Qualitas Limited (QAL) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Qualitas Limited FY '25 Results Briefing. [Operator Instructions] be a presentation followed by a question-and-answer session. I would now like to hand the conference over to Andrew Schwartz, Group Managing Director and Co-Founder. Please go ahead.

Good morning, everyone. Welcome to Qualitas 2025 Full Year Results Presentation. I'm Andrew Schwartz, Group Managing Director and Co-Founder. Joining me today is Mark Fischer, Global Head of Real Estate and Co-Founder; Kathleen Yeung, Global Head of Corporate Development; and Philip Dowman, our Chief Financial Officer. Before we begin, I'd like to acknowledge the traditional custodians of the land from which I'm presenting the Wurundjeri people of the Kulin Nation. I also acknowledge the traditional custodians of the lands from where you are participating today. We pay our respects to their elders, past and present. I'll now turn to the agenda and the presenters. Today, I will start with an overview of our performance and key highlights for the financial year. Mark will share insights into the market and our Funds Management business. Kathleen will provide an update on our ESG highlights, and Philip will take you through our financial results. Finally, I'll conclude with an outlook for FY '26 before we open for questions. Let's now move to our results. I'm pleased to report that Qualitas has delivered another strong full year performance. We achieved a record growth and margins in our Funds Management business. Importantly, we delivered these results while continuing to invest in our business. In FY '25, we delivered record annual growth in base management fees of 31%. This was our highest since IPO, and this was supported by strong fee-earning FUM growth. We achieved a record funds management EBITDA margin of 52%. This reflects strong credit funds performance and balance sheet efficiency. We achieved a 9% balance sheet yield, which drove a 35% increase in our principal income. We held $149 million of cash at the 30th of June. Our cash position provides ample capacity for future co-investments and growth initiatives, a significant competitive advantage. We improved our recognized performance fee pool quality with 52% from credit funds. We deployed $4.6 billion throughout the year. Much of the deployment was in the form of new mortgage investments to fund construction activities. As these investments further grew through the course of FY '26 given they are progressive drawdown in nature, it will be further beneficial to Qualitas earning higher management fees in future periods. We have increased visibility of large projects for FY '26 and beyond. We delivered full year normalized net profit before tax of $53 million. I'm pleased to report that this is towards the upper end of our FY '25 guidance and represents a 36% increase on FY '24. Our FY '26 net profit before tax guidance of $60 million to $66 million underscores the continuing growth and confidence in the momentum of our business. Overall, our FY '26 results reflect the strength of our business and the high-caliber team powers it. Moving on to the financial results and highlights. Slide 25 delivered strong top line growth across all key revenue categories. Base management fees and principal income have both increased by over 30% year-on-year. Performance fee revenue grew significantly on FY '24. This performance fee growth reflects a strong performance from our credit funds as we had anticipated. Funds Management EBITDA margin expanded to 52%, up 70 basis points year-on-year due to margin-accretive principal income and performance fees. This is a record margin for the business and a meaningful milestone in profitability for our high-performing funds management platform. Normalized net profit before tax of $53 million were up 36% on FY '24. Our only corporate tax is; the $20 million QRI manager loan. We continue to maintain a strong balance sheet. We ended the financial year with a cash balance of $149 million. I'm pleased to report that we have declared a final dividend of $0.075 per share, bringing FY '25 total dividends to $0.10 per share, representing an increase of 25% on FY '24. Shareholders should recognize that the dividend increase reflects our robust balance sheet and minimal debt together with our momentum for growth at Qualitas. We are pre -- and margin expansion we have achieved whilst at the same time, experiencing solid outcomes for our funds in our growing platform. Moving now to key operational highlights of our funds management platform. At Qualitas, deployment momentum continues. We expect the fee earning FUM will remain a key driver of growth and a leading indicator of platform performance. In FY '25, fee earning fund grew 28% to $8.7 billion. Deployment totaled $4.6 billion, up 9% on FY '24 with 75% in residential and 77% coming from repeat borrowers. As a reminder, in May, we shared a $5.1 billion pipeline update, which included a $500 million single check investment. I can confirm that this investment has now been incorporated into our current pipeline for FY '26. In addition to the pipeline, which Mark will talk about, we are also working on a number of co-investments with individual check size in excess of $500 million up to $1 billion. Committed FUM now stands at $9.5 billion. with additional capital and deployment not yet reflected in this figure. In our construction funds, we deployed $1 billion of investments based on the peak draw allocation methodology. This has now been utilized over the last 18 months. Mark will explain peak draw later in this presentation. But for now, peak draw applies to existing construction mandates and can drive allocation incremental to committed fund. Peak draw allows us to generate fee earning FUM in excess of committed fund and is highly efficient for our LP investors and Qual as manager. It provides us significantly greater capital than we would otherwise have available. Our management estimate is the peak draw methodology embedded in our construction funds has given Qual an additional $2 billion of dry powder over and above the $1.1 billion of conventional dry powder. Obviously, this is a very positive development for us. Mark will take you through peak draw later. Our embedded performance fee pool increased by $17 million in the last 12 months bringing the total unrecognized pool to $92 million, up 23% year-on-year. Capital flexibility is a key differentiator of our business. As deployment activates capital and drives fee earning FUM expansion, we remain well placed to pursue opportunities emerging across our core markets. I'll now hand over to Mark to provide further update on our funds management platform and the market we operate in.

Thanks, Andrew, and good morning, everyone. I'm very excited to say that we've delivered another strong set of results this period for the funds management platform. And what really stands out to me is the consistency of growth across all key earnings drivers which gives us confidence that we're well positioned to continue our growth trajectory. If I focus on a few highlights, fee earning FUM grew at a CAGR of 38% since FY '23. And 28% year-on-year, which provides strong forward visibility on our base management fee growth. Our invested FUM grew over the same period at a 23% CAGR and 22% year-on-year. And we do expect further growth in this during FY '26 as the construction drawdowns increase, which will drive higher base management fee revenue. If I move to our balance sheet usage, the yield on the balance sheet has doubled over the last 2 years, reaching 9.2% at 30 June, with $166 million drawn into co-investments and $109 million of undrawn co-investment commitments. This ongoing balance sheet flexibility will be key as we continue to scale the platform and also highly earnings accretive as that occurs. Finally, unrecognized performance fee pool is now 62% from credit funds, which is up from 47% in FY '24 and just 4% 3 years ago, which reduces the volatility in our performance fee revenue. If I move now to what sets Qualitas apart in the market. There are a number of key differentiators for Qualitas. Firstly, our 17-year track record as an alternative real estate manager has built a strong reputation that underpins some deep institutional relationships. We have our predominantly institutional capital base that enables us to prioritize quality deployment and a focus on stable fund structures. This is shown by 89% of our committed FUM being in long-duration vehicles, ensuring asset liability matching. Pleasingly, we've maintained our strong fund performance with 94% of fee-earning FUM on performance fee arrangements exceeding their hurdle rate. Importantly, in a more competitive market, our investment discretion and timely execution sets us apart in providing certainty to counterparties. Finally, we're focused on upholding our founding philosophy, what we call the Qualitas way. This means preserving our entrepreneurial mindset while maintaining uncompromising high-performance standards. All this together, our strong growth profile, shown by today's results validates that our focus on quality creates long-term value. I'll now touch on the current dynamic in the private credit market, where we continue to see a clear shift globally, where manager track record, reputation and platform quality are increasingly critical in attracting and retaining capital at scale. And the chart here shows that global private credit is consolidating around established managers who have that proven track record. So while more players may enter the market, capital is increasingly flowing to the trusted platforms. This is against a backdrop now where fundraising is stabilizing after slowing during rate hikes with average fund sizes now tripling as investors make larger allocations but to fewer managers. Importantly, for us at Qualitas, thematically, geographic diversification is accelerating. Capital is shifting from North America into Europe with Asia Pacific now emerging as the next growth frontier. Australia offers particularly attractive risk-adjusted returns in that regard and has relative stability and relative insulation from global volatility. Finally, this scale requires a demonstrable track record. This is where Qualitas benefits is we're a trusted real estate private credit manager with existing strong institutional relationships, shown by the fact that 60% of our fund investors have made 5 or more commitments to different funds. All of this just reinforces the value of track record and credibility in what is a structurally growing asset class, providing managers such as Qualitas with greater access to capital and therefore, deployment flexibility. I'll now move to what we're seeing in commercial real estate markets generally. And as we've entered FY '26, we started to see momentum in commercial real estate markets. The size of opportunity for deployment by Qualitas is a function of 2 things. Commercial real estate transaction activity, which feeds our investment loan and equity investments business and then new development commencements, which feeds our construction loans and equity investments. Right now, we're seeing transaction activity clearly showing signs of recovery for the investment space. By way of example, in the first quarter of 2025, there was a 41% increase in commercial real estate investment transactions versus the first quarter of '24. This is the strongest since 2022 and has signaled renewed equity investor confidence. As equity investors transact on buying and selling real estate, this leads to more investment opportunity for our credit platform. In the office sector, we think pricing has bottomed out, and we're now clearly in the recovery cycle. There's significant sale campaigns across the country on assets that we think will drive further recovery and create further deployment opportunity for us. in logistics and industrial, had 1 of the strongest quarters on record in Q1 '25 with a lot of the capital inflows focused on greenfield projects, which is leading to interest in financing opportunities for us. And at the same time, the syndicator model and private investors remain active in the retail sector, supporting deployment for us there. So whilst transaction activity has begun to recover as markets for traditional financing growth remains limited. This is creating significant opportunities for alternative lenders like Qualitas. What we're seeing here is this dynamic expanding our pipeline beyond residential into other commercial sectors, which I'll touch on more when I talk about the pipeline later. If I go now to the residential sector, specifically, the numbers continue to be compelling. Apartment commencements rose 34% in FY '25 across capital cities in the Gold Coast with over 28,000 apartments started, which is consistent with the signaling of the next development cycle. But equally, the markets remain materially undersupplied. Qualitas maintained its approximate 10% market share of this funding just under 3,000 units in FY '25. And as the next cycle continues to gather pace, we see upside potential for our participation in this. If I look ahead, we're very optimistic about FY '26 from a residential deployment perspective. The net overseas migration story remains strong. underpinning demand. Building costs have become predictable. We're now in a declining cash rate environment. And all of these things provide greater confidence to developers to commence new projects. Against this as well, we still maintain a significant price gap between detached houses and apartment prices, which we think supports ongoing apartment demand. If I move now to our deployment achievements and pipeline. In FY '25, we deployed $4.6 billion, which was entirely in private credit. And as we start the new financial year, private credit continues to dominate our pipeline. As at August, we have $2.1 billion of private credit opportunities under our control in the pipeline. And this is a 25% growth on our pipeline at the same time last year. Reflective of my commentary just earlier around the reactivation of commercial real estate markets, 40% of our current pipeline is in the nonresidential sectors. In addition to these pipeline opportunities and as Andrew flagged, we also have significant visibility on large investment opportunities beyond our controlled pipeline with transactions in excess of $500 million and up to $1 billion per transaction. In order to capture this ongoing opportunity that we're seeing in the pipeline over the medium term, we continue to invest in the platform with 7 senior investment team hires recently, many bringing decades of origination experience. We've also invested in new senior roles and functions including a Head of Transaction Management and General Counsel for the investment team and a Chief AI Transformation Officer. These functions aim to increase productivity and efficiency of the platform in the way we originate execute and manage our investment process. We're also excited that we recently welcomed a new CEO for Arch Finance, Michael Maloney, who brings over 30 years of experience with a background in building out structured financing businesses. In summary, our platform is exceptionally well positioned. It's underpinned by a scaled origination engine, deep institutional capital partnerships and a growing pipeline of high-quality opportunities. I'll turn now to net deployment and fee earning FUM. And our net deployment held steady at $1.9 billion, but follow-on investments are a growing share of our activity, increasing 19% of gross deployment in FY '24 to 54% for FY '25. These follow-on investments include upsizing of existing investments as well as projects that move to the next phase, such as a predevelopment land loan rolling into a construction loan or extending maturities of loans. Follow-on investments are important for us because they generate new transaction and base management fees at a lower origination costs. As we continue to scale the platform and development activity accelerates, follow-on opportunities will become more prevalent, supporting higher margins and sustainable earnings growth. The significant net deployment has been the key driver of our fee earning FUM. In FY '25, fee earning FUM grew to $8.7 billion, up from $6.8 billion in the prior year and coupled with an expected stabilization of churn in FY '26. This positions the platform for continued growth in base management fees. I'll now move on to further details on peak draw that Andrew flagged in his presentation. In FY '25, our peak draw allocation above our committed FUM reached $1 billion by year-end, up from just $100 million in FY '24. And if I break down what this means and why it matters, it's because construction loans are not drawn all at once. Instead, developers draw funds progressively each month as construction progresses and in large portfolios, such as the ones Qualitas manages, some loans are being repaid, while others are still drawing down funds. Rather than allocating capital based on total loan limits, peak draw allocation is focused on ensuring forecast invested FUM of the mandate is maximized to the pre-agreed peak draw limit but does not exceed it. This means the total deployed construction loan limit may exceed the committed FUM within that particular fund. This benefits our fund investors by improving their returns and optimizing their capital utilization and construction credit mandates from institutional investors are not considered fully deployed until it reaches its peak draw limit. This benefits us at Qualitas as well because we're in the same base management transaction and performance fees on the full loan limit, not just undrawn amounts regardless of whether capital comes from peak draw or committed FUM. So what this means is our fee earning FUM can exceed our committed fund in our construction funds. If we look ahead, we estimate around $2 billion of additional peak draw capacity in those construction funds, plus $1.1 billion of FUM not yet earning fees, which is reflected in our committed FUM numbers. This together gives us substantial flexibility to deploy new capital into opportunities while continuing to expand our investor base in the construction strategy. I'll now pass over to Kathleen to go through our progress on ESG initiatives.

Thanks, Mark, and good morning, everyone. When it comes to focus continues to be on a few key areas. At the corporate level, the First Nation's reconciliation remains a priority. Over the past year, we've advanced on our Reflect Reconciliation Action Plan or Reflect RAP to an innovate wrap where we're turning our learnings into action. Our Chartwell partnerships chosen by staff focus on new homelessness, youth mental health and children's health causes that really resonate with us. We're also deeply committed to building diverse teams. We believe that having a broad range of perspectives and experiences around the table leads to stronger decision-making and better outcomes for the organization. Governance and risks remain front of mine too. We regularly review our processes, including the composition of our Board to make sure we're keeping up with best practice and remain fit for purpose. On the investment side, our key initiative is helping borrowers decarbonize the built environment. Through our sustainable finance work, we're raising awareness with investors and encouraging lower carbon project solutions with our partners. And finally, we're especially proud to having selected as the only Australian private credit manager on the UNPRI's Private Debt Advisory Committee. This gives us a global voice on how private credit can drive outcomes set by the UNPRI. I'll pause there and hand over to Philip to provide more detail on our financial results.

Thanks, Kathleen, and good morning. I am delighted to report a year of record growth in our normalized net profit after tax to $37 million, up 36%. And reflecting continued strong earnings momentum across the platform. This growth was achieved through 4 core recurring revenue drivers. Firstly, as Andrew and Mark have highlighted, the continued exceptional growth in fee earning fund under management, up 28% year-on-year to $8.7 billion. This, in turn, drove a 31% lift in base management fees, a key recurring revenue stream. Secondly, record total deployment of $4.6 billion for the year underpinned the strong second half lift in transaction fees earned. Thirdly, there was a strong contribution from net performance fees contributing $8.1 million of net earnings, up from $2.4 million net earnings in the prior landing period. The growth in performance fee contribution is a natural consequence of rapid growth and credit funds under management. And lastly, earnings from our balance sheet investments also achieved record earnings of $31.3 million, up 35% on the prior corresponding period. These revenue drivers exceeded our growth in expenses, leading to a further modest expansion in our normalized group EBITDA margin to 51%, up from 50% in the prior current period. As a result of the strong growth in earnings, we are very pleased to announce a 30% increase in our final dividend to $0.075 per share compared to the $0.0575 per share final dividend last financial year. This underlines both the strength of our earnings and our strong financial position. Moving to our funds management result in detail. Looking now in detail at the Funds Management segment results. We achieved 39% growth in total funds management EBITDA reaching $55.9 million for the year. A particular highlight of this result was the 31% increase in base management fees, driven by the strong growth in fee earning funds under management. We achieved a 35% increase in the contribution from income on our principal investments. Largely through deployment, increasing the balance of drawn amount of those current investments. Our performance fee contribution was also up $5.7 million versus prior corresponding period, reflecting continued growth in performance fees earned by our credit funds under management. Overall, we maintained our Funds Management EBITDA margin, notwithstanding significant investment and new talent to grow our investment capacity. Corporate costs were also up by 25%, reflecting the investment made in additional office space in Melbourne in particular, and investment in a new data management platform. These investments not only supported this year's growth, but also strengthen our platform's capacity to capture more high-quality growth opportunities than FY '26. For you, our shareholders, this means recurring revenues are growing faster. Margins are holding firm, while our growth capacity has been expanded. Moving to our operating margin. Referring to the chart on the left of the slide, our funds management EBITDA margin, excluding performance fees, is a core operating efficiency measure with this steadily improving year-on-year since the IPO. This illustrates the scalability of our platform. The stabilization of our operating margin in FY '25 versus growth in the prior 3 years, reflects the timing of investment in drivers of future capacity and efficiency. These include more investment team resources, increased occupancy costs and a material investment in a new data management platform. Going forward, this investment is expected to be complemented by a strong focus on AI capabilities to further enhance our investment capacity without needing to scale head count as much in the medium term. Looking at the chart on the right of the slide, the key takeaway for shareholders is the strong growth in fee earning funds under management, driven by large new institutional mandates raised and deployed over the past 3 years. The proportion of construction deployment over this time leads to a lag in the growth in invested funds under management as construction loans invest over time. Internally, we focus on our top line margin being base management fees as a percentage of fee earning FUM, which is stabilizing at around 70 basis points as these new institutional mandates are now largely deployed. Moving to our principal income and balance sheet. As previously highlighted, our principal income grew by 35% to $31 million this period. driven by a near doubling in income from investments as we deployed more capital than to co-investments alongside our funds. As a result of higher drawn co-investments, average FY '25 cash balances were lower than in FY '24, leading to a small decline in interest earned on cash, while underwriting income remained steady. The Qualitas balance sheet remains strong with $149 million of cash and cash equivalents reported as at 30 June '25. Our end-of-period investments reported of $166 million are up by $46 million compared to June '24, underpinning our higher principal income in FY '25. Further growth in drawn co-investments is expected in FY '26 while still leaving adequate liquidity for underwriting opportunities in support of FY '26 deployment. Post balance date, we have also crystallized and invoiced 11.7 million of previously accrued performance fees with contracted annual cash performance fee payments now enlivened from 1 of our large credit mandates. For shareholders, our strong earnings momentum and balance sheet strength means we have adequate capital to pursue value-accretive opportunities, supporting co-investment and underwriting requirements while also sustaining strong dividend flows. I will now hand back to Andrew for his closing remarks and guidance statement.

Thanks, Philip. Before I move to guidance, I wanted to provide a brief update on our growth outlook. We continue to see global capital flows favoring Australia with investors attracted by the superior returns, stability and growth of the local market. Our significant international institutional investor base positions us well on this front. We see CRE momentum building, driven by lower rates, population growth and easing construction costs all set to unlock investment activity. At Qualitas, we're set to benefit from this with our deep origination network and large-scale capital. As a people-led business, we continue to invest in our people, focusing on core revenue functions to seize the emerging opportunities. Qualitas is very well positioned to benefit from these growth drivers and capture future opportunities. Now turning to our FY '26 guidance. As discussed through this presentation, we are well positioned for the year ahead. We anticipate that the reoccurring base management fees will continue to drive earnings growth in FY '26. It is with this lens that we've provided our FY '26 guidance. Net profit before tax between $60 million to $66 million and FY '26 earnings per share of $0.14 per share to $0.154 per share on a fully diluted basis. This excludes mark-to-market movements for Qualitas co-investments in the Qualitas Real Estate Income Fund and QRI capital raising costs. In making this assessment, we are taking a view on increased fund investments to meet undrawn construction credit, the timing and quantum of new deployment and our performance fee assumptions. This concludes the formal part of our presentation. We are now happy to take any questions.

[Operator Instructions] And our first question today comes from David Pobucky with Macquarie.

I think Mark spoke about the opportunities in office and logistics to a greater degree than the team has spoken to historically. I mentioned 40% of the current pipeline is in non-resi sectors. So I was just curious about dynamic in those commercial sectors and the risk profiles of each and perhaps what that 40% was a year ago or a couple of years ago.

Thanks, David, for the question. If I go back about a year ago, it was closer to 20% was nonresidential, and now we're sitting around 40%. So there has been a noticeable increase in what we're seeing in our nonresidential activity. And to your question of what do those transactions look like? They're typically 1 of 2 things. They're a recapitalization as values have traced downwards and people need to recapitalize to potentially get out of a capital structure that wanted to be at a lower gearing level than where we might be comfortable. So that's transaction type 1. And transaction type 2 that we're seeing is what I call transitional business plans on assets. So assets that need some refurbishment and repositioning, some re-leasing activity, where we're coming in, giving capital to the borrower to allow them to get through that and reposition their asset to hopefully capture the momentum that we're now seeing in the market. It's definitely noticeable in our pipeline. It's not an isolated transaction here or there. It's something that as we've invested in the team and expanded their capability and networks, we're starting to see more transaction flow. And as I said in the presentation, as markets are flowing, as people are starting to buy and sell commercial real estate again. We think we'll see more of that going forward.

And the second 1 is on deployment pipeline of $2.1 billion. You mentioned that Qual has gone a further $1 billion of opportunities in addition to the current pipeline. So I'm just hoping for a little bit more color around those additional opportunities if you can provide it?

Sure. So when we talk about the $2.1 billion of pipeline as at August, it's what we call controlled pipeline. So they are transactions that we are mandated on and either investment committee approved already or working through diligence on. When we talk about the others, they're in addition to that. So these are ones that we're working through constructively with prospective borrowers, but not yet formally in our control. And when we talk about those numbers, what we're highlighting is that there are multiple large-scale transactions. So there's one in around $500 million. There's one a little larger than that. And then there's a really large transaction around $1 billion. So it wasn't a single cumulative number. The point we were making was there's multiple large transactions that we're not yet in control of, but we're increasingly confident on that are in addition to the $2.1 billion of transactions that we do control at this point.

And just the last one for me. At the first half, Andrew spoke about what the team was seeing in Victoria around resi development and sales activity towards the back end of calendar year '24 and that was supporting your confidence in the backdrop. So I was just hoping for an update around what you're seeing in Victoria since then. And how is that trend looking from a deployment perspective? Is it intensifying given the tailwinds that we're seeing?

Sure. I think Victoria specifically remains one of the harder markets nationally for reasons I'm sure everyone understands. But that said, we continue to see the high quality, the top tier of private developers have the ability to attract presales to their projects and therefore, have the ability to commence new projects. So continue to see those that have that strong capability be able to do that, and we've been supporting them. A number of our repeat borrowers on repeat projects have been exactly that we funded perhaps stage 1 of a project now rolling into stage 2 because they've continued to get sales momentum. But what I would say is the general developer market at large in Victoria is not so blessed. And some of them are finding it a lot harder to get the revenue and presales required to commence projects, but certainly those that are the very well experienced, great operator counterparties that we like to deal with are seeing momentum back in Victoria. And certainly, as we look at our pipeline, we're starting to see that even more.

Great. Congratulations on the results.

Thanks, David. I might just add one thing to Mark. Mark's comments, although he did really already say is I do think Victoria amongst all the various states gets a particularly negative view expressed in the market. And I think Qualitas would say, the experience is relatively patchy in respect of what we see out there for those developers who are very well seasoned or been in the market for a long time. I think they are actually achieving great success in their various projects. And we're seeing that firsthand, either because we're involved in from a debt perspective or an equity perspective. So we do see quite significant amounts of sales going through. And I would say what they're capitalizing on is the fact that Victoria in our view has probably become the most affordable state. We've -- and previously, that title was probably held by Southeast Queensland, Brisbane, in particular, any more recent times given the demand that's been pushing into Brisbane. I really think it's now Victoria where if you're looking for the affordability play and the quality, you're most probably looking at Victoria coupled to the fact that you've got quite stable building costs in respect of third-party builders, which you also don't have that luxury in New South Wales and Brisbane at the moment. So I think that's sort of 1 category of developer. And then there's others in the market who have probably mispriced their stock at the moment or just the quality of the investment product that they're aiming to achieve is a fail on the market, and therefore, they're not really able to get the traction that they would otherwise get. So I think the best way I would describe it is it's not 1 market and it's patchy from what we see out there. But I'd say, overall, there's an element of market negativity that at Qualitas, we would say, is a bit overdone based on various developments that we're seeing where they are actually achieving some really good results.

Yes. I might just add one quick point as well finally, and it goes to geographic makeup of what we achieved in FY '25. And -- for the first time really in the business, around 50% of our deployment was in New South Wales market. Now historically, that's probably been closer to 1/3. So a lot of our focus and investment in building out our team in the Sydney market has really paid off for us as well, which I think has been a nice feature of our FY '25 results.

Our next question today comes from Edward Gane at Jarden.