Peoplein Limited (PPE) Earnings Call Transcript & Summary

Hello, and welcome to PeopleIN's Investor, Fiscal Year '23 Full Year Results Conference Call. [Operator Instructions] I will now turn the conference over to Mr. Ross Thompson, CEO. Please go ahead.

Great. Thank you very much, indeed. And welcome, everyone, and thank you for joining Megan Just, our CFO, and I, for PeopleIN's FY '23 results briefing. Before I get into the financials, I just want to confirm our purpose to inspire excellence in our people, both our internal staff but also our external contractors. And in FY '23, over that 12-month period, we provided employment to over 34,000 people, which is an absolutely fantastic result for the business. But now into our results. And it's a privilege yet again to present another record performance for PeopleIN as a result of our diverse talent offering and our reach into sustainable and defensive employment sectors. We achieved a massive milestone of over AUD 1 billion in revenue, delivering AUD 1.19 billion which was 73.9%, up on last year and represented over 25% in organic growth. Normalized EBITDA was up 29.5% on last year with a result of AUD 61.1 million, which was over 8% in organic growth, which is absolutely outstanding. Because as a business, we did have some headwinds in FY '23, particularly in the tech sector. We also made some further investment in the business, particularly in the Health division as a result of the Industrial division absolutely shutting the lights out and really, that's from their sector diversification that allowed us to deliver over 8% in organic growth, which is just outstanding. And that Industrial performance that Tom and the business delivered, was driven by access to more people. We're a simple business. We have more people in the market that we can provide employment to whether that be backpackers through holiday visas, whether that be international students through studying visas or whether that be through the Pacific Australia Labour Mobility scheme, access to more people then drove strong organic growth in the Industrial business. Normalized NPATA was within consensus at AUD 37.6 million, which was up 17% on last year. And then on the cash conversion front absolutely outstanding from the teams and the finance team as well. That laser-like focus on cash collection and cash is key, delivering 116% conversion, smashed our annual target of over 90% cash conversion. And it allowed us to really draw down that net debt-to-EBITDA ratio, which is now under 1 and really sets us up well going into financial year '24. So bloody fantastic result, which is great. Now on normalized EPS, it grew by 14.5% with EPS being AUD 0.37. And it's just great to see the business delivering of -- constantly delivering that double-digit EPS growth year-on-year. That consistency is phenomenal. And we're pleased to announce a final fully franked dividend of AUD 0.07, which is up just over 7% on last year, and it's really a testament to our strong cash collection, but also the confidence that we have going into the new financial year as well. And then the last metric to call out, return on equity. Again, it's a plus 20% result for us, and we've been doing that for many years. So really solid result for the business. And again, highlights that consistency in the leadership team, consistency of delivery and that proven track record. And this slide, I love this slide, it's a great slide showing our performance over the past 6 years and again, highlights that point around consistent delivery, whether it be on the revenue front, where we've doubled -- more than doubled our revenue over the past 2 years. EBITDA growth, strong growth through to this year. NPATA growth as well. And then the last graph there being earnings per share growth, that compound annual growth rate of over 23%. I think we are or we would one of the leading businesses, particularly on the ASX and the small-to-medium cap space, delivering that level of earnings per share growth year-on-year. So now I'd like to hand over to Megan to go ahead through this slide in a wee bit more detail.

Thanks, Ross. So since listing, PeopleIN has demonstrated consistent and significant growth. Ross went through the percentages there for -- each of these graphs have to show. And this year, we reached the significant milestone of passing AUD 1 billion in revenue, an achievement that we're extremely proud of. It reinforces our strategy of diversification across industries and getting the right revenue mix between permanent recruitment and contract labor hire. And our 3 vertical structure is deliberate to ensure that we weather any change in economic conditions and still provide strong returns to our shareholders. Revenue is up 74% to AUD 1.2 billion and normalized EBITDA is up 30% to AUD 61 million. We've seen a demand in early learning, food services, construction and transport infrastructure, all increasing over the years. This has resulted in the Industrial and Specialist Services vertical outgrowing the Professional Services and Health Community verticals. The overall EBITDA margin of the group is 5.15% and reflective of the increase in the Industrial and Specialist Services as this vertical has low margins and high volumes. Pleasingly, we remain above the industry average of approximately 3% and additionally, we have seen a change in our revenue mix with contractor revenue increasing from 90% to 94% of revenue. We've also been able to increase hours with the utilization of international candidates because of improved visa processing times. We placed more than 6,200 new workers onshore during the financial year across all the verticals. Our Food Industry People brand was a strong contributor to the increase of onshoring workers. With the improvement of onshoring nurses, we are optimistic that Health vertical will increase hours in FY '24. There's also been a focus on systems and process improvements in this vertical, which we're expecting to reap the rewards from our new -- in the new financial year. This will have the added benefit of improving our EBITDA margin overall at the group level. Both brands acquired in 2022, Perigon and FIP have delivered strong results during the year, exceeding our expectations at acquisitions. This has been supported by synergies obtained from the integration into the broader group and the ability for them to leverage our cross-selling program during the year. NPATA is up 18% to AUD 37.6 million despite increasing interest rates, increased utilization of the working capital facility during the year to support growth and the full year impact of the acquisition lines. Depreciation and amortization have also increased because of the newly acquired head office lease, growth in the Vision and Mobilise requiring motor vehicle and equipment investment and the amortization of acquired intangibles. We have delivered exceptional cash flows from operations with normalized operating cash flows of AUD 56 million for the year. Our normalized net receipts from customers was AUD 71.3 million compared to normalized EBITDA of AUD 61 million, resulting in a 116.8% of our EBITDA being converted into operating cash flows. Normalized operating cash flows were AUD 56.1 million compared to normalized NPATA of AUD 37.6 million being a conversion rate of 149%. These results are well ahead of our expectations and can be attributed to strong collections in June, supported by AUD 14 million in collections on the last day of the year alone. We have improved the aging of our debtors during the half, and we continue to drive improved processes in this area. Debtor days improved by a day to 31 days. We remain laser-focused on debt collection, which includes client bidding prior to onboarding and methodical debt collection procedures. It remains a focus of both operational and finance staff collaboratively to ensure that we can maintain these exceptional collection statistics. We always target 90% EBITDA conversion, which assumes growth of 10%, so to grow 8% and achieve a conversion like this is impressive. Our results are supported by a strong balance sheet. Net debt increased at the end of last financial year with the acquisition of Food Industry People Group and as a result of strong collections in June this year, we were able to significantly decrease debt by year-end. With the earnings generated over the years, net debt-to-normalized EBITDA has reduced to 0.96x. This is well under the risk appetite of the Board and well within our current banking covenants. There has been an increase in capital expenditure this year. This spend has been on 3 main avenues being lease bid-out as part of the lease consolidation plan, the growth of the Vision Survey, Queensland business and most significantly being our system program of works. For the year, we've spent AUD 4 million on the system program of works and AUD 5 million on other capital expenditure, which includes AUD 1.2 million in office lease bid-outs and AUD 1.9 million on the Vision Surveys' motor vehicles and equipment. The amalgamation of a number of brands in the head office of Brisbane has been a significant step forward for collaboration, culture and cross-selling for our group. Our investment into our systems and processes to continually improve our service delivery internally has been a major focus over the past 12 months. This program of works will continue into the next financial year as we complete roll out across the entire group. Given the significant increase in spend on this program of works, we thought it prudent to provide a more holistic update which is contained in the appendix. I'll now pass back to Ross to provide an update on market conditions and future outlook.

Great. Thanks very much, Megan and as you heard from Megan, an outstanding result for the year, which is great to be able to report on that. But now looking ahead, so the next couple of slides will address that and looking at FY '24, but also looking further out over the next couple of years as well. And really important to go through this given the general business sentiment at the moment. And also, there is an elevation there in the level of market uncertainty, particularly in the short term. However, for PeopleIN and given how diverse we are, and also the strength of our leadership team, then we still see a lot of opportunity in the short term, but also that opportunity just continuing to grow over the next couple of years as well. So I'll go through this slide in a bit more detail. So starting with the graphs on the left-hand side and at the macro level, just looking at the unemployment rate. So as it stands today, at 3.7% and if you look at any of the projections, they put it at around about 4.5% over the next 18 months to 2 years, which is still good conditions for PeopleIN. It's still a tight labor market. And to be honest, anything with a 4 in it means there's more people that are after a job, so it gives us more supply that we can provide -- talent that we can provide to our clients. And we saw that in FY '23 with our Industrial result. That was really driven because there was more people, there's more overseas people, particularly coming into the market that we could provide employment for. But even if you look further afield than those projections over the next 18 months to 2 years out to 4.5%, when we listed people in -- back in 2017, as you can see here, and it may be a wee bit small, so you might need eyes of a ninja, but it's over 5% and we still generated solid earnings when we listed and over the subsequent years when it had a 5 in front of it. So at the macro level, good conditions for a talent solutions business like PeopleIN and particularly a divest talent solutions business. Then going to the next graph on the left, wage price index. So as most of you are aware, our commercial model in most cases is actually a percentage of salary that generates or builds up our fees. So if wages are increasing, then our net revenue is increasing, and that drives organic growth for us. So you can see out to 2024, then it's elevated above that 3% mark. So again, provides good conditions, bodes well for the business over the coming year. Then delving into a bit more detail in each of our 3 verticals. So that's the table. So starting with Healthcare and Community, it's very well documented whether it be in the AFR, the Australian or other publications that there is a global shortage of nurses, there's a global shortage of healthcare workers, and that shortage is not going to change anytime soon. So even the current demand is more about finding talent than our clients wanting to use our service. But then if you actually look out to 2026, there's an additional 300,000 new roles coming into that Health sector, and I think that's probably conservative as well when you look at aging population and you look at other macro drivers as well. So a lot of demand there as one of the larger players in that space, we are well set up to capture and capitalize on that demand and that opportunity. Then going to our Industrial business. As I've said before, we operate in a number of sectors, but I've just called out a couple here to highlight. The first being education. For us, that's early learning through our Expect a Star brand, again, like the Health sector, well documented that there's a shortage of early learning educators in that space. And as one of the larger players in that space, then we're well positioned to continue to support our clients to find early learning educators, whether that is through our partnership with TAFE Queensland, who are training early learning educators and then we find employment for them or whether that is looking overseas to bring in workers into the country to support that sector. The next sector to call out is food services, which has grown when you look at our sector split within the business, particularly after the acquisition of Food Industry People Group, but again, highly defensive sector from a macro point of view, obviously tied to population growth, which is only going one way in Australia. So that exposure there, that increase in volume there, we are well positioned to be able to support our clients and meet the demand. And then construction, what does construction mean for us. It's really in the infrastructure space, so whether that be water infrastructure, whether that be transport infrastructure, whether that be renewable infrastructure or defense infrastructure. That's the key areas that we are focused on and providing talent into those sectors and mainly to the construction companies or directly to the government organizations as well. And that's not going to go backwards. The amount of investment that is going into that space, whether it be in that transport infrastructure here. In Queensland, with the Olympics, there's a lot of rail programs that are going to come online before the Olympics and they need people to deliver on those projects or if it's defense, look at the strategic defense review that came out a month or so ago, and that investment, particularly in the regions in North Australia, we are well positioned when you look at our geographic footprint to be able to capitalize on that and make sure we're providing talent, so that those investments can be built to the time frames that have been set. Then Professional Services, I've called out tech because of the challenges within FY '23. But as you're aware, our Professional Services offering is broader than tech through the acquisition of Perigon, who are providing resources into the finance space and sort of business services support space as well. But I've called out tech, because of that challenge. And for us, we're starting to see some green shoots there. And as we go into the second half of the year, we think that will really start to pick up. But then when we look broader than this financial year and out to 2026, then there is, as you can see in the table, over 200,000 new roles coming online. Again, I probably think that's conservative given the demand in the cyber space, and that's only increasing. The demand in the AI space, but also in companies digitizing their own processes like we are doing with program Unite. So medium, longer-term opportunities in there are massive. And again, we are well positioned to capture that opportunity. So now on to the last slide before we open up for questions, on outlook. And as mentioned before, really important that we wanted to spend time going through this given business sentiment, given the elevated level of uncertainty, but also given the opportunities that we have in front of us. And I've just talked about low levels of unemployment, solid wage inflation and that job creation, that high-demand sectors that we are tied to. It just means that we're well positioned to continue to provide talent to those sectors, which include healthcare, professional services, early learning, education, food services, mining, renewables, transport infrastructure. Also, given our service offering and the talent that we're providing to those clients means we're not tied to one sector. We can move talent around the sector and really follow the money, which is a massive mitigation measure that we have. So we have a welder that might be providing services into the mining sector. Our ability to move that welder there then into transport infrastructure projects is strong, and it's something that we've been doing for years. I've talked about the chef example before with the lockdowns in Sydney. A number of those chefs then worked at mining sites over that period of lockdown. So the ability to move and follow the money into sectors is high for an organization like ours. And as we all know, there's always money somewhere. We've been able to find it and having that commercial focus to chase that dollar and deliver for our shareholders. Cross-selling, continued focus for us and looking at FY '24, we're focus on that healthcare space and defense sector as well. And then continue to leverage our experience in at-scale international recruitment. When we look at FY '23, we brought in over 6,000 new international workers into Australia, which is a massive, massive result. And we'll look to ramp that up even further in FY '24. And we do see that as one of our key competitive advantages because, as I said previously, in a number of our sectors, it's all about finding the talent. The demand is there from our clients. We expect the technology sector start to recover in Q2 and really start hitting its straps in H2, and that's that ongoing demand for cyber, AI, skill sets and project managers as well. Megan talked about our cash collection in detail, absolutely outstanding for the business. We'll continue that laser-like focus. And again, really sets us up well, having that strong cash position going into FY '24. However, in the event of weaker economic conditions, we have a commercially focused and experienced leadership team that will navigate any potential downturn. We'll seek out revenue opportunities and deliver solid earnings above industry levels. We definitely back ourselves against any of our competitors. And we've proven we can do this. And I said, we've had some headwinds in FY '23, but we're still delivering a solid result for the year. And we will continue that laser-like commercial focus in FY '24. So thank you very much indeed for your time, and now we'll open up for any questions.

[Operator Instructions] Your first question comes from the line of Elijah Mayr with CLSA.

Just firstly, on guidance and maybe just your thinking on how your expectations, I guess, changed throughout the half. I mean, if we rewind to the first half, I think you're expecting to land at the top end of EBITDA guidance range. And then the guidance that's kind of reaffirmed at the end of May. So what kind of changed versus your expectations over the last month of the financial year and sort of early on to sort of drive down the EBITDA versus your expectations?

Yes. So it was a year ago, we came out with guidance and people [indiscernible] is not to give guidance that we felt last year, there's opportunity to do that -- AUD 62 million to AUD 66 million. We delivered AUD 61.1 million, so slightly down on that guidance. But from NPATA point of view, we are within that consensus rate and really Elijah, this is on that tech side. So they had an outstanding Q1. So really -- and we started to see that slow in Q2. So then we obviously came out with our half year results. Q3 was slow, and we have seen some pickups in Q4, but much lower than what we were expecting with our commentary there. So that business delivered in FY 2022 over AUD 12 million. We bought the business, including the bolt-ons of around AUD 6 million in EBITDA. So it's still delivering above the level that we acquired our tech businesses for, but clearly well off what it delivered in FY '22. And that's market challenges. We're still seeking out opportunities there. But as I said in the presentation, pretty well documented how challenging that finance -- tech space has been. So I think we've delivered a solid result given the market headwinds there.

No problem. And there's no guidance, I guess, this time around for FY '24. But if you -- I mean, if you look at the targets for the longer term, is that 10% sort of growth, what you guys are achieving, I guess, given the slowing growth in Q4 and some of the margin compression across the segments in Q4. That second half run rate, what we should be looking at? Or any sort of more commentary you can provide on an FY '24 basis?

Elijah, I'd say we'll stick with our default position over the years is not to give guidance, but what I will say around the H1, H2, there was the IT element, but also people business like ours is tied to revenue days. When you look at revenue days in Half 1 versus revenue days in H2, it was around a 51-49 split. And then when you look at revenue split between those 2, it was actually 52-48. So there's an element of just the days to make money. And then there's the element from a tech point of view as well. So those things need to be taken into account when you're looking at a people business and what we can look to deliver this year. And as I said, historically, you can look at our organic growth, et cetera, and what we've always pushed as a business internally, but from a guidance point of view, then we'll stick with our default position.

Your next question comes from the line of Ben Wilson with Wilsons Advisory.

Just interested, I guess, in the EBITDA margin outlook for the Health and Community and Professional Services verticals in the first half of FY '24. I understand sort of the reason for the weakness in the second half. But I guess the Health and Community margin, in particular, dropped to 4.6%, which was a pretty substantial drop. So I guess partly, it relates to how quickly the flow of nurses from the U.K. can resume and the like, but I guess, just interested in whether we should expect a recovery and sort of the trajectory of that? And then I'm sorry, just to round out that question. What is sort of steady state EBITDA margin for that vertical can be going forward?

Yes, thanks, Ben. I don't know if you're getting the 4% from my point of view. So it was over 6%, but still less than that 8% to 9% that we have delivered and target in that Health and Community space. And so it's going to be...

Second half, Ross -- sorry.

Some investment has been made in that business. We have brought in a number of international workers. So when you look across just FY '23, it was over 900 international workers, which is great. What we didn't expect was a number of domestic workers or talent that have left the industry. I guess it's been a tough, tough few years with COVID, et cetera. So those that we brought into Australia, were actually just needing some that we're retiring out of the industry for us. And also, we saw a bit of a change in mix in that second half of the year, rather than on the registered nurses. It was more in sort of graduate nurses that were coming through, which is fantastic. We want to support all health workers to find employment, but a lower margin comes with them. But to your question about looking ahead into FY '24, then yes, we're expecting that margin to get closer to historical levels of margin. And we are -- we think there's a bit of stabilization there on that sort of domestic resources retiring. So with a ramp-up in that international nurses coming in, then we are expecting some growth from that division in the year, which would be good.

Your next question comes from the line of Liam Schofield with Morgans Financial.

Can you just -- Ross, just touch on that sort of nurses onshoring numbers? I think in the presentation, you commented on it. Can you talk about sort of basal numbers or nurse numbers where they sort of came from at the end of FY '22, where you ended up and maybe where you think they can get to in '24?

Yes, absolutely. And Liam, we've called out before that we've had -- pre-COVID was around that 1,200 number at any point in time. So in the year, we brought 350 plus in the first half of the year. In the second half, we brought 545 in, so just over 900 nurses that or international nurses that we're providing employment to in the financial year, but we think we can get that back into that 1,200-plus within the year in FY '24. So given our You + AUS initiative, which I think I've talked about before, but that's a campaign to attract health workers from the U.K. and Ireland to Australia. So that's now been in the market over there since February. We've had really good response from that. Hence, that 500 number in the second half of the year. And we -- but we don't think we fully sort of realizing the real benefit from that. We'll see that in this second half -- first half and then into the second half of this financial year. So I'd say 1,200 for this year and then that will continue to go from strength to strength.

Your next question comes from the line of Ken Wagner with Petra Capital.

Well done on the cash collections. I'm just curious how we should think about that going forward. Do we expect some sort of reversion of that in '24? Or is the message that you've sort of rebased your debtor days. Can you just clarify that, please?

I'll pass you over to Megan for this one Ken.

So look, it was a phenomenal result and the fact, Friday, the 30 June collections were massive. So that's why I called out that we had collections on that day of AUD 14 million. So look, I think replicating those kind of percentages will be challenging for us, but we'll always target to get to that 90% plus.

Yes. Okay. No, that's fine. If I could just sneak in a second question. Just wondering, it's probably in there somewhere, but I found it. Significant items in the result. Could you just outline what's in that and the quantum of?

In -- Sorry. Can you repeat?

Just after significant items sort of below the line, it looks like your normalized NPAT is about AUD 28 million and reported NPAT is about AUD 20 million, I think.

Yes.

So what's in that significant -- the difference in there? Is that -- if I could ask about it?

Yes. So the normalized that -- you're wanting to us to go through what the normalizations are around?

Yes, if you could, yes.

So, there is a few restructuring costs in there around a few -- so that was around the integration of FIP, majority of those. And then also, we had a little thing called augment. So the strategic review, that would be a big number in there as well. So that...

And then just our normal -- normalization...

So around -- performance rights is the other one.

Right. Okay. Sorry, Megan, you cut out at the crucial time. The strategic review number was how much?

Just under AUD 1 million.

Just under AUD 1 million. Okay. And the FIP integration costs?

That was just under AUD 1 million as well.

Your next question comes from the line of [ Richard Choe ] with Storage Pty Limited.

This is probably a question for Megan as well. I'm just looking at the borrowings on the annual report, Page 44, and in relation to the lease liabilities. Yes, this year, it seems like there were AUD 19 million in new leases, whereas the year before, it was AUD 4.6 million on new leases and on acquisitions, it was AUD 4.1 million. So there seems to be more than a doubling of the new leases. Is that mainly related to the properties' leases? And can you just give a bit more explanation on the new leases?

Yes. So the most significant one is head office that we did in December last year. So that would be reflective in the half year results as well. In this half, there has been a few smaller ones in Melbourne and Sydney. But the most significant is that.

Okay. And are you able to kind of estimate annual cost for those -- of that lease -- those leases?

So the actual payments? The cash...

Yes, I'm just trying to ascertain how much cost that will be in terms of the leases on an annual basis?

Yes. the cash payments is about AUD 6 million a year.

Okay. And do you expect that to increase or decrease or stay around the same in the amount of new leases going forward into FY '24?

So obviously, head office was the most significant one for us. So we've pretty much done a lot of the consolidations that we were wanting. There's just one in Sydney that we're still working on. But apart from that, we're pretty much done. So we would expect those to stabilize now.

Okay. So you wouldn't expect a large increase in new leases for next year.

No.

Your next question is a follow-up from Liam Schofield with Morgans Financial.

You're only allowed one question, Liam.

Sorry, was that one question at a time. Isn't it, Ross? Just very quickly on those underlying changes, the share-based payments. They increased from AUD 3.3 million to AUD 5.3 million. Is there anything specifically driving that? And what does that look like going out 1, 2 more years?

It's going to go down, Liam. So last year, we rolled out a new program to further -- to include further people within the group. And we're just -- we've completed that rollout, and that is an opt-in scheme. So people have the ability to choose whether they participate in it. In the most recent months, we've seen a decrease in the participation in that.

And I think just generally, Liam, our RAM, et cetera, and what is tied to shares, that will probably drive a decrease in that over the next couple of years as well and actually even in FY 2024, around keeping those share-based terms really to the executive leadership team under the annual long-term incentive bonus programs.

Got you. So just to clarify, you saying keep it constant as a proportion or keep it constant in total dollars?

I would say, from a dollar point of view, there will be [ an effect ] on that number of AUD 5 million.

Your next question comes from the line of Ian Munro with Ord Minnett.

Just a couple of questions from me, please. Just firstly, just interested in the mix impact of kind of temp versus perm workers across the business and yes, whether that was behind the kind of the margin compression in Professional Services in the second half. And perhaps, I guess, bit of a comparison with some of the global peers and how they've been reporting and how you're thinking about the resilience of the sectors that [ prepare ] you in relative to some of these global peers that have been reporting more negatively. And then secondly, just on the food industry, People acquisition contributing well, talking around broadening this out to other sectors. Are there any other kind of regulatory hurdles you need to get through in the next few months to allow that to happen?

Yes. No, worries and we'll cover those off to start just with the mix, contract versus permanent mix, then we have seen an increase in the contracted space across the board. So now at plus 94% of revenues coming from contracting -- with that commentary that we've called out previously with that movement. Then more specifically on your question, within tech, we have seen an increase in contractor that has had an impact on margin there, but also the other element is, as I've talked about, some industry, sort of market headwinds, and we react to that. But also, you've got to make sure you keep the engine running there because we have confidence that, that market will recover. And when it does, like we saw after COVID that it recovers really quickly. So we've been holding some resources there. Obviously, then an impact on margin as well, but a long game is a good game. So that was the first part, then looking at industries or our global peers, and that is something we do track and particularly looking at global peers and their Australian businesses and from our assessment. Anyway, I'm looking at different comparisons then, they are down compared to us. So we are outperforming our peers. And I think that comes back to our diversification because when you look at our peers, be it global or domestic, then most of them have -- are operating in 1 sector or a couple. They aren't as broad as we are. If you look at those in the industrial space, they don't have the health offering as an example, and probably most don't have a professional services offering. So given that diversity, then allows us to outperform against our peer group. And as I said in the presentation, in my commentary, then we back ourselves as a leadership to continue to do that moving forward. And then your last question around the regulatory side, and obviously, there's a lot of commentary out there with regard to IR reform. My commentary from previous discussions, no change. We are working with government on that being the largest labor hire business -- good labor hire business, then we are working with government on that and given our viewpoint on what does that mean for small to medium enterprise, et cetera. And we are having good collaboration there, and we still see any changes coming out for a good labor hire business like ours. There's probably more opportunity than anything. The fundamentals of this IR reform, whether it be same job, same pay, et cetera, is all about those that aren't doing the right thing and to hold them to account. And as a public-listed labor hire, talent solutions business, then we are. So I'd say, overall, it would be an opportunity for us. And I think we're nearly out of time now -- other meetings, so I don't know if there's another question before we pull up stumps.

We do have a couple of follow-up questions on the line. Would you like to take one more or two of them?

No, we'll do one more.

Okay. So your next follow-up question is from Ben Wilson of Wilsons Advisory.

Just one quick one. Just interested in what your client retention has been in FY '23 in particular, in the second half? I guess, in particular, in the tech space, if you've lost any key large clients and also in nursing, just came to sort of understand whether you've, I guess, retained all your sort of key hospital relationships and frameworks?

Yes. So on the health side, we're growing that client base there. On the tech side, we're growing on the contracting piece. We've added some really good contracting panels, particularly over the last 3 months as well in the telecom space, but also in the government space, both states and territory government as well as more recently federal government. So that's good from a permanent recruitment point of view, then it's not panels really in that permanent equipment space. So it's hard to comment on that retention, given sometimes it's for 1 roles or 5 roles, but it's more of that engagement for a bulk rather than necessarily being on panel agreements in regard to permanent recruitment. Great. Well, thank you very much indeed to everyone. No doubt we'll speak over the coming days and cover off any other questions that you may have. But thank you again for your time, and hope you have a fantastic weekend.

This concludes today's conference call. Thank you for joining. You may now disconnect your lines.