RPMGlobal Holdings Limited (RUL.AX) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the RPMGlobal Holdings Half Year Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Richard Mathews, Chief Executive Officer. Please go ahead.

Hi, good morning, everyone. I guess this is our first of these sort of public presentations, so let's hope everything goes well. We've tried to sort of plan for it well. One of our shareholders at our last AGM suggested that we hold a public presentation. I don't think too many people would be that interested in us actually, but I think over 120 have registered for this the session, so hopefully we do a good job. So let me just kick off with the presentation. As you will see, the first picture is a golf course. The shareholders who know me well, I really like golf. Every year or every 6 months, I try and work out what I'm going to talk about in terms of the first slide, so we've got a golf course here. But this golf course is actually been rebuilt on reclaimed land from Mosaic. They had about 15 million cubic tonnes of sand. They end up building 2 world-class golf courses on it. I guess it was an illustration of just how you can take this reclaimed land and develop it in an environmentally responsible way. So they do have all the biodiversity. They really have worked hard at taking something, which was reclaimed and used and built something beautiful out of it. So that was the logic behind it for the people who don't -- I mean, think, what a strange thing for a mining services company to put on their first slide. And now I've got 3 other presenters with me today. There's myself. A lot of people ask how stable is the management team, so I thought I'd sort of give you a bit of a feel for how long these people have been with me. I've obviously been here for 11.5 years. Michael Kochanowski, our CFO is here. He's been with the company for 16 years. David Batkin, who is in charge of our software strategy, and Dave will talk to you in those software sections. He's been here for 10 years, and Phil Baudry, who runs our advisory business, very, very experienced executive within the industry, has been with the company for 19 years. So very stable management team. We all know what we're good at. We all know what we're not so good at. And we work very well together. So maybe if we go to the first slide, which is the infometrics slide. The company has been around for 50 years so -- and a lot of people are taking a lot more interest in us of late. But the business has been operating for 50-odd years. We're across all the different commodities and all the different mining methods. We do have operations all around the world. We have about 21 offices around the world, generally in most of the mining regions of the world. The one thing I would say about the solution that we provide, in terms of the software space, we really only deal with the Tier 1s and the Tier 2s. Software is very expensive in digitalizing business. Obviously, a little bit expensive, much more expensive, we think it's a better product, more innovative, more technically advanced. So it really is only purchased by the Tier 1s and Tier 2s. And the advisory team has a very, very strong reputation. So with the finances, they really only again work on the Tier 1 projects, the really top 5 profiles, projects. The really innovative in market, sort of edge projects, and I'll let Phil talk about that in this section. I don't want to spill -- steal too much of his thunder but very, very high reputation. That team really works with the Boards and the executive teams within the organization. So lots of geologists, lots of mining engineers, lots of ESG folks that really understand mining. We only focus on mining as an organization, lots of our products could go across the industry and lots of our skills to go across the industry. We really have focused on mining, and that's where we spend our time. So again, in the first half summary, people can read these things for themselves, so I'm not going to go through every word in every number, but probably worth highlighting a couple of things. That is our first half in the history of the company -- the best half in the history of the company, both in terms of revenue and profitability. And you can see that revenue steadily grows from that perspective for the shareholders who have been with us with our journey for quite a period of time. We're a pretty boring company now. Revenue just grows every half. Profitability grows every half now that we've done the transition from perpetual licenses to subscription licenses. And we finished that transition a couple of years ago so the operational and financial levers just -- obviously just chunks up every year. It's worth pointing out that we are a little bit second half weighted. And I'll talk a little bit about that when we talk about software. But compared against 6 months -- the previous 6 months with corresponding -- so 6 months, gross revenue is up 21%, EBITDA is up 89%, profit before tax,370-odd percent and net profit up 470-odd percent. So that operational leverage and net financial leverage that we've been talking about and everyone has been talking about for quite a period of time is really kicking in. Guidance, we've got a guidance. Everyone wants to talk about guidance. We just reaffirmed guidance. What was -- we upgraded guidance twice in the year. There's nothing different on this slide. We have sort of -- it nicely shows that financial leverage that's sort of kicking in. The one thing I'll continue to remind everybody about is that in our forward-looking guidance, we don't put in management incentives. We don't put those into it until they're likely to be achieved. And I know that shareholders will remember this, but they'll probably be -- if they are achieved, it will be on the last day of the year. Last year, we sold $23.5 million worth of software in the last day of the year. When we move to subscription pricing, we hope that, that would get away from that second half weighting, but it just hasn't. So of course, the good thing about subscription, licenses were signed on the last day of the year or the first day of the next year, it's irrelevant because there's no revenue going into the current year. So the relationship between TCV sold in terms of dollars and when is quite important. So we're reaffirming guidance. Obviously, the first half numbers came in pretty much just above guidance, so we feel pretty good about where we're sitting, where we're going. To talk about the software, a couple of things I do want to point out. We are an enterprise application, so when we got here even 5 years ago, we made the decision that the industry needed to go to enterprise software. The industry is really based on desktop software, so we were able to build the technology on the latest standards and the latest technology at the time. So we are really the only enterprise applications in the market. Lots of desktop products, but now for us, we felt that miners and the large organizations would want enterprise products. It's taken us a long time to build them. Obviously, I'll talk a little bit about execute, and it's been -- we've been building that for 10-odd years. And our EPF software, which is really the integration software that holds everything together and integrates within our products and third-party products, we've been building that for 12-odd years. So we like to think that from a technical perspective, we're well over here with our competitors, well ahead of anyone who's sort of trying to catch up. Since the time we've been here back in 2013, we spent over $100 million now, either in software development or acquiring solutions that fit into our products. So we've got a lot of products. A number of those products now, they reflect those standards in the market. We'd maybe talk about that a little bit later. Our simulation products, our financial products, our asset management products and the mobile equipment space are all really now to inspect those standards. So we're working with customers now to build those products out, and I'll touch base on that a little bit later as well. We've talked about the insights for the year. A couple of things we're talking about there. Again, as I got to mentioned on this slide, the -- ourselves sort of wait for the second half of the year. We got sort of 3 regions that we run the business in. We've got sort of the APAC region, Asia Pacific, Australia, Asia and that type of thing. Then we've got the Americas, so North America, South America and then we've got sort of African and European regions. Both the APAC and the EMEA regions have been growing flat out in terms of software in the -- their pipelines are the best I've ever seen them. I'll talked a little bit later when we talk about the outlook. But those pipelines have replenished after a very big finish to the year really quickly. And certainly, in the December/January period, the type of deals that are coming into the pipeline, and we're very excited about. A couple of years ago, I did talk about some of the larger deals we're working on, and then the shareholders only wanted to talk about those deals. So -- but I'd tell everyone, 6 months ago, we're not going to be talking about simply about big deals. I'm going to stick with that even though isn't quite sort of a bit summer. But we are doing that rebuild in the Americas. So one of the things about selling enterprise software, they're that obviously big transactions, but you need very experienced teams, because sort of got to explain exactly how the software fits into the customers' operations and where the value is for the increment ROI involvement. As you'll see on that slide, if you look down to that chart at the bottom, the Americas region was the biggest region in the company. We are rebuilding that. I think it can still be the biggest. I think it will eventually be the biggest again. And we've rebuilt the team. We've put in the product people that we need as well, so we're starting to see that pipeline build, but that's still a work in progress. So certainly, once that region starts firing again, we're running it with our best rig. So you've got great history with the customers and the product. So once that starts firing, we really will be on fire. So the other thing I'd -- but even then, software revenue increased 26% half-on-half, then a contribution in first 37% versus the first half of last year. Do want to talk about those 2 little points under the charts I'm sure some people are going to ask some questions about. So in the first day, you'll see, we talk about a customer who terminated a contract and paid out a contract. We're probably giving just a little bit of flavor in relation to that. Looking back on it, we probably should have highlighted it in the full year result a little better than we did. There was a deal which we signed to one of the Tier 1 miners back in 2021. It was an AMOUNT subscription. They had a big project going on. It was sort of -- AMT was -- powered it. That was one of the streams of the project. It was a couple of streams. The project went very well. The other stream was unsuccessful, so they canceled that project. Customer paid out the licenses on the subscription. They also have paid us for the development that we built for them for that project. So the relationship with the customer is really good. We've still got the [ GFA ] in place with them. Just this week, we've signed, with the same division, that we'll guarantee the development projects, 7-figure development project for another product. So there's no issue with the relationship. It can hold us accountable at fault for that termination. I actually think once they saw that other stream, they'll probably buy the software again, so that's not something that I'm concerned about. It's not something that customers are concerned about, and I think it's something that the shareholders shouldn't be concerned about. If you -- if that cancellation hadn't occurred, then you see that sort of linear line sort of flowing again and it would have been a 35% increase over the first half of last year and a 14% increase over the second half of last year. There's a couple of questions, I'm sure, was going to -- people are going to ask about that -- the $3.1 million that we received in the first half. What that was, was we bought a right back when we got to flex some software, bought a right many years ago to sell the FlexSim engine to the mining industry. It's an exclusive arrangement. During that time, we received some royalties, not a lot because it's obviously not the only simulation engine in the marketplace. But we then sold that right back to the original company for their $3.1 million. So again, a very good relationship with that company. The company is subsequently being bought by another organization. But we view it as sort of a one-off. It's not something that we do in the normal course of business. So that's really what that transaction related to. The one thing -- the other thing I would point out on a couple of things on this slide, when we have -- you'll see that again in that bottom chart, the second half was out -- or software, we do in the first half. The other thing I'd say is that the conversion rate from TCV to ARR is generally a lot higher in the second half. And the reason for that is maintenance comes up at the start of each year on the first of January for our customers. That's generally when they look at converting from a maintenance to a subscription license. So obviously, our ARR uptick is not the same, because we're already paying maintenance. Whereas at the end of June, customers that are buying there generally doesn't relate to maintenance or their ARR conversion rate is a lot higher, so something just to keep in mind. From a churn perspective, I should have probably put 2 numbers. That's 3% of revenue. But if you look at customer churn, it's about 4%. So again, very low. We've always said in the past, in the maintenance world, churn is really about 5%. Generally, when a customer closes down a mine, so we don't have those sort of churn rates that a lot of other companies do. Software is very, very sticky as long as you do a good job with a customer. They continue -- we've got customers that are still using the software after 35 years, so. The other thing I'd point out, I do want to make this point, because I always think we don't get a lot of credit for it, so I keep trying to make it. But sometimes it doesn't land, that we do have $144 million now precontracted, noncancelable software in terms of maintenance. Obviously, the maintenance is on a 1-year basis. But the subscriptions are on a lot longer period. So again, those are noncancelable and they're already contracted. So that revenue will flow into the business. The top of organizations we're dealing with, as I said earlier, Tier 1s and Tier 2S, so -- but I feel, like, there's credit risk associated with those. That's already banked. So when you look at us as an organization versus other SaaS companies, Netflix and so forth, where you can turn off your license tomorrow if you really want to, it's not really the way our business works and most of the contracts are 3 to 5 years. So that really will flow into the business, which obviously is quite lot of stability in terms of knowing what you're going to do and what the revenue is going to look like from profitability. I'll just touch a little bit on the mix. Obviously, in a 6-month period, the mix can flow around quite a bit, and you'll see that those top 2 pie diagrams, the one -- a couple of things I would point out in the top right-hand pie up, the raised -- suite, you'll see operations. Operations is XECUTE. As I said earlier, we've been building XECUTE for about 10 years. It really is in the mining operations space. So we made the decision early on to sort of see that when we're in scheduling, rather than move left to mine design, we'd move right into operations, so we felt that there wasn't anyone in that space. And we started -- we were able to use the brand-new technology and multi-user technology and gaming technology and so forth. I think -- keep an eye on that number. I think you'll see that number continue to go up. Half-on-half, that product is a product that's really the only go-to product in mining operations, really competes now against internal systems. Obviously, it takes a lot of time to build out the product, like, everybody saw the quality of their product quite early, but couldn't really buy, because it just didn't have enough functionality and care for enough of the mine, but it really is starting to narrow. And I think I'd say in the outlook, coming to effect those standards, the Tier 2s. And certainly, when you look at those nameplate customers in that execution space later in the presentation, they're always key customers. So I'm very, very excited about that product. It feels like it's time has come, sort of that reflect those standard for the -- seek Tier 2s now, and we've now started the part of that product in the Tier 1s of the 5 biggest Tier 1s in the market. Two of them now purchased the product for a couple of their mines and implemented it and they'll start looking at expansion. And 2 of the other ones were following the product in there as well, so I think time is going to count so keep an eye on that one. Some people will look at asset management and go, "Gee, that's low compared to what you've done in the past." The reality is that those deals are a lot bigger. There's less of them and a lot bigger, so. And generally, they sort of flow in the second half of the year as well. The other thing I'd point out is down in the ARR by commodity, bottom left. I just want to point out that OEMs and contractors -- I don't want people to lose sight of when we bought AMT, for example. That was a product that was used by the big global mining OEMs. So to come to achieve, they all use that product as an asset management product. 60%, 70% of all the equipment -- mining equipment out there uses that software. They're a big part of our business, the OEMs. They also have a big part of the miners' business, and the mining contract as well. So the big mining contractors, we really need to control their costs and really understand their margins. Generally, they all use AMT as well. The OEMs also use our simulation products, so SIMULATE and HAULSIM. They all decommission their own systems. So when I said earlier that simulations really reflect those standards, certainly, they reflect the standard for the OEMs and the contractors, but also, they're starting to become the standard for the miners. In terms of the ESG space, we've built in battery technology in simulation products quite early on, and it now it's got hydrogen as well. So as companies are looking at going forward and understanding the [ de-cap ] that product naturally incorporates all of the newer technology and the new innovation. So just worth pointing out, I think, those 2, how close we are with the OEMs are important for that and the mining contractors. I think you'll see that execute, our products start to flow more and more. I might hand over to David Batkin to talk a little bit about some of the software highlights. Over to you, Dave.

Thank you, Richard. So the Tier 1 miner there who signed a significant deal for a 5-year subscription to products they've been using for a while. So that's sort of an affirmation of the value they're receiving from the product. But we've also been invited to participate in a global procurement process with another one of the Tier 1 global miners. And we have a global framework agreement already in place with that miner. That's a new GFA in the last half. So we feel that we're well-positioned in relation to those opportunities. The large mining company in the UAE, we're seeing a lot of activity in the Middle East. We sort of feel that this is being driven a lot by the infrastructure spending that is going on there, and acquiring companies, especially have been investing fairly heavily in our products in that region. And a customer there has made a 7-year commitment to AMT. Some of the smaller products like EnviroDataVault, one of our more recent acquisitions. We made a very significant sale there. It was approximately -- it's larger than 10x anything that had previously been sold at their company. And it's really, I think, shows that we can take these products and put them into our enterprise sales team and substantially increase the size of the transactions and sales that we make on those products. Pleasingly, we also had a very significant sale of MinVu, which was an acquisition several years ago, and it's used by Tier 1 miners to really understand and report what's going on in the business operations on an hour-by-hour basis in the mining -- in the mine. We've also released the open pit design tool. So we talked about a product we have been building with a partner over in Europe. It's a very large company there. That product has been released to them for testing. They're on the third version of that. We've also got that product in the hands of a couple of customers who are piloting it in the South African region as well. On AMT Mobile, we had a significant customer there go live, Tier 1 miners using AMT Mobile as well as a major OEM in one of the largest contractors that we have in our customer base. Lastly, sort of ShiftManager. Again, another acquisition 4 years ago. And that's now live in probably one of the largest underground coal mines here in Australia. That project has gone very well, and we're looking forward to working with that customer. Back to you, Rich.

Here, we're talking about those -- I guess, those 2 new development arrangements. This is something which is a little bit new for us. So we've been -- we sort of started a while back where a customer really wanted 1 specific enhancement, and in their words, we talked to them about it and it wouldn't be in our pipeline. We said, okay, look, you pay us for it, and you -- they're going to commit to a whole bunch of software in the future, then we'll look at it. And we started doing that a little bit more and more over the last 12 months. We've seen this do pretty large agreements. I sort of referred to one earlier, which was like a 7-figure agreement where there are some specific software they need built -- not a lot, but a specific software that they need built just to cater for their environment, and we've agreed to build that for them. They'll pay us for that. And then assuming that we do a good job of it, pretty straightforward, then they'll look at committing to the software going forward. The key thing out of that, I guess, is that we own all the IP. They really get access to it first. So a very big one for an XECUTE that we're working on with a Tier 1 miner, and we got another really large 1 for Tier 1 miner in relation to AMT as well. We take those as really good signs that they -- oh s***, I'm not supposed to be talking about the big deals, so scrub that, you didn't hear anything. But yes, we think that is a really good sign. And usually, obviously, the 5 is successful and we go forward on that basis. Sorry about that, [ Rob], sort of late. In terms of the other one probably worth touching base was fleet optimizer. We announced that sort of 6 months ago and we're making pretty good progress. They offer versions out now as well, so it's starting to be tested. Really is a nice little product once we've got an explanation and we can constrain our production by tracks. We think that'll be a -- become a no brainer for people who are running new mines. If I talk a little bit about the product adoption. I know I said it before, but those -- in the execution, that's all XECUTE products. Interesting that you'll see in asset management and design, they're both really big quarry companies, like, huge quarry companies. If you get on the web and have a look at how big they are, they are massive. And of course, quarries have the same issues that miners have. They just do it a little bit differently. And obviously, the quarries -- some quarries will be pitch -- a bit smaller than big miners. But the same issues that the miners has got in terms of AMT and asset management and simulation are exactly the same. Interestingly, that [ Emirates ] is actually helping us build the open pit design, which is quite nice because open pit designs are probably a little bit more simple than Rio or BHP or Glencore and so forth. So it gives us the ability to sort of build and get it right and expand it over time. But I think some have got -- quarries are becoming a bigger part of our business, and obviously, with the world, more and more construction, it's a good space to be in. The other thing I'd point out, and I had mentioned before in terms of the simulation, would pretty much affect the standard, one thing I would point out is Bailey . It's still -- probably, of the big, big boys, that's the one customer that we probably haven't as much penetration, so it's great to see us stand to work with the Bailey guys. And the first that came up the rank was simulation. And hopefully, mine planning will be the next one. Now we're halfway max, I'm trying to leave some time for questions, so I'll hand over to Phil Baudry, as I said earlier, Phil has been here for 9 years. Very, very respected gentleman in the advisory -- mining advisory industry, flies around the world. He spends a lot of time with the bankers in London and the bankers in New York. Anything which -- if it's a big important project, Phil and his team are boarded work on that. Pretty much almost all of the stuff is confidential. So when I said "Phil, can you put me a slide together of your highlights." He goes no at that. So he usually doesn't tell me what some of the stuff he's working on because it's so confidential, so just being conscious of that. So when you go, gee, he hasn't told me many clients' names or M&A transactions that are happening or who's doing what to who, just keep that in mind. So Phil, I'll pass over to you. Good luck. This is the first time he's set in front of the investors, so I know he's probably a little bit nervous. Over to you, Phil.

Thank you, Richard, and thank you for the opportunity to update everyone on the Advisory division. I thought as a starting point for those that may not know what advisory does, we're a technical in the advisory firm composed of geologists, mining, processing, infrastructure, mechanical engineers, financial specialists, environmental and social experts supporting some of the world's largest miners with a study of their projects as well as supporting the leading natural resource finances in their investment decisions. As Richard just alluded to, as much as I'd love to put a slide deck together of all of logos of the people we work for, I just can't. So don't expect to see that in this presentation. The nature of the business means that our trusted relationships with globally significant miners, investment banks, government funds, EPCMs and off-takers means that our teams are working on projects in over 40 countries at any one time, exposing us to some of the more exciting new technology and projects that are actually under development. It's certainly been a busy time for the mining industry as it rises to the challenge of the green transition and all areas of our advisory division are being the forefront of supporting some of that activity. Looking at this infographics, while focused on the top line, which have changed the most in this half, we are engaged on a very large transaction in other areas of our service lines. So expect those bottom numbers to change materially in the coming 12 months. One of our key growth areas in advisory has been in support of miners in securing debt financing from a variety of lenders, and our PM is just a decline in raising over $12 billion of debt financing over the last 10 years. With over $3 billion raised in the past 6 months alone for new projects under development in Australia, Europe, Burkina Faso, and Mexico. We're active across 31 vendors projects globally. We're doing the initial technical and ESG review for the financiers, while monitoring the construction and ramp-up of the projects, which typically results in 5 to 10 years of recurring consulting revenue through to the payback of the loan from the mining company. Our support of the world's energy transition is becoming one of our main growth areas across a number of our service lines. Our lenders engineering team are currently supporting clients, with raising debt financing for $8.2 billion worth of development capital for some of the world's largest battery and critical minerals projects under development in Europe, Africa, Canada and Australia. Our ESG team is supporting a number of exciting WAGs, namely Azure Minerals and Hastings Technology Metals, progressing their approvals for the development of their battery and critical minerals projects in that state. Our mining study team is completing large studies in developing countries for rarer filaments, nickel laterites and copper, which are all earmarked to support the energy transition. And on the M&A side, we are continuing to support a large German OEM and a number of battery cell manufacturers from North Asia with a number of due diligences as they continue to look to secure supply around the world. Interestingly, due to the robust requirements of some of these organizations in regards to sustainability reporting, we are gaining exposure to broader opportunities for both our technical and ESG teams to support these groups in longer-term supply chain monitoring and voicing roles. These are multiyear engagements and certainly looking forward to some of those projects. Moving to the next slide. Our 20% growth in sales has really been driven by a combination of the market demand aligned with the diversification of our service lines for our ESG acquisition. The growth in our lenders and battery and critical mineral capability, the equity market reporting that's associated with some of the Tier 1 miners M&A activity, which has been disclosed to the market in the last 6 months, and the growth in large mining studies, primarily in developing countries such as the Kingdom of Saudi Arabia and Mongolia, where we have partnered with some of the leading global EPCMs to deliver those projects. The speed of our sales growth is probably towards the top end of our capacity to deliver. And we're taking this opportunity to focus on high-quality clients that are aligned with our longer-term growth strategy. The need to deliver more projects as well as involvement with battery and critical minerals is requiring us to bring in more specialist skills, which is driving an increase in our third-party costs. We'll continue to look to onboard some of those skills, whether justified and continue to partner with that broader bench to give us the capacity to deliver some of these very unique projects from a technology point of view. Our ESG acquisitions have been further integrated into our advisory business in the last 6 months with the merger of our technical and ESG advisory teams into a single group in the Australasia region. This is allowing us to further support our clients across an increasing amount of service lines. While we saw a small pullback in ESG in H1 '24 due to a couple of our clients stopping work on their projects, we have already secured $1.2 million of sales in ESG in H2 '24 and have line of sight on a further $2 million, ensuring the team will be busy well beyond the coming half. Some of the exciting ESG projects we're involved with includes undertaking a decarbonization study for an ASX operator with assets in Queensland and WA. We're working with them to identify opportunities to decarbonize their operations, bringing together our combined engineering, processing, ESG and technology offering to identify opportunities for decarbonization. We're working with De Grey on the approval of one of Australia's most exciting new gold discoveries at Hemi in the Pilbara. We've been working with De Grey since our ESG acquisition in WA, and it's great to see this relationship with our clients continue to grow as the project transitions from development to soon becoming Australia's newest Tier 1 gold mine. And our ESG executive team is actively working for financiers globally across 22 mandates, where we're certifying 9 projects against key global lending frameworks, EC4 and IFC performance standards as well as local regulatory requirements in jurisdictions, including the EU, Canada, Australia, Mexico, Botswana and other developing countries. RPM has certainly become a global leader in support of the variety of finances investing in the mining, processing and refining of battery and critical minerals to support the world's energy transition, and this has happened over the last 2 to 3 years. As a flavor of some of the projects we are currently working on with the technical and environmental leaders engineer on the behalf of the Australian government fund for the development of a large rare-earth refinery aimed at diversifying the supply chain of these critical elements away from China. Either directly or on the behalf of financiers, we're working on 5 graphite projects globally, including 2 globally significant vertically-integrated projects that aim to mine, concentrate refined graphite into battery anode materials for use in EVs. RPM is supporting an emerging geothermal lithium brine producer in Northern Hemisphere to secure development financing. This is 1 of such 3 unique projects in the world, which have the potential to really significantly change lithium cost curve, if successful. I'll hand back to Richard, and go from there.

Thanks, Phil. Good work. Okay. So what I might do is just -- I want to just jump forward to the balance sheet. A couple of comments on the balance sheet is still worth making mention of. I noticed some analysts on the call that'd be interested to understand how much EBITDA flows into profitability. You'll notice here that we have, pretty much, amortized all of our large acquisitions. There's only a couple of small ones left. Standing about $1.4 million left to amortize over the next 4 years. We used up in the first half, that $4 million of our Australian tax losses. We've still got close to $44 million of tax losses left, so not going to be paying tax in Australia for quite a while. And I think everyone knows that we haven't paid dividends, but we've got negligible franking credits, which sort of helps explain there, I suppose, as well. So for the analysts in the room, we obviously have a very high cash conversion in terms of our business, in terms of software and EBITDA and advisory, but also pretty much has a good flow-through from the EBITDA through the profit after tax. So if I just talk now about the outlook. I think I've covered some of these points, so I'm not going to labor them too much. But with -- the pipeline really has replenished as we finished certainly better than I thought it would be. We have a very strong pipeline, some good deals in there, and we're still working hard in the Americas to build that business. Asset Management, AMT continues to go from strength to strength. It's really just flowing through now in terms of the selling. Customers are doing a lot of selling for us. That is one of the things that's interesting about the mining industry, customers are quite happy to talk to other customers about their success and failure. So as long as you have -- you're successful and you continue to do a good job for them, they will speak positively on your behalf. We've got some of the world's biggest miners at conferences talking about RPM software and how it has added value to their business, so that product really sort of is being grained in the industry the same as the simulation. But as I said earlier, that XECUTE product, I think it's -- now I've always been talking about an inflection point. And I'm not saying the inflection point's now, but it was like it's getting pretty close, so very, very excited about that. And again, the size of the transactions. We've got some products which have smaller transactions size just because what they do and which part of the business we're selling to, but XECUTE certainly addresses that operational execution, which no one else other than sort of internal systems, whiteboards and walkie-talkies really address that in quite the way that we do. We think we're taking market share in both the software business and the advisory business. I think Phil gave you a little bit of a touch for some of the projects that we're working on. It would have been lovely to have put a slide with all those customers on it, but I can't do that. The other thing, I suppose, probably worth finishing with is we continue to, as I said we don't pay dividends, so we've been buying stock for a long time now. As one of our shareholders pointed out to me just the other day, and we've purchased 5% of our stock back, so obviously, profitability is growing very strongly, but EPS is going up even faster. So it's a business now, which is pretty easy to understand. Our shareholders understand the subscription business, they understand the advisory business. The numbers -- our balance sheet couldn't be any cleaner, almost like cash box. And we just sort of just keep doing what we say we're going to do. Our strategy hasn't really changed from day 1. We focus on mining. We're trying to build great enterprise software, trying to do a great job for our customers at the high end in the advisory space and things continue to go over really nicely. So that's pretty much all I was going to talk about. So now see if there's any questions.

There's a number of -- the guys have sort of summarized them. There's a lot of questions that I think I've taken care of, really, like what was that 3.1 about. What was the 2.4 about.-- what was the -- how is XECUTE going but what else is on here. Capital allocation. Some of that is a pretty good question here. They said, you're doing your buyback. Wouldn't you be better to pump it into R&D? And anything out there to buy? So there's nothing to buy. We think 15 companies or something over the period of time. We -- in a lot of ways, we're just the last man standing. Obviously, back in 2012, 2013, a lot of the really good mining -- technical mining products got bought. Jincoms, Fincoms, Datamines, what was the other one that had a really good mine market applications. Anyway, I'll remember it in a moment. So we -- so they got purchased in some of our good competitors have been purchased in the last couple of years. So from a -- in a lot of ways, we're still last man standing, so -- and that'll continue. So just in terms of R&D -- so in terms of M&A, there's really nothing that we can see. Nothing. If there was something, we'd probably stop the buyback and look at acquiring them. We think our shares are undervalued. Obviously, if you do a comparison versus our peers, I think we trade about 1/3. So maybe that's just one of the results of being on ASX. But -- so we think it's a good buy, which is the reason why we continue to buy. And in terms of the R&D, you'll probably see the R&D tip down a little bit. If you look at that chart, quite early on in the presentation, one of the key things about building a product is when it's almost finished, you need to stop, because otherwise, the development team will just keep building it and building it. Once -- simulation, we don't missed a lot of money in R&D and simulation because it pretty much does everything that everybody wants. So we're quite focused in terms of our roadmaps, I suppose. So we're pretty happy with -- every now and again, the customer wants something, we have put on some people to build it. But we certainly don't see development spiking up or anything like that. So yes, we're pretty happy sitting as a Board that our shares undervalued, and we're happy to continue to buy them, so. We've got another one. Let's have a look here. Taking of office. Right. That's got nothing to do with me. We're a public company. So -- have -- we're a public company. So you're always for sale. But certainly, that's an issue for someone else in terms of company. It's not for us. We're just focused on doing a really good job for our customers and what will happen will happen. What else have we got here. That's a good question. So maintenance to subscription profile. So for people that don't know, maybe some of the people haven't been on the journey with us. In the maintenance and sort of perpetual license, you sell a license -- a one-off license, the customer can have that in perpetuity, right? Then what they do is they pay maintenance each year, which is about 20% of the license. And for that, they get a couple of things, right? They get any base fixes and upgrades to the software. They continue to pay that as we sort of view that as by 50%. And then they also get response on. So they can ring up, and we can sort of help them with the bug fixes and those types of things, right? Subscription agreement, it's a little bit different. So generally, for us the longer periods of time. One of the things about the mining industry, which is different from other industries is miners look a lot further out. An acquisition for them is a CAT truck. So they're thinking about 5, 7 years, how they're going to get value for their building, the plant. They're looking at 15 to 20 years. So we've obviously seen over time the term of the subscription sort of move from 3 to 5. And I think I mentioned in this presentation, we've done 1 for 7. And customers are now looking at our software and saying, look, it's really important. We're going to put it in and we want continued whatever and now that's going to be in place for a period of time. So -- but in the subscription, you also get the response line and the support given you and the upgrades and so forth, so. When someone goes for goes for maintenance or subscription, they'll only really go there, generally, to buy some more software or -- and they want that certainly in terms of time frame. Through the course, maintenance is impacted by CPI every year. That cost go up, maintenance goes up. So that's obviously a bit of a model because -- for us, because we love that certainty, but we think it's a better model for our customers as well. But we haven't pushed our customers there at all. And some of the people on this call would have looked and said -- a bit of surprise that maintenance in the second half was the same as last year as the same as the second -- first half of this year. Obviously, we sold some perpetuals last year, but we let people move when they want to from a TCV state of results, it's not a good asset, but it's not something that we're really focused on. What else do we have here? Getting interesting. So the price thing, I don't want to get everyone on the pricing, because I've been on the list and there are couple of competitors on here listening in. Welcome, guys, and good luck. But there are a couple of things which are interesting in terms of the suites. Simulation deal is generally a lot smaller, so average for simulation is something like $120,000. For a mining scheduling, it's like $500,000. For AMT is more at $1.3 million. U.S., it's more like $500,000, I think it is. These aren't exact figures, team. But there certainly is pricing power in the asset management. And so these are bigger product. XECUTE is a bigger product. So the more value you add to the customer, then generally, the more you can charge. So it's sort of not much more to say about pricing than that. Okay. So this is someone who asked the question about -- in terms of our R&D development, how much of it is build new products and how much of it is sort of supporting the current products? Now obviously, when we started on this journey 13 years ago, most of it was new stuff. Now we started with 4 desktop products. The first thing we had to do is take those desktop products and turn them into enterprise products. So Xact is still being used around the world. XPAC, which is still being used around the world. We take those to mine planning. XERAS is just XERAS Enterprise, so HAULSIM and SIMULATE those types of things. So it was much higher. I don't probably quite had these numbers exact, but it was more like a sort of 80-20, 80% of this new business -- new products and 20% of support. It's still -- I think most of it is new product development. So I wouldn't know what the exact figures, whether the bill of the cut, something like 40% would be -- what is it, Dave? 40% in terms of supporting the current applications, about 60% on new technology, a lot of new enhancements, a lot of new modification, new modules. Can you say that?

Yes.

And what about the technology platform change?

We -- when we moved from desktop to enterprise, we had to build a lot of integrations. So we've built our enterprise planning framework, which is the technology that moves the data between our products as well as between any other product in the mining that the miners have. But we've also been on a journey of products to the cloud, so a couple of years ago, there was a heavy investment and -- for sort of standardizing our tool set for the cloud. And then we've been migrating products one at a time across the cloud. So there's a number of them that are full cloud set products already. The rest of them are at various stages of moving towards the cloud, so there is quite an investment in the technology that underpins that move to the cloud.

Okay. So in terms of questions, I think we've sort of covered them all or have covered them in the presentation already so I didn't -- I wouldn't be adding any additional value to it, so we still got 10 minutes free, so we'll be giving you 10 minutes back. But thank you, everyone, for being on the call. Hopefully, it was useful. We committed that we'll continue to do it every 6 months. Hopefully, we'll get better and better. And thank you to everyone who listened in and all the best for the rest of the reporting season.

Thanks, everybody.

Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.