Spark New Zealand Limited (SPK) Earnings Call Transcript & Summary

Thank you for standing by, and welcome to the Spark New Zealand FY '26 results. [Operator Instructions] I'd now like to hand the conference over to Jolie Hodson, CEO. Please go ahead.

[Foreign Language] Good morning, everyone. Thanks for joining us today for Spark's full year results for the period ending 30 June '26. I'm going to provide an overview of our results and the progress we've made against our strategy. And our CFO, Stewart will then take you through our financial performance in more detail before we move to Q&A. So FY '26 was the first year of execution under Spark 30, and we're building momentum in line with strategic choices that we've made. So while the economic environment remains subdued, we refocused on core connectivity, returned mobile service revenue to growth and continue to simplify beyond the core. We strengthened the fundamentals of our business with further structural productivity improvements, improved free cash flow and net debt returning to targeted levels following completion of the data center transaction. Overall, we finished FY '26 within guidance and with a stronger platform from which to deliver improved shareholder returns in the years ahead. So if I turn now to Slide 4 and an overview of the results. To clarify our reported and adjusted results, our reported results exclude the data center business, which is classified as a discontinued operation in the financial statements. FY '26 adjusted results include the earnings of the data center business up until the point of sale, while excluding the $278 million gain on sale -- and in FY '25 removes the $71 million gain on sale from our Connexa stake and the $53 million in transformation costs. So I'm now just going to speak to our adjusted numbers as these provide the best year-on-year comparison. So adjusted revenue was stable at $3.7 billion with mobile growth offset by declines in legacy voice and digital services as well as 5 fewer months of data center contribution following the sales partway through the year. Adjusted EBITDA declined 2.4% to $1.035 billion, primarily reflecting some mix shifts in revenue with continued decline in higher-margin legacy voice, which now represents only about 3.2% of our overall revenue and the part year data center contribution. This was partially offset by mobile growth and $40 million in productivity benefits. Adjusted PAT declined marginally to $225 million, reflecting the lower EBITDA result and offset by a relative improvement in tax expense. Free cash flow increased 18.5% to $308 million, supported by lower cash interest and tax paid and improvements in working capital. The Board declared a final dividend of $0.08 per share, bringing the total FY '26 dividend to $0.16 per share and representing a part of 100% of free cash flow, in line with guidance. So before I get into further detail on our performance, I'll first provide an overview of our progress against SPK-30 during the first year. We set the strategy to refocus Spark on our core connectivity while simplifying and optimizing me on the core, with the ultimate ambition of delivering annuity-like returns and growing dividends for shareholders over time. Slide 7 shows how SPK-30 is starting to translate into results. First, we focused resources and investment where returns are highest with mobile central to the strategy. Active portfolio management delivered $462 million in proceeds from the data center transaction, returning net debt to targeted levels while our 25% retained stake provides shareholders with the ability to participate in future value growth. This focus on maximizing the value of our portfolio continues with a strategic review of digital services. Second, we're investing to differentiate and grow in a highly competitive telco market, we are focusing investment on the areas that matter most to our customers. Network leadership better customer experiences and stronger propositions that give customers more reasons to join and stay. Third, we're strengthening the fundamentals of the business. We're delivering structural productivity improvements, growing free cash flow, building employee engagement and maintaining a strong license to operate. This progress supports the overall premise of Spark City, capital and resources aligned to the areas of highest return, investment behind what customers value and stronger fundamentals to support growing shareholder returns over time. Slide 8 focuses on one of the ways we've invested to further improve our network experience during the year. with our satellite to mobile partnership with Starlink. Our terrestrial network goes 99 -- sorry, reach is 99% of New Zealanders across 4G and 5G. Satellite enables us to extend their reach to the edge and to remote areas, black spots, maritime corridors and places where traditional mobile coverage is limited or unavailable. There's been a lot of interest in satellite and its role within the telco category. For Spark satellite plays a complementary role while our mobile network continuing to offer capability and functionality beyond what's possible with satellite alone. The mobile network provides the customer density into performance and throughput required for everyday use, while satellite adds an additional layer of coverage and resilience. Spectrum is the key enabler of all types of network Spark holding management rights to 350 megahertz of mobile spectrum, including the largest holding of the sub-1 gigahertz spectrum. So on Slide 9, we overview our sustainability performance. which remains an important part of our license to operate. Our Scope 1 and 2 emissions are tracking 59% below our FY '20 baseline and ahead of our FY '30 science-based target of a 56% reduction. Net supported by our renewable energy partnership, a lower grid emissions factor and improved energy efficiency within the business. We've also achieved our Scope 3 supplier engagement target with 71% to spend now the suppliers that have science-based targets. Skinny jump now reaches more than 38,000 households and Spark Foundation continues to support more New Zealanders to participate in the digital world. So Slide 10 summarizes the process -- progress we've made against our SPK-30 ambitions in the first year. On productivity, we've delivered $101 million in annualized savings at the end of FY '26 and against our FY '30 ambition of $150 million to $180 million from the FY '24 baseline. Free cash flow growth is on track as is CapEx as a percentage of revenue and Stewart is going to provide some more detail on that shortly. We still have more work to do to achieve our EBITDA ambition. FY '26 adjusted EBITDA is in line with guidance and where we anticipated it to be a new one based on the current operating environment. EBITDA growth in future years will be underpinned by our ongoing focus on mobile growth, diminishing legacy products, portfolio simplification and further sustainable cost reduction. And that will support further progress towards our [indiscernible] commission of 11% to 13%, with a reported ROIC of 13.8% in FY '26 and adjusted ROIC of 8.4%, which was flat on FY '25. Finally, we made strong progress on our nonfinancial ambitions. Customer satisfaction increased for the sixth consecutive year. 42 employee engagement was up 11 percentage points. We maintained leadership and network coverage experience, and we're tracking ahead of our science-based target requirements. So now I'm going to turn to our mobile performance starting on Slide 12. Overall, mobile revenue increased 4.4% to $1.5 billion. That was driven by strong device growth. Mobile service revenue returned to growth, increasing 1.1% to $998 million as consumer and SME mobile service revenue increased 1.4%, supported by strong pay-monthly ARPU growth and further stabilization in prepaid connections. Enterprise and government mobile service revenue remained under pressure from community pricing, but the rate of ARPU decline slowed compared with the prior year and connections were broadly flat. Wholesale revenue continued to grow through Spark's owned messaging products and MVNO partnerships. So to understand the drivers of performance. It's useful to break down mobile into its component parts, so I've outlined that on Slide 13. In Consumer and SME pay monthly, connections were broadly flat, and the small decline that we see was attributable to the 3G closure while ARPU increased 3.6%, supported by plan and pricing changes and a stronger product innovation pipeline. That pipeline included New Zealand's first Kids Plan, roaming and satellite and IFP acquisitions were up around 15%, supporting higher ARPU acquisition and retention. In prepaid, overall connections were down 3.6%, with the rate of decline slowing from 5.2% in FY '25. We Around 1/4 of that decline was driven by the one-off impact of the 3G closure. ARPU proved resilient, holding flat, broadly flat despite intense price competition. And importantly, our New Zealand base, which accounts for around 89% of our revenue was up 1.1%. Skinny also grew around 2%, supported by the launch of the 52-week plans that offer greater value for customers who commit for a year. And in the enterprise and government, we saw further stabilization with connections broadly flat and the small decline that we saw attributable to low-value 3G connections. Positively, the rate of ARPU decline also slowed from $3.26 in FY '25 to $1.92 in FY '26. And we're pleased with the customer wins and rewins achieved during the half. So if I now move to overall mobile market performance and market share as outlined on Slide 14. The mobile market grew an estimate of 1.9% in FY '26 compared with about 1.3% in FY '25. I -- within this context, we materially improved our market share trajectory in a growing market. So while our ultimate goal is to get back into share growth, we are flattening the rate of decline moving from percentage point decline between FY '24 and '25 to a 0.5 percentage point decline between FY '25 and FY '26. We also saw stabilization through the year. Our mobile service revenue share broadly flat from H1 to H2, which gives us confidence that the actions we are taking are having an impact. Overall, we maintained our #1 position in mobile service revenue share. Slide 15 brings together the FY '26 activity that is supporting this momentum and the pipeline that we're building for FY '27. In FY '26, we launched satellite to mobile. We refreshed roaming and long-term plans. We launched the Kids Plans. We introduced 5G use cases that leverage our investment in stand-alone. We improved digital journeys and increased customer satisfaction for the sixth year running. Looking ahead, our FY '27 pipeline includes new pay monthly and device upgrade propositions, new reward and recognition initiatives, a refreshed wireless broadband lineup, a new MySpark app and the continued rollout of new store fitouts across New Zealand. The common thread across this activity is the same, putting more value into mobile, leading in network and delivering a great customer experience. So if I turn now to broadband and business connectivity on Slide 16. Broadband connections declined 4.9% and a highly competitive price-driven market. The decline was predominantly driven by fixed line technologies with fiber and copper accounting for around 84% of that decline in wireless about [indiscernible]. This mitigated the impact on the growing gross margin. And when combined with product cost management, margins increased by $1 million. We have a strong pipeline of activity planned for wireless broadband in FY '27 including a refreshed lineup to improve competitiveness and bundling with mobile. Business Connectivity revenue declined 9.9% to $327 million, impacted by the divestment of Digital Island in FY '25, the decline of legacy managed data and network products as customers migrate to model alternatives and the phasing of hardware sales in IoT. Pleasingly, the rate of decline in managed data and networks was half that of FY '25. We saw some large-scale collaboration migrations completed, and IoT connections grew 5.1% to 2.5 million devices. So I'm now going to turn to digital services, which we've identified as an area of the business under strategic review. And as such, it's useful to start with a summary of the business and the products and services included within it before moving to FY '26 performance. Slide 18 sets out the key characteristics of the digital services business. This division includes cloud, IT services and smaller adjacent products such as data and AI consulting and digital identity. Digital Services is a leading provider to New Zealand's B2B market and it has a majority recurring revenue mix, differentiated intellectual property and cloud, IT services and data and AI, and exposure to long-term positive tailwinds as businesses adopt cloud and broader digitization. It also remains uniquely positioned to support data sovereign storage in New Zealand as well as offering access to all hyperscalers. In benefiting from global partnerships with Microsoft emphasis, NHPE to support efficiency and access to global innovation. This business continues to have a leading market position, significant scale and a strong customer is help New Zealand business and government customers transition from traditional technology environments to modern cloud environments over many years. At the same time, as outlined on Slide 19, this part of the business has faced both cyclical and structural challenges. Within Spark, it's been the hardest hit by weaker business and government spending in New Zealand, and it continues to navigate structural change as cloud volumes migrate from private to public and IT services from legacy to modern alternatives. It was this content contributed to digital services being identified as beyond the core and SPK-30 with a strategic review, the Nick's logical step to assess how we maximize shareholder value from this part of Spark in the future. An external adviser has been appointed, and that review is expected to be completed in the first half of FY '27. I will note that there is no certainty that review will result in a transaction nor as to the terms or value of any outcome, and we'll provide an update at our half 1 results in February. So on Slide 20, we provide more detail on the performance of digital services during FY '26. So overall revenue declined 3.4% to $372 million, reflecting the ongoing shift from private to public cloud some softer IT services demand and continued migration from legacy services to modern alternatives. Within that, public cloud revenue continues to grow strongly at 20%, benefiting from long-term demand tailwinds. Private cloud revenue declined 12% due in part to the impact of a $9 million reclassification of services due to the integration of CCL. The remaining underlying decline was due to the industry-wide shift to public cloud. IT service management revenue declined 10.3% to $104 million, reflecting continued migration from legacy services to Spark's modern ServiceFlex platform and some subdued project work. We've been actively managing the cost base with labor costs reducing faster than revenue and CapEx needs remain small and steady, reflecting the capital-light nature of the services business. Other digital services revenue was $35 million, up 2.9% from FY '25, with improvement in gross margin driven by product cost reductions. So I'm now going to hand over to Stewart, who's going to talk you through our detailed financial performance, capital management and guidance.

Thank you very much, Charlie, and good morning to everyone on the call. So I'm going to pick up on Slides 22 and 23 I'll talk to them collectively and talk through those key financial outcomes. I just did want to pick up on explaining the differences between our reported and adjusted earnings again. So if I look at Slide 22, the FY '26 reported an EBITDA of $1,295 million, which is 3% year-on-year includes the $278 million gain on the sale of the 75% stake in the data center business. However, it does exclude the net earnings of that business until the date of that sale. It was classified as a discontinued operation. So if you drop down, you'll see a number of $13 million against net earnings from discontinuing operation there. So that obviously sits outside of EBITDA number than just above NPAT. So the FY '26 result, adjusted result is effectively the opposite. It excludes the $278 million gain on sale. But this time, it does include the earnings from the data center business up until the date of the sale. And if you just -- if you do the same drop down, you'll see that there is nothing against that earnings from discontinuing operation there in the adjusted that's included in EBITDA for the purpose of the adjusted earnings. Now looking at the comparatives for FY '25. So FY 2025 adjusted earnings does remove the $71 million gain on sale from the sale of the Connexa stake, and it also excludes the $53 million of transformation costs that we took in that year. So adjusted the comparison of FY '26 to FY '25 adjusted earnings therefore, provides the best like-for-like year-on-year performance comparison. Now if I go back to reported earnings, our tax expense was marginally lower in FY '26 as the gain on sale itself was substantially nontaxable. Just dropping down, business as usual, CapEx was flat at $401 million year-on-year, and it's 10.8% of our adjusted operating revenues. And reported NPAT was up 91.9% to $499 million. Just moving across to adjusted EBITDA that declined 2.4%. And this primarily and Jolie just talked about this, it primarily reflects the decline in digital services, the decline in legacy voice, which now represents only 3.2% of our overall revenue. And we had 5 fewer months of data center earnings following the sale of that business partway through the year. Adjusted net profit after tax was down to only $2 million as a tax expense was proportionately lower. So those are Slides 22 and 23. I'm going to move on now, and I'm going to talk to Slide 24, which is the first of 2 slides covering our cost reduction program and the progress that we have made on that. So if I go back to our first half results and when we talk to our first half results in February, FY '26 productivity benefits were weighted to H1 and that's primarily due to the timing of labor benefits falling with an H2 FY '25 and expected OpEx increases, which were going to come through in H2 FY '26. Now what I can confirm is that overall, we have ended the year with $40 million in productivity benefits year-on-year. Now this includes $35 million of sustainable product cost reductions and a net labor OpEx benefit of $5 million. And so when aggregated, this is in line with our narrowed target of $40 million to $50 million in a year. Now starting with our product costs. So that's the bar chart on the left -- the first bar chart there. Our product costs are over $1.7 billion, and we saw a $65 million net increase connected with product volume sold. That's primarily driven by higher sales of mobile devices and plans partially offset by lower sales of declining legacy products. Over and above that, we then delivered $35 million of sustainable product cost savings. And this is -- this came through a combination of better buying terms with major suppliers and also the benefit of exiting some legacy products as well as ongoing simplification across the group. So then if I go to the second chart on the right-hand side, in labor and OpEx, we've called out the net benefit of the introduction of our new technology delivery model, and that net benefit is $23 million. So it included $58 million worth of labor savings, offset by a $35 million increase in other OpEx, which are the costs of our newly established global partnerships. Now across OpEx, some of this net benefit was offset by general inflationary pressures. We also put additional money into market to support the brand and the growth of our mobile business during the year. We've incurred some additional -- we've incurred severance costs, and we have some one-off shutdown costs in relation to legacy products, such as 3G. Now these cost increases would not be expected to occur at the same rate in future years. Look, I'd also note that data center costs were $6 million less due to the timing of the transaction. I'll now go to Slide 25. And this really summarizes how the FY '26 result places us relative to our FY '27 productivity target of $110 million to $140 million of annualized savings, which was based on our FY '24 baseline. Now at the end of FY '26, we've now delivered $101 million of cumulative cost reductions. This includes $46 million in labor and other OpEx and $55 million in product costs. So we're confident we remain on track to meet that FY '27 ambition, and we expect to deliver that through 3 main levers. The first is additional labor benefits through business simplification and the implementation of some of the organizational structure changes, which we announced last month. The second is managing other OpEx to be broadly flat year-on-year. This means that we do continue to have inflationary pressure, but we will offset that with our cost reduction program. And I think similar to the savings achieved in FY '26, we will continue to deliver further sustainable product savings across that $1.7 billion cost base. Now if I just -- I'll move on now to our capital management framework. So this is Slide 26. So you may remember when we talked to you a year ago, we set out a new capital management framework, and we wanted to provide a timely reminder of the objectives of that framework and what we've actually done to deliver against that during the year. So the first one is the proceeds of the data center transaction and have enabled us to reduce net debt to that to targeted levels. And so they've returned net debt to -- net debt -- our net debt-to-EBITDA ratio to around 7, which is consistent with the metric for our current credit rating. Our BAU CapEx, the $401 million is flat on last year, represents 10.8% of revenue, and it's sort of marginally sort of very close to the midpoint of that sort of targeted CapEx to revenue ratio of 10% to 12%. In '26, we did have strategic CapEx of $66 million, but this purely represented CapEx that was committed as part of the data center transaction and was in itself reflected in the sale price of that business. And then objective three, around sustainable shareholder returns. So in line with guidance, the Board has declared a final dividend of $0.08 per share, which gives a total dividend of $0.16 per share, which is 100% payout of free cash flow. This final dividend will be 50% imputed. The Board has also determined that the dividend reinvestment plan will be reinstated for this final dividend with the shares issued at a 0% discount to those who elect to participate in the plan. And finally, reported return on invested capital was 13.8%, and that was versus 8.7% in FY '25. Again, this was mainly due to the gain on sale of the data center business. When this is adjusted from the result, return on invested capital was 8.4%, and which was broadly similar with the FY '25 ROIC when calculated on the similar basis. Now on Slide 26, we have outlined our CapEx in more detail. And this really shows how this investment is aligned to support our SPK-30 strategy through network leadership and resilience, better customer experience and, of course, efficiency through tech and AI. Again, BAU CapEx of $401 million was the same as it was in FY '25. Now if I start from the top, our investment in fixed network and international cables increased 40% to $88 million. So what was this doing? Well, this was delivering increased capacity for fiber and transport an IP networks to meet the growth in forecasted demand for data as well as ensuring that we're making ongoing in resilience improvements, which absolutely underpin our network reliability. The second part of this is investing in our mobile network, which remains critical to our success. We spent $140 million delivering increased capacity across 236 4G and 5G sites for our customers and a further 81 sites built across the country. This spend itself was actually 18% lower than FY '25, but that was largely due to the completion of the build of our 5G stand-alone mobile core. Now spend on IT systems and AI increased $5 million -- sorry, 5% to $155 million. Now this spend really enables us to sustain and license core business systems that underpin our operations. It also captures our investment in enabling automation and efficiency and expanding the use of AI across the business, and ultimately, this is to support our strategic objectives of better customer experiences and delivering greater productivity across Spark. Finally, there was about $18 million of other CapEx, mainly -- mainly made up of property and cloud investment, and this was down slightly in previous years. I did talk before strategic CapEx in the year is at $66 million versus previous guidance of $55 million and this was due to additional committed CapEx on the data center business being brought forward. But under the terms of the sale agreement was paid for by Spark, but then reflected in the final amount received by PEP and [indiscernible] of the transaction. So next slide I'm going to talk to is just -- is on free cash flow. And so we've reported of 18.5% growth in free cash flow, and that is supporting the payment of a $0.16 per share dividend. If I look through the key drivers, so there's a $75 million increase year-on-year -- sorry, the key drivers of $75 million increase or lower cash paid on interest and tax plus the release of cash from changes in working capital. The cash paid on tax was lower as we the prepaid tax asset, which will continue to provide further benefit to free cash flows that on land in future years. Now cash paid on leases did increase by $37 million. This was due to a combination of more mobile sites being built and also the fact that FY '25 included a $12 million one-off benefit from moving into the new corporate office. We would expect the cash paid for leases in FY '27 to be similar to that in FY ' 26. We also have a $56 million benefit from working capital changes in FY '26. This was due to a reduction in receivables and an increase in pay and the type manage payables. We did, during the period, undertake the transaction with Challenger for the sale of our IFP receivables. And so the $219 illion impact of the sale of IFP receivables been completely excluded from this outcome given it's the first year of the transaction. I'll now turn to the debt slide. And the risk of repeating myself, but the proceeds of 75% of the -- sale of the 75% of the data center business. has reduced our core net debt 35% to $899 million and net debt-to-EBITDA ratio was turned to around 1.7x as at 30 June 2026 based on the S&P methodology. As we've said before, we remain focused on maintaining a strong balance sheet and targeting metrics consistent with our current credit rating. You'll also note that our overall borrowing costs reduced in FY '26 on a like-for-like basis to 5.5%. And that reflects the mix of debt. We've drawn down versus trends in market where I know rates are generally trending up. The FY '26 rate in this case excludes the initial loss on the IFP receivables book to improve comparability. Of course, levels of gearing and interest cover, I consider remain very healthy. And so turning to the last of my slides. The one I'm sure there's a lot of interest in is around our FY '27 guidance. So I'll just run through this very quickly. So we're guiding to adjusted EBITDA within the range of [ $1,010 ] million to $108 million. And this really reflects ongoing mobile service revenue growth and productivity benefits, and we do expect that to be partially offset by the exit of the data center business during '26 and continued margin across services business and some ongoing decline of diminishing legacy products note in my previous comments that those are now a smaller share of our revenue. BAU CapEx is expected to be in the range of $350 million to $380 million. That's down in FY '26 as we benefit from the maturing 5G rollout, lower licensing investment in core systems and really taking a disciplined approach to where we invest our capital as we simplify the business. For free cash flow, we expect this to be between $350 million. The growth there, primarily driven by an improvement in EBITDA, the reduction in cash CapEx and the ongoing unwind of our prepaid tax asset. And then finally, in line with our capital management framework. It's expected that the dividend in FY '27 would represent 90% to 100% of the free cash flow. Now what we've also done here is we've included a target FY '27 dividend range of $0.16 to $0.18 per share. And really, that is in the interest of providing investors with greater clarity on the expected range of the dividend based on both the range -- the free cash flow guidance range and also the fact that we have a 90% to 100% range payout ratio on that free cash flow. So on that, I will hand back to you, Jolie. Thank you.

Thanks, Stewart. So to summarize FY '26, we delivered our results in line with guidance. We grew free cash flow -- we returned net debt to targeted levels and delivered the first year of SPK-30 with tangible progress against the areas we said matters most. We moved into FY '27 with strengthened fundamentals, a clearer strategic focus and a strong pipeline of activity designed to build value in mobile to lead a network and to deliver great customer experiences. Future EBITDA growth will be supported by continued mobile momentum, further sustainable cost reduction, diminishing legacy products and an ongoing portfolio management. Our ambition remains simple. It's better with Spark, we're determined to deliver more for our customers, our people and our shareholders. So with that, I'm going to hand now back to the moderator to facilitate the Q&A session now. Thank you.

[Operator Instructions] Your first question today comes from Leo Pan from E&P.

Stewart, this is Leo from Edmonton Partners. I think just to start with -- I've got 2 questions here. First one, on mobile, enterprise and Gov. -- you guys had that the rate of decline in ARPU has slowed this year. Can we like that to further moderate in FY '27 and -- and how is that environment looking in ENG broadly?

Okay. I'll take your first question, and then we'll come back to your second one. In terms of enterprise and government, we have seen that rate. So if you think back to between '24 and '25, we saw around a 16% reduction in service revenue that is -- so 16% so that dropped to 7% this year. What I would say, though, is most of the enterprise and government contracts are 3- to 5-year type contracts. It is a natural portfolio renewal, but our expectation that will be similar levels of change in FY '27.

Cool. And just maybe broadly, how is that competitive environment looking?

From a competitive environment, we're really pleased with the customers that we're winning and winning within that. I think we've seen a stabilization in the overall pricing competition components. So really more what you're seeing is the flow-through of some of those impacts across the portfolio. But you can see from the connections, we're broadly stable in that base and the ARPU reduction is really -- is improving as well.

Great. And if I could squeeze in just one more, please. In terms of the price increase you guys rolled out for Consumer Mobile at the end of July, what are you guys seeing in terms of churn? And like how should we be thinking about revenue growth against maybe some lost starts.

So I think from a point of view of the July price increase effectively on the bell because obviously, we do have 2 points where we notify the price increase and then we -- we've been pleased to see the levels of turn sitting below what we would have anticipated within it. The price increases on average were around $3 if you were to look at it per month for most of those pay-monthly plans. And I think if you compare that to, to the investments we're making in networks and the resilience and importance of mobile connectivity for our customers, I think it's a fair exchange.

Your next question comes from Ben Crozier from Forsyth Barr.

Just first one for me, just on the DRP. Can you just give us a bit more rationale of turning the DRP on versus, say, paying out a lower dividend. Presumably, a DRP you get a bit of share count creep into the dividend growth going forward will be slightly lower. And you sort of alluded to our net debt back to target range. Why do you need a DRP on at this stage.

Yes, Ben, I can answer that. I mean so there's a cut there's a couple of drivers there. The first 1 is feedback from our retail investor base on the DRP. And so it's -- it has proved popular with our retail investors. So it's something we consider we wanted to switch back home. There's also the point around -- I mean we -- whilst we're back at 1.7x, we're looking to create -- we are looking to create sustainable headroom relative to the S&P metric and that we've got -- we've got a number of levers available to us. That includes the dividend payout ratio and it also includes the DRP as well. So it does have some value there. And that's the balance we are trying to strike now. I would note that the DRP has at a 0% discount as well. So there is -- it does not come at a discount this time around.