Pinnacle Investment Management Group Limited (PNI) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the PNI Half Year FY 2024 Financial Results Teleconference. [Operator Instructions] I would now like to hand the conference over to Managing Director, Mr. Ian Macoun. Please go ahead.

Thanks Lexi, and welcome to everyone who's joined us on the call this morning. Thank you for your time. Thanks for your interest in PNI. As you've heard, this call is to discuss our results for the first half of the 2024 financial year. We posted on the ASX last night, our formal results announcement, our interim financial report, including the audit reviewed financial statements for the half year, the appendix 4D, and our investor presentation. We'll be speaking to the key parts of the presentation this morning. The colleagues with me on the call are Alan Watson, our Chairman; Andrew Chambers, Executive Director with particular responsibility for Institutional Distribution and International; and Dan Longan, our CFO. I'll call out the main themes and highlights of our results and also briefly provide some further context, and elaborate a few aspects that we feel are particularly important for analysts and shareholders to understand. We'll leave plenty of time for questions, which you are welcome to direct to any of the Pinnacle representatives on the call. There are topics where the relevant executive will be Alan or Andrew or Dan rather than me. Slide 2 is a disclaimer that is important, and we would ask you to read this at your leisure. Slide 3 is an agenda. Slide 5 is a summary of our themes for the first half of the 2024 financial year. The aggregate funds under management of the Affiliates stood at a record $100 billion as we entered the second half of the 2024 financial year with inflows building and our platform positioned for further growth. We achieved robust net inflows during the half-year period, particularly across the retail and international channels in still challenging fundraising conditions. Net inflows into private market and alternative strategies have continued to build with a growing product set offering these strategies to more end markets both in Australia and overseas. International expansion both in Affiliates and in distribution continues to gather momentum. We had record FUM levels both in retail and in aggregate as we entered the second half of the 2024 financial year. The net cost of current Horizon 2 initiatives remained as anticipated at high levels during the first half. But this is expected to reduce in the second half and beyond as revenues generated by these initiatives continue to build. Many Affiliates achieved pleasing alpha generation resulting in performance-speed contributions from a diverse set of strategies. Slides 6, 7 and 8 elaborate these 6 themes. Firstly, robust net inflows, particularly across retail and international channels in still challenging fundraising conditions. Conditions for generating new business remain challenging during the half. Investor sentiment has been poor in essentially all relevant investment markets, both retail and institutional and in Australia and overseas. We believe our distribution result for the half is creditable in these conditions. Our diverse platform of Affiliates and strategies has enabled us to remain relevant to investors as risk appetites and market conditions have fluctuated. Our net inflows in the private market and alternative strategies have continued to build with a growing product set offer in these strategies to more end markets, both in Australia and overseas. We achieved over $1.6 billion of drawn capital for private markets Affiliates in the first half of FY '24. $950 million of this $1.6 billion was raised from wholesale and retail investors. Excluded from our reported first half flows is a further $1.1 billion plus of legally binding fund commitments, which closed in late December 2023. This includes $770 million which was the maximum targeted raise secured for Five V private equity Fund V, and GBP 200 million which was also the maximum targeted raise secured for the Palisade Real Assets Bioenergy Platform. So to Slide 7, the third thing is that international expansion both in Affiliates and distribution continues to gather momentum. We now have $14 billion of funds under management from more than 40 countries outside of Australia, having achieved over $8 billion of net international flows over the past 3.5 years. Now internationally domiciled startup affiliates are experiencing early success. Aikya, which is based in London, has raised $4.5 billion of fund within 4 years of startup. Langdon, based in Toronto, has raised $200 million of wholesale/retail FUM in just 18 months. Palisade Real Assets, also based in London, secures cornerstone commitments from a major European investor for its U.K. bioenergy platform. And Palisade Americas, based in New York, completed the acquisition of the digital infrastructure platform, in Washington State and has subsequently entered into an agreement to roll out a second local fibre platform. As mentioned, we ended the second half of FY '24 with record FUM levels. Aggregate FUM exceeds $100 billion for the first time. Markets remain volatile during the half, with Average Funds Under Management broadly equivalent to opening funds under management. We ended the second half with FUM 8% higher than this average, with much of the increase attributable to net inflows and market movements both occurring late in the reporting period, and thus having little earnings impact during the half year. We point out that the skew in our results, which tends to see profitability higher in the second half of the financial year than the first, is likely to be quite pronounced again this 2024 financial year. So to Slide 8, the net cost of current Horizon 2 initiatives remained, as anticipated, at high levels during the first half. This is expected to reduce in the second half and beyond as revenues generated by those initiatives continue to build. Pinnacle and Affiliates have continued to invest in initiatives for future growth this will drive strategic growth over the medium-term. Short-term profit impact in the first half of FY 2024 was broadly the same as in the second half of FY 2023. Pinnacle share, after-tax, of this investment was estimated to be equivalent to approximately $7 million of net profit after-tax. These initiatives create additional capacity, providing medium-term growth opportunities, and have historically delivered high returns on investment. Co-investment from Affiliates -- oh sorry, Co-investment from Affiliates in these initiatives reinforces the focus from our partners on growing their businesses and delivering superior growth through the cycle. Our Core business remains in good shape, notwithstanding the challenging fund flow environment experienced during the year. In fact this challenging environment has now persistent for just over 2 years and we continue to seek additional Horizon 2 initiatives of compelling quality. Finally, as announced on the 11th of January, many Affiliates achieved pleasing alpha generation, resulting in performance fee contributions from a diverse set of strategies. 9 Affiliates contributed performance fees this half across 13 strategies. 25 strategies are now able to deliver meaningful performance fees, 18 of which had the potential to contribute in this first half. All 25 are capable of contributing in the second half with 16 of those 25 entering the second half at or above their high watermarks. Turning to Slide 9, the financial highlights. We have a diversified platform that has demonstrated resilience in challenging market conditions. And as mentioned earlier, we have made substantial investments to support earnings growth in the future. Aggregate Affiliate funds under management at 100% was $100.1 billion at 31st of December 2023, up $8.2 billion or 9% from $91.9 billion at 30 of June 2023. Details of the sum of each Affiliate are provided in Slide 60. Aggregate retail fund was $25.9 billion at 31st of December 2023, also a record, up $3.2 billion, or 14% from $22.7 billion at 30 of June 2023. The Aggregate Affiliate FUM capital of earnings performance fees was $36.9 billion at 31 of December, up 9% on $34 billion at 30 of June. Total net inflows for the half were $4.5 billion, comprising $1.8 billion of net retail inflows, $3.1 billion of net inflows from International clients and $400 million of net outflows from Australian Institutional clients. The increase in FUM attributable to market and investment performance combined was $3.7 billion in aggregate, including $1.4 billion from retail. The ASX 300 index was up 5.3% over the past year. The MSCI World Index up 6.5%. The NASDAQ, which is particularly relevant to Hyperion Global, was up 8.9%. And the NAREIT Index, which is particularly relevant to Res Cap, was up 5.6%. Aggregate Affiliate revenue at 100% was up 32% to $295 million, of which base fee revenues were up 15% to $253 million. The performance fees were up from $3.2 million to $41.9 million at 100%, of which Pinnacle's share was up from $0.9 million to $12.3 million. We've reported net profit after tax of $30.2 million for the half year, down 1%, on $30.5 million in the prior comparable period. Earnings per share of $0.153 per share, down 2% on the PCP, and we declared a fully-franked interim dividend of $0.156 per share, the same as the 2023 interim dividend. The investment performance of most of our Affiliates has been strong. The performance fees earned speak to this at 81% of the Affiliate strategies, with a track record of 5 years or longer have outperformed their benchmarks over the 5 years to 31 December, 2023. There's further performance detail on Slides 11, 14 and 46 to 49. And we had $151 million of cash in principal investments at 31 December. Slide 10 shows our record of earnings growth over the 7.5 years that we have been listed Pinnacle. Slide 11 provides the specifics of the 5-year performance track records of the 33 Affiliate FUM or strategies. Slide 12 shows the detail of the Affiliate platform and highlights of the first part of the 2024 financial year. Slide 13 elaborates our track record of strong earnings growth through periods, which incorporate a range of stages of market cycles. Slide 14 shows some detail of our performance fee record and opportunities. As mentioned, we are growing the size and diversity of our performance fee potential. Slide 15 is a reminder that performance fees are a deliberate and ongoing component of Pinnacle's earnings and should be expected to deliver a meaningful contribution to our earnings each financial year. For a sizable portion of our FUM, we have negotiated lower base fees in exchange for performance fee opportunities. Slide 16 shows our 17.5 year FUM and net flow history. Our institutional pipeline remains strong and our client base is increasingly diversified, including overseas, as we grow and evolve despite the pressures evident in the domestic institutional market. Again, in -- Slide 17 provides some detail on the increasing diversification of our business. Slide 18 updates on more recent industry awards. Slide 20 has detail on our revenue and margin performance. And Slide 21 has further detail on our financial results. The main items I would point out there are the change in NPAT, excluding the return on our principal investments and offsetting interest costs, which I think of as an important measure of our core earnings. That was up 2% on last year. And then for those who are prepared to accept the OpenInvest write-down as a non-recurring category of expense, the change in NPAT excluding the net return on principal investments, the net interest costs and excluding the OpenInvest write-down, that figure is $33.5 million, up 16% on the PCP. Section 3 of the presentation provides an institutional and international market update and Andrew Chambers will explain the factors at work in these markets during question time and one-on-ones. Section 4 provides a wholesale and retail market update and Kyle Mcintyre will elaborate during one-on-ones. I will move now to Section 5, titled Growth Agenda, Slides 27 to 34. In Slide 28, we remind shareholders that we think in terms of 2 horizons of growth, Horizon 1 is the main gain, it is continuing to pursue net inflows into existing strategies of existing Affiliates. We remain very confident of our ability to continue to do that. We conservatively estimate the capacity of the Affiliate existing strategies at $400 billion, so there is plenty of Horizon 1 runway left with the strong attendant gains in operating leverage that will be accompanied by such growth. Horizon 2 is the subject of an enormous amount of activity both within Pinnacle itself and within all of the Affiliates. We've stated we estimate this cost in the order of $7 million to Pinnacle's bottom line NPAT in each of H1 FY '24 and H2 FY '23. This is a slow, patient process where we invest now for medium-term gain. But we have been doing this for a long time and have a very strong track record of very high returns on past Horizon 2 investments, not even including unrealized capital gains on the value of the businesses and strategies we have built and we are confident that will continue to be the case in the future. Slide 29 explains the future growth drivers in further detail. We have mentioned specific Horizon 2 initiatives in Slides 30 and 31, and the existing international Horizon 2 initiatives in Slide 33. Slides 30 to 33 also explain why we place so much importance on Horizon 2 opportunities and that we will continue to seek initiatives of compelling quality, particularly overseas, leveraging of the operational infrastructure that we have developed in the U.K., the U.S. and Canada. Our standards are very high, but teams which we judge to be the real deal, though they are rare, they are out there. In relation to Horizon 3, which of course is where we use capital to buy new existing businesses, our most recent transaction was the acquisition of 25% of private equity and venture capital managed at Five V in December 2021. And Slide 34 sets out excellent progress made by Five V since we entered into that partnership with them. In terms of potential new opportunities, Slide 34 explains in summary that we have done a lot of work on a large range of opportunities and the final analysis, we haven't so far progressed with any since Five V. This is because we have remained disciplined and patient, and we have not been convinced of the quality and valuations of the opportunities we have considered during that time were satisfactory. We will continue to work on additional Horizon 3 opportunities, encouraged by our record of success with Horizon 3 investments to-date. The 35% interest in Metrics, the initial 25% and subsequent additional 10% of Coolabah and the 25% interest in Five V. I'm out of time, but I really want to mention Section 6, Corporate Responsibility. We are proud of the progress we have made on so many fronts, but I will leave it to shareholders to read Slides 35 to 40 and ask any questions they may have. In conclusion, referring to Slides 42 and 43, I would like to remind shareholders of the basis on which we remain so confident of our company's ability to grow and prosper, which is our distinctive business model that was designed specifically to ensure sustained investment excellence. This is embedded in our DNA, call it our core ideology or fundamental beliefs, which are the basis on which our business was built, and which will endure and guide us for many years, hopefully, decades into the future. This is the source of our competitive advantage. The most talented and experienced investment professionals love it. More importantly, their clients love it. It delivers stability and sustainability, longevity, which traditional investment institutions are less able to facilitate. We execute on it better than others. We understand talented investment people and their needs, the subtle forces that sustain enduring excellence. And those that are inimical to it. We ensure succession when others don't seem able or willing to. Importantly, these basic principles are applicable to a very broad range of asset classes, geographies and markets. They will sustain our growth as we evolve and adapt and as the world changes. The need for investment excellence is massive, greater than ever, and more so as investing becomes more and more difficult and as market circumstances change. Let's now invite questions, noting that the Appendix to the presentation has information that people are often interested in.

[Operator Instructions] Your first question comes from Tom Camilleri from Wilsons.

And congrats on a pretty strong result. Just first one from me, the international retail flow environment looks quite impressive in that it seems to be predominantly driven by Aikya and alternatives in the fourth quarter. Can you just give us an overview of the timing and other input dynamics in that quarter and the initial signs you're starting to see in the first half to help us think about our estimates, and just any other comments you can share also on the domestic in-store environment and your confidence levels for a recovery this calendar year?

So that question is essentially for Andrew Chambers. On the timing, we pointed out that we've had strong inflows right close to the end of the half. Similarly, markets were up in December, so it feels like a lot came just at the end. It has a slightly unusual impact that we didn't get the revenue benefits of those factors during the half, but we've chosen to take the cost impact. We've chosen to provision full short-term incentives during the half, but the revenues, you're right, it means we're starting the second half in quite a strong position where we'll be earning the revenues from those extra flows. And there's more that we've called out that's coming early in the second half. But I think in terms of the outlook and so on, Andrew?

Yes, so Aikya were a very strong feature, as you mentioned, of inflows in the half. About $3 billion of that total number came into Aikya, largely from the United States and the United Kingdom. They really dominated those flows. But it wasn't all Aikya during that period, because obviously we seemed to have a lot of churn of ins and outs also during the course of the half. So other managers which were key contributors to this period of time from a positive standpoint were Antipodes, breaking new business in Canada, Langdon, of course, in the wholesale and retail market in Canada as well. Metrics has continued to expand internationally, with raising more FUM in Japan, in Scandinavia and New Zealand, and Coolabah across the United Kingdom and New Zealand itself. It's important to recognize in that $3.1 billion net inflow, that does exclude a further $826 million of committed capital which has yet to be earnings fees, which happens from this quarter, that was raised across Five V in Fund #5, and also Palisade Real Assets, which is dominated by a large European pension plan. Five V, very interesting, at the $770 million, more than half of that was raised from non-Australian investors. This interesting trend has been, with China now being really uninvestable for many international U.S., European investors, for the allocations are go into to Asia now, people are contemplating more strongly Australia as a destination, along with Japan and also India as well. But obviously, in a world where you have a higher cost of capital, leveraged buyouts are less favorable, but those that are in the mid-market space where operating earnings and driving returns are certainly very favorable. So that was a real feature of the result. So the inflows are close to $4 billion if you talk about committed and committed capital plus flows in that half. We'll obviously realize that committed capital during this half now. Is that sufficient coverage on the international side of things, or would you like me to elaborate first before moving to domestic, Tom?

Oh, that's good on international. Please touch on domestic for me.

Okay. So the domestic flows, whilst negative, at $365 million. Certainly, improved in the second quarter from the first, where we last reported a $1 billion of net outflows, which is dominated by one reallocation. Resolution Capital weighed particularly on that net result, we had $2 billion of outflows domestically in the half. But here's a really interesting fact about that. We didn't lose a single REITs mandate to another competing firm during that period of time. So those flows, or outflows, are dominated by monies going from public markets to private markets, and also through merger activity, where a small fund gets all up into a larger fund, but the larger fund doesn't have a default allocation to REITs. So importantly from a competitive landscape perspective, Resolution Capital is very strong today. Performance, consultant ratings, demand from investors, the people were allocated in the space. It's just an asset allocation perspective today between public and private, notwithstanding the recent discounts we've seen in the public side. Obviously, there's continuous structural demand for privates. On the positive side, we had strong inflows into Coolabah and Longwave, which dominated the net inflows for half. Coolabah was around $1.1 billion, and Longwave over $500 million in the half quadrupling their sum today, bringing them above $700 million. The rest of the flows were mixed across the board. Group side Metrics also produced positive flows in the half, but they're really the dominant ones within the domestic landscape. Just from a thematic perspective, fund consolidation continues on. So as small funds roll into larger funds, the typical trend is for the larger funds to terminate every single mandate that was sitting within that smaller fund merger partner. So this consolidation won't continue on forever, but as it occurs, of course, you can lose mandates with those smaller funds, assuming you're not prejudiced with a larger fund. I might see this still an issue, but the banking compared to what it has been in recent years, in the next 12 to 24 months, notwithstanding a few mergers, which is still yet to complete. But we do believe that our strategies are really relevant to the mega-funds in this environment, which are going to partner with managers, which can provide more insight into their asset allocation decisions beyond simply delivering an offer to their clients. So we actually remain quite optimistic about the domestic market, even though the mandates are fewer and the mandates are larger in nature. But obviously, the global flows are really the thing which is going to drive this business exponentially in future. And I'll pause there for any further questions.

And Tom, I think you mentioned retail as well. So we had net inflows of $1.8 billion into retail in the half, which we think was a very respectable effort in difficult, still difficult conditions. The retail equity flows are still very poor. So our retail inflows were due to factors specific to Pinnacle, and that is particularly strong flows into the less traditional asset classes, which reflect the benefits of our diversified stable of Affiliates and the quality of our distribution team, rather than positive investor sentiment in the industry. We can talk about when sentiment may turn and become positive again, which will give us a double whammy of our more alternative asset classes, as well as equities coming back. But that $1.8 billion, it was stronger in the second quarter than the first quarter of the half. So we feel there is momentum building. So the largest inflows were Metrics and Coolabah into retail. But actually 11 Affiliates had meaningful net inflows during the half.

Thanks, Ian. That's good color. And then just maybe a follow-up that's probably relevant for Dan. So retail FUM growth is strong half-on-half, and now the FUM mix as a percentage of the group is above the PCP. Is it as simple as we need to be expecting a higher blended fee margin in the second half '24, when thinking about your group blended fees?

It's a complicated issue, sort of overall fees, because there's a whole lot of stuff going on. We're also likely to win some fairly large locally business in the life of a plateau. But then we've also got some very high big business coming in. And you're right, Tom, that the more retail we get, retail is very helpful for average fees, they're higher, and also international tends to be higher than domestic. But it just depends on the blend of business. And we take, you know, we can take on really good lower fee business in a plateau as well. But I don't know, comment overall, we don't really want to speculate on the averages. We don't target average fee levels. But I know we watch the trend in them, which has been to float up over time, as we have more retail and more alternative asset classes where the fees are higher.

Yes, so obviously, something to note within, for example, Five V in its $770 million capital raises, the institutional fee is the same as the retail fee. So it's a very good example of the pricing elasticity in a market, which is alternative in nature and very high demand from investors, because of the scarcity of the skills involved.

As a factual statement, the blended fee rates is about 3 basis points higher at the end of this period PCP. So it has moved up a bit.

Your next question comes from Tim Lawson from Macquarie.

Can I start maybe clarifying Dan's comment there? That dropped away a little bit, that base fee margin comment you made at the end there, Dan?

Yes, that base fee in first half, Tim, was 3 basis points higher than the PCP on average.

Yes. And do you have a sort of comment on the sort of range, maybe, of what the exit base fee is, given the average and closing are all quite different, therefore, going to impact our sort of simple calculations from that?

The point, I think, to make on that is the one Ian made earlier, Tim, which is a significant portion of the FUM increase came in December. So the market increase was almost entirely attributable to the month of December. And a large portion of the flows came in the second half of the financial year, weighted towards December. So we've had a little earnings impact of that. So in terms of exit momentum, that would suggest it should be stronger, yes.

Yes. And retail there, et cetera. But I think we pretty much concluded, Tim. We created a bit of confusion when we started predicting sort of revenue rates and fee rates. I think we might leave that alone for the moment.

Yes. That's fine. Maybe a few more questions. Just on Metrics, just thinking about the net flows into that Affiliate sort of being maximum sort of around sort of $2.5 billion and half historically. Just thinking about the ability of the business now to originate, obviously, you've got to win the flows. But what's the sort of capacity or capability within Metrics, maybe on a half year or full year of what you think they can actually originate should the flows come in?

If you talk to the teams, Tim, about their origination pipeline, it's well more for $5 billion. You have to size $8 billion, which they've been transact on. So their issue is not having enough capital rather than not enough transactions. And some of them need to slow down the pace of origination to match the level of capital inflow. So that's really not the problem. And actually, the regulatory position for metrics is going to get stronger in the next few years with the capital charges being applied to the banks increasing. I think you note they're going to be increasing by about 4.5% by 2000 -- I was going to say '28, I'll correct myself if I have that wrong. But essentially that means that you should continue shrinking of the balance sheets, which means capital will be more scarce, we get better pricing power as a lender, and therefore greater capacity to deploy and originate new assets as those balance sheets continue to shrink.

Yes, okay. That's helpful. Just maybe expanding on your sort of first half, second half, few comments. There's obviously some structural element to that on the second half performance fee tends to affect your full year performance, so it tends to be stronger. Not wanting to try and forecast performance fee, but just any sort of cyclicality of that, I mean, obviously you're calling out Horizon 2, revenue sort of coming through there, and therefore, reducing that impact. Some of those offshore Affiliates look like they're now sort of through breakeven. And then obviously you've changed some Affiliate ownership levels in a couple of your Affiliates. Just thinking how thinking how much of that cyclical element starts to unwind and what you think the first half, second half split looks longer-term?

I think one of the significant factors this year will be the fact that we had those flows and market lift right at the end and that we provision the higher costs. So that really did retard the first half and won't be the same factor in the second half. So I think that's very helpful. And obviously, OpenInvest won't be there in the second half. Thank goodness.

Yes, yes. And just on your provision comment, Ian, I mean, effectively taking that incentive provision effectively at full freight for the first half, but you're also assuming performance continues to do that in the second half. So does that actually create a skew in that sense?

Well, in the sense that we didn't have the revenue. Like, we're mainly-- we're particularly paying for good work on inflows, which produces higher revenue, both in the Affiliates and at Pinnacle Parent. But we didn't have that in the first half. We'll have that in the second half. That's the point…

It's a revenue comment, not a cost comment.

Yes. Yes.

Okay. Just also on your sort of improving performance and the Horizon 2 investment, in a sense, the revenue coming through, is that specifically related to the late flows and a half? Or are you also commenting on a good outlook for some of those strategies?

Yes, it's a bit of both. So, 8-year had those large flows. That's now out of Horizon 2. But really, it's just a general point that we can see the things starting to come together and we expect that gap to narrow into the second half of build.

People like Longwave and so on, it's all building.

Riparian and Palisade Real Assets, with great momentum.

Yes, the revenues are coming now.

Yes, yes. Maybe a couple of questions on cost. I mean, obviously there's significant cost growth in the business as well, largely on Horizon 2, but can you just talk about maybe sort of call out specific more sort of one-off or structural changes, like maybe the impact of like a Payright, the cost impact of performance fees, given they were larger than historical averages, would suggest, and any other more one-off type costs in the growth we've seen?

Yes. Well, there's a general statement that costs relative to revenues were consistent with the second part of last year. So when you adjust to things like performance fees, which do have an impact on costs in some of the years, the cost relative to revenues were the same. So most of that growth came in the second part of last year. There are a couple of things that are specific in this half. You mentioned Payright metrics bought 50% of that business at the start of 2023 and increased its ownership in March of 2023, we had the higher ownership then for the full half. And then in April, with that business becoming successful, they've rebased their salaries. So there are a few little things like that. But as a general statement, the level of cost relative to revenues was the same in the second half of last year when we had that big step up.

And you are correct, Tim, that there are some costs that come with higher performance fees and some of our Affiliates' bonuses are related to revenue.

Yes, yes, okay. Just 2 more quick questions for me. Yes, 2 more quick questions for me. So unless you talk to base and sort of transaction fee and then sort of performance fee, just looking forward, your sort of thoughts on how Five V performance fee, how you will report that and that starts to maybe become a factor within that performance fee line and how you specifically going to address that?

Should be particularly for FY '25, shouldn't it?

I think, we will call it out as part of that performance fee line, yes.

Yes. Okay. And last question for me, if we just track this sort of service fee revenue, sort of basically that looked like it dropped sort of back below 8% having been above 8% for some time. Just sort of maybe running through the sort of mechanics of that and what your expectations are?

Yes, so a couple of those revenue arrangements are on trading 3-year revenue share. So some of those were related to some large success we had in particular in ResCap a few years ago. So some of them tail off, but then we've had the significant plumb come-in, in the back end of this half, which will then see those revenues increase in the second half of the financial year.

Okay. So that should somewhat normalize?

Yes.

Okay. All right. That's my, I'm done.