Pioneer Credit Limited (PNC) Earnings Call Transcript & Summary

Good morning. My name is Michael Pegum from Ethicus Advisory Partners. I would like to welcome you to the Pioneer Credit First Half '24 Results Presentation. By way of introduction, presented today is the company's Managing Director, Mr. Keith John. Late apologies from the company's Chief Financial Officer, Mr. Barry Hartnett, who could not attend due to a personal matter. [Operator Instructions] So over to you, Keith, and thanks very much for everyone attending.

Thank you, Michael, and again, welcome to everyone to the Pioneer Credit results presentation for the first half. We're particularly excited about where we are as a business and what we have in store for you today, but also in particular about the future of Pioneer. In terms of our highlights for the first half, you'll notice cash collections were up 11%. That was an exceptional result, and we're very, very happy with. That followed a 40% increase at the same time last year. So we've spoken repeatedly about the opportunity that exists in this market, the way that it's emerging for Pioneer, the amount of work that we have done over many, many years to position ourselves to take advantage of it, and we see that rolling through. So another very good performance at a cash collections line, up 11% to our highest ever. Of course, there's no point doing that if we can't manage our costs, and we've done that very, very well, again, $49.2 million in EBITDA line, $17.9 million at an EBIT line. Clearly, that number is impacted most heavily by interest. The opportunity for Pioneer is to really reduce that number, and we've made a significant announcement just in the past week with respect to that with the appointment of Nomura's exclusive arranger for our senior finance facilities. Finally, a small net profit for the period. We're obviously happy about delivering a net profit. We expect those numbers to increase materially going forward as we reduce our cost of funds and continue to grow our business and capture this exceptional opportunity that sits in the market for Pioneer. Sorry, a few problems driving that. In terms of how we've gone through the period, we started on an investment level talking about $60 million in investment. And that's really the baseline number. That's the number where we're holding our business and meeting our run rate and are profitable at, but that's what we need to hold our business. Through the period, there has been a broad range of opportunities that have come our way. Some of which we have taken, some of which we're looking at and some of which we've obviously said no to. What's really important is that we've got -- they were sitting in front of us, we've managed to capture some really good opportunities. We spent just shy of $66 million in the half, and we have upgraded our investment guidance for the year to $85 million. Our ERC, Estimated Remaining Collections, the amount of cash we expect to recover from those portfolios that we have acquired has risen to $661 million. It's the highest amount that we've ever had. So there's a big opportunity set for us to recover upon that and beyond. And I'll talk to that in a little bit. Underpinning that $661 million is our payment arrangement portfolio. So these are customers that have agreed to pay us back and are paying us back, be it on a weekly, [ quarterly ] or on a monthly basis. That number has been held relatively steady at $459 million, reflecting both the solid paydown of those arrangements through the period and also us writing new arrangements through the period as well. So keeping steady at that level. And our PDP asset, there's a modest uptick in the value of that of about $32 million to $340 million, obviously, as a result of $66 million purchasing through the period. In terms of the actual profit and loss statement, you'll note cash collections of $71 million and other income of $4.9 million. That other income has been a feature of the business in the past period, where we've been remediated for certain works by the banks. It will be continuing or expect that to continue through the next period as well. It's really a proxy for cash collections. We think about that in terms of, again, total revenue for the period of some $76 million, up 11%. Consecutive profitable halves. We haven't delivered that for some time. We expect that to continue and to materially increase from here. In terms of our expenses, slightly increase in expense line. The inflation story is well known across Australia and well spoken about. I think we've managed our costs exceptionally well. We're within budget. About $1 million of that, about 5% is nonrecurring project expenses. We don't back them out, but I just call them out so that you're aware of where we're spending our money and what we're getting for it. So that's really driving the investment in the new technology and the new platform that we expect to launch later this year. And what we expect will start to drive down or give us the ability to drive down our cost to serve even further. Our cost to serve is currently within that target range that we've been speaking about for some time and for which we hit at the back end of '23, and that is between 35% and 37%. That is best-in-class by any measure. We expect there to be an opportunity to continue to address that once we move to a new platform. And that's the major part of the project. As I mentioned, EBITDA up very strongly, 37% to $17.9 million, and we really look forward to continuing to drive that number up further. And obviously, as we reduce the cost of funding for it to drop down straight to the NPAT line and to see that materially increase going forward. From a balance sheet perspective, we've got an exceptionally clean balance sheet. There are effectively no intangibles. There is no other assets on there of what I would deem limited value. These are hard assets that you can bank on that are audited, that are valued appropriately and that reflects real opportunity for the company and for shareholders. Obviously, slight increase in borrowings through the period. We announced that we had that new facility that we established with Nomura ahead of our refinance. It's done at a margin of 6.5% cheaper than our Fortress facility, and we expect that rate or the rate that we get on our senior to come down materially from there when we announce that in a little bit of time. But that was being used to fund those investments. You'll also note trade and other payables there of $20 million. That really relates to PDPs that hadn't settled by 31 December. That's all occurred now as well. Importantly, and I think what everyone has been waiting for and certainly what we've been working very hard towards is the announcement of what we're doing with our senior finance. We've got plenty of tenor left in our existing facility, but we also have the ability now to refinance at a materially cheaper price point, and that reflects the quality of our business, the quality of our balance sheet and the quality of the opportunity set that sits in front of Pioneer, which we have spoken about for some time. Nomura Australia, who we are very familiar with, have been appointed as exclusive arranger for the syndication of that facility. It was a very competitive process. There were numerous banks and institutions involved on the way through. What we like about Nomura and why we think they're good for our business is they understand our business well. They were there when it was tough for us. they're there for us now when it hasn't been as tough and it's -- the outlook is rosy, but they're also a major shareholder. They own 8% of our stock, and that creates incredible alignment to you and me so that we're going to get the best deal, and we've got the best financing package going forward. We're expecting a significant reduction in the cost of funds as soon as this is implemented. On an annualized basis, we're expecting to save between $8 million and $11 million a year. And you can see from the P&L that we just went through, all of that just immediately drops to the bottom line. No exceptions. So that fundamentally changes the economics of the business in addition to the growth and the other things that we have going on. Of course, we're also exposed to the cash rate and the expectations that, that is going to decrease later this year, maybe into '25 and we'll be a beneficiary of that and that's a material amount of money that we can save, in addition to that $8 million to $11 million that's expected. In terms of Pioneer, I'm just going to take you through our business and our market. Just remind people exactly what you're investing in and what the opportunity set is. And frankly, why I'm excited and why we're all excited about what sits in front of us. It's been an incredible road to get to where we are putting aside the individual challenges that our business might have experienced in the past couple of years. We've worked tirelessly from the day we listed right through on making sure we're positioned to take advantage of what was a very, very clear market opportunity for us, which is ensuring that you provide exceptional outcomes to customers and to consumers. And you look after the institutions, the vendors that provide you with debt, and we're seeing that now in my press release, our media release was headed "Exceptional PDP market arrives for Pioneer", and it's very much there. Our purpose is very, very simple to put an end to debt stress. It resonates with vendors and it resonates with consumers, and it's how we think about our business. In terms of Pioneer, what do we do? We're a specialist debt recovery firm that acquires and services, retail, finance, PDPs. It's all we've ever done. We don't work for other people, and we don't buy payday. These are major things about our business. Our focus is about running our business for us and for you to get the best possible outcomes. PDPs are acquired from the major banks and the financial institutions that you're so familiar with. It's an important part of us. We don't have any exposure to utility or to telecommunications debt. We're a monoline business with an incredible growth opportunity in front of us. We have no exposure to the Northern Hemisphere. We are an Australian-focused business. That served us incredibly well. This is an amazing economy where we've had incredible resilience. As we're all aware, surprised many of us, I suspect, on the upside about how strong the consumer has been and how well they have managed through the circumstances of the past couple of years with rising interest rates and inflation and the like. And you would expect that, that would have impacts right across the economy. We haven't seen it in our business and our consumer base, reflecting the quality of those consumers that we invest in have done very, very well. We're the #2 player in the Australian market by size. We've invested over $700 million in PDPs over the journey across some $5.6 billion in receivables. So we've got a lot of data and an incredible amount of experience. In terms of the market, there's really a few things that are here that need to be called out. One is why are we successful? We've got a unique servicing approach. Our servicing approach has never changed. We differentiate ourselves in the way that we deal with customers and the way that we deal with vendors, and that's one of the reasons people prefer to deal with us. We're one of the few scaled participants. There's been plenty of media about this sector over the last few years, groups leaving, groups closing down, groups selling their portfolios. Pioneer's [ reach ] scale, and we've seen that with our cost to serve coming down. And now the opportunity for us is to continue to grow market share in a market that is very protective of incumbents. Banks don't want to take risk with new entrants. They understand Pioneer, they know Pioneer, they're comfortable with Pioneer. The amount that we pay to them doesn't shift the needle for a bank. So there's no need to take the risk. It shifts the needle for us, and that's why we work so hard to continue to invest in that differentiation. We've got a market-leading reputation without question, and we do not offer further credit to customers. This is a big one. This is one of the reasons the nonbanks in particular prefer us over others. We don't compete with them. We don't compete with them. So we're aligned to our vendors. We're on the same side of the ledger, and that's an important differentiation and provided we can do the two things that are required in this business: purchase it well and service it well. We're going to be able to continue to grow market share through that space. From an economic perspective, we've spoken about the Australian economy. It's been incredibly resilient as has our customer base. We don't have payday, and we don't have [ SAC ] and lower quality debt segments in our book, and that served us exceptionally well. The Australian debt market has had more and more regulation follow on top of it with expectations being driven now not just from the legislators but also through the Ombudsman and through quasi regulators like APRA being pushed down through the banks through to us. That's created this moat around pioneer that is real and is very hard for others to -- or for new entrants to break into. And in terms of the vendors, they're selling more, but they prefer partners, as I've said, without competing products. At a competitive level, there are 2 big opportunities for us. So in addition to the significant amount of debt that's available to us through the nonbanks and the banks, market exits have been a feature of this market. We announced only early this week about our acquisition -- $15 million acquisition of a portfolio from a group that's exited this market. It's a very good transaction for us, and we expect to see more of those opportunities as the next year or so progresses. And M&A, there are both platforms and large-scale portfolios that are available. Pioneer has exceptional trusted relationships with the group's that are looking to exit this market, change their business and move in different directions. That's good for us, but it's also good for them. People, when they're making these strategic decisions want to do it with the confidence that those discussions that relationship is not broken and not shared, and Pioneer has got that relationship with these people, and we expect that that's going to serve us well in the coming periods. In terms of investment, we're 90-odd percent complete so far this year, $85 million guidance. We've got great controls in place to ensure appropriate investment. As you know, no member of the leadership has a short-term incentive. And what that means is that when we invest money, we are thinking like you, we're thinking long term. If you want to earn an incentive in this business as a leader, you need to be thinking long term. Our next incentives [ best ] in FY '26, at the end of FY '26. That makes them 4 years long. It's a long time, but it's appropriate given the assets we buy and the way they roll off and your need and my need for us to make sure that we come to this with an ownership mindset and that we only take appropriate risk when we're buying or investing capital. No payday loans, very important our business is about growing people and about people getting ahead and having the capacity to repay, and we only focus on the upper end of the market. As you know, in the past or in the last month or so, we bought a $24 million portfolio of bank-originated PDPs and then that almost $16 million Part IX portfolio that we announced just the other day. Really good opportunities for us across the half, slight dip in price. But importantly, we are buying at better than historical IRRs, better returns than what we have got in the past. We're very happy with what we've got in the past. We're happier with what we're buying now. And a lot of that comes down to people preferring to partner with Pioneer. In terms of our portfolio, we've got 2 key parts to it. The performing portfolio, those customers that are on arrangements with us that we've spoken about, $459 million. We're very, very happy with that. And then we've got our WIP. This is accounts that have come into our business, they might be new today or they might be a little bit more older. There's $1.7 billion in receivables that we're working through. And if you remember back to that ERC number that we spoke about very early, $600-odd million. If we can dig deeper into that WIP portfolio, that number is going to increase or the money is going to drop to the bottom line, and that's a very key focus of our business through the next couple of years. In terms of customer outcomes, NPS is +19. It's come down a little bit in the last 6 months, and we really see that as a reflection of the stress that's in the economy. And you can see that in our new payers number there of minus 1, which is lower than it's been historically. Really good outcome in terms of our business and really good outcome, but it's reflects consumers under stress, which is something that no one wants to see. And hopefully, we've made that a little bit easier for them during the journey. And I think a score of +40 by the time they've finished paying us reflects the very good relationship we have with the consumers in the way that we've dealt with them to get great outcomes. I've spoken about alignment to shareholders, and this is something that's always been a feature of the Pioneer business and always will be. Management is the single largest shareholder in the business. And I think in small financials, that's a must. You're investing your capital and you're trusting us to be custodians of your capital in the way that we invest it, you need to make sure that we're invested alongside of you. Management and Board own over 18% of this business. We also, as I've said, don't have any short-term incentives. It's an important differentiation We do not do things for short-term outcomes. We don't take unacceptable risks because we think it will let us hit a target. That is not a feature of this business. This business has been through a tough period, which I doubt, few others would have got through, and it got through because you've got a management team that is wholly committed to delivering for shareholders because they are completely aligned to shareholders. In terms of our LTI, we've got a 3-year program and a fourth year hurdle. So there are 3 yearly targets set by the Board, they are demanding. They are not built around soft metrics, they are built around hard metrics that the Board sets. And then the ultimate hurdle depending on those, which you hit, if you hit all 3, you then -- or 1 or 2, you then maybe hit a fourth hurdle. And that's the one we've announced to shareholders, and that's our commitment to you, which is a statutory net profit after taxation for FY '26 of $18 million. So if we want to get our incentives, which management clearly do, then we need to deliver an $18 million net profit after taxation for FY '26 and that's what we will do. In terms of our outlook, it's steady. It hasn't changed. It remains the same as what I've said to you before, continued industry regulatory focus. It's an important feature of this industry. It provides you the protection that we are operating within a regulated environment that people just can't come into. It creates a nice moat around us, but it's a strong part of the differentiation of Pioneer to others. Strong tailwinds for PDPs. I mentioned in our media release, there have been more opportunities available to Pioneer than we can take at the moment. We expect that to continue. But that also gives us the ability to be super picky on the portfolios that we're investing in to make sure we can continue to buy at those and invest at those returns that are better than we've experienced historically. We've got agreements in place with 12 vendors at the moment. It's a nice spread. We've got that 5-year agreement with the CBA, which continues on quite nicely. And there is a monster amount of inventory coming to market. There's a lot in there at the moment. There's a lot more coming and that's really good for Pioneer. Clearly, reducing the cost of funds is a big focus for our business. We've appointed Nomura, financial close is expected this half, and we've said there's going to be savings in the vicinity of $8 million to $11 million. So a lot of money drops straight to the bottom line. Operating leverage, we've managed to keep that cost to serve at the bottom end of our range, 35% to 37%. We expect that to continue, but there's a lot of opportunity for us to continue to realize that operating leverage. Part of which starts with that CRM replacement, which we've announced previously, expected to deliver efficiencies in next year. And the outlook. Material uplift in NPAT for the year. But importantly, that target for FY '26 of a statutory net profit after taxation of at least $18 million. That concludes the formal part of my presentation, and I'll pass over to Michael to refer to any questions that shareholders might have.

Thanks, Keith. It's quite a few questions that have come through the Q&A box. So just [ bear ] your patience in the dozen questions. So the first question is in relation to cash collections. Just trying to get some more explanation around the uptick in those cash collections?

Yes. Well, Michael, if I cast our mind back a year, if you don't mind, we had that uptick of 40%. I said that was an exceptional result, but it's also what's expected, right? We've invested a lot of money and you'd expect that we're going to start receiving a lot of money. There's no point us investing it, not converting that to cash. That's the nature of our business. Through this period, the bulk of our investment really came very late in December, 11% uptick. We're very, very happy about. It's just really about the continued execution at an operational level in our business and also our growing book. So we're very happy with that number, but it's also a number we focus on heavily in the business we speak about in our operations. And if we continue to service our customers well in the manner I think we are, and I believe we are, we expect to continue to see that to grow for some time yet.

This question came through [ Billy in the piece ] of the presentation. So may have been answered. You referred to the exceptional opportunity out there. And there's been a request for explanation, and I'm sure you touched it, but if you want to reiterate that?

Sure. And again, we've -- I've spoken about this for some time, and it's quite different to what others in the market are talking to. But this is the opportunity set that's with Pioneer. I mean, the strength of this business is built around relationships and people having trust and knowing that they can transact with someone in a manner that respects their business, respects the privacy of those relationships and of the opportunity and can deal with it in a manner that's confidential. There is a broad range of opportunities that sit in this market from the banks, in particular, but the nonbank lenders across our competitive landscape and so forth. It's large. I clearly can't talk about and won't talk about individual opportunities, but there's been ample press over the last year or so and in recent times about what some of those opportunities are. Pioneer started investing in these opportunities 10 years ago. And that investment was in relationship, in understanding, in access, and it's today that we're getting the benefit of that. Anyone can pay the price. That's the easy part. Our job is to make sure that not everyone gets access to paying that price. And I think we've done that very, very well. And then obviously, making sure that we invest. We invest at a price point that makes sense for us and for our shareholders. So there's a big opportunity there. I think we'll find over the course of the next period as well, there's a wave of impaired credit about to hit the market or hitting the market, and we're starting to see that from groups that have really held back their receivables for some time.

Okay. Next question, probably congratulations around the results. But looking at the result half-on-half, not PCP, Keith. There's an observation that the first half '24 looks in line or slightly softer than the second half of '23 in terms of NPAT and EBIT. The question is sort of whether there's any seasonality in the business or the portfolio or is there any sort of other reason?

Yes. Look, there is some seasonality. I mean I think more than anything, the seasonality comes through the timing of acquisitions and so fort. We could have invested more heavily at the front end of the half, but we wouldn't have got the returns or wouldn't have bought on the returns that we expect to receive by waiting a little bit longer and doing it that way. So there's a range of other costs. I mean in the back end of last year, we didn't have the program of work that we have ongoing now. We called out there's about $1 million of project costs that are one-offs that come through to the bottom line. So there's a few moving parts. So we're very, very happy with where the business is positioned. And we're obviously just super focused on making sure we deliver on that refinancing now and get that cost of funds down as low as possible so that we can see that drop through to the bottom line.

Okay. Further to that question, I don't think you need to answer this. But provide any guidance for '24 and '25? And can win the savings from the refi we realized and how much would be you've already -- that's been answered and addressed. I might throw a question to you just in relation to your PDP investments. Looking at the bar chart to 94% contracted on the PDP guidance that you've done. You're not far away from fulfilling that, Keith. So what's the next steps in relation to your PDP investment guidance?

Yes. Before I get there, I mean, I will touch on the guidance for '24 and '25. Look, in terms of '24, we've said a material uplift in NPAT. '25, you can work that out, right? We've said we're going to save somewhere between $8 million and $11 million. We're making a decent profit this year, which we've said a material uplift. Add them together, and that will give you a ballpark of where we're going to land. It's too early to be forecasting what we are for '25 and for '26. What we've put out there is the Board's expectation and what management have signed up to in terms of getting incentivized. $18 million NPAT in '26. It's at least $18 million. We are clearly aiming working towards and building to deliver better than that. We're not interested in just getting our incentive. We're interested in [ smashing ] it. That's the first part. When we get to '25, then we can talk about guidance for '25. But I think our job at the moment really is to deliver on '24 and to complete the significant amount of work we have to make sure we get the best outcome to shareholders, and we capitalize those opportunities. The opportunities, yes, we're at 94% like all advisers might be very excited about upping guidances and so on and so forth. Let's get there first and have it in the bag. There is a mountain of opportunity for us. If we can close that out in a manner that we expect get the returns, then there's risk to the upside on that number, and we'll update shareholders as soon as we're able to.

Okay. Moving more to the technology front, CRM. Can you give us a bit more sort of update? You obviously talked about the benefits coming through in FY '25 [indiscernible] that sort of go live and start ramping up?

Yes. So look, we're well advanced with that program of work. We're very, very happy with it. I suspect we'll go live early in the new financial year on that, so we limit any impact if there was to be any -- from any crossover into a new year where you've got obviously a full period to work through that. But look, there's a mountain of work. And I think we've got about 30 people working full time on this. This is a true enterprise-grade system that is used by some of the largest investors in this -- in the sector in the world and some of the world's largest banks. It's going to deliver some pretty significant gains from an efficiency perspective, but also a data quality perspective. I mean increasingly data is more and more important. And the more touch points we have and data points we have through the life cycle of our customers, the more valuable and predictive we can be with the work that we're doing. So that's progressing very well. And like I said, we expect to get significant benefits out of it starting in the new financial year.

Next question, I think been asked and answered about funding costs reduced by $10 million in FY '25 question mark. I think you've answered that. That came in -- that question. Now in relation to the PwC claim that you put out in the last quarter of calendar year '23, sort of any intelligence or update where that sits today?

Yes. So we're due to get their defense, all normal part of the process. It's actually due now. There's a bit of work to be had. We've done our work. The claim that's been lodged and was lodged with the ASX as well is comprehensive. The QC or KC or Senior Counsel, which is from New South Wales, that advised us on that is very experienced in these matters is very comfortable with our position. There's not a lot more I can say, Michael, other than it just needs to run its course, but we're very comfortable with where we're at and what our claim is. This business suffered a terrible loss and shareholders suffered a terrible loss because of the advice that was provided, and we need to be remediated for that, and we expect to be. So that's the nature of the claim and what we'll be prosecuting on behalf of all of our shareholders.

The statement of plan, which is attached to the ASX release, makes some very interesting rating. I'd probably encourage investors to read it if they do get a period of time. Next question, just in relation to the market, talking about if you could discuss the apparent rationalization and the withdrawal of competitors in the Australian market?

Yes. I think, look, it's driven from a range of things. I mean, compliance costs are significant. Compliance expectations are probably much higher than compliance costs and the way that you engage with customers and so forth, reputation has a very significant part in that. And I think all of these things conspire to make it more difficult for subscale participants. And obviously, funding costs have been very high for a lot of those guys as well. So that's really a key driver for the rationalization of the industry. And of course, we've spoken repeatedly, right? We're in a virtual duopoly with the banks. It's really between us and another, and that's it. And if you don't have access to bank portfolios, you really are limited in your ability to be able to grow in a sector that's so fundamentally supported by and controlled by or influenced by the banks given their penetration into the retail credit market in Australia.

Next question is probably more directed around refi and the Nomura relationship as explicit. The question comes -- how many would be debt providers that would be?

Yes. Look, I don't know. We're working through that now. It really is a matter of making sure that we've got the best syndicate in place, and we're working closely with Nomura on that. We have great comfort in the work that they're doing. So we're comfortable, but it will be -- it's a syndication led by Nomura. They're the ones that are front and center and upfront. And we're comfortable with the terms that we've achieved today.

Okay. Next question around the ERC assets of $661 million. The person asking the question suggests that the NTA of $44 million is understated and whether you give some color on the valuation, methodology around that...

Yes. What I'd say about that is, look, the NTA also doesn't include our deferred tax asset of some $25 million. So it sort of gets you closer to $70 million. It would be wrong to say that the NTA is understated because that's the number that's been signed off by our auditors as being fair and reasonable and correct and accurate. But needless to say, we're very, very comfortable with that, number one. And number two, over the course of the journey, I have personally investors a significant amount of money in the equity of this business. And I think that's a very encouraging sign for shareholders. If I'm buying into the equity in the manner that I have been, then clearly, I'm comfortable with what the balance sheet looks like and, of course, the future prospects.

Next question, I think you probably answered it. Just a question mark around your LTI incentive hurdles at $18 million, whether that was a stretch? I think you've pretty much asked and answered that...

Yes. No -- if we don't get that number, there will be a lot of very disappointed people at Pioneer. And when I say disappointed, disappointed in their own performance, we're very, very confident that we'll deliver on that number. As I said, it's a big number. But it's what we need to be doing in this business. We get the refi done, we get the cost down there. And the growth we have and the operational efficiency of this business, we have to be delivering those numbers for shareholders, and that's the commitment. And that's why the award set there. It's set on what we have to be doing, and that's the very strong expectation.

Next question is what labor supply issues are you facing, if any?

Yes, interesting question. I haven't heard a lot of questions about labor in recent times. I think if you cast your mind back a year or so, there were sort of labor challenges everywhere. We don't exceed those in Australia -- or sorry, in Western Australia now. I think being part of a mining state to the extent that you lose contact center people that might go and do FIFO. The one thing that they want, that's a very brutal environment in terms of the way that they onboard people and offboard people and there's been plenty of press around the challenges with nickel mines and closing down and lithium and iron ore and so on and so forth over here. So no challenges at that level. I mean, what we are seeing is a moderation in salary expectations from people that might be looking to join our corporate part of our team. That said, look, we've got a very steady team. So we're not particularly hiring much around the place. So we're very comfortable with where it looks.

Question in relation to more of the macro with unemployment rising, was the expectation is that rising further? Do you see any different delays around your collections? And do you expect it to get worse?

Yes. So I appreciate the question. The short answer is no. I mean, again -- so we haven't seen difficulty. We've certainly heard. The consumers are on the phone, they're living -- they're going about their daily lives and what they share with us, what they share with my people on the phones is how tough things are at home. You've cut back on meat or certain meats that you might have bought for dinner once or twice a week, you don't go to the movies as often. You're not going to the shops as much as you did previously. There are things that people feel very, very heavily. But the other thing about Australian consumers is they're exceptionally honorable and they want to meet their financial commitments. They sometimes get in trouble. That's where we step in that they've got a strong desire to meet their financial commitments and they're doing that. We have certainly been alert to it getting worse in consumer, the consumer environment getting worse. It doesn't appear to be that way. And certainly, whilst we're alert to it and we do consider that in our -- in everything in the way we operationalize our business, the way our portfolio is valued and audited and so forth, we're comfortable that we've got the right amount of resilience. Our business really rises and falls, for lack of a better description, on unemployment. And we're still at full employment in Australia. It would need to tick up several hundred basis points before it became something that actually we think has an impact into our business, and that doesn't appear to be on the horizon in anyone's forecasts.

Okay. Second part of the same question was more around your effective average interest rates, your total loan [ post-Nomura ], I probably think [indiscernible] why don't you give any guidance on that...

Yes. Well, look, we've given some guidance. I mean we've said that if it lands between 9% and 10% all in, then we're going to save, I think, is between $8 million and $11 million per annum. So I think start thinking around there, there's some opportunity to -- for that to come down through a range of processes, but including a decrease in the cash rate. So if we get another 1% or 1.5% and the cash rate decrease, then that's going to drop through to our bottom line immediately.

Right. We just might pause there for a moment, if there's any final questions [Operator Instructions] I think we've exhausted the Q&A session. So again, I'd like to thank everyone else for joining the presentation today. The company will be in Sydney next Tuesday, Wednesday and Thursday and potentially the following week, I will circulate hard dates and times for any investors who would like to catch up with Keith and Barry for further follow-up. So again, thank you for your time today, and Keith, any closing remarks from yourself.

No, look, just to thank shareholders. They've been incredibly patient. We think we've delivered very, very well with the -- the next few periods look exceptionally exciting for us with some big numbers committed to roll through from management. So we look forward to delivering that for you and for all of us. But thank you for your time.

Many thanks. Thank you. Have a good one.