PEXA Group Limited (PXA) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the PEXA Group Limited FY '21 Results Call. [Operator Instructions] I'd now like to hand the call over to Mr. Glenn King, Group Managing Director and Chief Executive Officer. Please go ahead.

Good morning. First of all, I just want to say thank you for joining today's call, and welcome to our PEXA's results presentation as an ASX-listed company. I'd particularly like to welcome all of the new shareholders joining us today, including those in our practitioner member family and among our hard-working PEXA team who supported the successful IPO. Now I'm going to refer to some of the slides in the presentation. So first of all, I'm on Slide 3. And I just want to introduce myself, Glenn King, the CEO of PEXA; and my colleague, Richard Moore, who's the CFO. Today, we will go through our business and financial performance for FY '21. And we're presenting and representing all of our PEXA colleagues. You'll see the agenda on the Page 3, on the right-hand side. We'll cover some of the business highlights, an overview of our business performance for FY '21, the financial year '21 financial summary, a bit of a cover on the outlook and update for the future. And obviously, we'll take some questions and answers towards the end. So we'll kick off, if we go to Page 5 in the presentation, which is just giving an overview of the business highlights. And I must say, in terms of this year, financial year '21, was a significant year in the life of the PEXA, including our successful listing on the ASX on July 1. I can say that throughout the entire process and despite the challenges of COVID lockdowns, the PEXA team has remained focused on the business and ensured, our continued performance and delivery through our financial year '21. As a result, we're pleased to say that we're in line or exceeded our key financial year '21 Prospectus forecast, and our multiple growth initiatives had progressed as we planned. And with a strong start to financial year '22, notwithstanding the impact of lockdowns, we are reaffirming our financial year '22 Prospectus forecast. So if I go on to Slide 6 or Page 6 in the presentation, I can certainly state that both at a financial and operational level, we're in line or exceeded our financial year '21 Prospectus forecast. A couple of highlights. Our group revenue of $221 million is up 42% year-on-year. Our PEXA Exchange transactions at $3.3 million in financial '21 is up 37% year-on-year. Our PEXA Exchange EBITDA of $110 million is up 114%. And our EBITDA margin is up 17 percentage points to 50% year-on-year. I must say that we've had strong metrics and performance all around for the PEXA business as per financial year '21 Prospectus forecast. PEXA is a strong, resilient legal platform business, where we have sustained delivery, and we have good growth potential. And if you go on to Page 7, noting that good momentum and progress in financial year '21 across all our business. As an example, on the left-hand side of this page, we talk about our member highlights. And those renewed at PEXA, our members are our customers. A couple of things, as I mentioned, the growth in transactions on the PEXA Exchange platform. But in addition to that, in financial year '21, we continue to drive enhancements of the PEXA Exchange business with over 100 enhancements to the business. This included growth with PEXA Exchange services. It also reinforced the strong trust and partnerships we've built with our members, the lawyers, who utilize our service, the financial institutions that utilize our service, our relationship and services with the public sector agencies, all who use our services every day. We're a trusted platform business. And in addition to the delivery of the PEXA Exchange business in Australia in financial year '21, we also commenced our additional growth businesses with entry into the U.K. in France and ventures, all started in financial year '21. So let's go a little bit further in terms of performance. I'm now going to go to Slide 9 or Page 9 and just talk a little bit in terms of the performance for financial year '21. So PEXA has 4 key growth there, including the PEXA Exchange on the left-hand side of this page. Within Exchange, which is our large core business, we increased our digital footprint through the introduction of new party transaction types, while also bringing the growth in benefits of digital settlements to additional jurisdictions, such as growing in Queensland and South Australia and also building out our connections with ACT. On the left side of PEXA Exchange, we commenced in financial year '21 3 additional growth businesses built on the back of our success in the Australian property and legal platform settlements market. This includes PEXA International, where we announced we are going to replicate our success in Australia, in certain other international Torrens title markets. Starting with the U.K., PEXA Insights, which was started in FY '21, which seeks to commercialize our expertise to unique, many realtime and national property information while providing industry insights and analysis to existing and new customers; and PX Ventures, which seeks to build partnerships, delivering new digital platform products and services to business, industry and government. Now I'll go through those 3 new growth initiatives shortly. But in the meantime, let's start with the core PEXA business performance in financial year '21, the Exchange. So we'll now go on to Page 10. So in financial year '21, again, a successful year, a couple of our things to call out. The PEXA Exchange is Australia's leading property settlements platform handling 80% of all property transfers in Australia. We now have 160 financial institutions, 6 land title offices, 5 state revenue offices, 9,400-plus lawyers and practitioner firms, serving millions of consumers buying and selling homes, all connected with the PEXA Exchange or integrated with PEXA Exchange platform. And in addition to that, we have strong Net Promoter Scores of plus 50. Over $1.5 trillion worth of property have now been settled on the PEXA Exchange platform. In fact, we're an essential platform service to one of the largest and most important sectors in Australia property. We help connect property across Australia and ensure that it keeps performing well. The PEXA Exchange platform performed as per our expectations in financial '21, which, as I mentioned, over 80% total property transfer is now delivered through the PEXA Exchange platform. And in financial year '21, we saw strong growth in our newer markets within Australia. In Queensland, we grew market share from approximately 10% to now over 60%; and in South Australia, in the high-teens market share to now close to 95%. COVID helped to accelerate the shift of paper transactions to digital, and therefore, going on to the PEXA Exchange platform. In fact, the PEXA Exchange platform benefited from the rise in total property market transactions in FY '21. And we saw transfers continually grow. The volumes, in fact, remained strong throughout quarter 4. The PEXA business is a COVID-resilient business. And we're not going to do we just do transfers, but we also do property refinances. We also saw growth in that in financial year '21. In addition to that, we continued to grow and roll out more services to our customer base. And let's touch on some of that in the following slide, in Slide 11. So in financial year '21, if we have a look at this particular slide, on the left-hand side, we have a strong, innovative and customer culture, something that's being built up over a number of years, and that's come about not just in terms of what we've transformed into in regards to the property settlement platform across Australia, but also in the services that we continue to enhance and deliver. So in financial year '21 through the insight of our customers and data, we improved the customer experience and deepening our relationship with our customers. As an example, we rolled out a new simple financial settlement summary to the PEXA Exchange that improves on time and on day settlement for banks. We upgraded the PEXA Development Practitioner Exchange service through PEXA Projects. We upgraded our PEXA Exchange consumers services with PEXA Key. PEXA Key now has over 100,000 users that use it, that allows them to track and communicate their property bank details in a safe and secured way. And in financial year '21, we strengthened our partnership to work positively and proactively with governments and regulators to help with various reforms, such as possible stamp duty and interoperability reforms. And on the right-hand side of this page, we expect to continually grow and progress in the Australian market. As an example, we expect to see adoption of digital settlements in new jurisdictions, such as the ACT. We expect to see additional digital enablement of property transactions in selected jurisdictions, such as Western Australia that will be handled on the PEXA Exchange platform. We expect to see long-term development to roll out a new PEXA Exchange products and services to deepen our engagement with practitioners, financial institutions and homebuyers. And we will continue to work closely and collaborate with regulators and government to support industry reform and the broader economy. The PEXA Exchange business has done well. Now let's quickly turn to some of the growth -- additional growth initiatives on Slide 12 or Page 12, starting with international. As I've mentioned, we started 3 new growth businesses in financial year '21. And PEXA International targets large markets to Australia, which had a characteristics, such as Torrens title, and where there's an opportunity to use our leading digital and platform expertise. We believe the shift from paper-based property transactions to digital property transfers, refinance and others, a shift that is accelerating worldwide. And in financial year '21, we commenced our international expansion, starting with the U.K. Early days, but good progress has been made. We have a local team in the U.K., 14 professionals on the ground. We have an expert advisory board in place. We've appointed our build partner, ThoughtWorks, excellent build partner, and the platform design and build is underway. We've had positive engagement with bodies such as the Bank of England, Land Registry and a pilot group of lenders. And I can confirm the long target as per our commitment in our prospectives where banks would have committed to progress of the debt taking. And then if I go on Slide 13 or Page 13, our other 2 growth areas in financial year '21 also started. We started our PEXA Insights business. This business represents an opportunity to build new revenue streams and services from an active to unique data insights. And we started in financial year '21 and have made good early progress as per our commitments. For example, the PEXA Insights team is now 40 plus, including a number of data specialists. And we had built out a new Property Bureau. We commenced to development of new insights, products and services, and these are being tested with a small number of customers and testing well. This also included the release of various PEXA Insights reports through partnership with others, such as Domain, to the marketplace, generating good media and market attention. And this has helped us to take customers' domain and opportunities in the market. In addition to that, on the right-hand side, in financial year '21, we started PX Ventures, to appropriately partner and expand PEXA in the property ecosystem through the provision of new digital services to businesses, industry and government. And that unit, which is a new early business, has still delivered in financial year '21, our Launchpad. Our Launchpad incubator was released and allowed us to test new market innovations and digital services. We also had our first small investment in Honey Insurance, which in its own way is an industry digital disruptor. And we partnered with Small Business Australia through Launched Business Advantage to provide services to our business customers or members. So we've delivered as per our commitments on our 3 additional growth businesses. And lastly, from myself, if you turn to Slide 14, you can only do these things if you have an organization that is trusted and has a strong culture. And given the critical role by PEXA in the property industry, [indiscernible] maintains and builds the culture of trust with our communities, partners, people and the economy just generally. And in financial year '21, if I look from the left to right on this page, we maintain a strong performance as the leading, trusted brand among our peers. In the middle, in financial year '21, despite COVID, we continue to have a highly engaged talented and diverse workforce. And in fact recently PEXA was named in the top 3 Best Places to Work in Australia for companies over 100 employees. We have a strong people engagement of 80% plus. It's a testament that the culture that PEXA has built up over a number of years, and I'm proud of the PEXA team and our passion for customers. And a shout out to the team for the successful IPO. And lastly, as an organization, in financial year '21, we continue to make our ESG commitments seriously. We strongly believe in our role in the community. For example, we formed our net zero commitment and embedded that in our group strategy and are being vigil. From a societal perspective, we partnered with organizations such as Homes for Homes, a flagship social impact partnership, a highly innovative program working to address homelessness. And as another example, we continue to make great progress on delivery and our commitments to GRESB. So a successful performance in financial year '21. And I'll now hand over to Richard, who will take you through the financial performance.

Thanks, Glenn, and it's great to be here today for PEXA's first set of results as a public company. So before I start, just a couple of key points on this section. The first thing is the figures in the section reflect a pro forma P&L. And the adjustments from a pro forma standpoint are there to show PEXA as a listed company. So we've removed one-off costs that came about as a result of the listing. And we've added into both FY '20 and '21 about $6.5 million of public company costs, which will make the business comparable with the future FY '22 results when we come to report those. Second point is any reference to forecast in here is the FY '21 forecast that was in the Prospectus, which we launched in June. So as Glenn said, we have had a really strong financial year in '21. Our revenue is up 42% to $221 million. Costs are up 6% year-on-year. And what that means is that our PEXA Exchange EBITDA, so EBITDA from the core is up over 100% to $110 million. Our EBITDA after our investments in growth initiatives and other one-offs is also up over 100% to $101.8 million. And all of those 4 measures are on or slightly ahead of the Prospectus forecast. Our net profit after tax is in line with last year and the Prospectus forecast as was NPATA. And for those who don't know NPATA is our NPAT, excluding the impact of our noncash amortization of intangible assets, so effectively a cash NPAT measure. And we show that so that you can see effectively the cash generation within the business. What that means is that the financial metrics were also strong. Gross margin of 86.7%, up 1.5 percentage points, and a PEXA Exchange EBITDA margin of 50% exactly up 17 percentage points from last year. Both of those are also slightly ahead of the Prospectus forecast. So great FY '21 from a financial standpoint. I'll now go in and explain the key drivers. Our revenue is a function of our market size, our market share and price. And on Slide 17, we explain the first 2 parts of those. So as Glenn said, the overall market grew strongly in FY '21, up 19% to 4.2 million transactions. And on top of that, our market share or penetration grew 11 percentage points to 79%. So what that meant in total is that our volumes increased by 37% to 3.3 million transactions, as you can see from the chart on the right-hand side of Slide 17, that was slightly ahead of Prospectus forecast. If you look at it on a product-by-product basis, on the left-hand side, you can see our transfer penetration grew by 14 percentage points to 80%, our refi penetrations got pretty stable at 99%, and our other transactions grew 6 percentage points to 56%. And when you combine all of that, you get an 11 percentage point increase to 79% overall. So 19% market growth, 11 percentage point growth in share, delivered a 37% growth in PEXA transactions. On Slide 18, we then explain how that impacts revenue. So the volume that we've just spoken about is on the top left of 18. On top of that, we had a 4% average price increase, which took it to $66. And what that -- by that through means overall, we saw revenue up 42% year-on-year. So up from $153 million last year to $218.6 million in FY '21, which was 1% ahead of Prospectus forecast. I'll talk on the pricing a little bit more. On the bottom left, you can see our refinance and other prices went up very slightly by CPI, as you would expect, given we do increase prices by CPI each year. But what you see in transfer pricing is it actually dropped by a $1 year-on-year, and that was because we had a discounting campaign in Queensland, which was there through FY '21 to drive awareness and uptake. That discount ended on the 30th of June 2021. So whilst we did put a CPI price increase into transfers, the discount brought the overall average down to -- by $1. When you add all that together, though, the fact that we've had a mix shift into transfers during the year meant that the overall price increased by $3 or 4%. So adding that 4% of to the 37% volume growth we've spoken about delivered a 42% growth in revenue year-on-year. And we did come in, as I said, a couple of million or 1% ahead of Prospectus forecast. On Slide 19, we then look at gross margin and cost of sales. Our main cost of sales are LSS fees, so those are lodgement support service fees. They're incurred when a PEXA workspace is created. It reaches out automatically to the land registry and pulls back a bundle of property information. It's charged on every workspace, whether it's a multiparty transfer, which would generally have 4 participants, a 2-party refinancing or a single-party discharge or other transaction. So what that means is as we do more transfers, more multiparty transfers, as I said, you saw the impact on price. That also impacts the cost per transaction coming down. So 1 LSS fee against 4 transactions, whereas on a refi it's 1 fee against 2. So what that means is we see a drop in the number -- in the cost per transaction. You can see on our top right-hand chart on Slide 19, going from $9.50 to $8.80. And we also see that mix shift in transfer is improving the revenue per transaction on the left top -- left-hand chart from $63 to $65. When you combine that, the bar chart shows an improvement in gross margin from 85% to 87% and gross profit growing about 45% from $132 million to $191.7 million. Slide 20 then shows the rest of our operating expenses, which we group into 3 categories: product design and development, sales and marketing and general and administration. Our product design and development costs increased by 7% year-on-year. And that was predominantly due to higher hosting costs driven by the materially increased exchange volumes. These costs were also 2% higher than the Prospectus forecast. You'll see in the cash flow that we also capitalized a similar amount, just over $20 million of product development. So the total cash spend on product within the business in the year was about $45 million. In terms of sales and marketing, that spend actually dropped year-on-year due to the impact of COVID-19. We weren't able to hold and host many of our regular practitioner events, and we actually dropped our overall marketing spend as well. So they dropped 9% from FY '20, and they were bang on Prospectus forecast. And in terms of our general and admin cost, which is our shared services, our Board costs, our exec remuneration, professional fees, occupancy and the like, they increased by 1.6% year-on-year. It effectively means broadly flat headcount and CPI increases on salary and other costs, also in line with Prospectus forecast. And I'll just reiterate the fact that these G&A costs also do include that $6.5 million pro forma adjustment to bring in the public company costs that we'll see going forward. So hence, our pro forma EBITDA was lower than our statutory in FY '22, and there is a reconciliation between the 2 later in the document. So overall, our costs broadly flat year-on-year and in line with Prospectus forecast. So flat OpEx and strong revenue growth. And what that means is a very strong movement in PEXA Exchange EBITDA, which you can see on Slide 21. The chart on the left shows total costs, so that's OpEx and cost of sales combined and cost per transaction. And you can see that whilst costs increased, the fact that volume increased much faster meant that we saw quite a significant drop in the cost per transaction from $43 to $33, a little bit lower than the forecast in the Prospectus. What that means on the right-hand chart is a very strong growth in PEXA Exchange EBITDA that I mentioned, up 114% to $110 million and slightly ahead of Prospectus forecast, as is our EBITDA margin, up from 33% to 50%, and again slightly ahead of what we expected when we put the Prospectus together. So in summary, from a P&L standpoint, a year of very strong growth, very strong revenue, good outcome on EBITDA and delivering on all of the key Prospectus over past figures. Slide 22 then shows our cash position. So we've got 2 charts here. The one on the left shows the cash movement year-on-year, starting at $70 million, statutory EBITDA coming in at just under $117 million, key movements being the investment in product, which I spoke about earlier. So that's the one -- the column that has intangible CapEx. We have a positive net working capital movement. And when you roll that all together, just before the IPO, we had approximately $116 million of cash in the business. And you roll in some of the IPO changes, and we sourced $300 million worth of debt, and we paid out $400 million of shareholder loans just prior to listing. So on the 30th of June, we had a cash balance of $51 million. There were remaining $193 million of shareholder loans on the balance sheet on 30 June, and all of those were repaid on the 1st of July from the proceeds from the primary raise on the IPO. The right-hand side of the table shows our sort of standard pro forma cash flow. I think the key thing to provide here just is the strength of the free cash flow before financing impact, $90 million and free cash flow conversion of 89%, up -- almost double on the year before. So strong cash outcome in line with the volumes and P&L, as you would expect. Before I move to the outlook, I will just add that there are a few more details on the financials within the appendix, which are there for you to go can cruise as you see fit. And finally, from my standpoint on to Slide 24, which goes through outlook and the forecast for next year. When we listed on 1st of July, we did explain to the market that we'd have a strong Q4, and I think we quoted a number of more than 960,000 transactions in the quarter. You can see it was actually 967,000, up 50% on the equivalent quarter in FY '20. And what that meant was the second half was actually up 47% year-on-year in terms of PEXA transactions. And they also -- Q4 also exceeded the Prospectus by 5%. That momentum has continued into early FY '22, July volumes up 53% on the same month in the previous year. And while we are very conscious of the potential impact of the COVID lockdowns in the property market, we do keep a really close eye on property lead indicators, such as new listings, private sales, auctions and the invitations to create PEXA workspaces. We have seen, and it's been well documented, that there's been a slowdown in new listings in Sydney and Melbourne. But what we are also seeing is the other capital tooling up well and the region is being pretty robust. And also that hasn't really flowed through to sales or auctions yet, and invitations to PEXA workspaces are also holding up well. So one of the things we also noticed during the lockdown last year is that when restrictions do lift, if properties have been withheld or not listed, they come to the market pretty quickly. And we certainly saw after the Melbourne lockdown last year that it returned to pre-lockdown levels really within weeks. So this, combined with a strong start to the year, does give us confidence to reaffirm our financial year '22 Prospectus financial forecast. So thanks for listening. And I'll hand back to Glenn to close.

Thanks, Richard, and just to close before we have any questions just to summarize a couple of key points. So we're showing that we've got a consistent track record. We performed very strongly in line with our financial year '21 Prospectus financials and also in terms of our commitments of delivery. The growth is driven by the PEXA Exchange. And we've got momentum across our other initiatives, such as International, Insights and Ventures, whilst early days. As Richard said, the growth is despite COVID-19. We've been actively strong and robust. And the property market from what we've seen is continuing to be resilient. We have a trusted brand and a strong culture and a commitment to our partners, community, members and our people. And it's on this basis that PEXA reaffirms its financial year '22 Prospectus forecast. And on that basis, Richard and I are now happy to take some questions. Thank you.

[Operator Instructions] Our first question is from Josh Kannourakis of Barrenjoey.

Glenn and Richard, first question just around the U.K. You mentioned the commitments to participate in product testing with the Bank of England has been secured. I just wanted to clarify 100% that you have locked in that testing slot that you've talked about previously? And then also, if you could just give some details about the banks you have secured, is that 1 or 2 banks? Is it more? Maybe some granularity on the types of banks, that would be greatly appreciated.

Thanks, Josh, if I rightly got it. First thing is what I can say is that in terms of our commitment as per Prospectus and commitments and requirements of the Bank of England, I'll again confirm it. So there's nothing that has changed in that regard. And so we're working closely with the Bank of England. We've got our slots. And we're working now on our design of our platform. As I mentioned, we've got ThoughtWorks at the first point. The second point in terms of our commitment with lenders or financial institutions, and again, as per our Prospectus, we flagged that we needed at least one lender to commit. What I can say is that we've got more than 1 lender committing, wanting to be a testing partner with us with these Bank of England slots. So everything that we said in our financial year '21 Prospectus and what we're looking to do this year were in line with much in [indiscernible] our plan or on target. In regards to main particular financial institutions, I can't. As a matter of fact, they fully remain expect to say that we've got multiple who wonder our progress. So those are the things that I can give you, Josh.

Okay. Got it. Yes. So just -- and in terms of the mix of banks, are you able to give us any context in terms of whether some of the major banks, medium, more like how the sort of breakup is in terms of that mix?

Yes, for sure. I will definitely give you that. They are a mixture between the 3. So as you know or as you may know, in the U.K., you have a number of large clients and a considerable number of small players. We're purposely looked to get a cross representation of those 3 segments for multiple reasons. But yes, we do have representation from all those 3 segments.

Okay. Great. And just following on from that, would you be able to mention just in terms of any key observations you've had on your feedback in the U.K. so far around your value proposition, like for the key stakeholders, such as the lenders, and also some of the regulatory bodies?

Yes. So again, this is a -- publicly if I talk in certainly [indiscernible] for the quarter. The first part is that what has been achieved in Australia with PEXA Exchange and the positive difference it has made both in terms of efficiency for banks, as an example, operational efficiency, issuing new greater turnaround time, et cetera, that has been well received by the financial institutions in the U.K. market, and there was the operational efficiency and improvement in customer service as well. And the good thing with PEXA in Australia, we've got a track record of delivering and making it happen. And that has been an important part of the conversation. The second thing that I can add to it is our engagement with the government bodies, such as the Bank of England and the Land Registry, have also been positive. And there's a couple of reasons for that. First, again, is the track record. But the second element is having a dedicated team in the U.K., the team that have got experience of the U.K. financial services market and the regulatory market and also they're running operations complemented by Australian PEXA professionals, who have gone over to the U.K. market to help and to discussing the new IP. Having that track record certainly helps with the conversation and gain that momentum. And probably the third part to add to it is, again, for a number of reasons, not just because of COVID, but in addition to COVID, is the greater acceleration to get on to digital platforms, i.e., digital to keep physical distance. Second, well, the U.K. market has been quite hot in terms of property refinance amongst other elements. And thirdly, governments, banks and other bodies are all looking at how can we ensure businesses are resumed, not just from an efficiency and service perspective, but also in terms of pandemic, such as COVID as well. So there's some good tailwinds on that front. So the engagement, Josh, has certainly been positive and it's been effective for a number of reasons. So we're in line with what we said in our Prospectus, and we're committed to that.

Our next question is from Brendan Carrig of Macquarie.

I might focus my questions on the domestic side of things then. So just maybe starting on interoperability. So at ASX results last week or the week before, we had an update that Sympli is connected with 3 banks and expecting to connect with the fourth later this calendar year. Maybe just from your perspective and your end of things, how are you seeing the progress around the potential for interoperability to sort of go live at some point next year potentially? And in terms of the investment in the cost side of things, have you built any expectations up for potential costs that you might need to incur relating to interoperability or the implementation of it?

Thanks for the question. I'll kick off first, and Richard might want to add a little bit on the cost. But the first thing that I can say is and what I'm really proud of on the PEXA organization is that we're working positively and collaborating with all partners and stakeholders, including government, regulators, banks and others with numerous reforms and not just reforms potentially of interoperability, but as I mentioned, stamp duty reform, as an example. You know what wondering that is certainly a way to help the industry in regards to interoperability, we've agreed on a model, collectively, all parties. And we've been working very well how could that model happen and what's the best scene for all stakeholders, including PEXA shareholders, PEXA customers, but also the economy just generally. And what's important to know is you got to do it in a considerate way that is going to work collectively for all. And when I say a considerate way, a couple of points in it. As I mentioned earlier, we have connected with 160 financial institutions, multiple land title offices, multiple state revenue offices. And that's been built up over tens of years. It takes time because it's an important complex set, so you don't want to rush into these. So I firstly just want to say that, firstly, we are working to ensure we get the right outcomes for the Australian economy and businesses, et cetera. Secondly, I'm really pleased to see what the government and the regulators are doing, taking their time, we've got committees working, working groups going on. There's still work to do with legislation and the rules, amongst other, there's draft. Rules now have been publicized, which we provided our feedback. And I think what's also been realized in the industry that taking that considerate time with -- doing the one transaction in Queensland. It's looking like some time in the calendar year '22 I think is the right way to go. And that's the first thing I'd add. The second thing that regardless of interoperability, there's always competition. So that's why we're focused and making sure we deliver our quality customer service to our customers, quality outcomes for all the parties that we work for, that's why we're continually enhancing our service, adding more products and services. That's why we've got a strong market share and strong Net Promoter Score. And for example, that is Queensland where we improved from 10% up to 16%. So I mean ensuring as is Richard in the business, that we keep investing in our business, keep maintaining our strength, keep growing, keep delivering, delivering quality outcomes and ensuring that we support the government and regulators in ongoing reforms. So the way I look at it is we've got to just get working together in a very considered way. So very comfortable with where it is progressing. Richard, on the investment fund side, we've got some funds to decide in our CapEx...

Thanks, Glenn. If you read some of the forecast, I think the cash flow forecast in the Prospectus, you'd have seen that there's an incremental to a $6 million between FY '21 and FY '22 in product development CapEx. And a portion of that has been set aside for work that may be required on interoperability. So whilst it's not been agreed the work that needs to be done, yes, if there is work required in this financial year, it won't move us away from any commitments that we've made in terms of cash outflows in the Prospectus.

Okay. That's clear. And then, Glenn, I might just sort of targeting on some of your comments you made just around working with government on regulation and the stamp duty changes, so just maybe an update there in terms of milestones or time lines that maybe we should be keeping an eye on as the consultation or the most recent consultation period finished up 1 month or 2 ago now?