NAOS Ex-50 Opportunities Company Limited (NAC) Earnings Call Transcript & Summary

Good morning, everyone. My name is Sebastian Evans. Welcome to the Q4 webinar presentation for FY '21, which thankfully is now -- now ended. As you'd be aware, the ASX or the presentation material was lodged on the ASX. I think Angel also send it around this morning by e-mail, if you are trying to find the document that I'm referring to throughout this whole presentation. For those of you who would like to know, as always, there will be a recording that sent around to everyone who is on our distribution list. So if you do want to sign up, just hand to the NAOS web page. So with that, I'll just go to the next slide, please, Ange. Yes. That's -- I'll pass the disclaimer. But as I always say, in regards to the disclaimer, we do mention quite a few stocks through the presentation. And as many of you probably have been watching this for a few years now. As I always say, this is general information. It's not certain to your specific needs, please seek your own financial tax advice. And please don't take this as gospel. Yes. Actually, one point I did miss out on. In regards to the presentation today, you would have known or noticed hopefully, that this is a slightly different presentation than usual. We've been lucky enough to secure Jim Bindon, who's the CEO of Big River Industries. He will be presenting just a few slides to give you a brief, I suppose overview of the building industry in general, which has obviously been extremely topical in regards to house prices that's been on infrastructure. And obviously, the shortage of some raw materials and products and also labor probably more recently. So Jim has been very kind enough to supply us with 15 minutes of his time today and in clearly what is a pretty busy month of the year for him. So we thank him, obviously, and Jim will take over from me about halfway through the slide. Just in regards to NAOS Asset Management. For those of you who don't know who we are, NAOS has been around for quite a long time now, almost 15 years, but we listed our first LIC back in 2013 with 400 very loyal shareholders. And thankfully, we've turned that $17 million into almost about $400 million today, and we're lucky enough to have over 8,000 shareholders and investors across our group. Clearly, what we stand for when I get to the next slide, but we are very much along with all of our shareholders, as many of you would know me, for example, pretty much all of my liquid net wealth is in all 3 of the funds. So we feel that's the best way to align ourselves with all shareholders and ensure we maximize value for everyone. Obviously, we also have a very strong ESG overlay across all of our funds. That applies obviously to what we invest in and also what we expect out of our investments over the longer term. The next slide, please, Ange. This slide has moved up our team and directors obviously. The reason it has moved up is I do want to touch on a couple of key points. We've made 2 hires recently, quite notable hires over the past 3 months, which is quite a significant piece of, I suppose, new staff into a business of 10 people. So the first of those was Jared Tilley, you can see there, who is a senior investment analyst. Jared joins us from -- most recently from Contact Asset Management. Some of you would know that contact run the BKI LIC or managed fund. Jared joined us as a senior investment analyst to support the investment team, especially with a lot of our qualitative research, and it's been fantastic having him here for the first few months. And the second hire we've made recently, just -- Brendan just started a couple of weeks ago, is Brendan York. So some of you may know the name from our days as being a very large shareholder in Enero Group. So Brendan was the former CFO of Enero Group, of which we were a very large shareholder for a long time. We're pleased to say Enero was one of our best-performing investments over the inception of our NAOS funds. So we're very pleased to have Brendan come on as a portfolio manager to help us round out the team. Definitely gives us a very different skill set for myself and Rob and I suppose as Brendan progresses, and hopefully, is here for longer term, probably allows us to look at a few different strategies, hopefully to complement the way we invest and how we manage our investments today. Next slide, please. Just touching on this very briefly again. The investment beliefs obviously, hopefully, you would know what we stand for, but I think I'll touch on just 2 or 3 of these. The first one is we very much invest for the long term. So I think if you look at something like a Big River Group as an example, that's the type of business that we probably feel we could own forever. That's the mentality we take. We don't take the mentality that we want to own to some -- an investment for 2 or 3 years because we think we can earn a [ per quick turn ]. We really believe that these businesses can turn into something special based upon the people who run them, the industries that they operate in and being conducive of growth and the competitive advantage that they have. And I think that's the mentality that we apply across all of our investments. We don't follow stock liquidity. We don't know -- we don't follow the index in any way, shape or form. So not one of our stocks is actually in the small ordinaries, which is quite a neat fact. And we very much focus on management alignment. So just like the way we run our own business here, we expect the same from our investments. So we very much focus on founder-led businesses where they have a lot of skin in the game. They have a lot of ordinary equity and they're really very driven, I suppose, to succeed over the longer term. Next slide, please. Just I suppose the final slide on NAOS and this is one we've put in more recently, but obviously, the reasons not to invest with NAOS. Thankfully, I do get some people reminding me from time to time why they wouldn't invest with NAOS. But to summarize it for you, it really touches on why we're very different to our peers. We don't believe we have a peer and the reason is we run a very concentrated fund. We have about 10 investments across each of the portfolios today. As I said, we're very long-term investors. We have very little stock turnover. And yes, some of our investments are very small. So some of you would know we have a 30% holding in a business called BTC Health, and that would have a valuation of about, I think, $15 million to $20 million. We don't follow an index, so we can deviate significantly from index returns. We're focused on industrials. So unfortunately, in the commodity burn that we're going through today, we're not benefiting from that, and we don't invest in very early-stage businesses. And then finally, our funds are reasonably small. So -- and the reason is that maintains our nimbleness and our ability to get in a meaningful position in a smaller business. And therefore, hopefully, if that business over time develops, then our shareholders will gain more meaningfully from that. And then finally, as I have said before, we are very much ESG aware and clearly, that does not suit all investors. Next slide, please. So I suppose the most important slide of the presentation and probably very rear-vision mirror, unfortunately. But clearly, it was a fantastic financial year for all 3 of our funds. It's pleasing to say that all 3 funds actually had a record financial year in regards to investment performance. I think the other standout features of this was that even though the performance was very strong, you would find that the investments that drove that performance were probably held in FY '20 and also FY '19. So it's not like we changed something in '19 or '20. I mean, clearly, we've changed some things around the edges. But it's pleasing to see those investments finally turn into something that has generated some fantastic shareholder returns for our shareholders. The other thing I would say, though, is, yes, it was an excellent year, but as I do tend to play things down a little bit. It was a year that we felt like we needed to have after our first negative year in FY '19 and somewhat of a softer year in FY '20, albeit we outperformed quite significantly relative to the index. It's great to have a very strong absolute performance for all 3 of the funds. And importantly, we feel like the future seems like anyway, considering the macro backdrop, it seems like we're entering FY '22 with a significant amount of momentum across the board. Next slide, please. In regards to dividends, again, topical in a very low rate environment, but this slide has been updated to the 30th of June 2021. So for those of you that aren't quite sure what it means, essentially, now LICs require a dividend reserve to be positive to pay out a dividend. They also require a franking credit balance to make those dividends fully franked or partially franked. But what you can see here is for all 3 of our LICs, the dividend reserves are very healthy. So in NSC, for example, our reserve is a bit over $0.20. And then if you look at something like NCC, the reserve is closer to $0.48. But what you can see, and I think what we're most proud of is, we have paid a substantial amount of dividends out to our shareholders. So dividends in regards for NCC, if you gross them up for franking is almost $0.76 per share, obviously, post the final dividend being announced in our full year results that it will be substantially higher as well. So not many LICs have been able to do that consistently. And in regards to NCC and NAC, our dividends have actually never gone backwards over time from year to year. Next slide, please, Ange. Again, I'm probably -- I'm just repeating myself here, that this really puts the performance in a numerical form for you. But as you can see, yes, it was a great absolute return but just as importantly, from a relative performance point of view, it was again very strong. So you can see that across the benchmark, both for funds -- all 3 of the funds had significant outperformance. You might be able to see that there is a typo in regards to NCC and NSC and their 1-year performance relative to the benchmark. That's actually wrong, one of those figures is wrong. I guess it's the NCC. But regardless, very strong performance and pleasingly, those inception figures now are also very strong. And as of June for all the very loyal NSC shareholders who have remained with us, it's pleasing to see that, that fund is actually now ahead of the index for the first time from an inception point of view, after what was undeniably a rocky start for that fund. This is a new slide we've put in, and we do get quite a few questions around this. As I've said before, a lot of people like to understand, well, a, what makes NAOS different. What does the investment team do with their time when they only have 10 investments in each of the funds. And so we try to think of a way to really articulate this as best we could for all of our shareholders on this call. So as an example, this month, in July, the investment team has seen close to seeing -- unfortunately, not seeing, teams calls or calls with close to 80 different people that relates to each of our current investments or even potential investments. So I'd argue that that's quite a lot of bandwidth in what is generally quite a hard time of year to speak with people. And I suppose what we're really looking for is a few different things. But to give you some examples, clearly, there's a lot of internal engagement with companies, whether that's across the executive team. Unfortunately, executives don't always tell you the truth or they may not tell you that the full truth. So therefore, you move on to people like the Board of Directors, both independent and non-independent. But more importantly, wider staff, executives, general managers all the way down to sales executives, assistants, associates, things like that. But the bit that probably gets me most excited and what we're probably most passionate about is a lot of the external engagement. So as an example, many of you would know, we've built up a very big position in Gentrack recently, and a lot of our work has been with former employees of that business. A lot of their peers. So a lot of their peers are unlisted, but there's unique ways you can get in touch with these people, suppliers, customers and industry contacts. And some of the information you can get about businesses, especially from competitors and people are used to work there, people that are tendering to get it -- against each other and people that actually use the software is extraordinary. And it's nothing you're going to get out of a broker report, it's not even close. But it allows us to paint a very unique picture about the people that are running that business, the services that they provide and some of the shortcomings. There's always going to be shortcomings of what they can improve upon and what the opportunity is for them to grow and what they need to do to get there. And I suppose, overlaying that, do they have the people to drive that success and to execute? And clearly, with Gentrack again as the example, they brought in very new and important executives, so a new COO, a new CTO and a new CEO. So clearly, a lot of our time has been working with people who've worked with them before. And when some of these people have worked with them for 5, 10, 15, 20 years, you get some outstanding feedback, both good and bad, but it allows us to make a very good -- hopefully, some great analysis around what the potential could be for a business like that on a risk-adjusted basis. And then in regards to those right street columns, it's more research, I suppose what you would expect. Site visits using the service, a lot of cold calling and then more industry-relevant information. So we look at a lot of transcripts from competitors, industry papers, things like that, surveys, ratings, analytical tools. But I would definitely say a lot of our time around external engagement, first and foremost, then internal and then a bit on the right as well. So hopefully that gives you a bit of flavor for what we do. And when we're trying to do 1,000 meetings a year, it gives you an idea of how many things that we do. How many of these meetings we do when we've had calls with people from Israel, London, Belgium, the Czech Republic, some weird and wonderful places over the past month. Next slide please. There we go. So Q4 '21, without a doubt, it felt like it was a complete blur, to be honest. It was a busy quarter. And clearly, a quarter where there was a lot of flux, it was quite dynamic. Pleasingly, all the funds reported very strong performance. I'm definitely not going to lie, it felt like there was a little bit of puff in that performance. But with the way equity markets are in general, I suppose that's not a surprise. And as I said before, a lot of the businesses, we feel have very strong momentum regardless of the share prices. In regards to capital management for the NAOS LICs, it was a hectic 3 months. Many of you would know NSC issued a bonus auction issue at its post-tax NTA, which is pleasingly -- we're actually so close to that now. We did a convertible notes offer for NCC, which was very heavily oversubscribed, especially from a lot of our loyal existing shareholders. So thank you. And again, it didn't dilute any of our equity holders at the time. And we announced some dividends in regards to NSC and NAC as the quarterly dividends. Many of you would know that buybacks will continue to be very aggressive and thankfully, have continued to be very accretive for all of the shareholders in those LICs. And the NCC options expired. And we didn't -- we didn't underwrite those. We didn't place the balance. We just made the decision that if people wanted to exercise those, they could, and we would let any balance remaining expire. So it wasn't dilutionary for existing shareholders. And pleasingly, we got almost 85% of those exercised. So again, we thank everyone for obviously putting in more money into these funds. And hopefully, it can generate your very strong return going forward. In regards to those last just 2 points, I would say that in regards to structural tailwinds, it's something we've focused on an awful lot lately, especially due to COVID and some of the risk that, that brings. And we've paid a lot of attention to this, and that's why we probably made some newer investments in things like Gentrack and EXP, as you would know, things like the 360 Total Return Fund and Urbanise. And that continues to be a very strong focus for us because we think the macro environment is just so unpredictable, but if you're taking too much risk in regards to some stocks such as retailers, as an example, we feel we don't have any competitive advantage in really predicting the future and how the macro backdrop will affect them. Hence, we've been quite conservative in regards to what industries we're willing to gain an exposure to. It was a very busy period for a number of new investments that we made. I think we've gone through 3 years of making relatively few new investments, as many of you would know. And then, bang in Q4, we sort of -- the way the chips fell unfortunately, or fortunately, we launched into a number of new investments that we've been looking at for a long time, to be honest. So 360 Total Return Fund, as I mentioned in my month-end report recently is a business that we've been in before. We feel that due to a number of reasons, I suppose that the discount to NTA and the discount to NAV is quite significant. But we also believe that the underlying value of those assets could be substantially higher, especially looking at property prices for industrial property where they have a large exposure to. The second one was Urbanise, which Rob will touch on later, I think, in the presentation. And then as I mentioned before, our big investment, I suppose, which is now a top 3 investment is Gentrack. And again, I believe Rob will touch on that further in the slide pack. Just a few charts to give you a little bit of an idea of, I suppose, the relative returns globally when you put in perspective. I think a lot of people think, obviously, the Australian stock market was very strong. And yes, it was. The 3 things I would note was that Q4 was very strong across the board. Surprisingly strong, especially considering some of the issues that we've paid globally. And when you overlay that in regards to the 12-month return, I mean equity returns have been at record levels. And hence, you would see obviously U.S. markets remain at record levels and have done so for some time now. And a lot of that, again, was driven by some of those growth stocks, as you can see, the NASDAQ there leading the charge. They did have a little bit of a hiccup at the start of Q4, but that lasted all of about 2 minutes, and some of those gross stocks continue to charge. Again, based on the thematic, which I think is quite interesting that, yes, interest rates are low. But even when people are expecting inflation to occur and rates will rise, there's still very much an element of people want to be exposed to growth. People aren't necessarily looking for income with no capital growth. There is very much hunger due to the liquidity globally for businesses that can grow structurally over the longer term. Next slide, please. And I think if you look at that macro backdrop, there was clearly a lot of events that occurred through Q4. The major one clearly would be JobKeeper and JobSeeker programs, which ended in March. And I think there was a lot of hesitation around well, people aren't getting their x amount of dollars now on a fortnightly basis. They can't look going to buy the next Flash TV or in some cases, people -- a lot of people we've heard using their super money they could draw down on to buy a secondhand car or a bicycle or do a small renovation. So I think there was a lot of skepticism around what would happen. Interestingly, though, Q4 was relatively normal. If anything, it definitely felt stronger and a bit more normality from a lot of our investments, so people are looking to travel more. Clearly, people continue to spend a lot of money on their houses. There's definitely an element of quite amount of positive to be able to save from the consumer, which, to be honest, I was quite surprised by. But clearly, that was hit on the head pretty aggressively in July, led by the shutdown here in Sydney and New South Wales. But in saying that, there is still a lot of stimulus in the market, and some of that stimulus is affecting some of our investments like Big River as an example. There was a subsidy program for airfares as we have a very big holding in EXP. We understood that some of those programs were very successful, so people looking to travel the places like Cairns as an example, where 4 years ago, Australians probably wouldn't go near Cairns. Now Cairns has been full for months, and it's very hard to actually get accommodation up in a place like that. The SME loan schemes where small to medium business could get some of their lines guaranteed by the government. A big one though was probably the asset write-off program, which was extended to the end of calendar year '23. And that's a huge beneficiary for a business like coal, which we have a very large holding in where some very large businesses can write off in unlimited amounts relative to the turnover. And that's leading to issues like you can't get a new car delivered for 4 months. So speaking to someone yesterday who would be -- would know the industry very well. If you're looking to a trade or anyone looking to order a Hilux, it's a 4-month wait until delivery. So yes, it's had a huge boom effect, but we actually think that the boom is going to continue at least for, I suppose, the first half of FY '22. Then obviously, there's R&D tax rebates as well. Just touching on those last 3 points, which did -- they got a lot of headlines in -- I suppose till the end of June, and Jim might be able to touch on these later on. But clearly, there's some labor and skill shortages across the nation in some certain areas. So we've heard from stories like even hotels actually struggling to get cleaners to clean their rooms. Some hotels in Cairns as an example, are running at 50% capacity because they can't get the staff. It's not that they haven't the -- but they can't meet the service levels they require, obviously, shortage on tradies, skilled workers, even in the health care space due to the immigration and all the issues around immigration. And I think that's a big structural theme that unfortunately is probably not going away very soon. If anything, it's going to be here for a couple of years at least. The global shortages in commodities really led by the fact that Australia is a small market relatively to the rest of the world, and also the fact that those issues around logistics. When the U.S. was booming in regards to new houses and the demand for timber and things like that, suppliers are probably going to supply that market first before they supply smaller markets such as Australia. But at the same time, we have less ships coming here than logistics and the cost of even shipping things here becomes significant. And we definitely have seen that across some of our businesses. And then that last point, which continues to go from, I suppose, left to right and back again is just the topic of interest rates. I don't have a crystal ball. I can't tell you where it's going. But I think my personal view would be, but I think interest rates will normalize a little. But unfortunately, I think the ceiling for the interest rates globally is probably minimal because I think if you raise them too far with the amount of debt in the economy and places like the property market, I think that will stall growth very quickly. Next slide, please. And just to finish off my section before I pass on to Jim. This is just, again, a visual representation to highlight some of the movements we've seen in commodity prices. And unfortunately, the price of lumber probably skews this and takes some of the effect away. But as you can see, the price of lumber is up almost 300% year-to-date. Yes, this year 12 months to the 20th of July. Iron ore price, even though it looks relatively small, that's still up by over 150%. So if you -- so everyone, I'm sure some people here are Rio Tinto shareholders, and you saw the bumper dividend that you received or will receive after it was announced last night and that would be a big driver of that. But it's across numerous commodities, coffee, silver, cotton, rubber. Commodity prices in general have ballooned. And clearly, that will be passed onto consumer, and it may be at the expense of some margins for many businesses as well. So it's very important for us to have an understanding of how someone like a Big River can pass on some of those cost increases to their end consumer, whereby some other business, we'll struggle to do that because of contracted -- contracts that they have, they tend to be quite long dated and don't have the same mechanisms in place to pass on some of those cost increases. So yes, the revenue is ballooning, but you'll find the margins will be significantly impacted by some of these moves. So with that, I believe the next slide is Jim, I'll pass on to Jim. And as I said before, I really thank you for your time, Jim, in the middle of the end of July.

Yes. Thanks, Seb. Yes, thanks for the opportunity to chat to your shareholders. It's nice to have that chance. And that last slide was a good lead in. I think we're -- is an unusual focus on my timing of building products in the industry, which have been over 20 years sort of I've never seen so much interest in timber in building products in the lumber index. So we had calls from media, from analysts, from brokers during the last couple of months would outstrip their cumulative 20 years before that. So I think that's just the nature of the industry at the moment. So there's just a couple of slides that I wanted to focus on mainly, guys, this morning. Just one quick slide of introduction here that's up on the screen. It's really just to give you a feel for the diversity of Big River. And the main reason for that is when I move into the next couple of slides on a couple of the key drivers in the industry, you'll see where we're coming from. And I think the point is we're coming from a well-diversified business. You can see there we're spread across all states of Australia and New Zealand. We've got a lot of end-user trading accounts. We've got a good mix between geographies there. The bottom left pie chart, you'll see where we're well spread between the various states of Australia and New Zealand. That middle pie chart is a pretty important one for us, and that's that diversity throughout the construction sectors, you'll see, and you're probably aware that all the various construction components of the market run on different cycles. Often infrastructure is running differently to the privately funded commercial market, which is different to the resi cycle. So in our experience, the more spread you can be there, the less lumps and bumps you're going to get in your business. I think that's held us in good stead throughout the years. Just the right here and graphs our own internal language, they're our key product categories, but they all have quite different drivers. So the fundamental drivers of what goes on in the formwork concrete industry, different to building products which predominantly go into residential housing, which is quite different from our specialty panels and plywood products, which end up in a whole range of industries, manufacturing, and certainly the commercial construction market. So it's really just coming from a breadth of 120 years history as I move into these next slides. I think Big River has been through many cycles. Just a little bit of trivia for you. We have -- we had a farewell last night for an employee that just clicked over 50 years, which is pretty unusual in this day and age to be 50 years in the same business. There was 13 of us in the room, with just a small gathering and there's 360 years of history in Big River in 13 staff. So hopefully, when I move into these next couple of slides in, if you have my moving on, it comes from a reasonable background of the market cycles there. So just the first theme I want to chat about is about this construction cycle. I think it's not all that well understood about exactly where the cycle is at. People see construction activity and think it's always booming. Well, the reality is it's not always booming. It is cyclical. And this just to give you a little feel for the cycles and where we're at, at the moment. So it's always very difficult to get the industry data. I've had an article this morning with 6 different industry bodies or data companies were quoted. So always trying to find the norm or median in-between all those different forecasting bodies is challenging. So you heard Jim's mowing and Jim's cleaning. Well, this is Jim's forecasting to try and look through all that and come up with our view of how that fits. But previous peak of the construction cycle is clearly 2000 before the GST was introduced, and then 2008 prior the GFC, 2017 with the last peak in the construction cycle, which was about $235 billion of total construction. FY '21, where we sit now at about $195 billion, so a good 17% below the last construction peak and the cumulative expectation from all those various forecasting bodies in our own view, by the way, is that the next peak will be 2024 at somewhere around $240-odd billion. So -- and again, even within those peaks, it's worth pointing out that during the 2008 peak, actually, the resi market was relatively soft. During the 2017 peak, the renovations market was actually quite soft. And during the 2024 peak, one of the reasons that number is not stronger is that the mining, the [ 7 non ] roads and bridges and infrastructure type civil markets are expected to be over $20 billion down on the last peak, and that's largely about mining investments. So there's always lumps and bumps, is the point there. But yes -- the other thing about this slide is just a little bit of a proxy for the population growth versus the peaks as well. So you can see there, 16% population growth between the '08 and the '17 peak. And you can see the revenue uplift was around 20%. Australia's population is forecast to be about 10% higher in the 2024 peak compared to the 2017 peak. So you can see that population growth has slowed, obviously, due to the recent factors. But we certainly believe and the mean of all the forecasting bodies is cumulative, 15% growth in the overall construction market over the next 3 years. So I think a long and short of that is certainly, we're not at the peak of the cycle. I don't think that's well understood. So there's certainly really positive outlook for the industry and in fact, for every sector, which also looks pretty positive. And just for a proxy, Big River, our revenue has at least doubled as we move to every peak. So the 2,000 peak versus '08, versus '17 and versus our forecast for '24, we see our revenue is at least doubling. Obviously, we'd hope to leverage more of that to the bottom line as we get some economies of scale and margin expansion as well. And you might just move on to the second slide. And this is a little bit about what's going on in the industry at the moment. Obviously, that's why you got guys like [ Rob Squat ] quoting the lumber index and everyone talking about shortages of product. Obviously, once it starts to affect people personally when they're trying to do a renovation and so forth, how everyone's got a little bit more insight into what's going on in our industry. So I've just got 2 graphs for you guys that just hopes to point to a couple of analogies. So the first thing is that trends in detached housing. So obviously, there's only 1 relatively small part of the construction industry, but it's one that's pretty topical. And here's just the 4 years of -- a little bit of history in the next couple of years is the approvals and the construction starts. So remember, they are 2 different things. Obviously, approvals were very strong during the homebuilder scheme, which was part of the government stimulus. But obviously, all those starts haven't happened. So those approvals went up 34% in the financial year that's just finished. However, construction only went up much less now at around 17%. So there's a lag basically. You can see on the right-hand side, this is my proxy just to explain what's going on in the market. This is only 1 key product, but the key structural timber product that's heavily used in detached housing. You can see cumulative volumes of both imports and the locally manufactured product, it's only gone up 9%. Obviously, if you got fundamental demand going up 34% with the approvals, but the supply only going up 9% between the cumulative supply sources, then you can see you've got a clear lag there. So yes, that sounds negative. It's actually positive, in my view. No one likes cliffs and troughs, spikes and collapses, whatever words you want to use. All these supply constraints are doing is smoothing the supply chain. So you can see on the left-hand side there, in FY '22, I think the starts will almost match approvals. And then in FY '23 starts will exceed the approvals as the supply chains recover and as we play catch up. So again, it's much better to have 3 good smooth years of construction than 1 big spike and a trough year after. So I think that's very positive. On the timber supply, it's a bit topical. There's just a couple of little stats of trivia for you of how Australia produces 3x more food than we need. Obviously, a huge amount gets exported in most industries, yet we don't produce enough timber to build houses for our population. So look, you'd have to say that's a fair failure on many fronts, but not least of which is the political environment that creates incentives for the forestry industry. It's been political for a number of years. So I don't want to get on a political soap box. But clearly, that's not a great position for a company and -- sorry, for a country. And I think the whole supply chain disruption and some of the geopolitical things going on, I think that's caught the attention of quite a few people that we can't fundamentally supply the team we need despite our large land mass and very good growing conditions [ 14 ] [indiscernible]. So the long and the short of that slide, guys, is that it's a really positive outlook, albeit there's some short-term challenges around supply that is leading to builders struggling to get some products and some construction jobs have been pushed out a little bit longer than normal or there are some delays because of that upper medium and the longer term. And hence, for you guys, as investors, what's the impact on the longer term, it's very positive for our industry. The previous slide on the whole construction cycle, very positive. So just to finish off, my general theme is that it's a really good time. We've had a couple of hard years in the construction cycle leading up to 2021 as we've gone through that downswing of the construction cycle. And obviously, there's some really strong tailwinds as we move up towards that next peak of the construction cycle in another 3 years' time. So that's a nice place to be from an investment point of view and from a business perspective. That is it for me, guys. Perhaps I hand over to you, Rob, to cup off the next section.

Yes. Thanks, Jim. I appreciate your comments and insights that's very fascinating and hopefully all the all the listeners enjoyed that. Thanks, everyone, for dialing in today. I'll just quickly touch on the 3 different portfolios and obviously some underlying positions within the respective groups at the moment. Obviously, I'll start with NSC, say at the smaller end and the micro end of the -- of our investment profile. Contango Asset Management, which has been a mainstay within that portfolio for the last couple of years now actually had a very important quarterly, I suppose, results from our perspective. They obviously hit a milestone of having over $1 billion worth of [ funds ] within their distribution group. But I think the most key thing that they've been able to implement throughout the quarter was actually to finalize the outsourcing of their internally managed products, and now they are a pure-play distribution platform for funds management businesses. And I think from a perspective of the management's time and the future strategy of the business, this is a major step in being able to simplify what they do, having now be able to focus on growing what they do and then adding to that over time. We've seen with a lot of funds management businesses, the likes of Magellan, Platinum and Pinnacle, which is probably a more closely representative given it's a distribution play. You can see when you've got a relatively fixed cost base and then you're able to incrementally improve the top line of these businesses, you get very material leverage at the bottom line. And Contango at the moment is at a position where they're just generating operating cash flow positive now, which is a great sign. And the business has a relationship with the WCM Asset Management Group, which is a global leader in our opinion, in Funds Management for global funds management out of Laguna Beach, California. And to put it into context, Contango only represents almost 1% of their total funds under management in what is a very large market here in Australia for equities. And clearly, the demand for global equities is increasing over time amongst the Australian retail investors. So we think there's a very big opportunity for Contango to grow on that $1 billion worth of fund to $2 billion, $3 billion, $4 billion over time, and augment that with additional distribution relationships with new funds over time. So yes, overall, a very milestone quarter for Contango in our opinion. Secondly, coming to URF and this is a relatively new one within the portfolio, not one we've publicly spoken about too much. We've just put out a substantial notice of that just in the last couple of weeks. And URF is a real estate property sign that holds assets in residential space in New York and New Jersey. And that might seem like a weed and wonderful asset class. And I think the way that we think about it is it clearly hasn't been a spectacular performer. In fact, it's been far from it. And you can see that with the discount to NTA that the vehicle is currently trading out at the moment. And I think it's fair to say that it hasn't been a successful investment for many people involved in that business. What's key for this business now is as of 2019, December 2019, they set out a 2-year strategy to simplify the business, reduce debt, sell off assets in a regimented asset sale program and improve the capital structure of the business. We're now approximately 20 months into that 24-month journey roughly. And we can see that the management team and the responsible entity have done a good job to date, albeit there's still a lot of work to be done with this vehicle in our opinion. The catalyst for us to enter the position over the last little while over Q3 and Q4 has been a progress to date. And what we believe to be the underlying value that is inherent within this portfolio that is not yet being realized and potentially rightfully so not yet being realized by the market. Key catalysts for us going forward are a new strategy within Q4 for this property fund. And we believe there is a clear strategy here to realize value in a the most efficient manner for shareholders over the next 12, 18 months, and we'll certainly be making our views heard by management and the Board over time. And thirdly, Wingara, which is without any secret has been an underperformer for the -- for NCC over quite some period of time. And I think without dwelling in the past, it's probably more important to focus on where we are today and what we see going forward with Wingara. And the clear way we think about this business is there's been a line in the sand drawn from what's happened in the past and where we are today as we look to rebuild over time. There's been a new CEO appointed, James Whiteside, joined the business as of the 1st of July. He was ex Group COO of Incitec Pivot. So he's got a strong kind of agricultural and operations background, which we think is well suited to this business. A lot of work has been done to date, restructuring what was in FY '21, Wingara. We come out the other side of that into FY '22 with a strategic review underway for the -- what we believe potentially is a noncore business being the cold storage business. And we think over time, this business can get back to basics, focused on where it has a competitive advantage, which is in the pay processing and distribution, and we believe that they are good cash flow businesses, good cash flow operations, I should say, and we believe they can expand this over time, both organically and inorganically. So we're hoping to see, as I said, a line in the sand as of FY '21 being finished, and we look forward to seeing what the strategy is from the new CEO over the short term. Next slide, please, Ange. So just to summarize here, and what's always been our mantra since day 1 of listing NCC in February 2013 has been about providing a growing stream of dividends franked to the maximum extent possible, and that's certainly true across all the respective portfolios. So from the dividend chart here, we can see that it's obviously been relatively stable for the last couple of years, and we'll be announcing that the second half due to the final, I should say, dividend at the results for NCC, which should be up in a couple of weeks' time. So we'll see how that looks there. But I think the other thing I want to note here is just in terms of the pretax NTA and the share price. So there was some outstanding options in NCC, which expired at the end of June 2021. So we believe there was a little bit of pressure there on the share price as people were exercising options. Hopefully, over time, we can close that gap like we've done in the past in terms of the discount to NTA. And obviously, a true-to-label microcap fund with $134 million average market cap. Turning to NSC next, please. So again, a busy quarter for some of the key companies within NSC, and COG is obviously one of the biggest positions in that vehicle. And they've not only released their Q3 update within the quarter, but only in the last couple of days, they provided the Q4 update, which had some unaudited FY '21 results as well. The momentum this business is currently experiencing is very strong. But I think the most pleasing thing from our perspective is that we don't see this as a short-term spike. Similar to Jim's comments around, let's say, the construction industry as a whole where COGS certainly has some exposure with providing yellow kit, financing for yellow kit and whatnot. We see that as more of a longer-term trend underpinning what this business should be able to see as a tailwind over the next couple of years, certainly at the very, very least. What that means is that we should see a steady revenue profile from COG rather than a big spike and drop again is our expectation. And certainly, as Sebastian said, the Q4 was certainly interrupted by supply chain disruptions as the example, was 3, 4 months to get a Hilux. That is clearly going to flow through into FY '22. The most pleasing thing out of FY '21, though, for COG in our opinion, was the improvement in the quality of the earnings that the business generates. So we have seen over time the shift away from lending off their own balance sheet through their TL Rentals portfolio, which is now in wind down. And we've seen incremental earnings come through the business not only through Westlawn, but also through providing insurance broking services to their existing equipment finance customers. We think they're a very logical match insurance broking with equipment finance broking. So the qualitative side of the recurring earnings for the business, hopefully recurring over time with the introduction of insurance should see this business in a much better competitive advantage position over time. Secondly, Over the Wire, which is our core holding in the IT and telecommunication space. I'll start with the financial results here. So they provided an update late June around their FY '21 expectations. They were certainly hit by the impact of -- we've seen it widely across the whole economy with supply chains and disruptions. And it's key to settle right here, the nonrecurring side of over the wires business and the recurring side of the Over the Wires' revenue. So the nonrecurring is providing hardware for IT in stores and whatnot. That was hit late in June, and hence, we saw that not meet expectations. But from our perspective, that's not why we invest in this business. We are very focused on the recurring side of the revenues. And pleasingly, they delivered upon expectations for FY '21. And secondly as well, that provided some growth expectations around those recurring revenues for FY '22, which are very pleasing and hopefully can be delivered upon in our opinion, that would be a great result for the business. What was the major milestone for Over the Wire out of the quarter was the completion of their Tier 1 voice interconnect. And this is a space we know relatively well through our investment in MNF over many, many years. So this is a huge milestone in our opinion, and it puts them on a very strong competitive advantage and it puts them in a select few group, including the likes of focus MyNetFone, TPG and Telstra in terms of having a fully interconnected voice network across the country. Where they are different is they are the second one to have a fully digital one like MyNetFone, but this is clearly the newest, it's been the first built in many, many years. We think the underlying UCaaS and CCaaS trends, which we're all experiencing to the likes of Zoom and Teams and GoToWebinar, they can certainly now target those customers and those customers are looking for best-of-breed network solutions, and we believe Over the Wire has the ability to provide those over time, which could incrementally provide revenue synergies to the group as well as cost synergies by putting their own numbers onto that network that they hold themselves. To put it into context, there's about 85 million phone numbers that are used within the Australian market. That's landline numbers. So we certainly think that Over the Wire entering into a very big market, and they should be able to command their percentage of market share over time. Thirdly, here, Gentrack, which was -- which was the substantial investment we made in the fourth quarter. And just for a little bit of context here, I know Sebastian has briefly touched on the management team and some of due diligence we've done behind the scenes here. But it's worth noting that we were previously investors in this business. We sold out a few years ago when they started to capitalize their R&D. And it was interesting to see that the share price of Gentrack got up to about $6.50 and it's now -- it troughed around $1 and now kind of around that $2 mark. It's a business we know well. We've been relatively impressed thus far with the turnaround that the current management team have done to date. What we would say though, is it's a great when you can invest in the turnaround of enterprise software where the cloud migration is a logical one. And it's also one where the people who are doing that cloud migration have experience in doing so. We believe when you come out the other side of a cloud migration, the business can be in a much, much better competitive advantage in terms of the overall offering and the quality of the revenue that they generate can materially improve. Whilst it's great to have, in our opinion, a strong management team and the right strategy, they've still going to go out and execute, and we believe this will be a long-term journey. They've put out some FY '24 targets to market. Certainly, there will be some bumps along the way, but we're comfortable with the risk profile associated with that and the end prize with the management team who have, as I said, are proven performers that have done it in the past. Next slide, please. So yes, just touching on NSC. Obviously, you can see the market cap is a step-up from the true level macro account on being NCC. We paid the third quarter dividend during the quarter that was, and obviously, the fourth quarter dividend will be announced with the results in due course. The performance there since inception, we obviously had a few tough years at the start, we haven't shied away from that, but it's pleasing to see that performance is picking up, and hopefully, we can continue to do that over time. Next slide. Finally, on to NAC. Again, one we've Sebastian has touched on briefly with 360 Capital, total return from one we've known well and invested in the past. The only thing I would add here is around the landscape, which we find ourselves in is the investment that TOT has made and TGP have made in Irongate, which is another ASX-listed property fund that has commercial and property assets of approximately $1.2 billion. We believe those assets might be undervalued and there could be potential ways to realize value over time there, based on some competitive peers in terms of what they are currently being valued at. Over the Wire, I've obviously touched on. And finally, just on Experience Co, a tourism business that we've been well spoken about in the past. Key milestone in the quarter was making acquisitions of the first under the new management team and into a new area being Premium Adventure and focused on kind of high-grade walking to us at the moment. We believe the management team here and the board are best of breed. They were one of very few companies in the tourism sector not to raise money during COVID. We believe that earned the right to acquire. And as the turnaround, whenever it does fully take off within the industry, we believe EXP is certainly very well based to benefit from domestic tourism over time. Next slide, final one from me, just on the NAC profile there. It's worth noting that, obviously, the pretax NTA and the share price, there are some outstanding options in the money in NAC. So there's 22 million options in the money. So that is worth certainly considering when looking at those 2 numbers. And as you can see, the market cap size here is again a step up. And the final quarter dividend will be announced at the results on. That's everything from me. So I will pass on back to Sebastian. Thank you.

Thanks, Rob. So I've just been told that the webinar actually cuts out at a certain period of time. So I'm going to breathe through these slides. But before I do, just for those of you who haven't been on this call before, if you do want to ask a question, is the ability to ask 1 via the chat box on your bottom right corner, so you can type in a question there. I'll see it. I'll read it out and answer at the same time. If you don't want to use that mechanism, then please just e-mail inquiries naos.com.au and someone will then write it in the box for you, which will then get back to me. And as always, as most of you would know, I go literally through every single question, and I'll give you a very objective response. So just quickly through this slide, the capital management initiatives. Look, this has not changed but just gives you an idea of what we do as a business, especially from the LIC point of view and the LIC core point of view. Capital management is made up of numerous levers. There's no one lever that works better than the other or is more effective. It starts and stops really though with performance. Performance leads to dividends, hopefully, bigger dividends over time. Alignment is a key part of that. As I said, myself and my investment team don't trade stocks outside of the 3 LICs. So you know that we want, obviously, the best and our core focus is on the LIC performance and not anything else. And then our ability to communicate that with shareholders is imperative. If we can't communicate our strategy, our view and what we're doing in regards to new investments and exiting investments, then there's little incentive for you to acquire the LICs. And then if you go through those other 4 points that gives you an idea of what we've done more specifically from a capital management point of view. Next slide, please, Ange. This slide, again, I'll be very -- touch on it very briefly, but it just looks at how we view our business and what businesses we want to invest in. Many people ask, well, you only have 10 stocks, so that's going to be super risky. I take to the complete opposite point of view, it's really more like a Warren Buffet point of view, even though a lot of people do say that from time to time. And that is really based around the fact that we invest in quality businesses that are benefiting from industry tailwinds that support long-term growth. They have strong pricing power. They can scale without a significant amount of capital. They can fund their internal expansion opportunities when there's times when they can't raise equity or the banks won't give them money, and they have a very strong -- a very strong competitive advantage that doesn't just stop there. It should increase over time. That's really a ideal investment. And then on top of that, which is a given there should be a very strong element of alignment as well and people that can drive the business forward. Next slide, please. So I support the 2 country slides before I take questions. The outlook for FY '22 and then more importantly, Q1, obviously, a very important quarter, if not the most important quarter for the financial year and that's because it's a financial reporting season generally for most investments for the full year. Unfortunately, I think it goes without saying that COVID will throw a big spanner in the works, and that's been almost likely be that companies will, obviously, they won't be providing any guidance generally, I would say, because there's simply too much uncertainty. I think you'll see many companies give you an idea of how they're trading in the last month or 2 to give you an idea of what sort of effect it's having on them, more specifically. And then in regards to trying to get some clarity around how they foresee their business to, I suppose, grow over time over the next 12 months as the vaccine rollout program hopefully progresses a little bit faster than what it has done so today. And then how some of those other key points are affecting their business. I mean, I don't know if anyone has been focused on the market too much, but M&A has been at record levels. The amount of businesses getting taken over or getting bids to be taken over is extraordinary. Some of you may have seen Iris got a bid this morning. PointsBet, which is a company we can't invest in, but it was probably a start-up 2 years ago. Today, they're raising $400 million to expand their book making -- online bookmaking capability in the U.S. market. And then obviously, you've got cost issues in regards to the shortage of commodities, labor materials and then the potential for inflation. Next slide, please. And then I suppose there's probably the slide that people are really looking for outside of our performance. It's really, what are we looking for in Q1 and FY '22 more generally. And without a doubt, there are the big catalysts around the corner, we think that could have a very material effect on our performance. From Sonus' point of view, Sonus is the biggest position in NCC. Some of you would see there's been a lot of chat around the government is spending more money on the storage facilities for liquids. We believe Sonus will be a big beneficiary of that being an Australian business, a very strong balance sheet, a proven track record over the last 3 or 4 decades. And Sonus has been quite quiet on that front, but they've been doing a lot more in regards to building new regional bridges, corporate bridges and replacing very worn out bridges. They're also getting into other areas, albeit in very small scales that potentially is looking at renewables and some more newer technologies in regards to energy management and things like that. Gentrack is, as we've probably mentioned too much today. The big one for them, and the big risk for them is really changing that mindset and that reputational risk going from business that's probably had a few issues over the past few years, even though they're an industry leader and changing that mindset to a business that's bringing on new clients and some big new clients. I think if they can do that, that completely changes the mindset from an investor point of view and even from a potential client point of view. And then the sky could be the limit for that business if they can do that. And clearly, the sooner they can do that, the better for everyone. AGH, our most boring business that has probably been one of the most consistent performers across our existing -- our entire portfolio. And we think they're really on the cusp of really looking to scale that business. They've proven the model, the cleaned the business up. They've got some excellent people in. The Board is totally focused on shareholder returns and capital -- use of capital -- and we think if they can develop a strategy that meets all those and addresses all those issues, yet really build some scale, it opens up a huge market and a completely different investor base for that business. And in the last 2 -- last 3 points, COG, some of you may have seen they put out an announcement 2 days ago, which was their profit update for the full year. It was a record profit north of 100% higher than the previous year. But again, we think there's a lot more to come based on the feedback in regards to the pipeline from an equipment point of view and people looking to fund new equipment, but also rolling out their insurance broking strategy. So they've recently hired a very former senior executive out of Steadfast that started rolling out some insurance broking products across their finance brokers. And as many of you would know, insurance brokers in Australia trade on some very large multiples due to that repeat business, low capital requirements. And we think if COG got the database and the small business network and they can offer more products such as insurance, it makes a lot of logical sense for them. And then finally, as EXP, Rob has already touched on. And then in regards to that final point, we do get questions a lot as a very large shareholder. We're always looking to seek constructive engagement with all of our businesses. But obviously, those where there are, we believe there are some more issues in regards to performance, transparency and accountability, and we'll continue to do that for our shareholders. Next slide, please, Ange. And then to finish up before I get to questions, just obviously reminding everyone that the NAOS 1% Pledge. Clearly, we did and have done so for a number of years now, 1% of all recurring revenue goes back to those 4 charities that you can see there. And then obviously, we also want to donate 1% of our time in our intellect to people who could obviously put it to very good use that are in more need than us as well as community. So it's a big focus for this business. We don't want to get other people to do things that we're not doing and setting a good example for as well.

So with that, I might just get started on to questions. So as I mentioned before, if you do want to -- if you have any questions, please write it into the chat box on the bottom right corner, otherwise, in an e-mail to acquirers at naos.com.au. And before I do finish, Ange would like me to tell everyone that there is a short survey that you can do at the end. So if you do feel so inclined to give a glowing or otherwise review, please don't hesitate to do that. But it's greatly appreciated and allows us to hopefully continue to improve. So the first question, I won't read out the name. I can, if you want. I'll just say the first name. So the first question from Chris, it's quite a long question. But just says, when you feel when -- Sebastian, when you say that you could hold something like Big River ever, how does that play out at the size of the company grows beyond being a small company? Does ever really meant forever regardless of the size of the company? Or does it only mean until the company grows to a particular size? Yes. Good question, Chris. Great question. Look, I think definitely, the one caveat I would put on that is forever means it's really a focus on, I suppose, liquidity. As many of you would know, Objective Corp is a big business of ours, the big investment of ours that's capped at $1.7 billion, so a huge business for us. They're very illiquid but the MD continues to own 70%. So that fits right in our sweet spot. So that's something we could own forever. If a Big River -- if Jim continues to execute and knocks it out of the park, and it becomes a top 200 business because it's quite illiquid and very institution-aligned. That's not in our sweet spot. That's unfortunately, that will be the end of forever for us. But if they continue to be quite tightly held businesses that exhibit a lot of the characteristics that we're looking for, we can hold on to it forever regardless of its size. It's really more about the liquidity profile and the share register and how well owned it is by some of our bigger fund manager peers. This is from Alistair. The S in ESG suggest that there should be more women in the senior management directors of NAOS. Is NAOS seeking to develop or identify women for these positions? Thanks, Alastair. Without a doubt, always, I think if you look at our management team or if you look at the team in general, I think our -- the split between male and female staff is mid-30s-percent, might be 35%, 37%. My mathematics is not correct. So I think we've done a good job there. Clearly, we're lucky in the director department. Sara was appointed must be 18 months ago or 12 months ago. And Sara is an exceptional director, provides me with a lot of guidance and a lot of feedback on areas where we don't have that skill set, always looking for someone else. And we're doing a bit in the background. We found some fantastic candidates regardless of whether or not they're female or male, and that's what we're looking for. But unfortunately, to build out your network and to find some of these people and build a relationship with them and trust and understand what everyone is really about and wants to achieve, that does take some time, but it's very much a core focus of this business and will continue to be. This is from another Chris, lots of Chris, but a different Chris. How does NAOS do the investment and intent of Wilson Asset Management in NSC? Good question, Chris, get this one a bit. We haven't had it for a while, actually. Yes. Look, obviously, we know Geoff and Wilton Asset Management have known him for best part of a decade probably. Has been a shareholder in 1 of our other LICs before, was supportive, sold out when it got to NTA and then obviously sold that when it got to a premium [ 28 ]. I don't think we expect anything more or less in regards to NSC. Obviously, I can't speak for Geoff. But the way I view it is here to keep me and everyone else very honest. And by that, what I mean is we're here to before. We're here to have extremely high integrity and deliver a good outcome for shareholders, and that comes from buybacks. It comes from growing dividends, performance, being transparent, being objective in regards to the information that we give. And all of that over time equals to higher share prices, better total shareholder return for NTA for shareholders and then hopefully, the share price at NTA or even higher, which occurred in 1 or 2 of our looks before. And that's how -- that's essentially what I say I'm here to do. And in regards to what Wilson's do with their shareholding that is completely up to them. But I think in regards to what they expect from us, that is exactly what they expect from us. And when you look at some of the figures in regards to, I think we've delivered $27 million in fully franked dividends and $17 million in buybacks, all going back to shareholders, so close to $45 million, I think. In NSE, that's what they expect. And I suppose that's what we expect as well, and we want to continue to do that. This is from Vishal. Can you elaborate a little more on how you go about assessing ESG requirements as it relates to new current investments or current investments? Is it done by a mix of internal, external research on a company-by-company basis? Thanks, Vishal. Yes, great question. I think it's something we continue to improve upon. Clearly, we have a hard and fast external, I suppose removal of certain investments that we could never invest in, so that's quite easy. In regards to potential investments, all existing investments get a questionnaire from us once a year. We'll then also get aspects of what we believe there are some shortcomings or potential improvements upon and then we compare that year-by-year. In regards to prior to us investing, we do our own research on what we're looking for in regards to some key thematics around the environment, governance, community, employees. And then based on that, bespoke more basic analysis, we'll then determine whether or not we can consider it as an investment. But even going through the process at the end of this year and what we're putting in our annual report, just going through that, it's something that will continue -- something that needs to be improved upon, and we will improve upon, but it's also something that's extremely complex, especially having a very equitable and similar or transparent price for all investments. It's not that easy because all investments are very different to whatever reason. This is from John. Could you please discuss the thinking behind the recent issue of NACOA options? Yes. Thanks, John. Yes, I think definitely going through the NSC exercise, this is now year 3. There's definitely been an element of people who've completely left NSC because of the change in manager. I don't think that's -- everyone would know that. And some of the sheer numbers have been significant. Offsetting that, there's been a huge number of people who have come in on the back of that, viewing it as an opportunity and knowing us from some of our other LICs. And it was really a way to reward our existing shareholders. The discount to NTA has closed substantially. The performance has picked up, the funds in a much stronger position, and we think the outlook looks very good for the investments. So therefore, we thought, well, if we do believe in the outlook and we think the performance over the next 2 or 3 years can be strong, then we want our shareholders who remain with us and have bought shares recently and not so recently to be rewarded for that. But at the same time, when you go and look at what we do with the NCC options, if we get to a stage where only 20% of them are taken up or whatever it may be, it's not something that -- I don't think we'd be looking to then place the balance to someone else to let everyone down. It's really about rewarding existing shareholders that want to increase their exposure to NSC without paying brokerage. And then at the same time, it allows us -- if you look at all the uses of capital, we bought back a lot of shares at some big discounts to NTA. So by issuing these shares at [ post ex-NTA ], it's significantly accretive for the people who remain in NSC. This might be the same, John. It is the same John. So it must be in regards to NSC. The discount around here remains at 10%. Do you have any new initiatives to address? Good question. I'd probably rephrase it slightly by saying that yes, the discount is still -- I think it's -- if you look at the pretax enters $1.02, I think the share price yesterday was $0.99 or $1 post pretax NTA $1.08 and post tax of $1.02. So from a post-tax perspective, it's 2%. So I think the strategy doesn't change. I mean NSE was at 1 stage, it was at a 30% discount. And the strategy remains the same. We will continue to be very aggressive on the buyback where it makes sense. We'll continue to hopefully grow a stream of fully franked dividends and reward shareholders who have been patient and stuck by us. And then we'll continue to work on those other capital management initiatives. So we've issued the notes to maximize the performance of the fund, which thankfully today has worked very well and provide transparent communications and really provide an investment philosophy and portfolio that we feel can't be replicated anywhere else. And that is what certain people are after. And by doing that over time and building trust, the shares were close to NTA just like they have in some of their other LICs and we'll continue to do that. But we're not going to change it just because it's gone from 30% to 10%. And now we expect it to go from 10% to 0. We remain very confident that it will. We don't feel like we need to do anything different to get it there from what we've been doing in the past 12 months. A lot of the companies you have presented have very low or no dividends. How do you maintain the fund's high dividends? Good question, Doug? Yes. Look, I think if you look at the analysis, some of them may look like they're lower paying dividend companies, but I would also say that some of them are probably expecting to pay bigger dividends, so it may walk the dividend profile of the fund. So I think the way we view it is, we'd like to try and get 50% of our income is from the dividends of our companies. The other 50% is from capital gains, so realized capital gains through performance. That's how we manage the profile, and we feel like that's a very healthy profile. But clearly, we put some away in a dividend reserve that, when we have a bad year to ensure that we've got enough dividend reserves to continue to pay out the dividend for our shareholders. And then as the profits grow, we don't need those reserves so we could grow the dividend stream over time. But we do want our investments to continue to support at least the [ 4 ] [indiscernible] and half about total dividend profile. This is from Mike. With your investments being in listed companies, can you implement daily or at least weekly NTA updates? Good question, Mike, and we have spoken about this a lot. The reason we don't -- and it's quite a -- it's not obvious, but it's reasonably obvious, is when we own 10 investments in 10 quite illiquid companies, our NTA can move around a lot, weekly or daily even, weekly movements, you could have plus or minus 5% depending on what type of week it is. So I think to do that, we wouldn't be doing ourselves any favors and we wouldn't be doing our shareholders any favors because I would argue we will probably create almost a permanent discount to NTA because people would say, well, the NTA is so volatile. So therefore, why would I pay NTA? I think the other point is it doesn't align with our philosophy at all. When we own some of these investments for 5, 6, 7 years, a daily NTA update really does not align to that, and it doesn't align with our velocity. And I would clearly doesn't align with what a lot of our investors are after as well. So that's what we try to do a monthly NTA with a quarterly webinar, but at the same time, provide you a lot more information that a lot of other LICs don't provide, you see. You get a very grounded view of what we're up to and help what the portfolio looks like. This person didn't leave their names, so they must know me, but they didn't leave the name. Are you disappointed by the recent share price fall in Urbanise? I don't think you spoke about Urbanise today. I thought Rob was going to but maybe he didn't. So that's my fault. So yes, thanks for your question. No, no. Am I disappointed by the recent fall? Look, if I was disappointed by every share price fall in our investments, I'd be disappointed a lot of the time. No, I'm not disappointed. I think we are disappointed by some of the transparency, and I think that's something that this business is working on. Unfortunately, in some of these businesses, when someone wants to sell their shares, unfortunately, you can't sell them at market, as I'm sure you would know, you have to sell them 10% lower and the share price falls by that and then that person sells out. And then generally goes back to the share price that it was prior to that. I think most importantly, you would have seen our substantial we increased yesterday, I think. So we've taken the opportunity to increase. We think fundamentally, Urbanise can be a very good business. The proven markets -- if you're looking -- if you know the strata market very well, the software that a lot of strata managers use almost shouldn't be called software. It's so archaic. And we think Urbanise provides the only fully cloud-based solution to replace these. The issue that a lot of these customers have is they're very slow to move. But it's a big market. Urbanise has little competition. They've got the biggest strata manager in the market on their books now and they're also a shareholder, they've also helped fund Urbanise. So we think they've got a huge competitive advantage. They just need to provide some more clarity around I think, the competitive advantage, what the sales pipeline looks like and how that annual recurring revenue is progressing over time. Because I think Urbanise has had a very checkered history. Thankfully, we weren't there for it. But if they can do some of these easy things, and I think at the full year result, we might see some of this, then that will help build trust with our share register, bring some new shareholders on. And then obviously, it will be hopefully be valued accordingly. But it's still very early days for Urbanise. And I think, first and foremost, they need to show the market that they can continue to grow on [ alpha half ]. Here's a good question from Mark. I would argue alignment of management at URF is negative or minimal. The massive management fees [ tripped ] out the business. What are your perspectives on this given that you stated desire to invest in the long flow aligned management team? Good question, Mark, you pretty much got me. Look, I think you would have clearly seen that we went substantial the other day. I think URF is a little bit more unique in the fact. I would say they're aligned. I'd say Evans, I think it's called Evans. I don't know what it's called. It's not Evans Dixon it's called Evans Group, I think, is very aligned -- and this is my theory, our theory. I think they're very aligned in the sense that they need to get a great outcome for unitholders that remain in URF. I think to me, that's a huge tick. Sure, they may not own shares. I think from a brand recognition point of view, as you see, and I would agree with probably, previous management, obviously, decimated shareholders or unit holds. But I think the new management team and EP won't understand that they need to get those unitholders an excellent result to rebuild their brand, to rebuild trust, to ensure that when they sell the URF shares they stick to -- don't go and leave their adviser at [ Evansburg ]. So yes, they may not own 10 million units. We actually bought our units off someone who used to run it, funny enough. So I would say, yes, they don't own it directly, but I think from a business point of view and an alignment point of view, I think they're very aligned. And I think that's a big part of our thesis. I think unitholders want an outcome sooner rather than later. I think they've done a good job by selling assets at book value. So the NTA is real. And we also believe it's real from a lot of the people we've spoken to in those markets in New York and New Jersey. But I do think they need to give more transparency and urgency around selling the entire asset to close that discount to NTA and give shareholders or unitholders back whatever capital that they can get. So I definitely believe it's more than $0.30. Whether or not at $0.60, I don't know. But there are also some tax implications. If the investment is sold, the portfolio is potentially sold as 1 block. Some of that withholding tax is not applicable. So the pretax NTA becomes a lot more real than the post tax. So we think there's a lot of upside, but we would look to focus a bit more urgency and a bit more transparency. I'll ask a few here, so I'm going to go as fast as I can. Do you have a view on the future of copper? Sorry, Evan, I am so far from being a commodities expert even might apply to some industrials companies. I can't help you, unfortunately. But thank you for your question. How are ESG principles used in assessing companies? Thanks, Kathy. I think I touched on that before. But as I said, the same principles we apply to our business, we try to apply to investments. So it really looks at those key components, how the business is affecting the environment, what they're doing about the -- I guess on some of those processes in place. The governance frameworks, how they apply that in real life, how they interact and support the communities, their staff. We do get quite granular. As I said, we provide a yearly questionnaire that's quite detailed, albeit we do need to improve it quite a lot to all of our investments. We provide them feedback and then we compare it to the following year to see how they've gone relative to the year prior. So it's quite granular. It's definitely not perfect, but we're trying to be -- we're trying to improve every day. And as a very big shareholder in some of these businesses, we get some very good information. It's just how we -- we're getting the right information and how we're putting it to work. But we definitely feel like we're on the improve and well ahead of the pack. This is from Ian. I might be running out of time. I've got 8 minutes. You've noted the URF is undertaking a capital restructure. Ian, yes. I think I touched on it before. So do I believe it's a good investment or what are my projections? I can't give you any projections. But as I said before, NTA, post [ ex-NTA ] is $0.52, pretax NTA is $0.60. The share price is 31%. I think Evans Group are very focused on realizing value for all those unitholders who remain. I think the asset base is real, and they've shown that by selling assets at portfolio every month. I do believe there's no strategy for the business longer term. I think the only strategy is to sell the asset to someone who can make use of it, who has a lot more scale than URF. So that's essentially how I see it playing out. But I think over that time period, as they do gear, as they have more capital, the share price to NTA will close. But ultimately, it needs to be sold as 1 asset. Well, they need to get it to a position where it's cash flow neutral or even cash flow positive to put more capital to work to close that discount. But I think first and foremost is the asset value is very real. And I believe Evans Group are very motivated to realize value, albeit hopefully, sooner rather than later and with greater transparency. Another question from Kathy. How do you go about researching government support programs that are targeting the likes of house construction and instant asset write-off programs? Good question, Kathy. Look, I wouldn't say we spend a whole lot of time on going on programs and initiatives. I think in regards to our own investments, we probably spent quite a lot of time on it, but that's very company specific. So it's not like we go looking for them and then go looking for the investment. But in regards to some of our own investments like Sonus and Big River and COG, they clearly have an effect, but it's really more after the fact normally. Sonus doesn't apply to that. It's very much after the fact, but we very much do keep an eye on them. But I wouldn't say it proactively we don't go looking for them and then look to invest in that particular, I suppose. I think I'm out of questions. So if there are any more questions before this cuts me off, don't hesitate to -- I know everyone can email me directly, e-mail anyone here or feel free to call, and we generally get back to you within 5 to 10 minutes. Otherwise, if we're a bit longer, we apologize. But we're here most of the time, happy to give some frank and objective feedback. And if we can help, we're more than happy to. So as I said at the beginning, thanks again. But one more question. Actually, it's actually some feedback. Great presentation. I enjoyed listening to Jim and could that be repeated with another representative. Thanks, Kim. So Kim, thank you very much for the feedback. We don't get too much. So thanks for that. And yes, we wanted to get some feedback on Jim, so we thought we'd mix it up a bit, and it's definitely something we want to roll out. The trick is trying to get someone who's willing to do it and as good a presenter as Jim is. So hopefully, you can find -- we'll find one for you in September, and we'll see how we go. But yes, thanks again. And look, as always, we thank you very much for sticking with us, and hopefully, we can have a -- an FY '22 that's the last half as good as FY '21. So thanks again, and enjoy the rest of your week.