L1 Long Short Fund Limited (LSF) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to the L1 Long Short Fund Investor Update. My name is Mark Landau. I'm the Joint Managing Director and Chief Investment Officer of L1 Capital. Thank you very much for your time. Today, we've got quite a bit of ground to cover. We're going to do a bit of a recap of 2020, go through the main drivers of performance over the past year and the past quarter specifically, give an update on our vaccine research, key holdings and portfolio positioning as well as our outlook for the market and also provide a brief corporate update. So with that, I'll turn to the presentation, which hopefully everyone has access to, was lodged with ASX earlier today, and I'll start on Page 2. The L1 Long Short Fund performed very strongly in 2020. The LSF NTA rose by 29.5% compared to the ASX 200 Accumulation Index, which was up 1.4%. Hopefully, you would have seen the Board yesterday announced an interim dividend of $0.015 per share, which is fully franked. After a year that was dominated by the pandemic and a lot of top-down and macro trends, we believe the setup for 2021 should be much better suited to stock pickers like L1. We see robust corporate earnings, massive fiscal and monetary stimulus and the imminent global vaccine rollout, which creates a very positive backdrop for equities. We also expect a wave of M&A activity is likely to come through 2021, which we think should propel equity markets further. Global GDP growth is set to accelerate, triggering a rotation into value and cyclical stocks, which lagged the market dramatically in 2020. We see 4 broad areas of opportunity at present: monopoly real assets, COVID-hit stocks, depressed commodities, and demergers or restructures. Our team is very positive about the prospect for LSF and has been a large buyer of stock over the past 6 months. We're genuinely excited about the current set of opportunities, and we intend to continue buying LSF shares over the coming months. With that, I'll turn to Page 4. The company has had a pleasing performance in both 2019 and 2020, rising just over 25% and 29%, respectively, in each of those years. The performance has been driven by strong stock selection despite enormous headwinds for value investors like L1. We stayed composed and invested rationally during the crisis, and that really paid off with very strong returns, particularly over the last 9 or 10 months. The COVID-19 crisis and the market dislocation that are presented provided us with the best opportunity to invest over the past decade, and we continue to see very large valuation upside across many of our positions today. As you can see at the table at the bottom of Page 4, the portfolio has performed very strongly compared to the ASX 200, particularly over the last couple of years. We know that we started off on a very weak footing, where we had a very poor period of performance in 2018. But hopefully, our investors and our shareholders are really pleased to see the comeback that we've had over the last couple of years. And I can promise you we're working very hard to continue that strong performance in 2021. Turning to Page 5. The portfolio was very poorly positioned for the global pandemic. Leading into that period, we had a positive view on the outlook for business and consumer confidence. But obviously, the pandemic was not a predictable event and the portfolio was hit very hard. During the crisis, we aggressively bought stocks and we closed out a number of short positions that had collapsed, taking advantage of what we believe was a once-in-a-decade buying opportunity. We conducted a huge amount of proprietary vaccine research and gained a lot of confidence early on that vaccine success was highly likely. And based on that, we made numerous investments with an asymmetric payoff that we believe would enable us to capitalize on this insight. For those of you who've been following us closely, you would know that we expressed that contrarian view all the way back in June 2020 in our quarterly report and we also discussed that publicly with the AFR back in July 2020. As you can see at the bottom of Page 5, the portfolio returned 29.5% in 2020 compared to the ASX 200 Accumulation Index returning 1.4%. This was particularly pleasing considering the headwind for investors like us, which have a value and contrarian bias. And obviously, it's been an incredibly frustrating period having that investment style in a period where growth and momentum have been so dominant. Turning to Page 6. On Page 6, we provide an update on the global vaccine rollout and the results of the trials that have occurred so far. Pleasingly, all 5 of the companies that have released their Phase III trial data have been exceptional. They've all displayed a high level of efficacy with minimal side effects. As you can see in the table, Pfizer, Moderna, AstraZeneca, Johnson & Johnson and Novavax have delivered very strong results across both the efficacy for infections and more importantly, the efficacy for severe disease. All 5 vaccines virtually eliminated the likelihood of hospitalization or death from COVID-19. On top of that, the Chinese and Russian vaccines have also shown very strong results with high efficacy, which we think will enable a faster global rollout. We expect that the Western world will have widespread availability of vaccine in around 6 months' time, while developing world will take a further 6 to 12 months to be fully rolled out. Australia is set to commence its rollout in late February with widespread availability most likely around Q3 of 2021. We believe that the existing western vaccines are likely to remain efficacious against mutant strains, and we also believe that there'll be incremental positive trial news that's likely to enable a global inoculation on an accelerated timetable. Prioritization of access will also ensure that those most at risk are protected early in the rollout. One of the most exciting and promising areas of data that we've been following closely is that it's coming out from Israel over the last few weeks. Israel is by far the leader in the global vaccination rollout. And it's already seen a 35% drop in cases in over 60s just in the past few weeks since the rollout has commenced. So it's one thing that's a very encouraging sign that the trial data not only played out in the trials, but now it's playing out in the real world, which is obviously the true test. On Page 7, we go through some of our high-conviction long positions. These positions are not ordered in terms of the size of their position in the portfolio, but they are there to give an illustration of the key positions that we're currently holding. News Corp is an incredibly high-quality set of growth businesses with REA, realtor.com and The Wall Street Journal being the key assets. We believe there's more than 50% upside to the sum of parts valuation. The company also has more than AUD 2 billion of cash on its balance sheet. The key catalysts that we see to drive the share price higher is that we believe the company is set to continue delivering strong earnings growth ahead of consensus expectations. And we also are positively disposed to the company talking about a corporate restructure in 2021, which we think would be a major positive catalyst. Tabcorp is obviously one of the prominent lotteries and wagering businesses in Australia. The lotteries asset is exceptionally high-quality, high-growth, infrastructure-like asset with long-term licenses. The wagering division is a strategic asset and it's now in play with the company recently stating they've had numerous bidders for that division. In terms of the catalyst, we think the corporate interest in part or all of the business is real, and we also think the company is experiencing very strong operational momentum. Safran, which is our French-listed company, is one of the highest-quality aerospace businesses in the world with a dominant position supplying required parts for its installed base of more than 20,000 engines that are on Airbus and Boeing planes. The shares have more than 40% upside to return to their pre-COVID levels, yet profits should actually exceed pre-COVID levels due to a huge cost-out program that's been enacted over the past 12 months, price rises for their key products and increased market share. We believe that as the global aviation market recovers during 2021, we'll see the shares recover in turn. On Page 8, we go through 2 more of our key ideas. Teck Resources, which is a Canadian-listed stock, has an incredibly high-quality, low-cost, long-life set of copper, coking coal and zinc mines. Strong commodity price outlook from all 3 of those commodities is likely given the difficulties of expanding supply at a time of rising demand due to accelerating global growth. We think that 2021 is set up for rising commodity prices, a large cost-out program that will lower the coking coal cash cost for Teck and QB2, which is one of the top 5 copper mines in the world, is likely to commence production in the second half of 2022. And lastly, Entain, which is the U.K.-listed stock. Entain is a global online betting and gaming company with a very strong position in the emerging U.S. sports betting market through its joint venture with MGM. The shares have significant upside, driven by their significant growth potential in the core online business, which we think will double over the next 3 years, and further expansion of the U.S. market. We believe that over the next few years, the growth of the U.S. sports betting market is incredibly exciting, and we believe the company is well placed to benefit from that structural growth. Recently, MGM made a takeover bid for Entain, which has fallen over, but we believe it highlights the strategic appeal and the strong outlook for the business. For each of these companies, we believe they represent outstanding quality and value, and we're very optimistic about their long-term outlook. Turning to Page 9. The key contributors over the past few months are listed on Page 9. On this slide, we provide the name of the company, the return it's generated over the past 3 months, and a comment as to why the shares have performed or not performed over the recent times. Bed Bath & Beyond has been one of the strongest contributors across the portfolio. The business has enjoyed positive operating momentum, and the company has announced large-scale buybacks. During January, there was a short squeeze in another highly shorted stock called GameStop, and Bed Bath & Beyond also proved to be a beneficiary of this short squeeze and a degrossing by hedge funds. Given the rally in the share price, we elected to exit our position entirely in January. We entered the stock at around $9 a share back in June 2020, and we exited the last bit of our position around $46 right near the peak in late January. Unibail has also been a very strong performer for the portfolio over the past few months. The shares have rallied more than 100%. Two of the key reasons for that was, firstly, the company was electing to do a highly diluted capital raising, which fortunately was knocked back by ourselves, Aermont and a number of other activist investors. We also had a very strong catalyst in the form of the vaccine success, which dramatically improved the outlook for shopping centers going forward. Given the rally in the share price, we exited the position over the past few weeks, but we will continue to monitor the stock closely given we believe that the backdrop will prove to be better than what people expect on a 1- to 2-year view. Orocobre is a lithium miner that we think will benefit from the global transition to electric vehicles. Obviously, the Biden win proved to be a key catalyst for the sector in recent months, given the U.S. is now likely to accelerate the transition to electric vehicles. Empire State Realty Trust is another stock that's performed strongly and we've actually exited in recent weeks. The COVID-19 vaccine obviously proved to be a major catalyst for tourist destinations. Empire State Realty Trust owns the Empire State Building. The observatory is a key asset and key revenue generator for them. They also have a lot of our New York office space within the trust, which has obviously been badly affected by the COVID breakout, particularly in New York. Another stock that was a key outperformer in the period was Scentre Group. We've had a strong recovery in foot traffic in Scentre's shopping centers, particularly outside Victoria. Retailers have been enjoying bumper profits, and this has dramatically reduced the likelihood of bankruptcies across the retail sector and also store closures. It's another stock that we've exited as a result of a large share price rally. As you can see from the commentary here, we're very decisive in terms of the way that we exit positions if they hit our valuation. We're not weighted to any particular stock. If the share price hits our valuation or if the outlook deteriorates, we will exit the position. We're not sort of emotionally attached to any of these positions. Two other stocks that I'll quickly touch on. Lovisa has been a very strong performer for most of the last sort of 6 months or so. We've seen much-improved sentiment given the vaccine news and also given the improvement in the competitive landscape for Lovisa. Lovisa's main competitor in Australia, colette, is closing about 3/4 of its stores. And Lovisa also bought out one of its main competitors in Europe, giving it a much stronger position, and it's now the #2 player in Europe, and we think that the company has a very exciting long-term outlook. And the last of that I'll touch on is Imdex. Imdex has delivered a very strong set of results in early part of February. The company has accelerating earnings growth. There's an increase in drilling activity from miners given the strong gold and iron ore price in particular. And we think the company is likely to win market share, enjoy the structural tailwinds from increased drilling activity as well as benefit from 3 new products that are set to come to market in the short term. Turning to Page 10. On this page, we list the key detractors over the past few months. The past few months have been a truly exceptional period for the portfolio, and there have been no stocks that have detracted more than 1% over the quarter. Below, we list the key detractors over the period. Pleasingly, in most cases, there was no stock-specific news or no sort of shock announcement that caused the fall in the share price. In the case of Ferrovial, the shares largely fell due to the COVID-19 second wave. In the case of Hudbay and Canadian Natural Resources, that was largely profit-taking after that enjoyed strong rallies over the prior 6 months, and we had a risk-off and degrossing period in January. And lastly, St Barbara, which we have matched off against some shorts in the gold space, St Barbara fell largely due to the weaker gold price. Importantly, the portfolio was not negatively impacted by the extreme short squeeze or hedge fund degrossing that occurred in late January. Turning to Page 11. In the table at the top of Page 11, you can see the portfolio positioning at a gross and net and geographic level. As you can see, we're holding a higher net long than usual. This is an intentional decision given that we believe we have a very positive confluence of events with extreme central bank and government stimulus, negative real rates for cash and bonds, a likely increase in M&A activity and a strong earnings period ahead. We're very positive on the backdrop for Australia. We have very extreme support from the RBA and the federal government, relatively low COVID-19 case numbers, and improving business and consumer confidence. We also think the outlook for Europe and Hong Kong is attractive. We do have an intentional skew to global businesses that are less reliant on the European and Hong Kong economies, and we believe that part of the attraction for us is the surging manufacturing and export data that we're now starting to see as the global economy starts to recover. We do expect to reduce our portfolio net long during 2021 as markets rally or if the market outlook becomes less positive. People should not expect that this would be the standard positioning for the portfolio going forward. Turning to Page 13. We believe that the outlook for the market is positive. And on this page, we provide a key set of reasons as to why we think that's the case. Central banks are now enacting the most extreme monetary stimulus that we've seen on record. The Federal Reserve has bought more treasuries in the 6 weeks during the COVID period than in the decade post the GFC. The RBA is also conducting $100 billion of QE and has provided a commitment not to raise rates until at least 2024. This is the most extreme monetary stimulus and support from central banks that we've ever seen. There's massive pent-up demand from consumers that we think will be unleashed in the second half of 2021 as a result of the vaccine rollout. Consumers have increased their savings rates due to the lockdown and the limited ability to spend on services, and we believe that the pent-up demand will be skewed towards travel, entertainment and hospitality, basically the services and experience as the people have been not able to consume during 2020. We think equities are likely to remain well supported in the near term, tailwinds from monetary and fiscal stimulus, strong corporate earnings, rising M&A activity and the vaccine rollout. And the acceleration in global GDP that we think will occur, I guess progressively over 2021, is likely to see a transition from cash and bonds to equities, from growth stocks to value stocks, and from defensives to cyclicals. We still believe that the vaccine trade is in its very early stages. I know a lot of people have been suggesting that the vaccine trade is over, that it was a 2- or 3-week event. We strongly disagree and think this vaccine trade will be very persistent over the next 12 months. We believe that hard-hit COVID-19 losers will recover further as their operating metrics show tangible signs of improvement over the next 12 months. We also believe that we're on the cusp of a major M&A cycle, the likes of which we haven't seen since 2007. On Page 14, we provide some perspective on the relative valuations between growth and value stocks. Value stocks have now enjoyed the largest and longest period of underperformance on record, with COVID-19 causing a further melt-up in high P/E stocks as investors sought safety in COVID winners. On the right-hand side of Page 14, you can see a chart which summarizes the relative valuations. And as you can see, this has literally been a 13-year one-way trade, with COVID-19 providing the acceleration in the chart. The timing of the LSF IPO was unfortunate given that we have a value and contrarian bias and the rotation that we've started to see since the vaccine news in November is very small in the context of the move we've experienced over the past couple of years, let alone the past 13 years. We believe the rotation to value on cyclicals is now taking place, and the move that we've seen so far is tiny in comparison to the move that we experienced in 2020. The vaccine news triggered the early stages of this rotation, and we expect the vaccine rollout will trigger an enduring rotation into many of those COVID loser sectors such as travel, energy and financials. Factor dispersion in 2020 was absolutely off the charts. Morgan Stanley's U.S. growth basket was up 17%, while their U.S. value basket was down 59%, which is a 76 percentage point difference in the space of 12 months. LSF performance in 2019 and 2020 has been really pleasing considering the enormous headwind that we faced as a value and contrarian investor. We think that if the market does see a rotation into value and cyclical stocks, that would prove to be a major tailwind for LSF performance. Turning to Page 16 and a corporate update. The Board has announced an on-market buyback to take advantage of the share price discount to NTA. The company has bought back around $71 million of LSF shares at an average price of $1.31 per share, which represents just over 7.5% of issued capital. The buyback has been highly effective, accretive to shareholders and has significantly reduced the discount to NTA. The Board has also reiterated that the buyback will continue until the share price discount to NTA narrows to 10% or less, which will benefit all shareholders. The Board has announced an interim dividend of $0.015 per share fully franked. The senior management team of L1 Capital has also been making on-market share purchases of LSF, having bought $10 million of stock back in August and continuing to buy further shares since then. The senior management team have also committed to reinvesting any performance fees in LSF shares via on-market share purchases. These shares will be voluntarily escrowed until April 2028, which is 10 years post-IPO. The L1 investment team also intends to continue buying LSF shares, highlighting our confidence and commitment in the long-term success of LSF. We've continued to bolster the investment team with capable and highly regarded people. We recently appointed Andrew Levy, who's a top-rated media, telco and internet analyst who was at Macquarie for 16 years, and also David Vien to the investment team. We've enhanced our shareholder communication and engagement, providing regular webinar updates, broker and planner road shows, detailed monthly and quarterly reports, increased portfolio disclosure and an enhanced investor relations team. We put a huge amount of effort into these reports, and we would strongly encourage shareholders to continually keep up-to-date with our announcements and also the reports that we provide, which add a lot of disclosure and color to our portfolio positioning. So in conclusion, on Page 17, the portfolio has performed very strongly in both 2019 and 2020. Our detailed, bottom-up research has identified numerous companies with large, underappreciated upside that we think should continue to deliver strong portfolio performance. The vaccine rollout, we believe, will unleash strong global economic growth, causing a major rotation into value and cyclical stocks, which are now the most oversold they've been in the past 50 years relative to growth stocks. The portfolio is well positioned to capitalize on this rotation, and we believe it has only just begun. Thank you, everyone, for your time, and I'll now turn to Q&A.

We had a number of questions come in regarding the dividend. Admittedly, a lot of these questions were prior to the announcement we made yesterday regarding our interim dividend. I guess what I can say about the dividend is that it's clearly a decision for the Board, but what the Board has been very clear with is that they totally understand how important and attractive fully franked dividends are for our shareholders, and they're very keen to ensure that those franking credits get passed through to shareholders over time. Hopefully, people would have seen that we announced our inaugural interim dividend yesterday of $0.015. And it's the intention of the Board to deliver stable and growing dividends over time. That's not a guarantee, but it's definitely the intention of the Board to have stable and growing dividends over time. The second question is, can you walk us through your mindset in 2020? What lessons have you learned? I guess if you turn back to January 2020, we had the mistaken belief that it was actually going to be a very pleasing and improving global backdrop for the world. The outlook from a business confidence point of view, consumer confidence was definitely on the way up. We felt that the world had been through a tough period with the trade war and that life was about to get better. Unfortunately, that was totally the wrong positioning we had coming into a global pandemic. As we got the initial data out of China, we did a lot of work in talking to a lot of people on the ground in China, doctors and virologists and epidemiologists and various industry experts who gave us the expectation that it was likely to be a localized event, that it would be similar to a SARS situation where you had an impact on travel in Asia, you had an impact on energy demand within that local area, but it was not going to become a global pandemic. Obviously, that proved to be the wrong positioning and also the wrong conclusion. We quickly realized in February and March that, that was clearly not the case. Like everyone, we didn't expect it to turn into the enormous event that it ended up being. But I think what we did as we went into March, we realized that the share prices are totally disconnected from reality, and we acted very decisively and aggressively to add to a lot of those stocks that we thought were dramatically oversold almost regardless of how COVID played out. You don't get those opportunities many times in your career. We feel that one of the things that we did well was we kept our composure. We stuck to fundamentals. And most importantly, we were really decisive and aggressive in the way that we dealt the portfolio. And we closed out a lot of our short positions near their lows. We also added to a lot of our new positions -- sorry, we bought a lot of new positions, and we added to a lot of existing positions very aggressively in that week or 2 when the market was bottoming. And not only did you have great share prices but you also had great liquidity that you were easily able to get set in a lot of stocks in a very quick period of time, and that was the window to essentially take advantage of the crisis. As we sort of look forward into June, we became much more confident that the vaccine was going to turn out to be a real game changer in terms of the outlook for COVID going forward. We wrote about that in our quarterly reports. We had an article that sort of profiled our contrarian view back in that -- I think it was in July, in AFR. I think that, that gave us the confidence to keep that net long at an elevated level beyond June. I think at the time where we were thinking that it was an oversold condition and it would be a very brief period that we'd be over 100% net long. But given the confidence we got on the vaccine, that enabled us to maintain that higher market exposure, which has proven to be a good decision. Then as you sort of fast forward to sort of September, October, we had second wave of COVID, and that provided an opportunity for us to top up some of those COVID-hit stocks and also add in a couple of new ones. So we added to stocks like Safran. We've added Airbus into the portfolio. We also topped up a few of the travel and energy names at that point. And I think the asymmetry that we saw in those return profiles was really exceptional, and that's what we were trying to capture as we positioned the portfolio into the Pfizer and Moderna news in November. Obviously, as we got that positive news, we had a fantastic period of performance. The fund or the company's NTA was up more than 30% for that month. But I think the thing that we think is really exciting over the next 12 months is we feel like that trade is only part of the way done and that essentially we're going to get the second half of this COVID rotation from the COVID winners into the COVID losers over the next 12 months as the operating momentum improves for a lot of these hard-hit stocks. And then I guess lastly, as we come into February and reporting season, we're still maintaining a very positive portfolio positioning towards equities. We still think that there's a lot of upside for the market. A lot of people have probably been understandably cautious on the market given all the various concerns going on in terms of economic activity, in terms of the concerns around COVID, JobKeeper rolling off. So I can understand people's concerns, but from our perspective, we think that reporting season is going to be one of the strongest on record. Companies have aggressively cut costs. We think that the economic environment is actually a lot stronger than people appreciate. And we think that, that gives us justification to maintain that positive skew. That won't always be the case, but that's definitely how we're seeing things at the moment. I guess in terms of what we learnt, one of the great things about the job is that you're always learning. I think the things that we learnt most is keeping your composure, sticking to fundamentals. When you see an opportunity, be decisive and be aggressive. You don't get those opportunities often, and you've got to take maximum advantage of them. And I guess lastly and probably the biggest thing for me is just the reward and the logic of putting in the work and the quality of research. I think about some of the work that our team did during that time. I think it's some of the best quality research we've ever done. The work we did on the vaccine, some of the stock-specific opportunities that were totally off the radar for people or hated stocks, I think, is probably the thing that we're sort of most proud of and the thing that I'm sort of trying to keep the team focused on going forward. The next question is, you currently have a high net long position of around 130%. Does that mean that you believe the entire stock market will be rising in 2021? When are you planning to take the portfolio back to a more normal net long position? One of the things that, yes, we've touched on in the Q&A already is that we didn't expect to have our net long above 100 for such a sustained period of time, but we've continued to find reasons why the market was going to continue to grind higher. So at the period in March, we felt that the market was dramatically oversold and that COVID would prove to be less bad than what the market had implied. And then in June, again, we had another reason to stay positive because of the vaccine. And now we think that earnings season is going to be stronger than people expect, and you're going to move into a period where M&A activity is going to pick up and the benefits of the vaccine will start to become apparent. We're definitely not assuming that this positioning is what people should expect going forward. And we recognize that this is a pretty unusual situation and the net long is more elevated than what we would expect it to be going forward. We typically have a net long of around 60% to 70%, and that's what people should expect through the cycle with our portfolio positioning. But I guess at the moment, I might just rattle off a couple of facts that I think are super supportive for equities. The first one is just I think people still underappreciate how enormous the monetary and fiscal stimulus is both in Australia and globally. We've had $100 billion of QE in Australia. We've had the Fed expand its balance sheet by USD 4 trillion. The Fed has bought more treasuries in the 6 weeks during COVID than they did in the decade after the GFC. So to give you some context of just how extreme the stimulus is, we've never seen anything like it before. And the impact of that stimulus is asset inflation, and equity is obviously a huge beneficiary of that. The fiscal stimulus has also been enormous. The Aussie government is running $100 billion deficits. The U.S. government is now talking about another $1 trillion to $2 trillion of stimulus. Just over USD 1 trillion is about 5% of GDP. So there's absolutely enormous amounts of money that are coming into the system and ultimately going to increase asset prices. The vaccine rollout is going to unleash a huge amount of pent-up demand from consumers. Consumers are really restricted in 2020 in terms of what they could spend money on. If you look at what people spent money on, it was basically retail. It was goods. Services like travel, hospitality, entertainment were really restricted. And we think that as that gets opened up, as people feel safe to go about their pre-COVID lives, we think that, that will be a huge area of upside for the market. Consumer spending is about 2/3 of U.S. GDP, and that is by far the biggest impact on global activity. We think the earnings outlook is going to be really strong. We've spoken about that a couple of times today. The economy has already started to rebound fast, but I think companies were very aggressive in the way they've cut costs. Their balance sheets are quite conservative. They've been petrified about what COVID had in store for them. And as a result of that, they've decided to really catch up and make their balance sheets bulletproof. As they start to feel safe again, that cash will get deployed for acquisitions or capital management. And lastly, I think there's such a lack of attractive alternatives within the liquids space for equity. So liquids are investments where you can access your money quickly. Cash is giving you less than inflation. Bonds are giving you less than inflation. Equities look incredibly attractive in that context. So for all of those reasons, we think that equities will continue to perform well. That's not a set-and-forget sort of position. If conditions deteriorate or if the market has a big rally, you should expect to see us reduce our net long. But for the time being, we think that's still appropriate. The next question is, are you seeing options to become more activist at the moment? We've seen you become quite activist in stocks such as Iluka and Peet. Yes, definitely. We think that there's a major opportunity to improve shareholder returns through shareholder activism. It's something that historically we've done sort of behind the scenes. And I guess we've become a bit more public with our activism through stocks like Iluka and Peet, which is a live example. In the case of Iluka, hopefully, people would have read our quarterly report which had a big focus on Iluka. I think it was back about 18 months ago now where we encouraged the Board to conduct a demerger to highlight the hidden value of Mining Area C, which is now a separately listed company called Deterra. The combined value of that stock has increased more than 60%, largely as a result of that demerger, which we were at the forefront of getting the company to crystallize. That's something that has been discussed by shareholders for almost 10 years and was only as a result of our active engagement that, that really got a wind and got some momentum. The share price at the time was in the mid-$7. I think the share price, if you combine the Iluka share price and the Deterra share price, is roughly $11.50 today. So I think that highlights how much upside there is in some of these activist situations, and it's something that we're spending a lot of time thinking about, and we'll hopefully have more to say on that during this year. That concludes the question-and-answer session. There were a handful of other questions that were more specific, and I'll ensure that our Investor Relations team follows up with those people who have submitted those questions. Thank you, everyone, so much for your support. We sincerely appreciate it. We're delighted with the way the portfolio has performed in 2019 and again in 2020, and we go into 2021 with a lot of confidence. We're really excited about the companies that we have in the portfolio, given they have large valuation upside over -- on a 2- to 3-year view with numerous positive stock-specific catalysts that we expect to play out primarily in 2021. We look forward to giving you updates in our monthly and quarterly reports, and we look forward to having another one of these webinars in a few months' time. Thank you.