Steadfast Group Limited (SDF) Earnings Call Transcript & Summary

Welcome to Steadfast’s FY '24 Results Call. Following the formal presentation, there will be a Q&A session for investors and analysts. Participants can ask both text and live audio questions during today's call. [Operator Instructions] I'll now hand over to Robert Kelly.

Thanks very much, and good morning, everybody. And let me acknowledge the land upon which we meet today for the Gadigal people [indiscernible] and they [Technical Difficulty] nation that we're bounded by at the north and the [ Wisk ] and the [ Tane ] up north of Hawkesbury and down to the Cooks River in the south. So we just want to pay our respects to the custodians of this land. It goes back 40,000 years to the past, present, and the elders and the emerging people who will continue the custodial control of this land. So thank you, everybody. I'll now refer you to Slide 5 of the pack, and this is the group's EBITA. The underlying EBITA rose to 22.7% through the period, and our underlying NPAT up 21.8%. I must say, as a group, we're very proud of that. And as we start the second decade of this business being in a public arena, the ability for us to continue to increase like that is a pride that we all who operate in this business take with great success. And that success, we think, has been the product of many people that have made this organization what it's been over the past 11 years. So I want to thank all those people that work with this, our subsidiaries, and congratulate them for what we've done there. The bank and underwriting agency growth was up 19.6%. And I won't refer to the slide you'll see in the pack that says Slide 21. So I won't bore you by telling you that. Our underwriting agency’s underlying EBITA up 18.9%. Our diluted EPS is basically driven by organic growth and acquisition growth. And our acquisition growth is basically all of what we do in terms of acquiring businesses. We have an aim to make sure that, when we do them, they're EPS accretive. And so the acquisitions that we spent last year was $957.8 million to --

$457 million.

$457 million, I'm sorry, $457.8 million. The future corporate activities allow us to have a good runway of about $366 million. And that's -- at that level, we still maintain our disciplines, 30% gearing. And this gives us significant -- along with our free cash flow, significant headroom in what we want to do. So on the right-hand side, it encapsulates that in the blue sets in there. Our statutory earnings NPAT of $228 million, up from $189.2 million. EBITA, 22.7% up. NPAT, 21.8% up. NPATA, 20% up. Diluted EPS, 16.2% up. Diluted EPS NPAT, up 14.4%. Final dividend, up 15%. And the second half dividend, up 14%. From our point of view, we're delivering to you what we said we were going to do. So if we can go and turn to Page 6, the slide, so Slide 6, we're targeting, this year, $300 million in acquisitions, and we'll fund that by debt and, of course, free cash flow. The FY '24 acquisitions, we did complete 47 [indiscernible] at a cost -- at an acquisition cost of $309 million, giving us an EBITA of $31.5 million. The Sure acquisition came in during that period, and we didn't include that in that $280 million that we gave you of guidance on last year. So the Sure acquisition was at $148.8 million and $14.4 million annualized EBITA. So our current pipeline is strong. And as we're saying, about $300 million in acquisitions we expect to do. We've completed 8 so far for $83 million and $8 million in EBITA. We've got 14 term sheets signed, and we're in due diligence on a further nearly $120 million in available acquisitions. And you can even see $13.5 million EBITA. There are 4 term sheets issued, which means people want to do business with us for about [ around ] $6 million and $1 million in EBITA, and there's 26 opportunities that exist out in the market that we're working on as well. So the runway is pretty strong at the moment. And so again, reiterate a pipeline of about $296 million of active acquisition opportunities and completed the FY '24 with $457.8 million. So going to Slide 7, this is an analysis of our track record since we started. It's an interesting slide because it shows, at the start, you'll see around ‘14 and ‘15, our acquisitions. Across the bottom, we've given you what they are. So you've got a bit of a ledger there. And then you'll see how we build up and what we've done, and you can color match to what it looks like. And then if you go to the far right slide, for FY '25, you'll see we've put that in at the $300 million mark. And you see that $83 million is represented from what we've actually completed in the first 2 months of FY '23. And remember, our 2 aims in this business are: to increase earnings per share, so when we do that, we want to make sure that we gain organic growth; and secondly, that the assets that we buy are EPS accretive in the first year that we [ own them ]. So if you go to Page 8 of the slides, this is the network. It’s a -- this is an interesting slide. The left one or the one on the left is at the IPO and the one on the right is where we stand today. Okay? We had our IPO. We told you what we were going to, dual strategies, grow the network and increase our stake in the network. We have done that with great success, and we've done that with great determination to make sure that we never waver from that original way we wanted to go about it. The track capital continues to work on, and our EBITA that we still have the ability to buy is around the $440 million mark. That's a simple extrapolation for us. We look at the revenue which you would get out of the potential sales that are still out there. We look at margin of about 30%. And then tell you that circa 6% will be EBITA [indiscernible] that 30%. So it's a very conservative way we produce that for you, but it's a very reliable way. On the right-hand side, you can see how we've grown, the $6 billion there. An interesting point that Stephen always makes, and sometimes I forget to point it out, is if -- in the equity brokers, we own 77% of the equity brokers’ revenue. And if you think about that, eventually, those equity brokers, we own half -- a majority of, we will get the extra 23% of that. That roughly sits at about $100 million worth of extra EBITA that's sitting in the OE. And then if you go down to the bottom one, which is a very interesting slide, it shows that about turnover, $2.2 million is in [indiscernible] reps of companies that we own and the percentage ownership of those reps is quite small but ever-increasing as people get older or want to take succession. And there's circa $90 million worth [indiscernible] sitting in there. Then if you go around to the nonequity GWP that we've identified and trapped capital and that we are on the process of doing, there's another $60 billion there. And then, at that $3.4 billion on the left-hand side of the pie chart, that's part of what we believe we will get with the 1 below it in terms of another $190 million worth of EBITA there. And you'll see we conservatively take $2 million out of that pie chart to make sure that we are dealing with what is attainable for us and what we believe is absolutely eventually we're going to get the opportunity to look at. And that's why we're very conservative. We pulled $2 million out from that point of view. Okay. Go to Slide 9, and having a look at the Australian broking network. And just if you have a look at the bar chart across the bottom, it shows you, FY '14, our gross written premium at $4.1 billion. And then you slip across -- and I won’t bother -- bore you by going through each 1 -- and then the $13 billion that we achieved in financial year '24. The escalation in GWP was pretty low, I think, as demonstrated by an increase in organic and an increase in volume. So volume was circa 3% and price increases across the insurers in the nonstatutory lines made up the other side of it. Our network still is 85% commercial and 15% retail. That 15% retail, I'll remind you -- back in '99 was when we first did our data analytics -- was 4%. So we continue to grow retail alongside our commercial business. So again, the blue box on the right, $13 billion versus $11.6 billion, 9.9% organic, 2.7% out of the AR network. Honan's left. There was a lot of discussion about what impact Honan would have on this organization, and we highlighted that too, so all the people who tell you stories about that will be able to correct the erroneous statements that they made about the impact that that would make on this business. So it was 1.7%. Add back the 1.2% and you get your 12.1% total growth. Operationally, we've got 418 brokers in the network, 380 in Australia, 69 in New Zealand, 31 in Singapore. And our investment activity in the network in FY '24, we had 30 new holdings, including bolt-ons, 18 step-downs. What is a step down, people will say. That's where people are running the business and want to take a slice of the pie. And it runs in with our co-ownership model, but that's a great way to operate. So you'll see we put down step-downs. Of course, if we sell another 10% of our EBITA to some incumbent people running the business, we've got to make that 10% up. And so you see we do step-downs and we still get organic growth in the organization, that shows you how well we manage step-downs and, of course, step-ups [indiscernible]. We now have equity in 68 brokerages. Over the last decade, we've been collapsing brokers that wanted to collapse into with 1 another. We've put them together when it was appropriately -- appropriate. And of course, the client trading platform topped out at just over $1.4 billion for the FY '24 financial year. So if you go now to Page 10, the underwriting agencies, I think, 3 years ago, I said to you that the rise in the underwriting agencies cannot continue. I was wrong. Okay. And it has continued. And while we look at the 13.4% increase, putting us up to $2.3 billion for FY '24, it's driven by a couple of factors. It's driven by the fact that brokers go to where they can get answers and efficient service, and secondly, where the price can be not always competitive, but the price can be around the market price. So price and volume caused our 13.4%. Property pricing still remains strong. And the opportunities for our agencies to reposition product lines and -- for distribution is happening all the time. In other words, this is never a static part of our business. It's always dynamic and changing. So again, highlighting over to the blue box on the right, GWP up from $2.1 billion to $2.3 billion. Organic was 6.4% and 7% was acquisition. I think to get organic growth of 6.4% period to period is outstanding in the underwriting agencies. Operational highlights in this, we continue to use robotics in the administration of the policies that we have to run through. We're using some robotics in making some of the tedious jobs being done on an automated basis. So it's a crossover between machine learning and robotics, and we try and just talk about AI, but really a lot of it’s machine learning. Our long-term strategy is to completely align our capacity providers with our technology and underpin our strong service [ set ]. If we're doing the right thing, people keep coming back. And if we're making money for our capacity providers, they're very happy to keep giving us money to put a higher premium. Higher premium pricing from strategic partners allows us sometimes to gain market share. And participating in the SCTP across 4 product lines, Commercial Property & ISR, Strata, Liability, Professional, that's growing all the time. So every time we bring something into an auto rating on the client trading platform, we get an immediate uplift in terms of sales. And it's pleasing to see that, once it gets into the client trading platform, it may lapse for a specific insurer, but most times, it stays within the panel. And that's why we built that [ contestable ] platform, was to give choice to the consumer and take us into the brokers operation. Our in-house data analytics capability is quite amazing. I mean, we get analysis monthly on what's happening in the market, not every 6 months, not 9 months down the track. And I think – and we can do period-to-period analysis instantaneously. And we can explain to insurers where their strike rate is, where they're not getting business from, and realign their risk appetite. So the underwriting agencies are doing very well, and the ones that participate in the client trading platform instantly know how they're going and which areas they should improve in and indeed sharpen their risk appetite. Now, if we go to Slide 11, this is a little bit of an analysis of why -- the insurTech that we [ excluded on ] that we actually started 15 years ago. It wasn't called insurTech back then. It was called Automation. We continue to get -- take up of our client trading platform and our software. And the technology platforms that we got, that we run out, are very, very helpful from an insurer's point of view. If you go back to when we first started the Client Trading Platform, insurers didn't want to know anything about it. They thought competition was a [ pull away ]. Now they're seeking to have a digital platform. They're seeking to cut out the cost of doing business [ anyway ]. So the Client Trading Platform, genuinely, it's a contestable marketplace that generates access to competitive market pricing. We have bespoke wordings in it, and we have the ability to market each time the policy is renewed, altered, amended. It's a very powerful tool. It aligns with the client and the brokers' needs by having the same commission structure regardless of who does what. It's not volume-based in any way. And that -- the tailored policy wordings, the baseline, the fact that we have 2 lawyers and 2 ex-insurance brokers working on our triage team. So every time there's an anomaly that pops up in the policy, we get it clarified. We get it -- we either clarify it and amend it or we clarify it, and we can say that definitely, in that occurrence, that policy is not going to require -- respond in the [ event ] of a claim. It's very powerful to have that triage team working over the top of the policy [indiscernible]. So we're still very focused on the SCT. We're still very focused on the product line. We're very focused on the order rating. Once we put an order [ in ], [ await a ] product and then we get an automatic uplift and so does the insurers that participate. So we'll continue the development. We -- one of the developments, of course, that's been outstanding is our quote bind and pay solutions, which are available on most product lines, and they can be white label if it's appropriate. We've got 9 insurers operating over -- I'm sorry, 9 product lines operating over 19 insurers. It's a very strong and powerful position to have that digital platform. The insurers want to be trading digitally [indiscernible] and the efficacy it gives to the client and the brokers is amazing. And INSIGHT management system, we've got 7,100 people participating. That's a lot of seats, and also 219 brokers live on it. We've actually converted, I think, 250 brokers, but collapsed some together going forward. There’s additional brokers -- we're working to migrate 11 extra brokers at the moment and 15 orders in place. So $1.4 billion uplifted by 20%, $1 million we turned over in FY '15. $1.4 billion we turned over in FY '24. So if you go now to Page 12, this is a little bit of an operating view of where we're going. And we've put on -- I'll address the subheadings, okay, insurance and reinsurance markets. The discipline that we have seen over the past few years has been -- is remaining and that loss ratio is given. And you've got to consider that, over the last 2 years, we've put Australia's weather events would cost $2.2 billion each year. So people forget about it, that the underlying cost of insurance is predicated on loss ratio. So we continually had asked, is the -- when is the collapse going to happen? When is the waterfall going to occur? It's not going to happen at the moment. The regulations around the world, the impending regulations that Australia is coming under with IFRS 17 and CPS 230, means that diligence in how you go about doing stuff is -- still has to be maintained. So we still see that there will be accretive increases in premiums [ for certain markets ] over the next 12 months. June will be also basically in line with inflation. There were some corrections done where they needed to be corrected. And the cy- the impact of Jasper and Kirrily and then the subsequent floods and the stopping of the clients at the 48-hour mark has put a question over the efficacy of the cyclone pool in terms of what it will do for reinsurance pricing. In the first instance, in the first 12 months, it dropped dramatically, but we have to wait and see what impacts that all means. In terms of the underwriting agencies, we keep seeing a rebalance of insurers not wanting to do things. We keep seeing the intermediated market looking to get solutions from people where they get replies and when they get efficient answers on things. We acquired Sure. It's been successful for us. It's done exactly what we wanted, which are probably a terrible start because of that [indiscernible] the 3 occurrences, Jasper, Kirrily and the flood. And we are yet to take Sure out of its natural environment in Queensland. And the future for Sure is the algorithmic approach to underwriting, which has been successful for all them, taken into the other jurisdictions. And all of our binders got renewed. We had increased capacity come out of London, and we have a stable with base going forward. In terms of the subsidiary performance, I mean, this is something that Nigel's been working on with his team. So Nigel, do you want to make a small comment on the subsidiary performance?

Thank you, Robert. Steadfast margins have consistently been a benchmark in the industry and, as you mentioned, a large part down to the combination of co-owners and principles existing in many of our businesses, but also the capability and support provided by Steadfast. At the size and scale we are today, we've reprioritized investment at group level to welcome increased focus and sophistication of skill sets targeted at adding value to our business leaders to improve our operating performance. Simply put, the insights, benchmarks and best practices we were able to mine and replicate across the business is a big, competitive advantage. And we're even becoming better and better positioned to apply positive actions within our businesses moving forward.

Right. I think that's summarizes it rather clearly. So we're often asked about how we go about doing our business. And I think it's time that we actually said to you what we're doing, and Nigel just articulated it very clearly. The next one is international. Sam, Sam Hollman, our CEO of International, has spent a bit of time in America. Sam?

I have, yes. Yes, I'll just give you an update on all things U.S. ISU, our U.S. acquisition, has exceeded the budgeted FY '24 profit expected at the time of purchase. Our operational strategic review project has commenced and shows signs of support from the network. We're looking at harnessing the power of the network more. This could involve consolidating some businesses with strategic carrier partners or introducing new global carrier relationships. It's basically the ethos of coming together more and operating as a network more, which is the strength of how Steadfast has succeeded. ISU Group has been rebranded to ISU Steadfast. This was actually born out of the ISU Group and the U.S. industry, who saw the benefit of incorporating the Steadfast brand to reflect the enhanced strength and value proposition. We obviously also supported this as it creates greater U.S. and global brand awareness for Steadfast. Strategic priorities were established and include growing network membership, expansion of our services and solutions for members, and evolving the organization so foundations are strong to continue to build from. We are approaching the vast potential of the U.S. market in a measured and considered way. It is a long-term strategy for Steadfast, but we are pleased with how things are going, both strategically, financially and operationally, in the first 10 months of ownership.

Okay. Thanks, Sam. I mean, it's a measured approach over there. We explained that when we went and did the analysis of what we're going to do over the many years we've been [indiscernible] researching North America. So we're not trying to shoot the stars out there. We're trying to build, like we did in this business back in -- 28 years ago, a foundation that will be accretive and will slowly grow. And yes, we will look at opportunities in North America, but we're not out there saying we must do this. So I think that Sam and the team have been working very closely with the executive. And the interaction, Sam, has been really terrific.

Yes, it's been excellent, getting along very well. We're both -- we're all aligned with the opportunities that we believe are there, and we're diligently working.

I think the best part about it was that we -- the appeal to us was they were a very ethically run business and that we didn't -- that wasn't broken in any way. It wasn't [indiscernible].

That's correct. That they were Steadfast sort of before we listed, that's what they are. They can see the opportunities, but now, having a strong partner, we're all aligned with where we think the organization can go.

Okay. Well, the next one is the senior management team. I mean, this is something I'll get Nigel to talk on, but I think one of the people that came into the organization as part of that was Mark Senkevics. And I mean, Mark's around the table. Maybe just give us a bit of a rundown of your career in the insurance industry, as it's been vast. And this is a question without notice, but Mark's always looking at it and then saying, what are you going to ask me to say? And he's only been here a short time. So just give them a quick – give, Mark, a quick run-down on your history in insurance.

Well, thanks, Robert. Yes, my name is Mark Senkevics. I'm some almost 30 years in the industry, but more recently was with Swiss Re for 20 years. During that time, I ran some of Swiss Re's operations in Asia, but the bulk of that time was spent running Swiss Re's operation in Australia and New Zealand from 2010 to 2020. And after that, I was the Chief Underwriting Officer for Swiss Re. So it lends itself quite nicely to the role that I've taken on, the majority of which is looking after the underwriting agencies. So I consider myself, Robert, to have a bit of an underwriting DNA, and I hope that I can transfer that into the business that we have here with the agencies.

You started out pretty [indiscernible] you were an engineer. Right, Mark?

Yes, I didn't realize this was going to be an interview. But I started out life as an electrical engineer and that nerdiness, I think, remains. And in particular, when we focus on things like automation and data analytics, I think that's [indiscernible].

And so over the many years you and I have worked together, it's been a great partnership, hasn't it? And what a wonderful person I've been to work with, [ surely ]?

Yes, I would concur with that, Robert.

That's [indiscernible] that was really nice of you. All right. So Nigel, just give a brief run-down about what that means, the strengthening of our leadership and the outscaling of what we're doing.

I think it's a great example of welcoming Mark to the team where we're trying to complement what's worked really well for us historically and introduce new skill sets and individuals to really complement that or realign the existing resources into clearer roles and responsibilities. So we obviously welcomed Mark, which is a big addition on the underwriting side. We've added a very strong EGM of Operations, Noelene Palmer. And in the new skill sets, we've had an increased level of procurement focus from a new head of Procurement, EPMO, Australian network and insurance leaders. And then we've realigned Nick Cook into the EGM of networks and insurer relationships in Australasia, which gives us a chance to really get the best efficiency and effectiveness out of those 3 networks and insurer relationships. We've appointed a head of Subsidiary Performance. And we have stronger alignment at group with our AI strategy and data and analytics strategy. So I think we've got a really good sprinkling of what we talked about as a [ slot ] team forming at group level. We're not looking to change our decentralized ethos and approach, but instead look to complement that and bring positive support and solutions to the businesses that we own. So all in all, just really good evolution. I think our [ overall ] model, as I said, complementing what's worked well for us historically with a strong set of new skill sets and/or role definitions.

Yes. I mean, it’s a slight transition within the business, but it’s more realigned [indiscernible] isn’t it?

Well, I mean, a lot of those roles are really talented individuals that we’ve had in the business perhaps doing slightly different roles, and we've just reorganized ourselves to give very specific focus to these important initiatives like data and analytics. We've always had a strong data and analytics investment, and it's been a cornerstone to where we've come from, but we think we can even improve and increase our competitive advantage in that space, so we've spent even more time aligning on the investment in support of that function.

I asked those individuals to talk so that what may look like [indiscernible] is backed up by an incredible team behind our executives, and we always [indiscernible] together. So good. I'll go to Slide 13. Okay. And I mean, part of the strength of Steadfast is that we maintain a cultural alignment with our employees, or I prefer to call them our coworkers. And I'm very pleased that our engagement score was 77%. So we, particularly during the period, you might say have changed where we're realigning people in the business and changing a couple of things to get a score of 77%. It’s really exciting for me to get there. And I think our focus is on, I guess, it's a culture grounded in people with integrity, accountability and the potential to develop as leaders within our organization. And I guess that sounds like a little bit [ like ] everybody would say that. But in reality, we've worked very strongly to maintain long-term people that have worked here, that are aligned with what we want to achieve. So we're pleased to be a first-choice employer. And candidly, we had an aspirational 45% of senior women [indiscernible] by next year, in addition. And this year, we had 46%. So I think we're a great organization that recognizes skill levels across a lot of people and have some fantastic women working in this organization. [indiscernible] FY '24, do you want to just talk on that, Shalome? Do you want to just talk about the carbon?

Yes. Thanks, Robert. Given the nature of the business being acquisitive, we took a view that the metric is better to measure our intensity emissions. That's the intensity of our emissions. So it's pleasing to see we've made some progress here that, as we're acquiring more revenue, we're seeing the intensity of our measure decrease the last financial year.

That makes sense. And interestingly, as -- we're being asked more by the network about the [ industry ].

Yes. And so we've increased our support for the network and our subsidiaries. We've established the ESG hub, and looking at ways we can support them, looking at reconciliation, DE&I and carbon-neutral transition.

Yes. I mean, it's a [ steady ] job to do all that. But interestingly, if you would have said to me 5 years ago that the network or the brokers would be interested in that, I would have said I don't think so. But I've seen a real change across society that that's coming. And luckily, we've been ahead of that for some time. Okay. What's our approach to assets? It's pretty simple. Each entity we've got has its own Board. They operate under a co-ownership model. Each entity we've got competes against one another I must say sometimes much to the chagrin of people who lose business to another -– I mean, competition’s the DNA of business, and they must be able to compete against one another and make their own decisions. Each entity places business with the insurance market they choose. They choose. And I think that we give no direction of where you place anything you do in this network. And so sometimes people think that, when you've got a vast network like this where you own a great majority of it, that you dictate what happens. In fact, we -- the skill of the entrepreneurial people that we –- that co-own our businesses are what drives this business and makes it successful. But we do not direct any placement of business to any of the group's other assets, and quite reverse, we actually have -- we have a couple of underwriting agencies that hopefully compete against one another in the open market. Just to reflect then on the Trowbridge Report in the strata industry, the report, although we paid for it, was completed by John Trowbridge, where we had nothing whatsoever to do with it. We can -- in fact, we gave him access to everything. And unfetteredly, he was able to ask any question he wanted and get any information. He produced the report. Okay? And some people say, well, do I agree with all of the report? No, I didn't agree with all of the report. That wasn't – the report wasn't written for me. It was written for the market to understand the Rem transparency that occurs in the strata plan, its managing agent and the broker. And I think that the report showed that, there, in some cases, that was not clear. So we acknowledge the issues highlighted particularly in the Rem transparency. And then, so I guess to demonstrate our leadership in the strata industry and what we do, we've undertaken a review of all of our businesses. And that's been -- we commenced that. We've implemented. I'm not going to say to you that all the businesses were absolutely perfect. We looked at what Trowbridge said. We overlaid it over our businesses, and we found, in some cases, some gaps, and we worked at rectifying those gaps. Sometimes, those gaps will take 12 months to unwind, but the thrust of our business is to make sure that’s done. But that's the Trowbridge report, and that's -- from an operating update, we need to let you know about that. Then talking about regulation and legislation, there's been some changes. One of the major ones, of course, apart from IFRS 17, okay, which is a new way of how to do something, is the APRA CPS 230. So it deals with the operating management of insurers. Okay? And that responsibility bleeds down to any outsourced distribution they've got. So let me put that in more common [ terms ]. If there's an MGA or an underwriting agency that has a delegated authority, then that delegated authority must operate the same as what the insurer does. This has put a considerable amount of stress on some of the operating structure within the MGAs. We started this process 18 months ago. Stephen, did we not?

Yes, sir.

I mean, what happened? We took a couple of percent of our -- one of our underwriting agencies, and people were going, oh, are things going backwards? No. Things were going forward because we were preparing for CPS 230. If you ask somebody in the insurance industry, what’s CPS 230, they look at you blankly [indiscernible] insurance often, okay? ASX has also prioritized their clients’ handling levels and -- as a response to natural disasters. I mean, it's been horrific what insurers have had to go and of course we've had to go through in terms of natural disasters. So what it basically says is the insurers have got to maintain sufficient staff to handle a claim. The pushback for that is we have to have sufficient staff to handle the claims as well. Just at the bottom of that line, I'm very pleased to say that the Minister for Better Regulation and Fair Trading has acted really efficiently and quickly and [indiscernible] to work on the strata managing agents legislation. By putting an amendment through Parliament, it's on the floor now, I think it's in committees right at the moment, that basically clarifies the strata managers’ position in terms of transparency to the strata about the [indiscernible] [ receipt ]. Now, I don't want you to think on batching strata managers. We, as insurance brokers, could not operate without the efficiency created by a strata manager in working with us. It's got nothing to do with that. It's got to do with the consumer understanding what Rem is created by their transaction insurance and who in that process gets the Rem. And do they transparently know how that all works? That's what that's all about. And we're very supportive of that bill, and we're very excited that the government’s seemed to act in New South Wales that way. So that's just a bit of an operational update for you. I know it was a little bit verbose, but I think some of those things we needed to do, too. And I wanted to –- wanted the people that make this all happen to talk to you as well. So go to Page 14. This is the exciting part. We have to put that with all of what we've just said to get to the fact that the final dividend’s up 15% to 10.35 cps. This is outstanding [indiscernible] explain this is outstanding from our point of view for the [indiscernible]. If you have a look at the bar charts on the right, the dividend and the EPS, diluted EPS, NPAT, the wonderful charts from people who run our business and develop our business have put it in. So with the DRP -- we're running the DRP again. We do not, unfortunately -- for those people who like to come and play with our DRP, there's no discount on the DRP because we've got [indiscernible] mucking around with our share price. We never wanted to do that. So I’m sure [indiscernible] listening to many of the fund managers’ feedback. Some other people probably. The key dates extend then to the 3rd of September, record day, 24th of September, DRP date here and payment date, which is the best part for you, I guess, and me and all of us, the shareholders, the 24th of September So okay. Let's just go to Page 16, which is the guidance part of the program. The -- this is interesting because, again, we're giving -- going to give you a guide for underlying -- these are all underlying: EBITA, $590 million to $600 million; NPAT, $290 million to $300 million; diluted EPS NPAT, 12% to 16%; and NPATA, $340 million to $350 million. Some people say, why do you give the range? And I think Stephen and I and acknowledge and say the reason we give the range is you should be able to bank the lowest range, and there are some factors in this business which will mean that we could get more if they come to fruition. I mean, an example of that probably was the Sure acquisition that came around and how we handled that. The guidance, of course, is subject to a few factors on the right, 79% insurer partners growing. Some people might say, is that too high? Our experience is that we have picked the market and picked the pricing for the last 10 years. So I think, if we say it's going to be that in our business, that's what it looks like from our business point of view. But we do complete the $300 million in acquisitions for FY '25 and that the key risks that we delegate in our annual report may come to fruition. Now, we got a lot of queries on the little note down at the bottom last night about the share count of 1,104.6 million. And I think I'm going to hand over now to Stephen to start the financial summary. But do you mind having a talk on that chart and explain that rationale or maybe [indiscernible] straight into the financials, Stephen, if that's okay?

No problem at all. Thanks, and good morning, everybody. The actual query, I think, in particular on the waterfall chart, was the column there where we've put dilution from capital raise, and are we about to do a capital raise? The answer is no. That dilution from the capital raise really relates to the impact of last year's capital raise in November-December. So last year, we had 5 months at a lower share count, 7 months at a higher share count. And of course, in this next year ahead, we have the full 12 months of that higher share count. So it was just a movement in the number of shares that we utilize in the calculations of the earnings per share. So that gives that 3% so-called dilution of earnings per share because of that impact of that number. And otherwise, we have given you a breakdown of how those -- the next year's guidance is made up of between the organic as well as the different components of the acquisition to get you that 12% to 16% in the end. Maybe, moderator, we can move to Slide 18? Thank you. We'll start with our headline results. And we've mentioned there another strong year for Steadfast. Slide 18, please, moderator. Thank you. And so this result is in line with the upgraded guidance we provided, of course, in June of '24. We've given you there the underlying revenue, $1.6762 billion, up 18.9%, the EBITA up 22.7% to $528.5 million. The margins improved about 90 basis points, from about 30.5% margin to 31.4%. The underlying NPAT was up 21.8%. That dials down to about 16.2% when you dilute from the share count from the capital raise on the earnings per share. The cash earnings was up 19.9%. That's the NPATA number, and that dilutes down to 14.4% taking into account that share raise. So if I can make some perhaps opening remarks on the results, yes, the hard market in insurance definitely continued through the year, which drives some of the revenue increases across the group. And of course, for FY '25 is the continuation of those above the inflation trends for premium, which seems to accord with statements from all the major insurers in this last week indicating also about that mid- to high single-digit increase is coming through. Secondly, our acquisition program was executed in line with our guidance expectations. We guided $280 million for FY '24. That came in at $309 million plus the Sure acquisition. We had a couple of acquisitions which we were wondering which side of the fence [indiscernible] landing. One of them landed on the '24 side. There has been a little bit of conjecture again about why did the EBITA not uplift as much as maybe what the bottom line numbers did? If I can just emphasize that, every so often in our Trapped Capital, we gave you the wheel of opportunities. And every so often, we will acquire stakes as what we call a step-up. You, might say, have a 60% stake in the business and then you acquire another 20% to 80%. Because we've already recorded all the EBITA of that business in our numbers, you don't get an EBITA uplift. What you do is you reduce the noncontrolling interest. And so your whole line increases even though your EBITA doesn't uplift. So that really explains where some of that growth has gone. The actual impact of interest rates obviously helped dial up our revenue and our EBITA, but of course dials up our cost of funding. In November '23, we upgraded our guidance on the back of the solid organic growth to October, but also the impact of the Sure acquisition and the capital raise. In June, we really did upgrade on the back of the continued organic growth throughout the second half. So the EBITA margin, as said, improved by close to 90 basis points notwithstanding some of that forward investment we've made for that CPS 230 and that we continue to make. So we do anticipate another 40 to 50 basis points improvement in the year ahead despite the fact that we'll continue that investment as we further also leverage our corporate infrastructure that Nigel’s mentioned across that expanding portfolio. As advised in February, we said to you that the contributions of acquisitions was more heavily skewed to the second half, and that was partly due to the timing of acquisitions, including Sure, but also because the profit for ISU in America was all second half biased. So the results actually came in at or above our original acquisition expectations for both Sure and for ISU. We gave you perhaps a 43%/ 57% SKU in terms of the seasonality. The final result was coming in at around about 42%/58%, again on the back of the second half. Now, it's early days yet, of course, but we would be subject – would be forecasting between 42% and 43% SKU for the first half/second half in FY '25. Of course, that will be subject to timing of the acquisitions when we make them. So just moving to Slide 19, where we reconcile these statutory earnings to the underlying, the key movement here, we've called out here, a bit the largest item there, is the $18 million where we have ended up paying more for some of the businesses under the earnout arrangements than what we expected. And we actually had to call that an expense [indiscernible] and of course we normalize that out. We've always [ hailed ] that's not a bad expense -- adjustment to have because it means that businesses have actually performed better. We, of course, also remove out all the things to do with the standard items on the Johns Lyng Group investment share price movements, the profit or losses on any sell-downs and equity stakes or [indiscernible] other costs to acquire. There's also, of course, the adjustment this year that relates to the accounting for the earn-out of the Sure acquisition. So when we acquired Sure, we booked a very full potential earn-out, which also lifted the value of our intangibles in our balance sheet with the 2 cyclones and the flood event after we bought it. We now believe it's unlikely to gain the full uplift in FY '25 profit, particularly because of those profit shares. And that's been factored into the guidance. So now we're still expecting the Sure business to produce higher profits as each year progresses, including FY '25 being ahead of FY '24, given its strong core business model. It's just that it's a little bit less than we first assumed when we told you as we were in November. So we've written down that obligation to pay the earn-out. That goes in that accounts as profit. And we also wrote down the value of investment, which goes in the [ state ] accounts as an impairment. But when you net the two things off, you've got around about a $2 million adjustment in the books. There's also another weird item called the net present valuing. We have to take the deferred earn-out and actually present-value it and then unwind it as time progresses. We've taken that out of the numbers as well. So in summary, our view of the Sure earn-outs is that we're now estimating we'll be paying circa half of the previously published amounts, but we do expect profits, as I say, for '25 to be higher than that for '24. Of course, the final amount will be dependent on the different results, which we want to [indiscernible]. On Slide 20, [Technical Difficulty] [ against ] earnings, The organic growth has been generated through a combination of factors. Yes, we had the continued hard market conditions with the price increases circa 7.5% in our businesses and the volume increase is roughly 3% across our equity brokers. We had growth in the agencies, and we showed at the Investor Day broadly our agencies generally -- and of course, our agencies, in particular, have gained market share off insurers over recent years, and that's continued. We do benefit from the higher interest received on our trust and operating bank accounts. Particularly, that was notable in the first half. And so those interest rate increases actually gave us $26 million of the organic EBITA growth. If you would exclude the impact of interest rates from all analysis, our organic growth rate in the second half was stronger than that of the first half. They actually grew from around about 5%, ex-interest, to 7.4%. And our guidance assumes that that second half growth rate, excluding interest, carries through into FY '25. Now, given we've got a fairly natural hedge of having funds on deposit, as well as corporate borrowings, as well as all the different arrangements in play for our deposits, we anticipate only minor impacts to bottom line results should interest rates shift during this year ahead. The acquisitions continued throughout the year, as we said, $309 million for the Trapped Capital program against the $280 million assumption. And as we said, some of those acquisitions were a little bit right on the tail of the year. So of course, they're going to be more impactful into FY '25 than they would be in FY '24. And we acquired Sure on top of that. If you look at the multiples, we averaged at about 9.8x EBITA. I said we'd be probably coming in on 10. It was. It was 9.8 for the $309 million of Trapped Capital acquisitions, and the Sure was completed at 10.33x. If you take out America, then the domestic Trapped Capital acquisition multiples averaged at about 9.4x EBITA. We see in our guidance that we've got $300 million of acquisitions for FY '25 in [indiscernible] of that guidance, and we've done $83 million as of today. Now, that is -- in that $300 million, there is no expectations whatsoever of any acquisitions in the U.S. It's -- they're all non-U.S. related acquisitions. And so those acquisitions we anticipate will give another 3% growth into this year. And that actually, depending on the timing, will provide maybe another 3% growth in FY '26. Now, if I can move forward to the –- to Slide 21 please, these next 2 slides really are trying to convey what were the industry dynamics and the financial themes across our businesses as if we owned 100% of all the brokering businesses, or, in the next slide, 100% of the agency businesses. And as Rob explained, we don't own 100% of the businesses. In fact, they are all -- most of them have a co-owner model, which means they have local management on the ground directing each local decision to keep them competitive. So this is all about the themes that run across these different areas. So if you look at broking first of all, we actually own roughly 77% of EBITA that we have here, which is, if you’re going to split it up, 73% of the pure broking assets and 100% ownership of what we might call the network assets, that is the business of being in network in Australia, Singapore, New Zealand and, of course, now America. So for the period, there was 11.7% of organic growth in revenue and a strong result reflecting those hard market conditions but also the volume growth as well as the interest rate rises. As you know, we don't set those premium rate rises. That's done by the insurers, but the fact that our portfolio rose by similar amounts to what the insurers are reporting highlights [Technical Difficulty] is seeking to uplift pricing together. The premium increases really across most property lines have continued, and with 70% of our revenue being commissioned, that commission [indiscernible] levered against that GWP kind of gives you around about 6% revenue growth from those 8% price rises. And the balance of the growth was really that volume growth and that interest. The cost increases, particularly important here in FY '24, were in line with what we expected. And maybe the trajectory of that price and labor increases is starting to moderate a little bit at present. And we have invested a little bit further in capabilities in the broker network in the year ahead, but we do see that trajectory of cost pressures moderating, particularly as we go into calendar year '25. And on top of that, of course, we had the acquisitions giving a further growth to those numbers. Slide 22, on the agencies, here we own roughly 89% of what we show. The agencies again traded really solidly throughout the period, had a really good second half as well. And as highlighted on our Investor Day, that superior client service and product offering has meant increasing market share for agencies generally and for ours particularly. And that has continued again this year. We told you about the additional resourcing, particularly in people and systems, getting ready for CPS 230. And even with that investment, we have shown a nearly 10% uplift in organic EBITA growth. Now, we intend to continue to invest in those areas just to be ready for that 1 July '25 start date. And we actually believe that's a great opportunity for us to further promote why we are a great co-owner for agencies in that new regulatory landscape. Page 23 please, moderator, on the cash flows. Our businesses do turn, of course, our cash flow –- our profit in cash flow each year. And apart from the square-up of last year's tax, you can see again how we've converted earnings into cash, which, of course, we utilize to pay dividends and put to our acquisition program. So we still have circa over $120 million of free cash flow that we enjoy. The debtor days continue to show no deterioration. We've seen no signs of problems in the premium funding. We gave you a hint of that at the Investor Day, so another continued strong sign for the SME sector. So moving on then to Slide 24, on our balance sheet, we have a very conservative, you might argue, 20% gearing at the moment as a result of the capital raise last year. So it's well within our 30% gearing level. Our actual return on average capital employed during the year I calculate to be 13.8% if we use NPATA as the -- as a profit number. And we project that decline another circa 60 basis points if you look at the midpoint of next year's guidance. Our debt facilities of $860 million, they extend out to '26 NPAT, but a lot of them to 2028, as you can see on the right-hand side of that slide. The most important thing here to remember is that, as of today, we could borrow $206 million from the facilities for acquisitions, but I could actually borrow further another $160 million. That is I could borrow another $366 million and stay within the 30% maximum gearing ratio. So if you look at the year ahead, $366 million of debt capacity plus, say, $120 million of cash flow. Let's call it $480 million worth of firepower over the next 12 months. And we are saying to you that there is $300 million of acquisitions that we expect to be completed, of which we've done $80 million. So there's only $220 million to go. You can see my earlier comment. We're not anticipating to actually raise further capital this year, instead using debt and our free cash flow to execute the acquisitions that we see in front of us. I think, at that point, I'm going to hand it back.

Thanks, Stephen. It's a comprehensive view, I hope, of what you saw. And so I think -- are we going through questions now? I think there's a couple of questions come up on the screen that I can answer.

Thanks, Robert. [Operator Instructions] And our first question comes from Julian Braganza from Goldman Sachs.

Just a couple of quick questions from me. Just pointing to Slide 16, just on the guidance, just specifically on the organic growth line to [indiscernible] just interested in understanding the drivers of that range. And is it related to the premium rate increases that could eventually [indiscernible] FY '25? I just want to understand what could pull you to the bottom end of that organic growth range into FY '25.

Yes. Sure. Yes, yes, price rises and -- will always be an influence on the top line revenue and, therefore, the EBITA growth that we achieve. But of course, our guidance is made up of 100 different businesses, all who can win business, lose business every day. So there's always going to be where does those volumes finally end for the year? They're probably the key things every month. Obviously, we look at the results to see how that's performing, but you do have to look across the whole portfolio.

I think, Julian, constraints on our expenses and efficiency in how we operate also add greatly to the organic growth side of it. So it's not all predicated on growth. You see, when the hard market or the current pricing regime starts to wane, okay, and technically, we don't think it's going to drop, or it might drop in a couple of product lines that have been grossly overpriced over the last few years, D&O, and maybe that. And perhaps one could argue cyber falls into that. But the reality is, when you are a sales organization, which is what insurance brokers are, they're an advice sales organization, and when you're in that paradigm and the pricing starts to alter, then what happens is you actually increase volume quite dramatically sometimes because there is a gap in the insurance distribution networks around the world where some people are asleep and others are awake and they take advantage of any blip that might occur. So there's many factors that Stephen just put out, and there's many areas of niche that we do. So it's not just a simple -- I'd like to say, pragmatically, it's a simple paradigm. You can run out and say, if premium REIT rates start to ease, then this will be the sole factor. All I can say is that we floated this business in this lowest market in the world and made increased profits each year, demonstrated by our slides. I think -- and I think that the fact that we put in 7% to 9% really is indicative of what we know the pricing is doing at the moment. And the fact that our June figures were strong and others have said their June figures were weak I can't explain except to tell you we know what our businesses were doing. We know what the markets were doing. We know that the main insurers that we deal with, the main 9 insurers, we deal with them, not one – not one has said to us that they're going to reduce prices. They've actually said the complete reverse, that they have to keep driving them up. So when you -- when somebody says to me that some underwriters are saying that the prices are going to come down and our peers are saying there hasn't been increases, we, with about 32% of the intermediated market in Australia at the moment, are not seeing that in our businesses, and we're not seeing it with our insurers.

Okay. That's very clear, Rob. And maybe then just touching on the margins for both broking and agency into FY '25, I think you're still flagging a bit more investment in agency into next year. I just want to understand. Should we be seeing margin improvement there, even despite that investment? And also, I guess, when does that investment come off? Is it next to the last year where you sort of [indiscernible] resourcing and compliance?

Yes, as I tried to point out, we did see really good growth despite that forward investment in '24, and we expect that to continue. I think the margins for agencies should hold, if not improve, next year. And I said, on the overall picture, seeking for roughly a 50 basis points improvement in the margin across all businesses.

Our next question is from Andrew Buncombe from Macquarie.

Just two for me, please. The first one is on the $300 million expected payment for Trapped Capital in FY '25. Can you just remind us whether that's a gross or a net number of the sell-downs?

So that is $300 million of acquisitions. That is, if you look at our slide on -- 16 for the guidance, that $300 million relates to the acquisition's new column. And we have separately shown that there will be some sell-downs in that 1% where we sell a few equity stakes to the co-owners as a separate exercise. So that is a gross figure.

Excellent. And then the other one for me was just on the implied multiples from that Trapped Capital number. The shorter-term numbers look closer to high 8s to low 9s, but the back-ended piece was closer to 10. Is there anything unusual in the short term pipeline for those multiples as to why that would be so different to the long-term 10 number?

Yes. The actual multiples you'll note can vary, particularly if you're buying -- the timing of when you're buying a larger business versus a smaller business, a higher growth business versus a more stable business. And so it can just depend on, in 1 or 2 months, you might be buying a few of the more, let's call it, more stable, smaller businesses that you've paid a less multiple and then there might be a month where you've paid for a higher growth, larger business, and so it just skews in those couple of months in particular. So the general trends of acquisitions multiples really hasn't shifted over the last couple of years. It's really those 2 dynamics of size and growth that really dictates the multiples rather than anything else.

Our next question comes from Andrei Stadnik from Morgan Stanley.

My first question, can you just remind us of the mix of -- within your clients, can you remind us of the mix of small versus medium versus larger corporate businesses?

The corporate business -- well, I think you have to define what a corporate business is. A corporate business in Australia can be a business that's got $50 million assets, okay, or $500 million assets. So it's a very different area. What we say is that 85% of our business is in corporate. But if you go to Slide 34, you'll see that, for the micro or policy size, below $650 in premium is 1%. The SME, okay, size, which is $650 to $5,000 is 24%. Okay? And then the small to medium enterprise, which is $5,000 to $50,000, is 40% of ours. And then the medium enterprise, which we say $50,000 to $250,000, is 15%. And then the corporate, which is over $250,000 in premium, is 6%. And then retail, retail is 14%.

That's helpful. And my other question, can you just -- I mean, you already explained a bit around the short earn-out -- the potential earn-out being lower. So it sounds like it could be at the $50 million level. But it should perform better in FY '24 versus expectations. Can you just explain a little bit more on that? Because it sounds like you're getting the best of both worlds there [indiscernible].

It's pretty simple to explain. When we bought Sure, okay, we wanted a protection that, if they got hit by some cyclones and their profit share, which was quite a valuable piece of the acquisition, wasn't able to be maintained, that we wanted a protection. Under accounting rules, unfortunately, if you're paying $100 or something and you only pay 80% upfront because you don't think the 20% you're ever going to pay, Stephen -- of course, it's really difficult to deal with -- makes me have to put the $100 in. And then because it's even more and more difficult because of accounting rules, when we take the $20 off, I have to take it off. Can you explain that [indiscernible] 12 years to me to convince me, Stephen.

No, I'm not going to give an accounting lesson on this call. But I think, to your point, commercially, yes, Andrei, I'd say much to the Sure shareholders’ chagrin, yes, we got the best of both worlds because we wanted to have a protection for any risks on the earnings. You know, of course, we believe it’s a very solid business. So yes, our Steadfast shareholders get the benefit of that.

And we will be paying a proportion of that extra premium to them, anyway, right?

Yes, yes, because they've got a great underlying business.

Yes.

That's performed.

And look, if I can ask a third and final question, in terms of how you’re thinking about next steps for -- in the U.S. space, what are the next steps from here? What are some of the things kind of within your control that you’d like to do in FY '25?

Yes, I think the 4 areas of focus for us are basically market access to develop those carrier relationships more and that opportunity for the members of ISU to place business into strategic partners of Steadfast; the other will be the network growth, to continue to grow those numbers and make sure that we have a strong, viable network, that we're not losing too many people to private equity acquisition over there; agency perpetuation, which falls into our Trapped Capital opportunity, which will help lock them into the network but help grow our proposition there organically and acquisition-wise; and of course, our technology solutions. What can we do with the technology platforms we have here, taking them into the U.S.? So they’re our 4 major focus areas.

Your next question comes from Olivier Coulon at E&P.

Following up a little bit, just on the agency M&A opportunity, I suppose, that may play out with CPS 230, I mean, have you already had some discussions on M&A of some smaller, potentially subscale agencies that might struggle under the new regime? And is there any of that included in the $300 million Trapped Capital?

To answer the second part, no, none is from that point of view. To answer the first part, there's a real rationalization going on with insurers at the moment. I'm sorry, let me explain -- APRA-approved insurers in the Australian market. And there is underwriting agencies that are being told -- not that there's anything wrong with them, but they don't want to handle smaller underwriting agencies. So yes, there is some opportunities that may come forward. You have to also be very circumspect when you get an opportunity like that to understand what you're actually picking up. And so, when you look at a smaller agency that you're bolting on, perhaps in the circumstances that we've just explained, then you've got to be very careful that the loss ratio that you're picking up is not going to impact your current way you operate, and secondly, that the nuances that you've developed in an MGA's network, which are very successful and which are strident and which makes sure that we are very efficient for the insurer, that sometimes, in a smaller agency, that agency wouldn't operate if you had to put down all those rules. So we've got to be very careful to do that. I mean, it hasn’t -- I don’t think, in the Australian market, CPS 230 has actually hit a lot of the MGAs with what the owners’ responsibility is. So I think the time probably for this to start to reach -- or whether we can or can't do something with some of those will be in probably the March to June period of next year. My experience in this industry, I would probably say it will probably be around the 15th of June next year when people go, I'm not going to be able to comply, I didn't realize it's going to impact me, I'm under pressure from my capital provider to show how we do comply. What do you think, Nigel?

I agree, Robert. I think it will be the insurers getting themselves organized in first instance and then, as they look to apply that to the agencies more specifically, that an agency will identify the investment required doesn't meet the operating margins of the business, and they'll look for an exit.

Yes. So we'll look for opportunities. But please, those opportunities may require -- we've got a very detailed way we look at an MGA acquisition. And in the past 12 months, we've looked at a couple. And we don't vacillate from our known operating structure that we know is successful and our approach to the capital we've given. So -- and this sounds a bit arrogant, and I guess it is arrogant. We're not going to pick up scraps and put them into a very profitable business if we don't think that we can do -- make them do what we do. And in some cases, some of these smaller agencies, they operate on a shoestring. They operate with a very limited compliance ratio. And if you put our dedicated way we do stuff over the top of them, they would die. They wouldn't like it. They wouldn't be able to do it.

Yes. Okay. No, that's perfect. Thanks for that explanation. Just a final one from me. In terms of potentially entering a declining interest rate environment, not premium rate environment, how are you thinking about M&A, and I suppose the fact that you're going to be purchasing the interest income and paying an EBITA multiple on that?

Trust me, when we evaluate an acquisition, we evaluate every aspect of the acquisition. And if interest rate came into play, we would take that into our evaluation of what we would pay for that business.

I would like to say to you, over the last couple of years, as interest rates rises, that the multiples to pay would have come down, but the market remained as red-hot as it was. I'm hoping that, on the way down, that it doesn't seem to go up any higher, but it actually stabilizes where it is. But it's a competitive market [indiscernible].

And in terms of our own borrowing, we have more than our borrowing, in most cases, on investments. So we have an actual edge. If there was 1% drop in interest rates, then our borrowings would [indiscernible].

It would be. And I think the point there from me was we obviously seek to always assess what is maintainable EBITA as we buy assets. So obviously, we take that into consideration.

We don't get deal fever, Olivier.

Thank you. Our next question is a written question from Scott Hudson at MST. Scott asks, are there any U.S. acquisitions in the pipeline of $296.6 million opportunities? And can you confirm what acquisitions are included in the FY '25 guidance?

Per my commentary earlier, 0 on both counts, no U.S. acquisitions factored in.

And was Scott asking what are the names of the acquisitions? If he was, he can [ go to hell ] [indiscernible].

I think it’s Quanta. I think it's Quanta.

It's only Quanta, isn't it? Yes. Okay. So it's not a no.

The next question is also a written question from Siddharth Parameswaran from JPMorgan. It's a 3-part question. The first part, Robert, is the 7% to 9% rate you flagged for FY '25 suggesting any slowing in rates? In your booking network, you flagged 9.9% GWP growth in FY '24, but that was down from 10.6% in first half. You flagged 3% volume growth, so implies rate increases of 7%. This full year number suggests a slowdown from the first half. Your guidance for FY '25 assumes rate increases of 7% to 9%. Is that in line with what you saw at 30th of June renewals, or is it higher? And what comfort do you have about the level of rate? Most peers, including underwriters, are suggesting some slowdown in rates.

Firstly, the -- it's not an increase in what we think it will be. It's exactly what we did for the prior year, I guess, in the prior year and the prior year. It's our evaluation of what we think the GWP will roll out between then. And yes, [indiscernible], I think the 10.6% back to the 9.9% and the 9% shows that there isn't anything coming on, but that anything is not a slam dunk or anything like that. It's in some areas. It's not in all areas. But property, which is a major player of what we're doing, is still being driven dramatically in Australia from that point of view. So no, I don't think that. What do you think, Stephen? I mean, June was stronger than anything, wasn’t it?

Very well said. And I mentioned that even July continued, and it came in as we expected, so -- on those assumptions. So there's nothing in July telling us [indiscernible] in June.

No, nothing. So I think it's a solid. When we give a 7% to 9%, okay, we're betting that it will be somewhere about the 7% mark. Okay? But we have to give a range. So if it land – if it's in our predictions about guidance, we always put a range of, say, 7% to 9%, then we're guiding at the 7% [ up to ] 9%. Okay? But we're saying that's the range it could be at. And on the peers, none of the major insurers that we place $13 billion with in Australia have said -- their CEOs, in fact, attended, when was it, Nigel? Earlier last month, wasn’t it? Well, I’ve forgotten.

[indiscernible]

Yes, last month, the major 4 or 5 CEOs attended an intimate meeting with us, with our subsidiary guys, and they were absolutely dogmatically and absolutely clear that they have to drive rate up towards the 10% mark to get back to technical rate.

That was all done individually rather than collectively.

And that wasn't done in a group meeting where -- it was done intimately, one-on-one, without the others participating in it. What feeling did you get out of that? Did you feel that anybody was wanting to drop out, Nigel?

No, I think it was very clear that there's still a lot of compound inflation in the system relative to the headline inflation number that we all see as they're getting [indiscernible] all aspects of their value chain. So it's materials. It's contractors. It's [indiscernible].

I think, on that point, they were very intimate with us about their loss ratios, weren’t they? And much more intimate than what they would be in public, I guess. And in reality, the compounding effect on the escalation of clients is not being reflected in the current pricing.

And the increased complexity of what they're dealing with around natural perils or the weather, as well as things like cyber, and then, of course, the litigious environment that we live in today, the award sizes continue to increase. So I think it's a circumstance where they're continually trying to adjust to meet future price valuations.

And it would be a very unwise Australian insurer who looked around the world and had a look at the wildfires, and Canada is a good example right as we speak now, and said, "Well, we're going to have a great summer. It's going to be terrific. We'll all go to the beachâ€, and not actually say to themselves we could be in for a [indiscernible] summer in terms of bushfires in Australia. So yes, I hope that helps. [indiscernible] I think the renewal capacity you were seeking, Sure’s binders -- main binder doesn't renew at the end of next year [indiscernible] October.

30 of September.

Yes, so 30 September next year.

And I think this question there about the -- do they hit the EBITA that was flagged in [indiscernible]. So if you go back to the November disclosures that we gave and you compare what we projected to go into the numbers versus what they actually did produce, then, pretty much on every account, the FY '24 contribution or the annualized rate, then we are hitting the number that we said they would get or a bit higher. What I’m flagging is what they projected for '25 has probably got some downside to that number, but it's still an upside on what we [ bought ].

[indiscernible] Yes, still a great upside on what we bought.

Is there a difference in growth you're flagging between '25 versus NPAT? What drives these differences? Sorry, thank you. I’m just trying to read these questions. I have to get my glasses here. Is there any difference between what we're flagging for '25 EBITA? So if you look at the EBITA that we're projecting, I keep making the reminder or the comment that there is times when we make acquisitions, that is a step-up of investment, which means the EBITA has already been in our figures 100%. And what we do is we actually acquire some of the noncontrolling interest, which reverses that noncontrolling interest line in the profit and loss statement. So hence, the bottom line can sometimes be ahead of what is that EBITA line. So that's probably the key things I would like to highlight.

And I think that's all of [ Steve’s ] sense questions. We've got one more on the screen from [ Claude Walker ]. What is the most likely reason Steadfast’s earnings per share could actually go down instead of up? I guess, if, in fact, our costs exceed our income and we watch our costs absolutely incredibly hard [indiscernible].

Look, I think we've tried to give the waterfall of growth as the growth that comes from both the acquisitions we've made and flagging to make. They obviously contribute to earnings, particularly if you're buying at 10x multiple, call it 10% rate of return with a cost of debt of, say, 6%. And of course, there's some free cash flow, which doesn't have that 6% cost. So you get comfort on that. So it really then comes down to the performance of each business. And I think, like we've flagged before, even if the revenue wasn't to progress as it was, you do have some opportunity to move some of the what you might call more variable costs and consider how much do you invest in some initiatives so you've got a chance to vary some of you spend if you need to. So obviously, we remain confident for going forward. We enjoy the fact that insurance, by its nature, is a defensive purchase from consumers and businesses alike. So you don't have the variability of sales that maybe other retailers need to deal with and interest rate [ grievance ], as we flagged, don’t concern us as much either. So we're not as worried about economic or -- factors as other businesses are. Okay?

That's just -- that’s what we've got [ at the screen ] at this stage.

Thank you. There are no further questions on the online queue. I'll now hand back to Robert. Thank you.

Okay. Thank you so much, and thank you for your time. I know it's gone a little over time, but I hope it's been helpful, and I hope the interaction between our executives and -- that are running the particular divisions and initiatives we're doing has helped you. So thanks a lot. Thanks for your time, and we look forward to managing your money and continuing to make more profit for you.