Praemium Limited (PPS) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Praemium FY '26 Earnings Call [Operator Instructions] I would now like to hand the conference over to Anthony Wamsteker, Chief Executive Officer. Please go ahead.

Thank you. Thank you, everyone, for joining and allow me to add my welcome to that of our host today. Appreciate your interest in the Praemium Full Year Results for financial year ' 26. At Praemium, we acknowledge the traditional custodians of country and pay our respect to their elders, past and present. As I usually do, I draw your attention to the disclaimer that has gone out with our presentation today, although I don't intend to read it on this call. Praemium is a next-generation investment and wealth management platform trusted by financial advisers, private wealth terms and high net worth investors. Our integrated technology brings together managed accounts portfolio administration reporting and digital client experience, helping advice business scale efficiently and deliver exceptional outcomes. I'll talk a bit more about the importance of getting our strategy and product right and how that impacted on our results today and our outlook. I'm joined on the call today by Emma State, our CFO. And also in the room today is our Chief Commercial Officer, Dennis Arik. If I could turn first to the business highlights. Firstly, I want to say that these reflect the 3 key areas that we're focused on over FY '26 and going into FY '27, leading scaling and transforming. Leading, we want to lead in our chosen segment, our high net worth solutions are driving that. Spectrum grew 78.3% year-on-year and scope plus our market-leading noncustodial solution grew 30.5%. We're seeing strong penetration of the broker segment, and we've secured multiyear renewals on of our enterprise agreements with key groups, which speaks to the stickiness of these relationships. This allows us to continue to deliver for our shareholders with strong underlying earnings growth and the declaration of the full year dividend payment. Scaling. The revenue growth we are achieving is 1 part of the scaling equation. We've also done the complex integration work that lets us grow without growing our cost base at the same rate. The OneView micro-integration is complete with $3 million of synergies fully embedded in FY '27. Our technology restructures also complete, bringing a further $9 million of synergies into FY '27. And we've expanded our key account model to support enterprise growth. and transforming, we are positioning the business for what comes next. [ knot ] is progressing well on our platform transformation. Our super administration changes are progressing, and we're building custom integrations to support seamless and personalized high net worth advice across those 3 pillars we're leading in our segment scaling efficiently and transforming for the future. Turning to the financial highlights for the year. Emma will take you through these in more detail shortly, but there are a few points I want to call upfront. On funds, custodial and noncustodial for reached $77.9 billion, up 21.1% on FY '25. Some of you have heard me talk before about the opportunity of being so close to $100 billion gives us as a target, and we've made good progress towards that this year. Platform is up 10.8% and with Spectrum generating strong organic flow and Power returning to positive net flows. Our market-leading Scope Plus offering now holds $43.9 billion in full, an increase of 30.5%. And -- our strategic focus on the high net wear segment continues to deliver with $1.9 billion in platform net flows for the year, which was an increase of 130%. We've delivered underlying EBITDA of $32.1 million, up 14% on the prior year. That growth reflects the increased operating leverage in the business. with our underlying EBITDA margin lifting to 29.1%. As we scale, more of our revenue is flowing through to the bottom line. Our reflecting confidence in the business and its cash generation, we've declared a fully franked final dividend of $0.0125 per share. That's $6.1 million for the whole business. taking the FY '26 total to $0.025. Taken together, this is a strong set of results built on a solid structural foundation, growing revenue, expanding margins, rising funds under administration and a proven commitment to returning value and cash to shareholders. What we've seen is sustained compound growth on both the top and bottom line. Revenue has doubled from $55.7 million in FY '21 to $110.5 million in FY '26 over a 5-year compound rate of 14.7% per annum. And that's excluding discontinued operation. So it's clean organic momentum. But the more important story is on the right. Underlying EBITDA has compounded even faster at 18.1% a year from $14 million to $32 million. The key takeaway is that earnings has graced faster than revenue and that gap is operating -- moving on to the next slide, I'll look at a bit further. The pretty numbers tell the story. Revenue from customers up 5.7% and underlying costs only up 2.5% and the mathematical result underlying EBITDA up 14.5%. When revenue grows faster than gross margin expands, and it has underlying EBITDA margin is up 4 percentage points since FY '24 and now sits at 29.1%. The operating leverage comprise of 3 parts: technology and automation, including AI-assisted coding reporting and QA, acquisition synergies with $3 million EBITDA uplift from 1 view, fully embedded in FY '27. And a disciplined cost base. Looking ahead, there is a full year of bond view and technician synergies landing in FY '27. And it's not just how much we've grown. It's the quality of that growth. The growth is being led by our active loyal advisers. Their platform pool grew 21% over the year. Active Advisers now account for 85% of platform full and that growth alone contributed $5 billion of full growth in FY '26. A big part of what sits behind those numbers is the expansion of our key account management model, which I mentioned earlier. We've deepened the way we work with our largest groups, moving beyond a traditional service relationship to genuine partnership models embedded across those groups. That means dedicated key account resources in, joint planning with the licensee and working alongside their practice on adoption and training and how to use the platform day-to-day to get the most out of it. It's also leveraging our research partnership with core data, when we're very grateful and thankful for what they have done and providing practice development and education to the adviser and planners in our active groups. That approach is doing 2 things for us. It's lifting engagement and usage within advisers and we already have, which is exactly what the 21% uplift in active adviser who it reflects. It's giving us a much stronger platform for enterprise growth because when we're embedded in the growth level, expansion happens across the whole network rather than one a base at a time. This tells us 2 things. First, adviser churn is low, herbier stay, and they're using us more. And second, the fuller underneath is high quality, which means that platform revenue, it generates high quality and recurring. This is the engine that produces the operating leverage you saw earlier, growth built on active engaged advisers and real partnerships with the group sitting as the durable growth we own for and the foundation on which we'll build over coming years. It doesn't happen by accident. It rests on genuine and competitive advantage, a deeply embedded platform built on foundations that competitors are still striving to replicate. The starting point is that we were purpose built for this, and I'm grateful to my predecessors for the legacy Net lab. Praemium was built upon noncustodial administration from day 1. For us, noncustomers the foundation of the high net worth platform. It's not a bolt-on feature retrofitted to a case business. And our custody solutions are intentionally integrated on top of that foundation. So the client gets a single seamless experience rather than 2 systems sets together. That's more than 25 years of high net worth expertise built into the platform, and it's very difficult to replicate quickly. This advantage shows up in 4 concrete ways. First, our revenue streams are resilient. On one side, we have a scalable platform. On the other, we have factory administration through scope and scope plus anchored in long-term advisers relationship. So we've got growth and stability in the same book Secondly, our relationships are deep and high value, 8% of those top 20 clients hold multiple products. Third, we integrate genuinely sophisticated solutions. This reflects a deep understanding of the high net worth segment and the breadth to actually meet what those advisers need. Our alternatives capability, for example, is house in-house, not outsourced or a generic offer stretched to fit the market. And fourth, we were is to focus we win. We ranked #1 for data and integration and #1 for sophisticated client offer, and we've won a number of tenders in the high net worth segment in recent years. The quality of that growth doesn't happen by accident. Sorry -- an area where we're seeing considerable growth and future opportunity is the stock broking segment. It's a segment where we've had long-term clients and partly where we're leading this market. And the opportunity is still early despite the fact that we've been involved with the market for the full 25 years of our history. We've got relationships with 65% of Australia's stock broking firms. We've secured multiyear renewals with 2 key broking firms, and we're early in the onboarding of El Poder and Morgans. On that basis, we see our service book market as 2 or 3x or where we sit today, that is just with current opportunities. The broad order opportunity is even more significant. Our recent research suggests that the demand signals are very clear, 49% of brokers expect advice-led models to take share from transactional broking and 79% say half or more of their clients are high net worth some ultra high net worth with the largest portfolio is well above $6 million. A sizable pool of assets in play, $3.5 trillion sits in CES Holdings held by segment actively looking to move into recurring revenue streams. That takes a total addressable market well over 10x our position today even if we own the cash up a little more than 10% of the total market opportunity. Putting the stock broking picture together, we already lead this segment the structural shift towards advice led net worth models is running in our favor, and the firms we've won are only beginning to bring that high net worth for across. The lift ahead of this comes from plants we've already secured, not just from wins we still need to make. Stepping back to the results as a whole, a strong year built on years of consistent high-quality growth underpinned by a genuine competitive advantage that is difficult to replicate with substantial runway still ahead of us in the segments in which we are choosing to compete. This slide speaks to something we think is important, and we've continued to develop and improve the platform for applies today at the same time as building towards our future. These 2 things are happening in parallel, not 1 at the expense of the other. On the immediate delivery side, we've made a series of improvements to expand capability and strengthen the client experience. Administration is simpler, enhanced digital signatures, cash management to streamline, account processes taking friction out of the day-to-day for adviser and investment -- investors. Investment access is broader with our Clearstream Vestima and margin integrations opening up new investment options, data and reporting are better with enhanced reporting tools and stronger integrations. A number of API 4.3 integrations are being completed and [ expo ] 4.3 is the most crucial 1 helping guys work more efficiently. We've added more support and transparency with expanded self-serve training and support around Division 296 and other budget changes. Alongside all of that, our technology transformation in the future is led by our [ Technote ] team, and it's well underway. We're building the core architecture and modernizing the user experience. That's the foundation for faster innovation, greater scalability and improved performance in the years ahead. So the message is continuity and ambition together, keep delivering tangible improvements advisers need now following the groundwork for what the platform will become in the future. I'll now hand over to Emma who is going to take you through the financial results in detail. Thanks, Emma.

Thank you, Anthony. Turning now to the financial results. Financial year 2026 was a strong year for underlying performance. Revenue increased 5.7% to $110.5 million, while underlying EBITDA increased 14.5% to $32.1 million. The underlying EBITDA margin increased 223 basis points to 29.1%. The headline is that revenue growth continues to outpace expense growth, demonstrating the operating leverage in the business. Platform revenue increased 6.3% to $88.9 million, and portfolio services revenue increased 3.4% to $21.6 million, which we'll go through in a later slide. Underlying operating expenses increased only 2.5% with 1 new synergies and technology savings, partly offsetting investment in growth and capabilities. We also revised the presentation of certain revenue items. The changes increased reported revenue by $2.1 million in FY '26 and $1.4 million in FY '25, with no impact on EBITDA or cash flow. More details can be found in the appendix. Statutory NPAT was $6.5 million. And on the next slide, I'll take you through the bridge from underlying EBITDA to statutory profit. This slide sets out the difference between the strong underlying operating results and statutory NPAT. Starting with underlying EBITDA of $32.1 million, underlying NPAT increased 2.9% to $15.4 million despite higher amortization of development assets brought into use during late FY '25 and into early FY '26. Statutory results were affected by acquisitions, integration and transformation activity undertaken during the year. This included OneVue transition costs, the [ Technote ] acquisition and incentive arrangements. -- technology restructuring costs and the write-off of software assets under development as we transition to a new technology platform. These items were partly offset by the release of the OneVue earn-out provision. The tax expense was also impacted during the year when we identified a historical income tax shortfall following the review of the income tax treatment of certain expenses incurred in connection with Praemium's role as a responsible entity. Further details on this have been provided in the appendix. After these adjustments, statutory NPAT was $6.5 million compared with the restated $11.9 million in FY '25. Before looking at revenue in the revenue growth in detail, this slide outlines the quality and diversity of the 2 complementary revenue engines in the business. Platform revenue represents around 80% of group revenue and includes spectrum, SMA, Power and Supra. Its primary drivers are adviser and for growth through market performance and net flows transaction volumes and cash holdings. This gives us a scalable growth engine that benefits from adviser expansion and stronger markets where revenue varies with market levels and activity. Portfolio services represents around 20% of group revenue through Scope and Scopes. It is largely a flat fee per model per portfolio model. driven by the number of portfolios we administer and the complexity of the portfolio. As a result, it is more insulated from market movements and provides a stable recurring revenue base and coin long-term adviser relationships. The combination matters. We have a platform revenue engine that can scale with markets, adviser growth and flows together with a portfolio administration base that provides resilience through market cycles. That balance supports both growth and earnings quality. It is also important to point out how this supports praemium's integrated high net worth proposition. Advisers can use our noncustody administration custody platforms, reporting and digital capabilities together rather than a disconnected services. This strengthens heightened relationships and gives us multiple avenues to growth -- to grow market share. Looking at revenue over time, the group has delivered sustainable compound growth. Reported revenue increased 5.7% to $110.5 million in FY '26. Underlying revenue growth was 9.3% when excluding the $3.8 million impact of the planned OneVue Advisor exits. Since FY '21, revenue from continuing operations has grown at a compound annual rate of 14.7%. Platform revenue has been the principal driver, increasing 129% over that period while portfolio services revenue has increased 29%. The key takeaway is consistent long-term revenue growth supported by both scalable platform revenue and recurring administration revenue. Platform revenue increased 10.8%, excluding the impact of OneVue adviser exits supported by higher for strong net flows and continued spectrum growth. The platform revenue margin was 27 basis points in FY '26 compared to 29 basis points in FY '25. This movement principally reflects. As you can see, average for per portfolio has increased as a result of a higher portion of accounts capped under the administration fee model. along with that, a greater proportion of growth is coming from large enterprise clients, which can have different pricing structures is not driven by a change in underlying demand, and we expect to see the margins stabilize into FY '27. Spectrum margins remain below the platform average as early adopters have comparatively large account balances. As adoption broadens and average balances normalize, we expect the margin to increase over time. The key takeaway is that platform revenue growth remained strong. Margin will move with customer mix and account balances, but higher for us, strong flows and continued adviser adoption provide solid foundation for future revenue growth. Moving to the primary driver of platform revenue. Platform 4 reached $34 billion at 30th of June, up 10.8% on FY '25. Spectrum was a key contributor with 4 increasing over 78% year-on-year. And since launch in October 2024, Spectrum has attracted $2.3 billion of new business growth inflows. The OneVue transition is now fully complete, with 4 moved across to spectrum, SMA and scope. That shifts OneVue from a transition program to performance and value realization. Net flows were $1.9 billion, up 130% on FY '25 with Spectrum delivering strong flows and Power at returning to positive net flows. Market movements added a further $1.4 billion to floor. Stepping back from the annual movement, platform for worth has grown at a 5-year compound annual rate of 13%. This reflects the resilience of the core platform, the acceleration in spectrum and our sustained focus on the high net worth advisers segment. The quality of this outcome is as important as the headline growth. The planned OneVue exits are now substantially behind us. Retained adviser relationships remain strong, and the platform enters FY '27 with continued new business momentum. Turning to noncustody portfolio services. Praemium remains the market leader in this segment. Scope Plus -- so increased 30.5% to $43.9 billion. while Scopes portfolios increased 33.7% to approximately [ 12,800. ] Momentum strengthened through the second half with all up 15.7% and portfolio is up 19.6% since December. We signed 11 new client firms during FY '26 and and onboarding efficiency remains a key priority so that contracted opportunities convert to revenue more quickly. Scope portfolio is reduced to approximately [indiscernible] primarily reflecting the managed client exit and a contract expiry. This was partly offset by portfolios onboarded during the year. From a financial perspective, the most important point is the continued mix shift towards Scopes. Portfolio Services revenue increased 3.4% in FY '26 despite the scope reduction the June annualized revenue run rate reached $23.2 million following second half on boarding. We enter FY '27 with a strong pipeline, including continued engagement across the soft broking segment. This slide brings together the operating leverage and synergy story. Underlying EBITDA increased 14.5% to $32.1 million, while underlying operating expenses increased only 2.5%. As a result, the underlying EBITDA margin expanded by 223 basis points to 29.1% with the second half margin reaching 32%. For OneVue, we achieved $4.5 million of cost synergies in FY '26. These were offset by $3.8 million of revenue reductions from planned adviser exits, producing a net FY '26 EBITDA uplift of $700,000. With the migration completed and the retained business continuing to grow, the expected EBITDA uplift increases to approximately $3 million in FY '27. The technology restructure is expected to deliver approximately $9 million of annualized savings, comprising around $7 million of operating expense savings and $2 million of CapEx savings, of which FY '26 included approximately $2.6 million of operating expense savings and $0.5 million of CapEx savings. Together with technology and automation, these actions establish a lower growth cost base and improve the conversion of revenue growth into earnings and cash flow. Finally, turning to cash flow. Reported free cash flow was $2.4 million in FY '26, affected by a concentrated period of one-off transition, restructuring, acquisition and technology investments. The principal items were $2.6 million of OneVue transition and restructuring costs. $3.6 million of redundancy costs for the technology restructure. $5.4 million of preacquisition technology investment with Tegnatia; and $3.1 million of Technote acquisition and incentive costs, partly offset by $0.5 million of cash acquired in the acquisition. Adjusting for these items, underlying free cash flow was $16.6 million, demonstrating continued underlying cash generation without the elevated one-off activity. There are clear tailwinds into FY '27. One view is fully integrated. The technology restructure reduces operating costs, and internal development CapEx and improved onboarding should accelerate revenue conversion. FY '26 was an investment and transition year from a cash flow perspective. We enter FY '27 with a major technology restructuring and integration actions complete, fewer one-off cash costs and underlying earnings momentum. This positions the business for improved reported cash conversion and continued shareholder returns. That completes the financial results. I will now hand back to Anthony to take you through strategy and outlook.

Thanks, Emma, and thanks to all of you and your team for all your time getting us through the results today. If I could turn to the strategy and outlook. And before I get to our own strategy, I do want to frame the market that we're operating because the forces here are working for us and not against us. We are the #1 platform in the segments that matter most to us. Data and integration for noncustody functionality and the sophisticated client offers for that proposition most suited to a high net worth. And the high net worth market is enormous, around $4.4 trillion in investable assets in Australia, and it's underserved roughly 8,000 advisers short of the true demand. On top of that, 3 tailwinds are compounding, the demand and growth for alternatives is increasing as high net worth book for new sources of alpha and diversification. And we've seen that in our own platform with growth in alternatives of 12% year-on-year. In fact, we run that the market's largest alternative platform and 31% of total for us. I've talked about the broker segment. There's a $3.5 trillion book of CES Holdings and all the broker firms are looking at ways to move that to revenue-generating models recurring payments. Finally, we've got a $4.5 trillion superannuation market. and self-managed superfund assets set to grow further with the locked-in growth of compulsory superannuation. So how do we capture the opportunity of these unbelievable market tailwinds? There are 4 ways First, we deepen our penetration of the high net worth adviser segment by a strong and active sales pipeline and by lifting the share of wallet with the advisers who are already using our platform through the relationship management model that we've recently introduced and are now improving. Second, we simplified. This year is when our technology transformation lands. We're leveraging the technology and OneVue integrations, making onboarding materially more efficient and simplifying the operating model under. Third way is to differentiate. We intend to continue leading in servicing sophisticated high net worth and indeed ultra-high net worth clients, expand our noncustody capabilities, offer integrated wealth management and build a more competitive sub-annuation offering. And fourth, all this has to improve returns, operating leverage, cost discipline, capturing acquisition synergies and growing cash margins faster than expenses. Underpinning all of that, we're targeting measurable improvement in client and Promoter Score, employee engagement and our risk and governance capabilities. This slide sets out the technology transformation, which is fundamental to what we're doing at the moment, stronger foundations, a sharper experience and faster delivery. And why it underpins earnings growth. Starting with the foundations, the architecture transformation is cleaning up the code and database and rebuilding the underlying platform, which gives us better accuracy and speed and importantly, faster time to market for everything we build from here. On top of that, we're rebuilding the experience. The interface rebuild brings streamlined workplace, built-in task monitors, intuitive cash cows, compliance enhancements and an improved view of total wealth advisers. The trading experience is intuitive and automated across managed funds and alternative assets. Digital onboarding is fast from as with automated ID verification. And across the user experience, we're developing greater efficiency and transparency and AI-enhanced support center and client tested enhancements backed by a structured training program. Importantly, our own assessment has been confirmed by the recently commissioned independent technical review. It has confirmed our new platform is fit for purpose with engineering stream and a sound underlying design. Full platform transition is expected over the next 12 to 18 months. That underpins our expectations for continued margin expansion, additional productivity benefits and aggressive scaling of the business. This is the engine behind the operating leverage of a platform built to facilitate part wins and revenue growth without growing costs at the same rate. So that's how we see our entry into FY '27. We're carrying strong operational and financial momentum into the new year. It is an outstanding start the OneVue on Technote synergies are now flowing through to earnings. We're building real momentum in new business wins and enterprise onboarding. And Bentall -- the technology transformation is what makes us scalable and sustainable as those earnings grow with our costs growing at the same rate. If there are 3 things to take away today at the same 3 we opened with leading, scaling and transforming. We lead in the high net worth segment, and we're extending that position in stock broking while the opportunity is still in its infancy. The integration work is done and the synergies of loins growth is increasingly translating into margin and earnings rather than cost. The technology transformation is building the foundation and that was what allows us to keep compounding well beyond financial year '27. We have strong momentum today and a business built to keep growing from here. With that, I'll pause and open up for questions.

[Operator Instructions] Your first question today comes from Nick McGarrigle with Barrenjoey.

Can you just clarify, looking into the pipeline over the next 3 years? Obviously, you've acquired systems that give you a strong kind of replacement for some of the things that you've had and better infrastructure. Just how do you think about the pipeline in terms of product development, what the new architecture gives you in terms of the ability to ramp things up in terms of functionality going forward?

Thanks, Nick. I see the biggest area of the investment provide at the minute other than transitioning to the new platform as the superannuation offering. Whilst we've got a platform superannuation offering, and we've certainly got many self-managed funds using the platform. We feel that's probably the major area where there's further development opportunity, and we're -- and we're focused a lot on that transformation. Other than that, -- the thing that's obvious to everyone in every industry is how much the power of technology today allows you to do a lot of things that you couldn't have dreamed of doing a few years ago. and the pace of change with those things is very rapid. So a lot of what we're doing is taking the incredible capabilities we've got in technology now, particularly with the acquisition of Technote and the merger with our technology function. And so what do we need, but more importantly, what do our clients need to fully capture the opportunities provided by that platform. So that's working with our clients directly, and I'm very grateful to those clients who have been willing to help us pilot some of the new functionality that we've already built. And so right, what does it do help us on the business better, but what would it do help you expand your ability to service the market because without any exaggeration if every adviser suddenly could double or triple the number of clients that they can manage, there'd still be a shortage of advisers. So we're trying to work out with our clients how to utilize our capabilities and the capabilities in technology generally to expand our offer. And that's why the integration is to import. Some of the developments will be advisers themselves building out their functionality because AI is a very powerful acknowledge about very accessible. And so the integration with what we're building becomes critical to thinking not just how can we do what we do today better, but what does the adviser of the future look like, what does their technology infrastructure and technology step look like? .

Maybe a question for Emma just around the revenue margin on the platform side. I think you reported the 27 bps for FY '26, but just how to think about the exit rate or what might that look like in June and the compression year-on-year, I presume largely driven by higher average balances into spectrum, but just some impact on the revenue margin.

Yes, the margin in itself is an annualized margin as you see. And we did -- it would have been impacted through the year with the market movements that we saw through Q3 heavily dragging on and revenue. So coming out at the back end of the year, we were seeing some improvement in the margin. As I said, we do have those large account balances, particularly in spectrum with the early adopters. So we do anticipate as time goes on, and we've broadened that adoption base to a wider set of advisers and investors that we would see those account sizes trench down over time. which would have a positive upward trend on the margins at the same time.

Okay. And then in terms of the underlying OpEx run rate into next year. I think you've given us a slide to that, but maybe just to reinforce how to read Slide 23 in terms of the full year in FY '27, I guess, on the pro forma or whatever the black bars there that you've got in terms of costs coming up?

Yes. The water floor that we've provided on FY '20 -- sorry, on Slide 23 really talks to the costs that we had coming out of FY '26 to $78.3 million. We will have cost reductions, about $6 million sitting on top of that coming into an FY '27 run rate. which will then obviously be impacted by inflationary outcomes into FY '27. But we do have further synergies from OneVue and the technology restructure that will impact into FY '27. What we do see is that 32% margins that we see on the left-hand side of the page for H2 '26, maintaining and then trending upwards into FY '27 from those synergies, we'll see come through.

[ Rand ] then I think your contemporary platforms that have reported have already made some commentary around the first 7 now, probably for you guys 8 weeks of the year in terms of disflow momentum. Obviously, things are a bit challenged in terms of some uncertainty around tax environment and tax structures and things are you seeing similar trends to that, which has been recorded by hub network. .

Nick, not what they said. And you know Mali get into flow reporting more often than quarterly I'm happy with that cycle. I'm not going to disagree with the observations in the market, of course, that's reality. But we've entered FY '27 coming out of FY '26 with momentum that we were happy with, not totally happy, we would always like it to be faster. But nothing's happened to cause us great concern about the prospects for continuing to grow the business strongly over the next few years. .

Your next question comes from Tom Tweedie with MA Moelis Australia.

Just firstly, a follow-up on Nick's question to revenue margins going forward. You called out sort of a return to normal. And I just want to unpack that a little bit, when you say return to normal -- we don't have a huge amount of full year data since you repriced SMAs. So I'm trying to get a sense of where do you mean by what's normal on an annualized basis? And sort of what sort of timing should we expect for those balances to come down and then return the revenue margin to this normal state? .

So it's a good question. What we would expect to see is FY '27 to continue around that 27 basis points for the majority of the year. and then start to trend up towards and into FY '28 as those account sizes start to normalize through the back end of the year, particularly with where we can -- where we can use our platform technology development to work into other segments.

That's helpful. Just want to touch on depreciation, amortization and tax. Obviously, had a fair bit of influence on the underlying NPAT result. Is this a new sort of level of depreciation and amortization schedules and going forward, how we think about that given the internal capitalizations -- or what sort of cadence should we expect there?

Yes. So we did have a higher depreciation. As you'll note, a large part of that, that $5.8 million was related to a one-off write-off of depreciation for the old platform development that hadn't been put into you. Where we see depreciation going forward through FY '27, we will do some advanced acceleration of depreciation for the legacy platforms but going forward, once the legacy platform is fully depreciated, we would expect depreciation to come down given the level of investment that we're working through. with the new Technote and technology platform is based on that lower cost base after the $9 million savings through the year.

Perfect. And just 1 final one. With the new technology or the new superannuation platform you're planning on launching in FY '27. Just recall, when we launched the new Spectrum platform, we had a sort of slightly elevated marketing and launch costs for a half for a period. I just wanted to see that we should expect any sort of one-off temporary step change with costs launching that new platform and whether that should be sort of second half skewed or how we think about that?

Yes. That's a good kicker. And I would expect that we will make an investment in the launch. We were very happy with the that the launch events around spectrum went, and we think that certainly helped the momentum hitting the market pretty hard. And this is every bit as exciting for us is the launch of spectrum. So I would expect that there will be some elevation. But I don't expect it would be any more than what we had in terms of the elevated marketing spend around Spectrum. We learned a lot from that. We -- that was very well managed in my view by our team. And so we've got some good lessons about another big event for the adviser community. .

[Operator Instructions] Your next question comes from Lafitani Sotiriou with MST Financial.