OFX Group Limited (OFX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the OFX Group Limited FY '25 Half Year Results. [Operator Instructions] I would now like to hand the conference over to Mr. Skander Malcolm, CEO and Managing Director. Please go ahead.

Thank you, Ashley, and thank you, everyone, for joining the call. As Ashley mentioned, I'm joined by Selena Verth, our CFO; James Gref, who was acting CFO in Q2; and Matt Gregorowski, who leads our Investor Relations program with Sodali & Co. Selena and I will take you through the pages, and then there will be time for Q&A. Presentation will cover 3 things: first half '25 results and the performance drivers, our financials in more detail and our strategy and outlook. Then we'll do Q&A. Let's move to Slide 4 in the pack. The macro conditions we saw in the first half '25 did not reflect our assumptions, which affected our top line results, particularly late in Q2, as we outlined in our trading update of 18th of October. Nevertheless, we worked very hard and drove the business levers we have well, meaning, while results were behind where we expected, the business remains in very good shape. We also saw the strategic pivots we've made in the last 3 years to focus on B2B to grow globally and to launch a platform that provides our clients with a broader range of products and services generate very encouraging growth and returns. We delivered net operating income of $111.2 million and underlying EBITDA of $29 million. We continue to execute the fundamentals well. We generated $17.1 million in underlying net cash from operations with net cash held at $74.7 million at the end of the half. This is a bit lower than the prior period due to our active capital management strategy, which included a $3.3 million share buyback and $11.5 million debt repayment, which Selena will talk to later. We grew our NOI margin 2 basis points of the second half '24 to 60 basis points, which is flat on the first half '24 as that included one-off escrow payment. Risk management remains a core strength and the additional controls, along with continued vigilance results in bad debts being less than $1 million, which is ahead of our estimate. More broadly, synergies realized, and sound management of expenses meant overall underlying operating expenses were $82.1 million, down 1.4% versus the first half of '24. Moving to Slide 5, this aspect of OFX doing the fundamentals well underpins our confidence that we can build a sustainable growth business, one that performs through the cycle. As evidenced, although the last 3 years have seen some of the most unusual economic and political conditions driven by the global economy's emergence from the pandemic, high government stimulus almost everywhere driving inflation and a series of interest rate rises, we have delivered a 3-year CAGR in NOI of 17.4% and a 3-year CAGR of underlying EBITDA of 12.7%, even as we have grown our investment in intangibles, in employees and in more SaaS-enabled technologies than ever before. Whilst these investments have been thoughtfully deployed over that period, the rewards faster growth with returns are now beginning to emerge. Furthermore, as Selena will touch on later, our value proposition generates price elasticity, and we have seen the benefits of the countless pricing tests we've performed over the last 3 years, growing NOI margin 14 basis points. This belief that a strong value proposition can sustain a fair price has always been in the DNA of OFX, but it's now supported by well-developed analytics and technology. Finally, client engagement, as measured by transactions per active client in the last 12 months continues to grow at a good rate, up over 8% on a 3-year CAGR. And that is impressive considering the real growth will come, as clients are given the choice to select more products to satisfy more of their needs. In all, a very healthy company. Turning to Slide 6. I'll share more detail on our main segment performance and their drivers in a moment. But first, a recap on what drove our overall top line performance versus our expectation, as we outlined at the time of the trading update. The economic assumptions we used to build our FY '25 outlook, as shared in the FY '24 results in May did occur, although later in the first half than we anticipated. The single biggest difference between what we assumed and what we saw in the first half was the interest rate easing cycle starting later in the U.S. and not starting at all in Australia. Easing did start in Canada and the U.K. as well as Europe. The slower-than-anticipated easing in the U.S. meant a stronger U.S. dollar against both the Aussie and the CAD, 2 of our larger corridors, which slowed the rebound in corporate confidence that we were expecting. The U.S. dollar strength, combined with less optimistic views of the recovery in several economies, also meant that some of our larger corporate clients deferred higher-value transactions, which in turn affected overall average transaction values or ATVs in those markets. As we shared in our trading update, this was most acutely felt in September and parts of August. In September, we saw corporate ATVs declined 13.5% globally. Over the first half, corporate ATVs were down 9.4% in Canada and 19.5% in the U.K. as clients acted cautiously. This was very unusual. We also saw relatively benign markets, little volatility, which, along with more subdued consumer confidence and consumer activity, although it did grow versus second half '24, meant lower consumer activity, although it did grow versus second half '24. Against those assumptions, the levers we control did perform in line or better than expectations. We saw healthy growth coming from the new corporate clients we acquired in fiscal year '24. We continue to execute on our margin improvements, adding 2 basis points versus second half '24 to our NOI margin and the further controls we put in place to protect us from fraud, especially in North America, are working well, keeping bad debts below expectations. As we exited the first half, we saw positive momentum return with October revenue up 14% versus September and with ATVs returning to the levels we expected. You can see from the arrows on the right-hand side, how we see our key assumptions panning out over the second half of '25, all in line or improving. Moving to Slide 7, we saw mixed outcomes in our Corporate segment. The U.S. growing at just under 25% and Australia just over 9%, Europe continuing to grow very well off a small base at over 77%, whilst Canada and the U.K. were down just over 3% and 9%, respectively. As a group, we grew revenue 3.5%, supported by transactions being up just over 5% and transactions per active client in the last 12 months, up 11%, while we continue to see healthy new revenue growth up 15%. In sampling our clients in the U.K. and Canada, we see the following: a small number of larger clients did fewer of the high-value transactions we ordinarily see, but transactions are steady overall. Smaller clients are actually transacting more with ATV growth up over 6.5% versus the first half of '24. We're not seeing any kind of alarming decline in active clients. Corporate active clients did decline slightly in the first half, driven by the factors affecting their economic outlook, as I explained, and therefore, the FX [ needs ]. As the right-hand side of the page shows, we grew revenue by 3.5%, which is below our expectations, but against a difficult backdrop. We also continue to grow our penetration of forward revenue, as a proportion of all revenue by highlighting to our clients the benefits of reducing the risk of exposure to currency volatility on their financing. We do this through our team of over 150 commercial professionals worldwide. Putting together such a strong and high-performing team globally is very hard and [ very proud ] of them, but especially excited to see the value that they can bring to our clients with the introduction of the new client platform. Moving to our High Value Consumer segment on Slide 8, we delivered $34.5 million of revenue, down 3.6% on prior corresponding period, but up 5.9% versus the second half of '24. Volatility was lower than in prior years, which impacted transaction volumes. And encouragingly, we did see a slight improvement versus the second half in higher value wealth and property transactions, pushing ATVs overall slightly up on prior corresponding period. Naturally, having redirected all of our marketing spend to be focused on the Corporate segment, part of the revenue decline is due to a small drop in active clients, but we nevertheless retain and support a valuable consumer segment, which we continue to expect to grow at low single digits through the cycle. Moving to our Enterprise segment on Slide 9, it's excellent to see the revenue growth at just under 13% versus the second half '24 and the 3-year revenue CAGR of over 24%, given the investment and hard work our teams have put in. We've learned a great deal here, particularly how to win and activate smaller clients, and it's terrific to see traction building, especially amongst recent win. The pivot to focus on smaller opportunities and to activate them quickly is working. The ATP launch of the U.S. Open in August is terrific. We've seen strong growth from our established clients, too. There are now 20 active enterprise clients and the more that figure grows, especially regionally, the more steadily we will grow revenue from Enterprise. The pipeline is healthy with 7 prospects added during the half, taking the total to 84 in the pipeline. Post close, we have extended our relationships with both Link and WiseTech. As we've said previously, this segment will grow its contribution to OFX over time, generating EBITDA accretive returns. So in all, good execution. And whilst the top line growth was disappointing, the business remains in very good shape and the encouraging signs from the pivot give us great conviction in the future. And I'll discuss the early signs we're seeing from a new client platform in more detail later. But first, let me hand to Selena, who will walk us through the financials.

Thank you, Skander. Moving to Slide 11, we have had steady revenue in a challenging macro environment. Fee and trading income was down just 0.1%, so flat on the first half '24. As we outlined in our trading update, we had a good start to the half with soft trading in the second quarter of '25. September was the lowest month in 17 months, but pleasingly, we've seen a better performance in October. As Skander mentioned, this was up 14% on September and higher than the first half monthly average. As you'll see in the regional breakdown, APAC was up 1%, EMEA up 1% and North America up 3%. This was offset by treasury revenue of $6.2 million being down $1.4 million from the first half '24, as part of the Firma's treasury revenue was included in the North America number post migration. Given the macro backdrop, it is pleasing to see corporate revenue growth of 3.5% and enterprise growth of 6%, although these were offset by the softer consumer segment down 3.6%. Net operating income of $111.2 million was down 3.5%. If you exclude the $3.7 million escrow that was included in the first half '24 NOI, it was down just 0.2%. We've continued to work on margins, up 2 basis points on the second half '24 and controlled our costs well with operating expenses of $82.1 million, down 1.4% from the first half of '24. This resulted in an underlying EBITDA of $29 million and an EBITDA margin of 26.1%. This is expected to be 28% for the full year. With the investment in our platform and most of our entities [Technical Difficulty] in Australia, we are allowed to claim R&D tax benefits. Prior year benefits of $2.4 million generated a tax rate of 11.9%. As we stated at the full year, we expect the future tax rate to be between 21% and 24%. This will be dependent on R&D spend and future rebates. Statutory net profit after tax of $10.7 million, down 32.3%. This includes a $2.2 million fair value loss on the contingent consideration for Paytron. So this is a non-cash item and varies with the share price, which as at 30 September was $2.16. The contingent consideration vest in June of 2026. We have a strong balance sheet, and our net cash held balance is $74.7 million. In the first half, we continued to execute our active capital management strategy, which included a $3.3 million share buyback and $11.5 million debt repayment. Moving to Slide 12, we continue to see margin expansion with our first half margins of 60 basis points, up from 58 basis points in the first half '24 ex escrow. You can see from the margin walk, we increased pricing in the book by 2 basis points, which offset the $3.7 million escrow amount was booked as other income in the first half '24. You may remember in first quarter of '24, we had a handful of traders leave the Firma business. We had negotiated an escrow amount, Firma purchase agreement that allowed us to take short-term margin actions in first half '24, which reduced NOI, but was offset by the escrow amount. It is pleasing to see this revert to prior levels following the pricing actions taken [ in the half ]. We continue to work our cash balances to generate interest income. We generated $4.4 million of interest income in the first half of '25, which is consistent with the second half of '24 of $4.4 million. The new client platform will provide our clients with the wallet functionality, which will increase cash we are holding on behalf of clients and our ability to generate interest income in a falling interest rate environment. We continue to work on the pricing actions to drive improvements. We have dynamic pricing across all regions and have established pricing councils and reviews to ensure we continue to test price elasticity. We are pleased with our growth in forward, as it not only protects the FX risk for clients, but also allows us to price [ when it's ] risk. We have launched our new client platform and have a number of new income streams being subscriptions, interchange and merchant fees. As Skander will take you through, we are looking to migrate our Australian corporate customers and are excited for the [ use cases ] the new platform solves for, but also to build our non-FX revenue streams. We will update you at the full year results for how this is progressing. Moving to Slide 13, our underlying operating expenses were $82.1 million, down 1.4% on the first half '25 due to our group-wide productivity programs delivering synergies and tight cost control. Employee expenses were down 1.7% on the first half '24, as the Firma integration resulted in a reduction of 20 FTEs through productivity gains. Promotional expenses of $9.3 million were up on the second half '24, but down on the first half of '24 by 4.1%. We tend to have higher promotional expenses in the first half than the second. This is when we build a lot of our marketing collateral. We thoughtfully deployed promotional spend in the first half '25, which despite being down on first half '24 [ with ] B2B new revenue growth of 8.9%, and we've also launched our new OFX 2.0 marketing collateral in the Australian market. As a result, we have seen Australian website traffic increased 13%. Skander will take you through our rollout programs for other countries later. Bad and doubtful debts are down 41.7% and are less than 0.6% of revenue, below the expected run rate of 1% due to further process improvements and controls being implemented late in the second half of '24 and in the first half of '25. While this is great to see, we must always remain vigilant. In May, we guided for intangible investments for the year to be $18 million, with 40% of that dedicated to product investments. But we've also said that if we saw good returns on the product spend, we may go further. We launched a new client platform for new Australian corporate clients in June and began migration of existing Australian clients in November. Skander will take you through our progress, which we're really pleased with. In the first half '25, we spent $10 million on intangible investments. To accelerate the Canadian and the U.K. launch for new clients, we are going to spend $9 million in the second half of '25, so $19 million for this year and $1 million higher than the original guidance. Turning to Slide 14, we have a strong balance sheet. Our net cash held position is $74.7 million, which is both cash held for own use and deposits due from financial institutions. We hold some of this cash as collateral for our trading lines and bank guarantees. Collateral and bank guarantees were $28.8 million, up from $19.7 million at the end of fiscal year '24. This increase is due to the additional collateral we are required to hold for our wallets on the new client platform. The $9 million additional collateral and timing of operational cash flows resulted in net cash available balance of $45.9 million, which is down $22.3 million from the end of fiscal year '24. Our $29 million of underlying EBITDA usually converts at more than 80% to cash flows from operating activities. Our cash conversion rate this half was lower than normal at 59%, generating $17.1 million of underlying cash flows from operating activities. The reduction in conversion rate was due to timing of tax payments and growth in our customer forward book, where revenue is recognized on booking of the forward, [ where cash is only received on maturity ]. Through the timing of these items, we're expecting a strong cash conversion rate in the second half of '25. We have continued our debt repayments with $11.5 million repaid and our loan balance from the acquisition of Firma was $30.7 million at period end. Due to our strong cash balances and our net debt position is positive, we are on track to repay the debt facility by the end of fiscal year '26, subject to no other value-accretive growth opportunities emerging, which require funding. Our share buyback program remains active. In the first half of '25, we deployed $3.3 million of capital for 1.6 million shares. Buying back shares is a part of our active capital management strategy, which returns value to shareholders, whilst also providing capital flexibility to execute on growth investments. Activity will resume following the release of our results. I will now hand back to Skander to take us through the strategy and outlook.

Thank you, Selena, for that excellent description of our financial results and what drove it. We have never felt more energized or confident in our strategy, but let's expand on the data points on Slide 16 that support this conviction. At the heart of any sustainable growth company is growth in active clients. It's a very good measure of a company's ability to outcompete, to generate future cash flows and build momentum. Our challenge in OFX 1.0 was in driving a strong point of difference to our target prospect, where we had, in effect, a single product supported by a very good digital and human service model. We provided better pricing along with a very good client experience, and we were very well trusted, but those alone were not enough to unlock substantial client growth. The strategic pivot to B2B and particularly in our Corporate segment and that we dug deeper into what clients faced in their businesses every day and ways in which we could help them. We were building out a more comprehensive offering, [ including ] a wallet with multicurrency accounts and cards in response to that. But the acquisition of Paytron taught us there was a bigger pain point, spend management across both domestic and cross-border payments that was not well addressed or served. Further, Prospects saw us as a very credible provider of these solutions. June, around a year after acquiring Paytron, we launched our new client platform, rebranding the Paytron platform, as it was and gradually adding the OFX services that clients were looking for, for us to scale. The response has been excellent. Already, including the former Paytron clients, the new client platform now supports over 1,000 clients through 30th of September, up over 100% versus prior corresponding period. And this is on the back of a soft launch. Since then, we've added many features, which I'll turn to in a moment. It's working very well. The slide shows you 3 examples of clients that we've onboarded since June and their usage. The first client, software developer, actually left OFX back in 2015 because whilst they loved our service, we couldn't provide the accounts and cards they wanted. Since bringing them home, they have 2 multicurrency accounts, 4 cards and have already moved around 3 million in transfers. Based on their behavior so far, we expect them to grow with us with more of their spend being moved across, including for things like payroll. The second client was a prospect for over 4 years. Our sales team kept in touch, but the prospect wasn't interested enough in our pure FX product, so we can never get them to try us. When we acquired Paytron, we got in touch with them to explain the new platform and how it could help. Within a week, they had agreed to move and have already onboarded 120 users, each paying $15 per month subscription, 4 multicurrency wallets and have issued over 98 cards. They're absolutely delighted at the ease of the platform, the control they have and the simplicity with which it all works. And what's extraordinary is they haven't even started FX. The third client is a clean tech provider, who knew of us, but didn't consider us because we couldn't meet their needs for multicurrency accounts and cards. When they heard we had acquired Paytron, they approached us, and we onboarded them. And so far, we've already seen them grow to 12 users, 8 wallets, 28 active cards and over 1 million of FX volume. This is just a small sample of new clients we can win with our expanded value proposition. And what is even more exciting is the genuine engagement we see from them. Right now, we don't offer our risk products or limit orders on the new platform, but they're coming soon. Those products distinguish us, especially in the B2B space from most of the new entrants and certainly from the banks, and OFX's track record of delivering simple risk management will be a substantial tailwind. Moving to Slide 17, not only are we winning clients we could not previously, but we are seeing the clients onboarded on the new client platform by using a broader range of products, thereby generating more revenue and creating a stickier relationship. Firstly, although the Paytron platform was good, naturally, it was not yet fully developed, and we've been busy adding attractive features and services, as well as adding stronger security and scale. Our digital onboarding that we had deployed in OFX is now live on the NCP, generating excellent conversion rates for prospects to clients. We've adapted our ways of working, particularly in technology and product and have tripled the number of deployments per week. We've also launched our new partnership with Visa. There are so many more features, products and services coming that we firmly believe will add further to that excellent client experience. The platform is clearly resonating, easy to use and valuable. As a result, through to the end of September, of all the revenue we generated from new clients onboarded onto the new client platform since June, we've seen approximately 50% of that revenue come from non-FX products and services. And this is despite, as I mentioned previously, us not having a full new value proposition in market. That non-FX revenue is all incremental and at higher margins. At a client level, around 40% of all new clients have already taken a new product beyond FX. What excites us about that -- about that -- the nature of these products is that they tend to grow in value to the client and to OFX over time. For example, clients, who [ have ] cards tend to build their usage over time. Around 1 in 5 clients have already activated at least 1 card. And in fact, of the clients, who have cards, on average, they have around 7 per client. Each card generates revenue through interchange revenue, whilst accounts track revenue through funding fees, interest income and FX transfer margin. And this is why our whole team and Board have never felt as optimistic to build revenue over time at a faster rate through more products, more clients and more engaged clients. And as that grows, it reduces our exposure to macro. Moving to Slide 18, naturally, we monitor competition. We want to understand several things. Firstly, we want to see whether our products and services are more attractive to our prospects and clients. Secondly, we want to see whether our products and services are getting used in the same way or differently so that we can build out our road map to remain differentiated, as well as relevant to our target clients. It's not always straightforward to get clear unambiguous data points on competition. Many are private and don't publish detailed or timely data. Of the public competitors, some put parts of the data in the public domain, but not all. Some report over different time periods and some use different definitions or compete in different geographies. We have heard some investors express concerns that we're being outcompeted. This page throws -- shows 3 public competitors and their relative performance in as comparable a way, as we could present it. These are all large mature businesses serving B2B. Competitor A's result, the equivalent of our second quarter shows that in FX revenue, they shrunk over the period by 3% versus PCP. This compares roughly with our corporate portfolio growing 3.5% over the first half versus PCP. In fact, our 2Q revenue was up 2.1% versus PCP. They grew their non-FX revenue by nearly 40% over the same period versus PCP and interest income by 13%. Competitor B's results reflect the fact that they focus largely on FX and target larger clients than competitor A. Their FX revenue for the calendar year 2023 was flat versus PCP, but they grew their interest income 9x over the period. Competitor C generated 9% FX revenue growth for the equivalent of our Q1 versus PCP. We generated just under 5% over the same period. The same trend on non-FX growth can be observed with non-FX revenue growth growing at roughly 7x FX revenue growth. These data points do not suggest to us that we've been outcompeted in FX, especially when we overlay new revenue growth and transaction growth, but it further highlights the opportunity to grow revenue from non-FX, and we remain vigilant to competitors and competitive offerings, but very confident in the execution we have and the path we see. Our real opportunity to accelerate growth in the short and medium term is to provide our existing clients with these products and services on our new client platform, as we know many of them will be taking this product from new entrants, as we've seen [ or banks ]. Moving to Slide 19, this is an update of where we are so far on that journey. We acquired Paytron in May 2023 and began the process of uplifting and rebranding the platform almost immediately. By June 2024, we had a prototype we felt was robust enough to begin to offer to new prospects and launched under the OFX brand. We had received several requests from existing OFX clients for the new service, and we were onboarding them client by client, as we developed a robust systematic client migration program. That migration program commenced in October when we [ wrote ] to the first tranche of existing Australian corporate clients, and we've already seen a positive response. with clients asking to engage through webinars and product demonstrations. The first group was migrated from November the 9th, and we will migrate further tranches before Christmas and more in Q4. In parallel, we continue to improve and enhance the platform to ensure its OFX standard. And we will add our risk products over the course of fiscal year '25, so that every corporate client can be seen on the new client platform and get the same or better than they have been on the existing platform. And of course, we've already done a lot of planning and thinking about our global rollout, too. We selected Canada and then the U.K. as our first 2 markets based on our ability to launch well, the competitive dynamics and our desire to scale quickly. Again, it will be new prospects first, followed by existing clients. We were so encouraged by early indicators that we saw from the new Australian corporate clients that we allocated an incremental $1 million in intangible investment this year, as Selena highlighted earlier, to accelerate this global rollout. We are well underway for planning that rollout to the other global markets, and we'll update you at the full year '25 results in May on what we plan to do when and how. Moving to Slide 20, as we said alongside our trading update, we have revised our fiscal year '25 views for NOI to be stronger in the second half than the first half and on PCP to deliver a 28% EBITDA margin for the full year. But we did not revise our medium-term view because first -- because we first -- we first want to assess the performance from existing Australian clients on the new client platform, which will give us a much better feel for the likely level of take-up in our other markets. We will, therefore, update that with our fiscal year '25 results in May. We do remain committed to our long-term outlook of more than 15% NOI growth and EBITDA margins [ up ] more than 30%. We built our strategy to take advantage of the reputation we have with clients for being great value, reliable and secure. And as I've shown with our competitive results, non-FX revenue growth can and does happen despite macro circumstances. That gives us so much more conviction than before. Before I hand back to Ashley, I want to reiterate that both the management and the Board are very confident in the strategy. The execution remains good, and we're determined to combine these into a great outcome for investors. Thank you. And I'll now pass back to Ashley to handle Q&A.

[Operator Instructions] Your first question comes from Lafitani Sotiriou with MST Financial.

Can I just first start off with a point of clarification. On Slide 24, I can see that you now include online seller within corporate. But can I just clarify in the footnote for corporate, it says there's about 700 -- it implies there's about 700 clients on the new client platform. But Skander, you mentioned there's 1,000 on the new client platform in your comments. Is that up until today? Or can you just talk us through which number it is? Is it 700? Or is it 1,000 on the new client platform? And within the turnover stats that we're looking at on that page, the 700 or 1,000 clients that are on the new client platform, are there stats included in that turnover number?

Okay. [ Laf ] if it's okay, I'll take that one. So 1,000 clients have access to the new platform. Of those 1,000, 700 are active, okay? Those 700 active clients, as we footnoted, are not included in the [ 32,700 ] corporate active clients. So when you include that, that number becomes [ 33.4 ]. Also, turnover on this slide does not include the clients from that client platform. So if you added that, it would become, as we noted, [ 11.9 ]. Is that helpful?

Got it. And the expectations going forward, I imagine would we -- as the new client platform grows, would that be bundled into the corporate stats? Or what's the expectation? So will it just be one corporate number, which is online sellers, new client platform and your, I guess, legacy or traditional corporate?

Yes, absolutely. So it will all be put in together. We're just in this phase at the moment, where, as we're migrating and the revenue on non-FX is starting to pick up, this particular page is built for kind of FX revenue type dimensions being active clients, transactions, ATV, that sort of thing. When you start to add in subscriptions and other types of revenue streams, we will need to also give you updated metrics on how we are looking at that portfolio, and we'll do that at the full year results.

Got it. And just moving to my next question. With the transfer of the back book to -- for the Australian clients, and you flagged by first quarter '26, does that mean ultimately, every client you have will be -- in Australia will be on the new client platform? Is there -- or will you run dual platforms for those that are unwilling? And if you're not going to run dual platforms, what are you factoring in for potential leakage from those that may not like the friction of transferring?

Thanks, Laf, and maybe I'll take that one. Yes, the plan is to move them all on to the new client platform. What we have built and are testing, obviously, cohort by cohort is an automated process so that for the clients like the beneficiaries are migrated -- we can assist them with log-ons digitally. It can all be done seamlessly. The new client platform has to have all the same facilities that the existing platform has. So if the client just wants to do an FX transfer, they can do that. They don't have to take up all the extra features and benefits. But obviously, that's the reason why we are moving thoughtfully through the migration program and not just putting it all in one go. And each cohort sort of teaches some -- teaches us some things, as well as the existing clients, who have already moved across, as well as others who asked about it in terms of what they value, how they want to do it and how we can assist that client -- those clients to make it as frictionless as possible. But absolutely, it will be one platform.

Got it. And so, when you flag second half FY '25 for U.K., Canada, is that when the investment starts or when the rollout starts?

So U.K., and Canada, the investment has already started. That will be in the fiscal year '25 number, the intangible, that $1 million. That supports the new clients to be launched in Canada in March and U.K. in July. But what we're also working on is whether there's an accelerated migration program in all the other markets, which we haven't finalized yet. But by the time we get to May of next year, we will have a finalized plan, which we'll share with you, which covers the rest of the markets and full migration.

Got it. And can I just push one more question? So you talked [ through ] the trading environment being up 14% in October versus -- I'm not sure was it September or the September quarter. Can you just talk to a little bit around possibly the U.S. election and since the U.S. election, and I know it's only been weeks, sort of weeks into November, but any commentary around how November is tracking so far?

Sure. So that up 14% was versus September. So October revenue up 14% versus September. November is in line with October. So yes, the U.S. election has -- we've seen continued strength in engagement from clients. We haven't seen a major spike. We haven't -- but we've certainly seen good, continued engagement.

Your next question comes from Owen Humphries with Canaccord.

Just a quick question around capital management, given where the share price is, given where your balance sheet is, given where the free cash flow is expected to be. Can you just talk through some of the capital management initiatives you guys are pushing through for the next 12 months? And is M&A still a part of your strategy?

Yes. So a couple of things on capital management. Obviously, share buyback is active, and we'll continue to deploy funds there. We continue to pay back the debt as well. We do generate a lot of cash. The other nice thing is with the debt that we have paid back, we do have some debt capacity. So if an M&A acquisition came along, and we're always looking, but we always make sure that we're looking for the right asset at the right price. and we make sure that we pay the right price. So if you look at the moment, with current share price, where it is, you're probably not going to use [ script ] to do an M&A acquisition, but you do have some debt capacity, 2x EBITDA in the last 12 months gives you at least a capacity of $92 million that you could do an acquisition with if you found one.

And just a comment, you just noticed before around the volumes in the peer set, kind of like-for-like holding relatively flat. I know there have been some pricing initiatives by some of your peer set. Have you kind of seen any impact that you guys had to react? Or are you guys steadfast in your pricing initiatives?

No. In fact, what we -- what we see on transactions is they're actually up. So to the extent that there have been -- I think it's only one competitor that's actually dropped price, as far as I'm aware. And my understanding is, their FX revenue is kind of flat or down. So we haven't seen that. Plus, I would say that particular competitor is targeting a much smaller target client than we are. More what we see in the kind of midsize, we haven't seen any kind of pricing pressure from competition.

[Operator Instructions] There are no further questions at this time. I'll now hand back to Mr. Malcolm for closing remarks.

Okay. Thank you, Ashley, and thanks, everyone, for joining the call. Look forward to catching up with you in the next week and picking up any other questions that you may have. Thanks very much.

That does conclude our conference for today. Thank you for participating. You may now disconnect.