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

Good morning, everyone. My name is Sebastian Evans, I'm the Chief Investment Officer of NAOS Asset Management. And this morning, I'm joined by Robert Miller, one of the portfolio managers here, who will be speaking later on in the presentation, going through each of the funds as well as Mark Benson, who's the CEO and Managing Director of Saunders, who will be doing a short presentation about halfway through the total presentation. So for those of you who are looking for the presentation, it was lodged on the ASX this morning. It was also sent around to everyone who is on our distribution list. So if you want to be put on that distribution list, just e-mail inquiries at naos.com.au. Next slide, please. The disclaimer I will just touch on that, but obviously, we do speak about many of our investments here. As many of you would know, if you've dialed in before, it's clearly general information only. So don't take as gospel to your own research, seek your own external expert advice before you make any investment decision. For those of you who don't know NAOS, and it might be a -- obviously NAOS is an investment manager, a boutique investment manager started quite a few years ago now in 2013. We launched our first listed investment company. And we've always really had the focus and strategy to focus on emerging companies generally with an industrial focus. That's what we do across all 3 of our leagues. We started with 400 shareholders. Today we have over 8,000 investors, and we recently launched our first private investment fund, which now invest in only private businesses. Most of the directors and employees have a significant share, investing across all the NAOS strategies, all of my investable funds are in all of the NAOS strategies. And obviously, that we believe that gives us a strong alignment and interest with all of our shareholders. And then finally, we've got a very strong focus on ESG. And obviously, that's not just the folks on focusing on the environment. We're focused on governance is a big one for us and also people, culture, things like that is what we believe is that ESG ultimately builds a competitive advantage within a business and drives long-term value and creates much more value for all shareholders as well. The NAOS team hasn't changed since last quarter, thankfully. But as you can see there, we have quite a large Board of Directors across all 3 LICs as well as the investment manager. And you can see we have 5 in the investment team and then 4 in operations level and finance as well. Our investment beliefs. Obviously, we're quite a different fund manager. We don't believe there's really anyone else like us on the ASX listed, maybe 1 or 2 unlisted. But I think this is probably quite timely considering some of the equity market movements we've seen over the past quarter. As many of you would know, passive investing has been in vibe now probably for the last decade. And there's been a lot more talk lately with the volatility in equity markets that fund managers, stock figures in general, should really have their time to shine as the volatility starts to escalate. And things like ETFs really don't provoke -- may not provide as much value as what they have done so in the previous years. And the reason why we believe we have a competitive advantage just touching on 1 or 2 of these is we're very much the long-term investor. So we've had some of our investments for -- in some cases probably over 9 years. In the case of Saunders, I actually went in check this morning, but I saw Mark joined in October 2015. I think we were a shareholder in 2016. So it gives you an idea that we've been Saunders shareholder at least for 5 years at least. And we believe that we really want to own an investment forever they're the type of businesses that we want. We want our investments to compound over many, many years. We're not interested in how it is part of an index. So we ignore the index completely, and we did believe in quality over quantity. So many of you would know that we only have 8 to 10 investments across the 3 LICs, and we believe that diversification over time leads to the diversification, i.e., you get indexed returns. So you may as well invest in ETFs as opposed to having 10 high-quality undervalued businesses that we believe can compound strong returns over a long, long time. Next slide, please, Ange. The reasons not to invest with NAOS are probably all the opposite of what I just told you. So clearly, we run a very concentrated portfolio. As many people have told me, our investments don't tend to change too much. We probably changed a few of them more recently, which is quite unique for us. But we're not traders. We don't try and pick the bottoms and pick the tops and pick cycles and different trends and follow momentum. We do focus on smaller businesses. So in the case the other submission Saunders before. When we invested in Saunders, it was probably at one stage, it was a sub-$50 million market cap company. So we do like smaller businesses because we believe that's where the information advantage can be gained. We don't follow a benchmark. We do follow industrials. We need to probably think of a better word than industrial. But I think what we're trying to say is we're looking for businesses with proven investment models. We don't invest in resources and early-stage businesses. We want businesses that have a revenue stream. They may not be profitable, but they'll probably be free cash flow positive, and they have proven that they have a competitive advantage and they want to scale over time. Our fund size is relatively small. So we only run about $400 million, so we don't run $4 billion, but we believe that allows us to get meaningful positions in smaller businesses and therefore, maximize performance. And as I said before, we are very focused on ESG. So we have an internal full-time employee that focus on ESG issues. We provide all our parent -- investee companies with a yearly questionnaire. And we're always looking for our investee companies continue to improve in that area year-on-year. The most important 2 slides that everyone is trying to focus on, I think, is obviously performance. Again, I was looking at this morning, I think the FY '22 returns probably look a bit core because you compare them to the FY '21 returns, which was stellar. So maybe we should try and reduce the '21 returns if we can visually. But even so, it's pleasing to see that all 3 funds had a positive return or a positive start to the year, first 6 months. Clearly, they haven't been as strong as '21, but '21 was a very unique year. But I think internally, we're happy with the returns. Maybe 1 or 2 funds haven't been as strong as what we thought they may be considering how our equity market has been extremely volatile. Some of their investors have performed very well. Clearly, some haven't, and we'll go through those. But we think it forms a very solid foundation, hopefully, leading into February, which is reporting season for half year results and is setting up a much stronger second half. The only thing I would say is, clearly, NAC has lagged a little bit relative to the rest, which is a little bit disappointing. But when you do look at the past 4 years, NAC has been the clear outperformer relative to NSC and NCC, so maybe it's healthy to see those other 2 funds finally gaining some ground back that they gave away over the past few years. Dividends, the one thing I would note here because we have had this e-mail a few times is for everyone that is interested in our full -- half year results will be released on the 17th of February. The reason why that is important is because all 3 funds will be declaring A dividend on the 17. So in the case of NCC, we'll be declaring a half year. And for the other 2 funds, we'll be declaring our 2Q dividend. So some people have been asking for the dates. So those dates will be provided to the estate at record date and the payment date. So obviously, hopefully, we want to increase those charts in February, which we're planning to do. But what we're trying to get across the year is we're saying that all 3 funds have paid what we believe are very healthy dividends, especially for businesses that focus on smaller companies. And to date, they have all been fully franked, which is no easy task, let me tell you. And hopefully, we can continue to do that. So in the case of NCC, we've grown or maintained our dividend every year now for 9 years, and it's always been fully franked. So that's something we're really trying to push forward with, and we really want to maintain. Again, touching on the performance summary. This really just gives you a bit of a long-term focus. So clearly, I think it's pleasing to see the 1-year performances of all the funds now have been extremely strong. We do find it quite hard to get all 3 fronts sitting in the right direction. We said we get 2 and not 1. But here, you can see that all 3 funds have significantly outperformed the benchmark even though we don't have one stock in the benchmark. But more importantly, it's really pleasing to see those inception numbers still remain relatively healthy. In the case of NSC, we're very close to beating that benchmark now since inception. And hopefully, when the January NTA report is coming out, we can close that figure even further. So yes, the short-term figures are important. For us internally, we're really trying to get those inception figures close to internally, 15% per annum, considering some of the risks that we take in these smaller companies. And then finally, before I touch on the quarter from a qualitative point of view, just a lot of people ask us, what do we do that's different from a research perspective when we have such small investments. And it's probably again timely. I've spoken about Gentrack a few times in regards to this slide. It maybe a good example, as Saunders in the case of some of the research we've done on that business over the time. But clearly, we spent a lot of time with the executive team such as Mark and his team, who have had a lot of one-on-one time with the Board of Directors. We've even been lucky enough to speak to some of the wider management teams in the case of Saunders. So whether the division Heads or sort of lower ranked executives and people who are quite close to that business. Then it's also very important to speak with former employees, some of their competitors, a lot of their suppliers, how do they pay? Did they pay well? Are they a good customer, a reliable customer? And just general industry contacts, people who know the industry well and the landscape and then what's important from a customer perspective. And then clearly, we do a lot of site visits, look at what some of the services they provide and the products, and sometimes we will do quite a lot of cold calling as well just to get a really true objective feedback. And I think that's what we're trying to do. The trick is to find objective information and not just information that can be spoon fed to fund managers that's awfully subjective. And thankfully, in the case of smaller companies, we find that a lot easier to do then in the case of top 100 businesses. So the Q2 summary. I've just got a few slides here before I hand over to Mark. So I don't want to take too much time. I think if I look back and I was looking back this morning just trying to retrieve my memory. But yes, it was clearly a very dynamic 3-month period, no doubt. And that always doesn't include January, which is the small ordinaries index was down 9% in January. There was clearly a fundamental change in the market and especially in the makeup of the market, which we find quite refreshing properly internally. So yes, the funds had a reasonable Q2 performance. In the case of NAC, it didn't, but we probably think the negative 0.78% figure was probably a pretty good return considering some of the moves we had in some of our core positions, which was clearly our issue, not a market issue. But pleasing to see NFC and NCC have good, solid positive returns. And it was a very eventful quarter for us. So obviously, the highlight was probably the over-the-wire takeover from Aussie Broadband, which many of you would know about, over the while, it's been a core holding for many, many years. So that really gave us a liquidity events to either roll into Aussie Broadband or to exit that position and to put that capital to work in other investments that we think could diversify the portfolio and generate a higher compounding return over time. We had acquisitions by some of our core investments. So the notable one in this case was COG, probably was an [indiscernible] out of the box. They just increased their positions or ownership in businesses, which they already had a controlling position in. So they might own from 51% to 75% or 60% to 100%, which in our view was a very standard use of capital. But at the same time, we also had a couple of negative announcements and that really came from management changes. So in the case of Urbanise, the sudden resignation of their CEO. And then in the case of something like Gentrack, which probably wasn't a surprise really, their CFO has announced that he was moving on to a new position closer to home. But pleasingly, Gentrack has replaced, had some in mind the next day. So good to see some businesses do have succession plans in progress in the background. Pleasingly, it was also good to see that we have diversified the funds. So we have had some new positions. MOV Logistics is a very big large position across 2 of our funds. It's only listed in New Zealand surprisingly, but we believe it will list here soon as well. That's -- if anyone's followed main freight in New Zealand, one of the growth success stories over there. It's a lot of ex main freight executives getting back together and trying to take what they believe is an underperforming asset for quite a unique asset and turning into something much larger, but more importantly, probably much more profitable, much more capital light. So we think that will be a fun hopefully for a number of years. Step One, quite a unique investment. So for all of you who are in the market for men's underwear and now women's underwear, this was a business that didn't exist 5 years ago, taken it literally from 0 revenue to over $70 million of revenue in the space of 4 and 5 years. So it was initially men's underwear, got 6% of the markets in Australia. Then expanded to the U.K., will launch in the U.S. soon. So probably a bit more growthy for us. But from our point of view, founder led, the founder is still close to 70%, very capital light. So if we have any pause at all. It's all digital, it's all online. And from our perspective, we think this is a brand that can really scale over time. So if they get it right, the women's underwear market is twice the value of men's underwear. If you think of the U.S. market, the U.K. market is much larger than Australia. And there are plenty of other markets out there, such as Canada, Scandinavia, which might be ideal to Step One. And then finally, MaxiPARTS, which is essentially a distributor of truck parts, quite arguably a boring business. But for those of you that have followed another business called S&L has been a hugely successful list of business, still probably a microcap. We believe MaxiPARTS, which was demerged recently, it's probably been under loss, under resourced and really provides us a very unique exposure to a very defensive industry that's really dominated by 3 players. And we think that industry will continue to corporatize over time, become more profitable. And again, should have a good free cash flow, should be able to acquire, should be able to grow organically. And if anyone's been reading the paper lately, you would understand that there's a shortage of trucks. Trucks are getting older and trucks are being used more than ever before. So there are lots of parts that will be significant. And then finally, just those last 2 points, AGMs were held in November. The commentary was reasonable. But as we've said there, that probably didn't include the impact of Omicron, which probably really hit businesses in December and more in January from what we understand. So we will get a better view of how businesses are traveling in February, as you would expect. But from an AGM perspective, we were pleased. It's really business as usual and they're executing as we would expect overall, maybe 8 out of 10. And then finally, we continue to proactively engage with all of our investments, both good and bad. And as you can see, one of the highlights I would say is Wingara has been bit of a thorn on foot for years now. And obviously, we placed a director on the Board there. And it was pleasing to see that business with a new management team, really make some hard decisions and generate a positive cash flow for the last quarter, which they put out last week. So hopefully, the start of something that becomes a bit more sustainable, they can generate some longer-term returns to shareholders. So we believe that, that strategy is working, and hopefully we can continue to provide some value add for some of our other investments such as BSA. Just going through this relatively quickly. But as we've seen, as we've witnessed and we continue to witness 2021 towards the end, we've seen a number of disruptions and notable issues caused by COVID, have probably gotten worse towards the end of the front -- into the calendar year -- into this calendar year. The one that probably appears the most is skill shortages and labor shortages caught up with our number of our investments before blackout. And a lot of them are saying it's interesting to see the inflation in the environment, especially in staff and skilled staff is real. Stories of just data analysts might be paid $80,000, approached by a larger business and for $120,000 within not being able to find anyone to fill that role. That would apply across the technology sector a business that recently recruited a CTO, all the way down to lots of other type of staff and roles. And the other place we're seeing that is obviously in inputs. So businesses that need goods, whether it's in the case of say a Big River, where they need wood and building materials, whether it's more technologically related hardware materials, clearly prices are going up. And what that means is the businesses that have entered into long-term contracts that can have a significant effect on margin. And we've also seen that now with a lot of businesses that are trying to -- especially digital businesses that are marketing, so heavy reliance on digital marketing, you are starting to see in some of these results that they're not able to maintain those margins because it's simply too expensive to market digitally to find the staff to do it properly, and that's affecting margins even though they're growing revenue significantly. So I think we're in a very interesting environment and it probably won't normalize anytime soon, but I do think a lot of businesses have been able to manage some of these issues much better than others. So it will be interest income in the second and the last week of February. And then finally, that last point that's been put here is the market has changed or it appears to have changed. Last night, I think it was very interesting. You've seen the likes of PayPal down 6%, Facebook down 22%. We had a business here in Australia called [indiscernible], which has been in over 50 years, when I hear is a couple of years. Interesting that they grew revenue 190% or something, but EBITDA year-on-year went from positive $5 million to negative $10 million just through marketing costs and inflation. I think people are looking through this and saying, well, what is a sustainable model. And hopefully, that plays well into our strategy and we're very focused on cash flow businesses, businesses that can pay growing dividends, and that can also grow earnings. I believe that dividends and earnings growth is great supposed franked way to get compounding returns. I just don't think you can have revenue growth without earnings growth and the dividend growth. So hopefully, that shows up in some of our performance figures going forward. And just a few charts here, just to highlight it. Clearly, we've seen freight and logistics challenges. The one I would highlight is not the 2 lines that much with the green bar chart. So average days shipping is very high. It's taking a long time to get goods here. But the thing that doesn't show up in the chart and the thing we hear about all the time is it's actually the ports that are hardest hit, a container can stay at a port now for weeks just because there's a lack of trucks, there's a lack of staff and it's very hard to get a slot. And if you miss a slot, then ultimately you get back to the queue. So it's not just getting the containers into Australia. It's actually getting them [indiscernible]. And that sounds again. It sounds like that will not be abating anytime soon. Next slide, please. Inflationary impacts. Again, as I've said, commodity prices in the case have risen significantly over the past 4 years. Again, it will be interesting to see how that, I suppose, [indiscernible] margins for certain businesses. But in the case of businesses that enter into very short-term contracts, we believe that they should be able to pass this on to the end customer and hopefully continue to -- that will grow revenue and maybe even grow earnings a little bit. But it does reach a point where that end customer simply can't take 4% price increases every quarter. It does reach a ceiling where it does hurt significantly, and it will hurt demand. And then as we said here, this is probably the one that's changed more recently. 2021 was a boom year for businesses that were listing that we had literally no revenue. It was clearly a boom year for the businesses in Australia that were unlisted that were raising money. And the only anecdote that I would provide here is we've recently launched our own private funds, and it's interesting to see the amount of businesses that we've seen probably 3 months ago that are now coming back saying, well, we actually didn't complete that raising, which obviously, we weren't interested in. So we've rethought we've changed the valuation, and you're seeing a lot of companies looking to raise money at a lower valuation than they originally were trying to achieve. And in some cases, it might be the same valuation as last round or in some cases, it might be even be lower. And to be honest, in some cases, we're seeing some businesses not even being able to raise the money because the demand is not there. So I think as we said in the paper today, I think, it's easy to get into some of these businesses, but I think it would be very hard to get out of them depending on the quality of the business. So with that, I will pass on to Mark Benson. But just to -- just before I do, I will say, as I said, we've been a shareholder in Saunders now for 5 years. It started off a little bit bumpy for us. I'm sure for Mark himself. But a big part of our thesis was to Mark and his team, I think from Mark's point of view and Rob's point of view, Mark's done an exceptional job. This obviously shows in the financials. But I think from our point of view and speaking to people who know Mark, he really brings people on to the journey with him extremely disciplined. But most importantly for us, the 2 points I would say is really provides a focus on culture, safety and more importantly or just as importantly is really broadens the horizons of Saunders in our view. So that you've seen this business has diversified into infrastructure. They bought -- more recently bought an automation business to really diversify the business significantly and hopefully preparing Saunders for the next decade as opposed to the next 12 months. But at the same time, Mark has done on a fantastic job on growing the revenue base and the earnings base, which has led to some fantastic shareholder returns. So with that, I'll pass it on to Mark.

Thank you, Seb, and good morning, everyone, and thanks for the opportunity to present this morning. And we thank you, if you are a shareholder in Saunders. What I'll do is if we move to the next slide there, Ange, just a quick overview of who we are and what we do. Saunders is a multi-disciplined engineering solutions and service provider. We're established in 1951 by Loui Saunders. And Saunders celebrated its 70th birthday of operational excellence in August last year. So it was a big milestone for the company. We've been around for a long time. The company was originally focused on providing tank construction and maintenance services to the oil and gas sector. And over the years, we've progressively diversified our service offering across multiple sectors. So we entered into the infrastructure sector with the acquisition of Civilbuild and more recently with the acquisition of [indiscernible] mentioned on PlantWeave, we're transitioning from being a business that only operated in oil and gas. And now we operate in the defense space, energy, mining and minerals and water. We currently operate from 5 offices across Australia and deliver a comprehensive range of services to those diverse market sectors now. And -- our services still tank construction and maintenance, industrial shutdowns, structural, mechanical piping, electrical and process automation, which is our new -- new to the family and the EPC, EPCM and EPC, so the engineering procurement construction and the construction management. As I mentioned, we've got our civil part of the business, where we've got a precast fabrication facility in Newcastle and bridge construction right around predominantly New South Wales. You can go to the next slide, Ange, please. So Saunders has some tailwinds in the infrastructure business. There's the New South Wales Fixing Country Bridges program that's allocated some $500 million for grants, for New South Wales Council and Round 1 has approved around 53 New South Wales councils to build roughly about 400 bridges. Round 2 closed in November last year, and the results and the approval grants will follow sometime later in the year. There's also interesting to know -- there's also a Federal Bridge's renewal program. And in November, in 2021, the Deputy Prime Minister and Minister for Infrastructure, Transport and Regional Development, the man himself on Barnaby Joyce, announced the opening of the Bridge Renewal Program, which the Australian government will now consider projects on an ongoing basis with the applications being accepted all year round. So the Australian government is providing more than $760 million over 10 years, and that's been from the '15, '16 year right through to '24, '25 in 2025. And then there's an ongoing commitment of $85 million per year from 2025, '26 into this program. So the applications for the BRP funding are invited from state territories and local governments. So we're just starting to see the past 6 months. We're starting to see the New South Wales country bridges program starting to flow out to the market. The next slide, please, Ange. So just before I was going to talk a little bit about the IEA tree. And I thought before I do that, maybe just a quick history lesson and why the 1974 IEA treaty was created. I'm sure there's a few people on the call that can remember, 1973. But for those that don't remember that far back, that in 1973 there was an oil crisis, where the members of the organization of the ARA Petroleum exporting countries, led by Saudi Arabia, proclaimed an oil embargo. And the oil embargo was targeted at nations that supported Israel during the Yom Kippur war. So the initial nations that were targeted were Canada, Japan, Netherlands, the United Kingdom and the United States. And I think a little bit later, they extended that to Portugal, Rhodesia and South Africa. But by the end of the embargo in March of 1974, the price per barrel had risen some 300% to 400%. So it went from a USD 3 a barrel up to USD 12 plus a barrel. And the U.S. prices were even significantly higher. And the embargo caused an oil crisis or a shock as the call, then this caused many short-term and long-term effects on global politics and global economies and it was later called the first oil shock. There was also a second oil crisis in 1979, which called the second oil shock. But -- so really on the back of that in 1974, the IEA, which is the International Energy Agency, fuel security treaty was formed. And in 1979, Australia signed onto that treaty. And the treaty was developed, so that all member countries hold a minimum of 90 days fuel supply, and that was to combat future oil shocks. Since about 2012, Australia hasn't complied with the treaty, and we're the only country out of around 27 countries that does not comply. In 2016, the Australian government made a commitment to come back to compliance. And since the closure of most of our refineries, all but 2, we now currently import about 80% to 90% of our liquid fuels. So currently, we have only around that varies but around 45 to 68 days of fuel suppliers at any one time. And without a fresh supply, diesel would run out in Australia in approximately 20 days, and petrol would run out in approximately 24 days. So we're not talking a long time until things come to a grinding halt. The Australian government has developed now the fuel security package. And the fuel security package was introduced in the 2021 budget. And the government will pay refineries to fuel security services that they provide to maintain the sovereign capability, which basically means that if they're running at a loss, the government will support them. I think there's a further $302 million to support infrastructure upgrades. There was a looming a lot of work to be done in these plants to comply with the 2027 deadline for the clean fuels. Now that's been brought back to 2024. So that's good news for the environment. And I think there was another $50 million of fuel security framework, which includes minimum stockholding obligations by companies. But the part of the package that Saunders is interested in is the $260 million of boosting Australia's diesel storage program grants, which would be about approximately $600 million of construction of new diesel fuel tanks, which really will support industry in meeting that minimum stockholding. This will increase our diesel holding by around 40%. On the 30th of June, in 2021, this new fuel Security Act of 2021 commenced. So Australia is committed to returning to full compliance with the International Energy Agency's 90-day minimum oil stockholding obligation, and we've committed to do that by 2026. There's now been 10 diesel storage projects approved to about 8 different companies and all of these companies are customers of Saunders. So just to finish up, we -- the world is moving fast as we all know, and Seb is talking about the ESG, and it's a focus for our Board and our management and especially on the East side at the moment. Saunders currently looking into the renewable sector and with an initial evaluation of how we can provide services into wind, hydrogen and waste to energy. And I'll just come back from a trip yesterday down to the Portland area in Victoria, where there's already a large installations of wind farms down there, but there will be some more projects down that way, both offshore and onshore to help support the aluminum smelter down there who's now signed a new deal and we'll continue to expand that business. So this area has also been clearly earmarked for some onshore hydrogen projects as well. So -- just last bit to touch on that you've probably heard industry 4.0. And with the acquisition of plant, we're looking how we can participate in that area. An example of what that may look like for Saunders would be that the data analytics for fuel terminals. This might look like the collection of information from the community. Information like in 2 weeks' time, there will be heavily discounted fuel vouchers from Coles and Woolworths. This will align with the fortnightly pay cycle, which also collides with a long weekend in Victoria, and there's a lot of people who all travel and sort of et cetera, et cetera. But this all come together and the data is crunched to decide what -- with the current fuel levels in tanks, when new orders need to be placed, so that ships arrive just off the coast when the wharf is available to come straight into port and unload with no demurrage and anchoring off the coast in time for the road transport to distribute to the service stations in time for when the demand hits. And most of this is now done by a human experienced operators. So that's an area where we're sort of looking into. And the final one, we're still interested in the future is the defense will still play a big part for Saunders. We'll continue to focus on the future. With Northern Australia now being a very strategic location in terms of defense with countries located north of Australia becoming an area of concern for the whole world. So that's really a wrap-up. So thank you for your time today, and I hope you're all staying safe, and I'll pass you back to, I think, Rob.

Thanks very much, Mark. I appreciate you giving us some insights into some of the tailwinds that certainly drive your business, have done to date and certainly we'll do going forward. Morning, all thanks, everyone, for dialing in. I'll start, the usual, quick touchup on some of the key portfolio movements and events that occurred across the 3 portfolios over the last quarter. And there's been plenty happening despite the somewhat quiet period of year. There's certainly been a lot of movement and events for us to have occurred across the 3 portfolios, which is exciting to see. So Saunders to start with, obviously, you've just heard it from the horse's mouth from Mark there in terms of how that business is positioned going forward, some of the tailwinds. But I think kind of echoing to Sebastian's comments earlier around the job that Mark since coming into 2015 is diversified, he's transformed the business and the culture and he's got people along for the journey. And you don't win substantially large contracts with the likes of the U.S. Department of Defense and the large U.S. contracting business cruelty, unless you've got some good foundations to your business and you got what you do. And so that company making transforming, I should say, the contract that Saunders won, kind of like 2021, perhaps would set themselves up for a couple of good years ahead. And further to that, obviously, the Bridge program that Saunders is hoping to participate in, which Mark said a stat I saw the other day was in New South Wales, there's approximately 3/4 of all roads in New South Wales are over 20 years old and 1/3 over 40 years old, there's about 100 bridges that are deemed in very, very poor conditions. So these are some of the tailwinds that we've identified behind Saunders a long time ago, and it's pleasing to see that although COVID might have pushed some of that out to the right, obviously, at least seeing that now flow through. And the half year results, Saunders released their preliminary results just a little while ago and is fair to say their margin profile there is maintaining at a very high rate and Mark and his team tend to be able to turn profit to cash in a great man. So we look forward to seeing those tailwinds progress over the next year or 2. Coming to Contango, our funds management distribution business. They had a key milestone in the quarter with the announcement of around 2 new funds that they're actually looking to partner with, one in private equity called Vantage and one they haven't named to date. We think this is an important strategic milestone because it shows diversification in the distribution model. And we've seen this work very, very well with the likes of the $2 billion market cap pinnacle, where you're able to scale off an existing cost base and you get significant leverage over time. This is something we've always thought was the right strategy for Contango to do. And so we're pleased to see that not only have they generated a cash flow positive result in the quarter, possibly for the first time on a sustainable basis. But these 2 new partnerships should help to drive growth going forward. And thirdly, on COG here, obviously, Sebastian rightly touched on the rating that we participated in during the quarter. It makes a lot of sense to us for them to buy minority stakes in businesses that they already control and they understand well. And the key here is when you do that, you're able to fast track synergies within the streamlined operation that they do have now. So we think by owning more of the pie, they're able to generate more probably cross-selling opportunities across the wider group and also improve the aggregation of the buying power when they go to source deals from the banks and actually act as a one big group with plant system and all of the underlying operations are very much streamlined. We think that can have a good margin benefit going forward. And in terms of the operating environment for COG, we believe there are a bit of an inflation benefit beneficiary in terms of just seeing a lot of the cost and the pricing of yellow cars, trucks, all of that, they certainly get a benefit from that in terms of how their rates work with the underlying product goes up. They're still able to generate a margin on that product as a broker. We saw the results at the half. They put out some preliminary numbers, which show strong growth already, approximately $10.5 million of NPAT for the half, which is a big growth on the pace they pay. But pleasingly, that pipeline, we think is still there and that's something that management has mentioned in the past that we think the operating environment over the medium term for, that's the COG, still is very, very strong. Coming to the next slide, just on the portfolio metrics trend. Obviously, these [indiscernible] now. But I think a pleasing thing here is you can obviously see the consistency in the dividend profile that we've maintained over many years and something that we're extremely proud of that we've been able to lever to shareholders despite being a very much a microcap and you can see the number of holdings has slightly increased over the last couple of years, and that's been due to some new investments that we've slowly been making over time as well. And coming now to NSC, our small cap vehicle there. So a few new positions in the vehicle, which we've been looking at for quite some period of time, some more than others. So we've certainly been able to invest in a meaningful way, and some of these businesses are now a relatively meaningful part of the overall portfolio. So MOV Logistics, as Sebastian mentioned, is a New Zealand listed trucking and logistics business, we participated in their $40 million raising that they undertook in November. I think the key here is that the new management team and directors under Chris Humphrey and Mark Humphreys, they are proven performers at main freight, an $8 billion business that is nothing but an absolute success in the New Zealand market over a very long period of time. So I've been with experienced, they're rebranding the business. They're setting up with a future culture that we think should benefit this business going forward. There's a lot of easy wins in this turnaround, and we think they're doing that now in an operating environment that's very conducive to do that high inflation environment means they can pass through price increases and they can restructure contracts in a meaningful way. And I think with that, you can -- with main freight relates to, I think it was the full year results or half year results, yesterday, I should say. And you can see the significant growth of they having that business over the previous corresponding period. I think revenue was up about 40-odd percent and profit was up significantly more than that. So making changes and improving the business to move in a great environment, I think, really sets them up well for FY '23 and beyond, and we're backing the team to do it. Secondly, on MaxiTRANS, again, Sebastian's touched on this one, but it's a business aside, it's probably true to our research process and ability to see companies over a long period of time. This is a business that we've known for years and we were never comfortable investing until the catalyst was occurred where they divested the -- their trailers business and just focused solely on what we believe is the high-quality part of their operations being the parts business. Now that, that's occurred under new management, we think there is ample opportunity to improve the margin profile for that business over the medium to longer term. When you see some of their peers such as supply networks, they've got a significantly higher margin profile. There's a different product mix there, but there's some easy wins, we believe, in the MaxiTRANS business in what is quite a fragmented market. So the big 3 between MaxiTRANS, supply networks at Bapcor only control less than half the market. So there's lot of room to grow there. And over time, as we move and transition towards more automotive vehicles and more ESG-friendly vehicles, a lot of that actually requires more parts and more complexity. So MaxiTRANS has well benefited in that environment. And secondly, as well just recently, this week actually made an acquisition and on a capital raise, which we participated in, and that is to buy a like-minded business that we think there are a lot of cost synergies but revenue synergies in time, and we'll touch on that in due course. And thirdly, Gentrack, a staple in the portfolio now for approximately a year, led by Gary Miles and the team. He's done a great job in our opinion in his first 12 months of riding the shift there and bringing in a new culture similar to kind of what Mark I suppose did many years ago. We think the new people there are the right people for this business to not only get them through what has been a very challenging market. But I think underlying that, you've seen them actually grow their core operations as the FY '21 result was released in November despite the U.K. headwinds. We saw some underlying customer wins and growth there, which we think is very, very positive for this business. The U.K. energy market, we've touched on it before, it's all over the headlines, it's been very, very, very tough and not sustainable in its current format. We believe that is somewhat come to ahead where it can't really get any worse. We've seen that with some of the communications and the moves of some of the regulators over there, where they're now willing to have the conversation because so many underlying small customers being energy retailers have gone into receivership. So that's not sustainable, and we're hoping that, that headwind starts to abate, and Gentrack can operate in an environment where they can actually do what they want to do and without worrying about headwind. Just to NSC, on the portfolio metrics there, nothing substantial to note here apart from you can see that the -- if you annualize the dividend profile, which is a slight pickup on the $0.05 at 1.3% for the quarter. Obviously, we'll be announcing the next dividend on the 17th of February. And finally, coming to NAC, some of the portfolio notable for the quarter, starting with Eureka Group, which is -- which has been a business that we've held for a couple of years now, independent seniors living. We think those tailwinds behind that business maintains to be excellent over the longer term. It's a proven management team, proven Board in a business that we can just continually chip away with growth over time in the quarter. What we like about this management team Board is that good executors of capital management and they know how to recycle capital, and they've got a multi [indiscernible] pronged approach to growth and acquisitions. They were able to buy a site, they are able to buy management rights business, and they're able to divest some noncore assets during the quarter. So a lot of that is all about improving profitability for the overall business and improving returns to shareholders in time. Guidance was provided at the AGM. We think that's conservative over the new factor in that acquisitions are not included in that guidance. So we look to see what they update at the half and over the longer term what their plan is around future capital management strategies for that business. Step One, Sebastian, again already touched on this that we've got to know Greg Taylor, the founder of this business quite well over the last couple of months. And NAC was a shareholder and then we became a much larger shareholder once the announcement to market around in December that had some issues around obviously supply chain, which is certainly not just that one that is a field impact. The numbers that Step One provided to market at that update, we're still ahead of their prospective forecast. We're clearly under the market's expectations for that business for the first half. The customer base for this business, we believe they're ordering on fanatics. They love the product. And when you've got a consumer staple product where you could win a customer, you can have them for a very, very, very long time. And we think Step One has got the hallmarks and has the track record of doing that. Further to that, they're reinvesting a lot into their own business through sales and marketing spend, where they spend approximately 40% of every dollar at the moment of sales. They're reinvesting back into marketing, to win future customers that they become more loyal over time. So we think that compounds, and it's a very capital-light business, and that compounding nature should result in significant profit growth over the longer term. Tap that in with product expansion and geographical expansion with a founder who we think has the passion to do this and is very much in line with us. We think that it was a good buying opportunity once the announcement occurred in December. And finally on Over the Wire, which has been a key one for us for many years, they're obviously subject to a takeover with Aussie Broadband at the moment. That's going through the court process at the moment I think it finalizes in March. I think the key here is the cultural alignment between the 2 businesses. Both were founded at Aussie Broadband and over the while, we think they're great leaders, and there could be a lot of synergies and a very formidable business when they combine over time. So wait and see what happens there at the shareholder meeting and the required steps to get that potentially implemented in March. And finally, just on the NAC portfolio in terms of the key metrics the next slide, thank you. Just regards with the pretax NTA and the share price, it's always worth considering that the 1 for 2 bonus options that we issued back in 2020 in the money there. So I think they've got a strike price around $1.2. So an expiry, I think, in 2023. So it's worth factoring that into that. As you can see there, with the dividend profile as well on a quarterly basis on an annualized rate, that has again been stepped up following the stepping up in FY '21. So we now sat on the 17th of February. And with that, I will hand back to Sebastian to finish off. Thanks for dialing in.

Thanks, Rob. And just to finish up, just the last couple of slides before I get to the outlook. But obviously, capital management from a perspective, and I appreciate it's not just all of our performance. But look, nothing really to highlight here that has changed too much, but clearly, performance is extremely important. As I mentioned before, for all new shareholders on the call, dividends are a core focus for us, stronger performance, good long-term performance, equal, sustainable growing dividends that I hope will extend possible over the long term, and that's something we've done in 2 of our LICs. And hopefully, we're on the right track for NSC as well. So we really want to focus on that for all of our LICs. We're very aligned, some of you may have seen, there's been some direct purchases in a few of our LICs more recently and some larger ones, which is good to see, shows you that we believe anyone of this value in our LICs. And more recently, we would have seen that some of the buybacks we've done, especially have been very aggressive of late. I think one of our buyback was a record by someone. So shows you that we're not afraid to put capital to work as long as it's in the best interest of shareholders and in this case, I firmly believe it is. And hopefully, over the longer term, that will mean a higher NTA for all and stronger returns for all shareholders. So we're not afraid to use all the levers assuming they are the right levers to use at that time. And just touching on the outlook. I think it's only one slide. But look, it's going to be a really interesting Q3. No doubt, it will be probably the biggest quarter of the year, for this year anyway. And the reason being that I think a lot of businesses have gone through some very interesting challenges that they faced over the past few months. Interesting, I just got an e-mail then that some of you may think that New Zealand are actually going to have release or relax their borders over the next few months. So for someone like an EXP, that be a big deal as if they have a good a large business over there and been earning next to nothing for probably 2 years now. So it will be interesting to see what these businesses say in February, come the first half reporting season. I think expectations are very mixed. And they might be too low for some and too high for others. But we firmly believe we're on the right way I can suppose. And I think the reason we've seen that is more recently, some of our core investments, our largest investments have made some interesting releases, Saunders being that pre-released their half year result, which was a significant upgrade of the EBIT line. So EBIT was almost doubled what they initially said it would be. And the outlook looks very strong. The likes of COG again had a record announcement in regards to the [indiscernible] for the first half. And we think there will be others to come, hopefully. But at the same time, we're well aware that some businesses are not performing as we expected. Next slide, and then finally, just before I finish, as many of you would know, the NAOS 1% pledge. I did get an e-mail on this. To be clear, this is the management company making the pledge, not the LICs. So we donate 1% of all of our revenue to those poor charities. And we also want to donate 1% of our time to help those charities in more in a physical manner and then hopefully, 1% of our intellect to young people who may not come from such advantage background as others, hopefully give them a leg up into the finance sector and funds management sector, in particular.

So with that, I'll go straight to questions. So for those of you who don't know, a lot of you do know, if you wish to ask a question, there's a chat box on the right-hand side, which you can just literally type in your question, and then it will come through to me by Angela. If that does not work for you, you can write an e-mail now to inquiries at naos.com.au. And as I do with all quarterly calls, I'll go through every question, no matter how long it takes. So last quarter, we had some very pointed questions which were good. So hopefully, we can keep the ball up for some good questions. So the first question comes from Peter, he has written a few questions. Peter -- the first one is to how much of Over the Wire do you plan on rolling into Aussie Broadband? Good question. As obviously, Aussie had the quarterly updates, half yearly update, yesterday that sort of preannounced. As many of you would know, you can see that we have been selling down our Over the Wire holding as we were the largest shareholder by some margin. I think from our point of view, it comes down to 2 things. I think it's the opportunity cost way until March and taking that inherent risk around the deal actually completed. So clearly, we've taken some money off the table just in case that deal didn't complete, not to say there's no reason why it wouldn't and put it into some other holdings and just sit on that cash. But at the same time, there will be an element that investors that may have rolled into Aussie Broadband. Keeping in mind that the merged entity will be a very large entity and a much bigger entity than we would normally invest in. But we fimrly believe that 2 of those businesses coming together make a significant amount of sense, we in Over the Wire internally here for our own [indiscernible] issues, which there is no shortage of. Next question, this is actually for, Mark. So I'll read it out loud, unfortunately and then you can answer it. Again, from Peter, so I think, is a Saunders shareholder hopefully still, this is the risen guidance or the update you provided, I think it was last week, Mark, was for the revenue to between $44 million and $48 million. Why is there such a big range given that we're already -- I think what Peter is trying to say is why there's such a big range given that the -- I suppose, the half is already finished.

Yes. Look, when we provide that guidance, we're still going through the audit process. There was how some of the revenues accounted for in the bigger project that we've won in Darwin. So we went just to upgrade some guidance on what we previously had, and we just made sure that window was there to make sure that we're covered with that extra guidance. We're just going through that audit process now and release results at the end of February.

Thanks, Mark. The next one is actually for you as well, I'm not going to answer it, again from Peter. It said the original guidance for the AGM was for revenue between $95 million to $105 million with EBIT between 4.5% to 5.5%. So factoring what your EBIT is going to be for the first half, that implies little to no EBIT for the second half. I'll let you answer that, but I think I know the answer.

Yes. Again, we'll be releasing some guidance and updated guidance as part of our results. And we have got a large project on the books, and that's in the very early stages and just depending on material supplies and wet weather, as we're trying to start the project in the wet season in Darwin. So that program is still moving. And once we've locked that way and get a better understanding on when the material turns up, when a lot of the labor turns up on site, then we'll be able to sort of update those figures.

Cool. Thanks, Mark. That's correct. Just a question from -- there is lot of questions actually, I'll get them added -- 2 questions. The -- all right. Two questions. So the first one is on Move. What do you think are the main risks around execution for management? And what do you think are management's long-term ambitions for how big this business could be in terms of revenue? An interesting question. I mean, look, for those of you who have not -- I'm sure not many people have actually met Chris, who is the new CEO or Executive Director of that business. If anyone has read the main freight book, there is a book online for it, actually, that a lot of you may know of is actually in that book. I would say, a very ambitious person, a very ambitious management team that, more importantly, actually has the experience and the history to back it up. I think with this business, first and foremost, it has a very large revenue base already. So I wouldn't say the revenue base is the most important thing. I think for them, for Chris and his team, it's really about turning revenue into profit. So really going back to his old playbook where by some of the costs we've had everything that was leased should have been bought and everything that's bought should have been leased. So I think they're going through that process and trying to unwind that. We've had a lot of pricing issues and some long-term contracts, which we inherited efficiencies, PRP systems. So I think there's a lot of inherent risk in execution. But I think the thing that gives us comfort is there's some fantastic people all there. So I think you've got Chris and Mark who are both ex, main freight and very high up in main freight. And they've got 3 executives who are division heads or close to, therefore, the likes of Linfox New Zealand, I think another one from main freight and another one from Toll. So really putting a really interesting management team together. And I do think they're very ambitious. How ambitious? I think it's too early to say, but we're very firm in the view that it will definitely be a much more profitable business than what it is today in regards to how big I couldn't tell you. The second question is on MXI. What are your thoughts on the risk around being able to fill a possible earnings hole in years 2 and 3 up to the new owner of the trailer business may saw us par through elsewhere and generally around management's ability on capital allocation. Do you think S&L or MXI could become a $0.5 billion revenue business over the long term? Yes. Well, good questions. And as we've said before, MXI is probably our newest position. It would be the position that we probably have the least amount of experience with that management team and capital allocation and things like that. Clearly, now, I think we're the largest shareholder, there or thereabouts. So yes, I think that first question you said years 2 and 3 with that -- some of that revenue falling off. I think we are confident about that being filled. Clearly, they made a large acquisition a few years ago. But I think more importantly, they've got some interesting initiatives such as their Japanese aftermarket parts business, which they recently acquired. If anyone looked at Bapcor, Bapcor had a lot of success out of entering that market, sourcing those parts, which are much higher margin. And the market in general, where we believe is that there are more trucks than ever, a lot of older trucks. It's hard to get a new truck and we expect to move, a try and to get a new -- I think if you want a new Volvo, Volvo aren't taking any new orders for the next 24 months or the 6 months. So trucks will be here, they will get older, they will need more parts. In regards to capital allocation, to be decided. I think to do the right thing by paying a very large special dividend. I think the placement was sound arguably, I think, personally, I thought it was really a little bit cheap, but they really need to prove themselves as a team. But if you look at the management team and the CEO, especially he's been in that business for a long time, we've done a lot of channel checking. People speak very highly of him and his ability to focus on the things that matter in that business. And then that's the feedback that we've had so far, but definitely early days. From Kathy, could you publish the fund's performance after fees? Good question, a question that all Ex get. I think the best -- the way I would look at it, and we try to do this internally in a myriad of times is, as you would know, some Cuffelinks do pre-fees and pre-expenses. We do our post-expenses but pre-fees to try and give you the best element of us relative to the stock market. To do it after fees is something we can consider, but it does get very hard for us as we pay a lot of tax because unit trust don't pay tax, but we do. And that really makes the calculation extremely difficult, but something we're always considering, and we're always looking at ways to try and be more transparent in regards to our performance. But Cuffelinks are very different based to a managed fund because of all those nuances. Would it be possible -- another one from Kathy. Would it be possible to have weekly NTA updates instead of monthly? Look, another thing that we do consider all the time. And the reason, to be honest, I push back on this a lot. And the reason why I push back is because if you look at our investments, they're inherently at liquid, they're small, and I'm a big believer that weekly NTA updates will do not a lot to reassure our investors because a lot of these stocks can move on to shares. In the case of Saunders, I think it was up 10% yesterday on about $50,000 worth of stock. And then the day after it was down 10%. But it doesn't really give you a good view on what the long-term potential evaluation of that business should be. So that's why we're we stuck to monthly. But what we do try to do is make our monthly reports the best in the market in regards to the information we give you on the transparency. And then hopefully, calls like these help. This is from Dennis White. So the discount of NSC is concerned, do you have any new ideas on how to close the discount? Fortunately don't have any new ideas. But what I can tell you is if you look -- we look at the register, obviously, daily. What I can say is it's interesting because the number of shareholders are actually starting to increase. So we're definitely -- the NSC portfolio is resonating with people. But what we have seen is we've been 1 or 2 very large shareholders who have been there for a long time and by large holders, one has 6 million shares, and it's now down to a lot less than that. And they're literally been selling those shares very aggressively more recently for obviously, their own reasons. So what we've done, as you could see, I think we had a record buyback last month. And from our point of view, that's the best use of capital. But we are very strong believers internally that through the good performance NSC has had, hopefully, that continues. The buyback will continue to be aggressive. And as those 1 or 2 shareholders eventually exit, and we believe that will be in the next month or 2. The underlying health is actually a lot better than it's probably perceived to be because we are getting a lot of new shareholders, a lot of retail shareholders who've been very loyal to our funds, such as NCC. So that's what we'll continue to do. And hopefully, we can continue to raise that dividend in the short term as well to offset that. But ultimately, it comes down to performance, dividends, aggressive buybacks and good marketing as well. Just -- one for Mark, it's good I don't have to do all the questions. Mark from Jason Clark, how does, Saunders manage cost increases in its contracts, especially in a time like this?

Look, it's a good question because we've got different parts of the business in the construction and our tank side of the business, our biggest price is steel, and we've managed that very well, biggest purchase. And we always have that locked in at the time we sign a contract so that we can get a validity period to be able to purchase that, that's steel, an example in the big project we won, we signed the contract around 11:45 and about 3 minutes later, we placed a fairly large steel order. So we managed that fairly well. We have been -- steel being our biggest issue with increases up to 100% over the last 12 months or so or an average of 50% to 60%. We do see -- we get fairly good visibility from the mills, they'll come out and tell us that next month, we'll be going up 9%, the month after that, 10%, so we get that sort of visibility. We have been called out on a couple of occasions in the civil business with the RIO that we use. We use quite a lot of RIO. And by the time we sign a contract, it's sometime down the track, before the design is done to be able to order that and that's an area that we're sort of tightening up on at the moment. But in general, we've been okay, but definitely, it's an area we manage quite closely because it can catch us out.

Thanks, Mark. Just Peter again. Any thoughts on switching the NCC dividends to quarterly like the other 2 LICs? Yes, good question, Peter. And again, just like those 2 questions, I think we have Casey bring this up all the time. The reason why we haven't done it, and I think the reason why we probably won't do it is because the NCC portfolio is inherently more liquid than the other 2 and by some distance. So for us to manage those cash requirements and keeping in mind that NCC is actually the highest -- high yielding stock out of the 3, which you wouldn't expect, means that cash outflows were significant. So to manage those cash inflows and outflows, we need to sort of give ourselves some time to prepare for something like that because the last thing I want to be doing is going to sell -- I need to sell 4 million Saunders shares in the next 2 weeks, which would be near impossible. But hopefully, that's offset by the higher dividend. Hopefully, that offsets the lack of frequency for you and hopefully for our investors. Another question from Reece. I'm not even going to try at the last name. Unfortunately, Reece. This is in regards to Gentrack. With Gentrack, are you worried about more bankruptcies in England with the customers? Do you think there may be a good takeover target? Is the technology that they offer high-class? Do you think that the airport business is broken or is it just struggling because of all the restrictions? I'm going to give Rob the big [ hospital ] past year and pass it on to you. Can you understand the question or not?

Yes, I'll give that a crack, Reece. So I think I've got this in order. So in terms of the bankruptcies, yes, look, there's likely to be more. We think they'll be smaller. And obviously, some maybe Gentrack customers spend, some may not be. But I really do think that, that bowl, especially the administration that incurred late last year, which was a large customer of Gentrack. Clearly, I think that is a line in the sand for how this industry has gone down a very bad path very quickly. And I don't think that it can be sustainable. So yes, there might be some, but we personally don't think it's going to be a significant thing going forward for -- in terms of the impact to Gentrack, and we still do think that yes, Bowl which is a big customer of theirs has gone into special administration. However, we don't think that necessarily means that they will lose that customer. They still may keep it over time, but only time will tell that. In terms of -- I think your next part was around the software. Yes. I think pros in reporting here. So -- the fact that they've been winning new customers, not necessarily in the U.K. but other markets as well. I think that shows you that the software is good and it's improving. We think that it was under the new management team led by Gary and Zee, who were both from Amdocs. We think there's certainly been improvements made and there can be certainly some to come in time. But the fact that they're winning customers. And a lot of the customers out there are large Tier 1 customers who need to potentially get off some of the SAP and Oracle systems by certain life date. We think the environment is actually quite good for them to be able to show that the Gentrack software is already good, and it's improving and they've got finite dates where they can win potentially with new customers over time. So where the lens in the software, and I think there's been a lot of improvements already under Gary's leadership there. And I think there was another part of that question, but I just -- the airport business. So yes, I think that's a little bit of a sleeper within the Gentrack overall company. Clearly, that's been no secret, they're a very, very tough environment for them. And personally, when I look at Gentrack's business, I think that can be something quite material in time. The reason being is they haven't lost any customers during COVID period and they've actually been able to win new customers and their pipeline looks stronger. But clearly, no one's spending at the moment in that space. But that will have to change and revert back to some sort of mean in time. But also I think with everything in the world at the moment, one of the key parts of that software business in the airport space is around passenger tracking, and passenger tracking is becoming probably ever more important in airports in the COVID environment and going forward. And we think that's a key selling point. So I think you're kind of getting that thing and it has been an absolute bottom of the cycle in the airports business and certainly not being valued by the market, but we think there's certainly upside there over time. Thanks for the question.

Just last 2 questions. Again, from PK, it's on EGH. What are your thoughts on why the stock has held up? Well, considering the negative sentiment that has hit lifestyle communities and us in group -- asked us in Group. Yes. Look, I mean, I can't comment too much on the others. I think the one thing I would say is the likes of lifestyle communities that extraordinarily runs based on well and you, it's interest rates correlation. So the negative interest rates, the low interest rates have driven the likes of LICs to record hires. On APZ, I don't really have too much of a view, albeit it is a different model of EGH. It's very much residential leasing, I think, from memory as opposed to sort of more, I say, not older, but essentially more elderly people, I suppose, provide affordable housing. In regards to why EGH has held up so well, I think our thesis is extremely basic and that is the assets are undervalued on a cap rate of still 10%. They've got a significant amount of tax losses. It's a growing industry. they would be a large player in a highly fragmented industry. It's [ underwind ] and the growth prospects for that business over the next very long while probably [indiscernible] So we think that this business can scale quickly and those sales, the margins should continue to increase. So there's no reason why EGH couldn't be twice as size it was, hopefully, sooner rather than later. And then the last one -- there's another one actually, just in regards to our private opportunities funds, if we're providing an update? Yes, the quarterly update, so the quarter, unfortunately, only finished in January. So it will be out in the next week or 2. So you will get an update. It'll be e-mailed to you. What are the percentage of shares held by Christian Mark in Move? I think Chris owns 6%, and Mark would own maybe 1% a bit less than 1%, so it's 7%. But I think if you put that in dollar terms like that's pretty significant, I think from memory Moves captive cost to $200 million. So for someone like Chris, it's a lot of his personal wealth and he did take up his full entitlement. And to be honest, we spoke to Chris, just not that long ago, and I think the quote was I plan on maintaining my 6% position for as long as possible. So that's all the questions. Now first and foremost, I want to thank Mark for taking 1.5 hours of his day plus putting together the presentation. I really appreciate it. I know, it's no easy thing, especially during reporting season. So thanks, Mark. I will also say that we do have a survey. So if you do want to fill that out, there's a survey after the webinar finishes. And just as importantly, I want to thank everyone for attending and thanking all of our shareholders in what's been a reasonably difficult market. Hopefully, we can continue to outperform when our next NTA comes out and then into Q3 with reporting season with a bit of luck, we have some reasonable results from our core investments. So thanks again. If you do have any other questions, don't hesitate to e-mail me or any other in the investors team, but enjoy the rest of your week, and we'll speak to you soon.