MA Financial Group Limited

Good morning and welcome to the FY23 full year results presentation for MA Financial Group. My name is Julian Biggins and I'm here with my fellow joint CEO, Chris White. We also have Giles Boddy, the Group CFO, and Michael Leonard, our Head of Investor Relations in the room. We're very pleased to announce another strong operating result for the business, with our strategic initiatives progressing well and recurring revenue continuing to grow strongly. Let's start on slide eight and the highlights for FY23. Momentum remains with the business. Gross fund inflows reached nearly $2 billion in FY23, a record result that was up 27% on the prior year. Our assets under management finished the year at $9.2 billion, up 18% on the prior year. To put in context, when MA Financial listed in 2017, we had $1.1 billion in assets under management and therefore have grown it eightfold in just over six years. Our gross flows last year were nearly doubled in total AUM when we IPO'd. This very strong growth has only been achieved due to our focus on investing strategically. We believe in investing today for tomorrow. In addition to record inflows, we've seen meaningful change in our distribution channels over this time. In 2023, inflows from domestic sources continue to grow rapidly, as did investment from foreign high net worth investors into non-migration funds. Recurring revenue, one of our most important metrics, was up 23% over the period, reflecting strong growth in asset management and the Finshaw platform. This resulted in a materially stronger earnings composition, with recurring revenue growth partly offsetting the expected lower performance day revenue. Our residential mortgage marketplace is working, with Finshaw's loans on platform reaching $110 billion, up 20% over the year. and MA Money's loan book close to $1 billion. We're also very pleased to see MA Money undertake its maiden securitisation in the year, highlighting its ability to deliver capital-efficient growth. Our balance sheet remains strong, and we have focused on running a capital-efficient business. This has allowed us to hold our full-year dividend in line with FY22 at 20 cents per share, fully frank. Finally, we have always spoken about balancing short-term earnings with longer-term growth. Investment in growth strategies has an impact on short-term earnings. In 2023, we invested in a number of initiatives, including expanding our distribution channels into Singapore, Japan, and the US, MA money, middle, senior highs in corporate advisory and equities, and importantly, growing our brand awareness, which on a combined basis impacted our underlying earnings per share by approximately 5 cents. As significant owners alongside our fellow shareholders, we're confident that this investment will be rewarded in future years. This willingness to invest in growth is a major reason we've been able to grow our underlying revenue from $107 million in 2017 to $270 million last year. MA Financial is in great shape. It has a very diversified and robust foundation, and operating metrics are growing strongly, and we continue to invest to drive growth in the future. Turning to slide nine and our 2026 targets. We first published these targets last August with the objective of elevating the view to the medium and longer-term growth opportunities, which is how we think about the business. This is how we build the business and have demonstrated a track record of investing in strategies that deliver substantial growth over time. All of our targets remain unchanged, and the run rate over the last six months keeps us on track to deliver on those targets. Corporate advisory has been impacted by volatile equity market conditions and the EBITDA margin is impacted by both cyclically low earnings in our transactional revenue streams and our strategic investments. We believe that these targets are achievable and are excited about what this holds for the future. Now turning forward to slide 10. Pleasingly, recurring revenue was up 23% on the prior year, underpinned by nearly $2 billion of gross inflows and a 21% increase in Finshawe's Loans on Platform. The residential and specialty loan book also grew strongly, nearing $1 billion at year end, and has continued to grow post. As we have previously explained, underlying earnings per share was expected to be softer due to both corporate advisory and performance fee revenue being impacted by rising interest rates and uncertain market conditions. Neither of these areas of softness were unique to MA Financial in FY23. And when you consider that we've added over 25 million of recurring revenue in the year, replacing a fair bit of the outside performance fee of the prior year, you start to sense the real strength of the result. Now turning to slide 11. This slide demonstrates our ability to materially grow and diversify our business over time. In FY17, we listed MA Financial and forecast to have $73 million of underlying revenue of which only $17 million was attributable to recurring revenue streams. Only six years later, we're generating $270 million of underlying revenue with nearly $180 million of that being recurring in nature. That is 10 times the amount of recurring revenue that we had at the time of the IPO. We have grown significantly over the last six years and we continue to invest to deliver strong growth in the future. Today we have operations in six countries and employ over 600 people directly. in addition to many thousands more employed within our various portfolio companies. Recurring revenues are the foundations of a strong and resilient business. We see our FY26 targets align strategically with the objective of continuing to build recurring revenue base. With a history of delivering in areas that we invest in, such as the migration product, domestic distribution capability, our hospitality business, to lead and innovate into the next frontier. Now turning to slide 12 and our financial results. The headline financial result is obviously down. Although when you take into account the $44 million lower contribution from performance fees in this year versus last, it's a strong result in a difficult market. Recurring revenue increased to 66% of total revenue. That's up from 48% in the prior period. Expenses are down 3% year on year. despite our significant strategic investment in future growth initiatives. These investments added approximately $16 million to the expense line item. ROE and EBITDA margins were also impacted by our strategic investment spend and cyclically low revenue from our transactional revenue streams reflecting the uncertainty and lack of market confidence. We increased our working capital facility to $80 million over the period, which provides us with more flexibility to run an efficient balance sheet and we remain very focused on capital efficiency and having a capital light model. Overall, we believe the result is a very strong result reflective of a business growing its recurring earnings through difficult market conditions whilst continuing to invest in growth initiatives for future. Turning forward to talk more about our strategic initiatives. On this slide, we want to emphasise just how much We focus on investing strategically in the business to build future earnings growth opportunities. The balancing act here is delivering short-term earnings whilst embracing substantial future growth opportunities. We believe that we find a good balance in this regard. Since our founding in 2009, we have demonstrated our ability to substantially grow and diversify the business over time. Clearly, growth involves forward investment and a lot of hard work. Whilst the timing and impact of growth initiatives can be fluid. Our experience is that patience and vision is generally rewarded. Whilst we're excited about all the initiatives, I'll focus on a couple today that we might not have talked about previously. In FY23, we invested strongly in the MA Financial brand. The initiative is focused on elevating MA Financial to become a trusted household name. We believe that this will benefit all of our divisions, driving growth, and in particular, in growing our number of consumer-facing businesses. We acquired New York-based Blue Elephant Capital Management earlier in the year. This established our US credit platform with a team that has been in business in the US for a decade. Our objective is to leverage their strong track record as investment professionals with our distribution and product development capabilities. The US credit market is the largest in the world, and that's a massive opportunity for us as shareholders of MA Financial. We also invested into a digital distribution platform in Japan. named MA Alternatives Japan. This platform is targeted at attracting Japanese investors into foreign asset management products. Our first products on this platform will be private credit products. MA Financial owns one-third of the business in conjunction with our local partners. We've been on the MA money journey together and are really pleased about its progress with the line book of 15 to 20 million of impact in FY26. After a number of years of focus and financial investment, the meaningful prize is now within reach. Our middle technology business continues to gain momentum as we look to improve efficiency and accuracy in the way home loans are processed and approved in Australia. Middle makes the process of applying for a home loan easier and faster for mortgage brokers and their customers. While still in the investment phase, middle is rapidly moving towards being a key component in the processing of over $1 billion in home loan applications monthly. Growing user numbers and processing volumes is a key step in building the use of MIDL to become widespread across the home loan industry. Increasingly, mortgage brokers on the Finshaw platform are routinely using MIDL as part of their interface with their individual borrowers. The efficiency achieved using MIDL is proving to be a significant time-saving technology for brokers. and thus improves the attraction for them to be on the FinShore platform. The combined impact of these investments on our FY23 underlying earnings per share is around $0.05. However, when you consider the potential upside, it's exciting to think about what additional growth can be achieved. We think this investment is critical to grow the business over the long term, and we have a track record of delivering considerable growth for our shareholders. an ability to build a substantial business capable of navigating difficult markets and delivering strong growth. Now turning forward to slide 14. The charts on this table illustrate a year where we see the number of market headwinds. The trend in revenue growth demonstrates the longer-term momentum in the business and our ability to continue to grow revenue. Importantly, a lot of the growth is recurring in nature. The weaker second half result in FY23 is reflective of some of our strategic investments. MA Money and the US credit platform particularly impacting the second half result by $0.04 per share relative to a $0.01 per share impact in the first half of the year. Now turning forward to the business highlights on slide 15. Asset management now contributes roughly 80% of Group EBITDA with the other businesses providing diversification and a stronger ecosystem to create value. Asset management delivered record fund inflows, driving AUM to $9.2 billion, with a strong recurring revenue margin of 173 basis points. Asset management EBITDA was always going to struggle to lap the prior period, when we had $44 million more performance fees. Strategic investments in US, Singapore and Japanese distribution channels also impacted expenses by approximately $5 million, with most falling in the second half. Despite both the performance-based strategic investments, EBITDA was only down $20 million, with recurring revenue representing 87% of asset management revenue, and that compares to only 64% last year. Lending and technology grew its loan book by 150% to almost $1 billion, driven by accelerating growth in MA money. Binshaw continued its impressive momentum attracting almost 500 new brokers to its platform and growing managed loans to $110 billion. Almost double the amount of managed loans that were on Finsure's platform when we agreed to acquire the business in late 2021. It was a difficult year for corporate advisory and equities, as was the case for all market participants. The skew of activity remained towards M&A with very little ECM activity through the year. Early signs in 24 are more hopeful, however, we remain cautious. It remains an uncertain market. Turning now to our FY23 strategic outcomes on slide 16. Our strategic priorities have remained consistent over time and we continue to deliver on executing them. Recurring revenues across asset management and FinShore both increased materially over the year. Our distribution channels continue to expand and diversify, driving a 27% increase in gross inflows to nearly $2 billion. One of the continued highlights was the growth in our domestic flows, which exceeded $1 billion in FY23 and was up 81% on the prior period. We are and will continue to invest in future growth opportunities in our business across all three divisions. We focus on executing our strategy in a capital-efficient manner. We have demonstrated this through recycling assets from our balance sheet, including the maiden $500 million MA Money RMVS. Safety, low earnings. It is critical that we protect and reward our people for the future.

We continue to invest in the future and development through the MA Academy.

We also mentor executives to build new businesses within financial. We have global growth opportunities and move people around our business where it makes sense. We are proud of our culture and look to reinforce it as it's so important to our success. And the rebranding exercise was part of this. Now turning to our post-balance state performance and outlook, This is on slide 18. The positive momentum has continued across the group into 24. Our asset management funds have continued to attract strong inflows with $262 million gross raised in the first six weeks of the year. We have started our journey to build out distribution in the U.S. credit platform with the appointment of a head of U.S. distribution. We also launched and raised the equity for our MA Accommodation Hotel Fund with a seed asset and we see a significant opportunity to grow in this sector at a time that many assets are selling at material discounts to replacement costs and on attractive yields. Our digital distribution venture in Japan has received its license to distribute product with our first offering to be a private credit fund. MA Money's volumes over the first six weeks has exceeded $150 million and our run rate remains well on track to hit our FY26 loan book target. In lending and technology, Finsure continues its positive momentum into FY24, including building out a presence in New Zealand. The middle technology is gaining traction with Finsure brokers and received in excess of $500 million of loan applications on its platform in January alone. We anticipate this to reach $1 billion per month by the end of first half 24. And in corporate advisory and equities, we've started the year well with approximately $10 million of fees largely de-risked or paid. Now turning forward to our outlook. We are optimistic about the year ahead, although macro uncertainty remains. In asset management, we expect continued growth in both gross and net flows. In terms of recurring revenue margin, we expect there to be some headwinds due to the rising interest rate environment impacting our core real estate and hospitality strategies, and the sale of approximately 200 million of Red Capes assets. The FY23 recurring gross margin of 173 basis points was also elevated due to strong performance from the private credit funds. We expect transaction and performance fees to be broadly in line with FY23. In lending and technology, MA money is expected to hit a break-even run rate in second half 24 and remains on track to deliver 15 to 20 million of MPAT in FY26. In corporate advisory, while we've had a good start to the year, we are cautious about overall market confidence and volatility. We have a strong M&A Pipeline and equity markets are improving, although it still remains uncertain, and therefore we are pointing to the lower end of the target range in FY24. The year has a long way to play out. And finally, we are continuing to invest in expanding our distribution channels and other growth investments, such as brand and MA money. We believe these investments will represent around a $0.06 per share earnings impact in FY24, with a few to the first half as MA money continues to build momentum and we invest into the US credit platform. We plan to continue to focus on balancing shorter-term earnings performance with an appropriate investment in growth initiatives. As is our practice, we will invest in growth as we see the opportunity. Overall, the operating performance of the business is very pleasing, and our momentum of the last few years continues. We're navigating difficult markets that impact the more transactional side of our business, and we're well-positioned to deliver strong growth as the cycle turns. Our AUM is expected to grow along with FinShore section before handing over to Chris to briefly pick out some of the key highlights for lending and technology as well as CA and E. Let's jump to slide 24 quickly before I touch on flows. Clearly our assets under management have grown significantly over the journey. with AUM up eightfold since we listed the business in 2017, and up 18% over the last year. Private credit has continued to attract investors to a defensive yield, and we've also witnessed strong interest in alternative real estate, both the accommodation hotels and marinas. I believe today our AUM would be closer to 9.4 billion. Turning forward to flows on slide 25. When we look at this by investor channel, Clearly, domestic flows have had an exceptional year, growing at 81% and surpassing $1.1 billion of gross flows. Only three years ago, we were raising just over $100 million domestically. That's a phenomenal outcome. International non-migration flows were up a strong 27% to nearly $650 million. Non-migration flows were subdued as the review of the program continued, and institutional flows were marginally up with a couple of LPs allocating the private credit products. We see the institutional market as a significant opportunity for the group and continue to have more meaningful discussions with global partners. And turning forward to slide 26, the chart on the left demonstrates the execution of the stated strategy to both diversify and increase gross flows over time. In only three years, we've taken our domestic and non-migration international flows from 330 million per annum to 1.7 billion today. nearly a five-fold increase over three years, and we see plenty of opportunity for future growth in Australia, Asia and the United States. These numbers are very exciting and demonstrate the asset management business's strength in a market where many are finding it difficult to raise money. It is a very diversified investor base with many products offering tenure certainty. We're continually looking at adapting products or innovating new products to cater for ever-changing market conditions, whilst also having a bias for larger, more scalable funds. I'll now hand over to Chris to talk through the other divisions and close out.

Thanks, Julian. I'll briefly pull out some highlights from the lending and technology ecosystem that we've been building over the last three years. Turning to slide 34, a brief review of Finshaw. We've continued to see excellent growth within the Finshaw business and its market position. This stems from Finshaw offering a differentiated proposition for brokers in the value-adding services that it delivers. Insured broker market share has increased to 16.3%, up from 14.2% last year. And excitingly, in FY23, the platform cracked the $100 billion loans under management mark to close the year at $110 billion, with over 400,000 borrowers on the platform. More broadly, if we see a continuation of the increased activity in the residential lending market, We are optimistic about adding more new loans and continuing the rapid growth in the FinShort platform over the year ahead. Moving to slide 36, you can see the growth that we've had in our lending activity. The graph on the left-hand side displays the really strong growth that we've achieved, notably taking the MA Money Loan Book to $829 million. And as Julian mentioned, the current balance of the MA Money Loan Book sits at around the $1 billion mark. The graph on the bottom right-hand side shows the amount of capital that we have invested in growing the lending business and how we are investing into MA money and remain on track to deliver our FY26 targets of between $15 and $20 million of NPAT and a $4 billion loan book. We are investing for growth. Finally, turning to corporate advisory and equities. And this has been a more challenging year for the business. As you can see on slide 40, revenue per executive at FY23 was $0.8 million. This is below for the advisory activity across the market. However, we are seeing improved momentum at the start of 2024, and I'm hopeful that the overall environment for transacting will assist in timely execution and deal closure. However, despite these challenging conditions and consistent with our philosophy of investing in the business for growth, in FY23, we hired a senior natural resources team late in the second half of the year, and headcount now stands at around 47 executives. Consistent with our commentary on the CANE business, we would typically expect normal market conditions to see $1.1 to $1.3 million of revenue per executive, and our outlook for the year sits at the lower end of that range. Now, the remainder of the presentation and the appendices contain a lot more details on our financials, and as Julian mentioned, we're also joined by Giles Boddy, our CFO, who can take any questions on those sections. I will conclude on slide 46, which sets out the features that define our business and guide our decision-making. We are a building... We have diversified capital sources and client investor base. We have a strong balance sheet to support our growth initiatives and specialized advisory capabilities aligned to a leading independent global platform. And so on that note, I'll now conclude the presentation and hand back to the operator for any Q&A.

Thank you. If you would like to ask a question, please press star followed by the number one on your telephone keypad. Your first question comes from the line of Tim Piper from UBS. Please go ahead.

Good morning, Chris, Julian, and team. First question just on the investment that you've called out going into the business at the moment, $0.05 per share in FY23, and I think you've called out $0.06 per share in FY24, if I understood that correctly. Just how to think about that. Do we think about $0.06 per share on what the underlying run rate of the business was in FY23, i.e. without the $0.05 of investment, or... Do we think about FY23 and then an additional $0.06 per share of investment based on that actual FY23 run rate, if that sort of makes sense?

I appreciate it's a bit convoluted. So what I'd say is the $0.05 represents what we've invested this year, and we've obviously outlined what strategic investments we've made. We see that growing by... ..that we're looking at next year. I think MA money, you know, there's a bit of a skew in the... second half here in fy 23 to that investment i think i called out there was four cents of the five cents roughly in the second half we'd see you know the six cents being a bit loaded to the first half next year and then an ma money ramps into profitability um obviously that that clears that out in terms of headwinds so um does that clear it up for you tim or is that still ask you about ma money as well um clearly the origination growth

has been very strong and looks to be obviously tracking towards your targets. The revenue for FY23 at three something million, I understand NIM has come back, but I'm struggling to understand that revenue number. Are there some commissions or other sort of line items that's a drag on that revenue number for MA money? And then it still seems a bit of a way to that break even run rate by the second half of this year on that basis.

So we can come back with the specifics around revenue, but it obviously has ramped into the back part of the year, and so there's the annualisation impact.

I think as I said before, we are hitting volume, but it was a competitive market last year. That is easing a bit. And we've also been...

looking at our product mix and our pricing, and we're pushing into securing funding lines, which we've now done, for a higher yielding product in the self-managed super fund sector, for instance, or foreign owners. So we are going to have to work on sort of increasing our NIM, I guess, both the question of product mix and also also the broader market, which we are seeing initial signs of the pricing competition that we'd seen earlier in the second half of last year easing. And Chris, just also the additional warehouses there, and so the interest expense in relation to those warehouses also coming through that revenue item as well, and so that that need to have additional warehouses that we sort of build the book has had an impact on that line as well. Yeah, the conundrum that we face with MA money around the warehouse is you pay line fees on your warehouse. And what you don't want to do when you're ramping up your business is run out of funding capacity. And we had an optimistic target of going to the term market to do our inaugural securitization, which would clean down the warehouse and give us a lot more capacity. If for any reason that market was closed or we didn't get the size of deal away that we wanted, we wanted to ensure that we had sufficient warehouse funding in order to continue writing the increasing volume of the business. As it turns out, the market was not simply only open for us, it was open large enough for us to do the largest inaugural RMBS issuance in Australian history, which we did at 500 million. So we ended up having more warehouse capacity than we actually needed. And we took a judgment call on risk is that if the capital's there and the market's there for us, we'll take that capital because our growth profile and volume was ahead of schedule. But the flip side of that was we incurred more line fees than we had probably needed to. But from a risk perspective, as the business was growing, we picked a path where we wanted capacity as we're in ramp up.

Got it, thanks. Maybe just one final one. Again, just on the investment, but a bit more specific to the US. Where does the US investment piece on distribution, et cetera, fit into that sort of $0.06 per share? And then what are your thoughts around the return in terms of either flow numbers or revenue growth that you think you can generate out of the US, maybe in FY24-25?

Yeah, so... What we've got to do in the US is we've got to reposition the fund and the licensing a bit to get the right structure that we've got with the team there. So the market is huge and the reality is this year we are going through that process of hiring and ramping up the distribution effort coupled with hiring, coupled with the fund and getting a new internal fund structure. So, the fund flows that we would expect to see would be more skewed to the second half of the year and that also contributes to the bias of that six cents coupled with the MA money ramp.

Your next question comes from the line of Alafatani Sotiruru from MST Financial. Please go ahead.

Hi guys, just a follow-up question in relation to some of the fund structures and the investment that's been made. So if you think about the last year and your overall net flows, the distribution has been beefed up, US, Singapore, Japan. You've already got a very strong track record on the net flows, but can you just elaborate more on the other side, the product side over the next two or three years? Do you think with this expanding distribution, you have enough products, the appropriate products, to distribute into these markets? And can you just also comment on that pathway into all of those markets around the fund structures and the legal structures? Are they in place? I'll start with the States.

And that is exactly what we're doing in terms of beefing up the distribution and re-sculpting the fund price. Isn't it? interval fund structure. And to again clarify, growth in the US market is not included in our FY26 targets. So that will hopefully be in addition. And that is going to take us another six months to put together. It will be one single product in the first instance in the US. In private credit in Australia, products that we have on the platform are resonating and growing well. We've gone through a really interesting inflection point as a business in the area of private credit where we have had three primary, three or four primary credit funds that we've had on the shelf and that's in real estate credit, private credit and structured credit and then opportunity credit. What we've seen over the last five years of generating track record on those funds with those funds being on the shelf for investors is that there's an increasing acceptance of us just being able to manage credit. So the trend that we're seeing in Australia is we're actually now simplifying that where we have just in the last quarter put on the shelf a credit income fund as that was actually feedback from some of the domestic investors that we've had where they They don't want to look into the individual strategies so much, but just simply give us their money for private credit. So it's actually shrinking the product set, but with a way more versatile mandate. And that's a response that we had to the market last year.

I think when you think about it from the distribution side, these are incremental growths, sort of, I guess, adjacencies to what we got, right? whether Singapore is working very closely with the product for Australia, there may be hedging or different currency sort of angles to the product, but it's the same underlying. And really, when you think about it from whether it's real estate or it's private credit, the products actually have a lot of capacity to invest. And this is just increasing the sort of, I guess, the breadth of the network that we're marketing those products to.

Star 1 on your telephone keypad. Your next question comes from the line of Nick Burgess from Ord Minutes. Please go ahead.

Yeah, morning gentlemen. Just a couple of questions. Obviously, the last 12 months has been fantastic in terms of flows into credit products. Just in terms of your product development and your line of sight on the pipeline, what your broad outlook is for credit flows over the next 12 months?

see the defensive yield in private credit as remaining attractive, we see investors attracted to it and have a need for that yield, and when the yield's sort of 8%, call it 11%, 12%, depends on where you are in the capital structure, there's a real market for it in a defensive investment class. So, yeah, absent something changing macroly or something else, we see a continuation of what's been going on in our business for the last couple of years, probably the last six years, actually, as this trust has been developed.

Okay, thank you. That's helpful. And just, I was late to the call, apologies. Just the mechanism on the lower revenue margin that you're talking about in relation to those flows. And I'm not sure if you broadly quantified it in basis points, but just the impact and the mechanism that I may have missed.

Yeah, we haven't talked about that. We haven't quantified it. But what I would point you to is clearly a good example is where we've had, say, Red Cape Hospitality or Red Cape Hotel Group will have sold $200 million of assets. That selling campaign is over. We've actually bought another asset recently, but clearly that has an impact on and that's both investment management fees and hotel operator fees. So there's some headwinds through there. Also in real estate, we've just seen some valuations come down and maybe distributions come down. The gross margin that we've earned on the credit funds this year has been strong and we see, you know, we're going into the market cautiously thinking about whether that can be achieved again in FY24 but it's early days again. Around the hospitality fund, we made a small concession around fees for the hotel operator fee for this year and really that's about a partnership with those investors And clearly it's been a very successful investment for them and a successful venture for us. So we're partnering with them as well. So it's a combination of things. I think I'd say we're sort of going through a significantly low point in real estate or real estate-backed assets. And the private credit funds have been definitely strong this year.

Just to call out in the years ahead, the fee basis in the States is typically lower on a base as well so you'll see that blending in over time but obviously it should be a brand new market for us to grow into.

I think one thing we do try to focus on is sort of that longer term view. We don't see the fundamentals of our business changing over that sort of FY26 for target ranges that were provided and that's clearly what we're focused on delivering.

Okay. Thank you. And I might just sneak in one last question, just that six basis points, sorry, six cents per share of investment. Have you got that in terms of a dollar amount or an EBITDA total impact?

Well, we're not a big issue of shares, so you sort of back solve, I think it's roughly about $12 million.

Yeah, all right. So it's very similar to this.

Yeah, I think the only thing, Nick, that you want to keep in mind is probably a little bit of a skew to the first half as opposed to evenly spread over the two halves.

Yeah. All right. Thanks very much.

Thank you. Your next question comes from the line of Richard Coles from Oregon. Please go ahead.

yeah thanks guys could you maybe give us any more detail on the um on the ma accommodation hotel fund your initial acquisition there comfort on pricing any broad comments you can make on on um you know that deal and and whether you know your view on it um can you also maybe give us um some some views on the middle technology the billion dollars by the end of 1h24 just remind us of the fee structure for that that um sort of build out and and what you could earn there

I'll start with the hotel and maybe Chris on the middle. But we think we've brought an accommodation hotel on exceptional terms.

It's 96 minutes. It's a brand-new seven-day, sort of seven-night hotel in Melbourne. It's similar to the pub. and you can own the freehold or you can sell it. Part of the transaction we've changed the banner or we've changed the operator. It's priced probably at about 45% discounts or replacement costs. and total returns. So we're quite... Last year, we're seeing an enormous amount of... ...context. So we think we can really carve out a specialisation in that space, and it's the right point in the cycle to lean in. So that's...

Just to recap, in what is really, really important, and that's a market that is intermediated over 70% by brokers. What is really, really important is the ease of information collection and verified information collection and then accuracy and speed of decision making for the end customer. in the lowest cost manner for the underwriters and the lenders. So this is a piece of technology that we have built to solve those problems. And the technology came online last year and we have marketed that technology to the brokers and we are charging brokers a fairly modest fee to utilise that technology in order to see meaningful flow put through this technology infrastructure so that it becomes very, very on the FinShore platform.

And there is a nice synergy there where FinShore is growing its number of brokers quite rapidly and help the FinShore proposition.

So strategically, the key for us was to get this piece of technology actually processing in size. MIDL is also open banking certified. I think we're one of a handful of institutions outside of the banks that have achieved that accreditation. And so the ability to have direct-to-source verified data, it's quite a powerful platform. So we need to continue getting the volume up because if the volume is up, it becomes meaningful. And I think we're going to explore further on in the year how we look at more enhanced ways to monetize that. But before you can do that, you've got to make sure that it's actually processing considerable volumes such that it becomes attractive to folks to look at as a tool to solve problems. Because you don't have volume, people won't use it as a solution. And we're on that pathway generating that volume. And January was a very, very strong month. And I think the current The current sort of annualised run rate is about $750 billion and we expect that to get to the billion by the half year. So it's a really interesting asset for us that is considerably helping the proposition to brokers through the FinShore platform and as it becomes more meaningful and processes more volume, we can think about other ways to enhance the monetisation of it, which we expect to bend our mind to during the year, but we need that volume.

And just one more question. I mean, you mentioned you've actually bought an asset in Red Cape. So maybe just a summary of how you see things going there. Thanks.

I think Red Cape was a challenging year for all real estate assets last year. I think the path that we've followed on Red Cape is exceptional in terms of the balance sheets in very good repair. Earnings have turned the corner. The pubs are trading stronger. and we've got a clear visibility over the next sort of two to three years on strategy. I think to see liquidity in the pubs, to be able to sell $180 to $200 million at close to book value in the real estate or operating real estate asset class at the minute was a great outcome. I think generally investors are very optimistic about the growth that's coming through in the business now as we sort of turn the corner of what was a pretty choppy market last year. I think Chris Unger, who heads up that business, has done a great job, and I think the investors are, as I said, optimistic about the future.

Thanks very much, Chris.

And we have no further questions in our queue at this time. I will now turn the call back over to Julian Biggins for closing remarks.

And we look forward to seeing those folks one-on-one as we go around the marketing program. But thank you, and have a good day.

This concludes today's conference call. Thank you for your participation and you may now disconnect.