MA Financial Group Limited (MAF) Earnings Call Transcript & Summary

Thank you for standing by. And welcome to the MA Financial Group First Half 2022 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Julian Biggins, Joint CEO. Please go ahead.

Well, thank you, and good afternoon, and welcome to MA Financial's First Half FY '22 Results Conference Call. My name is Julian Biggins, and I'm joint CEO, along with Chris Wyke, who's also on the call with me. We're also joined by Graham Lello, CFO; and Michael Leonard, Head of Investor Relations. Over the last 6 months of June, MA Financial Group has delivered another record financial result. This is our third consecutive record result, demonstrating the momentum in the business and the execution of a well-considered strategy. Today's result is especially pleasing given the volatile market conditions and supports our strategy that a diverse business can successfully navigate volatile markets. Whilst we are constant long term about all our strategies, in any given period, some of our businesses contribute to revenue more strongly than others. Turning to Slide 4 of the presentation, which provides a snapshot of MA financials. MA Financial is a diversified financial services group that was founded in 2009. We've now entered our 14th year of business and have over 550 people in Sydney, Melbourne, Hong Kong and China. We're a growth company that looks to build long-term sustainable value for our shareholders. We recognize our people are critical to this objective, we respect and reward our employees and value our entrepreneurial culture. We are a diversified asset manager focused on alternative asset classes and private capital markets. With access to a range of distribution channels, sourcing investors both domestically and internationally, some of these channels are unique, which differentiates our business and allows us to source capital when others find it difficult. Our ability to deliver profitable growth is backed by evidence with the Group delivering 24% compound underlying earnings per share growth since listing and a total shareholder return of almost 22% per annum over the same period. We believe strongly in alignment of interest with employees and our partners smaller than company, owning approximately 45% of the company. Many of us are fellow shareholders with you. So now turning to the financial results. On Slide 6, we cover some high-level statistics. First half FY '22 underlying earnings per share of AUD 0.176 equates to 42% growth on the prior period. Underlying revenue growth was up 54% to AUD 146 million, another record achievement. All 3 divisions achieved strong financial results underpinning the Group's performance. AUM was up AUD 1.1 billion over the last 12 months, underpinned by strong flows. The record result underpinned our confidence to increase the interim dividend by 20% to AUD 0.06 per share fully franked. The balance sheet remains robust with AUD 113 million of available liquidity to support future growth. We are very pleased with the financial results and believe it demonstrates MA Financial's depth of talent and diversity and the ability for us to deliver robust financial results despite difficult market conditions. Now turning to Slide 7 for some more financial details. Just to remind people on the call, we announced the refinement of our underlying earnings per share definition to include only realized gains at the June Investor Day. Therefore, unrealized mark-to-market movements are now excluded. All financial metrics in this presentation, current and historical are prepared on the updated basis unless noted otherwise. As mentioned, we generated AUD 146 million of underlying revenues in the first half, up 54% from the prior period. Asset Management revenue growth and the acquisition of mortgage aggregator Finsure and residential lender MKM contributed to this growth. Excluding the acquisitions, underlying revenue still grew by 40%, which demonstrates the continued momentum in the business. The 58% increase in asset management revenue was primarily due to ongoing growth in recurring base management fees and a AUD 22 million performance fee from Redcape Hotel Group. Our return on equity was almost 15% over the period and up slightly on prior periods. These financial results were achieved while we continue to invest in the business. Over the first half, we invested in building our residential lending business, upgrading our asset management operating platform to better manage scaling and providing improved amenities for our people with new offices in Sydney, Melbourne and Hong Kong. All of these initiatives are designed to enhance our capability to build profitable scalable businesses, retain our people and culture and create long-term sustainable shareholder value. During the period, we put in place a AUD 40 million working capital facility, which provides additional access to flexible capital to grow the business. In summary, the strength of the financial results is reflective of a well-executed strategy delivering results from the benefit of diversification. Our business is retaining and developing its people and fostering an entrepreneurial culture that is ambitious and excited about the future. Now turning to the next slide, which shows our progress in numbers over the last 5 years. First half FY 2022 represents the strongest half year financial results for the company ever. The ability for the Group to grow earnings per share over time as evidenced in the chart in the bottom left-hand corner, which has also translated into higher dividends to shareholders. We'll continue to focus on sustainably growing both for shareholders in the future. Now turning to the next slide for our business unit highlights. Our Asset Management business had a strong first half. Gross inflows of AUD 574 million with a continued investor buyers for credit investment strategy. Base management fees were up 35% on the prior period, reflecting consistent inflows into our funds. Transaction and performance fees were AUD 38 million in the first half, equating to 107 basis points of average AUM. The margin of 107 basis points is higher than we typically expect and was underpinned by a AUD 22 million performance fee from Redcape Hotel Group. Our Lending division growth was accelerated in the half with the acquisition of Finsure and MKM completing. Lending's loan book grew 91% over the period, underpinned by organic growth and investor flows into our credit investing strategies. Finsure's managed loans increased 25% over the half to AUD 84 billion, exceeding our initial expectations. We are extremely pleased with its performance and continue to see strong loan originations across the platform. Broker numbers are over 2,400, which compares to 2,127 at December. This is up 13% over the 6-month period. The Lending division contributed 20% of Group EBITDA in the half. We continue to invest significantly in the residential lending opportunity, which we believe will provide meaningful growth over the many years to come. Corporate Advisory and Equities performed well in the first half, delivering a record result. The pipeline had a significant skew for merger and acquisition activity, and it's pleasing to see more diversity in our client base as we've expanded the senior team in Corporate Advisory. There are significant growth opportunities within our business underpinned by our approach of identifying large addressable markets where we can build operational edge and valuable profitable businesses. Now turning to Slide 10 and a review of our strategic objectives. Over the last 6 months, we grew recurring base management fees from AUD 89 million to AUD 93 million. Over the last 12 months, it has increased 21% from AUD 77 million. Finsure generated AUD 7.3 million of recurring service-based revenue, which is in addition to our base management fees and only enhances our recurring revenue base further. We have consistently talked about diversifying our distribution channels and the result today clearly demonstrates the strategy is working. Momentum continues to be strong in domestic flows with the Group raising AUD 268 million over the period, up 61%. International high net worth flows were also strong at AUD 306 million. The result is especially pleasing considering the processing constraints to Hong Kong and Mainland China migration [ applicants ]. We continue to look to scale our platform and the acquisition of Finsure and MKM are evidence of our focus to expand into the large addressable market of residential lending. Balance sheet has been used proactively over the period with the acquisition of Finsure delivering immediate accretion and longer-term strategic growth opportunities. Our people are critical to the success of the company. And over the period, we moved into new offices in Hong Kong, Melbourne and Sydney, which provided much improved amenity and meeting with employees' desire to return to the office for increased collaboration and development. In summary, our strategy largely remains unchanged. We're focused on the range of opportunities in front of us and delivering long-term growth for our employees and shareholders. Turning to post-balance date activity on Slide 12, which has been pleasing. Asset Management had a strong start to the second half with gross flows of AUD 354 million during the 7-week period. Of note, a 2 new institutional credit mandates from high-quality domestic investors worth AUD 136 million. One is a structured finance investment and the other is a hospitality related credit investment. Net flows were slightly less at AUD 277 million, which reflected some expected redemptions in a number of our earlier vintage funds and rent cadence. We recently launched the MA Sustainable Future Fund with seed asset secured or in due diligence. While the initial fund is relatively small, the concept is compelling and will achieve scale over time. We also instituted due diligence on a AUD 110 million office asset in Perth and if all runs smoothly, the asset will form the basis for a new stand-alone office in this half. In Lending, Finsure settled a record AUD 3.7 billion gross of new loans during July, benefiting from the tailwind of refinancing related to fixed rate mortgages rolling off. In residential lending, we continued to make progress in setting the foundation to scale with the addition of senior underwriting and processing capability, and we have implemented a new loan management system. In Corporate Advisory, deal flow in the first 7 weeks has been strong with over AUD 17 million in fees considered derisk. This is in addition to the AUD 28 million of fees booked in the first half. The transactions continue to be [ biased on ] mergers and acquisitions in our range of sectors and industry groups. In summary, momentum has continued into the second half across all divisions, with the only caution being the uncertainty and migration visa processing in Hong Kong and Mainland China and general equity market volatility. Turning to the next slide and the FY '22 guidance. We reconfirm our guidance for between 30% and 40% per annum underlying earnings per share growth on FY '21. This growth is being delivered despite the strategic investments being made in future growth opportunities in the business. In December 2021, we had originally guided the market for 10% to 20% underlying earnings growth per share on the old measure. And if we were using that measure today, our guidance will remain unchanged. We provide guidance with our normal health warnings and point out the markets are uncertain. It's worth noting that there are features of our earnings, including performance fees that are different to forecasts, adding variability to our results. Now turning forward to Slide 15 to talk in more detail about the divisional performance. Asset Management delivered another record result with underlying revenue up 58% and underlying EBITDA up 74%. Primary growth drivers for Asset Management were base management fees underpinned by ongoing strong inflows and improvement in the base fee margin as we cycle the COVID-related impacts of the prior period and a strong transaction and performance fee contribution. Period was also the first full 6-month contribution from RetPro as we settled the acquisition 1st of April 2021. This incrementally added AUD 3.1 million in base fee revenue and AUD 2.1 million of operating expenses for the half. Transaction fees were up significantly in the period, reflecting the strong growth in the real estate credit strategy. AUM under the strategy exceeded AUD 900 million today compared to AUD 80 million this time 4 years ago. Redcape Hotel Group delivered AUD 22 million performance fee during the period, underpinned by a return of distributions to investors and strong capital growth in asset valuations. We remain positive on the hospitality sector and believe the strategy will continue to contribute meaningful performance fees in the periods ahead. Operating expenses increased as we invest in the platform with a focus on enhancing our fund operations to scale more efficiently. Now turning forward to Slide 16. This chart illustrates the business delivering on a consistent strategy to scale our investment specialization with a focus on the alternative asset classes of credit, real estate and hospitality. Now turning to Slide 17 to talk through our fund flows. This slide demonstrates the benefit of diversity. As mentioned, credit investing has been a major beneficiary of volatile equity markets as investors seek to find defensive yield with capital protection. Over the last 12 months, our credit investing funds have received over AUD 700 million of gross inflows, which is an excellent result from an investment strategy we accelerated into only 5 years ago. While net flows are slightly less than gross flows across the Group, the main impact is due to asset realizations in the real estate and PEVC strategies during the period. In relation to flows by investor channels, the gross flows of AUD 574 million is a very pleasing result and given the visa processing issues for Hong Kong and Mainland Chinese migration applicants. Gross domestic flows were AUD 268 million, up 61% on the prior period. Over the last 12 months, we have raised AUD 583 million for this channel and this compares to AUD 142 million 2 years ago. Our international high-net-worth flows were AUD 306 million for the period, down on the prior period, although reflective of the migration progress -- processing issues. The pleasing data point here is international non-migration high net worth flows, they're around 53% to AUD 194 million. The growth in this segment is accelerating. In regard to our migration-related flows, we continue to see strong interest in the significant investor visa program from applicants from a diverse number of countries. We currently have investors from approximately 30 different countries in our funds. In relation to Hong Kong and Mainland China, our pipeline of visa applicant is steep and we see no underlying issues translating to reduced demand. As to the international non-migration high-net-worth opportunity, the flows are gaining momentum and wealth diversification globally these ultra-high-net-worth investors is a high priority. Australia is viewed as a mature state secure and attractive market for these investors. With this in mind, we are focused on continuing to build a private wealth business for this category of international investors and believe we are uniquely placed to provide this service. In addition, we have proactively moved into new international markets for both migration and non-migration investors. This initially saw us establish a presence in Hong Kong and we're now focusing on South Africa, Vietnam and Singapore. As part of our core strategy, we'll continue to diversify our channels where we can be effective and the benefit of this strategy can be seen in the numbers today. I'll skip over to Slide 18, as it demonstrates a similar narrative around our AUM becoming more diversified by investor type. Turning to Slide 19, which gives our investment strategies with some highlights. Credit investing experienced significant flows underpinning an increase of AUD 343 million in AUM. Both our real estate credit strategies and priority income funds experienced strong interest as defensive yield offers a strong alternatives to equity markets. In terms of rising interest rates, while we do see increasing competition for yield products as term deposits increase, we are well positioned with the majority of our funds having variable loans, and therefore, yields for the investors that arise with the market. In hospitality, the community venues have traded very well over the last 6 months, which was underpinned by active management. Redcape Hotel Group, our flagship Hospitality Fund delivered investors a 31.5% total return over the 12 months to June, which is a great result rebounding from the COVID disruptions. We acquired Brunswick Heads in Byron Shire in February and the Beach Hotel was revalued up to AUD 135 million during the period. We remain positive about the Byron region and are well positioned to take these iconic hospitality assets to another level. We also divested Minsky's, achieving a 40% premium to book value, which reflected the latent real estate value in the venue. In real estate, we made a conscious decision to pause coming into 2022, as we felt the direct markets would take time to digest the upward movement in interest rates. During the period, we settled on a number of small industrial investments and 25 Grenfell Street Adelaide, which was exchanged late '21. We believe we bought this asset well and the leasing performance to date has been positive. As to the markets, generally, we do believe that there will be opportunities in the current market as the buyer universe has shrunk and sellers are willing to meet the market. Our equity funds have had a difficult first half with market conditions challenging. Since balance date, the fund performance has improved and we believe many equity stocks offer compelling valuations at these levels, although economic uncertainty makes it difficult to predict how long it will take to rebound. During the period, we divested a number of smaller legacy assets, including a childcare and feed block investment. In the scheme of things, these investments were relatively small and it was positive to finally exit these investments on good terms so that we can return our focus on to larger opportunities. Asset Management's key drivers continue to be very positive. We are very pleased with the increased diversity in the distribution channels and the decrease in reliance on any single investment site. The funds continue to predominantly perform well, which translates into investor confidence in the business and inflows. Now turning to Slide 21, and Lending, our newest division. We remain very excited about the opportunity and have invested significantly into setting it up for scalability and growth. The acquisition of Finsure and MKM during the period both represented important steps in building out the platform. We have made a significant investment in upgrading MKM systems to ensure that it can offer a leading service to residential borrowers based on much larger volumes. All of these strategic decisions take time and incur expenses are put in place and are part of a well-considered multi-year plan to build a substantial residential lending business. While Finsure is a great business today, the strategic opportunity to unlock incremental NIM and grow fee-based revenue is significant. And as we discussed at the Investor Day, we're working on a number of initiatives that we'll launch in this half. Technology is a key focus for the Lending division and we believe that our technology offering can differentiate our residential lending proposition for our customers. Back to the business result, the total revenue grew to AUD 25.2 million, which was largely underpinned by the acquisition of Finsure and MKM. The loan book growth of AUD 190 million was predominantly due to growth in principal and specialty finance activity. Now turning over to Slide 22 and some of the key lending metrics. The key drivers on this page are very positive and exceed our expectations for the business. As we have previously mentioned, the NIM will blend down as we focus on large scalable markets. The lower NIMs will be offset by much higher volumes while retaining an attractive return on capital. The return on this capital in this period is less than our targets, although that largely reflects MKM being loss-making as we invest in the business to drive future growth. In terms of loan book health, we've adopted conservative underwriting assumptions with substantial stress testing of underlying borrower serviceability and collateral performance. Actual credit losses are currently tracking well below provisions levels. Finsure's managed loan book has grown 25% in the 6 months from December, which is a great result. This was underpinned by both the growth in productivity approaches and an increase in the number of brokers on the platform. Over the coming years, we anticipate these numbers to change materially as we lean into the large residential mortgage market and utilize our unique position with Finsure to originate loans. Now turning to Slide 23, nets out the growth in the loan book to around AUD 720 million at the end of June. As a percentage of loan book, the average capital committed was 11% for the half versus 20% for December half. As the loan book grows into the residential lending market, we'd expect the percentage required to fund the loan book to decrease, although the absolute capital required to invest. Importantly, we also expect the capital invested to generate NIM and deliver a very attractive return on invested capital for shareholders. And we continue to explore strategies to optimize the capital efficiency of our lending business as we scale. Now turning to Slide 24, clearly, all the Finsure's indicators are very strong, and we are very pleased with the performance since acquisition. We believe that the Finsure business offers a unique distribution channel for a number of products in the lending market and look forward to executing on the multi-year strategy. Turning to Corporate Advisory and Equities on Slide 26. The business has had a strong first half performance, underpinned by merger and acquisition advisory roles. Some of the transactions we've been involved in include advising Consolidated Press Holdings in relation to the Crown transaction, [indiscernible], the merger of DDH1 and Swick, [ the sale Technology Company Blitz and the sale of Stock Time ]. As I mentioned earlier, the second half has started well with over AUD 17 million of advisory fees already significantly derisked. We've made a couple of senior hires through the year with a focus on technology and equity capital markets. I'll leave Slide 27 with you to dodge it, although it just highlights the seasonality in Corporate Advisory and Equity, which appears to be the case again this year. I'll now hand over to Graham Lello, our CFO, to talk through the financials.

Thanks, Julian, and good afternoon, everyone. Starting on Slide 29, we've talked a fair bit about our revenue growth and its diversified nature. So I thought I'd briefly touch on the expense side of the equation. In this regard, there are 2 key impacts running through our results; one being the impact of acquisitions; and the second, our continued platform investments. The acquisitions added over AUD 10 million of OpEx in the half, with this figure set to be higher in the second half as we cover a full 6-month trade. On the platform investment side, as we mentioned at the full year results, compensation expense will continue to increase. Excluding acquisitions, both fixed and variable comp were impacted by headcount growth of over 30 FTE in the period. I expect this growth to continue in the second half. However, looking into the crystal ball, this should moderate as we move into 2023. Variable comp also moves with revenue performance and given our strong results in the half, this has also resulted in an increase. Other key expense items relate to our investments in new premises with associated costs up over AUD 4 million in the half. Staff feedback has been fantastic, and we believe our new offices will be an ongoing competitive advantage as the work environment continues to evolve post COVID. Pleasingly, despite these expense increases, we managed to maintain our margins. And the combination of increased earnings and our strong cash conversion means we have increased our interim dividend by 20%. As always, we have stayed within our dividend policy payout range of 25% to 50%, which enables us to balance shareholder returns with the retention of good levels of cash for future investing. And on the topic of cash and investing, over the page on Slide 30 is our operating balance sheet. For those of you that read our stat accounts, you will notice a much changed statutory balance sheet with gross assets and liabilities increasing to incorporate our lending securitization structures and Finsure's commission trail book. Our operating balance sheet seeks to present a simpler view of invested capital, which I hope you will find easier to follow. Key highlights in the half was the successful acquisition of both Finsure and MKM with the AUD 120 million of capital raised at the turn of the year utilized for this purpose. It's worth pointing out that both cash levels and NTA were artificially higher at the year-end because of this capital raising. Following settlement, our NTA has returned to a more normalized position at 30 June, with cash continuing to build from our usual working capital low point following the annual bonus and dividend payments in the first half. Borrowings were unchanged in the period. However, the highlight was the finalization of a new AUD 40 million revolving corporate facility. This facility, which is currently undrawn, not only enhances our balance sheet flexibility but gives us another lever to optimize our use of capital. What's more, with over 2/3 of our debt carrying fixed coupons, we are comfortable with the balanced nature of our borrowing costs. Looking forward, I don't see any change in our approach of maintaining our dynamic but prudently capitalized balance sheet. Certainly, stood us in good stead and allows us to not only invest in existing platform growth, but also explore new opportunities. Over the page on Slide 31, I'll touch on some of these investment highlights. Our focus in the first half was the ongoing support of key lending and asset management strategies, coupled with the drive on capital efficiency. This efficiency is best highlighted in our Lending division, where we reduced our invested capital while continuing to grow our loan book. While this is unlikely to be a recurring feature, importantly, the proportion of invested capital to loan book size will continue to reduce and ultimately drive stronger returns. Furthermore, we continue to recycle our seed and co-investment capital, utilizing the proceeds to reinvest some AUD 45 million into new and existing strategies in the half. This dynamic nature of the balance sheet and our focus on capital efficiency will continue to underwrite our future growth. For mind, the recycling of capital is a real strength, whilst the focus -- the efficiency focus will be an important factor driving returns in our lending business. Moving into the second half, when it comes to investing our capital, we will continue to maintain a level of cautious optimism. And with this in mind, I'll now hand back to Julian to talk you through our strategic outlook.

Thank you, Graham. And moving on to Slide 33. At MA Financial, we have a strong focus on building businesses and this slide illustrates how our method translates into results. We look to leverage our capabilities and platform into large addressable markets where we have competitive edge establishing a well-considered strategy and executing on it. We balance investing in new ideas with letting the business scale and seeing the benefits flow through to investors. This is always a strong focus for us and we are aligned like shareholders. Moving on to Slide 34, where we talk more to our medium and longer-term strategy. We're a builder of valuable businesses in large addressable markets. We focus on scale and diverse distribution channels. We diversify our source of capital, and we have a strong balance sheet to support growth initiatives. Our advisory capabilities provide technical edge and our stable and experienced management team is strongly aligned with investors. In closing, MA Financial has had another great start to the financial year, despite the significant market headwinds we all faced. On behalf of the management team, we are very proud and pleased with the performance of the Group, and we look forward to executing our consistent strategy in the years to come. With that, I'll hand back to the moderator for Q&A.

[Operator Instructions] Your first question comes from Glen Wellham with MST Financial.

Well done on the results. Just a question on the loan book. Obviously, you've had really strong growth in that. Just wondering what our expectations should be going forward, particularly given that the overall market in residential lending is coming off? And just as a follow-up, are you planning to spend more money to increase your brand awareness for residential lending?

Yes. Only -- it's Chris here. I'll take the question in relation to the residential lending. So firstly, in relation to residential, we are starting from a very, very low base, obviously. And the residential lending market has 2 impacts really on the business. Obviously, one, the loan book that we grow and a NIM off. And then secondly, the amount of residential lending volume that goes through the Finsure platform through the brokers and the aggregators. So in relation to the loan book that we have on our platform, it's really quite small and we think we've got the ability to continue to grow that even though that you might see the market volumes moving around with the uncertainty in the residential market. What we are experiencing and seeing is a large volume of loans are rolling off from being fixed rate. And so that means that we estimate over the next 12 months, you've got about AUD 350 billion worth of home loans coming off fixed rate where people will shop around for the best deal. So that does 2 things. It puts into the arena quite a large amount of volume for us to compete for to provide that residential loan from that very small base from where we're starting from. And so hopefully, for us, that's a tailwind. And secondly, that volume coming through the market with increasing predominance of brokers being the main route by which people undertake sort of the home loan and mortgage process should also push quite through -- quite a lot of volume through the Finsure platform, which we've seen sort of early stage evidence of. So I think there, we're starting from a very small base. And so we are optimistic that there's the growth there ahead of us. In relation to CapEx and spend on the brand and positioning, which I think was the second piece of your question. At the moment, we are still bidding down the infrastructure and systems that we need to have in place to cater for a lot larger volume within our residential lending platform that we just acquired earlier in the year. So it's something that we're grappling with and debating. But at the moment, the main expense coming through that residential lending division within lending is around the systems and processes that we're putting in place.

The only thing I'd add is our Finsure pipe gives us access to the distribution channel for residential home loans. It's obviously, one of the competitive advantages we have in the residential lending space.

And just one other question. Obviously, asset valuations have held up pretty well across your well-diversified book. But how should we think about -- well, how conservative should we be going forward? Obviously, there's a bit of a lag between cap rates increasing and valuations, how should we think about that going forward?

Yes, sure. And I think I'll focus on the hard asset side of it in terms of, I think, credit is pretty secure around the provisions and the underwriting. But from a hard asset perspective, when I think about real estate the predominant exposure we've got is around the shopping centers. We have probably, call it, 75% of our exposure probably sits. And really, the cap rates around the shopping centers that we acquired being sub-regionals or non-discretionary neighborhoods have really been tighten as much as probably some of the other asset classes. But we feel like we had a fair bit of buffer in there between bonds and sort of with yields that they're offering prior to coming into this year. In terms of hospitality, I think the positive around hospitality is that there's real earnings growth coming through the system. So there's still transactional evidence that points to quite deep levels of demand for hospitality assets, which is compelling, and it's sort of -- it supports probably cap rates tighter than where we have our hospitality assets valued. But in terms of having additional buffer to our valuations, we're forecasting EBITDA growth at a venue level between 8% and 10% this year and added the value on a backward-looking basis. So we're very confident around the sector itself riding very well and for assets to have that sort of growth, there is plenty of cushion around sort of valuations in the future. So we feel pretty good about it. I'd say, we've said it in my commentary, we acted on it during the half, we paused in terms of looking at broader real estate initiatives just because we thought there would be a period of time between sort of vendor expectations rising interest rates and where we saw value. I think the buyer universe has really thinned out quite a bit and we're seeing quite a few opportunities to come to market where you can be more selective and look at things quite interestingly. So we'll be more opportunistic in the next half.

Your next question comes from Nic Burgess with Ord Minnett.

A couple of questions just on the asset management business to start off with. Have you got a more recent funds under management update given the flows and market movements across July and August?

I think the update would be sort of AUD 280-odd million of net flows. Obviously, there's sort of valuation movements that come through over that period of time, but that would be a reasonable indicator for movement in AUM give or take. But we're really seeing -- we're really seeing most of the asset classes perform well. I think equities has obviously had a tricky first half given the volatile market conditions and we did see that rebound nicely in July. But it's a very difficult market to predict at the minute. So I think AUM would reasonably closely track net flows, but not perfectly.