Shine Justice Ltd (SHJ) Earnings Call Transcript & Summary

Good morning, everyone, and thank you for joining. My name is Alan Chan from Bridge Street Capital Partners, and I'm pleased to be hosting Shine Justice for their full year presentation. Today, we have Simon Morrison, MD and CEO, CFO, Robin Raj, and Investor Relations John George on the call. At the end, we will have time for Q&A. [Operator Instructions] Simon and Robin, over to you guys. Thank you.

Thank you, Alan, and good morning, everyone. Welcome to the FY '24 results. Alan let's start at Slide #6. And I want to open by taking you back to listing of Shine on the Australian Stock Exchange in 2013. Some core numbers for the company back then. We have revenue of $107 million. We were located across 35 sites in Australia and had about 337 fee earners in the business. Fast forward to 2024, revenue has almost doubled to just under $200 million. We have 51 offices across Australia and 2 affiliate offices in New Zealand, and we have 533 fee earners in the practice. A breakdown of some of those numbers across our segments. We have 403 fee earners in our first [indiscernible] business, which is the core of practice. We have 80 fee owners in our class actions practice, which is growing. And we have 50 fee earners in our adjacent legal services, which I'll come to in a later slide. At 51 offices as I've said, our market position. We are the #1 personal injury practice in Australia. We are the #2 class action brands in Australia. The breakdown of our revenues across those segments in FY '24, just under $150 million in the personal injury practice, $21 million in the class action practice and $29 million in the adjacent services. Let's move to Slide 7. And firstly, just a breakdown of what's fit-side those segments. So we'll start with the class actions and NPA segments. But the primary contributor there is our class action business, which we'll talk a lot more about in a late slide. Our adjacent services are super-annuation and disability claims, dust disease litigation, medical mega-line litigation and one family law practice. Our personal injury business comprises 4 key practice areas. motor vehicle claims, work-place claims, public liability litigation and abuse litigation. And we've run the core across 4 different brands in Australia and Shine Lawyers across the East seaborne shakers in Brisbane and bespoke union practice; and Stephen Brown and Bradley Bailey in the West. Moving over to the map, you can see we have a heavy concentration on the Easter Seaborne. We do have plans to improve our footprint, which I'll come to a bit later. We track how much we recover by way of damages for our clients in real time. And I can report to you that for the year-ended 30 June 24, since inception, we have recovered $8.8 billion in damages for 87,000 clients across Australia. Let's move to Slide 8. Thanks, Alan. I'll start with our [indiscernible] at Simple SHJ. We have 173 million shares on issue. As at 30 June, share trading price, $0.71 with a market cap of $123 million. A breakdown of our top shareholders in the company, myself and the other co-founders, Stephen Roche, at just over 50% of shares. 2 key shareholders, firstly, Fidelity out of Singapore have just over 10%. And i-Line partners out of Switzerland at just over 10%. Our staff hold 7% of the shares in the company and the remaining 23% is a mix of institutional and retail holders. Our Board is led by Graham Bradley AM, who we signed. He is a very prominent public company Director and Chair, together with directors, Teresa Dyson, David Bayes and Rod Douglas, Teresa and David have very broad experience in large public companies. Rob Douglas is a specialist in founder-led businesses. Our management team, Ravin Raj, our Chief Financial Officer. As we reported, I'd like to acknowledge, Ravin will be retiring from the company after 8 years of great service to shine. He has been a public company CFO for over 3 decades. And I want to acknowledge the enormous work he has done and shine, particularly the heavy lifting to reset our company for good things ahead. We have Lisa clean our Chief Legal Officer. She is a litigator in the practice of 25 years standing. She has practiced in all areas of the business and then in management roles for many years. Our Chief Operating Officer, Jodi Willy, Similarly, 25 years plus in the business, litigated in most areas and healthy key management roles. I'm the MD and CEO. I've been a litigator and a manager and have clocked up 36 years at Shine. I'll ask now to Robin to talk -- big I'll fees off on this slide rather than we can with some key financials. Let's go to Slide 10, thanks, Alan. And I'll just walk you through some highlights, Rod, we'll talk to more of the detail. I'll start with revenue on adjusted EBITDA. So both numbers were down on PCP. A fair chunk of that is to do with the reset work. We've been busy working on during the FY '20 full year and Rod may give some color on that. We had a very good result in gross operating cash flow at $51.8 million, a near record for the company, which we are very pleased about. We have announced a total dividend for the year of $0.055, a reflection of the very strong cash production in the company in FY '24 and again, a new record on dividend. Cash at bank is very strong at just a shade under $30 million, and we've had a good reduction in our debt in the consequence of cash production. So if I talk briefly to the key achievements, we'll start strategy. FY '24 as we flagged in '23 was going to be a year where we did some reset work in the business. I'll talk through that in a bit more detail. And I'm pleased to say we executed on those plans. We divested our non-core businesses, and that investment had a role to play in head count reduction and some revenue reduction in the FY '24 year. We decided to simplify the focus of the business in 2 main segments being the class actions practice and the personal injury practice and I'll come to those reasons shortly. So far as profit and cash is concerned, as I said, one of our best cash results in history, we delivered on our cost reduction program. We had a key focus on getting rid of some older cases that have been sitting around for a while. The good news is that was good cash in the door in the financial year. We had to take some web right off to get those cases to conclusion. Finally, we've been working hard on improving the efficiency in the PI process to try and speed up the rate at which we convert it into cash. Across practices operationally, we resolved more than 5,000 cases in FY '24 for over $810 million in damages for our clients. We achieved some landmark results in firstly, Silicosis litigation. And more recently, Black Lung, we received a record judgment of $3.2 million in the dust diseases tribunal for coal minus offering from black lung disease, a first in Australian legal history. We achieved class action settlements totaling $171 million against 2 entities, Commonwealth government for the PFAS firefighting foam litigation and the Evans Dickson plants action. We settled a major class action against the Western Australian government for style and wages on behalf of our original workers for up to $180 million. That case is pending approval by the quarter. We got busy filing class actions in the year. We filed class actions against KFC, rest, Aussie Home Loans and through our affiliates in New Zealand, Toyota and the [ Edgecon ] floods class action. And finally, we're in the final stages of our preparation on the Ethicon interest application. The last step for us in is not running case. I'll now pass to Rod.

Thank you, Simon. Go to next page, Allen. I'll just run through a summary of the financial results. As Simon indicated, our revenue was down 12% to $198.6 million. Adjusted EBITDA was down 26% to $45 million, and adjusted EBITDA, however, was up 14% to $33.8 million. And similarly, net profit after tax was up 89% to $6 million. In terms of the adjusted results, there were 3 main items that were impacting FY '24. And they added up to $11.2 million as a group, Epicon and Boston billing write-offs, which we reported in H1. A fair value adjustment that we made on the M&A receive, that's in our balance sheet of almost $2 million and then as Simon indicated, we did do a fair bit of work in resetting the business, but that cost us about $1.6 million in the year. The tax rate, when you look at the tax for the year, it was up to 37%, and that was mainly due to the fact that the write-off of the M&A receivable is a non-deductible. When you look at employee benefits expense, we maintained the expenditure between FY '23 and FY '24, even though there were lesser fee earners and shared personnel. In terms of overheads, they were controlled quite well between the 2 financial years, notwithstanding a 3% salary increase across the board as well as increased costs from suppliers. And looking at the results on a segmental basis in the financial statements, you'll see that the PI segment reflects a 5% decrease in revenue and also a decline in margin to 21.7%. As indicated, this segment's revenue was largely impacted by larger write-offs that all in the strategy of improving cash conversion. But at the same time, we wanted to clear some older cases. This segment will see an immediate improvement in financial performance in FY '25, including EBITDA margin. In terms of the NPA segment, the results reflect a 28% decrease in revenue as well as a decline in EBITDA margin, which stood at 25%. Most areas behind in FY '24, including a drop in revenue in class actions, medical law, family law and loss recovery. Class Actions revenue and EBITDA margins was significantly impacted not only by the Ethicon in billing write-offs, but also from the loss of carriage from the Star Casino case as well as a couple of cases that were brought across through the ACA class action. Next page, please. In terms of dividend, EPS essentially mirrors NPAT, which is sitting at $0.035 a share. However, adjusted EPS is $0.083 per share. Investors will remember that there was no final dividend in FY '23 due to negative cash in that year. But the Board have decided to return to dividends given the strong cash returns in FY '24. The final dividend is $0.04 a share, making total dividend for the year at $0.055 per share. This payout ratio is 157% of EPS and 66% of adjusted EPS. The Board hopes to continue to increase dividends in the future as long as the business continues to pretty strong cash conversion. Next slide, please. This is a bridge version of our statement of cash flows. As Simon indicated, we have one of our best years in terms of GRC outcome. We produced $51.5 million of GOCF during the year compared to PCP of negative $3 million last year. Our cash conversion ratio on adjusted EBITDA is at 115%. And we use the cash in terms of capital management. We retired $70 million of debt in terms of the use of that cash. As Simon indicated, we believe we have now got to the stage where the business is more focused on cash conversion than we hope to produce cash conversion, 70%-plus in future years. In terms of the balance sheet, because of the good cash year, the balance sheet remains strong. Cash on hand has improved. We have had a drop in with reflecting the deeper focus on resolving cases. Our provisioning, the figure that you see for work in progress that is net of provisioning, and we carry provisioning of $9 million as of FY '24. And you'll see the decrease in borrowings due to the surplus cash conversion. Back to you, Simon.

Thanks, Rodney. Let's move to Slide 16. So I want to speak briefly to the reset initiatives that we first flagged in FY '23. And those initiatives were designed to underpin future growth in our EBITDA. And there were 4 parts to the reset plan. The first and primary partners to simplify the business structure and operations. Secondly, to focus on meaningful revenue growth and improved earnings by concentrating on the practice areas that we know that we can grow. The third part was to identify areas where we could remove corporate costs within business units. And then finally, expansion of our operating footprint across the Eastern Seaboard. Let's move to Slide 17 for a bit more detail on that at all. I'll walk you through 4 key components on the cost reduction side. We executed most of those initiatives through FY '24. They will deliver and build future cash savings of $14.7 million into the business and expense savings of $12 million. In the simplification of the business, we targeted our activities to focus on 2 major parts of the business moving forward. Being the personal injury prompts and the class actions and NPA practices. And the common element to both is they are practices that we know very well and that we know we can grow at scale. Thirdly, we retired on 4 businesses from the practice, and that included winding down on areas like commercial disputes, travel, stable litigation and family law. That work continues into FY '25. And then finally, we've been working on the expansion plans of the operating footprint for FY '21 and beyond. I'll refer back to Rodney just to talk to us a little bit about the debt profile.

Thank you, Simon. But when you review the financial statements, I made the point earlier that gross debt has reduced to $55 million from $72 million in FY '23. Debt increased in FY '23, mainly through a working capital line, and we draw on the working capital line because we had to because we did not produce much cash in FY '23. Net debt has reduced to $26.1 million from $51 million previous from FY '23. We have a long-term relationship with CBA. The average cost of debt is 7%. And from a debt equity ratio, we're sitting at 20.4%, well below industry standards. In terms of CapEx, the company is not doing too much CapEx at the moment. And any investment that we've made in CapEx and draw debt to fund that CapEx, you'll see a reduction in that debt component through 2025. Let's move now to Slide 21, I'll break into some of the segment activities in both PI class actions to NPA. We'll start with the first injury market overview. The data that I'm about to walk you through is publicly available in the Ibis world reporting. We'll start with the market share. As we've reported previously, it's a very wide open market in the first injury segment in Australia. Shine is the largest player at 9.4% of the Australian PI market. One of our competitors later on board is at 8.4% and another competitor, Morrison and 7.4%. That leaves just under 75% of the market occupied by other practices, which will form part of our growth plans for the organic part of the PI business. A breakdown of where that work sits is the second pie chart, so it's broadly broken into 3 areas: major accident litigation is just over 35% of that work. Work-place injuries comes in next step at 28%, a big apartment at 36.5%. And then other comprises areas like public liability, medical negligence and abuse, all practice areas that Shine prominently is involved in. We've moved to Slide 22, next time. So we'll just give you a breakdown of the last sort of 4 years, 5 years journey over some of these measurements. Across that period, we've averaged net revenues of circa $150 million plus with plans to grow it. Personal ending still remains the core part of the business, albeit the class action practice is experiencing very fast growth. Our strong emphasis in '24 was cash conversion and resolving aging cases. As I said, the upside was an increase in cash into the business, the downside. We had to let go some with and running off in the process. We will continue that practice of trying to get rid of the older cases. So we have a cleaner balance sheet moving forward. The short-term outlook in the PI business is to keep focusing on revenue and gross margin. And the final comment I'll make is that the data reflects some movement of business units over years. So for example, those who followed the company will know that abuse litigation previously sat in the NPA segment, but we've moved it into the PI segment. If we move to Slide 23. Thanks, Alan. So these are our growth plans for FY '25 in the PI business. Our marketing team are working very hard and restructuring to focus on file growth on a branch-by-branch basis as opposed through a central strategy to attract new work into the business. We've done a lot of work to reorganize our call center to improve both the rate at which inquiry comes into the business and the rate at which we can convert that inquiry and new cases. We've been working hard on strategies aimed at staff retention. We're not immune to turnover issues that many, many experience in other sectors. And so strategies imposed we have a profit share incentive scheme very tightly aligned to both cash and EBITDA performance. And we have an equity scheme for our employees and 154 of our people participate in that scheme currently. And the final piece of work is we've done some work on our capacity management to ensure that we have the right level of fee owners across the right business units. Let's move to Slide 24, Thanks, Alan. Now let's move to the medium-term plans for the growth of the [indiscernible] injury practice. And there are 3 parts to this plan. First is organic and the 2 areas we're concentrating on the file intake that I just spoke to and the revenue and market share opportunities. The second plan is to return to acquisition of files. It's a practice we had done previously but had paused. And this involves literally shine buying files from other firms for varying reasons, most of which is capacity can't continue to run the cases. We look for files that are at lower completion levels, giving us more upside on the completion of the work. We worked to a payback of about 2 years, and that now allows the cash to recycle through completion. So it's a good strategy for the company and one we want to accelerate. And then the third arm is business acquisition. We were more active in the earlier years of listing on business acquisition, is a factor we do want to return to. We do manage a portfolio of opportunities that we assess. As I said earlier, 75% of the market resides in what we call the Tier 2 and Tier 3 law firms. The payback metric that we work to for acquisitions is a 3-year payback. Let's move to Slide 26. Thanks, Alan. -- going to the class action segment. So again, a similar data for you to see over a 5-year period. The 2 things I'll call out in that data is what's embedded in that is obviously the retiring of some parts of the business as part of our reset activities and transfer some parts into personal injury. But the class action practice is really the major focus of this segment as we move forward. In '24, its contribution to revenue of 17%. And our strategy is to decrease that revenue. Let's move on to Slide 27, which is a high-level overview of our class action practice. The practice started in Queensland many, many years ago. We now have operations in New South Wales, Victoria and through our affiliate in New Zealand. We are the second largest class actions practice operating in Australia. It is the fastest-growing part of the business and one we're giving a lot of focus to a bespoke strategy of Shine is that we have formed working relationships with a number of United States small firms, where we can transfer U.S.-domiciled class actions into Australia and litigate them here. I'll move to Slide 28. Thanks, Alan. A little bit about the portfolio. So the book we have is designed very deliberately to have a wide variety of cases. So we are not exposed to any one particular segment too much. And the reason for that is to manage against any potential reform risk. Our pipeline continues to go. I'll come to that in a moment. And our medium-term growth will, in no small part come from our strategies in the United States. So looking at the current class actions and when we say current visa litigated cases in the court system at the moment. So there are 25 litigated cases running as we speak. There are more than double that number in pipeline coming through. So the breakdown of cases involve employment cases, which are largely wages-type cases. We have a strong emphasis on First Nations and social justice cases, and we're very proud of the results we've obtained in that area. We run shareholder class actions, consumer class actions, fin services, environmental and rate payer class action. Let's move to Slide 29. So I just want to talk a little bit about litigation funding, which has been topical in this country. So our strategy in China is to continue to work with litigation funders for 2 reasons. One is it enables us to grow volume into the business whilst de-risking our balance sheet at the same time and unlocking cash flow. The way we run with litigation funders is the work is performed and built monthly and paid by the fund so that improves the cash in the business. Just some metrics of the total number of cases we have undertaken. 74% of our cases are litigation funded 17% are Shine funded and reducing, and we have 9% in the new group cost order jurisdiction in Victoria. Typically, funders will pay us anywhere between 70% and 100% of the work required and typically 100% of the disbursements. Any work that we do on non-funded class actions as bespoke provisioning attached to it. So typically, we could carry anywhere up to 30% of the work in progress on a funded case, which gets paid at the conclusion of the litigation. And in some circumstances, we can get a 25% risk uplift on those fees. Let's move to Slide 30. Thanks, Alan. The Australian part action strategy is to continue to work with our litigation funders to growing that part of our business, expanding our footprint. Victoria is now becoming a very important part of the class action landscape, and we've established a Victorian presence with the senior lawyer running that part of our business. We want to continue to grow the class actions practice across the country and through our affiliate in New Zealand, where we see key opportunity. The U.S. strategy is a strategic intention for Shine to accelerate both what we call class actions and international mass tort. So these are U.S. originated cases already run by American lawyers that we can transfer into Australia with the assistance of U.S. law firms. So we've been working pretty hard the last 2 years to source and build up those relationships with the United States. Let's move to Slide 32 for the outlook. So China is what we call it a strong defense business. And what I mean by that is we are relatively viewed to economic cycles. So far as the outlook this year is concerned, we want to continue the strategy of focusing on those 2 operating segments that I spoke to, NPI-class actions. We want to accelerate organic growth opportunities. We are in discussions with U.S. litigation funders to assist in the in-source of that work. We want to keep our focus on expense management. Cash generation, albeit a fantastic year in '24. We continue to plan for future growth in cash generation in the business, aiming to a long-term target of 70% cash conversion. So for the year ahead, we have budgeted to grow in both personal injury and transactions. That concludes the formal presentation. Allan, we're happy to move into questions.

First question from Daniel Senan. With the reset year, we have aligned the business now and revenue close to double since IPO, where do you send them business in a number 5 to 10 years' time in terms of potential for revenue.

Yes. So clearly, the work that we've done in recent times has all been designed to get back to future growth of revenue, both organically and through acquisition, I would see much stronger rates of growth annually moving forward than we've seen in recent times. If you want to add to that, Rod.

I think just putting the last couple of years aside, the core PI business has been growing at an average rate of 8% per annum revenue, so I think in 10 years' time, you could see the core business doubling subject to the value of files coming into the business. And certainly, from a class actions point of view, we certainly want to be seeing with all the work happening in the U.S. and also in Australia, we'd certainly be seeing a doubling Costas revenue as it stands today, if not more, within 10 years.

Okay? From Daniel. More has the company named offices in regional centers -- how important is this as part of the marketing and client engagement? And could we see a consolidation of that footprint of time in an extended market position and brand awareness?

Yes. So let's deal with the first question. The strategy of Shine is to expand across the regions and strategy occurs for this reason. What we want to do is bring specialist lawyers into regional areas so that we offer a far better service for clients in regional areas that have what I would call general brand, we do have hubs in our metropolitan offices, but we see a key advantage for having specialist lawyers in the regions and don't see any great change to that strategy moving forward. In terms of consolidation, clearly, that's something we'll keep an eye on. But for now, we think the strategy for China is to continue to accelerate the regionalization program.

Next question. Can you provide a view on the fee productivity at present versus optimal? How much opportunity is there in the driving productivity over the next few years?

I get started, you can Look, there's 2 ways of looking at productivity. One is utilization, and it's something that we've been talking about for quite a while now. And what that really means is we want fee earners to be operating at optimal. And early indications are in terms of FY '25 out that the number of fee earners is down but we're actually producing more productivity, which means that utilization is increasing in the business. I think the business has reached a stage where utilization is on the improved. Simon mentioned earlier that we did a bit of a cabinet review and capacity review. And we're getting better at having the right number of people in terms of versus the right number of files and that's improving productivity organically. The third way of improving productivity is having more files coming into the business and employing more lawyers. So that's the best way we improving productivity. But I think in my mind, the real value is through the improving utilization.

Yes. The only thing I'd add to that, Ravin's covered that well, is that, so to answer the question, yes, we have an admin opportunity. There's no doubt about that. Recoverable productivity for me is the key. In other words, what percentage of that work in progress ultimately converts to cash is the ultimate objective.

Are there any other adjacent versus segments that may be attractive in addition to the company over time?

So for those who followed the company since we floated we actually did go on a diversification program for some years moving into other areas. More recently, we took the decision that we are better concentrating, as I said earlier, on areas we know we can run well and that we can scale. So that's certainly our immediate focus moving forward. That's not to say we won't keep an eye on opportunities that are coming. I made the comment when Shine first listed on the stock exchange that litigation will be around forever. In my view, it might look different in 10 years' time. But there will always be wrong doing occurring somewhere and there will always be the remedy of damages for that wrongdoing. So that's a watching brief. But in the short term to sort of near term, our focus is on those 2 areas that we've outlined today.

So can I just add to that. We've been changing the business to focus on those 2 areas, which is class actions and first lender. As you've probably noted, there are still some businesses that are left at what we just call NPA. And over a period of time, ideally for better visibility and better clarity. It's a good strategy for the business to move those businesses into PI. So moving forward, you'll have a clear PI business and a more clear class actions business in terms of the metrics that the business will provide to investors.

Next question. How do you see wage inflation and skilled labor availability looking to FY '25?

Yes, another very pertinent question and across many industries, not the least of which is ours. We post-COVID, we went through a period where competitors were offering significantly larger salaries and Shine had to compete in that market without making decisions that really put the business at risk. I think it's fair to say that, that pressure is starting to abate. There are strategies we've employed to combat that. For example, in the last 18 months, we recruited something like 13 or 14 lawyers from the United Kingdom. That's been a strategy of Shine for more than 20 years that we will source litigation lawyers out of that country. We do that for 2 reasons: finance time of common wall litigation. And so the skill levels of those lawyers tends to be very high. We typically concentrate on layers who are looking for a sea-change in use that phrase. So that's a strategy that works nicely for the business that we will keep an eye on moving forward. But I have to say the price pressure and the supply pressure has probably come off in the more recent times. Net debt has come down specifically in FY '24.

What do you think is a normalized level of debt that this business should carry going forward?

Yes. I think I made the point earlier that our debt went up from $55 million to $72 million last year, mainly because the business didn't produce cash in FY '23. And we used a working capital line during the year to fund the business. Given that we had a fantastic year, we've repaid that line. So that was a come and go line. So look, I think assuming normal operations assuming no new acquisitions, which we can't fund out of cash, I think gross debt can remain at sort of $50 million to $55 million would remain $50 million to $55 million for a while and then slowly amortizing from 55 down to 50.

Next question. It seems like the tonality of win is not going concern for investors that in. These reports are regularly filled with him once of adjustments, which is not a dealer forecasting further doubt. How have you seen forecasting been effective on what you've observed the data? Are you trending to forecast the view more concerns?

So let's break that into a few parts. Firstly, when it comes to the one-off adjustments, there are 2 components to that. A big contributor to those adjustments were a couple of legacy 100% self-funded class actions, an area that we've moved away from. So I think we can say with some confidence that you won't see a repeat of those types of things. The second part, which I talked about in an earlier slide was a deliberate decision to move off older cases and we did take some WIP reductions, which resulted in write-offs as a consequence of that deliberate strategy. And again, we have some confidence that when we look across our portfolio, that position is improving. In terms of how it affects our forecasting, we have a very bespoke model of provisioning aghast our work in progress, which is linked to real-time results. So if we do cater at the other end for increased provisioning when we need to on the balance sheet. So we're relatively comfortable that that's a... So I'll give you the metric, Alan, that we've used for provisioning is that it's almost 20%. So the work in progress that you see in the balance sheet is net of 20% provisioning that we've taken. So is a pretty large number, $90.4 million compared to our network. And so we believe that we're carrying out with provisioning and it's conservative and it's proven in terms of business than no window fee business that we have.

Just on the U.S. strategy. I saw in searching acquisitions in joist market or just partner.

So for now, it's a partner strategy. And the reason for that is the work that we're sourcing from the United States, in fact, Australian class actions. But we're tapping into the IP of our U.S. partners who run these cases in that jurisdiction. So it doesn't require any activity by our acquisition. Downstream, we will see how that develops, but we think the smarter and more conservative strategy we can adopt is to organically grow that opportunity for the business and will reassess downstream.

Question here. Does the Board believe that Shine is currently undervalued on the ASX. And you show any consideration of a share buyback to supporting investors.

So yes, Shine does believe stock is undervalued. And yes, there is consideration in respect to share buyback, it's a topic that's been discussed around the board table for some time.

A question from Ben Drew. How should we think about OpEx growth, including wages in FY '25? Are there savings from FY '24 initiatives to flow into FY '25. Other question. What changes in litigation funding are being made to avoid a Boston.

Yes, another good question. So the short answer is the litigation funding market has changed demonstrably. And I'll speak mainly to the Ethicon case because it's the oldest that case started back in 2012. There was a pretty well only one player in the lit funding market in Australia back then, which is OmniBridge then called IMF. And a decade on, we have a lot of funders in play. And particularly, we have international funders, large international funders that we work with. So Shine is working with key funders out of the United Kingdom and talking to funders out of the United States. So Shine's strategy is an Ethicon type case wouldn't proceed without litigation funding clearly to avoid the lessons we've land in that case.

Another cut from the revenue results of FY '24 for each segment, a fair representation or base to grow from in between 5? Or are there further with the right out expected?

No, I think there are a fair representation of a base to grow into FY '25. I think there's adequate provisioning we're carrying out it with provisioning to hopefully not have any further with write-offs impact on revenue.

If there's questions. Can you provide an update on a potential recovery of the disbursement interest related to mesh.

Yes. As I mentioned earlier, we're near the end of preparing the material the judgment at first instance was a very comprehensive judgment by his honor, raising a number of issues that we were to address. The team have been working diligently at those. So we are hoping we're near the end of that preparation for that application.

Can you expand on the recent changes in the employee incentive program? How significant is this in terms of staff turnover and cash conversion going forward in your view?

Very simply, the incentive program has changed almost every year since I've been with Shine. But I think we've got the formula right moving forward in terms of FY '24 and FY '25. There is a gateway in terms of being eligible for the incentive program in terms of EBITDA targets. But what we're now doing is that, the cash target, the person will get a higher incentive, the higher cash results they achieved. So the more cash you achieve, the bigger your STI will be whereas previously, it's been relatively flat. And so what we're saying is if you achieve more cash flow, your bonus will be much, much higher. It sounds simple, but it's taken a while to get there.

So on to you from Lindsay Adams. And does [indiscernible] have any plans for retirement.

I don't have many plans for retirement.

The popular class actually looks very strong. How much capacity is there in the business to take on new case from the U.S. lead generation strategy and start to gain remitting. Yes.

So one of the areas we are ramping up in terms of head count in 25 is plant actions practice. With the establishment of the Victorian arm of the business down, we are recruiting people moving forward for those opportunities. But like the other parts of the business, that's a capacity question we have to manage and make sure that we don't bring on too many cases and not have enough layers to run them. But clearly, there is there is a recruitment going on in that part of the business. Just a little bit of time.

Any further questions? Okay. That will be the end of the Q&A. So Rob, I'll give back to you guys for some long remarks, please.

Thank you very much, Alan. Thank you, everyone, for attending the call and we look forward to seeing people on the road show starting Monday morning. Thank you very much. Thank you. Bye guys.