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

Good morning, everyone. It's 11:00. My name is Sebastian Evans, I'm the Chief Investment Officer of NAOS Asset Management. And as most of you would be aware, this is our third quarter FY or financial year '22 investor update and question-and-answer session. For those of you who are trying to find the information of the presentation that I'm speaking to, it was lodged with the ASX under H3 of the LIC cards or Angela [ have said me ] to send out this morning if you're on our distribution list and you registered for this call. So if you're unable to get the document for any reason, just feel free to e-mail inquiries at naos.com.au and we'll get it across to you as soon as possible. So I'll just -- I'll start going through the more -- I'll start with the disclaimer actually. As I always say, we do tend to speak about stocks quite a lot in this presentation, as I'm sure everyone's worked out by now. Don't treat this as [ impossible ], do your own homework, seek your own financial advice. And this is obviously very general information and doesn't take into account anyone's personal circumstances or needs. NAOS Asset Management itself for any new people on the call today. The business, we actually launched our first LIC in 2013 with just 400 shareholders. Today, we have about 8,000 investors across $400 million. We run 3 LICs. We also launched a private investment fund almost 6 months ago, I believe. And really, what we try to do is provide all of our shareholders with a genuine concentrated long-term focused investment strategy to emerging companies, generally with an industrial focus. We're very aligned, so all of my personal wealth outside of my family home is in the funds. And we have a very strong ESG focus. So we really want to believe that our businesses can make a difference and because they do make a difference, it gives them a competitive advantage over the longer term and in essence drives more value for the shareholders over the longer term as well. Just the team. I'm not going to go through everyone again because it hasn't changed too much, but I would like to welcome Hayley. You can see down in the bottom there, she's joined our marketing team as Marketing Coordinator. This is her first week. So hopefully, she wishes to stick around for the second LIC. Next slide. Just I suppose on our investment beliefs and why we believe it provides us with a competitive advantage. I mean, clearly, it's been a very difficult market depending on the perspective. The things that we think that our core investment beliefs provide us with a very strong competitive advantage. And I think the ones that I would call out, we really want to invest in businesses that may represent value over the longer term because they are growing. So they may not look cheap today, but they may be cheap tomorrow. We do invest for the long term. So some of our best-performing holdings. Some of you would have noticed the Saunders, for example, is at record highs. I think we've owned that business now for over 5 years. Big River would be more than 5 years. And our best-performing stock, I think, was the Nero Group, we own that stock for almost 9 years. So we do believe it's been compounding our capital and sticking with management teams and strategies that are proven as opposed to try and pick the top and the bottom of the market so that we can have best investments. And the other 2 I would pick out is that we ignore the index. So none of our holdings in any of the LICs are in any of our benchmarks. So we're completely benchmark unaware and we're big believers in management alignment. So mostly, our businesses tend to be found delayed in some way, shape or form and they generally have a high level of equity ownership in the business. Next slide, please. Other reasons not to invest in NAOS, I'm sure a few people on this call won't be able to point them out for me. But it's -- we run a very concentrated fund. So generally, most of our portfolios today have about 10 investments. We are long term. So people do say, well, there's no new investments this quarter, and that's just generally the way we invest. They are smaller businesses. As most people would know or -- sorry, just give me 1 sec. I think that's -- okay. Sorry. Sorry, everyone. I think -- can everyone hear me? Sorry. Okay. Sorry, I had my AirPods in, which now have been removed. It's, as I said, yes, the other reason why people wouldn't invest in these funds, obviously, we are a smaller fund size, and we are completely benchmark unaware. So as many of you would know, our returns can deviate significantly from the benchmark month-on-month. So sometimes we might be even underperforming by 10%. And then in other months, hopefully, we're outperforming by 10%. Next slide, please. In regards, I suppose the one that everyone wants to concentrate on, and I will hit the topic on the head. Clearly, the quarter that we've just gone through was not a quarter that we probably want to remember too frequently. But I think, in perspective, when I look at perspective on our performance, relatively, it has been a reasonable result. Clearly, FY '21 was extremely strong. We started at the beginning of FY '22 strong as well. And unfortunately, we've given back a lot of those gains. But as I'll touch on and Rob will probably touch on more than me, we remain very optimistic about the performance going forward. And as some of you who probably worked out by now, April is shaping up to be one of -- definitely, one of our better months in the history of NAOS as well, which does provide us with a level of optimism and hopefully, some momentum to finish out the financial year. Dividends. So I do get this question a little bit. As you can see here, this is the inception dividends paid to all of our shareholders. So you can see NCC's paid $0.6125 since inception. I would say that these figures don't include the most recent dividends paid in April, so NCC was $0.0375, which is not included in there, fully franked, and NAC paid another $0.016 from memory, fully franked, so these charts will increase slightly. I think the most important thing to note is that the profit reserves of all the funds are healthy, so I didn't get a question. So I would say if you do have any questions, feel free to put them in the chat box on the right. We can send them to inquiries. I do have a few questions here already. But one of the questions was, are these dividend yield sustainable? And I think there's probably 2 parts to that. They're sustainable as long as our profit reserves are there to be used, which in this case, they are. And the other part of that question is, are they the best use of capital, but also can we frank them? So for us to frank them, we need to get fully franked dividends from our investments and we also need to pay tax, which in the case of some smaller businesses can be tough. So everyone would be aware that NCC is in the smallest businesses in the market, so it will be tougher to maintain a fully franked dividend. But in the case of some of the other investments in NAC and NSC, it should be easier to maintain a fully franked dividend, so the level should be fine. It's whether or not it can be franked as always, supposed to a sticky point and has been the sticking point for the last 9 years, to be frank. As I mentioned previously, I think if we're touching on Q3 performance, clearly, it was a very challenging quarter for all funds. I think the way I was trying to summarize it more recently was the fact was some of our best-performing investments, such as EXP and John will be presenting after me, the fantastic investments. But from a share price perspective, clearly, they didn't go up for that quarter for whatever reason. In the case of EXP, there was probably no risk. But I think what hurt us the most is we had a couple of detractors, which we couldn't offset. And clearly, the detractors are disappointing. In the case of NSC and NCC, it would be BSA as the major detractor, probably the only detractor of any significance. And in some of our other funds, businesses such as Urbanise, and we had a small position in Step One, which we subsequently sold a number of months ago, did hurt our short-term performance. Been in saying that, as I've said previously. Thankfully, April, should change these numbers significantly, assuming everything stays together for the last few days of the month. Just touching on our process and what we do. A few people do ask this. I was asked this by a more sophisticated investor the other day actually. So most of our time, to give you an example, we've got -- there's 5 on the investment team and 3 people are thankfully not in the office today. So we've got 1, he's gone over to the Berkshire Hathaway AGM as well as doing some site visits over there. So things that would be noteworthy for some of our current investments. We have another member of the team in Melbourne, who had a Big River site visit. And then we've got another member of the team in Brisbane today on the Gold Coast doing a PWA for site visit. Most of what we do is face-to-face meetings to gather information, hopefully, objective information about a business, an industry and people and the people that run that business. And as you can see here, there are probably the 4 ways that we do that. We believe our competitive advantage comes from gaining objective information that other people have not been able to get for whatever reason, that gives us a long-term competitive advantage, our understanding of that business. So trying to understand the industry dynamics, what's going to make this business grow, how can we expand the margins and whatnot going forward. And that's really what we do day in, day out. The next 2 slides is really just a summary, I suppose, of the market and really what moved the market as well as our performance. And as I mentioned before, it was a very dynamic quarter. It seem like the quarter would never end. As everyone would be aware, macroeconomic issues were at the forefront of the market, the unfortunate war in Ukraine and some of the subsequent issues that develops due to that, most notably inflationary pressures, whether it's from food, supply chain, oil, energy prices. And that's obviously led to higher inflation, which is -- will I suppose sooner or rather than later lead to higher interest rates, domestically and offshore. That probably flowed on to the second point, and that was really valuation realism, which was put in this presentation and hasn't that sort of occurred as people say, sort of up by the stairs and down by the elevator. Some of the best-performing businesses over the last 3 years have come crashing back to work because they simply don't earn any money. And as interest rates go up, the risk-free rate goes up and investors generally will look to put that capital in other places. So some of the businesses we've pulled out here, Temple and Webster down almost 40%, Adore Beauty for any of you who use beauty products online, down 50%, and this is just for the quarter, this is not for the financial year. But as I was telling a colleague of mine yesterday, a great business out of Canada called Shopify. Some of you would know, it's a multibillion dollar business, considered one of the most highest quality businesses around, down 70% year-to-date. So just to put some of these in context, our valuation realism is here and it feels like it's here to stay. And it really has come at a rate of knots, which led to some of these significant share price falls over the past 3 months. I think, from our perspective, when we look at our businesses, the things that we've noticed the most is probably the post-COVID world has been, in some ways, probably more challenging than the COVID world, and I'm sure John might be able to touch on this after me. But some of the issues we're seeing and everyone on this call would realize that, but it's things such as finding staff, people are unable to find staff, so they can't -- I suppose they can't supply their customers or they can't offer their customers the same level of service. People can't get goods into the countries. Clearly, we have a big shareholding in Maxiparts, as an example. If you know secret is harder to get truck parts into the country just because they're harder to get into the country due to logistics issues or just the fact that people will make them unable to make in the same amount. And what this ultimately means for business is it's just very hard to manage a business day in, day out. Many businesses have daily issues, which they probably haven't been considered an issue before until now. So it will be very interesting to see how these businesses manage these issues. And ultimately, I suppose what is the effect on earnings. But I suppose, more importantly, how does the market treat these issues. Do I believe they're one-off? Or do I believe they need to stay -- here to stay and subsequently, share prices remain depressed for a while? The last 2 points, clearly, we have seen inflationary pressures. Agriculture has probably been the big one, food prices, employee costs. I think we mentioned that in the last presentation. But -- and it goes from all of our investments, an employee or a position that might have been a $70,000 position today is a $90,000 position with a -- I suppose, an employee who probably wasn't quite as qualified. It was the previous one. And that's if you can find someone to actually hire. I think there's plenty of jobs. We do a weekly search of all of our investments and the people that they're looking for on LinkedIn. And I noticed the other day when I was looking at it, some of our investments have 45 job openings. And have had folks who have done so for the last 12 months. And then as far as that final point, I do want to touch on this. The interesting factor is that the demand environment remains strong. As many people have said, personal balance sheets are in reasonable shape. It may change as interest rates increase. But unemployment is low and the demand environment is strong. I think the issue we may see is just how confidence changes over the next 3 to 6 months with the government election, interest rates going up and how does that change the demand environment. But from what we understand and all the anecdotal feedback that we receive is the demand environment for businesses probably has never been better for a long time. I suppose how it translated into our positions. We believe many of our investments are direct beneficiaries of what I just spoke about. So as some of you would have noticed, the Big River share price is on record highs this month. They are a big beneficiary of the demand environment. COG Financial Services, which they do a lot of finance broking, again a big beneficiary because small business, medium business and then a large business. So looking to spend CapEx on new cars, new equipment, new trucks, whatever it may be. And then amongst the volatility, we've been able to thankfully increase some of these new positions that we've identified over the last 6 months. MOVE Logistics, clearly a turnaround story in New Zealand. But as some of you may be aware, they will now list in Australia next month. Maxiparts, which is a distributor of truck parts, and then Qualitas, another new position, which is actually a fund manager but in the property space, but a very interesting business that raised $300 million not that long ago. And interestingly, the founders of that business did not sell 1 share. So all that money went back into the business, which is for us, it's a big ticket of approval. We continue to engage across all of our investments and especially some of those more problematic ones. You would have seen significant changes at BSA more recently with the Chairman and the CEO both resigning, really trying to bring in some new blood, reset that business with a sound management team, a good management team who are accountable. And we hopefully, that can protect our capital and grow it over time. Then ultimately, the performance was cool, and as I said before, because not only was -- our absolute investment probably reasonably cool. But the benchmark performance at that time was relatively strong, driven by the likes of energy prices, the lithium price and the iron ore price, which drove resources in some cases to regularize. And then touching on it was February reporting season, which seems like an eternity ago. But I would say we were -- probably there was no major specific results or issues that probably took us by surprise, which was great. That didn't lead to any significant share price increases, but they were obviously not able to offset some of the 1 or 2 very negative ones we had such as BSA. But we do believe that sets us up well going forward because we think some of these positions that did pre-buy and probably hit those figures have been very consistent, are probably likely to surprise to the upside come April, May, June, July when full year results are released. Just a couple of charts before I turn it over to John. But one of the most topical ones is wage growth and election's around the corner. And the hot topic is, yes, we're in inflationary environment and interest rates should go up. I think probably the most notable point is the fact that wage growth is actually negative. So real wages are negative, and they're negative because people aren't getting the pay increases as they thought or they should expect high inflationary environment. So for this economy to continue to tick higher, we really need to see real wage growth and wages increase. Otherwise, I'm probably a big believer that interest rate is going to increase as far as people will expect in the short term because personal balance sheets and confidence will come under too much pressure. And then the one that's probably been a little bit slower to eventuate, but probably does leave Australia in quite a strong position. It's just the fact that obviously, globalization is on the nose. Countries are looking to manufacture more domestically, such as Australia, and we're seeing a lot of investment opportunities in that space as well. But obviously, as a big exporter of resources and coal and iron ore and even LNG, that leads the Australian government balance sheet or in terms of trading in a fantastic position, which we think kind of sets the Australian economy anyway up very well. And probably, arguably, I would say, one of the best places to invest globally over the next 6, 12 or even 24 months. And then probably just this chart really just ties into that as well. As you can see, global trade has been flatlining now for a while. I think the interesting thing is that a lot of people have been commenting on the fact that it's potentially not a demand issue, but it has been very much a supply side issue. So a lot of people are talking about supply issues in China with some of the potential lockdowns that may occur in, obviously, Beijing and Shanghai where there are COVID outbreaks. But some people are now saying like out of China, it's actually becoming a demand issue. Obviously, the Chinese economy has slowed significantly. The Chinese government came out yesterday and said they want to throw all money into infrastructure, which they have done so for a better part of probably 2 decades now. But it will be interesting to see what has been a supply side issue, especially around things such as semiconductors does translate into a demand side issue because, obviously, if that is the case, and that generally leads to a worldwide recession, which is not great for stock markets. But that hasn't eventuated yet, but it will be something worth keeping an eye on. And thankfully, hopefully, a topic that's a little bit more upbeat in mind. I think we're very privileged to have John O’Sullivan join us today as many people have been on our presentations have known, we'd like to get a CEO on now every quarter, and we've had some fantastic CEOs previously. John runs Experience Co., has been there now for I think it's about 2.5 years. Was formerly the Managing Director of Tourism Australia for almost 6 years. So I would argue, you'd find -- it'd be hard to find anyone who's knowledgeable as John when it comes to domestic tourism or Australian tourism in general. John came in to run EXP, unfortunately, just before COVID. And since then, we've built up a very large shareholding. At one stage, it was a very large shareholding for us and still remains a top 5 position across the NAOS Group. And we thought it'd be very timely to get John to speak about some topics that are very topical. Some of the anecdotal feedback we've had, especially coming out of Easter, is actually domestic tourism around Australia has been exceptionally strong. So we thought it would be great to get John on to provide some color on how he sees Australia's inbound opportunity in domestic tourism operating, operators more generally. So I'll pass it over to John, and I'll return towards the end of the presentation.

Thanks very much, Seb, and thanks for that introduction and presentation. And good morning, ladies and gentlemen. I'm coming to you this morning from Gadigal lands of the Eora Nation and I'd like to start this presentation by recognizing elders past, present and also emerging and welcome any other Aboriginal and Torres Strait Islander communities that are with us here this morning. As Seb said, my name is John O’Sullivan, and I'm the CEO of Experience Co. And today, I wanted to talk to you about the Australian inbound tourism opportunity, which I think given everything that our country has been through, particularly over the last 2 years with COVID, but I'll say a little bit before that with the bushfires of summer of 2019. It's something that has been quite topical. But by way of my background, as Seb said before, having spent the best part of 5-or-so years running Tourism Australia. It's also something that's pretty close to my heart. And in this job, frankly, it's also pretty close to my heart as well. So it's a topic that's of quite interest. So Angela, we might go over to the next slide, if that's okay. Thank you. Look, before I get into talking about the inbound opportunity and the way that things are structured, I thought it'd just be an opportunity for me not to share a little bit about who we are at Experience Co. We're a business that was founded back in 1998, and we listed on the Australian Stock Exchange in 2015 by our founder, Anthony Boucaut, who remains a Non-Executive Director today. We are one of the few pure-play tourism stocks on the ASX. And we are one of Australia and New Zealand's leading adventure tourism companies. Our business really specializes in 4 really distinct areas. We are Australia and New Zealand's leading provider of tandem skydiving experiences. We operate across 17 locations in both markets, including the iconic Wollongong at Stewart Park, but also the Queenstown Basin, which is, frankly, the people who know adventure is the home of adventure in the Southern Hemisphere. We're also Australia's leading provider of 3 top aerial parks. We have 14 locations around Australia operating under the Treetops Adventure brand. And this was a business that we acquired in late 2021, and we provide high ropes courses, zip lines, wayfarers as well as suspended net worlds [indiscernible] that domestic family market. On the Great Barrier Reef, we're the second largest operator of day cruises out of Port Douglas and also Cairns. But also really importantly, we're also one of the largest providers of marine biology services to the Great Barrier Reef, working in conjunction with groups such as Citizens of The Great Barrier Reef, The Mass Foundation on Reef Conservation as well as Reef Preservation. And then finally, we're one of the leading premium adventure operators in Australia, operating multi-day war and wild life experiences through our WildBush luxury brand, which operates in the Northern Territory, South Australia and also Tasmania. Very simply, our mission in life for our customers is about helping them escape their ordinary lives. Not saying that everyone's life out there is ordinary, but that's what we're about. We're about providing highly immersive, life-changing experiences in some of the most iconic and beautiful destinations in Australia and New Zealand. And really importantly, we're also about working with traditional owner groups and also highlighting the conservation and environmental messages in and around those locations that we work in such as the Great Barrier Reef. Importantly, for this discussion, as Seb sort of alluded to before, prior to COVID's onset, we were a business that had 65% of our Australian customer base coming from international markets and over in New Zealand close to 90%. So that's a little bit about us and, of course, you can see from the slide there, our website should you require further information. Thanks, Angela. We might move to the second slide. To give you some context, I wanted to sort of -- it's almost like going back to my Tourism Australia days and talking about what was the Australian inbound tourism industry. And it was, as I used to describe it, from 2010 through to 2019, it was an overnight sensation that was probably about 9 years in the making. And from a modest start back in 2010 with $25 billion of overnight expenditure through to 2019, we saw unparalleled growth to almost doubling in the value of the industry to $45 billion. And during the peak of this growth period from 2014 to 2018, this industry was growing at a CAGR of about 7% year-on-year. So it was one of the fastest-growing sectors of the Australian economy. In fact, we were outpacing the growth rate of the Australian economy for a sustained period during 2010 to 2019. When you combine with that the $80 billion-or-so that Australians spend on intrastate and interstate tourism around the country, it was a $125 billion industry back in 2019. A lot of the inbound story was fueled really by 4 sort of phenomena, if you like, that really turbocharged the growth of the industry. The first was the growth of the Chinese market, which was fueled by a rising middle class in Australia back in 2019, welcomed 1.2 million Chinese visitors, which in and of itself had a 9 million, doesn't sound like a lot. But when you think about that of that $45 billion, they generated $10 billion of that, they were a very, very important market and fueled a lot of that growth during that period from 2010. The second area was the unprecedented growth in aviation capacity into Australia, particularly from international carriers who from markets such as Middle East, of course, China, the U.S. and also Southeast Asia and more lately in 2018 and 2019, a return of the Japanese aviation capacity from mainline carriers also. What also combined with that if those 2 structural elements, if you like, was an acute appreciation of the attributes of Australia as an international destination. We've always been known to be a safe and welcoming destination. But what really came to the forefront during that period was also an appreciation of our food and wine, our wildlife, our adventure experiences as well as the, I guess, the natural beauty of the country in and of itself. And finally, it was also fueled by some $800 million in investment in demand generation by federal, state and local governments as well as an unprecedented level of investment we saw into tourism infrastructure, which saw around 40,000 new hotel rooms built across the country. It was a 3% of our GDP. It was our leading services export. And importantly as well, it really fueled regional economy growth, $0.40 of every dollar that an international visitor spends is spent in regional locations. It employed 1 in 13 Australian, so it was a big industry. Of course, in 2020, with the onset of COVID-19, the music stopped. And as you can see from that slide there, the -- as fast as the growth was over that period of time, the fallaway was just as dramatic. And certainly, with the closure of our international borders, suspension of outbound travel from key markets and, of course, the -- I guess, the domestic lockdowns and border closures, the industry came to a standstill. So Angela, can we please go to the next slide? As dramatic as that cessation of tourism has been, I think it's been really important to notice and watch and particularly as an operator as opposed to being running our national tourism organization has been really looking at how this recovery pathway looks and how it will come out over the coming years. And certainly, it's been a topic of a lot of discussion. There's a lot of viewpoints. There's a lot of theories, a lot of opinions out there as well I should do. Certainly, from our point of view, a lot of the data that we look at and a great source of truth, we believe, in is the work that Tourism Australia has done. They've spent a lot of time in recent years working with the likes of BCG and also other houses in and around Australia to look at this pathway. And essentially, what it comes down to is 3 really fundamental factors. The first one is around customer intent, and particularly, out of those key inbound markets that have been so strong for Australia over a sustained period of time. The second one will be aviation -- international aviation capacity. And the third and really important driver will also be government policy. In and around customer [Audio Gap] tracks out-of-region travel intent. Out-of-region travel means, or OOR is the acronym, that means that people who spend between 6 and 12, 14 hours on an aircraft to get to a destination, so that is your typical international visitor to Australia. And what's really been pleasing is that, as you can see from the slide in front of you, is that even in February, when we still had a lot of these barriers to entry or friction to entry such as PCR tests prior to boarding aircraft and the like, that was already back at 50%. And that was after a relatively short period of time when the Morrison government had announced the reopening of the international borders, and importantly, was well before the announcement that from April 17 that preflight testing was no longer required. And actually, in February, it was actually peaking at around 60%. So that shows you that, that intent for our out-of-region travel to -- specifically to Australia was quite high. What we also saw was that, as I said before that, that international friction was still in place when those numbers were achieved. Supplementing that also was in and around aviation capacity. And certainly from the United States, particularly the growth in capacity since the reopening story has begun has really come out of the North American markets in carriers such as United, Delta, American Airlines. But importantly, Qantas have been able to maintain in the case of the U.S. carriers and then also add capacity quite quickly as in the case of Qantas to returning to those markets. And what we're also now starting to see is that other international markets, particularly the Middle Eastern carriers, but also carriers like Singapore Airlines are now starting to add back into capacity, the upgrading of aircraft and frequency into Australia. Now ultimately, a lot of this recovery pathway also be underpinned by what is government policy, not only here in Australia, but that's fairly well known. And in fact, now is very simple about how you get back into the country. But also what is going to be happening from these key inbound markets to Australia that have been affected by COVID. And what we've seen is really the emergence, I guess, of 2 very interesting trends. The first one is out of the Western markets. And when I speak of Western markets, I speak of the U.S., U.K., Northern Europe, New Zealand and Canada. Those governments have now said to their citizens that they can freely travel. Yes, there might be some testing that's required to be done prior to reentry into their country. But by and large, they've dropped away quarantine requirements, they've dropped away onerous requirements that may have prevented those citizens from traveling again. And certainly, what we're seeing in our business is that the initial phase that we're in now is we're seeing a lot of visiting friends and relatives. But from September, we are now starting to get group series bookings from these markets into our -- into various parts of our business. So the emergence of these Westernized markets, the segments such as the backpacker, the high-end traveler, particularly people who like luxury experiences, we're now starting to see that returning. And interestingly, also through our skydive business, we spend a lot of time on university campuses during our week. And in talking to international student housing providers like Scape, they're anticipating that some 80% of their pre-COVID capacity will be back by the end of the year, which we think is also a very pleasing indicator. The second group of markets is these really important markets, China, Hong Kong and also Japan. In these 3 markets, the markets have probably had the more onerous requirements on their citizens for outbound travel and people going into those markets. Certainly, we know with China, they are maintaining their COVID-Zero policy, which does make it incredibly hard for international travel into and out of the country. And so that will be very much something that the industry will need to monitor and watch as time goes on and as I said before as well, how their economy shapes up is also going to be a major factor and how that growth that market returns to destinations like Australia. But what we're seeing pleasingly out of Japan, which is now starting to become a great opportunity for Australia in the post-COVID world is that they are starting now to relax some of their COVID restrictions for people going back into the market. So the allowance they had now for residents and also business travelers to come back in with much limited quarantine period and less onerous requirements for pretravel testing is very encouraging. And finally, with Hong Kong, we've seen that from the 1st of April, they've started to lift their ban on international flights coming back into those markets. But those 3 markets will be really important in supplementing those Western markets in terms of government policy and the return to growth. So Angela, could we please go to the next slide? Thank you. As I mentioned before, talking a little bit about the post-COVID world. And I guess with these 3 fundamental areas of government policy, aviation capacity and consumer sentiment, it's really interesting to see and think about how we as businesses in this sector really take advantage of what we see is this great reopening opportunity. And we do think it's a great reopening opportunity because we are overwhelmingly buoyant about how Australia will return at a destination. At Experience Co., we really have built around our strategies around 4 really distinct pillars around how we do this. The first one is the balanced portfolio or the portfolio of businesses that we have within the group. With our acquisition of Treetops Adventures in October 2021, this was the third acquisition that we completed during the course of that year that enabled us to effectively double our customer base, diversify our customer segments and demographics and, really importantly, diversify our geographic footprint across Australia because one of the key lessons that we felt that we took away from COVID-19 was that status quo with a business that was overexposed to an international customer base really wasn't a long-term option. So our business now is very pleasingly a business that has a great exposure for when it returns for the international visitor market, but equally has a great opportunity to take advantage of the domestic opportunity that presents with us before. The second area for us has been in and around the customer. And I think this is really important that during COVID-19, what we found is that customers have never had any more options anytime in the past. More options at their disposal for travel within Australia, now -- increasingly now outside of Australia. Never had before has the customer had so many technologies at their disposal to dream and book their next travel experience, wherever that might be. And the customer now more than ever is demanding a far more direct relationship and far more contact with the end providers than perhaps they've probably done so in the past. For us at Experience Co., what this has meant has been moving to things like automated check-in on our vessels up on the Great Barrier Reef, new and improved reservation systems across the entirety of our business and the redoing of our customer websites across all of our products within the group. So it's been a really important lesson for us for in and around the customer. The third pillar for us has been around people. And as I say on the slide here, this is the new -- human capital is the new goal for the tourism industry. And yes, there are many shortages and that's probably the #1 issue that our industry is dealing with. But one of the things that we've had a lot of attention to in our business is ensuring that we've rebuilt our culture, that we expressed our values of what it means to be a member of the team at Experience Co. because we want to be an employer of choice. But certainly, that people management will be one of the key things because it does feed back into ultimately that experience you're able to provide your end customer. And then finally, for us, it's been about new product. We certainly think that the international customer, when they return, the domestic tourists that's here in Australia, they're looking for new and exciting ways to experience destinations. And the example I'd like to give is that we no longer like to stand on Main Beach and take a photograph with Surfers Paradise. People now want to come with us, 5,000 to 10,000 feet in a helicopter and jump out over it and experience it under canopy and through the joys of freefall. In fact, I think that's Seb's favorite experience that he's promised me that he will do. So it's really essential, we believe, that for tourism businesses as part of this great reopening year is to reinvest. So for us, we've commissioned new products such as Surfers Paradise. We've just launched our new $7 million pontoon on the Great Barrier Reef, which is the only place on the reef where you can hear the sea country story, the sustainability story and a scientific story as well as your stock standard scuba diving and snorkeling experiences as well. In June, we'll open the second of our 2 new Treetop parks up in the Cape Tribulation, which we're very excited about. And in September, our WildBush luxury brand will be launching a new wilderness trial experience, which gives you the opportunity to immerse yourself in nature in South Australia for 7 days without technology and without an itinerary. And we believe these immersive experiences and this investment in new product will be key to how you take advantage of the great reopening. So really in closing today before I hand back to Rob, who will take you through the next phase of the meeting, there's 3 really key points I'd like to leave you with. The first one is this, the tourism industry has been and will be, again, a very strong part of our economy. There's just no doubt in my mind, in Tourism Australia's mind, in economist's mind that, that won't be the case. We're good at this industry. We have a great destination to market, both domestically as well as internationally. The second thing is that international demand will return because of those destination attributes. But because the key indicators show that customer intend that aviation capacity and, ultimately, the government policy will allow that, that demand to return over the coming period of time. And then very finally, and very importantly, those operators who renew, diversify, invest in new product, but importantly, invest in their people will ultimately take it -- will be the ones best positioned to take advantage of what we believe will be a very exciting reopening story. So ladies and gentlemen, thank you again for your time this morning. Thank you to Seb, to Rob and also Angela for driving the presentation from NAOS. And it now gives me great pleasure to hand you back to Rob Miller to take you through the rest of the meeting and look forward to taking your questions post the meeting.

Thanks so much for that, John. It was great to hear your insights. And I suppose the key part of our investment thesis at NAOS is finding industries that have strong tailwinds and finding good pay to run the businesses within those industries. So I think it's clear to see John's quality there and the industry tailwinds that are becoming climate to the tourism sector mostly got a flavor of that today through this presentation. So once again, thanks. I'll quickly just touch on the 3 portfolios. And obviously, any updates that happened throughout the quarter. Saunders, coming to firstly with NCC. Saunders is a major business within the portfolio, one that's been there for quite some period of time. The previous quarter, they announced a very large deal with the U.S. Department of Defense. [indiscernible] to note here is when we have these conversations with management after hearing about the deal, I was straight on to the fact that it's -- there's little fanfare. It's time to focus on getting on the job and the mobilization to date, in our opinion, seems to be going according to plan. And also throughout the quarter, Saunders have announced further contract reinstated. It's good to know that Saunders have been very big in this for a while. They're not just a one-trick pony and they do a lot in the infrastructure space as well as tanks and the infrastructure program around New South Wales Bridges building. It's about $500 million to be spent on regional bridges. Saunders is certainly picking up that fair share of that spot. I think that the final point I want to make on Saunders today is under Mark Benson's leadership, this business has been turning profit to cash, I should say, in a much better place than it was before. And equally, the pipeline of the opportunities that they are able to go after has increased significantly. In fact it's doubled from a few years ago to close to $1 billion worth of work that they identify as possible over the next little while time. And clearly, we've got a risk weight up to what they may be able to win, but the environment for Saunders to continue to do well, in our opinion, is very strong over the medium to longer term. Secondly, on Contango, our funds management distribution business. A big part of the thesis there is around diversification of the platform. So clearly, WCM has been a fantastic success for Contango. Now that they've done the path of 2 new managers with Vantage being a private equity one and also recently announced with Woodbridge, which is in the alternative real estate funds management that's just a reason itself. And we think that has legs in terms of the areas that they're operating and investing in. Build-to-rent is very much a key and growing sector within the property space. And we think if you look at overseas trends, there's a lot of upside in that space within the Australian market. Also, there's been some more changes there, which we think are positive for the medium to longer term. And thirdly, COG, which is one that all of our investors all know well, been a big position for many years. I think what was a really key thing that they did within the quarter was the strategic acquisition within their subsidiary, Westlawn now that they've got a majority control of that subsidiary. They've been able to deploy cash in efficient ways. So they bought a business within the Westlawn subsidiary called Mortgage One, which is a well-established profitable business out in Melbourne. That business was at scale restrictions in terms of how it could grow from there, in our opinion. So COG can now use their excess cash and they are able to continue to grow that business and offer it across their wider distribution network. So clearly, the jewel in the crown of the COG business is the distribution platform that they've got. And you can see that in approximately about $7.5 billion of annualized net asset finance out raised through the platform. You look at some of the comparables in the space, and there's been some large multiples paid for things such Australian Finance of late, which is a much smaller one at much higher multiples than COG is trading on. And if the inflationary environment is here to stay in the medium term, then cover a beneficiary of that net finance broking arm when you see that they charge a commission on the total value of a deal. So if the deals go up, then certainly commissions in terms of the dollar value will increase as well. Coming to the next slide, just on the NCC particulars. There was a 3.75% dividend paid recently. And I think the one thing which I always like to highlight here is the consistent track record we've been able to demonstrate over a very long period of time of paying fully franked dividends. So that's all on NCC. I'll switch to NSC [ horizon ]. And once again, we've touched on COG, but I think it's worth noting as well that some of the major positions within the portfolio of the COGs, the Big Rivers of the world, they've been core investments for a long time and they're now starting to see recognition within the wider market with increased broker coverage as an example. But also from our perspective, we're not able to build up substantial positions in these businesses, for instance, in time like now. We have to do that years ago and build relationships with them over time. So it's really pleasing to see that those investment thesis, I suppose, are playing out over the longer term and the environments are there for them to do well over the longer term as well. Coming to BSA. Clearly, Sebastian's touched on this already. There's no hiding from that it has been an underperforming and a problem child for nails across the board. But what I would say at this point in time is the legacy issues around the class action have been settled. That is done now. That was a massive headache and a waste of time for the business. That's been changed. And I think where we got this business wrong of late is the lack of accountability from the previous Chairman and the CEO. Both of those issues have been changed as with the wider people issues we think are now fixed up within the business. Brendan has been excellent on the Board there. He's done great things in helping to turn this business around from where it was to now with a blank sheet of paper, with an existing strong revenue profile and also a strong customer base that are looking to spend more. We think there's upside in the margin. So they don't have to do much to turn this business around, and it's certainly an opportunity for the new management team when they joined at some point in time. And thirdly, just on MOVE Logistics, which is a relatively new one in the portfolio. Obviously, that's now looking to join list in Australia, which is a great thing. But I think the turnaround -- the transition period of the turnaround has largely been done and now it's business as usual. And I think if you're going to be a logistics business in the inflationary environment to do a restructuring pricing and fixing up of legacy issues, there's no better time to do it than in a strong inflationary environment, which has supply logistics issues. It runs obviously short on supply and no one can have that freight on time. We think we are in an excellent position to be able to dictate terms with customers where appropriate. I think as well, it's worth pointing out that the turnaround is not only successful, we've actually got a strong management team behind it and Mark Dunphy -- sorry, Chris Dunphy and Mark Newman that run this business are at excellent pedigree. And I suppose we can see that in the quality of people that have now joined the business under them as well. So the turnaround is done, and we look forward to seeing how they go over, say, FY '23 and FY '24. Next slide, please, this is on the NSC side of things. The other thing I think that's worth pointing out here is the buyback for the last 12 months finished. We've reinstated that again for the next 12 months. We bought back about $8 million worth of stock in that period of time. And we're very happy to buy our shares under NTA that benefit the rest of the shareholders who want to stay and also when we think we've got conviction on our long-term investment ideas, then we think it's a good use of capital to do that. The dividend was paid of 1.35% in March, and I think there's another 1.35% to come out in May as well. So that's it for NSC. Coming to NAC, please. And I suppose a very kind of clear state of comment that we certainly think it's true is that the share price performance of -- I suppose overall of the investments within NAC has been probably a true reflection in the quarter of how some of the underlying businesses have improved over that period of time. Firstly, with Eureka, which is an independent seniors living business. Clearly, there is more flood affected than which was a market announcement they made with their property there was largely seen as catastrophe in terms of the impact on that. But if you fast forward and you kind of separate that out from the business, FY '22 has been a reinvestment year, which has seen some changes to their original guidance. But I think this is clearly stepping them up for strong growth in the future. And we do a lot of [ work and analysis ], as I kind of mentioned at the start of my topic of discussion here was around industry tailwinds and finding and identifying them. And I think there's no stronger industry tailwind, in my opinion, in Australia and aging population and affordability around housing. So we think Eureka has now got a platform in place, the people in place to really execute upon growth in FY '23 and beyond. Secondly, Urbanise, I think, again, one where the share prices hurt us in the short term, but we -- the quarterly was raised this morning. So we'll echo with the interim CEO. [indiscernible] this morning, so very up to speed on that one. And what I would say here is the Ventia issue. They lost a contract with Ventia during the quarter. That was largely out of their control, and that certainly is the risk when you have enterprise software businesses that you can lose multi customers. But we certainly believe with Urbanise, the underlying business itself is very strong. This is a really, really good product in terms of not only in the strata space of the FM space and the ability for those 2 parts to connect. We think they have a genuine competitive advantage in what they do. And we think that once the CEO situation is sorted out, the same -- a few other issues around the cash burn and the profile of that business, that's all being largely taken care of at the moment by Simon, who is doing a fantastic job in terms of data. We think that once this is a stable business, the product will speak for itself, and you can see that already with the large customer wins they've had in the [Indiscernible] in the Middle East and also with Coles, Australia. There's plenty of upside with what they do. And then thirdly, just on Gentrack, which is our enterprise billing business for the utility space and also airports. They upgraded their FY '22 guidance, but the revenue line, which was very pleasing to see, but also, it's worth mentioning that their EBITDA, that's a reinvestment year, so the EBITDA has dropped down a bit in terms of what they originally guided for. But one key in our opinion is they've maintained what they've called their FY '24 targets. So their FY '24 targets have materially higher EBITDA margins than what they are today and also revenue growth. So we're seeing that revenue growth, and we see this as a one-off year of reinvestment. The management team are out here in Australia next month, so we're looking forward to catching up with them then. But we've had a few engagements with the new CFO, and we're very excited to see what comes of Gentrack over time. But what I would also like to say here is, as you separate, there's been a lot of noise in the tech sector. Things have derated significantly. Gentrack is a real business. They haven't suffered such a day rate as others. This is a real business with real customers selling real-world issues for those customers around deregulation, and decarbonization is huge issues for the energy sector going forward and having a lower cost of service paramount. Gentrack provide benefits to their customers in this space. We're seeing no red why this business can't be a much bigger business in time, led by what we think is an excellent CEO being Gary. And finally, next slide, Angela, please, just on the NAC snapshot at the end of the quarter. There's nothing material to note there apart from -- that's not already on the market. The only thing I would say is that the dividend for May is a step change again on the one that was paid, so investors also maybe saying that soon. So with that, I will hand back to Seb to finish up the presentation. Thanks, everyone, for listening.

Thanks, Rob. And I'll try to make it quick. But before I do, just a friendly reminder, [Operator Instructions]. Just in regards to the slide here on capital management initiatives, to be honest, I'm not going to really touch on it too much. I think the core of this slide is really the core of our investment policies as well, and it's all about sound capital management. So we really want to back -- align people, so we're aligned in these funds. As I said, the staff and directors are some of the largest shareholders in all the LICs. We want to provide quality, transparent and objective information to our shareholders and we want to allocate our capital as efficiently as possible. And we do that through a growing dividend stream that we hope remains fully franked for the foreseeable future. We buy back shares where we believe that represents value for our shareholders, and we try to eliminate dilution through ways such as the DRP, which is acquired in our market, which is below NTA. Next slide, please, Angela. So just an outlook. I mean, I always provide this at the end of every quarter, and I'm sure if I went back and looked at them, they probably wouldn't eventuate. But I'll give it my best shot considering probably the soft order we did have. And I think, in a nutshell, if I could probably provide it with in summary, the market is really hopefully shaping up to be a stock pickers market. Market volatility like what we've seen today because of those issues that are listed there, such as inflationary issues, interest rate expectations, geopolitical issues should really benefit funds such as NAOS. Our businesses should be able to grow, hopefully, regardless of some of these issues and aren't heavily reliant on revenue multiple valuations such as the tech counterparts. If I look ahead and say, well, what really gets us excited to drive the NTA higher and what could change? As Rob said, the Gentrack result, it's out of cycle. So to the end of May, I think that will be a very interesting result. Gary and his team have got a history now of upgrading or meeting expectations essentially every time, which I think he's initiated that plan, so that will be intriguing to see what can come up with there. We have noticed that on LinkedIn, as an example, they have started to win some larger customers. John and his team at EXP, obviously, no pressure, John, but an interesting post out of Cairns Airport, the other day, I think, was on LinkedIn or Twitter, saying they had the most amount of people through that airport since 2019. And then speaking to another hotel operator yesterday doing their budgeting, their budgets are now back to 2019 levels even with our international tourism. So that really shows you that tourism, in general, is very strong. So it'd be intriguing to see if EXP, they may provide some sort of update in regards to those conditions and what they're seeing from a demand perspective. COG, pleasing to see them at record highs. Andrew and his team have done a fantastic job of acquiring businesses and growing organically in a very smart, capital-efficient way. They've got their first bank facility from -- I think it was Commonwealth Bank. And it'll be interesting to see whether or not they can use that in the broking space because they are, as Rob say, they're the biggest broker by far. And I think if they can really cement in that position, then there'll be a valuation uplift from a multiple search -- multiple rewrite, sorry. BSA, without a doubt, they need a CEO. So we'll be waiting with bated breath whether or not they could find a CEO and what sort of CEO they can find because it really needs someone to drive that business forward, reset the culture and really take some accountability and hopefully drive the margin on that realized revenue base. And then Saunders, which again record highs today. Mark's done a fantastic job. But really whether or not we have noticed that a couple of competitors have won some more recent contracts of size. And I think it's probably Saunder's view that they're trying to wait and take their time and really pick up the most profitable, largest and easy execution contracts out of the bunch. So I think something might be a little bit concerned. I don't think we're concerned at all, as Saunders have plenty on the plate relative to their peers. So I think they have the right to be choosy when it comes to these upcoming contracts. And then obviously, just to finish off the now is 1% pledge, which is here all the time. Obviously, we donate 1% of our revenue to each of those 4 charities below, 1% of our time. I know the team is going out to start learning some trades with Greening Australia next month from memory, I think. And then 1% of our intellect, so we obviously want to help young members of the community who not necessarily as privileged as others develop an understanding of financial markets, and we want to try and assist them as best we can, which we have done so previously as well.

So with that, I'll touch on some questions. And I've got some in the box. I've got some on e-mails, and I'll just run through the e-mails first. So one from -- I'm not pronouncing, it's just going to be shocking, so I apologize. It's [ Kemnath ] and the question was around Eureka Group. So EGH, the big holding for us and how the recent flooding event has impacted EGH? So I think, as a group, it's been minimal. They do have a property in Lismore. And unfortunately, that property was, as per the ASX release, was completely destroyed, unfortunately. Thankfully, no one was injured or even killed. But I think from an earnings perspective, it will affect their earnings going forward. But as Rob said, we remain convinced on the industry backdrop. And even Lismore itself, the feedback we've had from Lismore is there still plenty of people there that obviously require -- people got a disadvantage that do require some form of housing, especially elderly people. So there is definitely a business case there. It really just comes down to economically does it work and what is the risk associated with putting another facility in Lismore. The second question is from [ Keith Round ] on Wingara, which has probably been one of our smaller positions now thankfully, but it has been a problem child for us. And the question is, can you comment on the progress of change at Wingara? And unfortunately, for Brendan, he's part of our team. He's been on the Board there now for must be 6 months, and it's really been a baptism of fire. I think the team is doing a fantastic job. James, the new CEO, the Board and they've also across some new executives there. They're working extremely hard. It has been a very tough market for them due to COVID, so they've had efficiency issues, which they've stated publicly, but we very much believe in the new team. They've got a plan which they've stated that they want to divest their cold storage business, and we feel if they can do that. The hay business remains a very attractive business, which they have shown so in the past. And then the last question from [ Peter Rickards ], and an obvious one. Just commenting on the recent performance of NAC over the past 3 -- probably 5 months, to be honest. And as I was telling someone yesterday, unfortunately, NAC was our golden child. And I remember this is clearest day 6 months ago. It felt like everything we touch turn to gold. And now it feels like everything we touch, it turns to something else. And -- but as Rob, I think, tried to allude to before, I think that's been a suffering for 2 reasons. I think the first reason is some of our core positions have recently -- they've stopped going up in layman's terms. And that's not necessarily a reflection of the business. I think it's a reflection of the market. Certain things were priced in, and I think they did need to consolidate where we really shot ourselves in the foot peers. Some of our smaller positions have really hurt. So obviously, once that is urbanized, as I mentioned before, Step One, which has been removed and that we just haven't been able to offset those gains. But I think if I look across the portfolios, I was saying to Rob yesterday, I feel like NAC probably has the most potential out of the 3. There are some fantastic businesses in there that are big core positions. Your Gentracks of the world, your Experience Co.s of the world. And they're real businesses, conservative businesses, great balance sheets. They will do well in a high inflationary environment, and they've really been left to their own devices and they'll dictate the outcome. And we're on future supportive of those businesses. And hence, why I think NAC may wake up one day and just like we did in the previous year where it was up 65%. It has plenty of potential. Performance, albeit I don't think that's going to occur in the next 2 to 3 months. Just moving on to some of the other questions. There's actually one. I'll do 2 questions and then there's one for John, if I could pass on to John. So it's just the 2 for me. Does NAOS currently own any shares in URF? No, we sold out. You would have seen our season to be substantial. We sold out, thankfully for again. We did see, obviously, the release of the transaction that they're entering into or want to enter into. So thankfully, we're not there. It will be interesting to see how you or our shareholders vote to stay support that transaction or not. The second question from [ PK ] is on MXI and MOVE. What drove us to see -- what drove you to add these positions to the fund? Yes, I think, so MXI, without giving the whole secret sauce away, I think, for us to put it very simply, I think industry dynamics, it's a cottage industry. Truck parts distribution dominated -- if you say, dominated by 3 players. But there's still a very small share of the market. So there's plenty of opportunity to grow. If anyone on this call try to order a new truck recently, it will be the best part of 12 to 24 months. It's impossible to get a new truck into the country. So hence, the need for spares will increase over time because the average age of a truck will increase substantially, we believe, over the next 2 to 3 years, hence, driving demand for truck parts. And the third one is the actual business that MXI is now has been probably very neglected. It used to be a truck trailer business and the one that actually made money was the truck parts business. So they divested the trailer business, and now it's just a parts business that we feel like the parts business was neglected, and now it's finally had time to stand on its own 2 legs and be reinvested into. And therefore, hopefully, we should gain some growth out of that. MOVE, I think what really attracted us to that was it's a big business. It's a big revenue base. It doesn't make a lot of money. As Rob said, if you look at Chris' history at Mainfreight as well as his fellow Board member, they have a fantastic pedigree. You'll struggle to find anyone better broadly in the logistics space without being a former CEOs as Mainfreight. And also, Chris has put a lot of money into that business, probably close to $10 million, I think, into that business and recently acquired some shares. And the market over there is dominated by Mainfreight. Mainfreight is probably more than half of that market. And then we think if MOVE has been listed here, it will bring with us some interest, which they're planning to list here next month. Then another question here is from [ Chris ]. He says, now it's substantial for many in meadow in most of your investments, which is true for such holdings. Do you ask for or hold Board seats? If you do not hold any, why not? Yes, good question. I think it's very much a motto internally. If we want to put someone forward, we generally want to put someone forward who is independent or the right person for that Board seat, which I think is an example of Saunders. Obviously, we put an independent on the Board of Saunders as an example. And we feel that is best for the business because the people at NAOS may not necessarily have the right tools and the toolkit to add value. And then obviously, the second part of that is if we feel like we would like someone on the Board to represent NAOS because it's a large position or we want to be, I suppose, more in the weeds of what's going on, then we will do that. We have done that in the case of BSA, Wingara and now Big River. And obviously, Brendan's on all 3 of those boards. And I suppose to your second question, why not? Because I think I'm a big believer anyway, rightly or wrongly, that we really want to trust proven people who are accountable and aligned so there should be no need for us to put someone on the Board as a representative of NAOS unless something really requires us to so we really want to back people and their decisions. And hopefully, that works out. So hence, why we don't request for Board seat every time we go substantially. There's a question here from [ Alistair ]. Due to the increasing aged care accommodation metrics, it is my view that there will be more government scrutiny in control of this area, including a focus on the cost on clothes on customers of these facilities because Eureka have the same view. I think the one thing I would say and we look at the hard way was Eureka is not an aged care provider. It is -- it falls on to the -- it's called rental -- legislation, just like you would rent in a park. So it's legally just -- it's for monthly rent, so they don't provide any aged care facilities or services and it's more like a community. And that's what we like about it because there's very little to no regulation. I do think if you -- Eureka's view is they need to provide a very quality -- high-quality service and a community feel because, obviously, more and more people don't want to go to aged care for all the obvious reasons that have been made very public to date, which is probably what you're speaking about. And hence, why it's probably quite hard for these operators to generate a reasonable return operating an aged care facility. Hence, why we're quite attracted to that AGH space. Last question here from [ Pico ] before I get back to John's question. Sorry, John. Essentially, it's about Qualitas. And what do you see they do differently to other property fund managers? There seems to be a lot of similar managers in this space, and it makes it hard to outperform, especially when we're entering into tighter macro environment conditions, et cetera. Yes, good question. I think that's really the first thing we thought. And I think the reason we're attracted to it besides the alignment is obviously their track record, but more importantly, their flexibility to go through the capital stack. So they're not just equity investors. Sometimes they are no equity, sometimes they'll have senior debt, sometimes they'll have mezzanine debt, sometimes it will be development funding. You have to be the same [ plain vanilla ] property fund manager that many others are. You may argue that others that do that and there are there probably -- there's nowhere near as many, and that's what attracted us to Qualitas offering because they do have such flexibility, but ultimately, you're getting property exposure. But I think the truth will be and out in the next few years and whether or not they'll continue to perform off a much higher fund base that they have been able to get far from some very sophisticated investors, which we think is a reasonable level of -- gives us a reasonable level of confidence. And the other thing about your interest rate environment is what -- the anecdotal feedback we've heard from much more sophisticated investors than us is that even though interest rates are tightening, their view is that cap rates for quality scale property assets will continue to fall just because the amount of money looking for a home that continues to be out there. So in theory, be quite supportive with property funds management businesses. And then just the last question was for John. Sorry, John, if you're still there. But it was just from -- but it was essentially how do you see the void of Chinese tourists being filled in Australia from an international perspective?

Well, I think the honest answer to that is you don't replace a market of 1.2 million people with -- in its entirety, you don't replace that. It's very hard to replace that. I think what you will see is you'll see a component of that market come back because there are students that will continue to come back here. There's an independent travel market out of China, which will go where they want to go to. They're not so subjective to the directives of the China National Tourism Authority as the groups are. And for Experience Co., we're not so obsessed with the 1.2 million Chinese. We are more interested in that really high-end independent market because the skydiving component of our business, particularly was built around that, not around the group series markets. I think you'll also see increased demand out of markets like India and Japan, I think, is the -- for me, is probably the sleeper, given the fact that they were starting to reengage again with Australia back in 2019. There was more direct flights coming out of Tokyo on their mainline carriers, ANA, Japan Airlines and Qantas also is upgauging its capacity as well. So I think -- I don't think anyone should be under any illusions how and important the Chinese market is to Australia. It's a very hard market to replace outright. But I do think what you'll see is that an independent part of that market come back fairly quickly. You'll then see some other markets that will maybe take up a little bit of that excess. And I think markets like India, Japan, particularly. And I also think there'll be probably in the initial terms and over-indexation of demand out of the U.S. for both Australia and also New Zealand because of just the perception of how Australia has handled the pandemic.

Thanks, John. And with that, that is actually the end of the call. So I would like to obviously thank John for taking 1.5 hours out of his day. I really appreciate it, and that's a lot of time and it was a big ask. We all really appreciate you making the effort going through your presentation. And then obviously, to all of our shareholders, thank you for listening and attending, especially when the performance was a little bit soft. But as always, if you do have any questions, comments, suggestions, there is a survey, which you can do at the end of this presentation. If you click the link but obviously, we always get a lot of feedback by e-mail of clients. So if you do have any questions or suggestions, don't hesitate to e-mail or contact me directly or any other member of the team. Everyone is happy to take that on board. So thanks again for your support. And hopefully, we can provide you with a much improved update next quarter.