NAOS Emerging Opportunities Company Limited (NCC) Earnings Call Transcript & Summary

Good morning. My name is Sebastian Evans, I'm the Chief Investment Officer of NAOS Asset Management. This morning, most of you would realize, we're running a webinar essentially on what was Q2 of FY '23, the new calendar year we've entered, so it's a little bit backward-looking. But essentially, we're just going to provide a bit of an overview on the performance of the funds for the second quarter of the financial year. I'll give a little bit of, I suppose, market analysis. We're lucky enough to have the management team from BSA here, who I suppose the company we chose to present this webinar. They'll be giving you a little bit of an update on their business and outlook and where they're hopefully trying to get that business to go. And then we'll finish with Rob, who'll run through a number of the investments in more detail than I will, and I'll provide a little bit of an outlook and run through Q&A. For those of you who have been on these calls before, you will know that we tend to have quite a lengthy question-and-answer session. We do answer all questions. So if you do want to ask a question, there's a chat box in the bottom right corner. Feel free to type in your question, and I'll endeavor to go through as many of those as I can. If you're finding that a little bit too difficult, feel free to send an e-mail to inquiries@naos.com.au, and someone in the team will put that in the chat box for you, and I'll touch base on that at the end of the presentation. It will be maybe a slightly longer presentation, so I'm going to try and skip through some of the front slides as fast as I can, so next slide, please. Disclaimer, I always speak about it. Many of you would know by now that don't treat any of these stock recommendations or commentary as gospel. Do your own homework. It is obviously not tailored to your own personal needs. It's not advised in any way, shape or form. So please remember that and seek your own financial advice. NAOS Asset Management, obviously, who we are. Believe it or not, we've been here now for, I think, 16 years. It seems like an awful long time. We run 3 listed investment companies and 1 private investment fund. We focus on -- I suppose the main reason for NAOS and what it does is we really focus on investing in emerging companies in a concentrated format. We focus on what we consider we call industrial companies. We kind of fund their work. But first quality emerging companies is what we look for, as well as private companies from time to time. And we're very much aligned with all of our shareholders. So NAOS is majority owned by staff, and some of the largest [indiscernible] investors in all the leagues, staff and directors of NAOS. The team, I'm not going to go through it at this time, but if you do want to obviously do your own research, feel free to go through that slide in your own time. And just I suppose our investment beliefs and differentiation. Fund managers in general have probably been under a lot of pressure over the last few years in what's been obviously a very challenging time to be a highly active fund manager. What we believe sets us apart is we keep our investment philosophy quite simple. We're focused on profitable businesses that have strong alignment generally from founders or management. We have a very long-term focus, so we own an investment or a stock for 5 to even 10 years in some cases. And we are big believers of quality over quantity. So in the case of all of our funds, we have about 10 to 12 investments in each fund. And we are relatively active. We like to liaise with management, the Board, people below that with high executive level to get a really good understanding of the business. And in some sort of more rarer cases, we will actually take Board representation or seek to put a quality independent Board member on their respective Boards. So reasons not to invest with NAOS, probably a few easy ones here. But as many of you would know, we run a very concentrated portfolio, which means it's obviously very volatile. Our returns can be significantly different to the market, both in the short term and the long term. We do have a very long-term investment philosophy. So you will see our investments don't change an awful lot. We focus on smaller investments. None of our investments even today are not in the Small Ords. So even though we're benchmarked against the Small Ords, none of them form any part of that index. We have a focus on profitable companies and industrial-type businesses. We are very ESG aware. So we want to see our businesses make a positive impact for their respective stakeholders. And because we are a LIC, as many of you would know, some can trade in shares or premium in the case of one of our LICs, and some can trade at a significant discount. I can dive into that into the Q&A section later on. From a performance perspective, unfortunately, it's been quite a trying time, I think, both for the NAOS funds in the second quarter and more generally into FY '23. It probably hasn't started as we would have hoped. I think it was, to be frank, really driven by the fact that, I think, as you've seen interest rates rise, without a doubt, the small end of the market is the one that has come under significant pressure. And as I said in my recent letter or quarterly investment update, higher interest rates has probably really affected industrial emerging companies more than anything else. And I think the statistics do show that. But we very much believe that our investee companies in our portfolios do have very high-quality companies, are made up of high-quality companies. They're cash flow generative, they're dividend paying, and they are growing. So as we move through the cycle, we very much believe that the share prices will be a way to, I suppose, reflect what we believe is fair value for many of these investments. And just really keeping me on the clock here, so keep flying. Just to give you an idea of -- we get this question a lot. I know many of our investors, our 7,500 investors we've got, are very much focused on our dividends and our ability to pay dividends. On this slide, I just really want to give you some transparency around this profile further. You'll see there's age of LIC here, it tells you what the dividend reserve is. So in the case of NCC, our reserve is $0.415 to date. We've paid $0.65 to date. If you were to frank that up, we've actually paid $0.90. So we've almost paid the entire IPO proceeds out from a dollar perspective, or from a per share perspective. And what this doesn't include though is franking. And I do want to make that crystal clear that for franking credits, we rely on our ability to pay tax. We can only pay tax if we perform, and we don't have any carryforward tax losses, because it's more beneficial to use our tax losses for shareholders to not pay tax when we don't have to. And we also rely on the franked income we receive from our investee companies. So ultimately, that can mean whether or not we can frank the dividend 100%, or in the case of NCC, last dividend was 50% franked. But I think it's what we try to pay to all of our shareholders and what our mission has been for the last 10 years is to maintain a stream of growing dividends franked to the maximum extent possible, and that has not changed. The performance here probably really makes it extremely transparent. As you can see, Q2 was not our finest quarter relative to the benchmark. As I said previously, we're very much affected by the fact that, yes, we are in smaller businesses. All of our businesses are probably more industrial in nature. We do have a few more technology businesses, though. And the benchmark was really driven by what we saw was more liquid businesses rose, but also resources. Resources have very much driven our index higher. In a high inflation environment, people are obviously flocking to resources because they view them as a hedge against inflation. And obviously, in the short term, that's affected our relative performance. On a 3-year metric though, we still managed to outperform the benchmark across 2 of the 3 LICs, and then from an inception perspective, we've managed to outperform the benchmark more materially across 2 of them. And more recently, NAC has just unfortunately dropped under, but we feel confident we can get that back sooner rather than later. A lot of people generally ask what we do. And I think you'll see it from this [indiscernible] cycle will give you an understanding of, I suppose, the relationship we have and the access we have with some of the management teams in our respective investee companies. We spend a lot of time on the team, especially spend a lot of time on speaking to suppliers, competitors, industry experts. Earlier in the week -- last week, we were out visiting a number of ARB stores to give you an idea of how that business is traveling, what their competitors are doing. I suppose how the demand environment for those ARB products, I suppose, is unfolding. For those of you who don't know ARB, they're makers of bull bars, light, suspension for four-wheel drive. That's a lot of the work we do. We don't spend time here probably crunching spreadsheets. It's really a lot more qualitative work. [indiscernible] we had a phone call with a couple of members of the Gentrack Board to give you an idea. So we do have a lot of in-depth analysis and access that we feel gives us a real competitive advantage to make, I suppose, quality long-term decisions for our shareholders. That's just the Director Alignment. Just looks at how many shares we own across each of the LICs, because we're very much big believers in alignment across all of our LICs. So we're aligned with all ordinary shareholders. And then finally, just the case of concentrated investing. You can see here, this is a paper that was done, really looks at I suppose people owning too many investments. And I suppose if you own too many investments, you get in there a return that is exactly like that of the index. We're very much a believer that there's an optimally diversified portfolio, which is that 10 to 20 stock level and gives you, I suppose, the optimum trade-off between risk versus return, which is generally where we find our investment portfolios from the number of stock perspective. So looking I suppose more at the market, before I pass on to the gents at BSA, I thought this was quite an interesting chart. I must admit I did find ourself another highly regarded fund manager, but I think it really sets the theme very effectively. Clearly, in 12 months, a lot has changed for the equity markets and the economy in general. You can see the cash rate in Australia alone has increased by a whole 3%, the fastest on record in history. Bond yields have obviously jumped by similar amounts. Inflation, as many of you would know, has jumped significantly. The dollars remain relatively stable, probably hasn't weakened maybe as much as some would have expected. And what you can see is the P/E of the ASX 200 has fallen significantly. So that's telling you that as interest rates have increased, as I said in my last call, money is no longer free. There is now a proper cost of capital, there are alternatives for people to invest in, in a risk-free way. And ultimately, that means equities are probably not as in demand as what they were 12 months ago, hence share prices have fallen. The only caveat I would say, when you look at that forward P/E, is the fact that earnings may very well be wrong. And I did say that in my letter before that fund managers and probably equity analysts tend to be very optimistic at the start of the financial year and calendar year, and then as the year goes on, reality sets in and earnings tend to finish lower than where many expected 12 months prior. Next slide, please. So I suppose a bit of summary from me. I think even a lot has probably already changed in a month, but from a Q2 perspective, in our view, expectations were very low. And I think a lot of that was driven -- it almost felt like we finished on a low in December, driven by the fact that interest rates had increased so sharply, there were very few signs of inflation falling, and therefore, many people expected interest rates to remain elevated and even elevated at a higher level than where many expected 6 months ago. As I said previously, that really places a premium on liquid stocks. And you've seen that with the likes of, I think, in the AFR on the weekend there was an article on what you should think about when you buy CBA shares at $110. That really highlights how liquid dividend paying stocks are very much in high demand. The illiquid small-cap stocks like what we invest in, there's a huge dispersion, and the dispersion is probably at a significant level where we are today. But we're very much in the camp that, that won't remain the way ever. What we have seen though is that more recently, interest rate rises are starting to have a desired effect. We'll go through a few charts that show that inflation is slowing. The trick is, is it lowing from 7 to 5, or is it slowing from 7 to 2 or 3. And frankly, I don't think anyone knows. What we did see at the end of the calendar year though is the corporate profits were under pressure, and there were a number of examples to show that. So Domain Group downgraded because the number of real estate listings had reduced sharply because people aren't willing to sell their house in a low demand environment. Symbio, which was one of our investee companies many years ago, had a significant downgrade because clients were returning services that they didn't use because those clients were reducing costs because they were under pressure themselves. City Chic Collective, which is a retailer that many fund managers owned over the years. To put in perspective, they were $7 probably 2 years ago. Today, you can buy those shares at $0.60, to give you an idea of how under pressure that business has been. And then finally, MAAS Group, which was another market darling, I suppose. They've seen probably just lead times slow out for their new homes that they sell in regional New South Wales. So again, showing you that the consumer is finding it hard to get credit. The fact that buyer hard to get credit means and their ability to acquire a new house is under pressure, so it takes them longer, I suppose to get that credit and to get that financing. And therefore, MAAS Group from an earnings perspective is under pressure, because they're not selling as many houses in the same period of time. And more recently, you've seen a great example -- that's alright, you can leave it, that's fine. Yes, another example yesterday from the reporting season is Nick Scali, probably the whole one of the highest quality retailers in the market. Those shares finished down 15%, not so much because of results, but more because of some of the quantitative guidance and qualitative comments that they made, saying that prices in January were down 10% to 20%. They have seen their order book probably fall at a faster rate than they had expected, and that's driven by the fact that Nick Scali is so efficient in getting, obviously, their furniture out in the market, but also by cancelation rates. They are seeing more cancellation rates than what they expected. And therefore, some of the earnings revisions people are pulling through is negative 20%. So really shows you quite a dynamic environment that we are in. This chart here just looks at a visual representation of what I've been trying to say. And that is the fact that if you look at the total return analysis of, I suppose, a select group of stocks or indices in this case, you can see that the ASX 100 has outperformed its smaller counterparts by a significant margin. So we tend to invest in small industrial-type businesses, which is that dark blue line, as you can see there. And then you can see, the Emerging Companies index is even smaller again compared to the Small Ords, and those 2 have underperformed their larger counterparts by a significant margin, in their case almost probably 20%. And that really does highlight that, as always, in all bear markets, the smaller one is always the one under pressure, but it's also the one that comes back harder as well when times change. This is just touching on probably more of that inflationary environment, and probably quite topical. This really just looks in employment. And you can see here that, obviously, the employment to population ratio has obviously almost never been higher, and the underutilization rate has almost never been lower. And obviously, what you would have seen in the U.S., I think it was on Friday night, that blew everyone away, that was the unemployment rate has never been lower, and that's probably really making the market very, I suppose, jumpy on where inflation is, because even though interest rates have increased, it feels like everyone is still in a job and is very much employed. So what we have seen, and I'm a big believer in this, is the unemployment rate always lags. We've seen a number of big businesses start to lay people off. We've seen Facebook, Amazon, there's a myriad of them. To give you an example, a friend of mine who works for a global toy manufacturer, I was speaking to him on the weekend, and he said that their Australian operations and globally, they're laying off 5% of their workforce. You're seeing it everywhere. Obviously, those effects and those job losses won't have an effect on these statistics, and necessarily won't have an effect on any statistics for 6 months, so I'm very much in the count that interest rate rises are having an effect. And if anything, I think interest rates are going to go too high for where we probably are or where we need them to be in regard to how fragile this economy may actually be. So this slide is probably a little bit revision there now because the equity markets really jumped out of the gate in January, and it really just is talking about are things as bad as they seem. Equity markets and equity investors are classics when it comes to overshooting to the upside and undershooting to the downside as well. And in my view, this is quite an interesting slowdown because it's one of the very few that's been purely engineered by the Reserve Bank. We are slowing down because the reserve bank is increasing interest rates at a record-setting pace. So there's nothing fundamentally wrong with the economy that's being purely driven by the RBA. What that means though is that there's meaningful scope for interest rate reductions when they are required or if they're ever required. So therefore, you do have the ability to sort of prop up the economy when the time comes. Corporate balance sheets have probably never been stronger. So I think if you look at our portfolio, we look at it obviously in great detail once a week because it's just the stock that we own. All of them are sitting on really healthy balance sheets. They're profitable, minimal net debt, they have lots of flexibility to pull levers to ensure they can continue to grow and reinvest in their business. And something that I don't think a lot of people are talking about, but when I started, this was very much the case, that there will be more focus on dividends. When interest rates were low, everyone was looking for growth. Interest rates are now much higher than where they were, so people are looking for an alternative to the cash [indiscernible] I can get a TD at 4%. For me to invest in the stock, I want some growth, but I also want some income. So what is the fully franked dividend. So I am a big believer that total return will now be derived from dividend and capital growth, not just purely capital growth, as long as interest rates stay where they are. And us as a team, we're always looking for structural trends, and a lot of these haven't changed. So the one is new housing availability. Every time you pick up the [indiscernible] pay groups, property prices are down 10% or 20%, but everyone forgets to tell you that it was 10% off a record high, to give it some perspective. And the fact is that if you're looking to rent a place, it is very competitive. Rental vacancies, they are almost at record lows, and we don't see that changing, especially as immigration ramps up. Infrastructure spending, if you just look in Sydney, there's a lot of projects that still need to be built. The train line out to the new Western Sydney Airport, the Harbor Tunnel, the Western Sydney Harbor Tunnel, the Western Sydney Airport. There is a lot of money that will still be spent in regards to infrastructure just in this state, let alone across Australia. The Asian demographic is obviously fairly obvious. Then the shift to renewable energy. Everyone talks about solar panels and wind turbines. But even just the analogy we use is they have to be connected to the network, and that alone is billions and billions and billions of dollars' worth of work. So we think, yes, in the short term, there are some macro headwinds, but from a long-term perspective, there are some fantastic industry dynamics that will be very favorable for a number of our investments. And then just to finish off before I pass on to BSA, there's just a few more charts we spoke about before, but you can see here that net overseas migration has jumped significantly, and we also expect it to jump again, especially post some of those COVID rules being relaxed in China, which obviously has quite a big effect for our property market and education market and things like that. And then just touching on that inflation point, and this was brought up in the Nick Scali call, is that if you look at logistics costs globally, yes, they obviously rose significantly, but they've come back an awful way. They're almost back to where they started pre-COVID. And what that ultimately means is a lower price for consumers. Companies won't be able to maintain this margin. They won't be able to keep the savings. They will have to pass them on to consumers, and ultimately, what that means is deflationary outcomes in regards to certain products that will require a lot of logistics. In the case of Mexico, it will be furniture as most of that is made in China. And then just finally, an interesting, I suppose, scenario analysis that was done internally here for an article that we did on Livewire. And we get this question a lot, and obviously, we put a lot of pressure on ourselves that we generally are always fully invested. We don't profess to be macro experts. We don't want to pick the market top or bottom. We want to invest in quality businesses with sound balance sheets that tick a lot of the boxes that we look for. But a lot of this analysis looks that even if you've made some of the worst timing decisions from an equity market perspective, so if you put money in just before Black Monday or just before the Dot.com Bubble, or the GFC or COVID-19, if you invested the same amount across all 4 markets, I suppose, peaks, you still derived a return of 7.9% per annum before the effect of any franking credit, or in this case, the S&P500 franking credit, you still derived a 7.9% per annum return, which we would argue is a fair return and probably better than a lot of people expected. So in theory, as an investor, you should be able to add more value than that. So we view that as a base. So it really just shows you that market timing is maybe not as important as what people think, especially if you remain fully invested at all times and invest in, hopefully, businesses that can compound capital at a greater rate than others. And just I'll pass on to Arno and Richard Bartley here. But just to provide you with some perspective, as I'm sure many of you would probably know BSA by now. BSA has probably been a little bit of a whirlwind for NAOS. Three years ago, it probably was actually our biggest contributor to performance of our funds, which is a great place to be. And then obviously, over the past few years, we've run into a few issues. There were some poor decisions probably been made by previous management and Board. But to the credit of Arno and Richard and some of the other new Board members, this business has really found itself in a much more sustainable position, hopefully, a profitable position and cash flow generative position. And I really want to say that these 2 especially put in an awful lot of hard work over the past 6 to 12 months in a situation that probably could have been a lot worse than many people realize. So with that, I just want to thank Arno and Richard for participating in this call, and then I'll pass on to both of you now, and I'll be back after Rob.

All right. Thanks, Seb, and thanks for giving all interest of the business. So good morning, everyone, and thanks for having me and giving me the opportunity to talk to you about BSA. My name is Arno Becker, I'm the CFO and interim CEO of BSA Limited. The timing of the update is quite perfect because we literally just completed a significant transaction where we divested 50% of the business in terms of revenue, which is also a key setting stone in our strategy, which I'll expand on shortly. With that in mind, please note that some of the slides need to be updated to reflect this. And to make the most of today, I'll be joined by Richard Bartley, who is the Executive General Manager of the Communications business, which we'll refer to as continuing operations. The format we'll take is I'll give an overview of the company, what we do and status of our current strategy, and Richard will get into probably more exciting stuff on what's on the horizon in the continuing operations. So what does BSA do? BSA stands for Broadcasting Services Australia, original business partner rolling out free-to-air services in Australia, and we can maintain that connection over the years with current key clients in that sector being Foxtel and NBN. So BSA is a technical services company operating in 2 segments, the first one being Advanced Property Solutions delivering HVAC, which is heating, ventilation, air conditioning and fire suppression services, construct and maintenance. I won't talk about that part of the business as we have divested a significant part and holding the other part as an asset held for sale. The second segment, our continuing operations, is CUI, stands for Communication and Utility Infrastructure, delivering technical services in the telco industry, primarily on fixed lines for NBN, but also in wireless and customer service. Richard will go through those platforms in more detail shortly. As you can see from the slide, we've got a very big national footprint. Now that will reduce with the divestments, but through Foxtel, we will continue to have a national footprint. We are primarily operating in the East Coast of Australia, in New South Wales and Victoria primarily, where we have a significant market share on the NBN work. You can see we've got a fairly large workforce to help us deliver our services, and I'll talk to that a little bit more. Next slide, please. So core capabilities. Concentrating on CUI, our core capability there is fixed line, which is a primary rollout of NBN, where we do assurance and activation work. We don't do the construction part. And again, Richard will expand on that a little bit further. We started doing wireless work with or acquisition in Catalyst One 2 years ago. And then the work that we do there primarily is SAED, which is site acquisition, environment and design, both greenfield and in building. And we do that for the major telcos and also for government institutions. Customer access refers to primarily Foxtel and the smart metering businesses that we have, the smart metering showing some good growth prospects, which we'll expand on. In those core competencies, we differentiate ourselves through 4 differentiating factors. The first one being customer experience. We've got a proven track record with our customers. We are client facing, and we've always managed to optimize that and make sure that we deliver to our customers. The second one is workforce management. Just to put it in perspective, we've got around 60,000 work orders that we complete per month. And our approach is quite simple, but it's not always as easy to get right, which means getting the right technicians to the right place at the right time. So that in itself has some challenges, but we continue to invest in that. The third differentiator is culture. So we've got the best full program approach where we partner with our clients and make sure that their success is our success, and that leads to our fourth differentiator, and that's building trust with our clients where we make sure that we do what we say we're going to do. We remain agile, because compared to our competitors we are smaller, which means we can react quicker. And we also invest in our clients through systems and processes. Next slide. This is group update, quite topical. Last year, the group performed a critical review of its operations, referring back to what Seb said we went through a little state of flux. And at the time, we evaluated our core competencies in markets that we operate in. And we made a decision to divest our APS Maintain business to firstly allow our prospective buyer to invest into that business when we didn't have the time and capacity, but also to generate some funds. That came to fruition on the 23rd of November last year, where we entered into a share sale agreement with CBRE, which is a New York Stock Exchange listed company. We sold that part of the business for $20 million before adjustments to the price on working capital, et cetera. The divestment is part of our three horizons strategy, which we'll look at shortly, and it allows us to invest back into telco, both time and funds. This transaction was completed on Friday evening, so again, fresh off the press. Next slide, please. So coming on from the previous slide, this is a reflection of the financials. And as you can see, the continuing operations shows a significant improvement from the prior year. This was due to firstly, higher margin mix with our existing clients, which more complex jobs delivering higher margins. Our platforms are fully modernized, which means there's a decrease in overall cost base. And then the other one is volumes have stabilized a couple of tiering issues last year through some of the major platforms, which has now been sorted out. We do believe that this is a sustainable run rate. And also, you can see that our corporate overheads have significantly decreased, which is part of the restructure which was announced I think for last year when we rebased our executive overheads to service the business. Next slide. This is a strategic direction slide. So all the items discussed previously formed part of this three horizons strategy, which we implemented a year ago. We targeted this approach to ensure that, firstly, we hold ourselves accountable, and also to create some credibility to do what we say we're going to do. The horizon approach consists of the three pillars that you can see there, stabilize, focus, transform. But to do a check in right now, I'd say we're at the beginning of the focus pillar. We've stabilized the business, we've exited loss-making platforms, branches, and now focusing on our core competencies. But more importantly, we're also focusing on our existing clients where we get the most benefit on. And that's been reflected in the continuing operations. The next phase is to continue to focus on the telco segment and ensuring that we set that up for sustainable growth, and then prioritize on our existing customers and take advantage of extra work that we'll get from them. We've also already started focusing on other areas and platforms. Most recently started, it's in its infant stages, but electric vehicle charging stations. And then we see that as a good prospect for the future. With that in mind, I think there is a good segue to hand over to Richard, who'll be able to give some more meat on the bones and go through more detail on what's next for CUI. So I'll hand over to Rich.

Thanks, Arno, and great to be here this morning. What's pleasing is obviously the numbers are now positively trending period on period, which is fantastic. And the CUI business is performing very powerfully from a financial perspective. All I want to do is just give you some highlights on what drives those numbers. So I'll give you an overview of the business, but also talk about our future growth areas, which is very important for the business strategy. So in terms of overview, as Arno mentioned, we are leading a national telco service provider with a strong brand heritage. So I think we've got 3,800 jobs per day. Direct staff, we've got about 250. And indirect staff, as in [indiscernible] mostly dotted around throughout Australia, but with the heavy concentration in our NBN areas, which are Victoria and New South Wales. We do have a lot of capability that we've built up over 20-plus years, specifically on the Foxtel business, which has been our longest customer where we went from digital to analog and we got some great capabilities obviously in Pay TV satellite. We extended that into many fixed-line broadband providers that telcos [indiscernible] and how the [indiscernible]. So we're a key provider to NBN and support their business. We've also added, as I alluded to, the Catalyst One acquisition, which gives us the wireless offering communications. So we've got fixed-line broadband, but we also need to hedge for future 5G, 6G deployment programs around Australia. And we only see wireless uptake increasing as data plans continue to increase as consumers consume much more online than they had ever done before and that rate of growth will continue. We've [indiscernible] important, we place great pride in the customer experience we provide and we do think that is a differentiator that we provide at BSA compared to our key competitors. And you can see by the tenure of some of these customers we've had, it's our customers [indiscernible], which is fantastic. And NBN, which is our biggest customer, currently is our partner and customer, is nearly 10 years. So we've been there as well from nearly the start of NBN, then rolled out the platform and other services, maintenance, activations, [indiscernible]. The prospects are strong in telecommunications. You can see that it's a $9 billion market. And that's just maintenance really, which does include the build. But I think the prospects are, given that we're Tier 2, so we're kind of at the $250 million mark, and the Tier 1s are $1 billion roughly. So we do think there's growth of BSA in that market and a lot of the smaller companies have been taken over by the bigger companies, if you like, in our market. And as I said, the future technology changes from a consumer perspective, but also the NBN change in technology approach and strategy from the previous [indiscernible] strategy, if you like, it is now maybe the fiber to premises from the other technologies that enables the end consumer to obviously have the highest plan for the best quality broadband around [indiscernible] as the end consumer through our retail service provider transitions to those high-speed plans, BSA benefit were the ones in plugging the end consumer to that network. I'm very proud of the management team we've been able to build in the last few years. A lot of them have been brought in to take advantage of that future growth opportunity. So we've got 100 years' collective experience, and we're ready now to, as Arno said, we've got the stability in the company, we've got the focus, and we're ready to grow now. So our 4 pillars are NBN, Smart Energy Solutions, Wireless, Residential and Enterprise. I'll just give you a flavor of what's in each pillar, and we will touch on some of these in a bit more detail further in the presentation. Obviously, NBN is the biggest show in town and quite possibly the only show in town when it comes to fixed line. We've got a great share of the assurance and activation. Bucket of spend that we spend. As I said, it's not the build. Although the build is over, we're now into the operate model, which is assurance and activation. There will be further upgrades and overbuilds planned, but it's a lot more than obviously rolling out the whole network. So our ambition is obviously to grow into other buckets, which there are 2 other key buckets really. It's the overbuild, as I said, and upgrade to the network, which we'll carry on as governments invest and reinvest in the network to keep it up to the committed customer reputations, and also the wireless bucket, which obviously was one of the reasons why we acquired Catalyst One. So we have the largest market share nationally in activation and assurance, which is pleasing. And the way it's split up nationally is we have our batches and our batches are in the high-density population areas in New South Wales and Victoria. So if you're getting a job done by NBN from a connection or assurance job, 1 in 3 jobs nationally are done by BSA. So we got about 36% market share, which is the largest across the 4 working partners, the others being Truestream, [indiscernible]. So we're very proud that we were able to achieve that outcome [indiscernible]. And obviously, we're in a great spot now to take that relationship further and build into those other buckets. So that's the focus of my team to obviously explore those opportunities. Smart Energy Solutions, we're very excited about it because it does have an even higher growth outlook than telco, we believe. And it's we do the smart metering business, our first largest line-up but we have 5 years experience supporting Vector and PlusES. And now we recently announced a new deal with Intellihub who are really strategic in the way they want to disrupt the market. So we're across both Vector and Intellihub at the moment, and we're in growth mode and recruitment mode for the electrician that are needed to support that asset and this is swapping out basically electrical meters in residential homes and just from -- a lot of them are 3G still, were obviously moving to 4G and there will be 5G and there will be 6G. So it's gift that is given in terms of future prospects. Wireless we've got some work to do there to capitalize on our investment in the design part of wireless, so we [indiscernible] meters, smart meters in design. We obviously added on the build side of the wireless, which is buildings, building new equipment on the tower infrastructure, that's already in Australia to account 5G. And we've got -- we signed up a deal in the last 12 months with Axicom who have now being taken over by Indara who are owned by AustralianSuper Optus come on to the market dynamics a little later. Residential enterprise, that's really our kind of, if you like, our heritage, we built off the back of the pay TV revolution in Australia in the Northeast. And we still now to see Foxtel delivery partner. That was 13, we started Foxtel as [indiscernible] last business standing, our last partner standing, should I say. So consistent with the BSA Group plan, or business unit is obviously looking to grow significantly in the next few years. And we've got a most opportunity to maximize with the existing clients. So -- we've only got double-digit clients, but that's all we need business side with those clients in terms of contract value, but we need to add some more, obviously, as we go forward into the growth areas, which is why the smart metering come on the electric vehicles. So but it's important that we realize that we're not even tapped anyone near the max in terms of the nbn opportunity, which is where we're going to the key immediate focus because we get more bang for the buck in investing in driving the business development opportunities there, obviously, due to the size and the budgets. So we're in a good place there. We've recently been able to expand some of the work types into Queensland, which is fantastic of a competitor. So that was a good sign of our -- the trust nbn and having that BSA and there's more of that to come. And then we've got, as I mentioned, we signed up Intellihub which we believe will be the market leader in smart metering going forward, but Vector obviously giving them a good win for their money there as well. The EV expansion opportunities are more longer term in terms of it's dependent upon the cutover of Australian petrol cars to EV cars. There's a lot in the press in the AFR about obviously the opportunities in this game and it's early days at the moment, but you'll be at the where we've got some real blue chip customers in this field, Tesla, GOEV and [indiscernible] so we're confident that we're there at the right time, but the real growth numbers will come as the consumers cut over on massive, elect to the EV and a lot of that will be driven by government policy, we hope going forward. I'll touch on the wireless expansion. There's a lot of opportunity here. The landscape on the wireless side changes. Previously, it was owned by the big telco carriers, the assets if you like, the mobile masks. They were owned by Telstra, Optus, the big TPG Vodafone. [indiscernible] it's once in our industry cycle really transferring those assets into super funds basically, new companies owned by super funds who really want to see those big recurring returns year-on-year for the super numbers. So lots of change there, lots of deals done, you can see in the press and because it's reset the market and BSA weren't in that market until 2 years ago, with the acquisition of Catalyst One, we are very positive about obviously our chance into ourselves with some big deals there. Innovation through investment in technology. I think ultimately, if you think about the global markets, its customers want plug and play. So field services are very important to our core and will always be -- but we've got to be moving on the value chain and obviously maximize the efficiency to by automation. And we do that a lot with some of the value-add services we add for our clients today, where we have planning teams, and the day teams which automate the customer experience, workflow for customers, which is fantastic, obviously, because we get higher margins from that work and we do the field work. So we're going to move beyond field services, but we're not going to move -- we're not going to [indiscernible] it will still be a very cool part of our delivery. So just touching on the clear growth. We see some amazing growth opportunities in the smart metering. Well, we've got Smart Energy Solutions, which is our pillar if you like that, contains both the smart metering customers and also R&D longer-term opportunities. But if you just look at the smart metering market, it's, again, similar to the wireless tower asset market. It's going through a state of change where the key smart metering installers and software providers to the key energy wholesale distributors. They're getting sold off some big numbers. So Vector NZ just recently got sold to QIC that is owned by Queensland state government. And PP sold to Brookfield for $1 billion. And the reason why we do at some devaluations is obviously, it's a recurring stream of revenues that will come from the data that's transmitted back from smart meters and that will continue to drive installations for us, as I said, as we migrate through the GE technologies. Intellihub for example are also looking at smart metering to EV. So that's where the synergies at [indiscernible] hold the number in the same pillar come in. So the EV market, this is going to be an enormous opportunity, but in the longer term. So I don't envisage that crossover between petrol and EVs happen until late 2020. Obviously, people have got different opinions on that. No one really knows the year of the cutover, because it has a lot of variables that have not been sorted out yet. -- you'd like to get to that stage. But there's no doubt it's coming, obviously. And that ties in nicely to the ESG statement. That may also obviously back in there -- this presentation on BSA. We've got a ESG strategy as well, which is great. This will obviously help in terms of the environment, going forward, so it does pass staff remain committed to some good values. On to the next slide, please. Just a couple of case studies to finish, just to give you a bit of an overview on some of the key contracts. We've got -- this is obviously fixed line broadband with nbn, and as I said, we've got 700 technicians on the project. That's goes up and down based on consumer demand, basically. nbn not the retail service provider. As we know, it's still the Aussie broadband server, Telstra help to CPG [indiscernible] but at the wholesale so they obviously look after all the distribution of the jobs to the delivery partners who fulfill those. So we've got 700 at the moment. We've been higher than that, and we've been lower. So this fluctuates depending on what's happening, but it will still remain an absolute powerhouse for us going forward, the nbn and we're looking to, as I said earlier, maximize the growth opportunities. We basically do the final as we call the final model but we connect the customer from the road of the pit to the house. So there's sometimes some -- we have to take that concrete if you like in that driveway, and that's always a -- that's a sales work job. Some of the easy ones are just the margins there, it's already connected to the driveway and we're just doing the final kind of lease goal [indiscernible] meters. In terms of lines, it's just a matter of switching them -- to put the plug in the model and we got. But as I alluded to, we do a lot of the operating model and the customer experience, we do a lot of technical services for them are nonfield-based which is we do the routing and planning, and that's making sure that alluded to the right sector in the right place. And also the objective there was to obviously make sure there is only 1 truck roll rather than multiple truck rolls because the customer experience is key. And with the nbn have a lot of press negative customer experiences when they first started and they will continue to as the broadband providers in the past but there's no doubt in the data that the customers have improved significantly in that period and when we use our expertise from Foxtel, we certainly -- that's one of our differentiators because we've got the experience to keep improving that customer experience as long as nbn goes into the central control tower. Next one, Angela, and this is the final one. It's just to give you a kind of view that we've got the end-to-end communications if you like capability -- now store, which is great. We used only on out the fixed line. Now we've got the wireless with the acquisition of Catalyst One. And the key thing there is the wireless market, only 20% of that market was accessible to Catalyst One because that was the design phase of the wireless projects and the rollouts which is quite engineering in its nature. So it is quite like high-value work, but it's only 20% of total pie. Whereas now we've built out the 80%, which is the build. So obviously, this gentleman in the front row in all the safety -- safety equipment, and he is putting 5G equipment on an existing 4G tower to enable the customers who are on 5G, got all those Optus's, telcos of the world to connect into the high-speed fund. So -- there's more of outwork to come. As I mentioned, with the shift in the industry to super fund and new asset owners, we see a good opportunity for BSA moving forward. That completes the overview of C One, and I'll hand it back over to Robert, I believe.

Thanks so much, Richard, and for giving us a quick update there obviously on the industry insights that you guys got in your business, it's great to hear and obviously hearing about the growth opportunities for a much more streamlined BSA going forward, that's great as well. I'll just quickly touch on some of the core portfolio companies and some of the movements and key events that have happened throughout the quarter that was. Firstly, starting with Big River building supplies and distribution business. Plenty happened in the quarter actually for them in terms of the first update was the AGM guidance whereby AGM results, I should say, when they provided commentary around the first quarter for the year. Pleasing to see that they generated about a $15.5 million EBITDA for the quarter. So the commentary out of the business is that they haven't seen a slowdown yet in certain areas where others in the market may be experiencing or certainly talking about it in the paper. Despite all that, when you look at Big River, it's certainly being priced like there's a severe housing downturn in place or coming in the short to medium term on a single-digit PE, and a very substantial dividend yield. We think this business is well and truly insulated in many respects, given its diverse customer base and industry focus, where you've seen over a 100-year life cycle, its history where you've seen its ebbs and flows based on what is strength and what is weakness in terms of what industries they are in. So we think that insulation will guard this business well going forward. Secondly, with Big River, the announcement of John Lorente as the new CEO, who starts in March, I believe. John set the business for quite some period of time running one of the divisions there. The culture of this business being a 100-year-old out of the Northern Rivers is important, and we see John's got a good grasp on that given his tenure already at the company. And finally, we've spoken about this a lot in terms of the M&A opportunity for Big River going forward. A classic example is what they delivered in the quarter where they bought a family-owned 50-year-old business. And we think there's ample opportunity where those lack of succession and retirement plan options are available for certain vendors out there, and we think Big River obviously acquire as many businesses out there over time. And hopefully, we can see their footprint increase over the medium to longer term. Coming to MOVE Logistics, Craig Evans was appointed the new CEO and he started last week, I believe, actually. And I'll touch on that a little bit further down the track on the slide here. But what I would say, it's great to have Craig kind of join this business now, and Chris [indiscernible] I suppose get back more into a directorship role. We think as well with this business, it's a turnaround. We've made that very clear when we invested to our shareholders over time, things do take time, and there are challenges along the way, especially in the environment that we have been operating to date whereby they repriced a lot of contracts, and they've been chopping and changing internally where they're now focused much more on profit as opposed to revenue for this legacy business that was part of them was very much a revenue-focused business, not bottom line. We think that has shifted. But obviously, we've seen some contract losses along the way, and the company actually pulled that guidance in November when they lost a certain contract. It's also worth noting that the other divisions they've started under [indiscernible] and his team at the time was the Ocean division, where they've actually bought a vessel from Europe, and they've started that up, and it's now operating efficiently across the Trans-Tasman at the moment. So whilst we think there's a long way to go still in this turnaround opportunity, the company is taking the right steps and the right people in place. And again, I'll touch on that a little bit further down the track. Gentrack here, they run a September year-end for their results. So they released in November. And the key thing here was regarding their kind of outlook and guidance updates whereby they provided effectively for their targets from FY '24, and they announced that they will likely achieve that in FY '23. In addition, they've provided further longer-term guidance where we're seeing the targets are around mid- to high teens revenue CAGR over the medium to longer term, as well as EBITDA margins that are sustainable around the 15% to 20% mark. And it's worth noting that is cash EBITDA. There's no capitalization of R&D in this business. They are very clean in their approach, and we certainly respect that and that is a key attribute when we look at companies these days as well. I suppose the key from our perspective and what they delivered in this last result was the reinvestment they're going to be making into international expansion. The company today is predominantly operating in 3 key markets: Australia, New Zealand and the U.K. Whilst we think there's still very much a long-term opportunity for growth in those particular 3 markets, other companies say that they're looking to get into 15 markets over time. And that won a contract in Singapore, which is certainly a key point in the map for them to expand into other jurisdictions as well where you see the same tailwinds around decarbonization, deregulation and digitization required of utility businesses. So we think of particularly in concert with the sales force integration, there is ample opportunity over time where 15 markets may be achievable in the medium to longer term. Coming to the next slide, just touching on Saunders quickly. Saunders again had a very busy quarter of contract announcements. I believe they won 6 in the quarter, including up to last week as well, 6 different contracts across a wide variety of core clients, including in the kind of government areas where the digital -- the diesel fuel storage program, as well as in the Bridge program as well as in defense as well. Probably what I'll highlight here is the Western Sydney Airport contract, which they won for $44 million. It's Phase 1, and it's a very key contract, I believe it's the second biggest in their history. And we think you're seeing over time, Saunders is moving up the -- I suppose, the contract curve in terms of size of work they are able to achieve, first they bid on. And secondly, win and thirdly, deliver on. We think that's a great sign for things to come, particularly when you referenced the pipeline of work, the dollar values that they're putting in place over the last in a while. We've seen that consistently grow and we think there's no reason why that continued based on the amount of work out there at the moment. BSA, I'll skip over given the guys they've given us a pretty comprehensive view there. But I would just say it's great to see them win a new contract in the smart utility area, as I said, with Intellihub. So it's great to say the cash-generative division is now the main focus. And hopefully, it's about growth going forward. Finally here, just on Objective Corp, which is one of the -- in our opinion, one of the highest quality software businesses in the market. What we saw from them was an FY '23 update at their AGM, where they sum it up, I suppose focusing on the longer term, not the short term. What we're seeing here is a move away from, I suppose, the lesser quality revenue of that business. That's putting hairs a little bit. But they're moving away from services revenue and one-off loss of sales and shifting that focus very much towards recurring long-term, high-quality revenue, even more than they already do. So we're seeing a single-digit revenue I suppose guidance provided by the company to the market for FY '23, and then returning to a far more what's expected around material growth for the company in FY '24 and beyond. So we think that's a prudent approach, and you can see when you've got strong alignment within the management team, it's the right thing to do for the longer period of time. Equally, they are very much still focused on M&A, reading some of the rhetoric there. They've made a small acquisition in the U.S., they've got a very large cash balance and we think there's opportunity for that to be deployed in certain areas, particularly in the U.S. service side as well. Coming to the next slide. I mentioned MOVE logistics earlier. And Craig Evans was appointed as the CEO and he started last week. He was a mantra for many years. And I'm sure many on the core here today would know mantra well and probably done invested in that over the years a $7.5 billion, arguably one of New Zealand's best businesses. Craig, as I said, the long-term mainstay that, and he has been running the New Zealand division for the last 6 years prior to him leaving. So we think this is a huge curve for MOVE logistics to pick him up as the current CEO as after the next step of the turnaround and then hopefully be on that as well. What I will just highlight here is we mentioned this in our roadshow last year when we talked about the -- we had a full list of some of the individuals that now work at MOVE Logistics and we referenced the book Ready Fire Aim, which is the main freight story. And you can see in this particular excerpts here, the focus on Craig ovens here around being focused on value and also trust, and we think they are very key attributes for any CEO let alone one that's executing a turnaround of a business in which they have a lot of history and a lot of experience. And it requires a lot of, I suppose, customer focus in an industry such as logistics. So we'll see how this goes over time. But in terms of the people that are there at the moment for this turnaround, we're very pleased with at executed today and hopefully, they can deliver over time. Coming briefly just to the portfolio overview, these are obviously at December, and we'll be putting out the next lot of NTAs reasonably soon. Well, I would say echoing Sebastian's comments earlier around the dividend profile of NCC, you can see that it was 50% franked within FY '22. It's a subject to how much tax we pay, but we continue to be very much focus the Board does on providing a stream of dividends to shareholders across all 3 of the LICs. In terms of NAC, you'll see here, if you compare this to the last quarter, we've got an increased number of holdings within the portfolio and they obviously pay quarterly dividends, both this and NSC as well. We've been doing work the team has here for quite some period of time on some new positions, as well as some potential new positions where that may enter some of the portfolios over the next little while. And finally, on NSC. As I mentioned, again, the number of holdings has increased slightly and it pays the quarterly dividend profile, which, as you can see, has increased since FY '19. And with that, I will hand back to Sebastian.

Thanks, Rob. So just quickly, I'll jump to the outlook, but just so you can see here, a lot of people do see how we view capital management through our LICs, and I think that we do it in an exact same way as we would with any other business or any other of our investee companies, so just like BSA. And from our perspective, it's really made up. I mean, everything is made up of performance over the longer term. Performance leads to dividends, hopefully, fully franked dividends. So we can obviously part those tax advantages or tax benefits on to shareholders. We want to be aligned with all of our shareholders because obviously, we want to benefit when things are good, but obviously, we will feel the pain with things aren't as strong as what we expect. We want to maintain a very high quality of communication. Hence, we do webinars like this. And have now started to bring some of our investee companies on so you can get an understanding of really what we're investing in and why who are the people that are running those businesses. Next slide, please. So an overview on outlook, I would say that in my 16 or 17 years, it's quite interesting that I feel like fund managers, investors, economists anyone that feels like everyone is very -- has very little conviction on where we'll be over the next 6 to 12 months. I think everyone is very much focused on the next 3 to 6 months. And obviously, leading that uncertainty is the impacts of interest rates, everyone is expecting another interest rate rise today, almost 1/4 of every home loan in Australia is rolling out of fixed home loans into variable rates through 2023. And obviously, that's a major unknown. But today, it looks like the consumer has been relatively resilient. We still believe that there are some positive factors that will insulate us or Australia from a recession. I've listed some of them there, such as migration, which has picked up significantly. Energy market intervention I suppose generally just the state of the Australian economy since we get such a positive effect from being so heavily focused on resources, which gives us a big budget impact. And obviously, that leads into more infrastructure spending, which continues at elevated levels. And then as I said at the very start of the presentation, just the general scope we now have for lower interest rates. Since they have been increasing in such a sharp rate. Equity markets do look forward. I think a lot of people do forget that. The market is looking forward, expecting that interest rates would probably peak or very close to peaking. But as I said, it feels like every man and his dog is doing this thing. Rates will remain at a higher level for longer, or the other camp is that rates have gone too far and a lot of the economic data is lagging. So therefore, people like the RBA are making decisions based on data that is essentially out of date and they'll have to reduce interest rates. From our perspective, we continue to see very limited liquidity in all of our stocks. There is not a lot of trades going on. I think there's a lot of uncertainty, but what I can say is that we remain very optimistic. And when the cycle does turn and people want to get exposure to small caps, they will not be able to get any exposure because the prices will run and they'll run very quickly, and that happens in the case of every bull market. So we feel like we're very confident where we are. It's really just a timing game, and we need to make sure we're in the right stock at the right time. We have the best prospects over 3 to 5-year period. And then just I suppose what we're looking for over the next quarter, I mean we're already a month in, more than a month in now. So I just listed a few -- February is a big month for us because we get half year reports for pretty much all of our investee companies besides one. MOVE Logistics, as Rob said, the new CEO, Craig Evans, started last Friday from memory. That's a big cue for that business. I think we're very interested. And I think a lot of the people in the market are interested to see what his feedback is on the business, what state he's up to, where it is in his transformation journey. And what he sees the potential to be of that business because if they can get it right, we're a big believer that MOVE can be 3x the price of what it is today. It really just depends on the people executing and how long it takes. BSA, we had in here. But to the credit of management and the Board, and they blew everyone's expectations out of the water and completed the divestment of CBRE actually last week, or it was actually, sorry, Monday morning. So now they can really just focus on that core CUI business. And as Richard said and Arno said, that business, if you look at that slide, actually made $5 million before corporate overheads in Q2 alone. So hopefully provides BSA with a better flexibility to really just focus on the future and put the past behind them and really turn that business into something quite special. Gentrack goes from strength to strength. But Gary and his team, we don't find it really not a more motivated team out there. We think there's more coming, and we'll be intrigued to see what new customer wins they can get over the next quarter. Big River, I think Rob has already mentioned and obviously Saunders they have won lots of work with all contracting businesses winning works one thing, you don't want to wind up like cluff. I think we prefer to be a profitable contracting business, who can maintain a steady margin and produce fantastic shareholder returns, which in fairness Saunders has done that today. I think they're winning some bigger contracts. So the market is probably slightly skeptical on what profit they can get out of these contracts, so February peak will be key for Mark and his team. Finally, just to finish off the 1% pledge, you all know about this, so I'm not going to repeat myself. But obviously, the management company, not the LICs, we donate 1% of our time in selects and money to those 4 fantastic charities as well as a few other ones. Just a way that we continue to get back, hopefully. We're obviously in a very privileged position the way we get back to the community and the environment for people who haven't been as lucky as we are. So with that, as I said, if you do have any questions, feel free to put them in the chat on the bottom right corner. I've got some questions in front of me, so I'm going to run through those first. And if I see any more in the chat box, then I'll run through those afterwards.

So a few of these actually I can't answer, believe it or not. So the first one is from Sean, asking about property prices. So unfortunately, Sean, I can't give any financial advice and with a huge disclaimer that I wouldn't have no idea where I expect house prices to be over the next few years. I'm going to have to defer to someone more capable than me. Apologies. Michael, just wanted the view on Australian shares and the outlook for dividends. Again, I can't really provide any feedback on that only to say that ultimately dividends are derived from earnings, and it really comes out of earnings. So if you would expect earnings to be -- earnings growth to be positive and obviously dividends, we expect to increase. The only thing I would say is that if you look at Australian businesses in general, the payout ratio of dividends is actually already quite high, so I wouldn't expect dividends to go up because payout ratios are increasing, you would really need earnings growth to increase. A question from Kidna. Essentially, it's talked about NSC, as obviously the dividend has been strong, but why is the share price discounted more recently. Good question, Kidna. You would have seen maybe people are watching, would have seen over the past couple of weeks that the buyback has been very aggressive. We follow very closely. I mean, without a doubt the performance has probably been weaker than we would have expected, no doubt. But in saying that, we've definitely seen on our register one of the large holder who's been exiting in quite an aggressive manner, hence, why the discount [indiscernible] blown out. At the same time, we've offset that with the buyback, and we feel confident that the performance, as Rob said, our next NTA report should be out in the next maybe 2 days, I guess. And hopefully, that provides a more positive outlook and in turn, closes that discount to NTA. That is same with all of our LICs. For whatever reason they tend to go from premium to discounts, trading at NTA for no rhyme or reason. So hopefully, we can get NSC sooner rather than later. David just asked for a predicted dividend for '22 and a bit of an outlook. I can't provide an outlook for the dividend, but what I can say is if you look at our history in the case of our NCC or back, the dividend has always been flat or increased slightly. So that's something we're very proud of. The Board focuses on, it's very cognizant of. So hopefully, we can continue to do that, but that's definitely not guidance. Outlook on the investments in 2023. Look, I'm probably inherently pessimistic, but I will say I'm pretty optimistic with some of the core investments of our portfolio. So if you look at our largest investments, MOVE logistics. I think Rob's spoken about, it's at a low, but I think a lot of the hard work's been done. Big River trades on a single-digit PA of probably something like 8x. So yes, the earnings might go backwards eventually, but I'm of view that at a time it's already factored in and haven't forgot if the earnings managed to stabilize where they are. Then I'd argue there's a lot of upside for Big River. COG, we haven't spoken about, which is our largest investment. And again, I think that's on a 10x PE. They're the biggest operator in that space. They've got plenty of cash on balance sheet. They're good operators, very aligned, so we think that there's upside there as well, along with plenty of our other ones, but I think we haven't spoken about, Urbanise is another one. MaxiPARTS has gone, now at the 6 months. But I think if you look at their biggest peer, SNL, they're at a record high. So we actually feel very good about the portfolio. The hardest thing about being the fund manager is timing and being charged against an index, which is much more liquid than ours. So fingers crossed, that I probably never felt better about the portfolio in the last 10 years. Chris was asking about Urbanise. We increased our holding in Urbanise, essentially, why did we increase? Good question, Chris. Obviously, we've got a large holding in Urbanise. Why did we increase. I think it's a simple story. The reason why we increased is Simon Lee has become CEO, I think, Robert would say everything that Simon said he would do, he has done, unlike maybe some of the previous management there. So I think that's a big tick. There's a leader in the space. It's very much a recurring business. We like the Strata business. Strata managers don't move software. So it's highly recurring in nature. In making progress in that FM space. That contract with Colliers is very close to going live. We just think there's a lot of optionality. It's unloved, it's very recurring. They're the leader in that strata space. They've got a good management team in there who's highly accountable, very much aligned and a straight shooter. And quite frankly, we don't see why this business shouldn't be valued at a much more appropriate multiple compared to some of the larger peers. The second question relates to the debt levels of NSC and NAC. You've really put me on the spot. So I think from memory, NSC has $30 million in debt, which is done through an unlisted note. NAC has $16.5 million, which is through listed notes. So you can actually buy those notes. What's the purpose of the funds to take on debt? Essentially, at the time, so if you look at what we paid to, from memory, the NSC debt, I think we're paying 4.9% maybe. And for the NAC debt, I think we're paying 4.75%. So that's all fixed. So we thought from a Board perspective, from a capital management perspective, it's a great way for us to lock in funds that aren't diluted at a low interest rate. We've been able to use those funds to reinvest in stocks, hopefully, that provides a better return than 5% or 4.5%. And at the same time, we can also buy our shares back in the case of NSC so we're using funds at 5% or 4.9%. We're buying shares back in NSC, in some cases, that are greater, at a 20% discount. It's a fantastic use of capital. That's really what it comes down to. As long as it's accretive to shareholders, then we'll continue to do it. If not, then obviously, we'll extinguish that debt and repay. And then finally, from Anne Marie, just asking, as I think we had before, and I've got a few questions on this. Obviously, NCC from a share price perspective, has underperformed relative to the market over the past 3 months, in essence, why and what's my outlook. Without a doubt, NCC has been the one along within MSC that has been affected by 1 or 2 large shareholders reducing their positions. And therefore, I suppose that's selling has put pressure on the share price and the market has gone up, and therefore, you've had resulted in a discount. I don't think there's anything on towards with those people exiting. They have very large positions and have been shareholders for many, many years and they've been very supportive. Essentially, what we need to do is continue to continue to perform. Hopefully, the update is -- shows that we are performing, and then over time, I think the market will sort itself out. And obviously, those sellers will stop selling. And then obviously, the discount will close. Obviously, outlooks are a little bit more illiquid due to their size, and obviously selling has a bit more of an effect, especially when it's a large seller with 0.5 million or 1 million shares. And then just some questions on the chat. So first one is from Stephen. So Stephen just got a question about LIC attributable capital gain of CGT benefits. So Stephen, I did see this question, so I've emailed to Richard, who's our CFO and an expert in tax. So he's in the process of just typing something out for me. and he'll actually e-mail you on that. So that's quite a technical question. that I wouldn't be able to give you a proper answer on, I'll just ramble on for too long on this webinar. So if you could just send an e-mail to inquiries, we'll then email you within the next hour with a proper answer, a more detailed answer. Zane, questions about NCC and buyback. So are you considering a buyback in NCC as per the other one. So yes, a good question. I mean, I think if you look at NAC as an example, we used the buyback and now MAX trading at NCA, NSC obviously isn't for the reasons I said before. NCC we've always decided not to because the stocks are inherently more liquid, and we don't have the same cash reserves. But at the same time, I think where it is today, it's something we're probably considering more aggressively. The only thing that NCC has relative to the others is the dividend payout is much higher. So we pay a much bigger dividend in NCC relative to the other 2. So if we were to do both, it's quite a lot of capital being put to work between a dividend and a buyback. And then a question from Sue Lee. Do you report returns post expenses over a 5-year period? So not on our report, the best way we can give it to you is in total shareholder return. So if you e-mail me again, we just do this for someone else. We keep this here. We can give you what the return is from a total shareholder return perspective so share price movement and the dividend franking in any option value we can then give that to you over any time period actually. So that's not hard to do at all. And then as we always say, we actually have quite a few reviews. If you do have any feedback or would like to review the webinar any way we can improve, don't hesitate to do the survey at the end of the webinar and marketing team loves feedback so they can continue to make it best and more efficient and if you do have any question, do not hesitate to e-mail me or any other member of the team and we'll get back to you, we get back to everyone as soon as possible. So thank you again for your support. Apologies, it did go for a quite a while. There will be recording which most people tend to listen to that will be sent around probably tomorrow. So thanks again for your support and hope we can provide good update for Q3. So thanks again and enjoy the rest of your week.