Latitude Group Holdings Limited (LFS) Earnings Call Transcript & Summary

Good morning, everyone, and welcome to Latitude's 2021 Full Year Results Call. I'm Matt Wilson, Head of IR at Latitude, and I'm joined this morning by our MD and CEO, Ahmed Fahour; and our new CFO, Paul Varro. I'd like to begin firstly by acknowledging the Wurundjeri people, who are the traditional owners on the land from which I'm hosting this meeting today, and pay my respects to their elders, past and present. There will of course be an opportunity to ask questions at the end. [Operator Instructions] Let's hand over to Ahmed Fahour for the highlights.

Thanks, Matt, and good morning, everybody. I'm assuming you have the presentation deck in front of you. And I'll refer to the slides that I'm going to speak to. Clearly, Paul and I are not going to do all of the slides here and there's an MDA and a whole bunch of information that supports our announcement this morning. But what we'll do is a short presentation and leave enough time at the end for questions and answers. But let me begin by saying a bit of an understatement to start with that 2021 was a extremely challenging year for Australia as a country and certainly for all of us as individuals, particularly as Melburnians, who put up with the longest lockdown of any major city in the world. But despite the economic and health challenges that existed in 2021, I'm proud to say that Latitude weathered the storm really well and produced what we see as very satisfying results. And as you can tell already from the announcement, we made a cash NPAT of $232 million. And very importantly, when you look back on the year 2021, 8 of the 12 months were negative months for the economy. And despite those lockdowns and declining consumer confidences, we still managed to produce an increase in profit. And the key highlighted results, as I said, is profit increase. Our balance sheet and the strength of our balance sheet is managed as measured by tangible equity ratio, TER was at 8.7%, which is up from 6.7% last year. So we increased profit. We grew the business and increased our capital strength. And even with the extra capital that we had in our balance sheet, we still managed a return on equity of 17%, which is, as I'm sure many of you would be aware, well in excess of the cost of capital and in excess of any -- most industry benchmarks. These 3 ratios give you a clear sense of the strength of the business and the performance that we had. What you can see is what the key drivers in this presentation are of that success in 2021. Some of those relate to how we ran the business and the strength of our cost management. We managed to, despite growing the business, still get the productivity benefits that we experienced through the investment in automation and digitization costs are down. And Paul will cover some of these elements with you. But we grew our business and we grew it really strongly. And clearly, the highlight for us was our lending business. We lend for personal loans. We lend for auto loans. This business makes up 1/3 of our profit and its volume was on a skyrocket, up 42% on 2020. It really took off. The other big highlight for us was the New Zealand economy and the New Zealand business. Right across the board, New Zealand was a great success. In New Zealand, we didn't have the same level of lockdowns in '21 that we experienced in Australia and the economy performed very strongly. One of the reasons our business does well in a economy that is open for business, which is what we anticipate the rest of '22 will be like. So when you look at New Zealand, its installments business was up 10%, for example. And last but not least, another big driver of our success has been our risk management and credit quality. Risk management and credit quality has been a highlight of this company for many years, but in addition to very disciplined cost management, we were able to grow margin, net margin by 41 basis points. We call that risk-adjusted income. That's where you take your revenue less your direct bad debts and what that's -- that RAI yield was up 41 basis points. And again, Paul will take you through that. So that's the success of 2021. But clearly, there were challenges, significant challenges that we have to wrestle and deal with, and we did so I believe successfully. And the first and major one that I was speaking to was the continued lockdowns, particularly of the Eastern Seaboard that took place between July and October that knocked the economy, knocked people's confidence and clearly meant that our business wasn't able to participate and function in a manner that we did. That was a real disappointment. The flip side was we managed to get out of that, and I talked about this concept of revenge spend, well, boy, did we have revenge spend in this economy in November. November was a great success. We were back at volume levels that made the peak years of 2019 look like very average days. We were able to really get back into our strides and shows how this business does well when lockdowns are not in place. We are very much leveraged to it. Just as an example of that, I just wanted to -- just as a buy to buy. If you had the same level of travel, if the borders have not been shut, we just had the same level of travel in 2019 on our famous 28-degree card. And we were able to get the same volume in 2021 as we had in 2019, which is roughly $2.5 billion. Our total company-wide volume in the year 2021 would have been close to 20% volume growth instead of the 4% volume growth that we experienced right across the board. So that's just an example. Now what happened is Omicron turned up in December and clearly slowed down the economy and people's confidence as that took hold. And you can see there on Slide 6, where I mentioned that that took a real shift of our growth that we were experiencing. I'm pleased to report that as of February, by the end of January, we have started to see the business grow again. Despite the not-so-great January from a forward flow point of view, February is off to a really good start. So we're pleased to see that this particular, let's not call it a lockdown, but it's almost a self-imposed lockdown by consumers that took place in the middle of December, and a lot of January, seems to have abated, and we're now back on a really good growth path probably towards the last week of January and certainly in the beginning of February. The single biggest challenge that Latitude faced in 2021 was the extremely high elevated repayments of debt. It's a forward sign of people's confidence. It's an immediate indicator to us of how the consumer is thinking about their savings, their wealth and their general fears. I know people will use different indicators. We look at debt repayments and see when people make extra repayments and faster repayments, this is a sign that they're worrying about things. And what you can see in 2021 is it was as high as it was in 2020. And we gave you the reference of what a normal repayment level looks like in 2019, which is close to 90% and this is the major reason why -- the major reason why our revenue fell in 2021. The biggest factor was people repaid their debt much faster than our volume was able to grow during that time period. The good news is and for us, the very good news is, is that this seems to be now stabilizing and that we are in a position as the economy now bounces back as it looks like it has from this particular variant that hit us in January that we are entering back into a normal stage. And when that happens, this business is really structurally leveraged for growth. So that's the summary of 2021. I'm just going to touch a couple of other points before I hand over to Paul that you'll see. On Page 7 of the deck, you can see the makeup of the volume growth. You can see the OpEx and Paul is going to take you through those. But I do want to call out how pleased we are with the strength of the quality of business that we're writing. Our margin is up as I mentioned close to 41 basis points, which is a big, big bounce back. And in 2021, we have a better rate margin than we had in 2019. This is a really positive point and it shows the quality of business that we're writing. The average loan that we're taking on at the moment is a higher-quality loan than what we wrote in our peak profitability year of 2019. And it gives you a sense of the strength of the consumer and the quality that they have, but it gives you a sense of the quality of the balance sheet that you have here. There is no question whatsoever that the profit that we make is on the back of a high quality, good quality customer and business that we're writing. And you can see that in the bad debt charge off. Our net charge-offs are down to 233 basis points, which is a staggering 30% down on the 2019 level of net charge-offs to AGR that you can see on Slide 7. The next slide that I want to take you to is a reminder of the Symple acquisition on Page 12. We made that acquisition in 2021. And this year, we start to get the benefits of that investment. Already our personal loan business is doing incredibly well. We are the second biggest lender of personal loans in Australia only behind CBA. We're bigger than the 3 other major banks in writing new personal loans. And our performance in November and December and particularly in the beginning of this year has been terrific. We've maintained our strength. We've maintained our position and now we've only tackling half the market. We now have the full personal loan market that we can attend to and this puts us into an even stronger position in what looks like 2022 being a very exciting year for our personal loan market. By April, no later than April, it might be a little bit earlier than that, but certainly by Easter, all of our personal loan origination now, all of it, will start to flow on to the Symple loan platform that we acquired in 2021. This is fantastic. This will lead to a lower cost, quicker time to yes and a much quicker time to cash. We will be among the best, not just in Australia, but we're benchmarking the best in the world in this category. So that's very, very exciting for us. You would have heard on Friday about the definitive documents being signed for the acquisition of Humm's Consumer Finance business. Slide 13, 14, 15 and 16 that are in this deck are a summary of what we presented already on Friday. I don't intend to cover those in any detail other than if you would like to through Q&A. But I do want to draw your attention to Slide 16 for a moment and say, this is a very exciting acquisition for us. With Symple, we got a great tech platform that basically stopped us having to spend 2 to 3 years investing in a modern receivables platform that accelerates time to yes and time to cash. With the acquisition of the Humm consumer business, we can not only -- not only will it deliver to us close to $100 million of annualized earnings of profit before tax. So think about how much money that is relative to the purchase price and relative to our business, but it delivers in addition a great brand, 60,000 merchants. It delivers to us 2.6 million customers in addition to our 2.8 million customer accounts and allows us to cross-sell even more personal loans than what we do in our existing portfolio. In our existing portfolio, we have less than 10% penetration and it derives for us a $100 million profit before tax in these results -- in our results today. So imagine that situation where we now double the number of customers we have and are able to offer cost synergies that delivers these kinds of results. It's really exciting, and it sets up probably the most amazing year in 2023 for this organization. So let me conclude by just making an obvious point on Slide 19. And that is our dividend. We made a commitment from our Board during the year that we would pay 60% to 70% dividend payout ratio. And we said that in the second half of the year that that dividend will be fully franked. I'm really pleased to say that the company has delivered on that promise. And now for the second half, $0.0785 dividend giving us a total of 0.157. I'm sure many of you can do the math, that's a 7.7% dividend yield based upon the Friday night closing price. And our ability, as you can see from the right-hand side to pay for that dividend is very clear. We're able to reward our shareholders with this great dividend, with strong balance sheet and an ability to look forward into the future with great excitement. So let me hand over to Paul to just walk you through that P&L, and then we'll go to questions and answers.

Thanks, Ahmed, and Good morning, everyone. What we thought we'd do is if you move to Page 21, just lay out some of the key metrics. I'm not going to walk through them in detail as Ahmed covered off a lot of them already. If we turn to Page 22, I'll take you through some of the operational drivers of the results. Top left of Page 22 is volume. And as Ahmed said, we're up 4% led by PLs and auto, and we've talked about installments and Omicron as well. Bottom left, the elevated customer repayment rates remaining at 2020 levels, but obviously above 2019. That really makes it hard for us to grow our receivables when payments are elevated in that way. You can see on the right-hand side, we have stabilized receivables, which is a really good result. And certainly we feel good about our position as we exit 2021. But as you can see, the relative difference '20 versus '21, it's a delta in terms of an average receivable of about $550 million. That's one of the bigger drivers that I'll take you through in the subsequent pages. I'll now move through the P&L. If you go to Page 23, so operating income, as you can see there on the top left hand chart, down $107 million. About 2/3 of that variance is due to that asset variance of $550 million. The other $36 million is based on price. And you can see on the bottom left-hand side there, we've just done some volume rate variance analysis for you. On the price variance, there's really 3 main drivers to that. One, we've improved the competitiveness of our pricing, both in PL and auto, but also in GO and Gem as well. We're also delivering a better quality mix, both in PL and auto, along with elevated payments and also product mix where we've seen the auto portfolio grow faster relative to personal loans. So those 3 parts are really what drives the 66 basis points that you see in the bottom left chart. As I'll take you through a little bit later though, we're getting paid for that based on our risk-adjusted returns that Ahmed alluded to as well. If we move to Page 24, what we've done there is just lay out the origination quality on the top left-hand side. And as you'll see, we've continued to see higher quality originations, which, one, results in improved delinquencies. And you can see that in the bottom left-hand chart, which has really improved all the way through 2019 through to 2020. Lower charge-offs top right, we've already alluded to that already. And then on the bottom right-hand side, we are, however, left -- we've left with reserves in a strong position, which we consider quite conservative. And you can see there our exit rate of 4.28% relatively similar to pre-COVID levels. So we feel that's in really good shape going forward. If you move to Page 25, and this really shows the result of those better losses and in particular the lower charge-offs in our risk-adjusted income. And as you'll see on the top left chart, RAI yield up 40 basis points, which is really delivering better returns for the portfolio. So I talked about the 66 basis points that you can see there at interest income more than being offset by the 94 basis points at net charge-offs to deliver the 41 basis points in risk-adjusted returns. So we feel really good about that metric. And obviously, our risk-based pricing, in particular on PL and autos is serving us well. Bottom-left-hand chart really is just the dollars. So RAI despite the yield upside down $30 million. But if we move from risk adjusted income, we'll take you through OpEx where we've also had a good result as well. So operating expenses down 4%. That's despite increasing marketing, in particular for PL and auto, but also for installments as well up $16 million. This is more than offset though by our simplification and Op model changes on FTEs down $12 million. And then in the other, there's a number of different items driving those reduced costs. But really, there's 3 main drivers that make up $10 million of it or half of it and that's lower fraud, lower occupancy costs and digitization on our collateral as well. If we move to Page 27, our core OpEx was down, but our significant items are also down 20 as well. And if we move to Page 28, I'll just finish up on our funding. We've had another strong year. Just as a reminder, we've got a strong and diversified funding program with about $5.8 billion in drawn funding and about $2.3 billion of headroom. It's very well diversified across 50-odd investors, half domestic, half international. We're a programmatic issuer, issuing benchmark size with diverse collateral. So our funding program remains really, really strong. We've had another good year. You can see there on the left-hand side with 5 transactions as well as the corporate facility. We're actively hedging our cost. So 36% of the portfolio is already hedged and we've got a progressive strategy to proactively manage our earnings in '23 and 2024. And then finally, on the bottom right-hand side with our capital. So it's up $300 odd million, largely due to the issuance of the capital note, the Symple as well as profits as well, but it leaves us in a really strong position to grow and exit 2021. So with that, I might hand it back to Ahmed to close out.

Well, thank you, Paul. And of course, I know that there's a lot of other information that's in this document that we would be happy to during the week for all of our investors and the media we have some time set aside where we can cover off on a lot of the detail that you're interested in, but we're happy to take your questions. Operator will tell you how to do it.

[Operator Instructions] The first question today comes from Josh Freiman from Macquarie.

Just a couple from me. The first, if I sort of focus on that -- those impacts to pricing on the sales finance book. You guys saw material pricing changes in that book to improve the competitiveness of the proposition. Are you guys able to provide some color on the competitive dynamics that you guys have experienced just in the second half after that pricing change? And then also whether you expect further pricing outcomes to be required to drive further growth in that area? And my second question, I'll just address as you've answered that one.

Yes, sure. So I think it's worth pointing out with the pricing changes for PL and auto as well as GO, Gem. But specifically on GO and Gem, just the extra color on those. What we did is reduce the APRs from say on GO at [ 22.94 ] down to [ 19.90 ] and on Gem, [ 24.9 ] down to [ 19.99 ] as well. I should point out actually that creates capacity for us in terms of our cost horizon as well as we look forward. The other change that we've made on that product, Josh, is actually implement 6 months interest-free above $250 million on GO as well. So those are -- both those products are really well-positioned for the future. What we've seen with that value prop change is more spend in the scheme above $250 million. And so we feel really good about those changes. And it actually aligns the value propositions between GO and Gem as well, which clearly delivers a clearer message for our customers and our merchants as well.

Josh, in addition to what was said there, on the one hand from a competitive point of view, we wanted the product to be ultra-competitive from a interest rate point of view. And on the flip side, though, I'm sure you're aware that we increased the monthly fee from around $5 to around $8, and we canceled the basic rewards program, which was driving cost but not a lot of benefits. And the benefits that we wanted to create was a 6-month interest-free for those customers that use that platform to be able to compete in that window for those that have good credit and want to do installments-based lending. So the work that we did with customers indicated that they value that significantly more than they value just the general rewards program. So we've been balancing the margin very, very carefully, and I'm pleased to say the risk-adjusted margin is actually up on the basis of all of that work. What was your second question, Josh?

Sure. So second question is actually still around the cards and sales finance, but more around the regular spend on the cards. Just conscious that with the Humm acquisition, you're increasing the size of your cards book and we're sort of entering into an environment where the majority of the market expects rates to go up. And so just with that in mind, I just wanted to know if you guys already do and if not, are you looking to hedge the impact of any rate rises on that book?

Okay. So thanks for that, Josh. So yes, in the Friday presentation, you may remember that I broke down -- we broke down the composition of what's buy now pay later versus the traditional what's called sales finance versus the general-purpose credit cards. And as you know, general purpose credit cards is a very, very small component of our business, but it's also quite a small component of the Humm business. But there's no question that the bigger part is the sales finance component. What I think Paul was alluding to was 2 parts to that -- to the answer to your question. The first one is Paul mentioned that by having changed the mix to a lower APR rate and a higher-fees that we were able to balance the economics quite well. Humm, I've noticed have done the same in their announcements, and I'm sure you'll take that up with them. But we are very conscious that they are also tackling the issue of fees versus APR rates. Now here is the good news. The good news is, is that as we've lowered the headline APR rate in 2021, if the cost of funds rises as it may do, because remember, right now, it's the forward curve going up, not the current BBSW. BBSW is still where it was. And so the short-term funding costs are not rising at the same rate as the forward curve is, which is clearly up nearly 100 basis points into next year. But as that flows through into our average cost of funds into the future, we have the capacity to match the interest rate that's charged to the interest cost as it emerges. If we hadn't taken that action in 2021, we wouldn't have the same firepower clearly. So you can see that we have a natural hedge in the ability to raise rates, if necessary, if the actual costs go up into '22, particularly into '23. The second part of your question, part B as question 2 was around our hedging program. And I'm really pleased to say that not only do we fully hedge the interest-bearing portfolio, you can see that's about 1/3 of our business, that's fully hedged and has been. But we put in place inside our organization a systematic program that particularly hedges the forward flow of the year '23 and '24. We are not hedging the variable rate component in '22. I just want to be very clear about that in our numbers because the current short-term financing costs as you're well aware is not moving. What's moving is the forward curve. And therefore, what we're hedging is the forward flow. And then last but not least, the Humm business, I'm sure you're aware or may be aware of this, that they do hedge the predominance of their business, and they are already on the variable rate stuff. And one of the things that we did in our due diligence was to look at that and look at that into the future, and that is an area where they do a very good job in hedging that portfolio as well. So we're very pleased and comfortable with the position that we inherit with that acquisition.

[Operator Instructions] The next question comes from James Ellis from Bank of America.

Just a couple of questions. Firstly, the effective tax rate seems to be a little bit lower in the second half compared to previous periods. Just wondering if you could talk about the drivers there and what you think might be a more normal rate going forward? Then second question is on the repayments being elevated. Just are you seeing any green shoots of that coming back down or should we expect that the repayment levels which -- to remain at the level that is now going forward basically?

James, thanks. We're going to have to take -- we have to fix the technology. You're going to have to get in front of Josh at some stage here. It seems to be a particular pattern. James, thanks for both those questions. Look, I'll just cover that repayments one, and Paul will give you the answer to the tax question. The repayments one, I think I made an observation and like when we say you used the word green shoots on that. The answer is we saw a very small green shoot right at the end of January versus the other time periods that -- where it's been just crazy. Our anticipation from what we can tell is that it's inextricably tied to consumer confidence. And there are a couple of other variables at play as well. And we are anticipating that as the economy rebounds in the coming month or 2 that that repayment level will subside. And the evidence for that is in the year 2021 you can see very clearly what started to happen. As we exited October, if you look at that October, November time period where the economy was quite returning to normal, you could see debt repayments were also coming back to normal. Part of the challenge that we experienced in 2020 and 2021 was and still remains the issue of the excess cash that's sitting in the economy. That's really the single biggest challenge that we've had to deal with. And when there's so much excess cash and people were getting barely any interest in the bank, well, then it's a logical thing of what people do, which is they just pay off debts. But we definitely have seen a stabilization and a good indicator of that. I don't know if you -- in your research report, which I think you did this really good research report on consumer debt repayments and consumer profiling, I think you can see very clearly that credit card receivables -- or balances, sorry, that was the word, actually started to stabilize and slightly grew in November, December period. And certainly, we can see the similar trend. So when you can see the stabilization of credit card balances, which is normally the go-to place where people want to pay off the debt, that's a really positive indicator. Paul, do you want to handle the tax question? And James, we can cover a bit more of that when we catch up in due course.

Yes. James, just on the effective tax rate. So going forward, we expect it to be at the 30%. There is just a couple of one-offs that helped the 2021 results. So as we round up one of our trust, we got a one-off benefit of $1.5 million. And then we also had a one-off in 2020, which inhibited that result or made the tax slightly higher. If you'll notice the tax in 2020 was just above the 30%, and it's just below the 30% in 2021. Going forward, you can expect it to be at the 30%.

The next question comes from [ Tony Mitchell ] from [indiscernible].

I'd just like to ask you the stock coming out of escrow, do you anticipate any of that being sold in the short term?

The stock coming out of escrow is a really positive announcement. And everybody on this call is well aware that the single biggest challenge that's outside of management's control outside of debt repayments, the second biggest one is liquidity of the stock. There's not enough shares available for people to buy and sell in our company for a multibillion dollar corporation, we're lucky to trade 100,000 shares a day, as you know very well. And it's really held back the company, this lack of liquidity. So we've been really looking forward to this stock being made available so that we can get liquidity back into the company -- into the company's shares. So the second part is, obviously, I'm not in a position to speak on behalf of KVDS, the shareholder that owns 65% of the company. They can speak for themselves in that regard. But what I can say is they've indicated to me in the strongest possible terms that they are a long-term holder. They love the company. They've invested in it substantially, and they are not going to do anything to hurt the stock price. And I feel like they're very, very supportive shareholders who want to do the right thing. So there's been no indication. This is not to put anything at -- because there's been no indications to me that in the short term they intend to sell the shares at this price.

Right. Okay. Okay. But if they don't sell it in the short term, then liquidity stays the same, clearly.

Yes, sorry, what I meant to say is on the market.

Yes. Right. Right. Okay. Can you give us an indication of the impact of the Symple acquisition? What will that do for profitability, EPS in the next couple of years? And then as an adjunct to that, given that the Humm transaction goes through, what would be the combined benefit of both of those acquisitions in terms of EPS in the full year?

Okay. Well, if you turn to Slide 12, I've indicated in the year 2023 that the annualized impact of the Symple acquisition is approximately $40 million annualized. And in year, it's $32 million. So you've got $32 million in the year next year in, in year -- in year, that's a key word. And you've got $41 million for Symple. These are profit before tax before tax. And then we've indicated with the Humm acquisition that in year in 2023 is $55 million, in year of 2023, and $90 million is the annualized impact. So when you add up these 2 items, you've got approximately in the year 2023, $87 million to the P&L profit before tax and then you've got well in excess of $130 million annualized in the year 2023. So take off 30% tax and divide it by 1 billion shares and there's your answer. So it's extremely accretive and highly attractive and that really underpins our confidence and our belief into why this company today at today's earnings levels, 9x earnings and 7.7% dividend yield. And you can see in here how pretty excited we are about the year 2023.

So -- okay, that's good. But what -- you're not quite sure, are you, about the additional shares that are going to be on issue because if for some reason, the Latitude holders don't approve the current form of Humm, you'll only issue 45 million shares instead of 150 million, which is a big difference. But are you assuming that the 150 million goes through?

Well, our assumption is, is that the 150 million shares will go through. Clearly, that's what we've done this so that -- so that we can deliver on the current plan. However, with the 150 million shares, we've indicated that it's double-digit earnings per share growth with the Humm acquisition, right, double-digit earnings per share growth with the issue of 150 million shares. If the shareholders don't want to issue the shares, if they say, no, don't issue the shares, use your excess cash reserves that you have, well, clearly the earnings per share will be significantly higher than what we're predicting being double-digit. So what I'm saying to you is, you're going to win both ways. But clearly if the shareholders don't want to issue the shares, then it will be using the excess cash and significantly higher earnings per share.

Can I ask you with the Symple acquisition, has the integration of it to-date been as you would expect?

Better than what I expected.

Okay. Okay. And the other question I've got, you've mentioned before about your share -- you'd like to replicate in the variable loan market, what you do in the fixed loan market and it's 26% share in the fixed market.

Yes.

Do the acquisitions of these 2 companies, what is that -- are they involved in variable at all?

Yes, Symple only does variable.

Okay. So what would that take you to the market share in that area then?

Look, we haven't predicted Symple. Symple, we bought the tech platform, and it only just started doing its variable rate products. So it's a very small player. So overall, when you add fixed and variable, we're at about a 12% market share when you have both and we're still #2 in Australia after CBA when you add -- in both markets, right, in both fixed and variable. Now when we made the acquisition 4 months ago, 4 months ago with Symple, we had said that if you look at what we've naturally acquired and assume that you could do the same in the variable rate that we've done in the fixed rate, we're clearly, clearly in the next 3 to 5 years going to double our business.

Right. So can I ask you if assuming you're successful with Humm, what impact does that have on the variable market?

It doesn't have a specific impact on the variable lending market because Humm doesn't participate in personal loans, Tony. So it doesn't do that. But what I was -- you're probably alluding to the fact that -- you're probably thinking about the fact that what I said what Humm does for us. Humm brings in $2.6 million buy now pay later and installment customers and they have no personal loans given to them. So fixed or variable. If we can do for them -- if we can do for them, what we do for our current customers, we have a massive distribution opportunity to do personal loans and auto loans with customers who haven't been offered that product because that's not been available inside Humm. So that's a really big cross-sell opportunity that's not factored into those synergy numbers that I gave you earlier.

All right. So how long do you think it will take you to bid down Humm assuming you get it in June?

Assuming it's June, we've indicated that the synergies will start to flow through immediately, but it's a 12-month program that we've outlined in our case on Friday.

Okay. So given that you've made those 2 large acquisitions, is it foreseeable that you will make further acquisitions, large ones in the foreseeable future or are you going to bid those down first?

Can you say that again, Tony?

Given that you've made those 2 large acquisitions or the other one hasn't crystallized yet, will you be making further acquisitions in the foreseeable future?

No. Look, right now, our focus is the next 12 to 18 months while we bid down Symple, like Symple, we've got a massive go-to-market announcements that are coming through in March about the front end of our book. The back end of the book is fully integrated by September. And then we are hopeful that in the next 4 to 5 months that then we'll get the Humm consumer business, and that's going to keep us busy for the next 12 to 18 months. So as you can see here, Tony, there is a lot of really exciting things on our plate. We're going to be head down bum up, but let me just be really clear, the organization now has this fully baked in. We're very clear on what we're doing. We're bringing in some really excellent management from the Humm side. I'm really pleased to have Rebecca and a number of her senior executives come over and help us run that business as we integrate it into the organization. That's a really positive sign. We have Bob and Paul and some of the Symple people doing a great job on the lending side of the business. But we're always going to be open to what I would call as long as they are very shareholder accretive opportunities, if those things came along, we have some capacity. But right now, my focus is on bidding all of this down.

And the other question I've got is what percentage now once you get Humm through, what percentage of your business will come from overseas?

Very minimal. Like, I think I gave one slide here that says even with these acquisitions, it will be 3% or 4%.

[Operator Instructions] At this time, we're showing no further questions. I'll hand the conference back to the presenters.

Well, thank you all very much, and I really appreciate. I know that there was a lot of information here for you all to digest. Let me summarize and conclude by saying I'm really proud of the team's effort in 2021. It was not easy with working from home and listing the company and undertaking all of the actions that we have over the last 12 months. They've done a terrific job, and we are very proud custodians of this company, and we look forward to a very, very exciting '22. Thank you all very much. Look forward to the one-on-one meetings that we conduct during the week, and we'll see you then. Goodbye.