HUB24 Limited

Thank you for standing by and welcome to the Hub24 Limited first half FY22 presentation. All participants are in listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Andrew Alcock, Managing Director and Chief Executive Officer. Please go ahead.

Good morning and welcome everyone. It's great to be here and we're very proud today to deliver hopefully what you regard as a very good result for Hub24. The first half of FY22 has seen us set some records in terms of organic growth but also success on our acquisition strategy to create strategic opportunities for further growth and expansion for the group. So with me today we have Katrina Shanahan, our Chief Financial Officer. Katrina will give an overview of our financial results today. Later on during the presentation, of course, we will have some Q&A at the end of the presentation. Just moving on to the strong financial results slide, the first one there in the pack. Great, as I said, to be talking about fantastic organic growth. We had $6.7 billion of net flows for the first half, bringing our total FUR up to $68.3 billion $50 billion of that being of custodial FUA and $18.3 in the PAS and on custody space. So the $50 billion is our closing number at $31.12. We're pleased to be able to say whilst there's been some market volatility our flows so far in the second half have offset that. So as we stand today or as of Friday the current custodial FUA was also at $50 billion. Those flow amounts have driven great financial results which have also been supplemented by the full half year of having Explore inside the business and so with our group underlying EBITDA up at 80% on PCP, our revenue up 72% and our underlying NPAT up 103% to $14.2 million. With statutory following behind that of course because there's $8.3 million of transaction implementation cost, statutory impact of 8.4. But really great to see EPS up 27% at 11.86 cents per share and we've been able to increase our dividend up 67% at 7.5 cents for a half year fully franked dividend. So all in all fantastic statistics with the numbers in the 70s or 80s in terms of percentage improvements in the underlying financials for the business there. And it's been a great half of proactive discipline management for us to do that, to be able to pivot investment in parts of the business that support ongoing growth and in fact growth that surpassed expectations where we had to move around to support onboarding of customers and advisors and sales team, to be able to move our expense base around to focus on what we needed to do so that we could expand margins, manage expenses but also deliver what we think is amazing growth. And in fact, if you look at the statistics in historical terms in terms of platform growth in this industry, it's been a very long time since platforms, in fact, not at all, or only once in the last 15 years where platforms have achieved growth levels of $12 billion per annum. So you've got two industry peers or competitors achieving that, which is really a record for the industry. And we certainly look forward and are aiming to continue to do that moving ahead. Moving to the next slide, if we look at the four year trend for our financials, you can see that we've consistently delivered record growth in terms of funds under administration and the record being having had three consecutive quarters of record inflows in what could be challenged as a very interesting and difficult time economically on a world sense. So our funds under administration, you can see the growth there over four years. It's been reliable and consistent and certainly the revenue and underlying EBITDA growth stats there for four years as well, also being reliable and consistent. We certainly hope to deliver that trend more again in the future. So our FUA is up from about $10 billion around about first half FY19. In a custodial sense, it's at five times that, being at $50 billion four years later. And when you add the non-custody, it's at the higher levels there. And the CAGR... of revenue and Adelangi Bidab being in the 41% for revenue and 63% for Adelangi Bidab. So good reliable trends for delivery for HUB24 and as I said we do aim to continue to do that moving forward. We work very hard to do that after our customers, our staff and deliver great results for shareholders. If we move on to the next slide and a quick look at the overview of the group today which has changed remarkably certainly from this month due to the completion of the class acquisition. And on the left-hand side of the slide, our platform business, there you've got our non-custodial platform business, as I said, with a total of $68.3 billion of FUA. Breaking that down, there's about 3,400 advisors using the platform and about $22 billion of the $50 billion in FUA is in managed portfolios, which is one of the fastest-growing parts of the market and certainly an area in which we excel and lead the market. We'll talk a little bit about that further on in the PAC. The non-custody piece is there as PARs or Portfolio Admin Reporting Service that also experiencing some growth through the half, landing at $18.3 billion and over 8,000 accounts. In the middle pillar there, there's the HubConnect or the Tech Solutions business line which is supporting brokers in the Australian marketplace and licensees and there's 92 clients or institutional financial services clients there and 96 data integrations. That's important for our ongoing strategy talking about how many data integrations when we think about the strategy about bringing a whole of WealthView together. And so that business is growing as well and the class business on the right hand side. Class being certainly a market leader, an award winning business. We completed the acquisition or the implementation of the acquisition probably only four business days ago. In fact it's week one this week technically. Tomorrow we took over the keys of the business last Wednesday. They are experts in the establishment, management and administration of wealth vehicles and you can see some of the products there with being class super, SMSF administration software or accounting software, class trust for trust administration, class portfolio and you can see the commonality between some of the existing hub strategies for investment reporting and administration for assets with data feeds. Class having 220 feeds of data to support those product ranges and the Corporate Compliance and Documentation Business Now Infinity which Class runs to help establish trusts and wealth vehicles and deal with ASIC and company administration activities there to support accountants and professional advisors. There are some great complementary opportunities and products and commonalities between client bases and opportunities to grow both businesses together which we're very much looking forward to. So that's an overview of Hub24 today and great to be able to talk about that and very glad that the class acquisition has been completed. Moving on to the next slide, of course the core value driver for our business is our award-winning Hub24 platform and once again please be able to say that we are Australia's fastest growing platform provider and by that I mean in terms of our share of net flows versus our current market share. Not in dollar terms but in terms of rate of growth or how much we're delivering off our base. Yes, we've edged out to be number one again and that will move around but we're very pleased about that to be the fastest growing provider at a ratio of 10.66 i.e. our share of new business is 10.66 times our current share of overall market. So in terms of the metrics on the market share, we've grown from 2.3% of the platform market as at September 20 and that's the latest data, September 21 has us growing to 4.6% so doubling our market share in a 12 month period. We're the seventh largest platform provider from ninth place in that 12 period. We're ranked second for annual net inflows and our five year compound annual growth rate of 65% for food in the marketplace. So you can see on the left hand side that ratio of new business to existing share and on the right hand side there just the growth in FUA and we've added the yellow bars there being the non-custody or PAS FUA. A little bit later Katrina will cover off some of our financial highlights but before we do that I want to just quickly talk about some highlights for first half of FY22 in business sense, that's on the next slide and I'll also talk about our strategic pillars. So moving to the first half 22 business highlight slide, as I mentioned we've had three consecutive net flow records for the business. and ending up with $6.7 billion for the first half of FY22. A great result, particularly when you look at the history of the industry. And I was looking the other day, even if you go back five or six years, it's hard to find a platform that delivered more than $6 or $7 billion a year except for the two main players that are in the market today. We are number two for annual net flows, as I mentioned on the previous slide. On that top row there, we've once again won the Platform Managed Accounts Functionality Award from Investment Trends. The data was out last week. That's the sixth year running for us to win the managed accounts functionality. It's certainly our sweet spot and our clear differentiator and we've also won first prize for overall product offer which we're very pleased about as well. We've just been edged out again into number two position overall having edged forward last year into number one position. Both of the peers in that space, ourselves and our competitor were neck and neck in that Both have had scores over 90%, which is a new record for the scoring, I think, in recent years for investment trends. So having said that, being number two overall, but first for product offer, first for managed portfolios, we're in the top two in five out of six categories. But interestingly, below that, we've won 22 subcategories out of 48, and that's the highest amount of categories won by a platform. So having won 22 out of 48 is the best result of any platform. I'd love to say we're number one, but we are very, very close and we're constantly delighted to compete with our competitor, trying to edge each other out on that award. In terms of the platform, 3,400 advisers there. During the half, we've done some ongoing enhancements, certainly to support advisers with regulatory matters, with advice fee consent, some of the changes that came out as a result of the Hayne Commission. We're pleased to have delivered what we call bulk ROAs, or the ability for an RO being a record of advisability for an adviser to trade across their client portfolio and issue an advice document and do that as one step to all the customers affected by that really great proficiency for advisors and really amped up our online account opening to make it easier for advisors and customers to work with us. The Explore integration is progressing well. The benefit realisation is on track and 13% EPS growth for FY22 is the plan for that and lastly the acquisition of class was completed during the half. and we absolutely aim for that to accelerate our growth strategy moving ahead. Moving forward to the next slide, in terms of our strategic pillars and it is about, we quite often talk about this, our purpose or why we exist is we want to empower better financial futures together for Australian customers but working together with financial professionals, whether that be financial advisors, accountants, solicitors, tax professionals, working together with investment managers, fund managers, working together with licensees and certainly working together with customers and other tech providers to build better futures for Australians. So of course, our first pillar is about delivering customer value and growth and that's about our core platform business continuing to develop that proposition and lead the marketplace in terms of building a sustainable competitive advantage, lead innovation and continue to transform the landscape as we've done previously. We are committed to that, to delighting our customers, and we'll continue to work in that space. In the middle pillar, we talk about continuing to build the platform of the future. For us, that means an integrated experience that supports financial professionals able to implement tax, investment, and strategic advice. And breaking that down, it's about providing a single view of wealth, allowing customers to see their entire wealth with one view whether that involves data from multiple providers but bringing those pieces together, the integration or the seamless integration of being able to view assets that you might hold in custody on a platform i.e. our core economic engine, the Hub24 platform and the Explore business bringing together or looking at non-custody assets and being able to see those transparently regardless of how they're held in different legal structures, being able to get a whole view but bringing the seamless integration of those together And obviously looking at product solutions that improve retirement outcomes for all client segments. So that includes the segments we've had pre the acquisition of Explore and now with Explore having high net wealth and non-custody assets there with the Orbitnet PaaS business as well. But building out the platform of the future that creates advocacy and transformation and support for our future and the future of our customers. And the third pillar there about collaborating or once again working together to shape the future of the wealth industry and to play our role to develop this industry to build advocacy and support for advisors and make sure we've got solutions that deliver on that promise to empower better financial futures together. I'll talk a bit more about some of the initiatives we've got there and we're very pleased that we actually have those three strategies on which to consolidate and think about our further growth. I'll hand over to Katrina Shanahan, our Chief Financial Officer. Katrina, for you to give us an overview of our financial results.

Okay, cool. Thank you, Andrew. So moving to slide nine, which is the group financial results, you can see strong results coming through this half with the group underlying EBITDA at $29.7 million and which is up 76% when compared to the prior comparative period being December 2020. Underlying NPAT is up at $14.2 million, being up 103% on PCP, and stat NPAT up again to $8.4 million, being 38% on PCP. The difference between the underlying NPAT and the stat NPAT is the acquisition amortization and the implementation cost for Explore and Orphanet. Post-tax, the combination of those two things is about $5.8 million. You can see on the right-hand side on the operating revenue bar chart that we've got that the platform segment continues to be the driving force of the growth. With the tech solution slightly back on PCP, which is an old infrastructure contract that rolled off this half. And so the continuing business being the applications business is still performing well. Revenue at a group level is up 72% to $81.6 million. And the operating expenses at a group level are up 70% to $51.9 million. So that's giving a positive jaws at a group level. and has improved the underlying EBITDA margin by about 1%, which has improved to 36.4%, up on 35.5% on December 2020 results. So then just moving over to the next page, here we have on page 10, we've got the platform segment results. And again, here you can see Andrew briefly talked earlier to the growth in the total sewer balances. So total FUA is up 118% to $68.3 billion, with the platform custody FUA being $50 billion and the PAS non-custody FUA being $18.3 billion. You can see both of those. Platform FUA is up 128% and PAS is up 97%. This half, we've got the benefit of the Explore portfolio being in there with the acquisition completing in March 2021. So the Explore business wasn't in the FUA numbers for first half 2021 but is in the first half 2022. The organic growth has also contributed quite significantly. On the right-hand side, you can see the FUA walk with $6.7 billion of net flows and $3 billion worth of market movements. The market movements in the first half to December were very strong. January and February have been a bit weaker, which everybody will have seen coming through, but the first half was a real benefit. We've got the impact of the last RBA rate cut. We've given this just as an illustration. So the positive jaws that we saw at the group level, the revenue for platform is still very strong at 76% growth rate at $77.3 million. Just as an illustration, the RBA rate cut, the last one in November 2020 of 15 BIPs, based on our average FUA balance and our cash as a percentage of FUA, that had a drag on revenue of $3 million over six months just for that one rate cut. So had it not been for that, you would have seen positive growth during the platform segment as well. Moving on to slide 11, continuing the platform results. Here we've included a five-and-a-half trend for you for the revenue, expenses, and cost-to-income ratio. You can see here that this half, when you compare it to Spolier 21, even in the platform segment, the positive jaws are coming through, which is the operating leverage on the platform delivering, and we're expecting that to continue. We've also got small synergies coming through for the Explore business. with the full run rate for synergies expected to come through by the time we get to the beginning of full year 24. The platform underlying EBITDA is up at $30 million for the six months. That's a 55% five-year CAGR. And you can see that compared to a full year underlying EBITDA number of $37.9 million, $30 million for the six months is a fantastic result for us. Moving on to slide 12, which is the composition of the platform for us. So this you can see in the wheels on the right-hand side. We started including this at year end just with the acquisition of Explore. With the Diversify portfolio, we included this just to help break out the retail, institutional, and Explore super admin. So it's... Based on full year 21, when you compare first half 22, the composition has remained relatively stable, with retail representing 81% of the portfolio, explore super admin representing 16%, and institutional being 3%. When you look at the bottom of the page on the right-hand side, the revenue margin this half has actually been very strong. We're very pleased with where the revenue margin has come in. Overall, for the whole of the platform business, Platform 4 is coming at 32 BIPs, And that's slightly down on the full year 21, which is with a total of 36 bits. You'll see when we get to the next page, that's the annual runway impact of the Explore business, which is a slightly lower margin coming through. So then when we move to slide 13, this is where we talk about the platform revenue. And you can see here the growth of 76% half on half. So taking first half 22 compared to first half 21, it's grown to $77.3 million. Administration fees have contributed nearly $10 million on the second half last year and about $18 million over the first half 21. And then cash and other being trading, cash and trading, and some small other revenue streams in there has contributed $10 million in this half and about $16 million this year. over first half 21. On the bottom right-hand side, you can see the platform revenue margin. So here, when we did the year end, we did the walk down from the 44 bits in the first half 21 down to the 34 bits at 30th of June 2021. And that was to do with the cash RBA rate cuts, the trading volumes normalizing to pre-COVID levels. And then this half, you can see that the only impact on the margin is really the annualization of the Explore portfolio coming in. And a key bullet point that we've included here for you, as I've mentioned earlier, the strong performance in the group is both the organic growth and the net flows, the $6.7 billion of net flows, but also the Explore and the Ord Manette acquisitions have contributed $14 million in the first half of 2020. Moving on to slide 14 being the group expenses. You can see here that the group expenses in total when you include abnormal items and acquisition, amortization, et cetera, you've got about $69.6 billion, $70 billion worth of total expenses. Just left of that in the far right graph, you've got $61.3 million, which would be the underlying expenses, which includes $3.5 million for the special rights that were issued back in 2021. Last year, we didn't recognize any share-based expenses for that issue because the probability of investing was still unknown. Given the strong net flows that we've had in the 18 months since they were issued, we've increased the probability of those vesting and included a $3.5 million share-based expense that we flagged to the market when we did the second quarter market update. Operations, technology and sales is the driver, the driving force of the core of the business and the increases, with $17 million of that relating to employee expenses being the the core driver of the investment for this half. We've got $8.3 million of abnormal items being $3.2 million before tax for implementation costs and then the $5.1 million of the depreciation and amortization that was acquired through the Explore and Augment acquisition that we did. Just moving on to the last financial slide, we've got the NPAT and we've got a walk of the underlying EBITDA of $29.7 million to the underlying NPAT of $14.2 million and statutory NPAT of $8.4 million. You can clearly see here depreciation and amortization from the normal core business is $3.2 million, which is broadly in line with the run rate from last year. Then we've got the share-based payments up at $6 million, which includes the $3.5 million that I mentioned earlier for the recognition of the special rights that were issued in full year 2021. And then, again, you've got the implementation costs for Explore and Orbanet of $3.2 million and the acquisitions or amortization for Explore and Orbanet of $5.1 billion. So overall I would sum it up as a fantastic financial result this half which we're really very pleased with. And then back to Andrew.

Thank you Katrina. It has been a great result and I look forward to doing Q&A with you shortly. I'm just moving on to an update on the class acquisition. Look it's great today to be able to talk about class. it's been a long process having announced September, October last year and getting to where we are and having successfully completed last week. I know everyone is keen to hear about strategies and products and markets and what we're going to be doing. I'm going to broadly cover our approach, bearing in mind it's been less than a week since we've had the keys to the business and since we've started working more closely with the team. There's some commercial, strategic and competitive matters that means we'll be very circumspect about what we talk about in the short term about our strategies and that's clearly just to put us in good stead. So I understand people want to know a lot and absolutely down the track we'll be giving some more detail about the Hub24 Group broader strategy including class. So we look forward to coming back to analysts in the market with that down the track and certainly working hard to just ratify some of the plans we've got which we hope to share subsequently. So on the class acquisition. As I said earlier, class is an award meaning market leader in the wealth vehicle space. Imagine a world where advisors, whether they be accountants or financial planners or lawyers or groups of advisors looking after a customer, can actually without friction create an ecosystem or a world for an investor where they can open a family trust or a self-managed superannuation account. They can open a platform account. They can connect that platform account to other providers and other investment vehicles and also at their self-managed super fund. It all happens without friction. It all happens with one process. That's just the sort of world or ecosystem we're aiming towards at the same time allowing each of our businesses, Hub24 and Class to operate in its own ecosystem with other industry participants as well. Really an open architecture approach as opposed to just Hub and Class together. Hence our need to and our absolute clear goal to operate Class as a separate business unit because it does look after other customers and institutional relationships that do around the edges or do compete with Hub24 in their own right. So not wanting to disrupt that. But imagine that world where you can make it easier and better. You can empower better financial futures together working across that ecosystem and you can make that world a bit more relevant to customers. That's certainly the overall strategy. Right now we're finalising an execution phase on the left-hand side of the chart. The transaction's been implemented. We've got an interim CEO in there and Managing Director being Jason Entwistle, so HUB's Director of Strategic Development and continuing to play that role working with me and my team. But Jason's in there as interim CEO and it is interim. We're establishing and making sure we're communicating effectively with customers and the class team and really excited about that. And we're just putting in place the transitional governance frameworks when we need to in terms of reporting through the group structure. Pretty much done. Moving into a transition phase, which is really where we are now. Class will operate, as I said, as a business unit inside Hub24. There will be some streamlining of corporate functions, as it makes sense, e.g. finance and so forth. But right now in that transition phase, whilst we get to know customs, we're really progressing the development of additional strategies that we can look at to increase growth, both Hub24 and Class. So working through those with the Class ELT or executive team and back with the Hub team as well and then looking at joint product development opportunities that can move towards that world I said where imagine a frictionless ecosystem where it's really impossible to set up and manage those vehicles. So we're looking at opportunities to create efficiencies for customers and so forth and we will in that transition phase look to appoint a permanent CEO and refine the operating model within the Hub24 group moving forward. And then moving into a growth phase where really it is about extending the core SMSF strategy that Class have to benefit the customers of the Class business and the Hub business. I deliver growth for those business and we're actually aiming to grow the market through innovating together, how can we actually increase the relevance and grow the market for self-managed super fund and some of the features and services that CLAS had working together with the hub platform. Think about a world where millennials enter the superannuation environment differently to how I did. They've got more years where they'll have mandated superannuation. They've certainly got higher targets with 12% from the government's point of view. So they'll have higher investable balances earlier than somebody like I did and so the relevance of really great solutions and making them frictionless is really important. particularly given the attitude of people today which is they want to do it themselves or they want to actually work with advisors and play an active role in securing their future. That's the backdrop for some of those earlier comments. We're going to collaborate on solutions to simplify the implementation of advice as I said. Interestingly, there's some really neat data capabilities that CLAS have that accelerate our platform of the future strategy in terms of giving a whole view of wealth. So we're going to co-develop data as a service with Class and Hub, combining the market leading capabilities of both companies as well and provide that in many different ways to this great industry. So obviously we're targeting or we'd like to say we're targeting acquisition benefits beyond the 8% EPS accretion which we announced when we published the original transaction. We always said that's a synergy based target. Clearly we're looking for revenue synergies and opportunities. As I said we'll share more about that down the track once we've got through our transition phase and formed out a more detailed plan and comfortable to announce the market what we're doing in terms of competitive matters there as well. If you turn the page to the next one, looking at a combined group snapshot all we've done is form results at 3112 and the class results which are unaudited at 3112 resulting in a pro forma consolidation or combination figure there. The group together would have $112 million of revenue and underlying EBITDA of $40.4 million. Interestingly the diversification of revenue is really great there with 23% of the group's revenue being software subscriptions. So broadening out the distribution footprint and the revenue sources for the group and a greater profitable business moving forward. So that's just a combination pro forma as I said at 31 December. Moving on to the outlook for Hub24 before we go to Q&A and on the slide we've got the Hub24 well positioned to capture market opportunities. That's the slide with the market share donuts. A quick look at that market share. As I said earlier we have 4.6% of the Australian platform market share. It's a $1 trillion market. We've got 4.6% where ranks are in first or second position depending on how you look at the Some of the statistics there, we're breaking records in terms of flows, but some of the traditional incumbent winners in that market share have traditionally had market shares above 20%. So a lot of room for Hub to grow if we keep executing well. So great opportunity for us to continue growing our business. In the managed account space, we have 19% market share there. That's increasing. The market there is expected to grow. I think over 40% of advisors now wanting to use managed accounts as an investment solution. So well positioned there and we're the market leader there. In the Portfile Admin Reporting Service market, those stats, we'll update them, we'll do some more research for the full year, but 12% market share there. And the SMSF market class is at 180,000 class super accounts in a market of about just under 600,000 accounts. So looking to grow that share, grow that business, work together with the sales culture across Hub24 and class to continue growth for class already, but also grow the market as well. Moving to the next slide. So what are we doing about enhancing our value proposition? Again, positioning this slide against three pillars or the three strategic pillars that I talked about earlier, and the first one being about delivering customer value and growth, we are absolutely focused on this and delivering platform enhancements to support advisors with regulations and efficiency. We certainly know that's what's held us in good stead to get to where we are. We certainly know we need to continue to do that. and we absolutely are. We're really excited. That is in beta phase. I think we've nine practices already and we're looking forward to getting feedback from those advisors and launching it to the whole customer base down the track. Of course we're working on enhancements to our managed portfolio capability. There will be enhanced trading and customisation features for managed portfolios. We'll update the market on in the future and we've also got development underway for a market leading payment capability to create payment flexibility on the platform for customers receiving money into their account and also making payments outside or out of their account, of course living within the rules of superannuation versus non-super products but absolutely looking forward to enhancing that as we move forward as well. Moving to the middle pillar in terms of continuing to build the platform of the future, we are continuing to deliver on a whole of wealth strategy. We're also progressing additional strategies and product initiatives across Hub24 and Class that will help round out that platform of the future capability. We're going to develop industry leading data services as I mentioned on the previous slide with new capabilities for HubConnect and as we complete the Explore integration we will leverage product features that Explore had in their high net wealth and private clients businesses across the Hub24 platform, a bit of a snapshot there. That includes unlisted bonds and the ability to trade on the ChaiX as well. So leveraging that out across building the platform of the future. In terms of collaborating with the industry, we are accelerating the development of our HubConnect offers. We have a HubConnect licensee service that we've been developing for some time. We're moving that from what we might call active beta into production. for those foundation licensees and we're also working with them on a future roadmap for initiatives. So that's licensees paying a subscription service to receive the HUB24 licensee capability offer. That really makes it easier for them to look at their business and support their advisors but also makes it easier for them to use the HUB24 platform and ecosystem as well. Our innovation lab is continuing to think outside the square. There are new members moving into our licensee think tank. and looking at how they leverage some of the data we've got and the investment we've got in machine learning and AI solutions. For example, I quite often talk about prevention versus detection when you think about advice delivery. We're looking at an advice validator module that allows advisors to validate an advice document according to licensee standards before they send it to customers. That's an exciting innovation we're delivering there as well as part of that ecosystem. It's all about having a finely balanced investment across our three strategic pillars, hopefully to result in a healthier, sustainable, profitable business and grow and enhance our collaborative, I suppose our collective value proposition with the marketplace. So we're very excited about that and continuing to enhance our proposition. We're not sitting still. We're absolutely committed to moving forward ahead. And finally on the last slide, as an outlook or a summary for Hub24, I'll go to the right hand side first. We've absolutely updated our FUA target guidance being our custodial FUA target. We had a range of $63 billion to $70 billion by the end of FY23. What we've done is we've updated that guidance, we've added a year to it so we've pushed it out to FY24 but in effect we've added $20 billion to $22 billion to that range. So a range for FY24 of $83 billion to $92 billion for the end of FY24 of custodial platform data. Really excited to be able to do that given we only made the other statement six months ago so our growth has surpassed expectations internally. Of course we obviously aspire to shoot the lights out with that but it's great to be able to come back to you and say hey look six months ago we made a statement, we're now adding $20 billion to it and pushing out the target by a year but we're really comfortable and pleased to be able to make that statement to you. So in terms of an outlook looking at the chart itself or the slide itself, In terms of positioning for success, we will continue to invest. As I've said, we are going to mature and scale our private client and non-custody offers. We're going to continue the integration of our new capabilities, that being Explore, Orbit NetPars and also the class acquisition as well. And of course, given the growth of the business and the opportunity and the strong runway, we're certainly expanding our executive capability, expecting new growth with the Chief Risk Officer joining us on the 21st of March. That's in our ASX release. That's Deborah Latimer, a partner at Deloitte who's leaving Deloitte and joining Hub24 and working on appointing a Chief Growth Officer really to lead our distribution and marketing functions and work closely with our operations and product functions to look at targeted strategies to increase growth across all our customer segments given we've broadened our distribution footprint. So that's institutional clients, that's high net worth private clients. the normal retail platform segment as well looking at how we absolutely continue to grow and continue to break records in the industry. In terms of pursuing growth itself we're obviously going to leverage our existing relationships and deepen those relationships with financial professionals across CLAS and Hub24. We're going to leverage the expanded product capabilities, develop new opportunities and we'll continue to evaluate other strategic growth options as they make sense if they help us lead change in the industry. In terms of financial results, continuing strong financial results is our expectation, leveraging the full growth and scalability of the business to deliver even further shareholder value, increased scale and revenue diversification following the acquisition of class, increased profitability and enhanced margins. We also expect to continue to do that and deliver expected synergy benefits and EPS growth from our acquisitions that we've undertaken. We expect those to flow through over time as well. all leading to us and our ultimate strategic objective at the bottom of the slide about leading the wealth industry as the best provider of integrated platform, technology and data solutions. So that's the end of us covering the formal presentation. I'd like to take some questions. So I'll go back to our moderator and open up for questions for Katrina and I.

Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask a question. Taraz Ahmed with Citi. Please go ahead.

Hi, Andrew. Hi, Katrina. The first question, just regarding this new term, so you've given the full update as of a couple of days ago. It does imply that the flows might have been down year on year. I think last year you had a pretty strong start. It was around $1 billion. Can you just talk to the flow? Sure.

No problem, Suresh. Certainly, you've got a market movement in there. So FUR is down because of market movement. Our flows so far to date have offset that market movement largely. and our flows are as we would normally expect. You would normally expect a slight softening of flows in January as people go on holidays and so forth after December. So we're very comfortable with the flow patterns, very comfortable with them picking up as we move through February. It's simply a market movement drop. Do you have that number, Katrina, since 1 January?

On the market movement drop?

Yes.

Yes, about 1.4.

Yes. So there you go. And you could do that analysis by looking at the market. So I hope that answers the question. Sure.

Yeah. Yeah. So the flow is actually not too bad. It's $1.4 billion. And second thing. It's not too bad.

The flows are exceptional.

Okay. I should say exceptional. There you go. And just on that, you did mention fees on the pattern. So any reason why we shouldn't expect the June quarter to be the strongest quarter this year?

We have no reason to suggest that. Of course, it comes as it comes. From our perspective, we think we're in uncharted territory with the flow levels that we've got. We don't know what normal is and hopefully we never find out because we'd like to keep exceeding expectations. But we've got no reason to suggest that normal seasonal patterns won't continue. You'll have advisors focused on clients' accounts as they lead up to June and activity. You'll have people reviewing accounts and as long as we continue to deliver, I'd expect we'll get transitions onto the platform. So... you know, I'm hoping to have a bumper fourth quarter.

Great. And I'll ask one more, but it's a three-part question. So on the FY2044 target, which is quite solid, can you just break that down between your expectation of flows versus market movement? And also on that, you did mention you expect an acceleration revenue due to class. Have you assumed anything in that FY2044 number? And lastly, on the same thing, your LTI is for greater than $100 billion. So what can get you from that $92 range to $100 billion, I guess?

Yeah, I'll answer most of that. I missed the middle part there, Siraj, so you'll have to just help me. So how do you get to $83 to $92? Look, we've just applied a very standard 5% market growth year on year. And then when you look at the net flows, there's clearly quite a broad range of what might the net flows be each year. And it could be anywhere between 10 to 14 billion between, you know, going from here out to full year 24. And it really just depends on whether or not the momentum continues and whether or not the market stays level at the 5% or what the market does. We've gone for a broad range. It's 10%. Last time we did the Outlook Portfolio 23, the range was around 10% of the top end of that range. It's 10% again on the top end of this range. So just for the uncertainty of where might it land. And I think, Siraj, what was the other?

Have we actually put anything in that for class? No, we haven't. We haven't actually looked at that model and said here's an upside or an increased advocacy for the platform due to class. And we haven't factored into that in any large meaningful institutional transfers either. So if they do occur, they certainly underpin or underwrite the achievement of the top end of that or overshooting that. But in our modelling, it's sensible. We look at different sensitivities. It's largely conservative, but there's a range there. It's simply because we don't want to be updating you and moving it backwards. We'd rather update it as we have and move it forwards. But those two factors aren't there, Suraj. Any uplift for class or institutional transitions? Sorry.

And I think the last one is just how do you get to $100 billion, I guess? I mean, is it just institution transfers or anything else that we should be thinking about?

Well, the $100 when you look at it includes path and non-custody. So when we put the last LTI out there, It's a combination of custody and non-custody and the mix of those two things may well shift.

You've already got $18 billion. Yeah, if you add the $18 billion, that gets you there already. And interestingly, surprisingly, with the strong growth we've had, we didn't expect, obviously we aim to work as hard as we can, but we didn't expect to get the strong growth in the first half. But that's how you get there. It's a combination. I think we're at 100 to 114 is the range, is that right? Yes, exactly right. Thank you. Thanks, Siraj. Good to have you covering us again.

Your next question comes from Scott Murdock with Morgan. Please go ahead.

Hi, Andrew, Katrina. Well done on the progress this half. Just a couple of questions if I can. On the cost base, Andrew, I know it's always a bit of a focus, but Can you, I guess, give us a few more comments on the breakdown? Apologies if I've missed any comments around headcount, but several parts of that. I mean, just the underlying wage inflation versus sort of headcount growth and scale costs. The ability to leverage that cost base from here in context of your outlook statements around margin improvement. And just the third part to this long question, sorry, the addition of class, just adding that further tech capability in it, assuming that they've already got, does that take any pressure off having to high in the tech space which is obviously difficult.

I might touch the strategic part but pass to Katrina for some of the detail there Scott but thank you for your question. I do think that the two businesses together create some optionality in terms of technology resources. It is a tight market and we're yet to look at how we can leverage that certainly in more detail as it's only day four but we've both got data strategies. I'm hoping that that helps us do that, get there faster or leverage that. And so certainly my other comment is obviously we always look to leverage our fixed cost base for growth. And the factor I always talk about is how fast are you growing?

Yes, Scott, just to answer your queries on how many is in there. So FTE for 31st of December was 460. That's up from about 380 at the 30th of June. So in those Six months from 30th of June, we've put on about 80 FTE, which is a 21% increase in the headcount. Class is clearly not in there, and class will add another 200-plus headcount for when we get to the year end. The bulk of where we added, it's in the operations tech and sales team. they're moving, one, with the volumes, but also just from a scalability perspective, just to make sure that we're investing for the future and that we can catch what's coming through. And then, like Andrew sort of mentioned, we've got a couple of group executive incremental hires in there as well, and then the support areas are just growing, not quite as fast as the front office areas, but, you know, in line with the growth of the size of the company.

So in fact, we are leveraging those other functions. It's sales which you have a variable cost towards supporting the market and customer ops as well as customer service. So they go with the organic growth and the tech is about investment.

Okay, thank you. Can I just ask a quick follow-up to that then? Sorry, just, I mean, the 80 FTE additions in one half is obviously quite sizable just so... what that, I guess, means in terms of what we should expect over the next six months or 12 months, what that investment, you know, that you've obviously put in in the next six months, you know, can it settle down from here in terms of needing to add people?

Yeah, so we... Andrew and I sort of had a conversation about this as well. We know that there's a... There's a challenge in the Australian market with actually being able to recruit. People are calling it the war on talent. For us, with the growth that we've got, we've actually been fortunate that we've brought forward the operations tech and sales hires. When we looked at the budget and what we were going to put on across the whole of full year 22, with the record net flows of $6.7 billion and the continued momentum, we were actually able to bring forward some of the hires that just because of the, it's actually, it takes a bit longer to hire people, and therefore we just said like, right, hire people as soon as you can, get them in the door so that we can manage the volumes. When you look forward to what that means for the second half, we're absolutely aspiring to continue to grow our margins, but at a minimum we'd expect to hold them flat.

Okay, thank you. I'll leave that one there. Just interested, just two more questions if I can. On the class contribution, you've given us an idea of there in the first half. If I go back to August last year, class detailed their own EBITDA target of $25 million for this year. Is that a target? I know this is a short-term question, but is that a target that you support given your due diligence on the business?

So I think, I mean, it's very early days. Like Andrew said, we're only into week one or two. So we... The budget is currently still tracking as class we're expecting. What I would say is that given that we've only just taken the keys, we want to make sure that that business continues to perform. We will absolutely make sure that we invest in that business and therefore it will come in roundabout there, if not maybe slightly below, but we're not expecting it to come in necessarily over based on what we've seen so far.

So we're not making a formal comment. That was a comment made by their board, but we're absolutely working hard to get the best result. OK, thank you. And just one more for a past... It's just too early. We need to get in and have a look. You know, you don't get to have a look that far when you're doing a public takeover, so we're just trying to be prudent.

Yep. Fair enough. Thank you. Just one last question. Just on the revenue margin there, I think, at last result, it was indicated that you were comfortable holding at 30 bps. revenue margin in total, obviously coming a bit above that. Page 13 gives us detail there. There is a step up in the other sort of revenue line, just wondering if there's a sustainable step up in that other revenue or whether there's some sort of boosted trading revenue and the like, how we think about that revenue margin going forward.

Yes, you're absolutely right that that cash and the other part of that is trading. We have seen sort of trading in this half quite normal compared to the second half of last year. The first half of last year was where you really saw the elevated levels. There's nothing unusual. There's no necessarily one-offs or anything like that in that 10.4 million. So exactly as you said, the margin has held up at 32 BIPs. If you did have some admin tearing coming through, that may well drop slightly from there. But at the moment, it's holding up and the mix of the four cronies is pretty comfortable with.

I think the – look, if there's more volatility, you'll see more trading revenue. But with what's going on in the world, if you see market adjustments backwards, that's a headwind. You've got the RBA rate environment that hopefully is creating – you know, it's creating positivity for consumers. So there's a whole lot of moving parts in that number. Okay. Thanks, guys.

I'll give someone else a go. Thank you. Thanks, guys.

Your next question comes from Brendan Carrig with Macquarie.

Please go ahead. Good afternoon, Katrina and Andrew. Just to follow up maybe from that last question, Just in terms of the revenue margins then, given that there would have been higher account balances and some tiering impacts in the last half, which was likely a bit of a headwind, what was the offsetting factor there, given that you've only called out Explore and the revenue margin bridge?

Yeah, so I think what I'd say there, Brendan, is that the tiering in this half, we've actually seen the average account balance is sort of quite stable, maybe slightly up, but quite stable. But there's not necessarily, we just haven't seen the admin tiering coming through. So it's not that there's particularly something that's offsetting it.

Okay, and then just following up from the trading question, in the analyst pack, there's a comment that says trading activity.

Absolutely, on the PCP. So when you compare it to the six months to December 2020, trading is absolutely down on that six months.

Percentage or dollar? Both. Okay, that's clear. And then just another clarification, just on the calculation, you mentioned about the $3 million for the impact from the RBA rate cut. Can you just confirm that methodology in arriving at the $3 million? Would that be calculated using 15 basis points, which was the hit from that last cut, on the average FUA for this half and the cash percentage you have for this half?

Correct. That's exactly right. However, we won't be giving you the cash percentage or the average FUA, but yes, Brendan.

But it's for the whole six-month period over the half, right? Yes, that's correct. It's the 15 bps on the average FUA with the cash percentage. Hey, that's the difference, half and half, to explain to you that for that final RBA rate cut, that was the impact for all the rate cuts. So that's a 15-bit impact. Leave it to you to look at the forecast and work out what that means with different forecasts from different banks.

I'll try and calculate it but I'll probably be wrong. That's all right. I'm sure you'll get close. One last question. You clarified a little bit around the EBITDA for class, but maybe just talking below EBITDA, it might be a little bit early, but the CapEx and therefore the DNA of the class business is much higher than what you run at Hub. Is there any initial comments that you can provide as to what the acquired amortization might look like in terms of the add-back that you would have to adjusted MPAT in your business after you've completed the acquisition accounting?

So for that one, Brendan, it's really two early days. We've obviously got 12 months to do the purchase price accounting, and we have to do fair valuation of the whole balance sheet to determine what's the intangible assets that we bring on and then what's the amortization profile of those. So at the moment, it's just two early days to know what that opening balance sheet will look like once we've fair valued it.

Okay. I'll leave it there and jump back into the queue. Thank you.

Your next question comes from Karen Chiggy with Yarden. Please go ahead.

Morning, guys. Most of my questions have been answered, but just a couple of quick follow-ups. On the revenue margin, when we look at the different segments you call out, obviously there's quite a pickup in the institutional margin. I think you kind of flagged that with a couple of new portfolios coming through this period, but at the 14 basis points where it is currently, is that sort of the best guide to where that should be going forward? Or do you still see further upside in that institutional margin, particularly as you're getting some growth through some of the relationships like RAA?

Yeah, so it's a good question. Based on the... So that is a full six months for the clients that we've got in the institutional sort of category. And so, however, depending on the mix of those flows, yeah, that could well... There could be some upside in there, but it really just depends on where that flow comes from.

OK. All right. And secondly, I know sort of you don't want to talk about sort of the... cash mix within the book, but I guess I'd be interested in any thoughts on how you see that spread margin evolving given the renewed contract you've seen from your peer out there when your relationship renews in December this year.

Yeah, there's quite a lot of talk out there at the moment. The RBA rate environment is certainly looking more positive than when we started the discussions with the ADIs. And so, look, there could be a couple of rate cuts coming through in this calendar year if you look at what the research report is saying. Increases, you mean? Yeah, increases. Did I say cuts? Yeah. Oh, sorry, I've got a cut on the brain. It could be some... RBA rate increase is coming through. Some people are saying that there'll be two in the remainder of this calendar year. We're yet to see or determine how the industry responds to that and whether it's passed on to customers or retained, but clearly there's potential there for upside if they come through. The negotiations on our contract with our ADI at the moment, we've clearly indicated to the market that that expires on the 1st of December 2022. We're still in negotiations with a number of different ADIs, including ANZ, who we're with.

The situation's fluid. It's hard to give you any guidance on that. And, you know, we'll keep working hard. So...

I mean, strategically, your approach to sort of allowing that cash margin to re-inflate relative to, I guess, being a bit more competitive if you don't allow that to happen. I mean, do you have a position today or are you just more likely to wait and see what competitors do on that front?

I don't think it's prudent to signal pricing things in the market or talk about competitive stuff like that. Absolutely you could see that we'd want to do the best for our shareholders. We're foregoing some fees and one party has signalled that. We'll wait and see what market behaviour is but absolutely we believe in we deliver a great service and our fees are very reasonable for that. So that's the best thing to say. We couldn't give you a position on that and probably imprudent to do that from a competitive positioning point of view.

All right.

Thanks for your thoughts.

Your next question comes from Bob Chen with JP Morgan. Please go ahead.

Hey, guys. Just a couple from me. Can you give me any comments on just the overall competitive outlook here? Just given that there's some news that some of the incumbents are reinvesting and there's some new models being introduced across the platform space.

Yeah, look, really interesting time. I think how I hear that, there are people looking at reinvesting and tooling up. I think they've got some catching up to do when you look at the scoring that we've got at over 90% in those recent surveys. yet we're continuing to extend our lead and continuing to invest. So of course there's execution risk with those large players as well. We've seen that not play out well previously. So from my perspective, as I always say when people ask about competitive retention, bring it on. But clearly from a customer service point of view and a functionality point of view, hands down we're very comfortable with the position we're in. I think it will take a long time to see results from some of those strategies play out and as yet they're unproven. So, yep, there's stuff happening. We don't seem to be having any trouble establishing new relationships and we're certainly committed to continuing to do that. So right now we're focused on our strategy and our growth and extending our functional lead.

Thanks. And just on the class business, I know it's early days right now. But it sounds like there is quite a bit of investment you want to make across the whole business, particularly in class. Have you thought about the quantum of investment required to put into that business?

No, and there's some opportunities to potentially do things jointly that might actually mean, you know, if you're doing it as artist strategy and both businesses had one, is it going to cost you less than doing it separately? So I'm not sure that that necessarily plays out that way. in terms of additional investment versus do you look at the whole group and what the group needs to achieve. But it's too early. We certainly want to look at... I mean, they clearly had their strategic priorities, as did we, but when you look at the both of us together, is there things that are more sensible you're doing faster? So once we've gone through that strategy review piece, which Jason's leading inside the business, we'll have a clearer picture on that. But too early to say that there will be more. you know, there could be complementary reasons to leave it flat. I don't know at this stage.

Okay, great.

If we don't invest in new opportunities, it will be driven by growth opportunities.

Okay, perfect. And then just finally on the platform business and that sort of cost-to-income ratio, I think it's sort of trended around that sort of low 60% mark. for a little while now. I mean, how do you sort of balance the growth that you're seeing or the accelerated growth that you're seeing and how much investment spend you're willing to put into that business to maintain that ratio?

Yeah, it's a good question. So we did see some improvement in that platform cost-to-income ratio. It sort of improved 1.3% on the full year 21. So we've gone from 62.5% to 61.2%. When we do the budgeting and the forecasting, it's a real balance between the operating leverage that comes through and how much of that you take and then reinvest for the future. So it was a very deliberate decision-making process this half year on how we've managed it over the whole six months to make sure that we did get that positive operating leverage come through. And so we'll continue to apply that approach, but we're not necessarily giving any guidance at the moment as to what that investment level will be, but it will absolutely remain where it is, but whilst we continue to focus on making sure that those margins continue to improve.

Yeah, if we think we can get to net flow levels of $14 or $15 billion, clearly we'll invest for that. So it's really a decision about how fast you move.

Great. Thanks, guys.

Thank you.

Your next question comes from Nick McGarrigle with Sarah and Joey. Please go ahead.

Hi, team. Thanks for taking questions. A lot of good ones have been asked, and I might just dive back into that $1.3 billion of flow for the first circa seven weeks. Is it fair to say that historically January has been the slowest flow month of the year, and that result probably indicates momentum building more into February and further into March in a normal seasonal pattern?

Generally, yes. So you'll see January dip and February starts to rebuild, and I think that's the normal experience. Particularly when you think that people had COVID issues and worked up and, you know, then we had that scenario where we all were sort of locked down, but all around the country we had that burst of COVID. I think you saw a lot of people distracted, a lot of advisors not working, so you generally get that drop in January.

Great. And then just to clarify on the revenue margin, you mentioned that trading margins in the first half of 22 are back to a more normal, sustainable level. And then the impact of Explore annualising that for a full period wasn't as material as potentially might have first been thought. Are they the main reasons for the better-than-expected revenue margin results in custody?

And I think I'd say that the admin tiering has levelled off. So we normally see a couple of bits of, as the average balances grow, they move into either the cap of the rate card or into a new rate card, and we haven't seen as much as that come through this six months, which just goes to show that the portfolio is maturing and it takes a bit longer for tiering to come through.

Well, as you've moved into a tier, you stay there for a while. So statistically, you're going to get a migration, and over time, it'll get to an equilibrium, and I think that's partly what's starting to happen.

So in the parlance of a net wealth result, your fee-earnings for a percentage was at a stable level, whereas over the last few years it's been declining.

Are fee-earnings for a stable, Katrina? I'm aware of the stat for this, but compared to last time, it's similar. Yes, Nick, definitely.

Great. And I think there was a bit of extra detail provided around class, but I guess there's a a project team working on potential products to go to market. Is there anything you can elaborate on in terms of now that you've got your hands on the asset and any competitive potential dramas have subsided? Can you give us a bit more about where the potential revenue synergies could come from, how you see the market that Class has access to providing complementary product and new clients?

Look, I'll reiterate what I said and really we don't want to be giving away what we're doing or what we plan to do earlier than being ready to launch a couple of things and that's just sensible for us from a market perspective. Certainly I think that there are opportunities to grow, ignoring Hub 24, there are opportunities to grow class and to focus on that segment. and certainly culturally we'd like to influence a sales culture because I think that segment's growing. And so at the time Class started looking at growing their total addressable market and so forth, that was post-Tain when part of the SMSF market was shrinking. I think it's coming back, so it's time to dial up sales there. So there's certainly, I believe, a growing SMSF market and an opportunity for Class to grow its share in that market with its current business model. We also, as I said earlier, think that there's opportunities to launch joint products or work together to reduce friction and potentially grow the market, I believe.

Well, just one last one from me just around the depreciation. I think there was some amortization of software intangibles related to Explore that was taken below the line, but there seemed to be a tax benefit on that. Is that just effectively the way the acquisition accounting worked on Explore that you took software as opposed to good will or customer contracts as the intangible on that acquisition and we expect to see similar things with class?

Yes, so the... Great question, Nick.

Thanks for asking. Thank you.

So when we completed the fair valuation of the balance sheet and we looked at the software that Explore had, clearly there's some, particularly when you look at the non-custody piece and the private wealth and high net wealth, there's some really strong technology in there. And so when we did the fair value of what that's worth, that gave us a benefit. And yeah, there was a move between that and the goodwill. And similar with the customer relationships. We'll do exactly the same exercise when we do the review of the balance sheet for class. I don't have any indication at the moment as to where will that land, but we'll do the process and we'll see where we get to.

But as a result, if you put an asset on the balance sheet and you amortise it, you can, as a consequence, alter the tax position, but it's certainly about valuing the balance sheet and the assets, and that's our approach. Great. Thank you.

Your next question comes from James with Credit Suisse. Please go ahead.

Good morning, Andrew, Katrina. Look, just a couple of questions on the revenue margin. Hi, can you hear me? Yes, go for it. Yeah, sorry. Just a couple of questions on the revenue margin. Look, on page 15 of the analyst pack, you talk about shifting more of your business towards institutional and that could lead to kind of some revenue margin pressure. Can you just talk about what the opportunity institutional is? Do you expect the flows mix to be skewed towards INSTO in the near term or is that more the upside that you were talking about from your guidance?

I don't see flows being skewed more towards that. I mean, it's a fairly new segment for us. So as it grows, it will increase in dollar terms, will it increase in percentage terms? I'm not so sure about that, but I think there's certainly opportunities there. And so we did in the first half do a very small, when I say small, years ago we would have said it was large, but it was about $350 million a transition or an SFT out of a product that was administered by one of our competitors into the Insto sector for us. And it was a good test case for us to do that. We'd like to work very closely with our institutional clients to see if there's more upside there. I think there's opportunities. I think being the leading platform and... And being able to have a track record of that, there's clearly possibilities for that to grow. We've not factored it into the forecast. And I don't think it'll mean that we'll shift away from success in retail. We're not relying on INSTO to keep growing, but it will be supplementary and very welcome.

All right. Thanks very much. Just on the other component of your revenue margin, when I look at your retail revenue margin, it was pretty pleasing to see it expanded significantly. half on half, which is not something we've seen for a while in the platform space. Can you just talk about what drove that revenue margin higher in retail?

It's all to do with the portfolio mix. There's nothing, there's not one particular driver of it. I think as we've talked about when we've done the quarterly updates, the question that we keep getting is where are the flows coming from and what's the mix? And it's coming from all states, all advisors, all clients. And so it's really just the mix of the portfolio at the moment.

All right. Thank you. And look, just final question on the revenue margin. I appreciate most of the decline was just due to mix or explore in the half, but you have seen declining cash allocations across the industry. Do you expect lower cash allocations to be a headwind for you and to over the next six months?

I would say that it's very likely that the cash balances will remain at the lower end of the spectrum. We're definitely not seeing any trend to say that that's ticking up. The whole of the last six months, it's remained at the lower end for us.

Perhaps it's moved around a little bit, but you get an influx July, August, because people are moving platform. And the more money you move on to the platform, the more growth you get. If it comes in in a transitory sense, it ends up in cash first unless it's been transitioned in. But we haven't seen anything – it's been a constant trend. If the rate environment improves, then the need for investors or advisors to look for alternatives is lessened so to speak. So you could see the opposite. Thank you very much. Thank you.

I think we're... Yeah, I know, further.

Go for it, Kayleigh, sorry.

Sorry about that. I'll now hand back to Michelle Fox for closing remarks.

Thank you, everyone, and thank you, Kayleigh, for moderating for us. Look, it's always a pleasure to talk about Hub24. It's really great to see the level of interest in some of the really good questions there. In some senses, it would be great to be able to give you more information, but, you know, we look forward to sharing with you as things unfold. We've worked very hard on this result and we'll continue to work hard moving forward. We think we're really, really well positioned in terms of flows and sales pipeline in terms of yielding results from our acquisitions.

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