Integral Diagnostics Limited (IDX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Integral Diagnostics IDX FY '26 Results. [Operator Instructions] I would now like to introduce and hand the conference over to Jason Martinez, Managing Director and Chief Executive Officer of Integral Diagnostics Limited. Please go ahead.

Thank you, and good morning, everybody, and welcome. I am pleased to present the FY '26 results for Integral Diagnostics. My name is Jason Martinez, and I commenced as Managing Director and Chief Executive Officer on the 6th of August 2026. Joining me today is our Chief Financial Officer, Craig White. Before we begin, I'd like to acknowledge and thank Dr. Ian Kadish for his leadership of IDX over the past 9 years as CEO. On behalf of the Board, management team and broader IDX community, I thank Ian for his contribution and wish him very well success in his future. While I've only recently joined IDX, I bring extensive experience in the radiology sector and have spent my first week listening, learning and engaging with our people, customers and stakeholders. In my most recent role, I managed a large portfolio at I-MED, the largest provider in Australia. I have been a hands-on Executive General Manager. I led margin improvement, revenue growth and cost-out programs, productivity improvement initiatives across clinics and support services to name a few. The lessons learned, skills developed and disciplined actions are the things I bring to IDX. What has struck me most since joining IDX is the quality of our people, the strength of our clinical reputation and the opportunities available to further improve patient access and shareholder returns. I'm truly excited by the opportunities ahead and look forward to working closely with our team as we continue to build on IDX's strong foundations. Today, I will share some initial observations and priorities with further detail to come as we progress through FY '27. I really look forward to meeting and working with everybody on the call. I will begin by outlining our key highlights from our FY '26 results and providing an update on the strategic priorities delivered during the year. I will then hand over to Craig, who will take you through our financial performance in more detail. Craig retires following this result, and I want to thank him for running finance through a significant period of growth and change. Jenny Martin joined us as CFO in October, and the handover is already progressing well. Following Craig's presentation, I will return to the call to discuss the industry and regulatory environment. I'll touch on our FY '27 strategy, priorities and outlook and conclude with Q&A. So let's move to Page 2 and the key highlights for our FY '26 performance. FY '26 delivered against what the business set out to do. Capital is integrated, synergies exceeded target levels, leverage came down and margin improved. Key highlights include revenue of $788.7 million for the FY '26 year versus FY 2025 year of $628 million, up 25.6%, reflecting organic growth, strategic acquisitions and ongoing demand for diagnostic imaging services. Operating EBITDA margin of 20.9%, up 80 basis points on FY '25 and in line with our guidance, demonstrating disciplined cost management and the benefits of scale across the network. Operating diluted EPS increased 23.6% to $0.126, supporting a fully franked final dividend of $0.06 per share, a 50% increase on the prior corresponding period and representing a dividend payout ratio of 73% of operating NPAT. Our balance sheet continues to strengthen with leverage reducing to 2.3x EBITDA, down 0.3. The business continues to have a strong cash conversion. Patient experience remains a key differentiator for IDX with our recent NPS or Net Promoter Score of plus 81, maintaining our position as a leader in patient satisfaction across the sector. Importantly, IDX is well positioned to continue supporting referring doctors, patients and government health care priorities across Australia and New Zealand, leveraging our scale, clinical capability and extensive network. Overall, these results demonstrate that the business is performing well. Our fundamentals remain strong, and we are well positioned to build on this momentum and improve on the return we can generate as we enter FY 2027. Turning to Slide 3. This slide outlines the progress made against our strategic priorities during FY '26. The Capital merger is now substantially complete and has been a significant success for our group. We have delivered annualized synergies in excess of $14 million, exceeding our original target. Any additional efficiencies identified moving forward will be captured through normal business operations. Importantly, we have maintained strong engagement across the workforce throughout the integration process. We have also seen increased participation from former capital radiologists within the IDX teleradiology network, further strengthening our ability to leverage our national radiology workforce. Overall, the transaction has strengthened the scale, capability and operating effectiveness of the group. Our organic growth remains a core focus of IDX, and we continue to drive both volume growth and operational efficiency across the network. During FY '26, we delivered solid revenue growth supported by increased patient volumes, Medicare indexation and a favorable shift in examination mix towards high-end modalities, including MRI, CT and PET/CT. As with broader industry, the radiologist workforce shortages remains a key challenge. Accordingly, recruitment and retention continue to be a major priority for our business. Pleasingly, our IDXt teleradiology platform continues to grow strongly. The IDXt radiologist workforce increased by 29 radiologists to 143 at June 30, 2026. The flexibility offered through our combined clinic and teleradiology model is an important competitive advantage in attracting and retaining talent whilst also improving service delivery across our network. Greenfield inorganic growth, we also continued to invest in all growth opportunities. During FY '26, we opened new comprehensive clinics at Wangaratta and Eastwood Private Hospital, including new MRI capability. We relocated our Launceston clinic with additional MRI services offered. We supported the opening of Maroochy Private Hospital in Queensland, which commenced operation recently in August 2026. Looking forward, we remain on track to open a further comprehensive clinic in Armstrong Creek in Victoria during Q3 2027. We continue to evaluate growth across greenfield developments, public and private hospital partnerships and other opportunities where they are strategically and financially compelling. Turning to Slide 4. I would like to briefly touch on why we believe IDX is increasingly well positioned for future growth. Over recent years, the business has built a strong reputational platform through investing in people, technology, network expansion and the successful integration of acquisitions. Today, IDX benefits from a larger and more connected network, enhanced operational scale and capability, a stronger platform to support clinical outcomes and patient access and importantly, ongoing opportunities for productivity and margin improvement. Importantly, our scale provides benefits for patients, referrers, radiologists and shareholders. As one of the leading diagnostic imaging groups across Australia and New Zealand, we believe IDX is well positioned to leverage its employee value proposition, clinical reputation and network footprint to drive future growth. This includes continuing to evaluate opportunities in attractive growth corridors across where we believe we can create value through both organic and inorganic expansion. Our focus remains on disciplined growth, operational excellence and delivering sustainable returns for our shareholders. Turning to Page 5. Whilst financial performance is important, long-term success is built on culture, clinical quality and the way we serve our patients, people and communities. These are our nonnegotiables. During FY '26, we continue to deliver a strong outcome across each of our value pillars. Some of the highlights include maintaining an exceptional patient Net Promoter Score of plus 81, reflecting the quality of care and service we provide across our network, serving approximately 1.7 million patients and performing more than 4 million examinations during the year, continuing to support regional and rural communities where access to specialist diagnostic imaging services remains critically important. We continue to focus on quality diagnostics and provide a network that enables our radiologists to capitalize on their specialized expertise and provide them with tailored work, maintaining strong employee engagement while continuing to build a one team culture focused on performance, accountability and continuous improvement. Further progressing our ESG and governance initiative to ensure we meet our obligations and continue to operate responsibly and sustainably. And we are investing in technology and systems to improve the experience for both our patients and our staff, including ongoing rollout of Workday and continuing optimization of our RIS and PACS network platforms across our clinics. These outcomes reinforce our strength of our culture, our commitment to clinical excellence and our ability to deliver high-quality health care services to the communities we serve. With that, I now hand over to Craig to take you through the FY '26 financial results in more detail.

Thank you, Jason, and good morning, everyone. Thanks for joining the call this morning. Just turning to Page 7. As Jason has mentioned, IDX's solid FY '26 financial results reflect the inclusion of a full year contribution from Capitol Health following the merger between IDX and Capitol Health on the 20th of December 2024. Revenue growth of 25.6% translated to stronger operating EBITDA growth of 30.3%, driving a higher operating EBITDA margin of 20.9%, being 80 basis points higher compared to FY '25 of 20.1% and in line with our guidance. Within that, the second half operating EBITDA margin was approximately 21.2%, 60 basis points above the first half. The operating EBITDA margin of 12.3% was also 120 basis points higher compared to FY '25 of 11.1%. Operating NPAT of $47.4 million grew strongly by 50.1%, up from $31.6 million in FY '25. Operating EPS of $0.126 per share grew 23.6%, reflecting the impact of a full year's weighting of shares on issue. A fully franked FY '26 final dividend of $0.06 per share has been declared, representing a 50% increase on the prior comparable period, bringing the total fully franked FY '26 dividend to $0.093 per share. Operating free cash flow of $106.4 million grew 30.7% compared to FY '25, representing strong free cash flow conversion of 82%. As Jason mentioned, IDX's balance sheet strengthened further with reduced leverage of 2.3x, down from 2.6x at 30 June 2025 and again, in line with guidance. Turning to Page 8. This page shows a pro forma P&L as if the merger had occurred on the 1st of July 2024. So FY '26 operating EBITDA margin of 20.9% was 70 basis points higher than FY '25 pro forma adjusted operating EBITDA margin of 20.2% after making several pro forma adjustments to present the results on a like-for-like basis. FY '26 operating EBITDA growth was 9.8% based on pro forma adjusted operating EBITDA. Turning to Page 9 and looking at each of the P&L line items in a bit more detail, starting with revenue. At the group level, solid revenue growth of 7% on a constant currency basis, excluding closed or sold sites was driven by growth in patient volumes, Medicare indexation of 2.4% effective 1 July 2025 and continued favorable mix impact. In Australia, organic revenue from all sources grew 7.4% compared to Medicare growth of 9.4% adjusted for working days. Growth for the legacy IDX business in Australia was 8.9%, reflecting solid growth supported by MRI deregulation and the National Lung Cancer Screening Program and further closing the gap to Medicare growth to 0.5%, down from 1% versus the prior comparable period. We believe this gap is due to the high growth of outpatients going through the emergency departments of public hospitals, driven by cost of living pressures. Growth for the legacy Capital Australian business was 5.4%, reflecting lower growth of GP attendances and referrals. Average fees per exam, including reporting contracts in Australia increased by 6.5% in FY '26, mainly reflective of Medicare indexation and an ongoing shift to the higher-end CT, MRI and PET scan modalities. In New Zealand, organic revenue grew 2.1% on a constant currency basis. While growth was below our Australian operations in FY '26, we expect an improvement in FY '27, supported by volume, pricing and modality mix initiatives. Turning to Page 10 and operating expenditure. FY '26 operating expenditure as a percentage of revenue reduced by 70 basis points compared to FY '25 on a pro forma basis, principally driven by labor costs, which were 40 basis points lower, reflecting the benefits of synergies realized across the group following the integration of Capitol and IDX workforces, together with increased use of teleradiology through IDXt. Other expenses were also 40 basis points lower, reflecting operational leverage, procurement savings and a decrease in doubtful debt provision, driven by improved collections across the group, offset by consumables, which were 40 basis points higher, reflecting modality mix towards higher-end modalities as well as price increases for radiopharmaceuticals in contrast. Turning to Page 11 and cash flow and cash conversion. As I mentioned previously, operating free cash flow of $106.4 million grew 30.7% compared to FY '25, representing strong free cash flow conversion of 82%. Turning to Page 12 and capital expenditure. CapEx investment of $49.8 million represented the midpoint of guidance of $45 million to $55 million and was aligned with IDX's strategy, both enhancing and expanding the equipment fleet for the benefit of patients. In particular, growth CapEx of $21 million represents both new brownfield and greenfield investments, as you can see on the map graphic on this page. And finally, turning to Page 13 on the balance sheet. As I noted previously, IDX's balance sheet strengthened further with reduced leverage of 2.3x, down from 2.6x at 30 June 2025 and in line with guidance. IDX also has significant liquidity headroom of $117 million available under group committed debt facilities. As at 30 June 2026, 51.2% of gross debt was hedged, providing protection against interest rate volatility at rates favorable relative to prevailing BBSY levels. I'll now hand you back to Jason. Thank you.

Thank you, Craig. Turning to Slide 15. I thought it would be useful to briefly step back and look at the broader industry fundamentals. The key takeaway is that the structural drivers supporting diagnostic imaging remain very positive, and we believe they position IDX well for continued growth. Demand continues to be underpinned by an aging population, increasing chronic disease and a greater focus on early detection and preventative health care. As a result, Medicare-funded diagnostic imaging services and benefits have continued to grow above their long-term averages. We're also seeing a continued shift towards higher-end modalities such as MRI, CT and PET/CT. Recent MRI deregulation is improving patient access and supporting growth opportunities across the sector. For IDX, our licensed MRI fleet increased from 23 to 42 units from July 2025, which has further strengthened our position. The commencement of the National Lung Cancer Screening Program is another important development. Not only does it provide support for increased CT activities, but it should also drive follow-on demand for interventional and PET/CT services over time. Technology also continues to play an increasing and important role. AI and teleradiology are helping improve productivity, support clinical quality and make better use of scarce radiologist resources, particularly in regional and rural locations. Finally, recent government initiatives around GP access and radiologist workforce pathways are encouraging developments that should support both demand and workforce supply over the medium term. Overall, we believe these industry fundamentals remain highly supportive and reinforce our confidence in the long-term outlook for both diagnostic imaging sector and IDX. Turning to Slide 16. This chart highlights the strength and consistency of industry growth over time. As you can see, both Medicare-funded diagnostic imaging services and benefits have been tracking above their long-term growth averages since late 2023. Importantly, the growth in benefits at 9% has outpaced growth in services at 3.5%, reflecting the continued shift towards higher acuity and higher-value modalities such as MRI, CT and PET/CT. While Medicare indexation has continued to grow, the underlying drivers remain structural in nature, including population growth, aging population, increased chronic disease and greater utilization of imaging in patient management and early diagnosis. Looking ahead, we expect industry growth to continue to be supported by MRI deregulation and the National Lung Cancer Screening program, both of which should provide additional growth opportunities over the near to medium term. Overall, this data reinforces our view that diagnostic imaging remains an attractive sector with favorable long-term demand fundamentals and one where IDX is well positioned to participate in that growth. Turning to Slide 18. I'd like to outline our priorities for FY 2027 and beyond. Having spent my first few weeks in the business, my view is IDX has strong foundations, attractive industry tailwinds and significant opportunities ahead. While it's still early days for me, I've spent considerable time meeting our people, radiologists, leadership teams and key stakeholders across the business. What has become clear is IDX has an outstanding platform, a strong clinical reputation and a team that is highly committed to delivering quality patient outcomes. Against that backdrop, our focus for FY '27 will be centered on 4 key areas. First, we will continue to drive core growth and operational performance through increasing volumes, optimizing modality mix and maintaining a disciplined focus on productivity and margin improvement. With the final deregulation occurring on 1 July 2027, we will ensure we are tight on execution in relation to new license opportunities and protection at sites where new licenses are expected with our competition. Our immediate priority is to maximize the value of our existing platform and execute on opportunities already within the business. At the same time, we will continue to pursue disciplined network expansion opportunities where they are strategically and financially compelling. This includes greenfield development, brownfield expansion, hospital partnership and the continued scale of our IDXt teleradiology platform. Growth for growth's sake is not the objective. I do want to emphasize that maximizing our existing platform will take priority over network expansion. Third, our success ultimately depends on our people. Health care is a business -- is a people business and attracting and retaining highly qualified radiologists and key staff remain absolutely critical to our future success. Accordingly, strengthening our leadership capability across all levels of the organization, fostering a high-performance culture and continuing to build a strong One IDX culture will remain priorities. We want IDX to be the employer of choice for radiologists and health care professionals and to provide an environment where our people can do their best work and continue to develop their careers. Finally, we see significant opportunities through transformation and innovation, including enhancing the patient and referrer experience. Expanding our digital capabilities and leveraging emerging technologies, including AI to improve productivity, clinical outcomes and ultimately service delivery. Technology is changing health care rapidly, and we believe IDX is well positioned to benefit from those changes, whether that's through AI, workflow optimization, the digital patient pathways or improved referral connectivity. We see meaningful opportunities to improve both efficiency and overall experience for our patients and our clinicians. Across all 4 priorities, our objective is simple: to improve patient access, deliver sustainable growth and enhance returns and create long-term value for our shareholders. Turning to our final slide, Slide 19. I'd like to spend a few minutes on how we intend to translate those strategic priorities into execution during FY 2027. One of my immediate observations is that IDX has a strong platform, attractive industry tailwinds and a highly capable team. Our focus in FY '27 is, therefore, not to reinvent the business, but rather sharpen our execution, drive accountability and ensure we maximize the value of the assets and capabilities already within the group. To support this approach, we have identified 3 areas of priorities in FY '27, revenue management, margin improvement and capital management. Each area has clear commitments and measurable outcomes. Our first priority is revenue management. Our objective is straightforward: continue to optimize revenue through a combination of volume growth, average fee improvement and the continued shift towards high-value modalities. MRI deregulation also presents an attractive opportunity to improve patient access and support growth across our network. Our success in this area will ultimately be measured by our ability to deliver sustainable revenue growth and convert that growth into EBITDA growth. Our second priority is margin improvement. While we have made good progress in recent years, FY '27 operating EBITDA margin is expected to be above 21.0%. I believe there remains further opportunity to improve productivity and leverage and operating leverage across the business. Commencing in quarter 2, '27, we will review remuneration settings, productivity measures, labor alignment to activity levels, organizational structure and the performance of lower-margin clinics. We will also undertake a broader review of our cost base to ensure we are appropriately positioned for our next phase of growth. Importantly, this is not simply a cost reduction exercise. It is about creating a more productive and scalable operating model that allows us to continue investing in patients, people and growth opportunity whilst improving our returns. Our key measures here will be labor as a percentage of income and continued margin expansion. The third priority is capital management. We'll undertake a strategic review of our New Zealand operations. We are looking at both improvement opportunities and divestment opportunities, which would unlock capital. We will also continue to focus on disciplined capital utilization across the group. We want to ensure we expand capacity to meet referrer and patient demands. And as I mentioned earlier, our immediate priority is to maximize the value of our existing platform. We will continue to assess opportunities for growth, but we will do it through a lens of disciplined capital allocation and shareholder value creation. Our measure of success will include both leverage and return on capital invested, ensuring that we remain focused on the quality of growth rather than growth for growth's sake. Finally, we've also outlined several strategic guardrails that will support decision-making through FY '27. These include reviewing and adjusting our structure where necessary to support clinic performance and operating leverage, prioritizing utilization of our existing assets before significant new investment and continuing to improve the experience of our patients, referrers and our employees through technology and AI-enabled solutions. Taken together, these priorities reflect a disciplined and pragmatic approach to FY '27. Our focus is on execution, improving productivity, enhancing returns and ensuring that IDX continues to build on strong foundation that already exists within the business. With that, Craig and I would be happy to take your questions. I'll now hand back to the operator to facilitate that. Thank you.

[Operator Instructions] Your first question today comes from David Stanton with Jefferies.

I wonder if you could give us your near- and medium-term plans for higher revenue growth inside the CAG business, which grew less quickly than the IDX legacy business. How do you get it to grow in line with Medicare over the near to medium term, please?

Thank you for your question. Look, I do want to stress, this is not a turnaround story. I think the business as a whole operates in an attractive and growing segment across the health care market. I think what's important is revenue growth is absolutely important. And I know Medicare benefits is one of the benchmarks that's public available and you have. I kind of appreciate your operating off incomplete information. We definitely are looking to close the gap and secure a pathway that's more sustainable. But I think it's also important to point out that Medicare benefits is not necessarily a fair hurdle. There's been an upward trend in GP bulk billing driven by Medicare's $8 billion GP bulk billing incentive. I think this is really good news for our capital business, which is predominantly bulk billing practices and clearly rely on GP referrals. However, the increased bulk billing should also bring, I think, more private sector growth as in line with Medicare as patients no longer really need to go to public hospitals to be bulk billed. So I think given that, I'm expecting the capital business to be a beneficiary of that.

Dave, I'd probably just add to also what Jason is saying and that is that the Capitol has 9 MRIs that were partially licensed and now fully licensed. And the opportunity uplift in those machines, we haven't really yet seen given Capitol is historically a GP referred business. So the business is now looking to build out the specialist referral network. So I think as we build that out, we'll find increased utilization of those now fully licensed machines, of which there are 9, and that will help also supplement the growth that Jason is referring to.

Understood. And I guess sort of a follow-up to that then. Are there plans for price increases across the Australian business in 2027? And if so, can you give us some color as to what modalities you might look to take price or perhaps on a regional basis as well?

Yes. Great question. I think when we're looking at revenue, there is a number of levers that we look at. We look at volume, we look at capacity, we look at ability to service capacity. And clearly, price is a lever that we look at. So I think to answer your question, price is a lever that we're looking at. We look at all levers when we're trying to grow our revenue and our margin. Specifically, I can't give you any specific details on the call. However, to just express that we are looking at price as a lever. Our aim is to maintain as much affordable and accessible health care as we can. But price is always a lever that we need to review.

Your next question today comes from Saul Hadassin with Barrenjoey.

I just wanted to ask the -- you mentioned synergy delivery ahead of expectations. Can I just check, was $14 million the synergy figure estimated to have been delivered in FY '26? And the reason I ask is that if it was, if we look at the pro forma EBITDA from FY '25, effectively, there's no underlying EBITDA growth across the business. And I'm keen to understand outside of those synergies, why was there not better operating leverage? What was the drag to EBITDA for FY '26?

Yes. Thanks, Saul. Look, I'll take that one. Yes, I think as you've observed, the pro forma EBITDA for FY '25 was $150 million. Bear in mind that embedded in that $150 million was only $7 million of synergies, given that, that was effectively only had a half year's worth of synergies in there. So if you then take the fact that we then had a further $7 million of synergies in the first half of FY '26, then really $157 million lifts to -- sorry, $150 million lifts to $157 million against the reported result of $164.8 million. So effectively, there's about $8 million of incremental EBITDA growth over and above synergies.

Got it. That makes sense. And there's a commentary about additional synergies ongoing in terms of, say, for example, procurement. Just wondering, I think at the half, you gave some color as to how much additional synergy could be achieved in terms of dollars. Are you able to provide any update what you're thinking there for FY '27 as it relates to incremental synergies above the $14 million?

Yes. So I think at the half, I would have talked about sort of an additional $1 million to $2 million on top of the $14 million. And I think probably post this result, we'll stop talking about synergies because I think it will just become part of the BAU procurement and leveraging our scale across the business. But when we say $14 million plus in FY '26, it's really that extra $1 million to $2 million. I think the reality is -- I've talked earlier about the fact that it was only really post the merger that we set up a group procurement function. I think that there are clearly further procurement opportunities going forward. And I'm sure Jason will be looking at those. Jason, maybe you'd like to just add some comments.

Yes. Thanks, Craig. I think absolutely, we'll continue to assess our procurement opportunities. I think with our increased scale and leverage, gives us additional opportunities to lean on our scale and size with our vendors and our procurement functions. So it's absolutely an area of focus for our business. I think there is further opportunities. But as I mentioned and as Craig has mentioned, those kind of savings will be built into our normal operating rhythm as we go forward.

And if I could just ask one more question as it relates to the dividends. The final dividend stepped up quite significantly versus first half. The payout ratio was close to 100%. I think it's around 90%. So just wondering, into FY '27, is there a target payout ratio we should be considering? What's the outlook for another significant increase in dividend into '27?

Yes. So look, probably a little cheeky with the third question, but I'm going to answer it. So I think the target payout ratio in the group historically has been in that sort of 65% to 75% of operating NPAT. Now there's obviously been a bit of a delta between operating NPAT and stat NPAT historically, just given some of the transaction integration costs. But I think at the end of the day, the dividend is a sign of confidence about the future. And so I think the intent would be to maintain that sort of payout ratio of operating NPAT, but obviously a matter for the Board and Jason going forward.

Your next question comes from Lyanne Harrison with BofA.

Can I start with your New Zealand strategic review? Can you give us a little bit of sense on time frame and what that might entail? And also, you mentioned potential divestment. Would that include all or part of your New Zealand operations?

Yes. Thank you for your question. So I think what we'll be doing is running a strategic review of the New Zealand business to assess kind of where it generates the most value. Look, the same stands for our Australian clinical site base. So we're not running a competitive process. But if there was a compelling offer, we would absolutely consider it. So I think importantly, I'm not afraid to take action to streamline the operations where it's relevant. But I just want to avoid making a move in haste without a full set or an incomplete set of information. So importantly, for New Zealand and all of our Australian clinics, we need to continue to review our growth options. We need to prioritize how we grow that business and importantly, focus on those initiatives that will shift the needle. So that's our priority.

Okay. And just coming back to the timing of your strategic review for New Zealand?

We'll be commencing it pretty shortly.

Okay. And in terms of -- this is probably a question for Craig. If I'm looking at your operating cash flow conversion, can you talk about the changes in working capital there? Obviously, some of that relates to transaction costs, which we would think would cycle out as we go into fiscal '27. So can we expect an improvement in free cash flow conversion going into '27?

Sure, Lyanne. I think -- look, first of all, I mean, I think in terms of cash flow conversion, we feel like it's pretty strong at 82%. I mean the prior year was a little bit higher. What are the drivers of that working capital movement, it's really across each of the working capital lines. So a little bit of an increase in receivables by $1.8 million due to growth in the business, a little bit of increase in inventory, $0.9 million, again, driven by growth in the business, a bit of an increase in accrued income. And there's also a payable in there of -- relating to the contingent consideration for IOP. So really, that movement of roughly $9 million in working capital is fundamentally related just to the growth in the business. There's nothing particularly unusual in there.

Your next question comes from Steve Wheen with Jarden.