Praemium Limited (PPS) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Praemium Limited FY '20 Annual Results Briefing Conference Call. [Operator Instructions] I'd now like to hand the conference over to the CEO, Mr. Michael Ohanessian. Please go ahead.

Good morning, everybody, and welcome to Premium's FY 2020 Results Call. I'll be starting off with a bit of an overview of the year that's passed before Paul takes you through the numbers. I'll then sum up and talk about what we see going forward, and then we'll be happy to take any questions. So if we can start on Slide 5, please? And it skews us if this seems a bit disjointed, we're in different locations for the first time. So bear with us. Okay. We're on Slide 5, Paul?

Yes.

Okay. So going into the new -- into this financial year, we had some known challenges, I guess, that we thought might drag on our revenue a little bit. And then, of course, COVID came along and made the year very interesting. I think it's fair to say, though, that the plucky team at Praemium really dug down deep and delivered, I think, a great result in challenging circumstances and really, I think, demonstrates the resilience of our business. I'm pleased to say that part of the reason for getting a pretty good result, which I'll come to the moment, is because I think we had a strategy, and we've executed quite well on that strategy. I'm really pleased with the increase in gross margin. As you can see there, 12% increase. We've almost doubled our NPAT. And most importantly, our EBITDA margin grew from about 25% in F'19 to 28%. We also managed to do quite well in the second half, a half that we thought was going to be particularly tough given COVID and other things. But here we are, I think, 13 consecutive halves of growth. And so really, again, it demonstrates the resilience of our business. We're really happy with the result, and I think we're well placed going forward. We can go to the next slide, please, Paul? So let me [Technical Difficulty]

Ladies and gentlemen, please bear with us. Thank you. We do have a technical issue. Thank you. Mr. Ohanessian, apologies, but we did lose your line and if you have redialed back in, if you can continue, sir?

Yes. So on Slide 6, just want to remind everyone of what our strategy has been. Back 3 years ago, we decided we were going to expand our very good SMA platform into a full-service platform. That happened in February 2019. And then in the U.K. We rolled out that same technology in September last year. To give you a sense of the scale of this, Australian total market is about $777 billion right now, of which $29 billion is the SMA. Now the SMA is growing quite strongly. But as you can see, it's a very small proportion of the overall platform market. And that's why adding IMA to SMA was a very important strategic move for us. And we think it's a really unique proposition, the way we've built out this fully integrated managed accounts platform. And you can see on the right-hand side, IMA being the new thing that we're doing. So we've now got a meaningful amount of money on platform, both in the U.K. and Australia in IMA. And so this has been a really, really important strategic move for us. And if we go to the next slide, please, Slide 7. Having rolled it out, particularly in Australia in February last year, we backed it with sales and marketing spend. We've increased our spend in that area by 22% over the previous year. We've doubled the number of BDMs we have in Australia and 70% increase for international as well. And just as importantly, we've actually put an active effort into engaging with the ratings agencies, both here in Australia and in the U.K., which I'll come back to shortly. Next slide, Slide 8. I think this tells the story of this execution of our new strategy. As you can see, if you look at the -- on the continuing business we have in Australia on the left-hand side, you can see the dramatic jump in net inflows from our client base. And that was -- that's a really pleasing result, given that for the financial year, we haven't had all that team in place. Equally, on the right-hand side, you'll see the gross flows there as well as some inflows or net flows, I guess, for the last 2 financial years. Again, a really strong performance, again, in tough conditions, particularly the U.K. where equity markets were hit pretty hard. If I go to the next slide, Slide 9. And just overall, look, our global FUA is over $20 billion, which is great. Our VMAAS continues to do really, really well. We did expect our platform FUA in Australia to dip in March, of course, that got amplified by COVID with what happened in March. But overall, look, our portfolios are up, our U.K. pension schemes are up by 50%. Australian Super product, our retail Super product is up 22%, and our WealthCraft product is also up. So it's been a good overall year, and our international platform, in particular, was up 25%, again, in a very, very difficult market. Go to Slide 10, please, Paul. Let me spend a bit of time on the U.K. market, U.K. business. And for those of you who aren't familiar with it, it really is a platform that services the U.K. market and advisers in expat markets around the world. And they're in places like Switzerland, the Channel Islands, Dubai, Hong Kong, Singapore, South Africa and very recently now Japan as well, go after those Japanese clients as well. I want to just go through where we are with that business. We've taken the revenue here and we've broken it up into 3 parts. One is the platform revenue, which you can see grew 28% in F '20 and then we have some in-house managed funds, which I'll come to in a moment, and they declined by 42% in terms of revenue. But if I just sort of look at both of those charts, if you take the top right-hand chart, there you'll see the FUA of our platform. And for the first time, we're breaking out the FUA that is in the U.K. for U.K. advisers as well as the FUA we get from offshore advisers. And you'll notice that the offshore component has grown quite strongly. In fact, it's up 67% in FUA over the previous year, a fantastic result and really demonstrates the infrastructure we now have in place. Remember, we have offices in Hong Kong and Dubai, which really supports those markets, particularly Asia, the Middle East and South Africa. And we think that's a fantastic capability for us. We're now starting to crack the tough market in Jersey after many, many years, where we also have an office, and so we're really pleased with that performance. Now when you talk about funds. Now these are in-house managed funds, where we have 2 different brands, 1 is called the VT range, as you can see, pretty steady. And then there's the Smartfund range, which we talked about is in outflow mode, and we expect we'll probably close in this new financial year. And that's really been the main drag on the U.K. business. You'll also notice that the expense line that our expenses for the last 3 years have been pretty steady. I think the guys have done a great job in growing the business. Now remember, almost all of those expenses relate to other end platform. There's very, very little expenses in the expense line since they are related to managed funds because the expenses in the managed funds tend to be in the AMC of those funds. And so for the path it's going strong, which is the platform, you can see the cost line is actually very, very steady. I'm also very proud of the fact that the FUA is up by about 25%, 26% in a time when the FTSE for the U.K., FTSE 250 was down 12% for the year. And we've also spent quite a lot of time working with ratings agencies, which I'm going to come back to in a further slide, but hopefully, you can get that sense of -- it's a story of 2 stories -- a tale of 2 stories. And the fund story of Smartfunds, there were about GBP 39 million left at the end of the financial year. So we expect that that's going to have very little left to run out for us. We'll go to the next slide, Slide 11. We'll talk about VMA and VMAAS, for those of you who don't know the difference so VMA is a noncustodial recording capability and the AS is just the admin service that we've added on. And look, both are growing very strongly our F '19 as you can see from the chart, if you look at June '19, had a massive growth. It's not surprising that you get some growing pains when you grow that strongly in 1 year. But it's fair to say F '20 has been another good year, more growth. But I think most importantly, consolidating the growth that we had in F '19. And so now we've got a property resource capability, and we're ready to take on more growth in that area. And we think there's a lot more potential. If you think about how many firms that use us just for software like VMA where they're doing that admin service, which is opening the mail and reconciling and so on, we think that over time, many of those firms will choose to outsource that to Praemium because we can do it more efficiently and its scale. Now go to the next slide, please, Slide 12. I want to spend a lot of time on product enhancements. I think you can read them. Suffice to say, I'll come back to those a little bit later on. As I think about some of the things that we think will be meaningful for Praemium going forward. Slide 13. Now this is very interesting. We're really happy with how this has turned out for us. We -- up until this financial year, we were not a full-service platform. So we have never really tried to play the -- I don't want to call it, a game, but enter the contest, if you like, of Investment Trends, so this is the first time we have tried to get ourselves rated with Investment Trends. And on debut, as you can see, we came in at 4 out of some 18 or 19 platforms. And look, we're pretty delighted. We've done a lot of -- in addition to launching a full-service platform, of course, we had to add a lot of other functionality and make that platform useful for devices. I think we've got a lot more work to do. But I'm really very proud of the results that we've achieved, as you can see on that chart. Equally in the U.K., where we also, from September last year, had a full-service platform. We got involved in a group called the lang cat. They're good like Investment Trends the U.K., if you like. And they rated us, about the same time, this year, in second place. Again, that's probably above another 19 or so platforms there. And that's a great result for us, fantastic result. Let's go to the next slide. A bit more detail. If you look at the Investment Trends, they have a number of different layers in each categories. But if you just take the 44 subcategories. Remember, it's almost 20 platforms that they're looking at. We came first in 7 of them, which I think is a great result, best for online permissions, best for APIs, best for managed accounts, best for white labeling, best for planning software integration, business reporting as well as segmentation and grouping. And likewise, if I go to the next slide, Slide 15, real quickly, lang cat survey, we came first in a couple of their ratings, and we came second in an awful lot as well. But I think the commentary on the right-hand side that I'll let you read, I think, is a really good summary of where Praemium were and where we are today. And that's just the change that we've made over the last 18 months in executing our strategy. And you can see it in the financial results, which Paul will take you through, but most importantly, it's changed our business fundamentally. If we go to the next slide, Slide 16. We continue to win awards. Again, I think for the fourth time now, we've been rated as the best international platform. And what I mean international, I mean those markets like Dubai, Hong Kong, Singapore and so on. We got the leading platform for discretionary management. This is a pretty big thing in the U.K. It's probably one of the most prestigious awards you can win in the U.K. We've got most innovative for the City of London Wealth Management awards. And we even won an award for marketing. Remember, this is the first time we've actually tried marketing, so I'm very proud of the fact that the guys were able to pull this off. I'll talk about Defaqto. Defaqto is a U.K. agency. And I'll say this, Defaqto is primarily focused on due diligence. If you're in a advice firm and you want to prove to the regulators that you're choosing an appropriate platform, going to a platform that's already got a 5-star rating from Defaqto is a pretty good way of saying that you've done your homework. And last, but certainly not least, Praemium was selected by the ASX to join its All Technology index. It's about 43 firms, I think, includes some of the Australia's greater technology firms. And I think we are the only intermediated platform that was included in that index. And I think it does remind us all that just how strong our technologies is and Praemium's DNA definitely use software and technology. And with that, I'm going to hand over to Paul to go through the results.

Great. Thank you, Michael, and good morning, everybody. I will start on Slide 18. And as Michael outlined earlier, this year's result has seen improvement in all major categories, including revenue, gross margins, our underlying EBITDA, net profit and cash flow. Slide 18 details our financial results relative to the adoption of 2 new accounting standards, which were included during the year. And we've restated 2019's results had these standards been implemented. Firstly, the adoption of AASB 15, customer revenue standard, has seen a number of fees previously recorded as platform recovery now recorded as revenue. Therefore, you can see $3.6 million has been reallocated from COGS to revenue for 2019, while for 2020, this amount was $4.1 million. This is a reallocation only. The second standard adopted related to AASB 16 leases, which as per we did in the half year, sees operating leases now recorded on the balance sheet and amortized over the lease term. If we look more broadly at the financial highlights, you see that this year saw strong growth in our gross margins, up 12% in dollar terms and, per the graph, increasing to 79% of net revenue overall. This improved margin allowed continued investment in our sales and marketing. And certainly, as Michael has outlined before, you can see that we've increased expenditure this year to $11.5 million, which we see as a very important driver of our future growth. Our improved financial performance was also achieved in underlying EBITDA, up 13% relative to the restated numbers to $14.2 million and net profit after tax up 91% to $4.9 million. I'd turn to Slide 19, I'll explain more detail of our results relative to the second half. You'll see that revenue was impacted from market declines post-COVID-19, in particular, during March and April. However, we did see an improvement in gross margins in the second half to 80%. This was partly driven from increased trading volumes during the period and the timing of expense recoveries in Australia. Outside of sales and marketing, we implemented a number of cost initiatives during the fourth quarter, which reduced our expenditure, such that EBITDA margins were 29% for the second half relative to 28% for the full year. Just to quickly note on some of the expense categories below EBITDA. You'll see that acquisition costs were higher in the second half from costs incurred in the takeover bid for Powerwrap. FX and other line includes $2 million of an unrealized gain on the Powerwrap shares that we did acquire before the takeover bid. And you can see that our tax expense was lower relative to the first half from the deduction of R&D costs that we process through a prior year tax return. Now if I turn to Slide 20, you'll see that this details our revenue by product and by segment in the top table with our segment earnings being outlined in the bottom table. So if I look at the revenue first, you'll note, overall, net revenue was up 8% on last year with growth across all products. If I then look at the Australian segment, revenue was up 11%, and this was both from platform revenue being up 11% from underlying inflow growth and also portfolio services also being up by 11% from VMA portfolio increases and the admin service onboarding that Michael touched on earlier. Again, with expense management during COVID-19, EBITDA was increased $18.1 million, you can see in the bottom table, a 20% improvement on last year with EBITDA margin of 47%. And we've consistently maintained EBITDA margins in the high 40s for a number of years now. If we turn to the international business, as Michael touched on, it certainly has been a challenging period weathering the global volatility. Net revenue was up 1%, with record platform inflows impacted by the outflows from Smartfund protected that Michael touched on, on an earlier slide. At the same time, expenses were also maintained at 1%. And this resulted in an EBITDA loss of $2.8 million, which was an increase in the loss of 5%, comprising $1.9 million for the U.K. business and a $900,000 loss for our Asia business. Last slide for me is on Slide 21. What you'll see is the balance sheet and cash flow tables. As I mentioned, the adoption of AASB 16 for leases now means that rental payments are shown as financing cash flows as opposed to operating cash flows. You'll see that we've had strong operating cash flow for the year, $12.1 million, which is up 95% on the prior year. If you include lease payments in that analysis, our cash flows are still up 74% on the prior year, which is a very strong result. Our closing cash reserves were $15.9 million, which is up 16%, and obviously, we continue to maintain a strong balance sheet to support our growth with -- sorry, regulatory cash requirements over 5 -- well over $5 million and no debt. And with that, I will hand back to Michael to turn to Slide 23. Over to you, Michael.

Thank you, Paul. So let me sum up F '20. We had our first full year for the Australian business with our new strategy, our expanded platform. For 3 quarters of the year, we had that same platform in place for our international business. We've gone in and done the ratings work in both Australia and the U.K. We're ranked top 4 in both countries, top 2 in U.K. at the moment and top 4 in Australia. The Defaqto 5-star rating is an important thing for advisers in the U.K. market. That's very important. And it was great to be added to the Australian All Technology index as well with ASX. We increased our number of salespeople. We've focused a lot of effort now on marketing as well to follow up the investment that we've made. And you can see from the numbers that we are gaining traction. Going forward, some of the interesting things that we've done, ESG is one that we're very excited about in addition to having a model portfolio with our very good friends at Australian Ethical. We've also got this customization capability. So to give you an example, let's say you have an investor, and they're in a model portfolio, an SMA model. It might be that this investor, on the one hand, is a smoker, probably doesn't mind tobacco companies; on the other hand, is concerned about climate change. Based on an investor's particular ESG values or perspectives, they can then set some settings, if you like, which will then filter out companies that don't accord with that person's views. Being able to do customizable model portfolios based on a person's preferences, we think, is going to be a big thing going forward. So we're very excited about that. I think also in times of great uncertainty and anxiety about what's happening with the world and the pandemic it's on and the impact on the economy, our Insights, artificial intelligence capability, which really helps provide some intelligence to advisers about potentially how some of their clients are thinking, I think that's also going to be very important, particularly in market like this and times like this. Because the worst thing you want is for investors -- at a time like this, it's really hard to know how to manage money. When markets are just grinding upwards and economies are strong and employment levels are high, it's pretty easy to be an investor. But it's times like this that financial advisers really can create a lot of value, and they're very important in times like this. We'll continue to expand our efforts on sales and marketing. We understand what our strategy needs to be. It's about growth. We're pursuing that very aggressively because we think we've got most of the things that we need to be able to convince advisers that Praemium is a good choice. And now I want to talk a little bit about the new normal. When the lockdown started, Praemium went to work from home immediately. We had no interruption in service. We're able to take service calls straight away. Our infrastructure is strong around the world. As you know, we service clients in South Africa, Hong Kong, U.K., Jersey and many other places. But because we have a presence in Hong Kong and Dubai and Jersey and London and so on and of course, Melbourne, we're able to support those clients from a time-zone perspective as well. So we think that -- given all of the infrastructure we now have in place, we think that the future for Praemium is going to be quite interesting. And we actually see the new normal is being very different. And obviously, as a technology firm, we can work from home remotely. We can change things. And we think that in time, we will gain some benefits, both in terms of expenses, direct expenses, obviously, but also in staff productivity. Some of our organizations, some of the people, for instance, our [ European ] office, who provides technology and admin support to pretty much all the other offices, they've been working remotely effectively for a few years now. So it's not a new thing for us, but we think the new normal on balance will be a net positive for Praemium. So now let me turn to the next slide, just very quickly on Powerwrap. I'm sure some of you'll have some questions on it. It's a takeover offer. I think we're 24% now, roughly. We think it's a compelling idea. And if I just go to the last slide, Slide 25, you can see Powerwrap today, but we think the combination is really, really powerful. Trend has a particular way of doing things. PowerWrap does it slightly differently. And the way they do it, I think, really does hit the mark with the high net wealth client segment. And we think we can add to that. We can add lots of user experience, client experience, technology, et cetera, et cetera, as well as well as a bigger footprint, if you like, in terms of servicing clients. We already have obviously the very strong -- they use our technology. So already, they've got good reporting, good corporate actions and so on. But I think having this mix of a more scalable, more of a retail-type solution as well as a more private wealth-type solution, we think it's going to be fantastic experience once we find a way to integrate those 2 things. And I think another important differentiator is that Praemium, of course, unlike most of our competitors here, we are quite well known here. We're very well established here in Australia, obviously. But our presence and our brand awareness has grown very, very strongly in those international markets. And I think that's going to become -- while it's not profitable yet, I'm quite certain that in time, people are going to see this as a fantastic competitive advantage that we have, where we can leverage our investments in technologies and product development. And with that, Harry, I think we can turn to questions.

[Operator Instructions] The first question comes from Danny Younis of Shaw and Partners.

Michael, Paul, 3 questions, if I can. The first 1 is about the gross margins. I think both yourself and Paul noted the increase in trading volumes, the timing of expense recovery and the investment in the sales and marketing that's driven that margin improvement. Can we look at it from a point of view of the other OpEx line? So your G&A has gone down. Your IT expenses have gone down. My question is how much of that is short-term COVID related as opposed to a longer-term reduction at that level. Should we expect to see that G&A and IT ramp back up? Or will they stay at those levels? And how will that drive the gross margin in the future?

Yes. Danny, Paul here. Maybe if I go through each of the categories. Obviously, G&A during -- certainly in the last quarter, you have a number of discretionary items that stopped. In particular, for Praemium travel, I suppose, has been a more reasonable expense because we are a global company. Obviously, all of our 10 offices are unable to travel, and it's most likely that travel will be delayed certainly internationally for a number of months. So we think that line will certainly hold. And as Michael mentioned, in terms of what we call the new normal, I think we're all getting very used to being able to continue our business, both from home but also being allowed to do so on video conferences. So I think some of those discretionary expenditure items, Danny, will hold flat for a bit longer. In terms of R&D, the way we look at it is we have around 120 staff around the globe, which are focused on R&D. We obviously choose projects which are to be capitalized versus expensed. You can see there was a slight reduction in the expense for this half because we've obviously continue to maintain some of our capital projects. And in particular, in the second half, we were finishing off the Investment Trends functionality work. We were rolling out adviser portal in the U.K. market. And as Michael touched on more recently, we've been focusing on ESG functionality. And in particular, post-COVID, there's been a lot of focus on improving our digital capability so our advisers and our clients can continue to work -- operate their businesses from home and remotely from their clients. So we've always said that the sales and marketing has been the key investments. We certainly think R&D from an overall cost base will be maintained and G&A should probably remain flat for a bit longer.

Excellent. And with regards to the arbitration and restructuring costs, they were $1.3 million for the year. If I look at Slide 21, when is the expectation that the arbitration component is likely to roll-off?

Yes. So in terms of arbitration, again, COVID has got in the way of this as it has for many other businesses. But the arbitration was scheduled for May. That's obviously been deferred until later in the year. But it's really dependent on -- it's being run through Hong Kong so being dependent on being able to travel to Hong Kong and Hong Kong being open. So at this stage, we're anticipating to try and resolve that arbitration by the end of the year. But obviously, we're just mindful of COVID timing and travel from that perspective.

Okay. And just one more. In regards to the U.K., I think Michael said, the expenses have been pretty steady, steady at $12 million, $13 million. So it looks like that's the optimal expense base here. But what's the narrative now that you're communicating to the market in terms of international breakeven?

Danny, Michael here. Look, we sort of predicted in the past when this would happen, but we're not going to predict the time. But look, there's a little bit more of the Smartfunds that needs to be flushed out, I guess. The VT funds, we think, will stay reasonably stable. So it's really now just a question of growth on the platform. We don't see any major needs to increase our cost base of international business. So you can imagine that's pretty much great lining. And yes, it's a question of how big the growth's going to be. And hopefully, you'll see from the awards that we're winning and the confirmation from Defaqto and just the growth momentum of FUA. Remember, the U.K. had a pretty tough year. I mean their COVID hit was pretty hard. And we certainly noticed that the June quarter inflows by onshore U.K. were a bit soft, and I think that's true in our industry here. So look, for us, it's just about the growth. And look, the pipeline is great. Our profile is much higher. We're now winning awards. We've been ranked very highly by independent agencies. So look, is it this financial year or the next financial year? I don't know, but it's one of the most important things.

Okay. And one final one, if I can. Just on -- I noticed you've taken out the platform revenue margin slide. I'm presuming that's because of the Powerwrap acquisition, which'll make things a little bit murky. But longer term, pre-Powerwrap, are the expectations that those margins will hold around 35 to 40 bps?

Yes, Danny, look, it's Paul here. Yes, we certainly expect that across the spectrum of our fee-based 30 to 35 bps, we've certainly been able to maintain that in the first half as we reported and I can confirm in the second half as well. So yes, we expect that should be stable going forward. Because remember, our pricing relative to other platforms is still well below the market. So we think we're quite comfortable that we can maintain those margins going forward.

Our next question comes from Nicolas Burgess of Baillieu.

A couple of questions. Paul, can you just clarify the audit issue and the reasons for the delay?

Nick, I certainly can. Unfortunately, after receiving audit clearance on Thursday night last week, we were given a rather late last-minute request, which was of a technical nature in relation to tax. So that just took us a little bit longer than we expected to answer and resolve. Obviously, we're disappointed, but that timing has come about. But as I mentioned in the ASX this morning, there's been no change in our results and certainly no change on our business operation. So it was really just clarifying a technical matter. It just took us a bit longer than we hoped.

Okay. Second question, just on AASB 15. So that $3.6 million boost. Would you expect that $3.6 million to scale with the business as it grows? Or that's likely to be a sort of a fixed number embedded within revenue?

Yes. Nick, if you look at, we've previously reported a line in the annual report called platform recoveries, and that's a component of recovering expenses either within the scheme or within our responsible entity. And that has as a number, been scaling up for a number of years. So -- but I suppose as Danny asked before, what we're doing is allocating more of that to revenue. So of that 35 average basis points, it's really just an allocation between what is in revenue and what is setting platform recoveries. So all we've done for this year is allocate a component of that to revenue as opposed to -- it's been previously sitting reported in the clothesline. So -- but yes, as the scheme and our platform grows in Australia, we obviously would expect that scaled as well because it's based on average basis points.

Yes. Okay. So it does count. Yes. And so 2 more quick questions. Could you just quantify any impact of government COVID assistance either here in Australia or in the U.K.?

Yes, I certainly, can In terms of Australia, we've had no assistance, neither job keeper or even the cash boost through PAYG. So there's been nothing in Australia. In the U.K., there was a small amount of rent assistance. That's not shown at the EBITDA line, but they actually closed the building in London. So we were given a 50% rent reduction for a couple of months, and we were given a small assistance package in Hong Kong, but given there's only a small number of -- less than 5 employees in Hong Kong, that was obviously a very small amount. But otherwise, Nick, that's been it.

And so that -- you don't regard that rent assistance in the U.K. as a material number. Do you...

No.

And lastly, Michael, maybe if you -- you've had a couple of comments here regarding the pipeline in the U.K. How the pipeline in Australia looking at the moment? And do you think that pipeline will be interrupted given the Powerwrap acquisition?

No, pipeline, you asked, will stay very strong for us. We have -- so if you think about our BDM team, which is much better than it was, most of them joined late in 2019. So they're still sort of building up their book if you like. So now the pipeline is fine. It’s been very good. In fact, look, we're now on quite a lot of APLs, probably like some of our peers. So we don't want for access, if you like. We just got to go out and just win the business. So there's nothing really holding us back at all. In terms of Powerwrap, we don't see any impact there. In fact, I've now engaged with some of the key Powerwrap clients. They are supportive of the transaction. They see the benefits of it. And look, if you're a client of Powerwrap, and you ask me that question, why wouldn't you say, hey, if Praemium can bring a better client experience and better user experience to something that's already a unique proposition, in other words, we can help make it better, then, obviously, they're going to be happy with that. And so we feel it's real opportunities with the combined entity in terms of expanding our pipeline and some really good cross-sell opportunities as well. Thank you. A reminder, at this time, if I'd like to ask a question, please start then one.

[Operator Instructions] Our next question comes from Lafitani Sotiriou of Bell Potter.

A couple of questions, if I may. The first one is just a follow-up in relation to the revenue margin. Split. Obviously, it's been restated in the Australian business, in particular. But the reason for the question is I'm trying to work out the trajectory from first half to second half, in particular, because a lot of ANZ, private, supposedly low margins rolled off. And I'm trying to understand what trajectory's coming out. So are you able to clarify roughly the first half '20 and second half '20 revenue margins -- platform revenue margin win?

Yes. LAF, Paul here. So what we've seen is a slight improvement in platform margins because, as we said, across our total base in Australia, the average has been around 25 basis points when you include ANZ Private. As we reported last half, that -- excluding that client, our average outside of that is around 35 basis points. So it's really just a mix. So as some of the outflows have continued, slowing but continued, naturally, our platform margin would continue to improve, but only slightly in terms of how that relative mix flows through.

Do you have the actual numbers?