OFX Group Limited

Thank you for standing by and welcome to the OFX Group Limited FY22 full year results call. All participants are on a 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. Skander Malcolm, Managing Director and CEO. Please go ahead.

Thank you, Melanie, and thank you, everyone, for joining the call. As Melanie has mentioned, I'm joined by Selena Virth, our CFO, and Matt Gregorowski, who leads our investor relations program with Citadel Magnus. Selena and I will take you through the pages, and then there'll be time for Q&A. This year, we'll cover three things, the full year result, what it is, and what drove it, our focus areas for fiscal year 23, and our guidance on fiscal year 23. Let's move to slide four in the pack. fiscal year 2022 was a record year for OFX. In terms of financial performance versus fiscal year 21, we delivered turnover of over $33.2 billion, up 32.7%, net operating income of $147 million, up 24.7%, and underlying EBITDA of $44.5 million, up 53.1%. These results were underpinned by great execution, with every region up double digits, with also growing active clients and stable margins excluding same currency transfers. In addition to the great results and the great execution, the team completed the investment in TreasureUp and agreed to acquire Firma Foreign Exchange, which largely completed on May 1st and significantly bolsters our corporate business in North America. Finally, our consistent focus on risk management and the investments we've made have delivered exceptional risk outcomes, along with consistent positive regulatory engagement. In an uncertain operating environment, I couldn't be happier with the team, the strategy, and the momentum created in fiscal year 22. Moving to slide five, it's very encouraging to report the momentum of the company across its key operating metrics. As mentioned, turnover of $33.2 billion was up nearly 33% versus the prior corresponding period, which is excellent, but it was also terrific to see second half up over 21% versus first half. We will unpack the drivers of turnover later, but suffice it to say there is strength in all key areas and we saw a substantial growth in average transaction values that certainly helped. Net operating income of $147 million, up just under 25%, was outstanding, and the hard work on managing our costs that arise from revenue, being bank fees and commissions, is creating a much healthier leverage from the revenue we generate. It was also encouraging to see the second half grow over 14% versus the first half. Finally, the underlying EBITDA of 44.5 million up over 53% versus last year and up over 19% versus first half was also terrific. It reflects a very healthy company with good fundamentals. Moving to slide six, as we shared at our investor day on March 16, we strongly committed to growing a portfolio across four segments, corporate, online seller, enterprise and high value consumer. I will share a regional view later, but for now, let's focus on the segments. As we said, we chose those segments and passed on others because we believe we can differentiate to those clients and prospects and create a valuable portfolio accordingly. So it's good to see such progress across the board. In corporate, revenue growth was 14.5%, which is good. But when we remove the unusual revenue from offshore share purchases in fiscal year 21, it's even stronger at just under 30%. In the second half, it grew over 20% versus the first half. We have a very good platform supported by exceptional service that more and more clients are choosing. Our marketing programs continue to tilt toward this segment, further reinforcing for clients why RFX is a great choice. The addition of firmer in fiscal year 23 will give us further scale, expertise and learning in corporate. In online sellers, notwithstanding the ups and downs of the e-commerce market, we performed well, growing 2.7% or just under 16% excluding Asia, which we have pivoted away from in the last couple of years. Again, good to see the second half up 6.6% versus the first half, It's clear to us that the capabilities we have built for this segment, as well as the insights we've gained in serving these clients and this ecosystem, will serve us very well both now and in the future as more corporate clients evolve their businesses to operate in the marketplace ecosystem. Our enterprise segment delivered $6 million in revenue, up 31.3% versus fiscal year 21, and up 6.3% versus the first half. We will share further detail later, however, we are encouraged by the performance of existing clients as well as the pipeline of prospects we're building. In consumer, we saw growth of 24.5% versus fiscal year 21, and we grew over 7% in the second half versus the first half. Again, I'll share more detail later on the drivers of this, but we're encouraged by the performance of consumer in our portfolio. Moving to slide seven, We're sharing for the first time further detail of performance by region. To remind all, we operate in three regions, each run by a regional leader. APAC covers Australia, New Zealand, and Asia. North America covers the US and Canada, and EMEA covers the UK, Europe, and small revenues from the Middle East. This chart shows revenue from each region and the split by segments. The regional view is also very encouraging, with every region growing double digits. In APAC, we saw growth of 12.8% versus fiscal year 21, or just over 24% when normalizing for the offshore share purchase revenue we saw in fiscal year 21. APAC is our largest and most diverse region, with every segment contributing. And Jungno, leading a strong, mature team, driving very strong outcomes. Highlights have been further great progress in enterprise, a very strong corporate performance, and a good second half, especially in Asia. In North America, Alfred Nader and his team are delivering great growth and are balancing risks and opportunities well, driving down losses to near zero in fiscal year 22. As you can see, their revenue splits by segment are similar to the group. They're doing a particularly good job of growing corporate, delivering over 31% growth in fiscal year 22. And as Alfred mentioned, they're also building an enterprise pipeline and we're expecting to announce some wins in fiscal year 23. In EMEA, Sarah Webb and the team have done a terrific job, delivering growth of 26% versus fiscal year 21, and their second half was up 17% versus the first half. Again, they've done a good job in corporate, growing over 28%. What is probably surprising to many of you is how well they're driving growth in the online sellers, up 68% in fiscal year 22. As we push into continental Europe, we see corporate and online seller as very attractive segments. Also in Europe, we're very encouraged by the Treasurer Up investment. The team have great expertise, good annual recurring revenue, and a strong pipeline of prospects. We'll further support their growth in fiscal year 23. Turning to slide eight, this is a bit more detail on the corporate and online seller segments. As I've already covered, each region is contributing well. Several years of improving the commercial excellence programs, increased promotional expense, better currency options, faster payments, and better client experience have driven this. As noted, we've benefited from elevated average transaction values in fiscal year 22, which are likely to moderate. But this also reflects a more embedded client base. Supported by our targeted marketing programs, we expect to continue growing the active client base over time. further investments are naturally planned for fiscal year 23 and beyond into better pricing options, a better platform experience, better risk management tools, and further investment in commercial people. We know this segment is getting more competitive with new entrants and specialists targeting valuable clients and prospects. So it's good to see us winning market share, growing active clients, and of course, revenue. As interest rates rise, our cash generation will help us continue to invest and continue to win. Of course, the addition of firmer will also give us more clients, more expertise and a valuable set of insights into the corporate client segment. The additional scale will no doubt help us create leverage too. We're encouraged by the continued strength of our online seller segment. The overall revenue growth of 2.7% was modest, but excluding the Asian portfolio, it was a healthy 15.7% and it was good to see growth returning in the second half up 6.6% versus the first half. The decline in North America is due to a few large clients seeing reduced e-commerce volumes versus fiscal year 21 in line with the market. The growth in EMEA and the UK specifically is encouraging an August wealth of further European expansion. We're continuing to invest in dedicated promotional spend and it's encouraging to see the growth in active clients over the year as a result. Our relationship and engagement with Amazon continues to be a source of strength. In fiscal year 23, we'll invest further in people, capabilities, and risk management to drive our growth. Moving to slide nine, we are building or rebuilding a valuable enterprise segment. Back in 2014, enterprise accounted for 12% of our group revenue, whereas in fiscal year 22, it was a little under 4%. It declined because we didn't seek to win new clients and invested very little in the capabilities to support existing clients from 2014 to 2020. That has changed, as Jung shared at our investor day. Today, we invest in product capabilities. We have dedicated commercial people in every region. We've refined who we want to target, and we're investing in supporting existing clients. So it's good to see us grow revenue over 31%, as well as increase the number of prospects, particularly in North America and APAC. We're making good progress in activating wins from prior years also, including Y2Link, and learning a great deal about how to do this well with our partners. Whilst the rate of activating prospects is less than our own expectations, the opportunities remain substantial, and in years to come, we believe this can return to a significant part of the group, which we're working very hard to achieve. Moving to consumer, it's terrific to be winning the consumer rebound in every region, growing revenue over 24% versus fiscal year 21 and seeing good momentum through the year, with the second half up 7.3% versus the first half. As we shared at Invest Today, we're quite clear about the consumers we serve best. And during the last two years in particular, the capabilities we have through T1 Banking Partners, exceptional digital plus human service delivery and improved speed of payments has given us great results, especially versus some of the competition that lack this winning combination. We've shared with you how the use cases in consumer have evolved in the last two years. As note, we saw substantially more property-related transfers, up 36% from fiscal year 20 and around 47% up from fiscal year 21. Wealth-related transfers were also up over 24% versus fiscal year 21. These are typically larger transactions, meaning that as with corporate, we've benefited from elevated ATVs, which are likely to moderate as use cases change. But as you know, consumer does fluctuate with the market, and we're happy to take this kind of growth rate when markets work in our favor. Regardless, our clients need us to be strong, secure, fast, and competitively priced. They can't wait for us to clear backlogs or not be available to explain sensitive matters if the client prefers it. And we remain confident in our ability to grow this segment irrespective of the market's conditions. Moving to slide 10, this is a page we've shown you over the last several years. It helps you get a feel for what is driving our volume and in turn acts as a good indicator of the underlying health of the business. Starting on the left-hand side, we saw an increase in active clients driven by healthy reactivation of dormant consumer clients, growth in corporate and online seller clients, and good new enterprise activity. Transactions per active client was actually down, but this was due to the very active offshore share purchases in fiscal year 21. When we normalised for that, it is up a healthy 7.3%. Similarly, we saw a decline in the total number of transactions but it was actually up over 10% when normalizing for offshore share purchases year on year. Those offshore share purchases also skewed average transaction values down in fiscal year 21, so the growth of over 58% needs to be read in that context. When normalizing for that, we still saw growth of 23.5%, which is extraordinary, as I've already talked about. Now, let me hand you to Selina to walk through our results in more detail.

Thank you, Skanda. Moving to slide 12, we have delivered a strong financial result with growth across the portfolio. We've seen continued momentum in the business with fiscal year 22 fee and trading income, which is what we refer to as revenue, of $158 million, up 17.7% on fiscal year 21. As Skanda has already taken us through, it is great to see that the growth is across the whole portfolio, with all regions and segments up double digits. We have also seen consecutive growth with fee and trading income up 13.7% in the second half of 22 versus the first half of 22. And again, this has been seen in all regions and segments. North America is up 27.8% versus fiscal year 21 and 8.3% versus the second half of 22. APAC is up 12.8% versus fiscal year 21 and 13.9% versus the first half of 22. CMEA is up 26% versus fiscal year 21 and 17.2% versus the first half of 22. If you look at our segments, we see the same trends, with corporate up 14.5% or 29.9% ex-offshore share purchases versus fiscal year 21 and 20.3% versus the first half of 22. Online seller is up 2.7% or 15.7% ex-Asia versus fiscal year 21 and 6.6% versus the first half of 22. Enterprise is up 31.3% versus fiscal year 2021 and 6.3% versus the first half of 2022. And finally, high-value consumer is up 24.5% versus fiscal year 2021 and 7.3% on the first half of 2022. Net operating income, which is our fee and trading income plus partner commissions and bank fees, is up 24.7% on fiscal year 2021, which is a stronger growth rate than fee and trading income as all our work on reducing bank fees and partner commissions continues to hold during the first half of 2022. Our NOI margins are down three basis points, but when you look at FX transactions only by excluding same currencies, they are at 53 basis points and consistent with prior years. It makes sense for us to exclude same currencies given they have a very different margin. Firma also has large same currency volumes, which we will split out at the first half 23 results. We're working hard to sustain our margins and look at our pricing on a regular basis. Underlying operating expenses of 102.5 million are up 15.4% on fiscal year 21, but are growing at a slower rate than NOI of 24.7%, which delivers positive operating leverage. We've delivered our largest ever underlying EBITDA of 44.5 million. Underlying EBITDA margins are strong at 30.3%. Scandal will take you through the guidance for fiscal year 23 later in the presentation. But for fiscal year 23, we expect EBITDA margins to be around 28% as we integrate FOMO with OFX. As outlined at the investor day, we expect EBITDA margin to return to 30% after delivering synergies over the next two years. This is our biggest statutory profit of $24.5 million in the history of the company. The effective tax rate is just under our guidance of 24%. We expect our tax rate to be 24% in fiscal year 23, and we're working through what the tax rate for fiscal year 24 and beyond will look like, given that our offshore banking unit tax benefits will no longer continue in fiscal year 24. We will still have some benefits from research and development tax credits and offshore tax rates, but the rate in fiscal year 24 will be closer to 29%. Net cash held is strong at $84.2 million, and net available cash, which is after collateral obligations and bank guarantees, 31.1 million, which is down 5.7 million on fiscal year 21. And I'll walk through this later in the presentation. Moving to slide 13, our underlying operating expenses are 102.5 million, up 15.4 million on fiscal year 21. The largest increase is employee expenses, up 9.4 million over fiscal year 21. This is a combination of three items, being investment in more people, Salary inflation and excellent performance driving increased incentives paid versus fiscal year 21. We've added 52 employees who support both revenue generating and revenue enabling functions. Like all companies, we are experiencing salary inflation and due to exceptional performance, our short-term incentives are paying out 100%, up from 47.8% in fiscal year 21, and the LTI plans are in the money. STI and LTI accounts for over $5 million of the increase. We continue to invest in our promotional spend, which is $16.5 million for the year, up 29.3% on fiscal year 21 and across all our regions. A mix is consistent with fiscal year 21 with 60% spent on demand generation and 40% on demand capture. We've also launched and are activating a partnership with the National Hockey League in North America as the official currency exchange sponsor. We expected our technology expenses of $8.3 million to increase, and they did, rising 8.5% on fiscal year 21. This is a result of high software as a service expense due to our investment in risk and customer service tools that are paid on a SaaS basis. Bad and doubtful debt to $100,000, which is 94.1% reduction on fiscal year 21 and an exceptional outcome. This is a result of the investments we have made to detect and prevent fraud. We use multiple technologies, including identity verification and voice biometrics. However, we do expect losses in the future, especially in North America, as North America continues to grow and plan for at least $1 million per year. This is an area where we will always be vigilant in tackling new types of frauds and mergers. Other expenses of $10.5 million are up 20.2% on fiscal year 2021. which include increased professional fees, insurance premiums, which everyone is experiencing, and the return to travel. Turning to slide 14, we continue to have a strong balance sheet and generate good cash flows. This has been critical to enable us to secure the $100 million Aussie debt facility for the purchase of FIRMA. This will be included in our financial statements from May onwards. Our net cash held position, which includes cash held for owned users, use and deposits due from financial institutions is $84.2 million, up $23.6 million on fiscal year 21. You may remember we hold some of this cash as collateral for our trading lines and bank guarantees. Collateral was $52.6 million, up from $23.8 million in fiscal year 21. Due to $16 million of customer cash for our global currency account product being held as a bank guarantee and increased collateral requirements due to the volatility at the end of March, Since then, over $6 million that was being held for increased volatility has returned. Net available cash is $31.6 million, down $5.2 million on fiscal year 21. Cash flows from operating activities is $47.6 million, which is an excellent cash conversion rate from our underlying EBITDA of $44.5 million. Of the $47.6 million of cash from operating activities, we've invested $10.5 million in intangible assets as we continue to deliver our single-scale platforms and our payment risk capabilities. We also invested $6 million in TreasurerUp and bought back $2.65 million through our on-market share buyback program. We announced with the acquisition of FIRMA in December 2021 that the board considered it prudent to put the share buyback program on hold to prioritize repayment of debt associated with the acquisition. OFX remains committed to repaying its debt in less than four years, subject to no other value accretive growth opportunities emerging which require funding. Moving to slide 15, we continue to invest in our client experience and reliable, scalable systems. In the last 12 months, we've invested $10.5 million. You may remember our original guidance for fiscal year 22 with $12.6 million and why we have had a successful year in delivering enhancements. Like all companies, it has been hard to find resources in this space, hence the gap. We've developed a number of outsourced partnerships and expect the development in fiscal year 23 to increase to between $12 and $16 million. Firstly, let's cover the progress we made this year. There have been some exciting developments. Delivering better payments capabilities across four key currencies, being the Philippine peso, Indonesian rupiah, Malaysian ringgit, and the Indian rupee. This not only reduces the settlement time from days to minutes for our customers, but also provides bank fee cost reduction, so everyone wins. We've automated payment allocations, spinning up payments for our customers and achieving straight-through processing. We've improved customer verification tools in the UK with consumer conversion rates up 107 basis points and the US up 117 basis points. We've also implemented improved onboarding processes for online seller customers. Lastly, we went live with our cargo-wide solution with YTech Global and their customers are trialing the new experience. The investment in intangibles in fiscal year 23 and beyond will be focused on firmer integration and providing the clients a digital platform experience continued work on payments and straight-through processing, also allowing clients to track their payments across key currencies, improved client due diligence and verification experience for all our global clients, a new client platform that is fit for corporates as it integrates transfers, global currency account and multi-user services, and new tools for customer service teams to perform client relationship management and communication more effectively. I will now hand back to Skanda to take us through our areas of focus for fiscal year 23.

Thank you, Selena, for that excellent coverage of our financial performance. Now let's turn to our areas of focus in fiscal year 23. Moving to slide 17, our attention and effort is very firmly on delivering EPS accretion in year one through the acquisition of the Thermo Business, which largely closed on May the 1st. I traveled there in early May, along with several members of the global executive team and several members of Alfred's North American leadership team. It was an excellent visit. I conducted over 15 one-to-ones to add to the 20-plus I'd already done. We had workshops on the integration program and we reviewed areas of progress in Zermatt's business. I got a good sense of their client focus. My observation is that this is a well-run business with a clear focus on service and risk. They generate real cash, make real EBITDA and have been growing well in the last 12 months. The team understand their local context and are very committed to the growth of their clients and sustainability of the business. It's clear we can learn from them, especially in commercial excellence, and that we can help the portfolio grow faster by giving access to better banking, better product capabilities, and a better digital client experience when it's required. The UK business, which accounts for 11% of turnover, has not yet been formally acquired as it remains subject to approval from the SCA. While we go through that process, we will support their UK clients via a service agreement. Our integration efforts are well underway. We've split this under three main streams, people, customer experience and business combination synergies. As part of our people program, phase one of the new organization is in place and planning is underway for phase two. Integration leaders have been appointed and work is going well. In customer experience, the product stat analysis is well underway and there's already a plan to integrate by regions so as to minimize risk and disruption. In terms of synergies themselves, as we said, we expect these to be more than 5 million customers In fiscal year 25, the areas are clearly identified in both cost and revenue, and we are already simplifying bank fees, for example. Performance at Therma has been good, underpinning our revenue synergy assumptions at this point. In conclusion on slide 18, we are very encouraged by the progress we've made and by the outlook for this year. Our strategic focus will be largely in the same areas with the addition of a strong firmer integration being a high priority. We will continue to invest in the areas that will make us more valuable. Regional growth in North America particularly, but also starting our European expansion plus APAC will continue to be a strong core region for us. We will invest and grow our corporate and online seller segments. We will win prospects in our enterprise pipeline and activate the ones we already have. And we'll continue to grow our valuable consumer segment. As we do these, we expect our financial results to be healthy. We are providing specific guidance for fiscal year 23 this time, given the integration of Burma. And that looks like net operating income of between 200 and 212 million at stable net operating income margins. Underlying EBITDA will be in the range of 55 to 60 million. These numbers take into account the fact that we don't expect the consumer rebound to continue at the same levels, a tempering in average transaction values, as outlined earlier, as well as a normalised loss rate. Further, we'll have the contribution of 11 months of firmer rather than 12. As planned, we expect to deliver firmer underlying EPS accretion of 20% on an annualised basis through the integration synergies we've identified. Finally, we expect intangible investment to be in the range of $12 million to $16 million, as Selena outlined. So a very strong fiscal year 22 and a bright outlook for fiscal year 23. Thank you for your time and now let me hand back to Melanie for any questions.

Thank you. If you wish to ask a question, please press star 1 on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Seth Hoskin with Countercord. Please go ahead.

Thanks, Alfreda. Morning, Selina, Skander, Matt. Thanks for the time and congrats on the good result. Just a few questions from me, starting off on the corporate side of the business. So obviously the second half is really strong and that run rate now tracking over 72 million if you annualise that in the second half. Just wondering how we should think about that growth throughout the year. I mean, just the 1H23 growth, deliver positive growth, or should we sort of look at that more on a whole year basis and then going back to that sort of low single, double-digit growth rate?

Yeah, look, we haven't split it by a hard set. You know, we continue to think there's going to be strong momentum in corporates. And as we touched on in the call, it's just going to be a case of tempering a little on those average transaction values. That's what we're kind of assuming. But I will say that we're still seeing pretty good performance in corporate and we still feel pretty good about the outlook through first half, second half, fiscal year 23.

I understand that you don't want to guide half and half. And then just sort of on the ATVs, obviously talk to them and they're a big driver of the result. So what are the other levers that you have within them? You've got that slide that works through that. But if ATVs are coming down, how do you sort of offset that headwind going into 23? Is it higher transactions for the customer or do you think you can drive a bit of margins?

Yeah, it's a bit of both. So you definitely saw transactions for active client continue to be strong. And then secondly, obviously from an NOI margin perspective, some of the compression in NOI margin is just down to average transaction values. So if they moderate, then there should be some improvement in NOI margins. And then obviously the other thing that we touched on that the team has really done a fantastic job on is things like bank fees and commissions because those more active clients just by definition are doing more transactions. So the bank fee benefits actually grow as well as the work that we've done in the corridors to drive up speed and drive down costs. So all of those things, are really the levers to your point that we can drive to offset if there are ATV moderations.

Thanks, that's really helpful. And then just, is it possible to get a bit of an update, I suppose, the market dynamics, financial year to date? Obviously, the fourth quarter, we saw a real spike in volatility, which drives transactions through consumer in particular, but just how's that evolved to start the year and how does that kind of impact the outlook over the rest of the calendar year if it pulls back a bit?

Yeah, so look, I mean, obviously, all of you will have seen the volatility out in the market in currencies. And, you know, as you would expect, that's been a tailwind for us in our consumer business through April and even to some extent in the first part of May. So we're obviously encouraged by that. It's kind of in line with our expectations when volatility hits. So we feel pretty good about that. But, you know, as we've highlighted, that's not something that we can predict for the full year, but certainly it's performing well given the volatility.

I'll jump back in the queue and let some other people ask some questions, but congrats on the good results. Thank you.

Thank you. Your next question comes from Lafatani Sotaru with MST Financial. Please go ahead.

Good morning, everyone. Congratulations on a good result. A few questions from me, if I may. The first is in relation to FIRRMA. And it's great that you've reiterated the guidance and also provided $5 million in synergies. I think the last number you provided in terms of the EBITDA was $10.9 million odd or $11 million for the year finishing September 21. Is the underlying firmer business tracking at about the same rate or has it come off or would you be disappointed if you can't reach at least that level pre-synergies?

Yeah, so obviously it only went live in May. Everything we're seeing is tracking well. We're happy with that. And you would have seen that we also recommitted to the 20% EPS accretion on an annualised basis. really happy with what we see, we're really enjoying integrating the businesses together and we're off and running with some of the synergies which is great.

So just to clarify, so the $11 million EBITDA that they're running at beforehand sounds like that that's a baseline and the timing of the $5 million synergies is, if I was to have a best guess, there'll be half in this financial year and half in the future years?

Yeah, so yes, I agree that the EBITDA is the baseline, the 10.9, which is fine. The synergies will ramp over the two years. So you'll see more in the second year than the first as we start. And it's really due to what we're trying to achieve. So the really easy ones out of the gate, so things like, well, they're slightly easy, but bank fees. So we'll start looking at bank fee providers and making sure we get best rate and it doesn't require any technology. Whereas other synergies were requiring integration, which will come later, and that will come through further in the second half. So I wouldn't bank half and half. I would probably ease it in over the two-year period.

That sounds good. Thanks for that. So moving on to the second area, I just wanted to dig into the enterprise piece a little bit more. I think there were some comments made by Skanda that you'll be looking to get your first wins in financial year 2023. in the North America. Did I hear that correctly and are we talking about at least one wind or are we talking multiple winds and just the timing on those winds and the magnitude if you could add some colour?

Yeah, sure. So yes, you did hear that correctly. The thing I would say about North America is they've got a good pipeline, got a strong team, we're adding resource at a product and technical level. So, you know, we're expecting progress and the words I used was some wins. But as with these things, it's very, very hard, if not impossible, to give you a date or a size. You know, let me just say that we're encouraged and it's looking healthy, which is why I made the statement, but I can't be more precise than that at this point.

I understand that and just on the other side of the enterprise, the $6 million-odd revenue you achieved in last financial year, can you give me broadly how much of that $6 million was made up of WISETEC and LINC?

Don't actually split it out but we did make the comment in the presentation that actually The really encouraging thing is that the existing client growth is really what's helped that overall number. In terms of the wide second link, relationships are very strong. We feel really good and there's lots of Excellent partnership going on there. It just is taking time to activate. And the more you sort of think about it, you're sort of talking about working with major counterparties and their clients to go in and change their systems. So it just does take time. But very encouraged and on both sides, our side and the WiseTech or Lync side, there's continued commitment and excitement about what we can do.

I understand that. I guess where I'm coming from is that there's existing guidance for $5 million apiece revenue for both Lync and WiseTech and your current revenue in that whole division is $6 million. If we're looking out over the next two to three years, just trying to work out the ramp up in those two revenue lines that have been already previously flagged, would you be disappointed if you didn't hit those target guidance in the next year or two? Or how should we think about that?

Yeah, I mean, we actually updated the market on link. I think it was... about six months ago, to say that the $5 million revenue number that we had previously guided to, we were no longer guiding to really as a result of a couple of technical items that we're trying to work through with Link. Certainly on WiseTech, we're continuing to make good progress As you say, we'd certainly be disappointed if over the medium term we didn't hit those types of numbers but we're not providing specific guidance by relationship at this point there were any change to that from what we've said in the past.

Okay, understood. Just a couple more questions. One's in relation to the staff number. There's 52 new staff members over the last year. Can you just remind me, Selina, how many staff members do you currently have? on the books and so just trying to work out the magnitude of that increase and can you be a little bit more specific around where they've been allocated both is it R&D, is it sales, is it BDNs just so we can get an idea or the broadly evenly spread to what you've currently got?

So we went from about 400 to 450 is the magnitude. Also, remember that Firma has a wonderful talent pool as well, and that also adds another just under 200. I think there are 197 FTE on top of that, which is excellent. Look, it's broad-based where the staff has been added across, you know, there's regional ads. Obviously, we want to grow each of the regions, but there has been... Probably more than most increase in technology as we are building our platform and you're seeing that as the CapEx expenses rises or the intangible expense rises year over year. It's pretty broad based. It is to generate growth in the growth first of its sales growth in the regions and then also continue to build on that technology and capability for the business.

Yeah, okay. And just my final questions in relation to the EBITDA guidance. I just want to unpack that a little bit. So just as our starting point, we've got 44.5 million, sorry. And if we just go to the firmer numbers, and I understand there's some timing issues, but if 11 million is the base and there's, say, a million or so of synergies, then that will come through in the current year. And you minus, I guess, some of the timing impacts, you still have over 10 million EBITDA being added that effectively gets you to the base of your guidance, which is the 55 to 60. And so effectively, the organic number is around 0 to 5 million. Given the momentum that you're seeing, the continued growth that you've called out, particularly in the corporate and enterprise, is it a case that because of the volatility and you're cycling such strong numbers, you're just more concerned of putting a big number out there, particularly because we know that consumer can be volatile. But can you just give a little bit more colour as to, you know, when you walk through those numbers, there isn't a lot of guidance for the core business?

Yeah, I think that's a fair assessment, Laf. And look, the three things that we've kind of guided conservatively on, one, as you say, The ATVs. So at the moment, you know, at $28,000, that's sort of 20% higher than the highest they've ever been. And it's north of 20% higher in consumer and even more in corporate. And it's all over the world. So there's a lot of, let's call it, demand that we're getting and we love it and we're servicing it very, very well. And it isn't necessarily going to abate all of a sudden, but it's hard when we've been in this business for 20 years to suddenly see that sort of jump and then just assume there's been some dramatic shift in one year that's permanent. So we've been conservative on ATVs. Obviously, if it comes in, that's great and it's upside. The second thing to your point, which we've been consistent about, is consumer volatility. And as we shared on the chart, you know, there was 51 days of what we define as volatility in the second half. It's actually less than other parts that we've seen. And it's jumping around a bit. We think as well competitively. As I mentioned in my script, relative to the competition, we were open and available with T1 banking relationships, so we kind of won more than our fair share. But it's very hard to predict what that's going to look like. So again, we've been relatively conservative on that. The other one on the EBITDA side is outstanding execution on losses. It's about $100,000, but you only have to go back a couple of years and it was $2 million and the year before that it was $3 million. So Again, we'll be very, very strong in our execution, incredibly focused. But it'd be unwise for us to just build that into some sort of permanent, very, very low loss rate. So those things plus the timing on the firmer, you know, we've just put a conservative outlook, which we think is sensible. I think people are heading into a very, very uncertain operating environment and economic environment, geopolitical environment. All of those things will have an effect on our corporate clients and our online seller clients and our consumer clients. and, of course, on enterprises who are trying to go execute. So that hopefully unpacks it for you on how we've thought about it.

No, it does. Thank you for that, and congratulations again. Thank you.

Thank you. Once again, if you wish to ask a question, please press star 1. Your next question comes from Cameron Horkett with Wilson's. Please go ahead.

Hey, team. Thanks for taking questions. Might just weigh in on last question there. Following a bit of a similar train of thought, I'm just wondering what you guys are baking in or thinking for the Aussie dollar in terms of strength or weakness over the coming 12 months now that as you consolidate firmer, you know, there's around two-thirds of earnings now coming from offshore. So just wondering how that relates to EBITDA guidance.

Thanks. Yeah. So, look, I don't think we, I think we're, it's not that, yeah, so we haven't really thought about that too much at the moment. While firmer earnings will come back, yes, there will be other offsets if you have a weaker Aussie dollar that will come back as stronger as earnings, but then you'll have other costs that will offset that. There are some natural hedges within the portfolio. So we haven't provided any insight into that. We can take it and think about it and get back to you.

Yeah, the other thing I just add to Cicelyne's comment on there is obviously a strong U.S. dollar with a growing North American and U.S. region is tailwind. And you're going to make more.

We're going to make more out of volatility and revenue from customers than any upside or downside. I know it's coming back.

Yeah, that's fine, guys. I guess the summary there is guidance in the market is more or less constant currency, and then if things swing around a bit, it hasn't really been factored into the statement that has been produced.

Thank you. There are no further questions at this time. I'll now hand back to Mr Malcolm for closing remarks.

Well, thank you, Melanie, and thanks, everyone, for taking the time. As I said up front, we're absolutely delighted with the result. It's a very high-quality result. We think the outlook is healthy with being conservatives because we're all heading into a very uncertain future economically and politically, but love the cash generation, love the profitability, love the execution of the team, and we'll continue to keep you updated on progress. Thank you very much.

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