Infratil Limited (IFT) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Infratil conference call. [Operator Instructions] I would now like to hand the conference over to Mr. Jason Boyes, CEO. Please go ahead.

Thank you, Ashley. [Foreign Language] Welcome, everybody. Thanks for joining the call this morning. I'm Jason Boyes, the Chief Executive of Infratil. I am joined here in the room by Phillippa Harford, our CFO; and the very excited CEO of One NZ, Jason Paris. A couple of Jasons for you this morning. An announcement and the presentation that we'll run through have been released by the NZX and ASX, but let me summarize what's happening. I couldn't be more pleased to announce that Infratil has today agreed to purchase Brookfield's 49.95% stake in One NZ for $1.8 billion. This will take Infratil to almost 100% ownership, certainly full control, and is a financially and strategically compelling opportunity. In many ways, it's really the logical conclusion of the story that we began when acquiring the business nearly 4 years ago to the day, actually, alongside Brookfield. We're very happy with the terms we've agreed, particularly given how well we know the business, be it track record and trajectory of growth ahead of peers and the strong tailwinds and outlook for the sector here in New Zealand. We're forecasting attractive 10% to 12% per annum return on that additional investment over the next 10 years, or 18% when blended with our returns to date on the existing stake. And we see upside beyond that. Jason Paris and I will talk more about the key drivers of those returns later on in the presentation. It's also an important acquisition because it strengthens that cash-generative core of Infratil's portfolio that we talk about that generates stable cash flows that can support not only themselves but other growth investments in the portfolio for years to come. The transaction is scheduled to settle next week and is unconditional. We'll fund it with a mixture of cash; debt facilities, which we have extended; and an equity raise, which we have announced this morning, too. That will leave us with good capacity and flexibility to address other growth opportunities we see within the portfolio and externally. And Phillippa will talk more about that capacity and flexibility later on, too. The equity raise is a $750 million underwritten institutional placement, which happens today, and then a $100 million retail offer that runs until 27 June and is not underwritten. This is similar for the other structures we have used before successfully and gives almost all shareholders the ability to maintain their holding if they wish but also minimizes the cost of the offer for those who can't. As usual, Infratil will remain in trading halt today while the institutional placement is completed. So that's the summary. Now I, Jason Paris and Phillippa will take you through the transaction in more detail, and there'll be time for questions at the end. So if we move on one more slide, let me expand on why this is a compelling opportunity for Infratil. I mean one of the first and main reasons we invested in One NZ 4 years ago was that it owned a high-quality digital infrastructure that's critical to New Zealanders and New Zealand, and we saw tailwinds for the investment from increasing digitization globally. And then infrastructure has only got more critical, as we've all seen recently, and those tailwinds are really only accelerated. The business has transformed itself since we bought it with significant further investment in its infrastructure. Today, it's a high-quality business and a management team that we know really, really well and have high confidence in. One NZ as being one of Infratil's best investments in recent times with the sale of its passive mobile tower network last year. Infratil's received, in fact, nearly all the capital we invested in 2019, and our return to date is sitting at around 30%. Its trading performance has been strong, too, with very good cost control and momentum following its recent rebrand, and the business has achieved double-digit annual EBITDA growth during our ownership, ahead of its peers and its guidance for the year ahead and maintains that momentum. Although we've done a lot with the business since initial acquisition in 2019, it's not fully optimized. And we see significant and attractive value creation opportunities to achieve returns over and above our 10% to 12% investment case, more like mid-teens core plus returns over the medium and longer term. We'll talk to some of those later on. I think increasing our ownership to nearly 100% and full control now improves our flexibility to support One New Zealand to make the investments needed in the short term for those medium to long-term benefits. And as I said before, moving to 100% gives us full control of One NZ's stable and growing cash flows to support our other growth platforms, and it has the potential to perform that role in our portfolio for many, many years to come. I mean, in a lot of ways, the timing of this transaction is perfect for us as some of those investments at One NZ for those medium to long-term opportunities really need to be started soon. And as our other growth platforms like CDC Data Centres and Longroad Energy, like we talked about at the end of results, are really kicking into an even higher gear to address the demand that they are seeing. So if we go ahead one more, these graphs show that our weighting and digital infrastructure will increase modestly, but it remains our highest conviction investment sector. I think about 65% after this transaction. I mean it's not concerning to us today. Our 2 investments in that sector, CDC Data Centres and One New Zealand, are quite different but, in a large part, quite the same too because of the scale and the stable growing markets they're in driven by those attractive long-term tailwinds. And investors can also expect that our renewables platform, you'll see here, will continue to grow as they develop new projects that they're already planning to do. And then the last one for me before we talk about One NZ. Just zooming out, I guess, and thinking about the portfolio as a whole, it's performing well and remains well positioned. When we released our annual results a couple of weeks ago, right, Phillippa, we announced double-digit EBITDA growth and outlook and an increased dividend. And we continue to see the tailwinds driving our digital infrastructure and renewable investments accelerating. And that's continued since our results, with CDC, in particular, continuing to see strengthening demand for its data centers. With the equity raise, additional debt facilities and full access and control of One NZ's cash flows, we retain good capacity and flexibility to support those growth platforms but also to address other opportunities. I've said for some time now that some of the most interesting new opportunities we see are in the digital infrastructure space like One NZ, and we'll continue to explore those opportunities after this as well. So with that, it's probably time to zoom in on One NZ for a bit, and I'll hand you over to Jason Paris to see how he's seeing the developments today and the outlook. Okay, Jason?

Thanks, Jason. Good morning, everyone. And as Jason Boyes mentioned, super exciting day for One New Zealand. Infratil know us very well. We've been with this business for 4 years. And so we love that such an important and iconic Kiwi company that keeps more than or around half of the country connected is going to be 100% kind of owned and operated for the very first time. We bought it back in 2019, and I think this is just the natural next step, which is really exciting. Infratil know the business really well, as I said, and so the strategy is really clear. It's about value creation across all of those themes that we've been talking about are often around growth in mobility, ICT, expanding our wholesale business and then good cost control through simplification and automation of the business. There's also further opportunity in infrastructure. I think it's important to remind ourselves that we're the second largest owner of fiber in New Zealand. And that's just not an opportunity for greater utilization, it's also an opportunity for greater optimization at the same time. And all of those options are available to us. The trading momentum that we've got in place mixed with the good cost control has seen us on track for that 30% EBITDA margin that we have been talking to. In fact, the FY '23 results that we recently announced, you're seeing really good underlying performance, both from a cost and a trading perspective that is creating further momentum for us as reflected in our FY '24 guidance. Moving to the next slide. The performance is not a surprise to us. It's been created through a deliberate set of actions and strategic choices. And a lot to thank Infratil and Brookfield for from 2019, both have been outstanding shareholders, and we're delighted that they've both benefited from the success. 2019 really saw us take a business back from Vodafone Group that was ripe for upside after some investment. And those investments that Brookfield and Infratil have made have paid off, whether it was in network upgrades or rollout across the country. You've seen that we've been awarded New Zealand's best mobile network for the second consecutive year. If it was investment in service or IT stability, you'll see that we've had the best service and IT results since records began. Of course, when you have those things in place, so service, experience and high network quality, your trading comes. And so we're growing more business with our existing customers across all segments, and we're attracting more customers to join us at the same time. And that's just where we're at. We've still got further opportunities ahead. And the performance within the market has been excellent, but it's important to note that it's a very stable market. So 2019, the market was competitive but stable. We think that's improved even further with Vocus' acquisition of 2degrees. So we are a 3-player mobile market. Each player has a significant number of customers, and we are seeing us all focus on ARPU and margin growth versus attacking for net base add. And there's also further optimization from an industry perspective. And I think we've publicly stated some of these key pricing moves that we've made. We've got still some more pricing moves to make. And we look at CPI-based pricing constructs internationally with antitrust as an opportunity for us here in New Zealand at the same time. If we move to the next slide, on top of that, so healthy existing performance within a stable market structure. The themes for further growth potential remain the same. So our strategy is set, and it's about accelerating it further across mobile, across ICT, across wholesale and from a cost efficiency perspective. And what I love about the Infratil ownership is that we continue to look at medium- to long-term value creation through investment and focus. Jason?

Agree. That's what attracts us to this business. I agree, Jason. Our approach at Infratil is to find these businesses where you can continually reinvest to earn effectively compound returns over the long term. This one always looked like it had the potential to be that. But as the market structures remained stable and digital transformation has accelerated, it's become clear -- probably super clear to Marko 10 years ago, but clearer to everyone the many opportunities that are ahead of businesses that form the core backbone of connectivity in the country like this one does. So all these things on the page, all the things Jason mentioned about, we agree with. And the ability to invest in those early and in those kind of compound returns over the long term is exactly the kind of thing we look for on top of access to the excess cash flows for other high growth platforms as well.

I think the growth that we're having in the market from a trading perspective is pretty clear across those areas that I mentioned. I'll just, before we move on, mention a bit more detail on our costs. So the first phase of cost discipline really was around operational excellence, so within each of our divisions, just running our businesses significantly, significantly better. And then what that's leading through to now is further cost optimization and areas that we haven't yet really gone after. So dramatic product and plan simplification, migrating our customers on to those latest end market plans, allowing us to turn off legacy technology, digitizing and automating those customer experiences which then leads to a much more efficient operating model. And this is really the next big phase. It's a proven way forward based on the best telcos internationally. And if you look at those best telcos internationally and the EBITDA margins that they are getting, 35% or in excess of that, that's the kind of trajectory that we're targeting internally. As I mentioned previously, we've said for a few years now that our focus has been on getting to that 30% EBITDA margin. And based on the guidance that we've recently outlined, we'll be nearly there at the end of this year. And again, that EBITDA is driven through both cost and trading. And in particular, the revenue probably hides on the slide the real mobile momentum that this business has: 8 consecutive quarters of postpaid growth, outperforming the market, and the market is growing at the same time. So it's a rising tide for the market and an even faster growth trajectory for us. The only thing I will mention on this slide as well is that we know exactly where we play within the Infratil portfolio, and that EBITDA growth needs to turn into cash generation. You'll see that we are managing our capital well and getting to those kind of 11% or 12% capital intensity ratios that we've been talking about. That doesn't mean, however, that we don't have a very supportive shareholder when opportunities come up. And whenever they have, and I know when they will in the future, that we've got a supportive shareholder that will invest in the right things for medium- to long-term value creation for our customers and for our business. And then just lastly, in terms of our FY '24 outlook and then beyond, you can see that our performance is made up of a mix of both cost and trading. We're 2 months into this financial year. And I can tell you that we are on and we're on with confidence, both from a trading and from a cost perspective. So again, that momentum in the business continues. And we still see further growth opportunities in the business while also avoiding some of those one-off costs that we incurred in previous years. And the One rebrand in particular, I've noted there that it's a one-off project and rebranding costs. That could not have gone any better from our perspective. It's been very well received in the marketplace. And not only does it reduce our costs, but it has improved our trading momentum immediately as well. That was it from me, I think.

All right. Thank you, Jason. I mean it was a great run-through. Clearly, you can tell from this investment and that summary that we're upbeat about the outlook for this business. We're rational, right? This requires good execution and market structure to remain stable. There are many levers in this business to deal with, it changes over time, which we've always liked. But we're rational about that. We do feel though that the returns we're talking about will reward us well for that and the upside beyond those that we do see will reward us even more. So we're positive about making this deal today. So thanks, Jason. And maybe over to you, Phillippa.

Thanks, Jason. Yes, I'll just run through a couple of slides quickly before we move to the equity raise. Just in relation to the FY '24 guidance, you'll be aware that we set that guidance range of $570 million to $610 million when we came out with our FY '23 results in May. The components of that guidance remain unchanged as to the underlying assumptions that we set within. Really just to note that we've increased that guidance range to reflect the fact that we'll be holding or will hold 49.95% of One NZ for 2.5 months. And then for the balance of the year, we'll obviously have 99.9% of One NZ. So the result of that is we're increasing our guidance range for FY '24 to $800 million to $840 million. The other thing to note is just in relation to dividend outlook, as you'll see and as we've talked about, one of the fundamental propositions for the acquisition of the balance of One NZ is the cash flow that allows us to flow through to Infratil. As a result of that, we are expecting that we can continue to support a stable dividend posture at the Infratil level. So turning now then just to the funding of the transaction. I won't spend too much time on this. Total cost of $1.815 billion, including transaction costs. Completion is expected to occur late next week, and the completion funding will be by the placement portion of the equity raise together with cash on hand and drawing down of debt facilities. As you'd expect, the retail portion of the equity raise will follow, and we'll then use that to partially pay down some of the debt we've drawn. And then Slide 20, and I think really just to note that, as Jason talked about earlier, we've got not only the excitement of this acquisition, but we've also got a lot going on within the portfolio of companies as well as potential investment opportunities that we also want to keep in mind. As a result of that, in tandem to negotiating the acquisition of the 49.95%, we've also looked to secure our capital structure so that we can continue to fund the portfolio and look at those opportunities. As a result of that, we put in place additional bank facilities with 3- and 4-year terms of $300 million in total. And we've also put in place a $400 million bridge. The purpose of that bridge is to effectively allow us to now go out post transaction announcement and look to also extend some of our core debt facilities and also just to consider what our capital position is relative to things like our bonds, which is also another good source of capital. So overall, we've got total liquidity of $880 million post completion of this transaction. We're reasonably confident about the forecast commitments that we have over the next 12 to 24 months, and the way in which the portfolio can look to fund those. Final point is post completion, we'll have gearing of about 19%, which is still well down on the 30% but we think appropriate at this stage. And now I'll hand back to you, Jason Boyes.

Thanks, Phillippa. Just quickly on the equity raise, just to expand on that a little more. So we're raising $850 million to partially fund the acquisition and maintain that flexibility Phillippa just spoke about. As I said before, there's a $750 million placement, which is underwritten, and $100 million retail offer, which isn't. Investors who bid for their pro rata stake in that placement will be allocated to their full bid, on a best efforts basis. And the placement will take place today, and the retail offer will open on Tuesday, the 13th of the month, through to the 27th of June. Retail shareholders will be contacted directly with instruction as to how to participate. If you want to participate in the placement, you can contact your broker. So there's more details on the page there, but those are the highlights. So let me summarize and we can go to questions. I appreciate that's a quick a quick run-through of the presentation. But as you can tell, we're excited to be announcing this transaction today, investing in a high-quality business we know really well, which is trading well, and has good growth opportunities ahead of us. Our investment case equity returns at 10% to 12% over the next 10 years are attractive, and there are opportunities to achieve more over the medium to longer term, which we really like. And the rest of our portfolio remains well positioned, and we continue to see upside in the valuation of the CDC Data Centres and Longroad, as I said at the annual results, in particular, as they continue to experience the strong tailwinds, and they're effective. The equity raise, new debt facilities and full control of One NZ' stable and growing cash flows will maintain and enhance our capacity and flexibility to support those existing growth platforms and address new attractive opportunities that we wish to; as always, remaining patient and disciplined. So I'll finish the presentation here. I think we've made good time actually. But we can go to questions, Ashley, if there are any.

[Operator Instructions] Your first question comes from Aaron Ibbotson with Forsyth Barr.

A couple of questions for me. And I appreciate, a few of them, you may want to differ. But just first of all, you now have a sort of captive cash flow from One NZ. Is it too early to comment on how that may influence your dividend policy and sort of buildup of imputation credits? And then maybe secondly, if I may, my favorite question on One NZ, 30% EBITDA margins, you're talking about 11%, 12% CapEx effectively, at least 18%. It tends to disappear a little bit between those 2 numbers. So I was just curious to know if you could share with us anything around, Jason or Phillippa, what you see as the sort of free cash flow to revenue type number we should think about when we think about this business sort of medium term.

Yes. Phillippa, do you want to answer that?

Yes, sure. I can start with the question you had on the dividend. I think the message we're giving at this stage at the Infratil level is that we do expect to be able to have a stable dividend outlook. As you'd expect, we've got other investment opportunities across the portfolio. So like any shareholder of ours would expect, we'll look at the amounts that we get in, look at the investment opportunities that we have and, at the same time, have regard to the desire to receive dividends. But at this stage, our message is that we expect our dividend to be stable.

And free cash flow through to rev?

Yes, free cash flow through to rev, I think it actually goes back to Jason Paris' point that it's a bit of a balance between where we need to invest capital and want to invest capital at the One NZ level and actually tagging or tying that into the cash flow needs at the Infratil level. I think the beauty of the result today is that we can both actually be quite flexible about that. Clearly, there'll be CapEx and other spending at the One NZ strategic imperative. At the same time, we'll have cash flow needs at the Infratil level, which will be a strategic imperative for us. So we're not really giving guidance at this stage, but obviously, we're expecting it to get to be net incremental for Infratil.

Yes, triple-digit-plus type stuff, Aaron.

Yes.

Very clear. And then obviously we have to ask about this EBITDA margin you talked to near term. And I guess if we take the number you're guiding us towards, stripping out these sort of One NZ rebranding costs and the SaaS, you're already there. So you sort of teased us with some cost-out initiatives and some continued strong growth. And I appreciate you don't want to go out with a new guidance when you're just about to achieve your previous one, but if we think about it broader -- and maybe this is a question to Jason Paris. You have higher weighting towards mobile, clearly, than Spark has. If you look at the business overall, mobile is clearly a higher margin business. So when you think about your mobile operations, relative to your nonmobile operation? Is there a wide margin differential? Can we think about your overall stretch target to reach sort of similar margins for the group as Spark has for their mobile? Or is there anything you can help us with when we think sort of over the next 3 to 5 years of where One NZ can get to?

Yes. I will hand that to Jason Paris to answer all those elements of it, but I know the general direction you're asking him.

Yes. So I think I said in the presentation that the best-performing international telcos have an EBITDA margin percentage of 35% or above in, I think, 10 or 15 of those. And there's no reason why we shouldn't be one of the world's best digital telcos. And I talked about that cost program before. That's not at the expense of customer experience. So our people want us to make it easier for them to do their jobs. Our customers want us to be more digitized and automated and all of those things mean that we reduce our operating costs. I see margin expansion in all 3 areas I mentioned, though, mobile, ICT and in wholesale. I think our posture and all of those is that the overall market is growing at the same time now, so this is not at the expense of any market stabilization at all. So if you look at the projections over the next 5 years in mobile and ICT, they're all in growth mode. I think mobile is about 3.5% over the next 5 years. ICT is about 10%. We would like to be a bit faster than that, and that's our target. And in ICT in particular, we're starting from a lower base, so we don't have any walk-back slowly or any incumbent business to protect, especially in cloud. So you'll see us already as the hyperscaler partner of choice. I've mentioned in the pack, a very strong relationship with Greg from CDC. In fact, I think we did our first 30 sales calls together. And so we want to work with customers to migrate these hyperscaler cloud solutions as fast as possible. So whether it's IoT or cloud or contact center or security, we see some good margin expansion in there as well as in mobile, as well as in wholesale.

That's more forthcoming than I had anticipated, so thank you very much. Last question from me, apologies, but you mentioned, Jason Boyes, in the release, clarification of the IRA benefit. Obviously, all of us that read this assumed that this is good clarification or positive, but you don't spell it out. So I just want to know if you're willing to add just a tiny bit of meat on that sentence for the benefit of us.

What is that, Jason?

Yes, I think you said, "Since our results, we have seen strong demand signals for CDC and clarification of the IRA benefit for Longroad," if I got it right.

Yes, I think it was really those local content requirements and now with lawyers and accountants who are getting more and more confident about what they actually mean, which will make it easier for us. I think by the time we get to the site visits, certainly by the time we get to the site visits in Phoenix with the Longroad team in September, to give everyone some clarity on free cash flow drop-through from the investments we've got in the pipeline was really what I was referring to there. So more and more of that is coming out every day from the team as the lawyers pore over the details of that. It's not straightforward, but it's becoming clear, and we can guide more confidently in a month or 2 on what that free cash flow is going to look like.

Your next question comes from Phil Campbell with UBS.

I was just wondering, Phillippa, if you could just help me a little bit on the transaction in terms of what the potential tax implications could be. Obviously, you're taking full control, so I'm assuming, given you go north of 66%, you will be able to potentially utilize some payment type structure. And I don't know if you want to be giving this number but just trying to get an idea of what the value of that could be because, obviously, on one of the slides, we're looking at free cash flow of over $200 million. And it may just, I suppose, help us understand. Obviously, the valuation does look pretty similar to Spark. But if you take into that the tax benefit, you could obviously be further benefited, Infratil. I just want to try and get a bit of an understanding of that.

Yes, you're right on the money there, Phil, in terms of the ability to put in place tax loss offsets and subventions. At this stage, though, really, it's not just the question of what the taxable income of One NZ is but also what the tax losses are at the Infratil level which, you'll be aware of, are largely generated by virtue of interest deductions and other deductions. So in terms of our investment case, we've taken a pretty moderate view of the extent of that benefit. But certainly, we are expecting that between the Infratil tax losses and the One NZ taxable income, we will look to optimize that so that we can apply the subvention.

Great. So is there any way to quantify what that potentially could be? Or is it...

There's other sort of tax things that go on that soak up those losses within the Infratil group. So it's a bit of a watch this space at the moment. But yes, that's about all we can say at the moment, Phil.

Yes, I mean I guess the full size is driven by the infrastructure bonds and the interest rate you could get some of those and bank debt. So that will give you the total bookings. And then obviously, as Phillippa said, some of it's used elsewhere in the group, but that will give you the -- that's akin to that.

Yes, that's right. We've got accumulated losses to date as well. So if you effectively started in the accounts and work forward from that using the method that Jason talked about, it will get close.

You'll get pretty close.

And then just maybe a quick one more just for the kind of industry, the telecommunications industry in New Zealand in general. Like, as a result of this transaction, it doesn't sound like we're really seeing any major change to -- we've got a pretty rational kind of sensible industry structure, both in mobile and fixed, so we're not really seeing any major change -- there's no real major change in the strategy as a result of the transaction. Or is there potential for some acceleration of certain things like 5G?

No, no. So we expect a stable but competitive market structure. I think we publicly said that we want to have co-leadership on our network for all the reasons that we've outlined and the use cases that, that provides us, whether it's trading, fixed, wireless access, et cetera. So that's been on. Phil, you shouldn't expect any change in strategy or any change in market dynamic.

[Operator Instructions] Your next question comes from Wade Gardiner with Craigs Investment Partners.

A couple of quick questions from me. Given the good outlook, why did Brookfield decide to sell?

Yes, I can talk to that. So I think it was inevitable that we would have a longer halt period than them. They are our long-term investors, but they naturally invest from funds that had limited lives. So I guess it's not surprising they would be looking to exit before us. Also, they felt like they would be thinking about this about now having executed that mobile tower deal last year, Wade, and the IRR that they're seeing, and we have as well, at 30%, incredibly strong. And the forward outlook, we are positive about. But we're not saying we're going to hit 30% out of this going forward. So it does feel like the rational time for them to have been thinking about it we thought and that's proven to be the case. There are things I think going forward that will require sort of more medium to longer term investments and views on the market that you want to really be starting now. You don't want to get behind on your mobile network like this. Business did before we owned it and things like that. That I think would have added to that idea that they're better to realize this IRR that we're sitting on as well and move on to other things. They'll have other funds to raise in the future as well, and that's proven to be what they've wanted to do.

Okay. And can you comment on Board changes at the One NZ level?

Yes, yes. So obviously, the Brookfield representatives will move on. But the Board representatives on the Infratil side will stay the same. So at the moment, that's Marko Bogoievski, Brett Chenoweth, another experienced telecommunications executive, and Phillippa Harford here, the CFO, who will be the Chair. So there's good continuity there with people who know the business, know the strategy and know the opportunities ahead. And then we'll properly look to supplement that over time with maybe a couple more. But there's nothing we're announcing on that today.

Okay. Was it $26 million or so million of imputation credits at the end of last year? Is there any impact on the imputation balance from this?

There was only about $2 million at the end of last year for One NZ, Wade, so no. The disposal, we lost, but that wasn't really regarded as material to the transaction.

Okay. And finally, just on Page 16 of the presentation where you've got the EBITDA bridge. The $35 million of one-off costs and capitalization of the SaaS expenditure, what's the split between the 2 of them there?

Yes, sorry, I'll just pull up my notes on that. So essentially, there's 3 things going on there. As you know, we've stopped paying group on the brand at the end of March 2023. And last year, we had rebrand costs, which will continue to some extent into FY '24, but at a lesser level. So the other point to note, I think the net movement in that regard is about $30 million. But the other point to note is we just want to call out that One NZ has got slightly elevated SaaS costs at the moment because it's actually more in the development phase for some projects as opposed to just paying licenses. So what we're expecting over the longer term is that the SaaS cost at the One level go more to sort of where you'd see in its comps. So that's the reason for drawing that out.

Your next question comes from Nevill Gluyas with Jardien.

I think you've covered most of the ground already I had to ask, just a few from me regarding the digital platform. First one is really, should we think this as the last sort of big acquisition to the platform given it's already sort of got quite a high weighting in the portfolio? And I guess, the second part of that question, and you flagged it in this presentation, was the potential for more capital potentially. Infratil equity capital at CDC, if it's getting positive growth signs more so than you source onto the result. So how should we think about the platform size going forward?

Yes. I mean I would never say never on another big one, but I think more likely, it would be something that is a higher growth business with potentially more global exposure. Because when you roll forward the portfolio, it doesn't look -- for ANZ. And I think to complete the picture, something that expose more globally to the tailwinds we're seeing a bit of down here will make more sense. But it will be more at the growth end, I would say, if there was going to be something else. But never say never. And then on CDC, we are seeing attractive uptick. I think it's more like the type of thing we've done in the past, really. And I mentioned this at the annual results where, as a result of the discussions they're having, we're definitely being more active and confident about extending our land portfolio to be able to address the demand in the time frame people are looking for. And if you remember back to when we first expanded the [ CDC ], I think the business raised sort of $100 million to acquire that site. And it's really accelerated land acquisitions that require equity shareholder support. And it's sort of that order of things, maybe more this time, right, because the signals we're seeing are strong, we're more confident we know how to expand into other regions. But that sort of order of things is what I've been thinking about, pretty similar, in some ways, to the Longroad, the way the Longroad capital is going to be dripped, I think.

That's useful color. Just to follow on then, make sure I understood correctly the first part of that question, you said sort of more growth focused. I guess that means we should expect sort of slightly smaller acquisitions, sort of not on the scale of this deal now with the higher IRR.

Yes, exactly, once we sort of feed the capital then to grow the business.

Perfect. Okay. And just one more for me. And I guess this is really just a disclosure question. For a while, Sparks had pretty clear disclosure, quite detailed, cutdown. And I imagine that's been harder to you guys to replicate with another shareholder. Now that it's your business entirely, can we hope for a similar level of disclosure to Spark?

No promises. But definitely, that takes a lot of more work out of the equation for us. So we're not averse to it at all. We know it's a significant part of the portfolio, right, and people will need the right level of information. So yes, you could definitely expect an uptick, I would say.

There are no further questions at this time. I'll now hand back to Mr. Boyes for closing remarks.

Thank you, Ashley, and thank you, everyone, for joining. Nothing really to add here. You can tell we're excited. We think this is a positive step, and we look forward to catching up with you again soon. Thanks, everyone.

That does conclude our conference for today. Thank you for participating. You may now disconnect.