Iress Limited (IRE) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning. I'm Roger Sharp, Chair of Iress Limited. I've been told that it's 11:30, so I declare this Annual General Meeting open. Before we begin, I'd like to pay my respects to the traditional owners of the land on which we meet, the Wurundjeri people of the Eastern Kulin Nation. I'd also like to pay my respects to their elders, past and present, and Aboriginal elders of other communities who may be here today. Thank you for taking the time to join our meeting today. It's a hybrid meeting. You can join either online via the Computershare platform or here with us at the KWM office in Melbourne. Before we move to the formal business of the meeting, I'd like to make some introductions. All directors join us today are either in person or by video link, I'm just checking to see that our colleague, Niki Beattie is here. It's probably 2:00 in the morning in the U.K. Niki sat with us through a very long Board meeting yesterday, worked the whole night. So you must -- let's see how she's doing today when she turns up on the screen. Let me introduce my fellow directors to you. Michael Dwyer, AM. Michael? Julie Fahey, who is also Chair of our People and Performance Committee; Tony Glenning; Marcus Price, our Managing Director and CEO; Trudy Vonhoff, who chairs our Audit and Risk Committee; and of course, Niki, by video link. I can't see Niki, but I'm hoping she's there. Also in attendance today are members of our leadership team. We are conscious that a number of members of our leadership team were not working for Iress' last year's AGM. We're very keen for shareholders to meet with them after the meeting, and this will be a recurring theme during the day. We'd like you to meet with the team and ask them anything you like. They will give you a very clear barometer on how things are going. I'll start with Cameron Williamson. If you could raise your hands, team, Cam, Group Chief Financial Officer; Justin Schmitt, Chief Operating Officer; Harry Mitchell, Group Executive Wealth; Jason Hoang, CEO, Global Trading and Market Data; Paul Giles, CEO of Superannuation; Kelly Fisk, Chief Corporate Affairs and Marketing Officer. There she is. Chris Donlon, Interim Chief Technology Officer; Naomi Dawson, Company Secretary, who recently joined us. Welcome, Naomi; Aimee Yi, General Counsel, Asia Pacific. And I have to say Paul Giles wins most colorful socks at the AGM today. I'd also like to acknowledge representatives from our legal and accounting advisers, Diana Nicholson from King & Wood Mallesons; and David Petersen from Ernst & Young, our auditor. David will be available for any questions when we consider the financials, which will be the first item of business. In today's meeting, we will consider 6 matters. The presentation of the 2023 financial statements and reports, resolution 1, which is the reelection of Niki Beattie as a director; resolution 2, which is the reappointment of Julie Fahey as a Director; resolution 3, the reelection of myself, Roger Sharp, as a Director; resolution 4, which is the advisory resolution to adopt the remuneration report; and resolution 5, the proposal to grant share appreciation rights to the Managing Director and Chief Executive Officer, Marcus Price. I'm advised that due Notice of the Meeting has been given both within the requirements of the Corporations Act and the ASX Listing Rules and that a quorum is present. We'll take the Notice of Meeting as read. I'll now talk briefly -- hopefully briefly about questions and voting before we move on to Marcus and my addresses. The slide appearing behind me now outlines the process for asking questions online. There will be an opportunity to ask questions on all items of business, and I will take questions from those attending in person first, followed by online written questions, followed by online verbal questions. This will allow a bit more time for online participants to formulate and submit questions. Towards the end of the meeting, we will also have a general Q&A session during which shareholders and proxy holders will have the opportunity to ask any additional questions. For those shareholders and proxy holders attending in person who wish to ask a question, please raise your hand at the time. We'll ask you to show your blue admission card and state your name. We'll bring a microphone to you. And if you're representing someone other than yourself, we'll just ask you to identify whom you represent. For those attending online, questions can be submitted at any time. As previously mentioned, the process for asking questions online as outlined on the slide. Further information for online participants, including the help number if you have any difficulties when asking questions, can be found on the online user guide in the Notice of Meeting. Although you can submit questions any time from now, they will not be addressed until the relevant time in the meeting. Questions may be moderated. And if we receive multiple questions on the same subject, they may be amalgamated. We do reserve the right to limit the number of questions from any individual shareholder if the number of questions asked starts to deny other shareholders the right to ask questions. I'll now outline the process for voting. The first of the matters to be considered at today's meeting is in relation to the presentation of the 2023 financial statements and reports. This is not a matter for voting, but it's for tabling and discussion. The resolutions regarding the reelection of Directors and proposed grant of share appreciation rights to Marcus are ordinary resolutions. The resolution on the remuneration report is advisory in nature. The voting restrictions for all resolutions are included in the voting exclusions section of the explanatory notes to those resolutions in the Notice of Meeting. Voting today will be held by way of a poll on all resolutions. I appoint Michael Stretton from our share registry, Computershare Investor Services as the returning officer. To provide you with enough time to vote, I'll shortly open the poll for voting for all resolutions. And voting will remain open until I declare the poll closed at the end of the meeting. As we go through each resolution, the proxy results received before the meeting for the relevant resolution will be displayed on the screen. The four numbers displayed for each resolution will include proxies received and available to be voted by me as Chair of the Meeting. I'll now outline the instructions for conducting the poll, firstly, for those attending in person and then for those attending the meeting online. If you're here in person, and you're entitled to vote, you will have received a blue admission card upon registration. On the reverse of that card is your voting paper, which details the resolutions being put to this poll and the instructions. If there's anyone here present today who believes they're entitled to vote but didn't register to vote on arrival, could you please make your way to the registration desk to register? Proxy holders have attached to their admission card a summary of proxy votes, which details the voting instructions received, if any. By completing the voting paper when instructed to vote in a particular manner, you're deemed to have voted in accordance with those instructions. In respect of any open votes, a proxy holder may be entitled to cast, you need to mark a box beside the resolution to indicate how you wish to cast your open votes. Shareholders and representatives and attorneys of shareholders also need to mark a box beside the resolution to indicate how you wish to cast your votes. Please ensure when you print your name, where indicated, and sign the voting paper. And when you finish filling out your voting paper, please lodge it in a ballot box to make sure your vote is counted. For those attending online, if you are eligible to vote at this meeting, the vote icon will appear in your browser. An image of this icon is now being displayed in the slide on the screen. Once voting opens, press the vote icon at the top of the screen and all resolutions will be activated with voting options. To cast your vote, simply select one of the options. You can change your vote up until the time I declare voting closed. If you have any problems, again, we refer you to the online user guide referred to on Page 5 of the Notice of Meeting. I now declare voting open on all resolutions, and I'll give you a warning before closing the voting at the end of the meeting. Subject to any applicable voting restrictions as set out in the Notice of Meeting, the Board recommends that shareholders vote in favor of each resolution. As also indicated in the Notice of Meeting and the proxy form, a proxy form specifies that as Chair of the Meeting I'll be an appointed proxy, and I intend to vote all undirected proxies in favor of each resolution. And of course, any directed proxies in accordance with directions. We'll now move to, hopefully, brief addresses from myself and Marcus before moving to the formal business of the meeting. I'd like to really start my address by focusing on the single largest issue at Iress, which is change, specifically why Iress is changing, how we're executing on this change and where we're heading. Iress is now more than 20 years old. It has significant market shares in large addressable markets, serving long-standing clients in its three core businesses. Nearly a decade ago, Iress declared in its annual report that its purpose was to be the most innovative, reliable and respected technology partner, recognized by our clients as essential and desirable. It's an admirable purpose. However, one senses that Iress lost its way, collecting too many businesses, doing too many things in too many locations to scale effectively. In the process, Iress lost sight of its roots as a software business and began offering services in areas we aren't experts in, bringing exposure to regulatory and operational risk. As a result, the company's customer experience deteriorated, as did its financial performance. And as the company's financial performance deteriorated, frankly, it failed to hold itself accountable. Iress needed a hard reset from this trajectory. Over the past 2 years, we have been on a mission to transform this company. Our mission started shortly after EQT's discontinued takeover attempt in 2021 with a CEO search that commenced early in 2022, culminating in the hire of Marcus Price as Managing Director in October 2022, which is the first leadership change the company has experienced in 15 years. As you shareholders are well aware, Marcus quickly restructured the company into operating divisions, appointed new divisional leaders, launched a plan to improve returns by optimizing the core business and managing noncore assets for value. In that process, we've reduced costs. We've sold noncore assets and we're now focusing on strengthening and growing our three core businesses, Asia Pacific Wealth, Trading and Market Data and Superannuation. Through the transformation process that you will hear us speak about a lot today, Iress is becoming a simpler and more profitable business with a stronger balance sheet. We've issued guidance that Iress is targeting an adjusted EBITDA run rate of $140 million to $160 million at the end of calendar 2024, our financial year-end. Meeting this target will set your company up for a record 2025. Having said that, the transformation process has been both challenging and bumpy, if not bruising, and we acknowledge at times that it has been a very challenging experience for shareholders. When we posted the speech to ASX last night, I wrote that the stock price here today was then 16% below the price at which you traded at the AGM last year. Fortunately, that's 14%, but still not good enough, 14% today. It's also at its lowest level since 2014. And the irony is that Iress today is more transparent, more accountable than at any time in the recent past and is heading towards record profitability. For those of you who have seen the pack we filed with ASX last night, our first quarter EBITDA is up 43% on the same period last year. We think that's more than green shoots. We think it's evidence that the transformation is working. Having said that, I'll now review our 2023 financial results and comment on 2024. The result reflected both the change that needed to happen and the process of change itself. These are not results to be pleased with. Revenues flat year-on-year or up 2%, operating EBITDA 12% down on 2022 and a statutory net loss of $137 million after taking write-downs principally in the U.K. and accounting for restructuring costs. The company's FY '23 results reflect the reality, and that is that Iress needed to lift its game to deliver better outcomes for both customers and shareholders. Reflecting early wins in the transformation program, the second half of last year showed us an improving trend line with improvements in a number of key metrics. I would say it is not the easiest task to undertake a transformation of this magnitude and complexity in the glare of the public markets, but we're now well advanced after a busy year. And as shareholders will know, the transformation is scheduled to be complete by December this year. A leaner and more profitable Iress is already emerging, one that will scale better with conservative gearing, improving product road maps and customer experience. We're now 1/3 of the way through FY '24, we're ahead of plan. Confidence is high that the transformation is delivering, and I think we stole your thunder by posting to the ASX last night, Marcus, but Marcus will talk about the upgrade to our earnings guidance that we announced last night. The three businesses that we have sold are expected to reduce debt by around $200 million, paving the way for Iress to reinstate dividends in 2025. We'll update shareholders on dividends in 3 months when we released the half year result in August. I'll talk briefly about corporate responsibility. Despite the effort going into the transformation and to improve customer experience, our profitability and so on, there has been a lot of corporate responsibility work done. And we continue to prioritize areas such as Modern Slavery where we completed a risk assessment of our supply chain and in the environment where we've actually adopted science-based targets. And what that means is we've committed to reduce our scope 1 and 2 emissions by 27 -- actually by 70% by 2030 and our scope 3 by 27.5% by 2030, which are quite material reductions. We've also strengthened our support of Talent Beyond Boundaries, which is a wonderful organization that supports skilled refugees who want to find meaningful work in safe harbor in new countries. If there was ever a more important time to be working in areas such as it's now. I spent a bit of time at the beginning of the meeting, introducing you to the leadership team who are present today. And my perspective as Chair is that this team is bedding in well, the cadence and rhythm of the business has started to improve quite significantly. There's a pattern and our people are starting to -- really to deliver. We realize that as shareholders, you don't see the momentum that we see inside the business. The shareholder experience as a fellow shareholder, no one wants to be down 15% year-on-year. It can be quite frustrating. But we think, as I mentioned earlier today, is a great opportunity to speak to our people and ask them for yourselves. I would like to pay a tribute to our previous company Secretary, Peter Ferguson, who stepped down last year due to illness. Unfortunately, Peter passed away recently and his memorial service is today in Sydney. The Board wishes to pay tribute to Peter for his contribution, service. He was a fantastic character, and he was here for more than a decade. We send our condolences and best wishes to Peter's family. I'll talk briefly about the Board, talk about the votes at today's AGM. I'll then conclude and hand it over to Marcus, who is far more interesting. As you're aware, we're refreshing our Board of Directors. We've currently got a Board of seven, including the CEO, two of our longest standing directors, Julie Fahey, and Niki Beattie, are standing for only 1-year terms to provide us with breathing space while we find successors. We're already in the market for new Board members, we'll enter 2025 with a refreshed Board. Today, when we get to voting, you will note some voting against the company's remuneration report. This transformation is challenging for shareholders. Some have focused on past results and registered their objections, which they're absolutely entitled to do. Most of our larger shareholders, all of whom we have spoken with, see the positive trajectory and enhanced earnings potential and are supportive. The vote partly reflects the transformation, and we think it partly reflects our new remuneration framework. I do want to be clear that we completely revamped the company's remuneration framework this year after a lot of consultation with shareholders and proxy advisers. We replaced the Equity Rights that shareholders disliked with some intensity and replaced them with a short-term incentive plan. We replaced the performance rates with an options scheme. And as I say, we consulted extensively beforehand. And so the changes we've made are in direct response to shareholder feedback. I think we've proven that we are open to input and we do listen carefully. Ultimately, we had to make decisions and run the business based on what we see beneath the covers and that's what we've done. I'm comfortable that the structural decisions on remuneration we've made are the right decisions. Although I do note that we will focus on improving some elements of our disclosure and reporting next year. To conclude, I would like to thank shareholders for their patience during this process. It is a great thing and somewhat of a relief to be able to stand here and talk about the first quarter being up 43% on last year. That is no accident, and it is a sign of -- it's not green shoots. It's proof. It's a sign of, I think, what we can do. This company needed a fresh vision and tighter execution. That's what it's getting. We've got high expectations and confidence that we will deliver. I'd also say that having done the math pretty carefully, your Board is also quite clear of the view that this company's fundamental value is significantly higher than the stock price you see. Why you may ask? Share price is a 10-year low. We're heading towards record earnings in FY '25. We just demonstrated that we're well on the path. I think we're up to a second or third -- second earnings upgrade this year. I would like to thank the team at Iress, both our employees, people you see here and our Board. Turnarounds like this don't happen by accident. They take a lot of hard work from a lot of people. Our new management team is absolutely delivering. There is still much work to do. We're not there by any means, but you should expect to see clear signs of improvement in August when we report the half year. I would also say that the process has extracted a very heavy toll from our people. Some of whom are no longer with us and of course, the existing team. And I want to acknowledge and thank the team for a lot of heavy lifting. I expect there will be a lot of questions this year, and I look forward to taking them. I'll hand over to Marcus, and then we'll look forward to questions after he's spoken.

Thank you, Roger, and good morning, everybody. Before I begin, I'd also like to pay tribute to our former Company Secretary, Peter Ferguson. My time working alongside Peter was relatively short, but I feel very fortunate to have known him. He was a highly intelligent man, very compassionate, a really thoughtful leader who made such a big difference to so many people's careers in this company. And it's some degree of irony, I guess, or some odd serendipity that it's his memorial today when last year, he was here running this meeting. And I know many of you will have interacted with him over the course of a decade. So it is a sad day for us, and our thoughts are with his family and colleague, former colleagues, who I know will be remembering him, his life and his contribution to this company over a decade. So thank you for that. Today, I'd like to take the opportunity this morning, in fact, to provide an update on Iress' progress over the year. I'll take you through a brief review of 2023, provide an update on our progress against the commitments we made as part of our transformation program, and I'd like to comment on our outlook for the company. Looking into the financial results, first of all. 2023 was a year of significant transformation for our business. The reset we initiated last year is well underway, and our focus is now shifting to organic revenue initiatives. To summarize our performance -- our financial performance in 2023, our revenue was up 2% to $625.7 million. Underlying EBITDA, our current headline measure of performance came in at the top end of our revised guidance at $128.3 million, albeit it was down on financial year 2022. An important figure for me, what I'm particularly focused on now is the $106.1 million in adjusted EBITDA, which is our preferred measure, the measure we're moving to as part of our commitment to increase transparency in our financial reporting. Ultimately, we reported a statutory net loss after tax of $137.5 million and reported an EPS of negative $0.764. This is primarily a cost story, where inflationary pressures were a key factor in higher salaries and third-party input costs, particularly in the first half of the year. In response, we undertook significant cost reduction initiatives. Our profit result was obviously impacted by some very significant one-off, noncash impairments and the accelerated amortization of some intangible assets. As I will discuss in more detail, the numbers only tell part of the story. What I'm more focused on, and emboldened by, is the significant work we've done to transform this business and set it up for success over the longer term. The transformation we initiated last year is bearing fruit. Our refreshed leadership team is firmly in control of their businesses. We've restructured the business into a Core and Managed Portfolio. We've progressed our asset sales in the Managed Portfolio. We've enacted a cost management program leading to an improved earnings result in the second half and a trend we're seeing continue into the first quarter of 2024. We've certainly shifted to a clearer and more transparent financial reporting framework, and we've delivered a clear capital management plan. At the start of the year -- sorry, at the start of this program, we had six big jobs. In April last year, we outlined a refreshed strategy to optimize this business. You may recall at the time, I took you through the six big jobs we had outlined to streamline our business and set Iress up to deliver on its potential. I'm pleased to report that we're tracking very well against those objectives. Indeed, I think we are slightly ahead of what we thought we'd be at this time. So going through each of them. We've reset the structure of our business and reset our cost and asset base. In July 2023, we completed the company-wide restructure focused on improving accountability, performance and customer focus. We formed new dedicated business units, APAC Wealth Management, Trading and Market Data, Superannuation and the Managed Portfolio. We refreshed our global leadership team, transitioned all Iress people into the new structure and implemented a new performance and remuneration framework to underpin Iress' delivery of its vision. This is already driving improved performance outcomes, and I'd point you in particular to look at the U.K., where we've seen a very significant turnaround in performance, and I really pay tribute to Harry Mitchell's leadership in the U.K. and the work that he's done in that market, which is clearly delivering results. In 2023, we also undertook significant actions to arrest cost growth momentum. This included the removal of $47 million in annualized costs -- gross cost, sorry. We reduced our head count by 24%. It's 15% when you take out the sales of the MFA and Platform businesses. But even so, it's a significant reduction in head count. We also made strong progress on resetting our asset base with a number of divestments of nonstrategic businesses. Our next big job was to refocus our core businesses, APAC Wealth Management, Trading and Market Data and Superannuation. We've been doubling down on our investment in these businesses. Each business has now developed 5-year strategic plans of their own with a focus on improving efficiency, focusing on organic growth and unlocking value for customers. We've reset the cost base for each of the businesses and the revenue opportunities are now being actively pursued. We've refreshed the sales and the account management teams, and we've uplifted core technology, and we have seen customer sentiment improving. In 2023, we also established the Managed Portfolio. Midway through last year, we separated this portfolio further into the U.K. and other. As you can see, we're evolving our thoughts in regard to the Managed Portfolio. In the other division, we've made significant progress on asset sales. We've sold the MFA and Platform businesses, and we have a binding agreement to sell the U.K. Mortgages business, which we expect to complete by the middle of the year. These asset sales are supported by the streamlining of operations -- of our operations and efforts to deleverage the business. In the U.K. component of the Managed Portfolio, we've separated Wealth and Sourcing from Trading. Harry Mitchell, as I mentioned earlier, is overseeing the Wealth and Sourcing businesses in the U.K. in addition to his responsibilities with APAC Wealth. While Trading, now reports to Jason Hoang as part of our global portfolio of Trading and Market Data businesses. This strategy is also bearing fruit with improved earnings in the U.K. Wealth, and we're seeing also improved performance in our Trading business under strengthened leadership. Our next focus for the Managed Portfolio is a strategic review of the businesses within it. This might include moving the U.K. back into the core part of our portfolio. We'll have more to say about that in the middle of the year, but we're also continuing the process of disentanglement in South Africa and Canada. Finally, we have been committed to building for the future by completing our technology uplift program and innovating to drive future growth. I'm pleased to confirm that our technology uplift program concluded at the end of March as we had forecast last April, and it modernized our core technology offerings, particularly in the Trading business, which was solely in need of some remediation. I have to thank Jason and the team for the work that's been done in that area in particular. We've made great strides on establishing a dedicated Innovations team, which is focused on exploring new opportunities in data and AI. It's early days, but we already have identified some significant initiatives we'll be exploring in 2024 to drive new revenue streams for the business. In regard to capital management. In addition to our Investor Day commitments, we committed at our half year presentations to come to the market with a refreshed capital management plan led by our new CFO, Cameron Williamson. And thank you, Cameron, for all the work you've done in the last period as well. It's been a quick induction. This was presented to the market in February and encompasses our approach to earnings debt, R&D, dividends and shareholder returns. As you will be acutely aware, in 2023, we made the difficult, but prudent decision to pause the dividend to support balance sheet repair. Our new capital management plan is focused on three principles: operating, optimizing -- sorry, optimizing operating cash flow, deleveraging the business with the sale of nonstrategic assets and establishing a clear path to the reinstatement of sustainable dividends. I'm pleased to report that with the very strong progress we've made on asset sales, the proceeds of which are being used to retire debt, we expect to reach our target leverage ratio of 1 to 1.5x by the end of 2024. This gives us confidence that dividends are on track to be reinstated in 2025. In terms of the outlook now. As we look forward, we see an increasingly positive trajectory. We saw improved earnings in the second half of 2023, and this is a trend which we've seen to continue in the first quarter of 2024. In fact, our Q1 adjusted EBITDA, our preferred measure, is 43% higher than the prior corresponding period. As a result of this, yesterday, we announced a slight upgrade to guidance with our FY '24 earnings now expected to deliver on a continuing business basis between $122 million and $132 million of adjusted EBITDA, that's up from the previous range of $117 million to $127 million. We're also reaffirming our exit run rate forecast of between $140 million and $160 million in adjusted EBITDA, and the guidance upgrade is largely coming about by the bringing forward of some of benefits in our transformation program to deliver more in-year benefit. In closing, we sort of remain -- we remain laser focused on transformation. We are emboldened by what we've achieved. This upgrade is evidenced that it is delivering benefits to clients and shareholders. We're pleased with what we've achieved over the last year. We've passed the inflection point and transformation has created the capacity for Iress to innovate and grow. I would like to echo Roger's comments here, we see Iress' true value as materially higher than that which is reflected in the current share price. At our next update in August, I'd like to provide further information regarding the various components of the Managed Portfolio and our plans for these businesses. As I said, it's an evolving strategy around those Managed businesses, and we'll provide you with updates on them. We'll be able to update you on our debt and leverage position, including when we expect to see dividends reinstated. Further, we'll be providing updates on our progress against our full year earnings and the final phase of our transformation program. This will include the organic growth vectors, which we are looking to -- which we're currently exploring and which we'll provide information to you on. I'd like to finish by thanking our shareholders for their support. I've had many interactions with you over the last 12 months. I appreciate that when you're not living this change every day as we are, it can be frustrating as you wait to see the heavy lifting bear fruit. I want to acknowledge that it has been very difficult for many shareholders to be patient at times like this. But this is a reset. I'd like to thank the management team, what you've seen in the earnings updates. The upgrades are all the fruit of a lot of work from our management team, every one of them stepping in and doing the hard yards to deliver this reset. I really want to thank all of you. It's a team effort. It's been a challenging year and -- but I really think we've turned that corner. And in particular, I'd like to thank our Board. We've had to face into some tough stuff this year. It takes courage, and it takes hard decisions. And at no time, have we felt unsupported by this Board, who've had the courage, the Directors have all stepped into that and have been incredibly supportive of the management team and myself. And I really do think at a time like this, that's really important. Finally, I'd like to thank our Chair, Roger Sharp, for all of his work. He's been an incredible support to all of us, both personally individually, professionally every way you want to measure it, his courage, his leadership and his -- we wouldn't be here without that, we wouldn't be here without the support of the Board, without the support of Rogers. So I really want to thank you, Roger, for the work you've put in the last 12 months. We look forward to sharing further progress with you as we deliver further on our commitments and potential. And so back to you, Roger. Thank you.

Thanks, Marcus. You went off script.

Sorry.

I think this is an opportune moment to ask for questions in relation to either my address or Marcus'. So we'll start with shareholders who are here in person, and then we'll go online. Naomi has a microphone. And if you put your hand up, she'll come over to you, if you could identify yourself.

[indiscernible] raise questions. [indiscernible] the accounts?

Yes. Is your microphone on? Can I just...

Is that better?

That's better. Thank you.

I've got to swallow it. Okay. Yes. Is this the appropriate time to [ run ] or is there a separate time?

Well, we've got a separate time where David Petersen, our audit partner is here, if you want to ask questions about the accounts. I'm happy to fill questions on the annual report, if you want to.

Well, they're not -- I don't think it needs the auditor to answer on the annual accounts, frankly. My name is [ Barry Telfort ]. So the question on the accounts. I noticed you wrote off $130 million of goodwill with the usual dry comment that is noncash as if it doesn't matter. And I have a problem about $130 million write-offs. What I would like to know, cash would have gone out the door, I presume, at some stage for that to appear on your balance sheet. I'd like to know when and what for the cash went out the door to create that goodwill you've just written-off those?

[ Barry ], that's a fair question and a good question. As I said, in my opening address over a number of years, this company bought too many businesses in too many geographies, doing too many different things that didn't work. It's one view. It's the U.K. There are too many to name. There are hundreds of millions of dollars involved. We don't take that write-off lightly at all. The maths tell us that we had to take a write-down. I don't think anybody's ducking for cover. We took a write-down because we had to, and now we're turning that business around. And as Marcus said, Harry has managed to extract a little more value, in particular out of the U.K. And I think the acquisitions have been very well documented over many years. They simply have not all worked.

On the front, it's one of the 3 things as refocus. And you've mentioned in your report, you're concentrating on 3 core businesses. But then I look to Page, I think it's 40, your leadership team. And that's a pretty big team. It's almost, I'd call it a swarm almost. And I just would really like to know if you've got 3 core businesses, why you've got such a large leadership team? Who do they all report to? And do you know this leadership team is larger than the leadership team of Chicago Mercantile Exchange, who is a business about 10x larger in revenue than this and probably more complicated.

That is something we were talking about yesterday, unwinding some of the things that we should not have bought, takes time and takes people, it takes resource. I'm going to hand over to Marcus to respond to that because the team do report to him.

I think one of the things we deal with is, this is an incredibly complex company for its size. It's just overly complicated. There's too many different moving parts, none of which can be ignored. So we do find ourselves in a situation where we're trying to simplify the business by reducing the number of those things, but we also need a span of control to actually cover them. It's not an efficient structure, I agree with you. I would like -- I would certainly like a narrower leadership team. And over time, we will restructure around that part of our transformation will evolve into a narrower leadership group, I'd expect. But for the time being, we have -- we're just managing complexity. And I think that's actually, frankly, one of the inefficiencies in the business. We just spread too thinly with too many small moving parts in different markets, in different products. And part of our job in the managed portfolio is to rationalize exactly what you've just described. We do want to get back to a set of core businesses.

Sorry, can I just add?

Yes, sure.

Do they all report to you?

Yes.

I don't know how you manage it seriously.

Well, I do -- well, yes, I do. But the core reports are really around the owners of P&Ls. So the 3 core businesses, in particular, all have their own P&L, balance sheet, CFO, et cetera, and they report through to me. So that is very clear. The Managed Portfolio similarly is run by the CFO, which is quite right, given the types of things. So those are the 4 reports from a financial perspective that matter. The functional reports, the group reports are spread, I agree too thinly and this is why we have a COO, who's there to aggregate those sort of services. So it works day to day, but it is a big group. I agree with you, and it's something we are looking at.

Thank you, Barry. Any further questions from shareholders present, please? Naomi, any questions online, please?

Yes, Chairman. We've received one question. The question is from Mr. Eric Pascoe from the Australian Shareholders Association. Eric asked, Mr. Chairman, previous large shareholders of Iress such as [ AFIC ] have deserved your register because they believe there is substantial risk that Iress' profitability will not recover as you believe it will. What undertakings will you provide to shareholders if by this time next year, Iress is not back to full strength and resumed its profit growth profile? Who will be accountable?

Thank you, Eric. Well, as we talked about last Friday, as I think about 3:00 when we chatted about this, different shareholders have different reasons for being on the register at various times, some require dividends. Clearly, we did not pay a dividend. Other shareholders have moved in. But I think the core of your question is if Iress doesn't perform, when does the buck stop. The buck clearly stops with me. I did not create these problems, and we're on a path to fixing them. If we don't resume the profit trajectory that we should be on, I would expect our shareholders to have their say, quite frankly. But 43% improved EBITDA in the first quarter of this year versus last didn't just happen by accident. It's evidence that the turnaround is starting to work. Any other questions, Naomi?

No further questions. Thank you.

All right. Thank you. As I noted earlier and as set out in the explanatory notes in the Notice of Meeting, there are 6 items of business and 5 resolutions before the meeting. The proxies received for each resolution are being shown on screen now and were released on the ASX website last night following the close of trade. And although we've fielded a question on the annual report, we will -- the first item of ordinary business is to receive and consider the financial report for the year ended 31 December 2023. It's not a voting item, but we're happy to field questions. And as I mentioned earlier, our external auditor, David Petersen, is here to answer questions on the conduct of the audit, the auditor's report, the company's accounting policy or indeed the independence of the auditor. There were no written questions for the auditor received in advance of the AGM. Are there any questions on this item from shareholders and proxy holders here in person? Any online, Naomi?

[indiscernible]

All right. Thank you. Just checking the room. All right. We'll now move to the resolutions. The first one is for the reelection of Niki. Now I did text Niki to see if she was here. And can we confirm, Naomi, that she is online?

I believe that Niki is online.