Telecom Plus Plc (TEP) Earnings Call Transcript & Summary

All right. Let's get started. Good morning, everyone. Thank you for joining us this morning for the Telecom Plus full year results presentation for the year ending 31 March 2024. I'm Stuart Burnett, CEO; and with me is Nick Schoenfeld, CFO. And we are very pleased to report another year of record performance across the board with record customer and service numbers, as well as record profits and returns to shareholders. Now before we get into the detail, here's a quick overview of the running order for this morning. I'm going to kick off with our FY '24 highlights. Nick will then take you through our continued strong financial performance, and I'll then finish with our positive outlook for the year and years ahead. Now as we go through the update today, I think there were 3 key takeaways that I wanted to call out. First, our recent and future double-digit growth performance is underpinned by our unique multiservice business model, our structural cost advantage and our partner route to market, which together enable us to sustainably outcompete. Second, we've got a medium-term target of hitting 2 million customers. And as we go on that journey, we expect to deliver between 10% to 15% annual net customer growth. And at the same time, we see a real opportunity to increase our EBITDA per customer from the sort of the mid-120s up towards the GBP 150 mark. And third, over the year ahead, as we take our first big step from the 1 million customer mark towards the 2 million customer mark, we expect customer growth of between 12% and 14%, resulting in adjusted PBT between GBP 124 million and GBP 128 million. But we'll come back to that growth and profit outlook a bit later and after going through our business highlights for last year, which are summarized on this slide. And as you can see, FY '24 was a year of record performance with the numbers really speaking for themselves. We saw a 14% increase in customers all acquired organically accompanied by 12% service growth. Gross profit was up 16%. And as Nick will touch on later, gross profit is actually where we really see the P&L as starting for most purposes. And this then translated into an adjusted PBT up 21% to just under GBP 117 million, within which, of course, is that positive Q1 impact from higher energy prices, which we mentioned at the half year, and that explains why PBT increased slightly faster than customer growth last year. And then finally, reflecting the capital light and cash generative nature of the business, we increased the dividend to 83p alongside the GBP 10 million share buyback that we did in H2. Now I think it goes without saying that we are very pleased with these results, which show yet another year of compounding double-digit growth. But what's the story behind the headlines? And to really understand sort of how the business delivered this record performance and why it's such a positive indicator of what's to come. I think it's important to understand the key market dynamics in place during the year. Now first, and as expected, over the course of the last year, competition returned to the energy market with all major suppliers now open for business and so actively seeking to acquire new customers. In fact, I think everybody in the room and on the call, will surely have seen a significant advertising activity that's now being undertaken by Octopus over and pretty much every major supplier. However, in this post energy crisis marketplace with capital requirements being imposed on suppliers and a low regulated EBIT margin available critically, and this is really important, the pricing strategies have returned to being rational. And it's against that rational competitive backdrop that we're still achieving the sustained double-digit growth as our structural cost advantage really sort of kicks in. Now within that growth, we did see a slight increase in churn as expected to just under 9%, still meaningfully below the churn rates of around sort of 14% that we saw sort of pre-2022. I note that later this year, the ban on acquisition tariffs is due to be lifted as expected, but we don't see that as having a notable impact given the rational, stable marketplace that we're now in. Now in addition, in contrast to FY '23, where energy prices increased significantly, and we grew at that rate of over 20%. Last year, in FY '24, we actually saw significant falls in energy prices. The average price cap level during the course of last year was just over GBP 2,100 compared to GBP 3,100 in FY '23. And when you look ahead to the rest of this year, FY '25, we see the average price cap according to latest forecast as being a much more stable sort of GBP 1,650 to GBP 1,700 for the year as a whole. So as you can see, we've demonstrated our ability to grow at a double-digit rate in a rising and falling energy market as well as the more stable energy market that we now appear to be in. And that's because underpinning all of that growth is our structural cost advantage that we generate from our unique business model. So let's have a quick look at our business model. Look, it's a really simple, but really powerful business model. And there are 3 key elements that all sort of work in tandem as shown on the slide, to really drive the business forward. First, you've got our unique multiservice proposition, which attracts these high-value multiservice customers. Secondly, you've got our unique structural cost advantage, which enables us to reinvest in and make our proposition even more recommendable. And then thirdly, we've got our unique word-of-mouth route to market, which is how we're able to acquire those multiservice customers in the first place. And each of these 3 core elements helps to create this sort of self-reinforcing model that's been propelling the business forward for over 25 years now, a year after year. So let's just take a quick deeper -- deeper look at how it works, starting with our multiservice proposition. As you can see on this sort of Venn diagram of sorts, we are the only true multiservice provider in the U.K. by bundling together all of the multiple services with us, customers can stop wasting time by only paying one bill, by only managing 1 account, by only having to remember 1 password and they can stop wasting money through the great savings that we offer on our bundles. Yes. So genuinely sort of hassle-free way of managing your home services. And it's a true point of differentiation between us and all other utility suppliers. And not only do our customers benefit from the ease of this multiservice offer, but we as a business benefit from the increased customer lifetimes that we get because the more services the customer takes, the longer that they stay with us. Now the other great thing about multiservice is that multiservice customers are the core of our structural cost advantage, and this is the best way probably a visualizing that. So we generate up to 4 revenue streams from our customers, but we've only got a single set of overheads. And that means that relative to all of our competitors, we have a lasting operating cost advantage that we share back with our customers in the form of sustainable long-term savings. There's a real win-win. But more than that, our one-of-a-kind proposition, combined with these great long-term savings, it creates a service that is really worthy of recommendation. And that's exactly what our partners are for. And we have a network of over 68,000 partners who are based all over the country as you can see on this sort of heat map on the slide. And these partners are experts recommending our unique model to their friends, their families, people in their local communities and sort of breaking down that nationwide inertia to switching and in particular, switching multiple services in one go. Now part time, they're fitting what they do as a UW partner in and around busy lives, their busy jobs. But like most of Middle England, they are people for whom an extra few hundred pounds a month and a long-term trial income could really make all the difference. I'd like to think of them as sort of micro influencers. So whether that's at the school gates or the golf club or online, on Facebook or Instagram, I think of them as micro influencers. And so there you have it, the 3 key pillars of our unique business model. Now before handing over to Nick, here's a quick run-through of some of the key developments that took place during the year as we continue to invest in both managing and maximizing the growth opportunity in front of us. And some of the managed highlights are set out on this slide. Firstly, this is really important. Our core operations are now scaled for growth. We've invested significantly over the last few years in our people and systems, particularly since the energy crisis kicked off from -- that's from the front line all the way through to the executive leadership level. And now that we're seeing core volumes, I mean, particularly start to return to sort of precrisis typical levels, and we're comfortably managing the growth rate. We've begun sort of streamlining the business with tighter management of our full-time workforce. And as a result, we expect to see our admin cost per customer gradually for going forward. But critically, this hasn't come as a cost, however, to our customer experience. In fact, the opposite. And this year, we've had multiple endorsements from Uswitch and Trustpilot amongst others, and there are more to come over the -- to be announced over the next week or so. Whilst our tech team won Tech Team of the Year for 2024 at the Prestigious National Technology awards. We made a number of sort of developments big and small over the course of the year, including things that we've launched a new WhatsApp contact channel to provide a low-cost form of contact with our customers. We've introduced 1 way video calls, so our advisers can quickly resolve technical sort of technical broadband issues, for example, with customers. And we've also continued to invest in our platforms using AI where appropriate to ensure that we're sort of scaled and ready to be able to support 2 million-plus customers. So that's how we've been managing the growth, but now to how we've been maximizing the growth and we've made a number of significant updates to our multiservice proposition over the course of the year including creating a new GBP 100 energy discount for 4 service customers and also introducing a new fixed energy tariff for 2 service customers, whereas previously, you had to take 3 or more services from us in order to be able to access our fixed tariff. We've been working on the launch of our sort of first new sort of EV tariff as well as the relaunch of our UW business offering, both of which we expect to land later in FY '25. And then over the year ahead, we'll be looking to further accelerate multiservice take-up and in particular, growth in our mobile services by giving customers access to our multiservice discounts when they take a second mobile SIM from us, where was previously only the first SIM counted towards multiservice discounts. And we expect this increase in multiservice -- sorry, in mobile service growth that we expect to see from this to at least offset slightly slower insurance service growth given that we've temporarily decided to pause new insurance sales, while we discuss some elements of our policies with the FCI as part of what is an informal process. Now we've already removed Income Protector and Bill Protector. Bill Protector is a legacy product. We've removed them from new customer sales, but we're continuing with renewals. And we're planning on temporarily pausing boiler and home insurance sales probably later this month or in early July, whilst we review them as well, and we expect this review to take a few months to be closed, it's a voluntary informal process that we follow. On to the cashback card. In FY '24, our customers spent over GBP 0.5 billion on their prepaid cashback cards, resulting in over GBP 10 million of cashback. And to further drive that spend, we've been adding new cashback partners over the course of the year, including Aldi, IKEA and Adidas to name a few as well as adding the U.K.'s top 5 streaming services, which we launched back at our Power Up partner event earlier this year. And those are Netflix, Spotify, Disney+ Paramount and Amazon Prime. And we've also launched the card on Google Pay to make it even easier for customers to spend. I mean this cashback card is not as well known [ some other ] services, but it is a truly differentiated and hugely powerful tool to sign up new customers, to build loyalty and to reduce their bills. And it's critically, it's funded by the retailers where our customers are doing their weekly shop. So if you haven't got one, I'd recommend that you get one. And then finally, capitalizing and investing in the demand that's clearly there for our partner income model. And it's just so important. I've actually got another separate slide of this because what they do and what we offer through our partner income opportunity is increasingly of its time. Now of course, over recent years, there has been a tailwind from higher interest rates and the increased cost of living, but of course, that sort of cost of living tailwind is by definition temporary, even though it's not going away, particularly fast. And the upfront income that a partner can get of GBP 300 per customer can make a real difference to thousands of people who are struggling to pay their bills or meet the higher mortgage costs. But I think that there are 2 much more significant tailwinds in play, which we expect to drive growing interest in our partner income opportunity over the years ahead. Now the first of those is the work transition. There are now more than 20 million people in the U.K. with an additional sort of second, third, fourth part-time income. And so our partner part-time income model is much closer to the norm. It fits squarely into that sort of modern way of working where people want to escape the 9 to 5, they want to be their own boss. And of course, this work transition shift is only going to accelerate over the years ahead. And then I think even more significantly, I think that the biggest financial crisis that we expect to see over the coming decades is the pension crisis. You see there are literally tens of millions of households who are not saving adequately and are therefore facing retirement poverty. And government and policymakers, they've only got 2 answers or 2 solutions to this. One is to work harder. The other is to contribute more. So work longer. The other is to contribute more or some combination of that. And unsurprisingly, neither of those are particularly popular options. Our model, however, our partner income model, where you can get an upfront income plus an ongoing income, which is effectively a revenue share or a residual income. It's a small cut of every bill that the customer that you sign up pays into perpetuity. It fits squarely into the gap. And I'd like to maybe you give 2 sort of anecdotes, for example, is to really try and bring to life how powerful an opportunity this is for our partner model. So when we passed through the 1 million customer mark earlier this year, we went back and we traced down and tracked down our very first customer. And of course, because our customers stay with us for a long, long time, they're still a customer 25 years later. But even more interestingly, our very first partner who signed up our very first customer has been paid a small cut of her bills every single month for the last 25 years. Now that's the power of the residual income annuity style income that you can get from being a partner in action. And then secondly, to try and sort of demonstrate sort of how significant this income opportunity could be. If you were to sign up just 2 multiservice customers a month, that's one a fortnight. We're not talking about a huge sort of time commitment here. One a fortnight, 2 a month for 5 years, that at the end of 5 years, you'll have 120 multiservice customers that will generate you an annuity-style residual income equivalent to having a pension pot valued over GBP 100,000. GBP 100,000 pension pot. According to DWP, the average household pension pot is about GBP 30,000. I think if you look at sort of older age brackets, it maybe gets into the GBP 90,000 or approaching GBP 100,000. But either way, this small amount of additional effort over a relatively short time frame, giving you the opportunity to multiply your potential retirement income and retirement prospects, whichever way you look at it, this could be life changing and that is the power of our partner income model. Now given these tailwinds, of course, we expect growing interest in our partnering income opportunity over the years ahead. And you can see in the box on the right-hand side of this slide, how we might envisage our total partner numbers, our active partners per year and our active partners per month to evolve over time as we go on that journey from 1 million to 2 million customers. So pulling all of these growth elements together, including those exciting changes being planned for our mobile proposition, we have a lot of confidence in our customer growth expectations and the P&L range that we have shared today. I'll come back to that in a moment. But in the meantime, over to Nick for the financials.

Thank you, Stuart. So let's start with the P&L, which shows a very strong performance across the year. Now as Stuart mentioned, adjusted profit before tax is up 21% to GBP 117 million, and that's driven primarily by the strong year-on-year customer growth. Now if we look at the main themes within the P&L, revenues of just over GBP 2 billion are 18% lower than the prior year, and that's driven by energy prices returning from their very high underlying levels in the prior year to more normal levels going forward. And as we've mentioned before, are expected to increase below the rate of customer growth in the coming year. The bad debt charge as a percent of total sales was 1.5%. Now that higher level of bad debt overall, relative to lower historical levels is driven by the temporary moratorium imposed by Ofgem on the involuntary installation of prepayment meters for those customers who refused to pay 100% to the group. Now all this contributes to an adjusted PBT increase of 21% to GBP 117 million, as mentioned before, with adjusted share buyback, which we undertook in half 2 of last year. Stuart?

Thank you, Nick. So look, we've talked through our record operational and financial performance for FY '24, which continues that sort of exciting sort of trading outlook that began all the way back in FY '22, which has recently taken us through that 1 million customer milestone. So really sort of symbolic milestone for the business. So now to look forward to the years ahead and our journey from the 1 million customer also into our next milestone, which is 2 million customers. So as you can see here on this chart, with 1 million customers, and not all of our customers take energy, which is why we appear slightly below the 1 million customer line on the slide. We've got 3% energy market share and that makes us the seventh largest energy supplier and the biggest independent challenger to the new big 6, you can see all on the right of the slide. And of course, our market share was meaningfully smaller than 3% in our other services. So when we go on that journey from 1 million to 2 million customers, our 2 million customers will have 6% energy market share will only be the seventh largest energy supplier and the largest, most significant independent challenger to the big 6. So the question to my mind is not about the size of the opportunity, but it's about the journey to deliver on it. And here, you can see the 25-year journey that we've been on to get to this point. And I think there were 3 things that I'd like to call out, which is sort of labeled on the slide. First of all, we were delivering a double-digit compound annual growth rate in the period from 2008 to 2014, which is a period where we first became sort of truly multiservice as a business, and it was a sort of a normalized marketplace, very similar to the one that we're back in today. It was a marketplace where there were around 15-or-so suppliers in the energy market. They were competing, but they're engaging in rational competition. And that was an expectation that suppliers would all make a fair return. Then we had that period between 2015 and 2021. That sort of a slightly flatter period, the price war period where a failure of regulation led to that bearing over 70, so from 15 to over 70 suppliers. And we emerged into a period of what was a rational price-based competition with suppliers offering energy at negative gross margin. And that resulted in a loss-making sector, where we were pretty much the only profitable energy supplier, albeit a slower growing energy supplier. And then now having gone through the energy crisis, which cleared out those unsustainable operators, the regulator has rightly reformed the marketplace to be rational and profitable. It's a marketplace in which our unique business model has thrived and it's set to continue thriving. And that's why we've been saying and expect to continue saying that double-digit net customer growth, which is what we're expecting for FY '25 in the 12% to 14% range as we've set out. And in this normalized marketplace with our market-leading customer proposition and those growing tailwinds around our partner opportunity that I mentioned earlier. We've got a lot of confidence in our continued growth trajectory. So what does this customer growth opportunity mean in terms of profits and returns. What you can see on the right-hand side of this chart, our EBITDA per customer evolution over time. Now it was typically around GBP 100 a year mark. And then it structurally increased to the sort of mid GBP 120 mark since around FY '23. And that was originally driven by a combination of higher energy prices and also increased energy supply profitability. You might recall that our FY '23 profit outcome can be sort of traced back to like an implied energy price for the year of GBP 2,000, which is actually pretty similar to the average price cap level that I mentioned that we saw in FY '24 last year as well, albeit that last year, there was that positive impact I mentioned in Q1 from the very high energy prices that sort of fell over into the first quarter of last financial year. And that explains why our EBITDA per customer last year was actually over GBP 130, although if you strip out the Q1 impact, then you actually get back the underlying was once again in the mid-120s. So looking forward to the new year FY '25, we again expect an EBITDA per customer result in the mid-120s. And that assumes that energy price cap levels remain broadly in line with the latest forecast. And that's because we've already taken the necessary steps to offset the impact of energy prices falling from that sort of GBP 2,000 level that was the reference point last year and the year before. So the current forecast for this year of around the GBP 1,650 to GBP 1,700 level. Now in terms of the drivers behind our EBITDA per customer level and looking further out as we head towards the 2 million customer mark, we can see a clear opportunity to further increase our EBITDA per customer from that mid sort of 120s to the baseline up to the 130s, 140s and ultimately towards GBP 150 over time. Now again, the key components are set out on the slide. On the gross profit side of things, the main levers are improved supplier terms, the sort of improvements that you get with sort of greater scale and greater buying power. Secondly, from selling additional higher-margin services into our customer base and increasing our multiservice penetration. And third, by optimizing our pricing for overall returns rather than just for growth. And together, when you put all these elements together, and we see these elements as being worth well in excess of GBP 10 maybe as much as GBP 20 of additional EBITDA per customer with the rate of delivery being partly impacted by any need to offset any further falls in energy prices over the years ahead. And just try and put that additional sort of EBITDA on the gross profit side into context. An additional GBP 10 is less than GBP 1 a month of additional gross profit per customer. I think that's why it sort of feels so achievable over time. Now in addition, on the admin cost side of things, as I mentioned earlier, we're now scaled for growth and expect to start delivering operating leverage, whilst maintaining our high standards of customer service. And in addition, there are real benefits to come from AI and to the continued investments that we've been making in our technology platform. So together, we can see sort of admin cost opportunities over time in the region of, again, GBP 20 or more, which again feels very realistic. If you sort of consider the fact that a few years ago, our admin cost per customer was around the GBP 100 mark, and it's now sort of well over the GBP 140 mark. There's a significant opportunity to sort of rebate back sort of -- and if you take the midpoint between those 2, you can see where that GBP 20 sort of comes from. And then in terms of what do those growing profits over time mean in terms of actual returns. Now Nick stepped you through the headlines earlier, but our capital-light business model means that we expect our growing profits to convert into growing shareholder returns, and we expect to return in the region of 80% to 90% of adjusted profits after tax through an inflationary dividend supplemented by share buybacks. So in summary, in FY '25, the New Year, we expect customer growth of 12% to 14%, adjusted PBT of between GBP 124 million and GBP 128 million and an inflationary increase to the dividend, supplemented by share buybacks where appropriate. Over the medium term, from FY '26 to FY '27 onwards, we expect to start seeing the benefits of sort of the new launch of our EV tariffs and our business offering, which we're planning on launching later this year. As we look to increase our market share across all of our services, stepping on our journey from 1 million customers towards that 2 million customer milestone at an annual 10% to 15% customer growth rate with growing shareholder returns as we go. And then over the longer term, as we talked about, our customer proposition and partner model both have really significant further potential. As a reminder, 2 million customers when we get there. That will only be 6% market share in energy and 100,000 of partners, that was one of the numbers I mentioned on our partner slide. That will be just 0.5% of the 20 million people who are currently multi-income individuals in the country. So stepping back, it's very easy to see how over time our model could really emerge as the leading platform for taking new services into customers' homes over the years to come. Thank you very much, everybody. And I think on that note, we're going to move on to questions. And on the slide, you can see some autumn highlight snaps from our Power Up event earlier this year. If you've not been to it, I'd very much encourage you to get to it over time, ask anyone who's been and they'll give it a rave review, no doubt. I think we'll start off with questions in the room. Charles?

Charles Hall from Peel Hunt. Stuart, could we start on the insurance point? And just give us the background to why you've withdrawn the Bill Protector and the reviews of the boiler cover and home cover? What gives you confidence that there's nothing material that you need to change and that it will be a relatively short period that you're not able to issue those to new customers?

Yes, sure. So the backdrop here is this came up because we had an individual customer complaint about an aspect of our Bill Protector product. As a reminder, our Bill Protector product, it's a sort of a legacy -- it's a noncore product, it doesn't feature in our service numbers and doesn't make a material sort of contribution to the P&L but the right thing to do was to sort of review the terms of that policy. So we've sort of taken off the market for new customers, but only a handful of new customers take that product in any event, but we're keeping going with renewals for existing customers while we sort of step through that process. And whilst doing that, sort of the right thing to do is to obviously step back and take a look at your other products as well. That's what we're planning on doing with boiler cover and home insurance. We don't have a date for this but we will be planning on either later this month or early in July, taking them off the market as well. I don't know exactly how long these reviews can take, but we expect a few months. But yes, that's sort of the ballpark. But -- and just as a reminder, when you should step back and think about what we're trying to do with our products. We're trying to sort of be a challenger brand to sort of the established big players in each of our marketplaces by providing better service and better value across our products and that's true across our insurance products as well. So we're confident that these products are -- our boiler cover product, we've been sort of running at a sort of breakeven for the last few years. It's a really comprehensive product that's really keenly priced. Same with our home insurance product, which is -- it's a 5-star Defaqto rated. And we only sign up customers onto these products where they're offering better value than what they're already paying or what they quoted for elsewhere for these products. So we're confident in the value that we're offering, but you've got to step through the process. And until that time, then we'll temporarily withdraw from the market. The key thing is we don't expect and impact on our growth outturn, on the P&L outturn that we set out today. And in fact, when we look at the changes that we're making to our mobile proposition, mobile is a more ubiquitous service than something like boiler cover. Pretty much every household has got multiple mobiles in it, and it's a much simpler and easier switches. It's an easier sale. So not only do we expect the increase in mobile service growth from those changes in our mobile proposition to offset any sort of slowdown in the insurance service growth, I mean it could actually be sort of a broader growth accelerator sort of more generally.

And what was the specific issue with the Bill Protector product?

So one of the features of Bill Protector is that it provides sort of coverage of your utility bills in a scenario where you might lose your -- be unable to work for certain reasons, like redundancy, for example and certain customers who might have taken the product whilst they are working at a certain stage in life, they might stop working. Obviously, over time, work trends are pushing that age up, further up because people are working longer and longer. But for people who get to certain of the older age groups, the propensity to claim that product is less high and it's a less relevant product for people that age group. So that's the area that we're looking at, is confined to a relatively narrow cohort of people.

And the second SIM, what's the reason for making that change now? Why have you not done that before?

It's a really good point. I've actually given my team a bit of a hard time now that we sort of started thinking about it in this way and we see the opportunity from it for why we hadn't thought of it earlier and why we are looking at it sort of more sort of -- to sort of be lined up in response to this issue but I think it could be very powerful. But obviously, time will tell us that we will certainly drive and improve and increase mobile service growth. I'd like to think it will increase multiservice penetration more generally as it makes it easier and more attractive for customers to become multiservice. And because of that, it may also be a tailwind for growth overall. I think, John, I think, was next. So we can pass the mic over to John.

It's John Karidis from Deutsche Numis. Actually, I have 2 sets. So I'll just ask the first one, if I may. The first one, Nick, it would be useful if you can help us conceptualize the difference in EBITDA per service between energy, broadband, mobile and insurance? Because I know, for example, the OpEx for some services is less than it is for energy maybe. And that way we can sort of see what could happen if you choose to lead on different services over time? And then secondly, I just wanted to confirm that what you're saying about operating leverage essentially means that if you have 10% to 15% customer growth, the adjusted PBT growth would be what? How would you summarize it, 15% to 20% over that period of time. So these are my two questions for the time being, please.

Sure. Well, in terms of the margins per service -- contributions per service, we don't actually disclose that. But to give you -- but to give you a feel, the energy side of our business is high volume, low margin. And the sort of nonenergy side of our business is, if you like, lower volume, higher margins. So the margins that we're talking about on the energy side of the business are in the low tens of -- sorry, between 10% to 15%, and the nonenergy side of the business is materially higher than that. So it's -- that's just to give you a little bit of a feel for that, but we don't actually disclose specific numbers in terms of per service.

Just to explain why we don't do that. And we're really focused on the customer level. And we're therefore -- that's obviously what I was talking earlier about EBITDA per customer, and that's how we think about things. And that's because the multi- one of the real strengths of our multiservice bundle is that we can -- and multiservice offers that we can choose where we price and where we take our margin. And therefore, we can react to different market and competitive dynamics. And we're also able to, again, react to a falling energy price environment by increasing the price of our nonenergy services to partly offset that. And the way I like to think about the multi-service offer is always a little bit like we've got the power like a graphic equalizer where each -- across each of our services, if there's a particularly sort of competitive marketplace in mobile at one time, we can reduce our mobile pricing and offset that investment by increasing our price elsewhere. And if we were to report sort of more -- in a more granular way, or sort of margins per and contribution per service line basis, they could be moving all over the places as we did that graphic equalizer causing more confusion than help I think, over time. That's what we focus on the customer level contribution.

Absolutely. And then on your question about operating -- around operating leverage, where we're obviously -- we're talking about growth rates in the sort of 14% we've seen this year, for instance. Then going forward, assuming that level of growth rate, we would expect -- if you look at our admin costs, those went up between FY '22 and FY '23 materially. And then they are now much closer to -- that was slightly higher than that rate of customer growth. Going forward, we would expect the rate of customer growth to be in the single-digit percentage points per year of growth.

Admin costs.