McMillan Shakespeare Limited (MMS) Earnings Call Transcript & Summary

Ladies and gentlemen, thank you for standing by, and welcome to the McMillan Shakespeare Limited FY '20 Results Conference Call. [Operator Instructions] Please be advised that today's conference is being recorded. I'd now like to hand the conference over to your speaker today to Mr. Mike Salisbury. Thank you. Please go ahead.

Thanks, Kevin, and good morning, everyone. Welcome to our full year results presentation for financial year '20. As Kevin said, my name is Mike Salisbury. And for the last time, I'm joined today by our Chief Financial Officer, Mark Blackburn. As you know, Mark's finishing later in the year after 9 years with McMillan Shakespeare. So I'd like to take this opportunity to thank him for his many years of hard work and commitment to the business and for his guidance and support to me over the last 6 years as CEO. I'm sure you'll hear this a lot in the reporting season, but 2020 has been and continues to be an extraordinary year, necessitating a need for resilience as well as the ability to be flexible and agile in managing the challenges that we're all dealing with. Today's results presentation, as in the past, includes a significant amount of detail, much of it in a very consistent format to prior periods. I don't intend to take you through the presentation page by page today. However, Mark and I look forward to your questions and to engaging with you all once you've had a chance to review the presentation in more detail over the coming days and weeks. The 3 key points I'd like to emphasize today are that our business is resilient despite the challenges of COVID. We've prioritized the safety and welfare of our employees and delivered on revised earnings guidance. We are strengthening the group. We've achieved our capital-light funding target. Our debt facilities have been extended, and the net cash position is $67 million. Third, we're entering a new strategic phase. We are winning new clients and growing the number of salary packages we administer. COVID is presenting opportunities to redesign our future ways of working with rapid digital transformation. We're restructuring our U.K. operations for a sustainable future. And with the acquisition, we're accelerating growth in Plan Partners. We've been encouraged by the positive operating performance across all of our business and early signs of recovery in July. Before we talk to the results, I'd like to spend just a minute or so on COVID and our response. And we've included a slide in the pack today on Page 5. And you can see from the chart that the impact was sharp and severe in April, with activity levels falling by 50% in most businesses. Our primary focus was on the health and well-being of our people and the delivery of service to our customers. It was important for us to retain all of our people, and we were able to move quickly to remote working for 100% of our staff. And of course, we were able to very quickly stand back up our workforce as the activity increased. A staff engagement survey that we conducted at the end of May showed a sustainable engagement score of 87%, some 6 points higher than at the same time last year. As you would expect, we also took proactive measures to reduce costs, access government supports and extending and strengthening the balance sheet. Importantly, we continued progress on our strategic initiatives. We accelerated our investment in digital technologies, including the transformation of our on-site distribution model to 100% off-site, a model that's delivered immediate benefits and one that we'll retain post-COVID. In all, we've managed the period extremely well. Our performance in quarter 4 showed a lot of resilience with improvement delivered through May and June and some encouraging early signs through July and August, notwithstanding the current challenges in Victoria. Now if you turn to Page 2 of the presentation, we'd like to provide some detail on our financial performance, including some specific COVID impacts, together with some early insights around first half '21, our approach to capital management and the strength of our balance sheet and our operational performance pre and during the pandemic and how the business has reengineered our activity systems for the new environment. Starting with the financial performance. We've achieved underlying net profit after tax of $69 million, which is within our guidance range announced on the 29th of June, and 22% down on the prior comparable period. The result includes a $7 million contribution from the JobKeeper subsidy, following a greater than 30% fall in revenues in April, together with a $1.6 million increase in credit loss and residual value provisions and $2.1 million in IT asset write-offs. We've included an UNPATA bridge on the following slide to show the annual movement across each of the business segments. Given the uncertainty of COVID-19, the company has determined that no final dividend will be paid with an expectation to resume dividends at the half year in February '21. In our June 29 announcement, we also provided detail in regards to a number of adjustments, including write-downs of intangibles and restructuring costs in the U.K. and in our aggregation business here in Australia. We also spoke to the change in statutory profit from the changes in how we will recognize revenue and costs incurred across our warranty business moving forward. A provision of $2 million for possible settlement of the class action has been recognized, together with all legal costs incurred up until the 30th of June. The reconciliation between UNPATA and statutory profit is provided in the appendix at Slide 33. I'll now pass to Mark to talk to our capital management performance and to present more broadly on the company's financial position.

Thanks, Mike. As our investors will be aware, MMS always extends our revolving fleet financing facilities in the second half of the financial year. This year was no different. And on Page 32 of the presentation, we provide a summary of MMS's facilities that have been extended for various periods from October next year right through to March 2024. Including the amortizing loans, the group has committed facilities of $347 million, which have been drawn to $265 million as of the 30th of June. These facilities have been priced in a competitive process at investment-grade rates based on common terms. And we have now achieved our objective of diversity of on- and off-balance sheet funding for the operating lease portfolio from Australia's major banks with over 30% of the asset management, Australia and New Zealand portfolio off-balance sheet. In relation to our balance sheet, it continues to be strong. On Slide 14, without the asset management components from the group balance sheet, net cash being cash on hand of $91.4 million less amortizing corporate debt of $24.7 million sits at $66.7 million. The fleet businesses are geared at 77%, whereas the group gearing is at 46%. Earnings before interest and tax was impacted by impairments and warranty adjustments that Mike spoke about. These adjustments saw interest cover reduce and net debt-to-EBITDA rise. Equity has reduced from $371.3 million to $228.9 million over the year. The main drivers have been returns to shareholders of $80 million from the share buyback and dividends paid of $59.6 million. Statutory profit only added $1.3 million, and a further $8 million was used to acquire the minority interest in Plan Partners. Whilst having no impact on the overall equity account, investors should note that we've undertaken a Section 258F share capital reduction of $55 million. This enables MMS to have substantial retained earnings available to pay future dividends. Notwithstanding the one-off impairments and other adjustments to earnings, all bank covenants have been met with ample headroom. Group cash flow on Page 15 was very strong. Free cash flow before the fleet increase was $103.3 million. If I exclude the benefits of delays in tax remittances offered by government as part of the COVID relief, free cash flow was still $92.6 million, which is a major reason for the strong working capital inflow that you see in this chart in relation to those tax deferrals. The majority of the adjustments for the period were added back to the net profit after tax for cash flow purposes. And the CapEx for this year fell by $4 million versus the previous corresponding period. During the year, sell-downs of fleet management assets on balance sheet exceeded acquisitions by $94.3 million. The cash flow only records receipts of $68.7 million because $25.6 million of operating lease assets were sold to a new P&A funder at year-end. The debt was recorded in other receivables, and settlement occurred in July. Our Plan Partners' 25% joint venture partner shares were acquired for $8 million, as I said before, at the 30th of June, and we now hold 100% of the shares in that business. This slide -- the slide that deals with the fast-growing Plan Partners business is on Page 7. Borrowings reduced by $63.2 million off the back of fleet management asset sell-downs. $80 million of cash was used to fund the off-market buyback. And of course, as I said before, $59.6 million was returned to shareholders by way of dividends. Closing group cash at the 30th of June stood at $91.4 million. The financial performance of the U.K. business had not met our expectations. The U.K. lending market is structurally unattractive with low margins, low returns on capital employed for the risk involved. Furthermore, the outlook for the economic growth in the U.K. over the next 3 years suggests rates of at least -- of less than 1.5% per annum. Accordingly, based on the options available, the MMS Board have chosen the hold and restructure option. Slide 8 provides details of the approach, but the key features are to continue the current operations and deliver on a cost-out program. A restructure of leadership and the U.K. corporate office functions will be completed by 31st of December 2020. Maxxia Finance in the U.K. will transition to a capital-light model and has ceased funding on balance sheet. As the book progressively runs off, capital will be repatriated. The establishment of the McMillan Shakespeare novated funding warehouse is progressing to plan. We have strong appetite from potential funders for the warehouse, and we're confident this option will enable more customers access to novated leasing products and services. Our project are on track to have the warehouse established by the second half of this financial year. As Mike already mentioned, we wrote off $3 million of previously capitalized software in FY '20 net profit after tax that became impaired as a result of new software developments. We recognize that our new IT strategy and digital projects are agile and require continual development. As a consequence, we have decided to reduce the rate at which we capitalize project teams and the external consultants on those initiatives. Long-term development of core operating systems will be still capitalized and amortized over 5 years. An example of this will be the capitalization of the novated funding warehouse. But as a result of this change, in FY '21, CapEx will reduce from $14 million last year to $9 million this year, and OpEx will increase by $3.8 million. I'll now hand back to Mike who will discuss the operating highlights for each of the segments.

Thanks, Mark. And turning to the specific segments and starting with GRS. We've had very solid performance with 5.2% growth in salary packaging customers to 361,000. And we've included a split by industry segment in the pack, and you'll be able to see that around 87% of our customers work in either government or the health sector. Despite COVID, business development activity remained high, and we were successful in winning 19 new contracts during the fourth quarter. Novated numbers at 71,800 were also up, around 5.5% year-on-year, but clearly impacted by the 23% drop in new sales in the last quarter. Net profit after tax at $60.9 million includes the JobKeeper subsidy of approximately $6 million, the additional contribution of $2.7 million from Plan Partners and the write-off of software assets in the year of $2.1 million. We've included a novated leasing performance slide on Page 20 that shows from the low in April, that we've seen an improvement each month with the June sales around 92% of the prior comparable period. You'll also see that we've included some detail in respect to average yields, down around 10% for quarter 4 on the same time last year, in part due to the reduced insurance penetrations and the change in funding mix that we spoke to at the half, but also impacted by the higher percentage of existing leases that were refinanced in the period. As you can see from the commentary on the slide, the improvements in sales through May and June has continued into the first quarter with a stronger first 7 weeks. And I'm sure you'd be interested in the increased restrictions in Victoria. And on that, I'll just make the following comments that Victoria makes up around 11% of our total novated leasing activity. And as expected, we've seen a softening of new inquiries over the last 2 weeks. However, the team have done a great job in being able to continue the delivery of new cars for our customers in a COVID-safe way, and we continue to see the increased inquiry levels across all other states. In the U.K., revenues in the half were particularly impacted by the extensive lockdowns, the need to support customers through repayment holidays and lease extensions and an inability to dispose of assets at end of lease, culminating in the noncash impairment of $15 million that I spoke to earlier. Given the additional challenges of COVID, the outcome of the strategic review, as Mark's already mentioned, was determined to hold and restructure the business. And we've provided some detail on Slide 8. Between now and the 31st of December, we will transition the leadership structure and reduce head office costs. We made the decision to cease lending on balance sheet through Maxxia Finance and will progressively repatriate the capital back to Australia. And then the focus now is on executing on the restructure and returning the broker and asset management businesses to pre-COVID activity levels. And post the easing of restrictions, it's been pleasing to see an improved operating performance in June and that, that increased activity has continued into the new financial year. In the RFS business, it's a very similar situation with both our aggregation and warranty businesses both closely tied to the performance of the general car market. The overall softer year-on-year performance, and in particular the 25% fall in the fourth quarter, has had a significant impact on our revenue and profits. In aggregation, increased competition from new entrants has also reduced margins. The combination of lower originations and softer margins necessitated the cash impairment of $35 million. Both businesses have seen an improvement in activity since May with current performance on par with the same time last year. In Asset Management in Australia and New Zealand, it's been a challenging past few months for the team. Whilst we've clearly had a fall in revenue due to the number of hardship requests and reduced remarketing opportunities, the team has done a great job in reducing the impact of the disruption by renegotiating contract extensions and minimizing the number of early returns. And whilst we believe the work we've done holds us in a reasonable position, we felt it prudent to increase our provisioning for both residual values and credit losses by $1.2 million and $400,000, respectively. It was pleasing to have added a second P&A funder to our Asset Management panel during the second half. And of course, we achieved our target of moving $100 million off-balance sheet by 30th June, an objective we set ourselves at the end of FY '18. Now to a business that's activity levels, service delivery and performance were generally unaffected by COVID, and that's Plan Partners. The business continues to go from strength to strength and reflects the emphasis the business has placed on building scale and creating a market-leading value proposition. Plans under administration is growing by $400 million to $669 million as at 30 June, and importantly, the performance of the NDIA throughout the pandemic has been supportive and provided a solid base for growth. You can see that the number of plans issued with plan management continues to grow every quarter, now in excess of 40% for the current period. And importantly, agency managed continues to reduce, now down to around 25%, which is a strong indication of the future success of the National Disability Insurance Scheme. As I mentioned earlier, Plan Partners' contribution to group profit was $2.7 million based on our 75% shareholding, which I'm pleased to say, has now increased to 100% post the acquisition of DSA's minority shareholding at 30 June 2020, which is a significant milestone in Plan Partners' short history, and we are well positioned for customer and earnings growth in FY '21. In summary, FY '20 has been a quite remarkable year, not one any of us would have anticipated. Whilst challenging in every respect, our performance has shown how resilient our people are and how committed they are to our customers. We made decisions quickly that were based on the long-term sustainability of our organization. We retained all of our people, and we maintained the strength of our balance sheet. The core business continues to perform strongly through the defensive nature of our salary packaging business, a faster-than-anticipated recovery in novated leasing sales and accelerating growth in Plan Partners. In FY '21, we're committed to streamlining the business, with the restructuring of the U.K. a priority. We've had a strong start to the new financial year with positive performances across all segments. And importantly, COVID has created an opportunity to redesign our future way of work. We've made rapid changes across the business to accommodate 100% remote and flexible working and accelerated our investment in digital to improve productivity and support growth opportunities. We've made a commitment to take the learnings from this experience and to leverage them to create an even better business. I'll now hand back to Kevin for any questions.

[Operator Instructions] Our first question in the queue comes from Tim Lawson from Macquarie.

Just 3 quick questions. Just on the capital repatriation from the U.K., I mean, how much are you expecting and how much will remain and what sort of time frame are we talking about?

Tim, there's probably around about $30 million to $40 million that can be repatriated over time. It depends on a number of different things. But out of the book itself, we're funded at around about 80% debt, 20% equity. So there's a number of different amounts that come back, and it just depends on the time frame. But I would have said that, over the next 12 months, there'd be another at least $10 million coming back.

Okay. And then second question, just on the warehouse you're talking about, I think that's second half '21. Can you just talk about the earnings impact from that in this financial year and what you think it might be sort of on an annual basis as you roll out that sort of upfront distribution commission into a warehouse earnings structure?

Yes. Look, Tim, it's hard to estimate. I think we'll probably get better visibility of it at the half simply because we'll have a better appreciation of the deals we're proposing to put in there and the quantity of them. I'd suggest to you that it's not going to have a huge earnings impact this year. The impact will be in '22. The reason for that will be that it will just take us a little bit of time, I think, to get it working exactly how we want and to make sure that we're optimizing the use of the warehouse. So I don't expect that there's going to be a huge impact on this year. But you're quite right, the earnings rate on the warehouse is completely different. The revenue will be amortized over the life of the lease whereas, as you know, currently, the revenue is all recognized upfront.

Okay. And in your 3 points, you're talking about extra $3.8 million OpEx. Obviously, you've called out the CapEx as well. Just trying to think about how the spending on the warehouse is in that number or is some of the spending going to be capitalized? I mean how does that work?

Okay. So what we're calling out there really is that we wrote off $3 million in '20 of capitalized software that was essentially became superseded by additional work within our digital program. So it didn't have value anymore, so we wrote it off. So we really looked at next year's capital program, and we're saying that any digital-related projects or those that aren't going to have longevity, we'll expense. Those projects that have long-term benefits, core systems, the warehouse will be one of those, we'll capitalize as normal and amortize over 5 years. So we called out our CapEx for this year. And the warehouse is fair and square in that CapEx because all of the warehouse will be capitalized. But all of the digital spend this year where we're really pushing forward with our digital program and accelerating that and enhancing that, that will all be written off. So that's the $3.8 million.

Tim, can I just elaborate on the warehouse, particularly for those who may not have been a part of previous conversations, that it's not our intent to replace our existing funding panel with an on-balance sheet funding model. But the warehouse is to supplement the existing finance panel. So when we talk to the impact on revenue recognition, clearly, we're not moving the upfront origination revenue for novated lease completely to a warehouse model. It is really to deal with those customers who are warranted of receiving finance approval that under the current regime have struggled to be able to get that through traditional funding. So it's to supplement the model, not to replace the model.

So the earnings under a warehouse model, obviously, you take some credit risk and you put some more of your own capital, but they would be higher than under the third-party funded model. So would there, at some point, be an option to supplement some of that third party? I mean you're initially talking about those that get effectively rejected. But has that -- as you've established and invested in that warehouse structure, wouldn't the returns -- wouldn't it make sense from the returns to replace some of that third-party funding into that warehouse?

It creates us the opportunity to consider doing that, Tim, absolutely. But our driving force in FY '21 is around being able to pick up the percentage of customers who historically would have been able to receive finance for a novation who currently aren't able to. So I just want to make that clear that when you talk about impact in '21, as Mark alluded to, will be very, very minimal.

Okay. So I mean maybe how many were rejected? What sort of rejection rates are we at, at the moment?

The percentages have dropped by about 5% over the last 18 months.

Our next telephone question is from Paul Buys from Crédit Suisse.

First question for me is just on novated leases. And looking at the yield on Slide 20, you show a useful progression from a month-on-month basis in terms of both sales and yield. And you mentioned that you entered the period, obviously, with, I guess, some of the residual impacts of other moving parts and then it was impacted by COVID as well. My question is just trying to understand, as you look forward into FY '21 and try and kind of split those 2 things out, in terms of other impacts experienced prior to COVID, do you feel they are now on the base? Or is there still some residual impact to flow through, for example, in terms of change of funding mix as you highlighted last year?

No, I think the funding mix is in there. And if anything, over the next 12 months, we should see that start to improve. Just with -- the only other consideration would be just around the changes in insurance program, Paul. The potential for changes in warranty, particularly around the way that -- or the age of the asset that it can be sold to, yes, there might be a very small change in earnings just from that single product, but it would be very minimal in regards to impact on yield.

Understood. And then kind of, I guess, moving on to the COVID impact. So the sales component evidently recovered really strongly, as you've already articulated, sort of from that April trough through May and June. But it looks like the yield impact has kind of stayed more or less the same. So how do you see that playing out? And at what stage do you get to when the yield recovery comes through as well from a COVID recovery?

And so clearly, with the growth in new cars sold through the end of financial year deals that flowed into July, we're seeing more new cars in the mix in July and August. I think it will take a few more months of recovery for us to see those percentage points returning back to where they were in pre-COVID levels for the amount of refinance deals but definitely improvements in the amount of new assets so far in the first 7 weeks.

Okay. Just based on a conference call yesterday, it sounded like there are some elevated levels of competition in -- on the novated leasing side from a rate perspective. Just curious to see if you -- if McMillan Shakespeare observed that or you haven't seen that as much?

No, we haven't seen it, Paul. I mean we're on panels with a number of our large contracts. Those rates are fixed against our competitors. No would be my short answer.

Okay. One last one on the novated lease side and then one more after that. So just to understand, I guess, your earlier comments in terms of the continued improvement into July and August, I just want to kind of get a read there. Presumably, that implies you had an improving trajectory through to June, and you're saying that trajectory has continued to improve. It's not like you're holding June levels, you're actually continuing to improve in July and August. That was just kind of my read on that.

Correct. So our July number is actually above July last year. So we're actually ahead of pcp. But I do want to put the disclaimer around that number to say that it's 1 month, and none of us have experienced a pandemic before and understand how pent-up desire might flow through into the future months. So the July number is stronger than July '19, but there's clearly some pent-up demand that flowed through into that month from the last quarter. So it's a very encouraging start, but we would love to see more months like July before we are prepared to say that we're ahead of pcp.

Sorry, Mike, when you say that number, are we talking about novated lease volumes or revenue or overall?

Novated lease volumes, Paul.

Novated lease. Got it. Okay. And then just the last one from me. It just seemed that -- I mean you got some useful divisional commentary across all your divisions. It seemed that there's kind of a little bit less, I don't know, certainty, maybe just my read, on asset management in Australia and New Zealand in the outlook. I guess, just kind of keen to -- you gave some commentary, for example, in the U.K., where there's sort of quarter 1 activity improving, and obviously, we've got the read on novated lease. Just keen to get in that kind of context where you see assets management evolving in the near term in Australia?

Yes. Thanks for the opportunity to restate or to correct that because that's an improvement that we've seen in the U.K. around customers restarting repayments and reinstating prior contract terms. It's definitely happening here in Australia as well. And the ability to get assets and sell them at end of lease is certainly -- is back in full flow. So obviously, slight hiccup in Victoria over the last 2 weeks but outside of that, we've been able to access assets and regenerate, refinance revenues, which were obviously much more constrained during the first 3 months of COVID. So the Australian and New Zealand guys as well as the U.K. asset management team have done a really, really good job in managing our customers and helping our customers through a difficult time. We've protected the business by not having a whole lot of assets returns by our clients or extended leases, and they've managed those relationships extremely well. We've just taken a conservative approach that -- and particularly in our New Zealand business where there's more SME customers that there is still plenty of uncertainty around COVID. So it's appropriate to increase our provisions to make sure that we're well protected for any adverse changes in the future. But the business is definitely improving. We're writing new assets again, which we put on hold during the last quarter in regards to protecting cash flow. So we're certainly back in business, Paul, and the guys are doing a terrific job. So thanks for the opportunity to restate that.

[Operator Instructions] Our next telephone question is from Scott Hudson from MST Marquee.

Just back on the warehouse. Can I get a sense of what sort of size of warehouse you're looking for in terms of sort of a dollar value?

Look, the first instance, as Mike said, Scott, is to make sure that we've got the ability to fund the deals that are being rejected right now. And then as Mike also confirmed that it gives us the flexibility to look at deals where we see better margin in the warehouse versus third parties. But this is a strategic initiative rather than sort of a replacement of our existing facilities. We want to make sure that we've got the ability to increase the size of the warehouse should we need to or we find it incredibly profitable, then we look at that as well. But in the first instance, we just want to get the warehouse up and available to this, to 5% of our customers that currently can't get a novated lease. So I'm a little reluctant to sort of say what the size is because it's going to depend on our needs because we know that there's lots of appetite out there to participate in funding the warehouse. That's not an issue for us. It's just a case of making sure that we have it available in the second half of this year.

That's great. In terms of the -- I guess the impact of lease extensions through the fourth quarter, what sort of duration are those lease extensions generally done through?

In asset management, Scott, sorry?

In terms of the lease extensions in the novated business, what…

Usually, 12 months. It's unusual if there would be any -- a period less than that. So typically, there are a 12-month extension. So it gives you the opportunity to talk to those customers again in 10 months' time.

Yes. Okay. Got it. And in terms of the -- sorry, in terms of the funding mix, you talked about sort of maybe seeing an improvement in yields sort of going forward. So has the financier sort of panel been renegotiated to a large extent in relation to volume benefits?

Yes. It's well on its way, Scott. So it's not complete, but the transition of volumes is largely done. So we will start to see -- as that builds out over the next few months that we should start seeing things normalize through the end of the first half and into the second half.

And lastly, just on Plan Partners. So I guess incremental $2.7 million UNPATA contribution. Can you give us a sense of sort of what the growth trajectory is like in that business from a sort of a revenue perspective?

Well, in short, no. We've been giving the market some indication of the growth trajectory through the amount of funds that we're managing on behalf of their customers. You can see it grew by $400 million in the year. But what I would say about our views of Plan Partners, which supports our acquisition of the minority shareholding, is that we're very encouraged by the opportunity that Plan Partners is for our organization and the investments that we've made in the development of the business and in the value proposition to our customers into the supply chain gives us a great deal of confidence around its ability to continue to grow. And certainly, it's early days, so growth expectations are not dissimilar to what we've been able to deliver in recent time.

And is the strategy that to just grow that business organically? Or are you looking to sort of nonorganic opportunities as well?

No. We're more than happy to speak to other plan managers in the sector, Scott. It's -- yes, there's very few significant providers of services in the market. It's very much a cottage industry. There's around 900 Plan Managers in the country registered, many, many of them very small, less than 100 customers. So we are and have been able to take over and look after some of their customers as they've made decisions not to scale their businesses. And if there are opportunities to acquire in that space, we're very open to that prospect.

[Operator Instructions] There are no further questions at this time. I'd like to hand the call back to speakers for closing remarks. Please continue.

Thanks, Kevin. And we do appreciate it's a very busy time for everyone. So just in closing, I'd just like to restate how resilient the organization has been. Our focus is on leveraging from the learnings, from the experience, to build an even better organization, and we're very encouraged by the positive start to the new financial year. I'm very proud of the organization and the decisions we've made to support our people in serving our customers and the way that the business has been able to flex to meet the challenges. I'm very appreciative of the hard work and commitment shown by all our people. And again, I'd like to acknowledge Mark's contribution to the organization over the last 9 years. And finally, thanks to all of you on the call for your time and interest in McMillan Shakespeare. It's much appreciated. And we look forward to catching up with many of you over the coming days. Thanks very much.

Ladies and gentlemen, that does conclude the call for today. Thank you for all participating. You may all disconnect. Goodbye.