Mader Group Limited (MAD) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Mader Group FY 2024 Half Year Results. [Operator Instructions] I would now like to hand the conference over to Mr. Justin Nuich, Executive Director and Chief Executive Officer. Please go ahead.

Awesome. Thanks very much, Rachel. Good morning, everyone, and welcome to Mader Group's First Half FY '24 Results Presentation. With me today is our Chief Financial Officer, Paul Hegarty. We're both really pleased with the group's performance over the last 6 months as we continue to evolve into a global diversified services business. Delivering our half year revenue -- record revenue, sorry, of $374.4 million, an increase of 34% versus the PCP is an exceptional result, delivering consistent growth over the half year, with demand for our services remaining strong globally. The ability to support a global customer base and provide the best technical services all comes down to our dedicated team, which now exceeds 3,000 employees working within our business globally. We'd like to express our appreciation to our team out in the field and in the office for their efforts, and we look forward to bringing it home in the second half of this financial year. Okay. Let's jump into the presentation. So just to continue what I previously touched on, the business really has evolved since its inception in 2005. So we kicked off in 2005 with one man -- Luke Mader -- providing mechanical support out of his field service vehicle in the Kimberley region of Western Australia. Luke had a vision to build a business that people were excited to work for like they were just going to work alongside their good mates. Since then and fast-forward 19 years, we are today a global provider of specialist technical services across multiple industries. Throughout the half year, we operated in 6 countries, servicing 400 customers in more than 460 locations worldwide. As I previously mentioned, our team has continued to grow, and today, we are supported by over 3,000 employees from a range of different trades, skillsets and backgrounds. We continue our evolution into a truly global diversified services business, with our business model replicated across multiple industries. The compounding effect of this success is reflected clearly in our ability to achieve consistent growth in our financial results. This includes offering specialist technical services across heavy mobile equipment, fixed infrastructure, transport logistics, power generation and marine, and the energy sector. We'll further touch on our achievements in this area as we progress through the presentation. Okay. Moving on to Slide 3, highlighting our evolution from our original service offering as heavy-duty diesel techs to today where we -- where almost half of the business comprises of other trades and technical skills. These include auto and high-voltage electricians, boiler makers and fabricators, light vehicle technicians and road transport specialists. On the left, we highlighted the age of our workforce. 65% of our workforce are under the age of 35. While we create meaningful careers for individuals of all ages regardless of their stage of life, it is clear that our company culture and the adventure-driven lifestyle we provide specifically resonates with a particular demographic. We invest in our people and their careers heavily to provide flexibility, variety and opportunities that are unparalleled in the industry. We offer tailored rosters, site variety, wide equipment exposure across multiple industries and locations, all without having to change your shirt. Our culture program, which features both Global Pathways and Three Gears, are continually being enhanced, with the impact of those internal divisions creating meaningful experiences both on and off the tools, and we'll expand more on this later. Our goal of zero harm remains an absolute priority across our business, and we're pleased that our total recordable injury frequency rate improved, with 3.88 recordable injuries per million hours worked. During the half year, a driver fatigue management system across our global fleet was approved, adding an extra layer of safety to our 1,200 vehicles worldwide. Further, we continue to strengthen our internal safety culture by streamlining procedures, technologies and systems. We acknowledge there's always room for improvement, and we'll continue to invest accordingly to ensure our people go home safely to their loved ones. Okay. So moving on to the executive review. I'm pleased to be able to deliver these financial results. In the first half, we delivered $374.4 million in revenue, an increase of 34%, up from $280.3 million on the previous corresponding period. EBITDA was up 43%, delivering $48.5 million. NPAT closed out at $24.2 million, an increase of 38% on the first half '23. Net debt closed at $35 million -- $35.3 million, which was down 17% from 42.7% at June 2023. Lastly, we've declared a $0.038 per share dividend fully franked for the period ending 31st of December 2023. I think these results speak for themselves as we continue to deliver step-change growth period-on-period. So Slide 5 gives you an overview of our revenue profile segmented by region. Active in 6 countries, demand remains strong globally as we continue to strengthen our customer base and diversify our service offerings. Revenue in Australia was up 26%, delivering $275.1 million for the half year. The demand for our core mechanical services remained strong nationally, while growth for our industry verticals was aligned to expectations. As you can see here, the core business grew 27% whilst one of our growth drivers infrastructure maintenance delivered a 48% increase. In North America, revenue increased by 64% compared to the PCP, operating in 23 states in the U.S. and 6 provinces and territories in Canada. With headcount exceeding expectations over 90 technicians have now been mobilized to the region through our Global Pathways program. Another 60-plus technicians are expected to mobilize throughout 2024. Jumping across to our Rest of the World segment, we provided specialist services and technical support for customers in 3 countries across Asia and Oceania. Up 13%, the international opportunities are leveraged to attract and retain skilled personnel within our business. So that concludes everything for me for now, and I'd like to hand over to our CFO, Paul, to run through the financial review. Over to you, Paul.

Thanks very much, Justin, and good morning. Thanks to everyone who's taken the time to join us on the call this morning. I'll be going over the financials for the group throughout the half year. We'll start with the profit and loss. As Justin mentioned, on Slide 4, we delivered $374.4 million in revenue, up 34% versus PCP. Pleasingly, North America continued to gain momentum, delivering 64% in revenue growth. If you've been following our journey for the last year or so, you'll know by now that North America, in particular, Canada, has been a real success story in a market that is still very new to us. Also of note is that the revenue contribution from North America has increased to 25% of total group revenue. This is up from 20% in the PCP. To be able to deliver compounding growth in North America at this exceptional rate is an impressive feat for our team on the ground locally. Importantly, all of this revenue growth has been delivered with improved operating margins, with gross margins, EBITDA and NPAT margins all increasing year-on-year. To be able to deliver these operating margins in today's environment is a testament to the team's dedicated focus on efficient operational delivery. From a shareholder perspective, EPS was up 38% versus PCP. Our profit payout ratio closed at 31% of NPAT, and our total dividend payments increased by 58% versus the PCP. Some decent results there. Let's now take a look at the balance sheet on Slide 7. As you can see, our asset base primarily comprises of cash on hand, trade receivables and property, plant and equipment. We don't have contract positions or any intangibles to be concerned about, and therefore, we consider it a relatively simple balance sheet. Our trade receivables position is largely with Tier 1 [ ore ] miners and large mining contractors, and we generally don't have any abnormal credit risk profiles in the debtor book. PPE increased year-on-year as we invested in growth. We added over 100 service vehicles to our fleet during the half, and we now have over 1,200 service vehicles deployed across multiple continents. I should also note that all CapEx during the first half was gross CapEx to fund the acquisition of new service vehicles to support ongoing growth. From a leverage perspective, we continue to view our business model as CapEx light, and we closed out the half year with net leverage at around 0.36x. We are well supported by our lenders and in particular, our primary lender NAB, with strong working relationships established across all operations. The flexibility in our finance facilities allows us to respond quickly to opportunities as they are presented. And finally, on the balance sheet, we announced a few weeks ago, our plan to transition the business towards net cash in the medium term. This will allow greater flexibility and freedom to make strategic decisions around future growth. Now on to the cash flow slide. Our net cash flow from operations was $35 million. We maintained an intense focus on EBITDA-to-cash flow conversion, closing out the half year at 89%. This reflects the quality of our client base and trade receivables, as I mentioned earlier. I've already spoken about our growth CapEx for the half year, which was $19.5 million through in the cash flows for these investments. And that's about all from me. Justin, I'll hand back to you.

Great. Thanks, Paul. Some great financials there, which are supported by a solid foundation of building blocks that continue to drive our growth trajectory forward. These building blocks encompass a multidimensional approach to growth that extends beyond financial metrics. Probably the most significant growth driver behind our business today is our company's culture, which is absolutely crucial to our success as an industry leader. We are proud to be able to reward our people with exciting global opportunities and incredible lifestyle experiences. Our employees can work around the world without changing their shirts, and then come home and go on an Epic Three Gears adventure. That is unmatched in the industries that we operate in. We've now expanded the Three Gears to the East Coast of Australia, allocating dedicated resources to the region, enabling us to extend these experiences further than ever before, from camping to hiking, canyoning, quad bike riding and much more. In the second half of this year, we are planning to extend these experiences to North America, making the final stage in the global rollout of Three Gears. Some of the other building blocks for our business have evolved as we have diversified across industries and services, penetrating new addressable markets with our unique business model allows us to bolster our portfolio and build a business more resilient to macro market influences. As you can see by the ROM data in this slide, in the resources sector, we are just getting started in several large addressable markets. In the infrastructure space, we are still largely supporting customers in the mining industry. However, the opportunities beyond this sector are significant and being addressed by our team. Our primary growth drivers include the energy market, in which we have entered the industry delivering maintenance for natural gas compressor stations. This business unit is growing in line with headcount and customer base expansion, and we'll target opportunities in the upstream and midstream sectors in due course. We've also seen further success in the transport logistics industry, providing maintenance for rail and road transport. We are now operating in several states in Australia and look forward to continuing to expand our delivery. Lastly, a key building block, which involves deliberate entry into emerging markets. We are currently conducting market research into new industries to assess the suitability for the Mader business model to be deployed. We'll continue to do this, exploring opportunities that will allow us to penetrate large addressable markets, some of which are directly relevant to our existing operations and others, which are further removed. While capitalizing on emerging opportunities, we plan to leverage our proven business model to foster sustained growth and create more opportunities for our people than ever before. As a business, we continually seek to improve the diversity of our revenue profile. This is a pivotal step towards achieving our ambitious FY '26 target of $1 billion in revenue. Through the strategic enhancement of our service offerings, we are able to tap into new markets that allow us to expand the group's revenue streams. We are constantly assessing addressable markets that we can apply our culture-led business model to. Having successfully launched over 40 organic startups through our 19-year history, we have developed a tried-and-tested formula that gives us access to new opportunities, new customers and new talent pools that significantly widen the network of potential candidates that can join the Mader family. This is key to driving our future growth and ensuring long-term sustainability of our business. Our diversified operations will create compounding returns for our shareholders with our historical growth rate of around 30% year-on-year expected to continue into '24 and beyond. Moving on to our outlook for the remainder of the financial year, our geographical footprint will continue to be central to our growth strategy. We're excited to have multiple geographical beachheads to drive our expansion from and look forward to further growth as we enter new localities and diversify our commodity exposure. As you can see, North America now contributes 25% of group revenue, an increase from 20% this time last year. Our North American segment continues to perform with demand in the region remaining largely unfulfilled, presenting significant opportunities for our business. Our Australian business continues to generate a large portion of revenue for the group, at 74%. We are confident that we'll continue to deliver strong results within this area, with diversification into new industries. Our Rest of the World segment contributed 1% to the revenue across the business. While this is a modest number, we believe in the value this segment brings to our adventurous workforce as a method of attracting and retaining skilled specialists. We'll continue to actively engage in opportunities with customers as required. With low capital intensity, a unique business model and opportunities identified to accelerate growth, Mader has the confidence to reaffirm FY '24 guidance of at least $770 million in revenue and an NPAT of at least $50 million. We've delivered a 10-year compounding annual growth rate of around 30%, and we anticipate with current market conditions to maintain this. We're on our journey of evolution, an exciting time for the story of Mader. To current and prospective investors, Mader presents a robust investment opportunity with many prospects ahead. We have clear goals, a disciplined approach and the ability to recognize our strengths. We have grown a -- we have grown to a market cap of around $1.27 billion by investing in our people and successfully replicating our business model in new markets. Our goal is to become a global diversified services business, and we are well on our way to achieving that vision. On behalf of the entire Mader Group, I would like to extend our sincere gratitude to our team, our shareholders, our customers and our suppliers. Thanks, everyone, for joining us today, and we'd be pleased to take any questions you may have at this time.

Thanks very much, Justin. A few questions coming through on the line now. The first one sort of coming through from Ary from Barrenjoey, talking about how -- or a question around how exposed is Mader to the recent mine curtailment closures? And will this unwind the tightness in the labor market? What are we seeing there?

Yes. Thanks, Ary. Good question. Yes. Look, we are seeing some movement within the industry as you -- most of you would have read on the news and the like. I mean our exposure to the commodities that are sort of under fire at the moment being sort of lithium and nickel is pretty small. We've been able to easily sort of move people that have been offset, I suppose, from any movements in that industry into other works. So we haven't seen any impact to our revenue or our workflow today, Ary, at all.

John O'Higgins from Unified Capital Partners has put this one through. North America margins are over 20% in the half, and it's a pretty strong result year-on-year and half-on-half. Some context around that in North America. I guess I'll take that one on the margins question, and then I'll throw to you on that's what you're seeing in the more over there, Justin. Margins in the half were up. Those that have been following us for a while will recall that when we entered Canada a couple of years ago, we always thought that we would -- that those rates or those margins would sit at the midpoint between Australia and the U.S.A. And as that market has evolved for us over the last 2 years, we're seeing those margins edge towards the U.S.A. margins more and more, which is pleasing. And that's in part reflective of that labor market in Canada just being as tight as anything that we've seen around the world. So you've got that factor playing on margins in North America, as Canadian margins are a little bit better than we originally expected. But the other side of the coin there is in the PCP, there was start-up costs around energy and things like that so we had these, as Justin pointed out, these pilot programs or market testing around energy, for example, where they have a little bit of a drag on margins in the PCP moreso than they did in this half. So that's kind of the flow there. But what are you seeing on that North American theme, Canada, U.S.A., -- how is it all going?

Yes. Good question, John. Look, I'm just back from a trip over there, John, I got back yesterday, spent a couple of weeks sort of out the field and chatting to customers and people. And yes, I have to say I'm pretty excited about what we're seeing there and the opportunities that are ahead of us in that North American segment is -- very optimistic about what's coming up.

Yes. Question on notice from Brock from Blue Stamp, he came -- this came through yesterday. This one is around AHS or autonomous haulage systems -- general question around what are we seeing in overall demand for maintenance services at sites to implement this? Does it decrease maintenance services? Does it increase maintenance services? Does the service run more smoothly without sudden braking, accidents, et cetera? Or is it the opposite?

Yes. It's a good question, Brock, and I know a lot of people sort of talk about the reduction in maintenance due to autonomy. And there is, and for all those reasons you just said, everything is done in a much more controlled fashion. You don't have sort of operators banging things into walls and that sort of thing. But I guess the offset of that is, because they are autonomous, and they don't need to stop for lunch or toilet breaks or the like, you find the equipment actually racks up hours much quicker than what it would do in a manned or personal environment. So yes, really, I mean, in my experience, you probably don't see a whole lot of difference in the maintenance requirement. What you offset in accident and operator-related damages, you sort of always make up for in additional hours and components coming due earlier and servicing intervals being shortened up because of the additional hours those things do on a daily basis.

Another one here, what's your approach to Mader service vehicle fleet management? And how do you incentivize the appropriate treatment of your vehicles?

Yes. Largely, Brock, most of our vehicles globally are assigned to individuals, which is a great thing because these guys and girls are all technicians. They're all mechanics. They have their own vehicle with their tools in it. So just as a result of that, we see a lot of pride in those vehicles from those people. It's not a pool vehicle like you'd see on a mine site where sort of first person to the key box gets the vehicle for the day and probably, you can just imagine the appropriate care would be taken there. Our people generally assigned a vehicle per person. So that alone just drives a lot of pride through the fleet. We measure and monitor maintenance on all of our vehicles. So if we're seeing any abnormally large spend on be it tires, suspension, whatever it might be, we can identify that quickly and address with individuals, but we tend to see very little of that across our fleet.

Questions through from Andy from Bell Potter. Congrats on -- the corporate costs in the first half FY '24 was higher versus PCP. Any exclusive items or should we take this as the new run rate? And that question also came through from Joe House, also at Bell Potter. The corporate costs on the PCP were up a little bit. Share-based payments was the main driver there around expensing quarterback programs and the like. Nothing exclusive or things that should be taken out. And I don't think that growth rate will continue in corporate costs up on the PCP. I don't think that growth rate will continue into the second half. So that should stabilize as we move into the second half. Another one here, what's the breakdown by OEMs for heavy mobile machinery that you provide maintenance services on it, i.e. Cat, Komatsu, Liebherr, et cetera?

Yes, good question. I guess, I mean, it's probably very relative to the sort of market saturation by areas. Yes, we're seeing, I would say, probably 60% of the gear in most regions we work at would still be Caterpillar. And probably Komatsu being probably the next highest, with sort of high touch is Liebherrs, et cetera, making up a smaller percentage as that goes through. We're probably spread out almost as evenly as the equipment placements there. So I would say 60% Cat, maybe 20% Liebherr, and everything else will probably make up the rest with sort of drills and other ancillary equipment.

Yes. Good stuff. Second component of Andy's question, second half CapEx to be similar to the first half? So first half was 19.5%. Our full year guidance remains at $45 million. So there will be a slightly higher CapEx spend in the second half compared to the first half, but total full year CapEx will be around that -- around that $45 million mark. Some questions from Marcus Burns, at Spheria. Can you give us some idea of the new areas you mentioned you were looking for expansion and Matt Chen also chasing some guidance there. I don't think you have much to say on this on, Justin, believe it or not.

You're consistent, Marcus, I'll give you that. As we said before, a lot of that stuff, I mean, we've talked about energy, and we've talked about the power gen and marine, and some of the rail and that sort of stuff. The others are really sort of too new to be sort of talking about too much, Marcus we still call them pilots, where we're just feeling out the market and making sure the model fits, and when it becomes sort of material, we'll talk about those a bit more.

Question through from Hamish. I'll refer this on to you, Justin. You've alluded to a net cash balance sheet in the medium term. Is this more about revenue growth slowing down? Or is the business getting less capital intensive in the longer term?

Yes. Thanks, Hamish. No, look, more about the -- I mean we don't expect the growth rate of the business to slow. We sort of target that 30-plus percent compounding annual growth rate for the business, and that won't change. I guess where we see that reduction in net debt is around the expansion of the business and the verticals we're bringing into the business being a lot less capital intensive than, I guess, the traditional business where, like field service, driving services, I guess, suck up a lot of the CapEx as we grew those business units. We still expect those to grow, and we'll invest in those accordingly. But I think when you look at it at a ratio of total business, when you look at things like infrastructure maintenance, rail and some of the others are very capital light or almost noncapital at all. So as those become more mature, we'll see the ratio of requirement for CapEx per business unit will reduce. So hence, the net debt will keep coming down as the business grows, if that makes sense.

Yes. So it does. Ary, back to Ary from Barrenjoey, how should we think about EBITDA margins in Australia and North America for FY '24 plus? I think there, Ary, where we're kind of sitting now at group margins at the 13%, North America at 20%-plus. I think that's something that we will set as a benchmark to continue. And I think Australian margin is pretty much where they're going to sit. They might ebb and flow 0.1% or 0.2% from here, but I don't think we've got an ability to move them plus 2%, plus 3% into FY '24 plus. So I think stability is probably the theme around EBITDA margins moving forward. And obviously, where we can optimize them, we obviously will. Frank [indiscernible] has come through with an interesting question. He's picked up the post balance date event note on Page 6 around the ATO private buying ruling, what does all this mean? I think the easiest way to explain it would be, Frank, it's a favorable ruling in our -- in native saver. As an example, if we have one performance right that vests and is exercised today, and the share price is $6.40, we will get a tax deduction for $6.40. So the market value of the equity when it vests, that's when we get a tax deduction for and that -- as opposed to the accounting deduction, which is when they were granted way back when in 2021. So we effectively get a tax deduction for the fair market value upon vesting, which when you extrapolate that out over the rights that may or will vest, it's a positive outcome of the business, non-P&L impact. It's all the other side of that, entry goes through equity. So yes, a good thing for the business. Sorry about talking about share of those payments in ATO private buying rulings everyone, if you can wake that up, we'll get back into the other questions. This one comes through from Pedro at [ Targetable ] Capital. I'd like to know a bit more about our competitive advantages and what sets us apart from our competitors that could protect our business for many years to come.

Yes. Thanks, Pedro. Yes. Look, I guess it's pretty multi-faceted. But yes, we talked about the culture of the business and essentially what we provide our personnel as far as lifestyle opportunities, roster flexibility and the like. So that's a huge part of it. Our Three Gears culture division providing adventurous activities for people outside of work. Again, we're seeing that as something that nobody else is doing to that level in any industry that we've seen. Our Global Pathways opportunities, again, providing our -- typically a young demographic, but all of our employees, the opportunities to sort of work across the world without having to change their shirt, and we've seen probably a couple of hundred people take that opportunity up. A lot of those people have actually joined the business in order to take up those opportunities, as well. So it creates a really good feeder into the business as far as headcount growth goes. Probably the other one there, as well, on one of the earlier slides there, Pedro, is just our exposure to different commodities, different customers and different geographies. And I think when you look at that and to Marcus' point before, there's been a -- I guess, the shift in the nickel market at the moment, we're seeing a fair bit of those mines closed down and all the rest of it. Our breadth of customer base and commodity base means we can just reposition that labor into other areas of the business, which we've done with sort of zero impact to the business. So I guess when you look at that and what that does for our employees, it just makes sure that they -- they've got that security of continuity of work. We can put them to work anywhere, and they're not losing a day's pay, so to speak, whereas if they're involved in those particular mines, and they're probably off looking for a job somewhere.

Question through from James Abela at Fidelity. What's the sort of client pressure or focus on fixed-price contracts rather than cost-plus or time-based charging given the tight labor market conditions? And I guess the question is really around how are we managing the risk of inflation from a wages perspective against what we're getting from our customers. I guess the question there, probably best to reflect on our revenue profile. So half our revenue there is generally contracted. So that's under a multiyear master framework agreement. And all our contracts are hourly rate based. So we're not cost-plus or fixed price. We set a price for 12 months and then we charge that a rate for the 12 months. And then in 12 months' time, we'll have a rise and fall adjustment and the rates move up accordingly. So we have to price in an estimate of wage inflation into that. But generally, we're pretty good at doing that. The other half of the revenue book is uncontracted, which means short form agreements or rolling rosters. The work in that regard is very much ad hoc, and it means we can move rates pretty dynamically on a monthly, perhaps quarterly or half yearly basis in response to wage inflation. So the way that we've kind of structured the business is that we've got ultimate pricing control. And importantly, none of our contracts have minimum volumes of engagement commitments in them. So if a customer is asking for labor at a rate that we don't like selling it, we just don't sell the labor to that particular customer, and we move it elsewhere. And that means that, generally, our customers are pretty happy to have a chat around price increases, particularly in this market. Okay. Let's move down here to Matt Joass, Maven Funds. Here we go, can you share some inflow on the new underground division in Canada and how that's going?

Yes. Thanks, Matt. Yes, look, it's going. We're doing a lot of -- we're very much in BD phase at the moment here, Matt. We're doing -- I think there's -- I'm just trying to get how many people at work there now. They're probably a dozen people sort of in that space working in the underground division. That said, we do see it as a large opportunity. It's only been sort of fairly recent that we've sort of struck a blow in anger, so to speak, in that space. So definitely more to come there. It's not a huge sort of percentage of our revenue out of Canada yet, but we see it as a big opportunity. And obviously, a big opportunity to move some of our underground-based people in Australia out there with the Global Pathways, as well, when that -- when those work opportunities sort of arise from that.

Yes, good stuff. Martin Watson from MJW Funds Management. Reported that Australian revenue is up 26%, core revenue up 27% and infrastructure is up 48%. This means that other Australian sources must have fallen, what where they... The balance there is ancillary services. It didn't fall by much less than 26%. But because the core grew so strongly at 27%, we ended up at 26%. But yes, both ancillary, infrastructure and core all growing at sort of 25% to 27% than infrastructure at 48%, so some good growth rates there in Australia for sure. So a quick look down here Marcus again, Spheria. Margins -- will margins come down if we move into less capital-intensive areas like rail maintenance? The way that we price those services, Marcus, is we go back to NPAT. And so rail services, which is capital light, the NPAT margins are the same or very similar to, perhaps, for example, our Pilbara Field Service division, which has a lot of vehicles running around in it, almost one to every single employee. So we -- at an NPAT level, they're almost like-for-like or very, very similar. So we won't see NPAT margins change too much there.

Almost the prerequisite for entry, isn't it? If it's going to sit there at a 2% impact, Marcus, we won't, we won't bother doing it.

That's for sure. Frank, again, can you chat to the DSO change? Is it due to some client relationships ending or some broader group initiatives? Frank, the DSO income improving half-on-half was really more in line with the broader group initiative, and that's just an intense focus from our aged debt team to make sure the customers are paying on time that all of the back office kind of function around aged receivable collection is operating efficiently. And yes, it's been a good result overall. So yes, pleased to see that impact on net debt coming through. Question from Joe around workforce utilization. So as sort of that North America outlook continues to improve, as we've seen, we talked about already, does that mean that utilization will continue to improve into the second half?

We see that it will, Joe, yes, at this point in time, everything sort of in the outlook tells us that, that will be the case.

Running out of questions here. Looks like we've got one left at the moment. A question from [ Micah ]. There's been rapid headcount growth in North America, which is true. Have there been any challenges replicating the culture you have in Australia in the North American market?

Yes. Good question, [ Micah ]. Look, I mean, the U.S. is a very, I suppose, very different culturally to Australia. We see [indiscernible] something that the Australian business does without really thinking about it. That's almost our way of life. In the U.S.A., in particular, we put people on their first airplane flight, period, as an adult. So there's things like that, that are a little different. But as far as the culture goes, we invest really heavily in our leadership team and our team leaders out in the field. And we've got a lot of people that have been with that business since inception over there in the U.S. and Canada for that matter. So I guess through all of those avenues, we try and keep that culture as similar as we can, albeit there are some subtle differences, I suppose, just in the way people operate there compared to Australia. But no, we're seeing that sort of roll out quite effectively. I think as the Three Gears team heads up there into North America and engages with our team up there this year, I think that will further sort of cement the culture and across the business there as well.

Yes. Final question, just circling back to some questions on notice from Brock at Blue Stamp. What's driving the intention to reduce gearing in the balance sheet? So I guess if you go back 2.5 years ago, the business put in place a 5-year plan to get to $1 billion revenue in FY '26 and spit out a $65 million NPAT number. And when that plan was put in place, we had all the building blocks, as Justin alluded to, in place for that 5-year plan. So we knew that infrastructure maintenance was going to be repositioned into the market, and rail services was going to be repositioned into the market, and new verticals established, both energy and Canada, for example. And we knew that with those building blocks, we would get to the -- or we thought anyway that we'd get to the $1 billion revenue target by FY '26. And I guess when -- as we talk about net cash over the medium term, the internal view that we have now, when we're looking ahead to what the next 5-year strategic plan will be, so this is post-FY '26, there are obviously a lot more and different and bigger building blocks that will be required to get to the next $1 billion or the second $1 billion of annual revenue. And the leverage flexibility that we -- or sorry, the funding flexibility that we want when we are delivering on the second 5-year plan is really around the flexibility to do what we want, when we want, to not have to talk to banks as pleasant as they are to talk to, to not have to raise any external capital. We can do it all in-house, all organically. And it just gives us a significant amount of flexibility to continue our growth trajectory. So that's the intention behind the net -- the move to net cash over the medium term. That is sort of a 2- to 2.5-year time line, which lines up coincidentally with our sort of FY '26 -- the close of our 5-year plan in FY '26. That's kind of the genesis or the idea behind reducing gearing in the balance sheet over the next few years to enable us to springboard I guess, to the next second billion of revenue. I have got no further questions on the line, so we will cut it there. Thanks very much for joining us, and no doubt we'll speak to some of you today, or all in the weeks ahead. Thanks very much.

Awesome. Thanks, everyone. Appreciate it.