the total revenue to be between the $131 million and the $139 million. Around 95% of our annual revenue is recurring, which gives us a strong starting point. We have a growing pipeline of new revenue opportunities that will add to the annual recurring revenue base in the future. We are also confident that Infodrive and SimplePart will deliver double-digit revenue growth in FY '23. Our focus is to accelerate our existing ARR that drives shareholder value. As previously mentioned, operational excellence initiatives are expected to improve our underlying cash EBITDA in FY '23 and beyond. Slide #30. Before I hand over back to the operator to open up for questions from the audience. I'd like to say a big thank you to Jim Hessel for his leadership as the interim CEO, and the Board and our Chairman for their continued support. I want to thank our customers across the 3 regions for the very exciting meetings I had across the planet for their long-standing partnership and looking forward to working closely together with them in the year ahead. Last, but definitely not least, I would like to thank our 500 strong global team for their continuing hard work and the passion that you all show every day. Together, we are empowering the data-driven automotive ecosystem and write our next chapter of growth. Thank you, and back to the operator. Ari?

[Operator Instructions] Your first question comes from Tim Plumbe from UBS.

Just a couple of questions from me, and then I'll jump back into the queue, if possible. A really impressive result in terms of Infodrive. Can you maybe talk a little bit more about the traction that you're getting there in the new geographies? And maybe also just a little bit about how that sales pipeline is looking at the moment, please? .

Yes. I see Australia as a role model for Infodrive. So here, we have, obviously, the proximity to our clients and to the dealerships. So we have the right blueprint and now we have to roll it out, obviously, to EMEA and the U.S. I traveled both regions already. I had very good talks with clients and my old friends in the automotive industry. And they sometimes did not even know about our solution suite, and they were impressed. So there are many workshops starting now and understanding how we can drive together more profitable growth for them and for us. So we are rolling this out in the moment in EMEA, and we are also rolling it out to the U.S. and there's plenty of opportunity. If you think about Australia, just have $25 million population, but the U.S. has $300 million and Europe, if I'm not mistaken, $560 million. So there's a huge opportunity for our innovative products and data-driven products.

Got it. And just maybe a little bit in terms of pricing increases, I think at the last -- the half year result, Jim had commented that while you guys were renegotiating particularly on the microcap side of things going into those renegotiations now that you've got next-gen platform, you guys are getting pricing increases. If you could give us a sense maybe in terms of how far through your portfolio you are and what sort of scale of pricing increases you've been able to achieve thus far? .

Yes. It's obviously a very nice opportunity, especially if you think about the current inflation rate. So we are driving this in the moment. We have already looked at our current contracts and what rigor room we have there. The other thing I would like to mention is that the totally renewed Microcat solution with a very modern UI/UX design, but also then with a much more reliant and quick performance, we are very well on track with renewing contracts and also then pushing for a higher price.

Got it. And are you able to give us any sort of -- I mean, I guess I'm just trying to think in the context of the cost inflation that you guys are seeing at the moment. How should we think about the opportunity for the pricing increases percentage wise?

Yes. So on the cost side, there is obviously, as I laid out with the operational excellence initiatives, some opportunity. And on the other side, yes, we are in the moment implementing based also on the high inflation price upside as long as our contracts allow, not every contract is allowing this, but where we have that rigor room, we are renegotiating with our clients.

Okay. And maybe just last one. The Americas business looks like it was -- once you back out at SimplePart, it looks like it was flat in the half. You guys have made some good progress in terms of the Infodrive, but by default, that kind of suggests that the other business might have gone backwards in the half? Is that a fair assessment? Maybe can you just talk about the progress that's been made in the U.S. over the last 6 months? And how you're thinking about that business over the next 12 months, please? .

I'll start with the later one. So in the moment, we are stabilizing the U.S. business. We had a wrong leadership. We had also not the right go-to-market approach. And on my visit, I just returned back now, I think, 12 days ago, I saw a lot of opportunity of making this better. And that goes from a multichannel approach with some white label [ CMS ] partners, but also then a much better and closer workshops with our OEM clients because I think with the success that we have in EMEA, but also in APAC, we should not shy away to reach out to the American headquartered OEMs, and there is some movement in the moment. It was very nice to see in the meeting with thought about the interest of our data-driven solutions. But as you know, acceleration also takes a little bit of time. I'm now a few weeks in. I see these big opportunities. And as soon as I will be back in the U.S., we will drive some acceleration across the leadership team, across our go-to-market approach, but also then across our current structure and organization, there's a lot of room to do better than we did in the last year.

Your next question comes from [indiscernible] from CLSA.

Good morning, and welcome, Jens. Just a couple from me. Maybe just starting, I guess, operationally, you've mentioned a couple of times around some of the initiatives for margin expansion. Can you maybe give a bit of color on, I guess, timing, magnitude and particular segments you'd expect some of that margin expansion to come through?

Yes. We obviously don't provide guidance on the [ evident ] and earnings side. But I see just to mention a couple, I see aligned with the team some offshoring opportunities because maybe developers in the Northern Beaches are on a different payroll than if you look at maybe the Philippines. We also have identified current cloud opportunities in our infrastructure and our IT infrastructure. There's a lever and then there is a lever in the scalability of our products. When you think about the high current level of customization that we can better invest in scalable solutions for all our clients and customers. I think -- just to name a few on that side, there's a huge lever in there, that needs to be balanced because at the same time, we are pushing further our revenue momentum, and they have to [indiscernible] and think.

Yes. Understood. And then maybe just on corporate costs. I think it was around $32.5 million for the second half. What growth are you kind of expecting in that into FY '23? I guess you had a run rate now of $65 million. How much growth do you expect in those costs, I guess, for FY '23?

I think we should look at this from 2 angles. There were obviously some one-off costs. We had a change of leadership. We were also hiring some talent that we lost during COVID. So one-off hiring costs, one-off double cost of the leadership team. But then what I think is a good thing is that we are back on traveling, back on visiting our clients, back on establishing and implementing our products in the leadership -- in the dealerships, and that was not possible during COVID. So I'm actually pleased to see that travel cost is going up because it means that we are closer to our clients. And I would like to inspire our teams to continue to do that. So one hand is one-off costs. One other hand is an increase in client engagement, which will then also push revenue. So these are the both angles that you can look at that. Gareth, you would like to add something on this?

Yes. Thanks, Jen. Thanks, [indiscernible]. I think it's a good point. And as Jens said, there were some one-offs around that transition. And if you put a number on that, that's approximately $0.5 million talking about recruitment fees for some of the CEO change, some of the senior leadership change. And in terms of that increased travel, that Jens was talking about, that's $800,000 higher in the second half is substantial, but that's also very, very positive in terms of people getting out and being able to meet clients, some of the senior team and the product team being able to get to things like NADA in the U.S., I think that's money well spent and also, like other tech companies, we've had a lot of challenge in terms of people poaching our staff. There's a substantial war for talent out there and us as a management team and the board have put in a number of retention programs to make sure we hang on to our staff. I think that's exactly the right thing that we should have done and needed to do and you'd expect us to do that. So in the first half, there was clearly some gaps in the organization in the second half, we've been able to hire some of those and actually hang on to the staff. So dealing with the circumstances that are in front of us. But while there is some one-offs that we described, that Jens described as well, there's also some spend for the right reasons there. But nevertheless, I think what's -- when Jens and I first caught up when he arrived, one of the first things we started to talk about was opportunity in that cost base is this is and some of the stuff that's in that presentation is there for a reason because we're highlighting some of the opportunities that Infomedia has in terms of operating effectiveness and efficiency and excellence. So hopefully, that gives you a bit of color around that point.

Yes. Other color helps. And then just one final one, perhaps for you, Jens in the time that you spent here at IFM, you guys are still sitting on around $16 million in cash with sort of, I guess, expectation or acquisitions. Are there any particular areas or businesses you are interested based on your prior experience or any different sort of is, I guess, from the existing sort of board direction that you've sort of got with your initial time in the company?

Yes. I already engaged with 2 specific targets. Our new vision and our broader vision on a data-driven ecosystem is allowing now to invest in the right areas to further grow our solution ecosystem and building critical mass. I would probably look more towards the growth, the identified growth markets in the U.S. and in Europe. But for sure, I don't want to have that money in the bank. I would like that money working in future, growing solutions. We demonstrated in the past, I think Nidasu was a success. SimplePart is a success. Some other business we acquired earlier are very successful and integrated. Owners and founders are staying with us, and that's very exciting for me to build that broader footprint and leverage that money. And the bank, it's not leveraged.

Your next question comes from Chris Savage from Bell Potter Securities.

Jens, Gareth, forgive me if pronunciation of your name is not quite right. Similar first question to the one just asked before and costs, corporate costs of 32.5% in the second half, 53% as a percentage of revenue. I appreciate that might go up in an absolute sense as you say travel and whatnot is likely to increase going forward. But do you think as a percentage of revenue, it's more or less now peaked? And if that comes off, then is that the area you're looking to get margin expansion from?

Well, definitely, there are opportunities, and we talked about them. Now it's a question of how quick and rigorous we can implement them. And then we will already profit from this in FY '23. And ongoing, it will be then more sustainable in terms of the full leverage of these initiatives. But I also have to say, I'm just 90 days in. So this has to be carried out careful and mindful in that regard. So it's fantastic to work with the leadership team and talking about our plans. In the moment, we are building time lines. We are building responsibility and accountability of how we are leveraging the operational excellence measures. And in the moment, I'm very happy to be where I am.

Okay. Maybe slightly.