NZX Limited (NZX) Earnings Call Transcript & Summary

Good morning, everyone. Welcome to the NZX' 2024 Half Year Results Call. I'm Mark Peterson, NZX Chief Executive, and I'm here today with Graham Law, our Chief Financial Officer. Graham and I will take you through the result. I'll lead off with some key elements of the result and some broader comments. And then Graham will step us through the financials. After which, we are more than happy to take questions. [Operator Instructions] Before we start, please note the importance notice at the front of the Investor Relations pack and -- as the statement applies to all content and comments made by us during this call. Just a few opening remarks. As we all know, the first 6 months of 2024 has largely been a continuation of the economic environment that we all experienced in 2023. Inflation remains stubbornly high. Interest rates remained elevated, and this did impact the attractiveness of equity markets. Hopefully, this is starting to change. Notwithstanding the challenging macroeconomic environment, NZX has delivered a solid result for the half year. Earnings, excluding acquisition, integration and restructuring costs, were $22.9 million, up 11.5% on the prior comparable period. If we include acquisition integration and restructuring costs, earnings were up -- earnings were reported as $22.4 million, which was up 12% from the same time last year. Underlying NPAT, which excludes the QuayStreet fair value adjustment, was $8 million even, which was up just under 11%. And reported NPAT was $15.3 million, up 119%. And we've declared a fully imputed interim dividend of $0.030 per share. Dropping into the component parts. Revenues were $57.9 million, up $3.9 million or 7.3% compared to the previous corresponding period of the first half of 2023. And breaking this down at a high level, Capital Markets revenues were slightly down, $0.8 million on the prior comparable period. Listing fees have been steady. Trading and clearing fees were down 3%. However, they were up 7% against the second half of last year. As previously mentioned, we did pick up sizable audit fee relating to indices usage. However, uses of data have been rationalized in new terminals, and industry consolidation has also had a small impact. Our dairy market activity levels continue to show good growth, but the interest margin revenues that we share with SGX have reduced this year due to the change in the interest rate forward curve. We'll explain that shortly. Smartshares continues to benefit from organic growth and funds under management and having the acquisitions onboard for the full period. Revenues were up 18.4% on the prior comparable period and 12.2% on the second half of last year. NZX Wealth Technologies revenues are growing strongly as client transitions [indiscernible] and revenues are up 39.3% on the prior comparable period and 11.2% half of last year. We continue to be disciplined on our group costs. You will see in the result a further movement in Smartshares between the revenue line and the cost line as the full effect of the integration flows through to the numbers. At an overall level, costs were $35 million for the half year. This was up 4.7% against the prior comparable period and only 0.2% against the second half of last year. And breaking this down, Capital Markets costs were down 4% over the prior comparable period and largely flat against second half of last year. Staff numbers have not changed, and we have adjusted the composition of our team to optimize for the challenging economic environment and the delivery of the strategy. For Smartshares, you can see the full effect of the integration of the acquired businesses. As discussed over the last 2 reporting periods, we have hired our own people to support the acquired businesses and reduce the cost to us of utilizing the selling party services through that transition period. This cost was shown previously through the revenue line. Wealth Technologies is always balancing its costs relative to the new business opportunities we have, and we are seeing strong growth. And Wealth Technologies did take on a few extra personnel to assist in onboarding these opportunities as quickly as possible. Corporate costs were down on both the first half and second half of 2023 periods. Good cost control is being shown, and we have been able to soak up the inflationary effects with savings elsewhere. A pleasing aspect of our result for the first half of the year is the positive jaws we've been able to generate despite the challenging environment, while we continue to invest in our growth. The total revenues lifted 7.3%, while total costs rose 4.7%, and this has translated to improvement in operating margin from 38% to close to 40%. Our technology platform continues to operate reliably. Our risk management functions continue to advance in its maturity, and the oversight review by the FMA released in the middle of this year was positive in its assessment. As I mentioned, Graham will take you through the financials in more detail shortly. Speaking of Page 6 on the pack. Many of you will recall us rearticulating NZX' growth strategy at our Investor Day back in November 2022. We said our 3 businesses, Capital Markets, Funds Management and Wealth Technologies, were all targeting greater scale and operating leverage. In Capital Markets, we were looking to round out our product range with additional trading venue and [indiscernible] product. And we also mentioned there were benefits for the NZX Group in having these businesses supporting one another. The following update for the various business areas should be considered in their context. The business highlights have been laid out on Pages 8 through 15 of the pack. First up, capital listed and raised. $6.3 billion of capital was listed or raised over the first 6 months of the year. $3.5 billion was debt issuance, $1.8 billion of secondary equity and approximately, we're just under $1 billion of funds. This was down 11.5% compared to the first half of last year. And the economic environment clearly has a part to play in the result, and we also know company earnings have been under pressure. With a change in outlook and interest rates appearing to have peaked, we expect activity levels to pick up. And we continue to spend a lot of time engaging with the New Zealand government on capital market settings. Ministry of Commerce has said publicly that the capital market settings are firmly on the agenda for the second half of this year. And we're working constructively with capital markets community, government ministers, regulating agencies and officials on a broad package of change targeting regulatory improvements and the opportunity to encourage investment and improve New Zealand's productivity and international competitiveness. We are receiving positive signals from everybody involved. This is critical to remove the regulatory arbitrage that has built up over time between our market and other markets globally and against the obligations that private companies have or, in some cases, don't have in certain areas. Trading and clearing values remained at lower levels. But within the numbers, there's actually a brighter story. First half of 2024 was actually down on the first half of '23 but was up on the second half of 2023. The first 3 months of 2024 remained soft, those levels that we saw at the end of last year. However, in April, May and June this year, we have seen a 24% pickup. With the recent cut to the New Zealand official cash rate, which suggests that interest rates may have peaked, we believe we have a brighter outlook for the remainder '24 and beyond. In early June, we launched our midpoint order book and are seeing encouraging usage early on. Our NZX 20 equity futures work continues with the key pieces falling into place, and we continue to grow our assets in the depository, which is up 24.4% for the half to $8.3 billion. Lastly, we remain committed to developing a more efficient clearing and settlement system for New Zealand. Information Services, our data business, had a steady first half, a significant one-off indices audit was received. However, this was offset by some rationalizing of terminal numbers as a result of industry consolidation [indiscernible] organizations have been going through. We did complete a full upgrade of Trans-Tasman connectivity capability. This is now in a much more modern technology platform, which has lifted our resilience in security, and we can now also connect international network traffic to our market much faster and much easier. Our dairy derivatives market volumes continue to lift, up 23.6% for the half, and that is with a slow start. Revenues were impacted by a reduced interest margin fee level that we share with SGX. This is due to a change in the interest rate forward curve, which our fee level is set at from the beginning of the year. The partnership with SGX is strong, and we are now attracting more market makers into the product and with it additional financial markets flow providers. GlobalDairyTrade's profitability remains strong, and we continue to work with our shareholder partners, Fonterra and the European Energy Exchange, to lift volumes. We remain positive as to what the possibility is out for this business. Smartshares had another period of strong funds under management growth from $11 billion at the beginning of this year. We took the business through to $11.9 billion at the end of June, and this has jumped further to $12.3 billion at the end of July. Outlined in the investor pack is the split between net new cash, which was up $200 million and the market return, which was up $700 million. We launched a range of products under the QuayStreet brand in conjunction with Craigs Investment Partners, and we are seeing growing cash inflows in these and across the wider Smartshares product suite. Whilst we're seeing good growth momentum in the cash inflows to the QuayStreet and Smartshares products from the Craigs network, accounting standards require us to assess the track we are on towards our earn-out targets. Notwithstanding the growing inflows, the accounting standards require us to be formulaic in our assessment, which has resulted in an accounting adjustment being made, which flowed through to the NPAT line. We remain confident the partnership with Craigs will deliver everything both parties saw at the time of the acquisition. Behind the scenes, we have work underway shifting the platform that sits behind QuayStreet, Smartshares, both the KiwiSaver and the Superannuation product range to our Wealth Technologies platform. This will have a range of benefits, including reducing the external cost to a supplier, leveraging the modern platform capability we have within the group, opening up new product opportunities, lowering our technology risk profile in Smartshares and delivering further cost synergies once the current Smartshares platform is retired. This won't be a quick piece of work, but it will deliver significant benefits and further operating leverage. Turning to NZX Wealth Technologies. We are making significant progress in delivering the potential of this business. With the steady stream of new clients being onboarded onto the platform, its funds under administration had grown from $11.5 billion at the end of last year to $14.2 billion at the end of June. And as at the end of July, funds under administration levels were $14.8 billion. Most of these clients are adviser groups who are on our full service offerings, which attracts the associated pricing and margins. This is flowing through to the improvement in annual recurring revenue, which is up 24.7% on the position we're at, at December 2023. And we have laid this out in the investor report on Page 13. We are tracking well against the Q3 2024 component on that page. As previously mentioned, we are managing costs closely and appropriately against the opportunities we have. We continue to field client inquiry off the back of the platform, people and overall experience our clients receive. Some of these will come on to the platform in the second half of this year. Others will flow into 2025, which is also looking very healthy for us. We continue to make strong progress on our path to cash flow positive and already have sufficient contracted clients to get us there once all currently contracted clients are migrated. One driver to achieving this in the near term is the pace at which we can transition new business onto the platform. And this is in part controlled by customers, for example, working around tax reporting cycles and at the same time, it takes -- where in the same time, at -- the time it takes for an incumbent platform supplier to provide us with the necessary customer data for us to transfer onto our platform. Finally, we continue to see strong interest, and we respond to RFPs from further potential clients. Our people and running the business in a responsible manner have always been the 2 highest priority [indiscernible]. Our staff engagement levels remain high across the group, but we have identified 2 business areas that deserve greater focus, and our management team is confident these areas will improve quickly. Staff turnover continues to operate below target. Our gender pay gap compares well against other financial service businesses. However, we are focused on bringing great agenda and diversity balance at a more senior level across the organization, and we are lifting our focus on staff development across the organization to help achieve this objective. Our operations, technology and risk teams continue to deliver accurately, safely and within risk tolerance levels. And we have set our operating responsibility vision as one which creates value while delivering a positive impact to society and the environment. And we have this ethos integrated into the way we set our strategy and operate our business. I'll now hand over to Graham to take you through the financials in more detail. And after which, we are happy to take questions.

Thanks, Mark. Before I start, I'd like to draw everyone's attention to the disclaimer on Slide 30, which contains important caveats relating to the information we're about to cover. Starting on the financial performance on Slide 17. The table summarizes the income statement for the second month period ended 30 June 2024. Additionally, a detailed analysis of the operating results of our business unit is provided in Appendix 1. I'll first discuss the results at a high level, and then I'll drop down into some detail on our business unit by business unit basis. Operating revenue increased $3.9 million to $57.9 million. I note that the diverse revenue sources that NZX has are noted in -- are included in note 5 to the interim financial statements. The increase in the operating revenue was driven by Smartshares. There are several factors that influence Smartshares revenue change, which we'll go into detail a bit later on, and also by Wealth Technologies as ARR from new client increases. Those revenue increases were offset by lower markets revenue despite the large one-off backdated indices revenue that Mark referred to earlier on. Operating expenses, excluding acquisition, integration and restructuring costs, increased by $1.6 million to $35.0 million. The increase was driven by Smartshares. Again, there are several factors at play here, including a full period of the QuayStreet acquisition as well as the SuperLife Superannuation Master Trust, formerly ASB Superannuation Master Trust integration, which I noted at the year-end investor presentation, the impact of those and again, I'll go into both of those factors a bit later on. The Smartshares cost increases were partially offset by cost management and all the other business units. This resulted in operating earnings before acquisition, integration and restructuring costs rising $2.4 million to $22.9 million. The acquisition, integration and restructuring costs related to the integration of QuayStreet and planning to mature the Smartshares systems and operations. And after those costs, the operating earnings lifted by $2.4 million to $22.4 million. For the nonoperating expenses, net finance cost increases are driven by a full period of debt funding of the QuayStreet acquisition and higher interest rates on subordinated note from June 2023. Depreciation and amortization continues to increase as expected, reflecting both the full period's amortization of the management rights of the QuayStreet acquisition and the increasing Wealth Technologies amortization levels, where amortization on migration CapEx commences as and when new clients are onboarded as well as depreciation increasing for the new Auckland ticker and signage, which commenced in September 2023. The share of profit/loss of associate relates to the GlobalDairyTrade investment. And the change in fair value of contingent considerations, as Mark had mentioned, relates to an accounting adjustment for the QuayStreet earn-out liability. When Smartshares acquired QuayStreet in February '23 from Craigs Investment Partners, it agreed potential earn-out consideration of up to $18.75 million. This was based on net funds under management inflows from Craigs network over a 3-year period to November 2025. FUM inflows post-acquisition have been slower to build than expected, but the size of the opportunity remains, and we're seeing very strong cash flows over the last quarter. Consequently, our reassessment of the probability of achieving the net cash inflows required by the November 2024 target has reduced, resulting in a net $7.3 million release of the QuayStreet earn-out liability. The probability of achieving the full FUM inflow targets by November 2025 will be reassessed at year-end. Overall, this has resulted in net profit after tax being $15.3 million, up $8.3 million on the comparative period. Excluding the accounting adjustment to the provision for earn-out, the underlying net profit after tax was $8 million, which a year-on-year increase of [indiscernible], so [ 10.9% ]. The operating margin is slightly up at 39.6%. As I noted earlier, further detailed analysis and the operating results by business unit is provided in Appendix 1 and summarized on Slide 28. I'll now break down the operating earnings by business unit in more detail on Slide 18 and starting with the Markets business. Our operating earnings decreased by $0.4 million. This was a combination of revenue decreasing $0.8 million and cost decreasing $0.4 million. The main factors driving the Markets business revenues are starting in Capital Markets origination. Revenue decreased due to the overall annual -- firstly, the overall annual listing pay increase, driven by price changes and the growth in the value of the NZX Debt Market, partially offset by a slight contraction in the equity market capitalization. Remember, this market capitalization of 31 May each year, which drives the annual listing phase for the year to -- July to June. Additionally, there were lower levels of prime listing and secondary issuance for both retail debt and equity recapitalizations. Remembering that equity has a relatively higher [ fee ] than retail debt and wholesale debt [ and funds ]. In secondary markets, revenue decreased due to a mix of lower levels of trading and clearing value and, to a lesser degree, higher levels of uncharged value traded, i.e., where trades value exceeds the fee cap. This was offset by higher levels of depository revenue from OTC settlement lines and uplifts. Dairy derivatives revenue has been adversely impacted by the margin fee normalization in line with global future interest rate curves, which has outweighed in the period in question the higher levels of lots traded. We've seen these reductions were partially offset by inflationary increases in contractual revenue for the Electricity Authority, Fonterra and the Ministry for the Environment. In the Information Services, revenue decreased, which is a mix of lower levels of terminals, higher value -- more high-value licenses and a significant backdated indices revenue, which is thereby showing separately from the normal indices revenue. The main factors driving market business expenses are, firstly, net personnel costs are $0.4 million lower. This is a combination of restructuring at several of the teams resulting in reduced headcount, offset by the transfer of 2 roles from corporate services; reduced energy contractors in line with reducing levels of consulting and development revenue; and finally, increased capitalization relating to the NZX Dark and the S&P/NZX20 Index Futures projects. IT costs are higher due to trading and clearing system inflation related price increases and NZX.com upgraded infrastructure running costs. Professional fees include lower levels of audit fees in line with the reduced audit revenues. Moving to the Smartshares business. There are 3 factors, all of which I've previously indicated, that are making a year-on-year comparison of Smartshares business complicated. Headline operating earnings, excluding acquisition, integration and restructuring costs have increased by $0.8 million. However, this isn't a like-for-like comparison as H1 '23 included 2 factors. Firstly, there was significant one-off revenue relating to prior financial years; and secondly, the QuayStreet revenue and expenses were only for part period as the acquisition occurred in February 2024. Adjusting H1 '23 for these factors to get a like-for-like comparison shows an operating earnings excluding acquisition, integration and restructuring costs are approximately $1.8 million or 19.8% higher. This increase partly reflects the third factor in that H1 '24 includes the synergies unlocked by the SuperLife SMT, formerly ASB SMT migration of transition services, i.e., the investment management, investment admin and registry services, which occurred from late August 2023. As I indicated in the full year '23 investor presentation, the migration resulted in a grossing up of the P&L in revenue, transition services fund costs no longer being incurred against the FUM-based revenue and then costs Smartshares having employed additional FTEs to perform those services within existing teams, the net impact being an estimated increase in operating earnings of about $450,000. The remaining increase in operating earnings beyond those 3 factors reflects the FUM-based revenue growing in line with the increasing average FUM, which is a combination of positive returns and positive net cash flows, which were both shown on Slide 12. And these were offset by cost increases in personnel costs, where we did add additional AML compliance resources, for example; professional fees, where we did have and undertake a review of our AML and CFT processes; and some additional marketing costs around brand development; and of course, our other costs, which are largely linked to compliance costs such as nonrecoverable GST and FMA levies, which increases FUM increases. We continue to mature the Smartshares operations, including having commenced planning to replace the client portal and the registries as well as looking at fund simplification and rationalization with the aim of gaining operational efficiencies for this business. Now moving to the Wealth Technologies business. Our operating earnings increased $1.4 million. This was a combination of revenues increasing $1.2 million and costs decreasing $0.2 million. Our Wealth Technologies administration fees increased in line with the increase in average funds under administration, which is a combination of new clients being migrated onto the platform in either 2023 or '24, positive market returns and positive net cash flow from the clients. These are movements are shown on Slide 13. Development fee revenue reflects the levels of customization-specific client requirements, some of which is paid in advanced and for accounting purposes, recognized over the full life of the client contract. Wealth Technologies net personnel costs were lower, reflecting a combination of gross personnel cost being higher. As previously indicated, average headcount has been temporarily higher to accelerate the migration velocity of additional FUA current clients, which is netted against [indiscernible] and overhead being higher, reflecting the continued product development and transmigration activity. And also, H1 '23 was actually lower, reflecting on capitalization -- capitalizable effort required to migrate clients from the legacy platform, which we closed in H1 '23. As indicated on Slide 13, the remaining migration of Wealth Technologies' current contracted clients will get this business to cash flow positive targets, the timing being dependent, as Mark has alluded to, on the client strategic prioritization and migration resource commitments as well as their current plan -- the client's current platform provider supplying data in a timely manner. For the corporate functions, expenses are lower with reduced personnel costs due to lower headcount from a combination of vacancy levels, transfer out of some roles in the Markets business and one new policy rule. Those were more than offset by reduced professional fees relating to legal fees, timing of internal audit activity and cost savings from lower external members of committees, i.e., the CGI Chair. And finally, for NZ RegCo, regulatory fee generating activity levels have been higher than 2023 and personnel costs lower, being a combination of vacancies and the impacts of a restructuring of surveillance resources there for '23. We remain mindful of the cost base, and cost control continues to be a priority. We are continually reviewing headcount and project prioritization to ensure we deliver to our strategy. And supplier contracts are reviewed across the business. That said, I do note that the normal pattern for our cost base [ subsidy ] H2 costs are generally higher than H1 costs because our contract inflationary uplifts effective from July each year, and we are impacted by where the USD FX rate lies at any point in time; and also, the timing of certain costs being phased more to H2 than H1. Moving to Slide 19. Our acquisition integration and restructuring costs related to the integration of QuayStreet and the Smartshares business as well as planning to mature the Smartshares operations. These one-off costs represent external costs net of capitalized internal costs. Maturing the Smartshares operations will continue into next year. Additionally, I note that the other investments for growth in the current period have been using NZX Dark, which was launched in June '24. S&P/NZX20 Index Futures progresses towards its relaunch, and Wealth Technologies migration activity for new clients. The nonoperating expenses include net finance costs. These were higher due to -- which were higher levels -- which are at a higher level due to inclusion of full period of interest on the funding of the QuayStreet acquisition and the acquisition accounting treatment for the unwind of the present value discount on the earn-out. Also, our subordinated notes were rolled on June '23 with the interest being reset from 5.4% to 6.8%, which is fixed until June 2028. These interest increases were offset by interest income being higher on our various cash balances, which was positively impacted by the higher average interest rates in the first half of 2024. Depreciation and amortization is higher. This is in line with expectations as outlined in previous investor reports, reflecting a full period's depreciation and amortization on capitalized items in 2023, specifically amortization of the QuayStreet management rates; Wealth Technologies completing new client migrations, which will -- which we expect to further increase as migrations continue for the remainder of the year and into next year and as new clients join the platform. This is a pattern that I sometimes refer to as amortization bubble. And then finally, depreciation on the new Auckland ticker and signage, which commenced in year '23. The share of profits of associate -- profit/loss of associate relates to our investment in GlobalDairyTrade. As indicated previously, their 3-year expansionary strategic plan is expected to result in NZX' share of profit of associate below until those strategic initiatives successfully mature. The accounting change in fair value of contingent consideration relates to the decrease in the earn-out liability to recognize the cash flows to date have been lower than the run rate required for 100% earn-out at November '24. We will continue to reassess the earn-out probability of each accounting reporting [ be available ] until the final earn-out is assessed in June -- in November 2025. The effect of tax rate is lower than statutory rate of 28% due to a combination of nondeductible items, particularly the adjustment to the provision for earn-out, partially offset by accounting and tax valuation differences in the share of associate earnings being net of tax. Moving to the balance sheet on Slide 21. There are 3 key points I just want to note. Firstly, the cash includes balances that are not available for general use. Specifically, the Clearing House has $20 million of risk capital and approximately $2.7 million of quasi risk capital. And the Smartshares business has about $1.4 million of working capital requirements under its [ SEC ] amendments, license and [ the agent ] requirements. Second point to note is that funds held on behalf of third parties, assets and liabilities, offset and hence the assets are not available for general use. These relate to issuer bond deposits, participants' collateral deposits and deposited funds. And the final point is the disclosure of the interest bearing liabilities. The sub notes' next election date is June 2028, and they're disclosed as noncurrent liabilities. And the acquisition loan facility at $22.5 million for the QuayStreet acquisition, the bank facilities all have an expiry date of February 2025. This loan therefore is disclosed as current liability. And [indiscernible] discussions have already commenced with the bank. Slide 22 then summarizes the CapEx in 4 graphs, all of which have the same scale, so that I can show relativity. Starting on top left and moving around clockwise. For trading, clearing and energy systems, the CapEx levels are really dependent on the specific system's life cycle. At present, there are no large upgrade projects underway, and we've enhanced our trading system for the S&P/NZX20 Index Futures and automation as well as automating some of the depository systems. For property, plant and equipment, which is top right, in the current period, CapEx included a refit of the Wellington office to allow retrenchment to one floor. Other software relates to normal life cycle replacements for IT equipment and software as well as an enhancement of NZX' technology architecture, which further strengthens our cybersecurity. For the growth businesses end, Smartshares continues to enhance systems. Maturing Smartshares' operations model will require further enhancements to the client portal, CRM, digital tools and registries. And then finally, Wealth Technologies is our largest area for CapEx, and the business continues to migrate new clients and [ obtain ] its product offering. We continue to expect the level of CapEx for the Wealth Technology business to be similar over the next few years, as contracted new clients and [ other price-based ] prospects are migrated to the platform. Slide 23 then summarizes the cash flows for the year. Operating activity cash flows reflect higher net profit after tax adjusted for the nontax, noncash items such as depreciation, amortization and the accounting adjustment to the provision for earn-out as well as the working capital movements, which were adverse in this period, noting that our annual listing fee normally comes through in quarter 3 when we're at peak cash. Investing activities reflects the CapEx that I've just noted on the previous slide. H1 '23 also had the settlement of the QuayStreet acquisition in there. Financing activities are mainly the dividends paid net of the participation in the dividend reinvestment plan with the comparative period, H1 '23, also reflecting the [ debt layers ] for the QuayStreet acquisition. Other financing activities include lease payments with the prior period, including the subordinated note refinancing costs. Overall, as I noted earlier, we continue to be conscious of Wealth Technologies' cash burn and are well on our way to being cash flow positive for that -- this business. Slide 25. Our fully imputed interim dividend is $0.030 per share, which will be paid on the third of October. The dividend payout ratio adjusted for the change in the fair value of contingent consideration is higher than policy, and the business is focused on future earnings to support the dividend level. The dividend reinvestment plan is available for the interim dividend and the share to be issued at 1% discount, which leads me to an update of our 2024 earnings guidance. NZX is maintaining our full year 2024 operating earnings guidance in the range of $40.5 million (sic) [ $40.0 million ] to $44.5 million. The half year financial results indicate NZX is tracking towards the upper end of the '24 full year guidance range. Progress towards achievement can be tracked within our shareholder metrics, which we publish monthly. As always, I note that this earnings guidance is, of course, subject to the usual market caveats that are listed on the slide. This concludes our presentation, and we'll now open it up for questions.

I've got one question from Dave Storms. I'll just take you off -- Dave, I'm going to take you off mute. Dave, can you hear us? He's disappeared. We had one question. That question is now off-line.

Right. Any further questions?

Doesn't appear I've got any further questions from the meeting. Anyone else got any further question? [Operator Instructions]

We're obviously always happy to answer questions that come through directly as well.

No further questions.

No further questions. So apologies, everybody, for a slight technical hitch there, Dave, or everybody. And then, Dave, very happy to take your question directly. If there's no further questions, Simon, we maybe will call it to a close. Actually, standby. There may be a question.

We've got one now in writing from Dave.

Okay. Dave's writing his question.

So great to see growth in Wealth Tech. Can you give us a little more insight into what the current customer acquisition environment is like for Wealth Technologies?

It's positive, Dave. A lot of activity coming our way. Client inquiry continues to build even over and above the clients that have contracted. We're seeing a number of adviser groups in that sort of mid-tier level that are showing interest in the platform. So no, we're very positive about -- we are all [ at 10 ].

Another one from Dave. Is there any further outlook for the Smartshares QuayStreet integration specifically around the time line, milestones or logistics that we should be aware of?

Do you want to take that?

Yes, we're looking into synergies that the business can -- the group can gain from Smartshares using Wealth Tech for certainly some type of registry offering. Fundamentally, the driver of -- the benefits of linking the 2 businesses together in this regard are [ mathematical ] in terms of synergies. Secondly, it derisks the Smartshares business around some old systems and registry in most products. And finally, it could open up another addressable market for the Wealth Technologies business. So yes, it is something we are looking at. We are being honest. We're business casing it and looking then to make a decision in probably the fourth quarter. That will drive a lot of activity out of Wealth Tech if we push that button. And it will be over probably the 15 months, the 24-month period, I would imagine, given the nature of the project that's required.

That's all we've got. No further questions at this point in time.

Okay then. Well, let's leave it there. Apologies once again for a slight technical issue. But as a -- just to reiterate, please enter your questions directly. Graham, and I are always happy to answer those or take phone calls. But once again, thank you for your time this morning. I hope you enjoy the rest of your day. Thanks very much.