IPH Limited (IPH) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the IPH Limited half year results presentation. [Operator Instructions] I would now like to hand the conference over to Dr. Andrew Blattman, CEO. Please go ahead.

Many thanks, Cole. Good morning, and welcome to the IPH results presentation for the half year ended 31 December 2020. My name is Andrew Blattman, I'm the CEO of IPH. And with me today is John Wadley, our CFO. Thank you all for joining us for our presentation and for your continuing interest in IPH. Before commencing the formal presentation, I would like to acknowledge and thank the IPH executive team and our Board for their support. And of course, all of our people from across the group for their contribution during the first half of FY '21. As we've outlined previously, we have experienced some disruption from COVID-19 and it's a testament to all our people across the group that we've delivered such a strong result in this environment. We're moving to Slide 3. This is a table of contents that we will talk about. In today's presentation, I'll provide an overview of the operational highlights for the year. John will discuss the financial results in further detail before handing back to me to provide comments on our key markets in terms of filing activity and a review of our operations. I will conclude with commentary about our strategic focus for the current year and beyond. And as always, we'll be very happy to answer questions at the end of the presentation. So moving to Slide 4. Let me start with a recap about our business. Hopefully, many of you will have noticed the new branding for the presentation, which incorporates the new corporate identity for IPH. This new identity reflects the evolution of the IPH Group and its ambitions. We are the leading IP services group in Asia Pacific region with #1 patent market position in Australia, New Zealand and Singapore and the #1 trade mark position in Australia and New Zealand. We operate 6 brands with over 900 employees, working throughout 8 IP jurisdictions in Asia Pacific, servicing more than 25 countries across the region. We are very proud of our origins, but we're also excited about the future for the group. And our new identity represents a strong opportunity that the IPH Group network presents. I'll talk more about our branding position later on in the presentation. Moving on to Slides 5 and 6 on highlights. On Slide 6, particularly, we have delivered a solid result for the first half. In the challenging market, including a stronger Australian dollar in the first half and the ongoing impact of COVID-19, we have delivered underlying earnings growth and increased returns to shareholders. Underlying EBITDA was up 2% to $61.7 million, while we continue to generate very strong cash flow with operating cash flow up 39%. This has enabled IPH to declare an interim dividend of $0.14 per share, 50% franked, which is up 4% on the prior corresponding half. You've heard me say many times before that China and Hong Kong, particularly China, represent key growth markets for the group. And I'm pleased to report significant patent filing growth in both markets for the half, with patent filings into our Beijing office increasing by 18.1%, and patent filings to our Hong Kong office increasing by 23.2%. The core part of our strategy, and has been from Day 1, has been successfully acquiring and integrating companies to deliver margin accretion. We've always understood margin. You'll recall that the acquisition of Xenith IP in August 2019 was our largest acquisition since our listing in 2014. And it's very pleasing to see how the successful integration of Xenith is adding value to the group. What that successful integration of the Xenith Group of companies has meant is reflected in the delivery of $15 million in underlying EBITDA for the half compared to the $19.7 million Xenith delivered as a separate entity in its last full operating year. More specifically, the former Xenith business delivered an EBITDA margin of 27% for the half, which is up 35% from FY '20, a terrific achievement. Synergies are being delivered in line with our expectation, and Asian strategy is increasing client referrals from acquired businesses to IPH entities, but particularly into IPH Asia. Once again, you can see how we're improving on that measure with new patent and trade mark client referrals into IPH's Asia business from our acquired companies. Of course, that's AJ Park and the Xenith Group, in particular, as I say, up 39% for the half. That's a strong endorsement of our acquisition strategy. Of course, during this period, our business, like many others, continue to weather some disruption due to the ongoing global pandemic. In this half, we again navigated operational challenges with the temporary closure of some IP offices in [ a small area ]. Pleasingly, our ability to mobilize a remote workforce, underpinned by a robust COVID response plans, has allowed us to maintain client services remotely and ensure the health and well-being of our people throughout this period. In summary, I'll say again, IPH has delivered a very solid result, particularly in the circumstances applying during the half. And I'll hand over to John to talk through the financial results in more detail.

Thank you, Andrew, and good morning, everyone. Our financial highlights reflect the group's performance in the COVID trading environment and must also be reviewed with an understanding of the foreign exchange impact. [ U.S. dollar ] in the 6 months averaged $0.723 versus $0.685 in the comparative period. We have previously advised that a $0.01 weakening of the U.S. dollar equates to $1.9 million reduction in service charge revenue. Further, the strengthening of the AUD versus the Singapore dollar has had the impact of reducing the profits of our Singapore business when reported in Australian dollars. Finally, the FX losses recorded in our P&L, i.e., those derived by banking receipts at a weaker rate than booked, are $1.5 million greater than in the prior corresponding period. Both sides of this slide reflect these FX headwinds. In addition, the left-hand, or statutory side, reflects the increase in noncash amortization of intangibles, which results from our acquisitions. Pleasingly, we have shown growth in all of our underlying headline financial metrics against the prior comparative period. Unpacking the result, the main contributors have been an additional 1.5 months of acquisitive growth from the Xenith IP business, 2.5 months of acquisitive growth from the Baldwins acquisition and margin expansion of both the ANZ and Asian businesses. Particular feature of this has been the contribution from the former Xenith IP Group of $15 million. This has been achieved by the previously announced initiatives of corporate cost reduction, sale of the Glasshouse Advisory business and the merger of the Griffith Hack and Watermark businesses. Those factors have assisted to deliver a group underlying EBITDA of $61.7 million, up 2% on the prior comparative period. Underlying NPAT has grown by 3%, and the underlying diluted earnings per share has risen by 1% to $0.174. I also highlight the interim dividend of $0.14 per share. Dividend will be 50% franked. And the $0.14 per share represents a 4% increase on the prior period. As the group has now utilized the franking credits obtained through the Xenith acquisition and received a tax refund in the current year, the franking level will likely revert to between 40% and 60% on an ongoing basis. The DRP will operate for the interim dividend. Moving on to Slide 9 and the like-for-like revenue and EBITDA. The like-for-like basis eliminates the impact of acquisitions. And more importantly, in this period, the foreign exchange impacts I discussed earlier. On a group-wide basis, revenue declined by 5%. However, EBITDA grew by 8% on a like-for-like basis. The new business column in the table removes from the half year results the 1.5 month contribution of the Xenith business and 2.5 months from Baldwins. This is a representation of the corresponding period prior to IPH ownership and does not include additional contribution generated under our ownership. Andrew will reflect further on the Xenith IP Group acquisition and integration in later slides. The next 2 columns to the right show the FX impact on both the balance sheet and the P&L. The currency adjustment column reflects the comparative disadvantage of the stronger Australian dollar throughout the first half '21. Like-for-like revenue reduced by 5%, including as a result of the challenges of COVID-19 as well as the integration of Griffith Hack and Watermark in Australia. While inbound new filings have a long lead time, filers do have the ability to delay the decision to file right up to the filing date as well as the ability to temper their spend by filing in fewer countries, that might be the case in more certain economic circumstances. Despite the revenue reduction, both regions have seen growth in EBITDA. ANZ, through the margin expansion activities previously outlined, and Asia through increased filings in China, Hong Kong and Singapore, some of these through the expansion of the network effect, i.e. those files referred from other IPH offices. Excluding the impact of foreign exchange from the revaluation of the U.S. dollar debt, the group has seen a net increase in corporate costs -- sorry, a net decrease in corporate costs of $1.1 million, reflecting the benefit of the elimination of the Xenith IP Group corporate costs, offset by investment in the IT function, increased D&O insurance costs and compensation for new executive positions added during FY '20. Moving on to Slide 10, the underlying NPAT and EPS. Slide 10 shows the calculation of the underlying result, which is on a consistent basis with prior periods and reconciled based on the reported statutory half year '21 results. The main adjustments to the statutory results in the current period include acquisition costs related to completed and potential acquisitions, restructuring costs related to the post-acquisition activities at the Xenith IP Group and Baldwins and the cost of equity-based remuneration. Amortization of acquired intangibles has increased as a result of the 2 acquisitions mentioned. On an annualized basis, this noncash expense will be $21.8 million. The underlying effective tax rate is marginally lower at 26%, reflecting utilization of the Xenith tax losses, leading to a subsequent refund, as I mentioned earlier. Moving to Slide 11 in the cash flow statement. Cash conversion was particularly strong. The improved metric is reflective of the collection of a large receivable related to a legal matter, a tax refund as well as consistent underlying collections. Strong cash flows allowed for the repayment of $32.7 million in borrowings in the period, reducing leverage to 0.6x net debt-to-EBITDA. It also continues to support a high dividend payout, which is reflected in the payout ratio of the interim dividend, which is 85% of cash NPAT. Looking at the balance sheet on Slide 12. The main movements relate to movements in AUD valuations as a result of FX fluctuations and the acquisition of Baldwins. Completion of the Baldwins transaction resulted in the issue of $2.5 million worth of shares. And the acquisition accounting increased goodwill by $2 million, recognized intangible assets of $6.8 million which relate to deferred tax balances. As mentioned, strong cash flows allowed for the repayment of $32.7 million in debt. Looking at the impact of foreign currency on Slide 13. Based upon the U.S. dollar profile in the first half of '21, a $0.01 movement in the AUD-USD exchange rate equates to approximately $1.9 million of revenue on an annualized basis. As USD costs are minimal, the majority of this reduction falls to the EBITDA line. As mentioned previously, our first half results came through at an average of approximately $0.723 versus the comparative of $0.685. The use of an average FX rate over the period actually understates this impact as our results are more heavily weighted to the second quarter when the U.S. dollar is weaker. The AUD has also strengthened against the Singapore dollar, reducing the reported profits of the Asian business in Australian dollars. I'll now hand back to Andrew to take a closer look at the business.

Good. Thanks, John, very much for that. I'm moving to Slide 14, market overview and more specifically Slide 15, the scale of IPH. And most of you will have seen this slide before, so I won't dwell on it. But I think it's important to put the overall scale of our group filings into some context. Our patent and trade mark filing activity extends beyond incoming filings into our local markets. And those primarily supply what I would call overseas applicants, particularly from those primary markets I talked about. We also filed externally on behalf of what I call local clients, whether that be in Australia, New Zealand or Singapore. We do this all around the world, either directly through IPH entities as per the referrals mentioned earlier, or via external agents. And the IPH Group is the largest filer of international PCT patent applications in Australia, which, in turn, have the potential to multiply as they generate their own family of applications around the world. And looking at the chart here, we've got the horizontal lines that show total patent market size of each of the Australian, Singapore and New Zealand markets, and the bar charts reflect IPH Group filings. Annualized aggregate IPH Group filings in all markets are more than your total combined markets of New Zealand and Singapore and are indeed more than 3/4 of the entire Australian market. And why I say this scale is important is it mitigates the periodic fluctuations in the filings of any individual market. Now moving to Slide 16, the Australian patent market, an update on that. As always, I'd make the point that IPH is not a business that should be measured on a 6-month cycle, which is especially the case given the impact of COVID-19 during the half and, of course, the integration of the Xenith businesses. Overall, the total Australian patent filings increased by 11% compared to the prior corresponding period. However, this includes innovation patent filings, which are due to be phased out in August this year. The overwhelming proportion of the increase in innovation filings were from Chinese and Indian applicants. I think it's a -- probably a last guess, but getting in before this was shutoff in August. Innovation patents, however, do not constitute a large part of the IPH Group filings. Once these innovation filings are removed, total patent filings decreased by 0.5%, a decline of about 82 cases across the market on the prior corresponding period. Now IPH has maintained their #1 position with combined group market share, that's including Baldwins on a pro forma basis of 36.8%. Again, that's excluding innov. However, the trend is pleasing because you'll recall from my AGM statement in November that we've reflected an 8% decline at the 4-month period to 31 October, and now we're sitting at 5.7%. So I think the direction is good going into the second half. We do not experience significant client losses during this period. IPH has the local market's largest exposure to U.S.-based clients. And as expected, some of those clients filed less with the COVID-19 disruption with IPH filings originating from U.S. clients down 1% for the period. As we've also outlined previously, the integration of Watermark and the Griffith Hack has caused some disruption to Griffith Hack during the half, and this is something we've seen before when we did similar integrations in Brisbane 2 or 3 years ago. Being largely Melbourne-based, these businesses are also more significantly impacted by the extended lockdowns during the second half of the calendar year. As the businesses are now fully integrated, we expect greater stability going forward. Looking to Slide 17, moving to Singapore. We continue to be very well positioned in this market with the ongoing benefit of our network effect. Preliminary data for CY '20, calendar year '20, indicates a market decline of 9% compared to CY '19. And those of you who followed the story for a while will know, we always talk about preliminary data in Singapore as there's quite a lag between when we look at it, and it's not quite real time like it is in Australia. However, in this case, it's very important to note that the Singapore market experienced very strong growth up to 31 December 2019, which reflected changes to the Singapore patent examination process, the closure of the so-called foreign route from 1 January 2020. That resulted in an influx of applications in December '19, seeking examination under the old system. With this in mind, looking at data for year-to-date November calendar year '20, shows a total market increase of 3.3% compared to the corresponding period. Market growing at 3.3% for the same period. IPH increased by 5.7%. So we're in good shape there to reflecting good organic growth. IPH market share increased from 22.5% in calendar year '19 year-to-date November to 23% in calendar year '20 year-to-date November. Notwithstanding the closure of this foreign route and the impact of COVID-19, IPH is holding, in fact increasing its market share for the CY '20 period, and we maintain a #1 position in the market. Moving to Slide 18, the Asian picture. We continue to leverage our network across the Asian region during the half. This is a key differentiator for the IPH Group that provides scale and diversity across the region. As I've said earlier, one of the key highlights for the period is how we are successfully leveraging our network effect with an increase in client referrals from acquired companies to our IPH hubs, whether it be Singapore or Hong Kong. And total new patent and trade mark case referrals were up 39% for the period, again demonstrating the success of our acquisition integration strategy. And as previously highlighted, we had significant patent filing growth in the key growth jurisdictions of China and Hong Kong, up 18% and 23%, respectively. Again, as many of you will recall from the last few presentations I've given, our filing activity for the half compares with a very strong prior comparable period, where one significant client filed across several jurisdictions with numbers I've never seen before. Removing the effect of this significant client filing activity on a like-for-like basis, we have seen total growth across these key jurisdictions of 5.3% in half year '21 compared to half year '20. Additionally, when we compare first half '21 against first half '19, again, removing the significant client activity, we have seen nearly 13% growth across the key Asian jurisdictions. We're in good shape there. Slide 19, trade mark market, Australia. While the overall trade mark market in Australia increased by 20% for the period, a proportion of this growth was about 15% for the half. The increased trend towards self-filers is illustrated by a 30% increase in self-filed trade mark applications from first half financial year '20 to first half financial year '21. Despite some disruption in the Griffith Hack business due to the impacts of integration and the Melbourne lockdown, IPH remains a leading Australian trade mark group by market share of the top 50 agents with a market share of 19.7%. Slide 20 is our trend slide. We've done this previously. I think it's important to look at the current market in a historical context. We have seen some disruption, but generally, our market is generally stable and the recurring nature of our work continues to provide a steady income stream for the group. Over the past 25 years, disruptions to Australian patent filing have been fairly minimal. The so-called tech wreck in 2002; GFC, where the impact was felt in 2009, 2010; there was a [ led ] sort of slight change in the Raising the Bar Act in 2013, pulled the work out of '14; and of course, the American Events Act in '13, that saw an influx in '15, pulling work out of '16. At the moment, we're not seeing any discernible impact of those long-term trends. As we've indicated previously, U.S. PCT applications are a reliable indicator of future patent filings in the markets we serve. And as you can see, this continue to be quite stable. We are seeing strong growth in Chinese PCT applications, and China represents a significant opportunity for IPH in terms of those filings into and out of this jurisdiction. As you can see, there has been a significant upward trajectory with nearly 25% growth in China PCT applications over a 15-year period. Moving to operations. Slides 21, 22 and particularly integration and synergy capture in 22. We've now successfully completed the integration of Xenith IP into the IPH Group. The major initiatives related to this over the past year were the integration of Watermark and the Griffith Hack to create one firm operating under the Griffith Hack brand and the divestment of the Glasshouse Advisory business. A major focus of our integration has been the removal of corporate costs, rightsizing the property footprint and staffing levels. The successful integration of Xenith has resulted in delivery of $15 million in underlying EBITDA in the 6-month period. That compares to $19.7 million in its last full operating year as a separate entity. Griffith Hack and Watermark are now operating as one fully integrated firm under Griffith Hack, and we've appointed a new Managing Director with a renewed leadership team in place. We remain on track to deliver $2 million in synergies from the combined entity in FY '21. The merged entity traded at an EBITDA margin of 28% in the period. This compares to a combined margin of 18% while operating as 2 separate entities. This is a terrific outcome. In New Zealand, AJ Park completed the acquisition of Baldwins on 16 October 2020. This acquisition has provided AJ Park with an expanded IP team and a greater depth of IP expertise across a number of areas. We completed full physical and system integration in December '20, and that will lead to synergies in the areas of rental savings and rightsizing of the business. We remain on track to deliver an expected contribution of between AUD 2 million and AUD 2.5 million for the 8.5 month period to 30 June 2021. Slide 23. We continue to focus on attracting, motivating, developing and retaining our people across the group. A key element of the strategy is providing opportunities for continued career advancement, and we're pleased to be able to progress client-facing promotions for people in key parts of our business during the half. For example, we have made 10 principal appointments so far in FY '21 and have more than 40 principal appointments made since we listed in November 2014. We continue to invest in the future on the IP profession with 72 trainee attorneys across the group as of 31 December 2020. Now some of you may have seen recent commentary in IP media about staff departures in the Australian business. This is not unexpected. And of course, reflects that there'll always be a natural turnover in the profession and also as a result of the integration process as we've rightsized the business to generate operational synergies. Across the group, our voluntary staff turnover for all staff during the half was 8% of the total headcount. This is well below industry averages for professional service firms. And when we narrow this to voluntary attrition amongst IP professional staff to within the IP industry, this figure drops to 3%, a significant improvement compared to our previously reported figure for those of you who follow us for a while in FY '19 -- FY '18 rather of 10%. This improvement reflects the significant efforts we are making across the group as part of our people strategy, including a centralized people team now in place across Asia Pacific. We are particularly focused on investing in our people to ensure that we have taken -- our talent rather to continue to deliver great outcomes for our clients. We're also implementing a number of initiatives across the business to make IPH the employer of choice. I'm very pleased with the progress we are making in this regard. We're also delighted to welcome Francis Gurry as a strategic adviser to IPH last October. Francis is one of the world's leading authorities in intellectual property matters, having served as Director General of the World Intellectual Property Organization for 12 years until September last year. We will be able to draw upon Francis's unparalleled knowledge, insights and experience in global IP matters for the benefit of our clients and our IP professionals across the group. Looking ahead on Slides 24, 25, particularly 25, a new brand. It's a -- it's a good thing for us. As I mentioned earlier, we've launched a new brand and reflects the evolving nature of our business. Since our listing in 2014, we've undergone a period of rapid growth and change. Now we have the largest portfolio of IP service firms in the region. So it's appropriate that our new corporate identity represents this evolution growth and focus on creating value for our shareholders by enabling individual firms to work smarter to enable growth opportunities for our people and allow clients to secure IP protection seamlessly across the Asia Pacific region. And we call it the network effect. And as you can see in these results, it works. Our new brand is a cornerstone for our renewed focus, and we hope in time it will come to represent the standard of quality in IP services globally. Slide 26. Leveraging this network effect is particularly important in the context of how we seek to achieve organic growth. But our network effect is more than simply referring clients. It's about leveraging the combined power of our member firms, finding smart and more efficient ways to operate and building greater capability and enhancing performance. We reviewed our marketing and business development activity to identify group opportunities for improvement across the group. We have commenced the recruitment of a Chief Commercial Officer to support organic growth and deleverage the combined power of the IPH network. So looking ahead, let me conclude with some final comments about our progress and outlook. After a somewhat challenging period, IPH is emerging as a stronger group, ready to further leverage our networks. We have demonstrated our ability to achieve business improvement from acquisitions, and the rightsizing of our acquired businesses has created a more efficient operating model. This provides the group with increased operational leverage down the P&L to further enhance margins as markets stabilize and recover. We maintain a very solid financial position with low gearing and strong cash generation. Back to our WiseTime software business, which many of you recall is in the autonomous timekeeping space, we have seen strong sales growth over the half, and we're aiming to continue to build this momentum as we go forward into the full year. Finally, we continue to progress growth opportunities in core secondary IP markets, notwithstanding the limitations of COVID. So this concludes the results presentation. I would like to acknowledge the hard work and contribution of all our people across the group. Many thanks to all of you for your continued support and interest. And over to our moderator, and of course, as always, happy to take some questions.

[Operator Instructions] Our first question today will come from Michael Peet with Goldman Sachs.

Just on the market share in Australia, obviously, down a little bit, 38.1% to 36.8% on the slide there. And looking at Slide 20, I mean it's pretty obvious. Obviously, the growth in China, that's been pretty sustained for a long time. Are you -- do you think it's the case of sort of your -- you've mentioned the U.S. exposure there to clients coming in, U.S. clients inbound? Is this a case of sort of old world to new world? And if so, what do you need to do? Or are you thinking -- how you're thinking about sort of maybe capturing some of that China inbound, if any? I mean I know you've talked about how problematic they could be, potentially, some of them, but with payments or whatever, but just interested in your thoughts on that, that shift that looks to be occurring.

Thanks, Michael. You've got some interesting observation. And, look, I think we are capturing some of that outgoing Chinese domestic work coming into international markets as in a number of ways, not only in Australia, but internationally for us in the Asia Pacific region. That client I was referring to before is a Chinese domestic, although it does come to us out of a primary market instructions. So we're capturing that in the context of Asia Pacific. We're also capturing it in Australia now in that one of our business units, ex for the largest patent filer in Australia at present, which is also a Chinese applicant. So we are seeing that movement, and we think we're well placed in that. What we are -- I guess, as part of that market share movement, a couple of things. The U.S. exposure is one. But -- and the integration is also a part of it. And this is what we saw before when we integrated the old columns and FAKC into Spruson in July '18. There are some clients that don't make the transition, and that's part of the improvement in margin, to be frank. And we're seeing the same thing in the integration of Watermark into Griffith Hack. That margin improvement is, in my view, fantastic. But sometimes, it comes at a cost of market share if you can't monetize the client. So we are happy to let that go to drive the margin.

And our next question will come from Callum Sinclair with Macquarie.

Maybe just a follow-up to that. Just with the management changes, particularly Griffith Hack, just the renewal, and if you expect to improve the underlying performance in the second half post that change? And maybe the impact that we saw in the first half, just the difference between the disruption on Griffith Hack versus the Melbourne exposures?

Yes. Look, I think, Callum, it's a good observation. I would say, at the very least, I'm very happy with where Griffith Hack is. I'm very happy with the position of Griffith Hack and that I think we're primed for growth there. We did have disruption in the integration of Watermark and the Griffith Hack question. We had to -- we did it in the middle of a global pandemic. We had to even do it virtually in -- it wasn't completed until early June. And really, we only ever had 25% until just recently, what goes up and down, as we all know, in the office in Melbourne. So it has been a challenge. And with that as well, the Griffith Hack business was probably more exposed to local domestic clients in their client base than any of our business units. So which, of course, is a Victorian client base predominantly, although there was also offices in Western Australia and Sydney and Brisbane. But the larger proportion of it is in Melbourne, which has had their own challenges for that domestic client base. So I like where it is. The new leadership is good. We've got the margin heading in the right direction. The combined firm has got to -- it's moved from that 18% margin operating by just combining the margin of the 2 single businesses. We now have a combined margin of 28%. So it's heading very much in the right direction. The EBITDA underlying of the Xenith business to go from $15 million -- or $19.7 million for the year, and we've done $15 million for the 6 months, I mean it's a terrific run rate. So I think it's absolutely primed for growth.

Can I just sneak one additional question in on the same topic just around client behavior, and if you can give examples of where clients may have delayed or saved costs during the period? And if that sort of represents catch-up or pent-up volumes, whatever you want to refer to it as, in calendar year '21?

Yes. Yes. It doesn't really run like that in patents and it's -- for international clients, well, in fact, everything in patents runs on dates. And you can't really use financial considerations to delay your -- the national phase entry date to filing of Australia for -- as an overseas applicant coming into Australia. So in some ways, that's passed, although you can delay your instructions until closer to the deadline date and scenarios like that. So we do see a bit of that. Domestically, we'd probably see scenarios where people may just hold off on following that first application or preparing the patent specification or filing the trade mark, whatever the case may be. But really, the show goes on in patents. So that's what generates that recurring nature of our revenue.

[Operator Instructions] And our next question will come from Sam Haddad with Bell Potter.