PEXA Group Limited

Thank you for standing by and welcome to the PEXA Group Limited FY21 results call. All participants are in 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'd now like to hand the call over to Mr. Glenn King, Group Managing Director and Chief Executive Officer.

Please go ahead. Good morning.

First, I just want to say a thank you for joining today's call and welcome to our TEQSA's first results presentation as an AXS instant company. I particularly want to welcome all the new shareholders joining us today, including those in our practitioner member family and among our hard-working TEQSA team who supported this successful IPO. Now, I'm going to... refer to some of the slides in the presentation. So first of all, I'm on slide three, and I just want to introduce myself, Glenn King, the CEO of TEXA, and my colleague, Richard Moore, who's the CFO. Today, we'll go through our interest and financial performance for FY21, and we're presenting and representing all of our TEXA colleagues. You'll see the agenda on the page three, on the right-hand side. We'll cover some of the business highlights, an overview of our business performance for FY21, the financial year 21 financial summary, a bit of a cover on the outlook and updates for the future, and obviously we'll take some questions and answers towards the end. So to kick off, if we go to page 5 in the presentation, which is just giving an overview of the business highlights, And I must say, in terms of this year, financial year 21, was a significant year in the life of TEQSA, including our successful listing on the AFX on July 1. I can say that throughout the entire process, and despite the challenges of COVID lockdowns, the TEQSA team has remained focused on the business and insurance, have continued performance and delivery throughout financial year 21. As a result, we're pleased to say that we're in line or extended our pre-financial year 21 perspective forecast, and our multiple growth initiatives have progressed as we planned. And with a strong start to financial year 22, notwithstanding the impacts of lockdown, we are reaffirming our financial year 2022 prospective forecast. So if I go on to slide six, or page six in the presentation, I can certainly state that at both a financial and operational level, we're in line with our financial year 2021 prospective forecast. A couple of highlights. Our group revenue of $221 billion is up 42% year-on-year. Our extra exchange transactions at 3.3 million in financial year 21 is up 37% year-on-year. Our petrol exchange EBITDA of 110 million is up 114% and with our EBITDA margin is up 17 percentage points to 50% year-on-year. I must say that we've had strong metrics and performance all round for the Vector business as per our Financial Year 21 prospective forecast. Vector is a strong, resilient digital platform business. We've had sustained delivery and we have good growth potential. And if you go onto page 7, noting that good momentum and progress in Financial Year 21, across all our business. As an example, on the left-hand side of this page, we talk about our member highlights, and those who are new to VEXO, our members are our customers. A couple of things, as I mentioned, the growth in transactions on the VEXO exchange platform. In addition to that, in financial year 21, we continue to drive enhancements of the VEXO exchange business, with over 100 enhancements to the business. This included growth with respect to change services. It also reinforced the strong trust and partnerships we have built with our members, the lawyers and advisors that use our service, the financial institutions that utilize our service, our relationships and services within public sector agencies, all who use our services every day. We're a trusted platform business. And in addition to the ability of the electric science business in Australia in Financial Year 21, we also connect our additional growth businesses with entries into the UK, insights and insights, all started in Financial Year 21. So let's go a little bit further in terms of performance. I'm now going to go to our slide nine, or page nine, and just to talk a little bit in terms of the performance for Financial Year 21. So PECTA has four key growth areas, including the PECTA Exchange on the left-hand side of this bar page. Within the exchange, which is a large core business, we've increased our digital footprint through the introduction of new property transaction types. We're also bringing the growth and benefits of digital development to additional jurisdictions, such as growing in Queensland and South Australia, and also building out our connections with ATPs. But outside the picture it shows, we can make, in financial year 21, three additional growth businesses, being on the bank of our success in the Australian property, visual, and employment market. This includes Exxon International, where we're now seeing a replica of our success in Australia, in certain other international tolerance title markets, starting with the UK. Exxon France, which we started in FY21. We've started to commercialise our access to your meat, mini real-time and national copy information by providing industry insights and analysis to existing and new customers. And thirdly, it seeks to build partnerships through the new digital platform products and services to business, industry and government. Now, I'll go through those three growth missions shortly, but in the meantime, let's start with the core text-to-business performance in 2021, the exchange. So we'll now go on to page 10. So in financial year 21, again, a successful year. A couple of last things to call out. The Factor of Change is Australia's leading property settlement platform, handling 80% of all property transfers in Australia. We now have 160 financial institutions, 6 land title offices, 5 state revenue offices, 9,400 plus lawyers and practitioner firms, serving millions of consumers buying and selling homes, all connected with the PetroExchange or integrated with the PetroExchange platform. And, in addition to that, we have strong net promoter scores of plus 50. Over $1.5 trillion worth of property has now been settled on the PetroExchange platform. In fact, we're an essential platform service to one of the largest and most important sectors in Australia, property. We help connect property across Australia and ensure that it keeps performing well. The PECS Exchange platform performed as per our expectations in financial year 21, with, as I mentioned, over 80% of total property transfers now delivered through the PECS Exchange platform. And in financial year 21, we saw strong growth in our mule markets within Australia, In Queensland, it grew market share from approximately 10% to now over 50%. And in South Australia, in the high scenes, market share to now close to 95%. Fabric helped us follow the shift of paper transactions to digital and therefore going onto the PetroStrands platform. In fact, the PetroStrands platform benefited from the rise in total property market transactions in FY21. and we saw transfers continually grow. Volumes, in fact, remained strong throughout quarter four. The investor business is a totally resilient business, and we're not only doing this through transfers, but we also do property refinances. We also saw growth in that in 2021. In addition to that, we continued to grow and roll out more services to our customer base. And let's touch on some of that in the following slides, in slide 11. So in financial year 21, if we have a look at this particular slide, on the left-hand side, we have a strong innovative and customer culture, something that's been rebuilt up over a number of years. And that's come about not just in terms of what was transformed in terms, in regards to the property settlement platform across Australia, but also in the services that we continue to enhance and deliver. So in financial year 21, through the influence of our customers and data, we improved the customer strength and deepened our relationship with our customers. As an example, we rolled out a new single financial settlement summary to the PECSA chain. It improves on-time and on-day settlement for banks. We upgraded the PECSA developer practices and expenses through PECSA projects. We upgraded PECSA exchange consumer services with PECSA Keys. Hexatee now has over 100,000 students as users that allows them to track and communicate their property and bank details in a safe and secure way. And in Financial New 21, we've taken our partnership to work positively and proactively with governments and regulators to help with various reforms, such as possible standard duties and interoperability reforms. And on the right-hand side of this page, We expect to continually grow and progress in the Australian market. As an example, we expect to see adoption of digital settlements in new jurisdictions such as the ANZP. We expect to see additional digital enablement of stocking transactions in selected jurisdictions such as Western Australia that can be handled on the best Australian platform. We expect to see launch and development tomorrow of new petro-exchange products and services to deepen our engagement with practitioners, financial institutions and home buyers. And we will continue to work closely and collaborate with regulators and government to support industry reform and the broader economy. The petro-exchange business has done well. Now let's quickly turn to some of the additional growth initiatives. On slide 12, or page 12, starting with international. As I've mentioned, we started three great businesses in 2021. And PetroInternational targets light markets to Australia, which has characteristics such as time and title, and where there's an opportunity for users and leaders, resource and platformers for their needs. To lead the shift from profit-based property transactions to digital property transfers, refinances, a shift that is accelerating worldwide. And in Financing 21, we commenced our international expansion, starting with the UK. Early days, the good progress has been made. We have a local team in the UK, 14 professionals on the ground. We have an expert advisory board in place. We've appointed our build partner, Phil Brooks, excellent build partner, and the platform design and build is underway. With our cognitive engagement with bodies such as the Bank of England, the Anne Registry, and the private digital vendors, And I can confirm we're on target as per our commitments, in our perspectives, with banks that are committed to progress with our testing. And then if I go on slide 13, or page 13, our other two criteria in Financing Year 21 also started. We started our digital insights business. This business represents an opportunity to build new revenue streams of services from an active to unique data and insights. and we've started in financial year 21 and have made good early progress as for our commitments. For example, the PetroInclines team is now 40-plus, including a number of data specialists, and we have built out a new copy bureau. We've commenced the development of new Inclines products and services, and these are being tested with a small number of customers and tested well. This will also include the release of various PetroInclines reports through partnerships with others, such as Domain, to the Masterplace, generating good media and market attention. And this has helped us protect customers' domain and opportunities in the market. In addition to that, on the White House side, in financial year 21, we started Big Centres to appropriately partner and expand FECSA in the property ecosystem through the provision of new digital services to businesses, industry and government. And knowing that this is a new, early business, it still delivers in financial year 21, our launchpad. Our launchpad is the way it was released, and allows us to test new market innovations and digital services. We also had our first small investment with Honey Insurance, which in its own right is an industry visual disruptor. And we partnered with Small Business Australia to arrange business advantage to provide services to our business customers or members. So we believe it as direct commitments on our three additional growth businesses. And lastly, from myself, in terms of slide 14, you can only do these things if you have an organisation that is trusted and has a strong culture. And this is a critical role by testing the copy industry to ensure that it maintains and builds a culture of trust for their communities, partners, people, and communities as a whole. And in Financing 21, if I look from the left to the right, on this page, we maintain a strong performance as leading trusted brands among our business. In the middle, in Financing 21, despite COVID, we continue to have a highly engaged, talented and diverse workforce. And in fact, we've been effectively named in the top three best places to work in Australia for companies over 140. We have a strong people engagement of 80% plus. And it's a testament to the culture that they've built up over a number of years. And I'm proud of the PEXA team and our passion for customers. And a shout out to the team for the successful IPO. And lastly, as an organisation in 2021, we continue to take our ESG commitments seriously. We strongly believe in our role in the community. For example, we form-marked our net zero commitments and invented that innovative strategy around being involved. From a societal perspective, we partnered with organizations such as Homes for Homes, a flagship social impact partnership, a highly innovated program, looking to address homelessness. And, as another example, we continued to portray purpose at delivery and at commitments to diversity. So a successful performance in financial year 21, and I'll now hand over to Richard, who will take you through the financial performance.

Thanks, Glenn, and it's great to be here today for PECNA's first set of results as a public company. So before I start, just a couple of key points on this section. The first thing is the figures in the section reflect a pro forma P&L. And the adjustments from a pro-forma standpoint are there to show PECTA as a listed company. So we've removed the one-off costs that came about as a result of the listing, and we've added into both FY20 and 21 about six and a half million of public company costs, which will make the business comparable with the future FY22 results when we come to report them. Second point is any reference to forecasting here. is the FY21 forecast that was in the prospective tree lodged in June. So, as Glenn said, we have had a really strong financial year in FY21. Our revenue is up 42%, $221 million. Costs are up just 6% year-on-year. And what that means is that our tax exchange EBITDA, the EBITDA from the core, is up over 100% to $120 million. Our EBITDA after our investments and growth initiatives and other one-offs is also up over 100% to $101.8 million. And all of those four measures are on or slightly ahead of the prospective forecast. Our net profit after tax is in line with last year in the prospective forecast, as was NPAD A. And for those who don't know, NPAD A is our NPAD excluding the impact of our non-cash amortization of intangible assets. so effectively a cash impact measure, and we show that so that you can see effectively the cash generation within the business. What that means is that the financial metrics were also strong, gross margin of 86.7%, up 1.5 percentage points, and a tech exchange margin of 50% exactly, up 17 percentage points from last year. Both of those are also slightly ahead of the prospectus forecast. So great FY21 from a financial standpoint. I'll now go in and explain the key drivers. Our revenue is a function of our market size, our market share and price. And on slide 17, we explain the first two parts of those. So as Glen said, the overall market grew strongly in FY21, up 19% to 4.2 million transactions. And on top of that, our market share or penetration grew 11 percentage points to 79%. So what that meant in total is that our volumes increased by 37% to 3.3 million transactions, as you can see from the chart on the right-hand side of slide 17, slightly ahead of prospective forecast. If you look at it on a product-by-product basis, on the left-hand side, you can see our transfer penetration grew by 14 percentage points to 80%. Our refi Penetration stayed pretty stable at 99, and our other transactions grew 6 percentage points to 56. And when you combine all of that, you get an 11 percentage point increase to 79% overall. So 19% market growth, 11 percentage point growth in share, to about 37% growth in PESA transactions. On slide 18, we then explain how that impacts revenue. So the volume that we've just spoken about is on the top left of 18. On top of that, we have a 4% average price increase, which took it to $66. And by that through means overall, we saw revenue up 42% year-on-year. So up from $153 million last year to $218.6 in F-121, which was 1% ahead of prospective forecast. I'll take down the pricing a little bit more on the bottom left. You can see our refinance and other prices went up very slightly by CPI, as you would expect, given we do increase prices by CPI each year. But what you see in transfer pricing is it actually dropped by $1 year on year, and that was because we had a discounting campaign in Queensland. which was there through FY21 to drive awareness and uptake. That discount ended on the 30th of June 2021. So, once we did put a CPI price increase into transfers, the discount brought the overall average down to about $5. When you weight all of that together, though, the fact that we had a mixed shift into transfers during the year meant that the overall price increased by $3 or 4%. So adding that 4% up to the 37% volume growth we've spoken about delivered at 42% growth in revenue year-on-year. And we did come in, as I say, a couple of million or 1% ahead of prospective forecast. On slide 19, we then look at growth margin and cost of sales. Our main cost of sales are LSS fees. So those are Lodgement Support Purpose fees. They're incurred when a PEXA workspace is created. it reaches out automatically to the land registry and pulls back a bundle of property information. It's charged on every workspace, whether it's a multi-party transfer, which would generally have four participants, a two-party refinancing or a single-party discharge or other transactions. So what that means is as we do more transfers, more multi-party transfers, as I said, you can see the impact on price. That also impacts the cost per transaction coming down. So one LSFP against four transactions, whereas on a resize, one fee against two. So what that means is we see a drop in the number in the cost per transaction. You can see on that top right-hand chart on slide 19, dropping from $9.50 to $8.80. And we also see that mid-shift in transfers improving the revenue per transaction of the top left-hand chart from $63 to $65. When you combine that, we've got a chart showing improvement in gross margin from 85% to 87%, and gross profit growing by 45% from $132 million to $181.7 million. Slide 20 then shows the rest of our operating expenses, which we group into three categories, product design and development, sales and marketing, and general administration. Our product design... and development costs increased by 7% year-on-year, and that was predominantly due to higher hosting costs driven by the materially increased exchange volumes. These costs were also 2% higher than the prospective forecast. You'll see in the cash flow that we also capitalised similar amounts, just over 20 million of product development, so the total cash spend on product within the business in the year was about 45 million dollars. In terms of sales and marketing, that spend actually dropped year-on-year due to the impact of COVID-19. We weren't able to hold and host many of our regular practitioner events, and we actually dropped our overall marketing spend as well. So they dropped 9% from FY20, and they were below the prospective forecast. And in terms of our general and admin costs, which is our shared services, Our board costs, our exec rent, professional fee, occupancy and the like, they increased by 1.6% year on year, which effectively means broadly a flat headcount and CPI increases on salary and other costs, also in line with prospective forecasting. And I'll just reiterate the fact that these G&A costs also do include that $6.5 million pro forma adjustment to bring in the public company costs that we'll see going forward. So hence our pro forma EBITDA was lower than our statutory EBITDA. There is a reconciliation between the two later in the document. So overall, our costs probably flat year on year and in line with prospective forecasts. So flat OPEX and strong revenue growth, what that means is a very strong movement in PECS exchange EBITDA, which you can see on slide 21. The chart on the left shows total costs, so that's OPEX and cost of sales combined. and cost per transaction. And you can see that while cost increased, in fact, the volume increased much faster, meant that we saw quite a significant drop in the cost per transaction from $43 to $33, a little bit lower than forecasted in the perspective. And what that means on the right-hand chart is a very strong growth in the tech stage that I mentioned, up 114% to $110 million, and slightly ahead of prospective forecasts. as is our EBITDA margin, up from 33% to 50%, and again, slightly ahead of what we expected when we put the perspective together. So, in summary, from a P&L standpoint, a year of very strong growth, very strong revenue, good outcome on EBITDA, and delivering on all of the key prospective forecast figures. Slide 22 then shows our cash position. So we've got two charts here. The one on the left shows the cash movements year on year, starting at 70 million. It started for EBITDA coming in at just under 117. Key movements being the investment in products, which I spoke about earlier. So that's the one, the column that says intangible capex. We had a positive net worth and capital movement. And when we rolled that all together, just before the IPO, we had approximately $160 million of cash in the business. We rolled in some of the IPO changes and we sourced $200 million worth of debt and we paid out $400 million of shareholder loans just prior to listing. So on the 30th of June, we had a cash balance of $51 million. There were remaining 193 million shareholder loans on the balance sheet on 30 June, and all of those were repaid on the 1st of July from the proceeds from the primary raise on the IPO. The right-hand side of the table shows our standard pro forma cash flow. I think the key thing to put out here just is the strength of the free cash flow before financing and tax, $90 million. free cash flow conversion of 89%, up almost double on the year before. So strong cash out come in line with the volumes and P&L, as you would expect. Before I move to the outlook, I will just add that there are a few more details of the financials within the appendix, which are there for Lisa Cove and Farooz, as you see fit. And finally, from my standpoint, on to trade 24, which goes through outlook and the forecaster next year. When we listed on the 1st of July, we did explain to the market that we had a strong Q4, and I think we quoted a number of more than 960,000 transactions in the quarter. You can see it was actually 967, up 50% on the equivalent quarter in FY20, and what that meant was the second half was actually up 47% year-on-year in terms of PEXA transactions. Q4 also exceeded the perspective by 5%. That momentum has continued into early FY22, July volumes up 53% on the same month in the previous year. And while we are very conscious of the potential impact of the COVID lockdowns in the property market, we do keep a really close eye on property lead indicators, such as new listings, target sales, auctions, and the invitations to create petrol work spaces. We have seen the And it's been well documented that there's been a slowdown in new listings for Sydney and Melbourne. But what we are also seeing is the other capitals holding up well and the regions being pretty robust. And also that hasn't really flowed through to sales or auctions yet. And invitations to peck for watch faces are also holding up well. So one of the things we also noticed during the lockdown last year is that when restrictions do lift, if properties have been withheld and not listed, they come to the market pretty quickly. And we certainly saw after the Melbourne lockdown last year that it returned to pre-lockdown levels really within weeks. So this, combined with a strong start to the year, does give us confidence to reaffirm our financial year 2022 prospective financial forecast. So thanks for listening, and I'll hand back to Glenn to close.

Thanks, Doug. And just to close before we head back, any questions, just to summarise a couple of key points. So we've shown that we've got a consistent track record. We perform very strongly in line with our financial 21 perspectives, our financials, and also in terms of our connections with the middle. The growth is driven by the effects of change, and we've got momentum across our other initiatives, such as international insides and ventures, whilst early days. As Richard said, the growth is despite our code behind him. It's been actively strong and robust, and the property market, from what we've seen, has continued to be resilient. We have a trusted brand and a strong culture and a commitment to our partners, community, members and our people. And it's on this basis that our customer reaffirms its financial year 22 prospective forecast. And on that basis, Richard and I are now happy to take some questions from you.

Thank you. If you wish to ask a question, please press star then 1 and wait for your name to be announced. If you wish to cancel your request, please press star then 2. And if on a speakerphone, please pick up the handset to ask your question. Our first question is from Josh Samarakis of Barranjo. Please go ahead.

Hi, Glenn and Richard. Thank you for taking my call. First question is just around the UK. You mentioned the commitment to participate in product testing with the Bank of England has been secured. I just wanted to clarify 100% that you have locked in that testing slot that you've talked about previously. And then also, if you could just give some details about, you know, is the bank still secured? Is it one or two banks? Is it more? Maybe some granularity on the types of banks. That would be greatly appreciated.

Thanks, Josh. The first thing is what I can say is that in terms of our commitment as per our perspectives, our commitments and requirements of the Bank of England, I can confirm, so there's nothing that has changed in that regard. And so we're working closely with the Bank of England. We've got our slots and we're working now on our... of our platform, as I mentioned, with ThoughtWorks. That's the first one. The second point in terms of our commitment with lenders or financial institutions, and again, as per our prospectus, we say that we needed at least one member to commit. What I can say is that we've got more than one member committee wanting to be a person partner with us with these old bank of England slots. So everything that we've said in our Finance Year 2021 perspective and what we're looking to do this year, we're in line. There's nothing out of our plan or on target. In regards to naming... I think if I need some decisions, I can't. It's not a problem for me to name them, except to say that we've got multiple on the right progress. So that's been pretty easy, Josh.

Okay, got it. Yeah, so just in terms of the mix of banks, are you able to give us any context in terms of, you know, whether some of the major banks, mediums, more like how the sort of breakup is in terms of that mix?

Yeah, for sure. I can definitely argue that. They are a mixture between the three. So, as you may know, in the UK, you have a number of large planes, a median and a principal number of small planes. We've purposely looked to get a cross-representation of those three segments for multiple reasons. But, yes, we do have representation from all those three segments.

Okay, great. And just following on from that, would you be able to mention just in terms of any key observations you've had on your feedback in the UK so far around your value proposition, like key stakeholders such as the lenders and also some of the regulatory bodies?

Yes, I can. There's a couple of things I can certainly say for the quarter. The first part is that what is being achieved in Australia with the textual exchange And the positive difference that's made, both in terms of efficiency for banks, as an example, operational efficiency, ensuring you get the greatest turnaround time, et cetera, that has been well received by the financial institutions in the UK market. And they're all over here for operational efficiency and improving customer service as well. And the good thing with PECSAR in Australia, they've got a track record of of delivering and making it happen. And that has been an important part of the conversation. The second thing that I can add to it is our engagement with the government body, such as the Bank of England and the Land Registry, have also been positive. There's a couple of reasons for that. First, again, is the track record. But the second element is having a dedicated team in the UK a team that has got experience of the UK financial services market and the regulatory market and also the running operations, complemented by Australian VIXA professionals who have gone over to the UK market to help the discussion with the IRP. Having that track record certainly helps with the conversations around that momentum. Probably the third part to add to it is that There's, you know, for a number of reasons, not just because of COVID, but in addition to COVID, there's a greater acceleration of get-on-to-visual platforms. A, you've got to keep physical distance. Second, well, in the UK market, it's been quite hot in terms of copy refinance, amongst other elements. And thirdly, governments, banks and other bodies are all looking at how to ensure that businesses are resilient not just from an efficiency and service perspective, but also in terms of pandemics such as COVID as well. So there's been a good pile of wins on their front. So the engagement, Josh, has certainly been positive and it's been receptive for a number of reasons. So, you know, we're in line with what we said in that perspective in the community there.

Great. Okay. Excellent. I'll run back into the queue. Cheers.

Thanks, John. Thank you. Our next question is from Brendan Carrick of Macquarie. Please go ahead.

Good morning, everyone. I might focus my questions on the domestic side of things then. So just maybe starting on interoperability. So at our best results last week or the week before, we had an update that simply connected with three banks and expecting to connect with the fourth later this calendar year. Maybe just from your perspective and your end of things, how are you seeing the progress around the potential for interoperability to sort of go live at some point next year potentially? And in terms of the investment and the cost side of things, have you built any expectations up for potential costs that you might need to incur relating to interoperability or the implementation of it?

Thanks, Chris. I'll... I'll kick off first, then you go, this might weigh in a little bit on the costs. But the first thing that I can say is that, and what I'm really proud of from the PECSL organisation, is that we're working positively and collaboratively with all partners and stakeholders, and I include that government regulators, banks and others, with numerous reforms, and not just reforms potentially of interoperability, but as I mentioned earlier, stanchionary reforms, as an example. Now, one thing that's certainly taken away from the interest is to help the industry in regards to interoperability was agreed on a model collectively, all four parties. And we've been working through, well, how can that model happen and what's the best thing for all stakeholders, including tech shareholders, tech customers, but also the economy just generally. And what's important to know is that you've got to do it in a considered way that is going to work collectively for all. And when I started considering, like, a couple of points in there, as I mentioned earlier, we're connected with, you know, 150 financial institutions, model land title offers, model state of the office, and that's been built up over 10 or so years. It takes time. It's just an important complex sector. You don't want to rush into these. So I certainly just want to say that firstly, we are working to ensure we get the right opportunities for the economy and businesses, et cetera. Secondly, I'm really pleased to see what the government and the Red Rabbit are doing. It's taken time. We've got committees working, working groups going on. There's still work to do with legislation and the rules amongst other things, draft rules now being privatised, which we've provided feedback. And I think what's also been realised in the industry is that Taking that piece of their time, doing one transaction in Queensland now, it's looking like sometimes only 23. I think it's the right way to go. And so that's the first thing I'd add. The second thing, though, regardless of interoperability, there's always competition. So that's why we're on the money till we deliver. Quality customer service to our customers. Quality outcomes for all the parties that we work for. That's why we're continually enhancing our service, adding more products and services. That's why we've got strong market share and strong, you know, promotional ones. Downward, that is Queensland, where we've proven 10% up to 60%. So, I'm ensuring, as is Richard and the business, that we keep investing in our business, keep maintaining our strengths, keep growing in particular areas, improving quality outcomes, and ensuring that we support the government regulators in ongoing reforms. So, the way I look at it is, We've got to keep working together, and it's very considerable. So it's very comfortable for us to have progress here. Richard, on the investment side, we've got some funds to decide in our capex.

Thanks, Glenn. If you read some of the forecasts, I think the cash flow forecast in the perspective, you'd have seen that there's an incremental $6 million between FY21 and FY22 in product development capex. and a portion of that has been set aside for work that may be required on interoperability. So, whilst it's not been agreed the work that needs to be done yet, if there is work required in this financial year, it won't move us away from any commitments that we've made in terms of cash outflows in the perspective.

I guess that's great. And then, Brian, I might just... targeting on some of your comments you made, just that I'm working with government on regulation and the stampede changes. So just maybe an update there in terms of milestones or timelines that maybe we should be keeping an eye on as the consultation or the most recent consultation period finished up a month or two ago now.

Yeah, what I think is obviously government has to make their own decisions in terms of policy reforms and introducing those policy forms. Really what I can flag is HEXA as an organisation and we work with all the states, Land, Coal Offices, State Living Offices on their reforms and we're well-placed to support reforms such as Down Treaty and any other changes to their public sector agencies or governments from a national policy perspective. That's time that's left to consider. And so the timelines of implementation, that's up to government to do what they want to do. But we'll be ready to support as appropriate.

Okay, that's fair. And then, Brett, just one last quick one. Just on the UK, because I've covered most of my questions there, but just on the competition side of things, are you aware of any other... I guess, providers globally or technology companies globally that are potentially looking to do exactly what you're doing and roll out an electronic property settlement network in the UK or elsewhere in the world?

I'll tell you the UK. That's the area that we're typically focused on at first. There's different organisations. that play across the property sector. And not to use them until Australia, where you've got organisations such as real estate portals and organisations that are driving efficiency, for example, in bank areas. But there's no right organisation that has done to the same degree as PECTA has with the exchange of bringing the rent and the payments together in a... consider the way connecting banks, government agencies, lawyers and practitioners. And that's the plan in the UK. There's different parties doing parts on the property value chain, but not across the whole, the extra chains of looking at it. So, again, we're well-placed. We've got the IRC. We don't take it in a very urgent way. We're working through. We're continually looking at the market and what changes are going on. in either we believe that we're the leading player and we haven't seen one or two in a sustainable way and on a scale way as Fletcher has with Australia, and that's why we think we're in a good position.

OK, thanks. I'll leave my notes. Thank you. From Josh Kaneraki for Per and Joey. Please go ahead. Hey, hi, guys. Can you hear me OK? Yes, yes.

Great. Greg, I just thought I'd ask a couple more questions just around the domestic business as well. Obviously, very strong start to the year. Can you give us a little bit more context around some of the refi versus transfer mix and just maybe some of the trends you're seeing in that regard? Richard, did you want to pick that one up?

Yeah, I can pick that one up. What we are seeing, which is consistent with the last quarter of last year, is refis in particular being really strong. So the continual interest rate environment and the level of competition between the banks is driving refis to continue at elevated levels. Transfers are up as well. So, you know, as Glenn said earlier, the total market year on year was up 19%. were up more than that. The transfers were up pretty close to it. We are continuing to see that, but as I said, the lead indicators are not particularly negative at the moment. We're still seeing good flows coming into the exchange. Obviously, in the future, it sort of depends on what happens with lockdowns. We do believe that if we get to the point at the end of this calendar year where there's enough vaccinations out there that we can open up early next year, that history would suggest that the property market will bounce relatively quickly. But the reason we're confident in reaffirming our prospective forecast is because we have had a strong start to the year.

Okay, got it. And just a second one, just around within the domestic business innovation and development of the platform, you've mentioned a couple of those key initiatives. When you think about median terms for the Australian business, can you maybe talk us through a little bit about some of the key focus items and how, you know, you can, I guess, provide but also extract, you know, more value out of the domestic landscape?

Yeah, if I'll just kick off. So, as I mentioned earlier, even in the year that's just gone, you know, we give, you know, over 100 enhancements to our core platform, which is an ongoing basis, which could take, I think, such as, I think, the Land Title Office or State Building Office want to improve your customer experience. And, you know, we have these member of the customer inside the organisation and want to help them with design improvements. So I'll just give you... One snapshot, we're looking at, as an example, to even streamline further the refi experience for our banking customers and partners to remove a number of touchpoints, which makes it more efficient and effective. And that's important given the volume that's going through banks. Generally, it's important to help the banks and also to streamline the process to generate a better outcome for customers. So that's one example of efficiencies that we're looking at our drive-in. The second example, which I can also explain to you, is that they're working in terms of design to make it even better experience for lawyers and practitioners in terms of the front end, and they're currently giving a number of tests in its module areas at the moment. And that's been led by our two customers that lead the value. So certainly over FY22, which we've had a number of service design improvements being tested with our practitioners and members. And that's an exciting area as well. So these two examples are about improving the customer experience efficiency. And again, as I mentioned earlier, just making sure you get a better outcome for the end consumers.

Right, okay. And just a final point of clarification on the UK on timing. Great to hear you've signed up multiple banks to do the testing with. Is that this side of Christmas, next side of Christmas? How should we be thinking about, I guess, the next signpost that investors should be looking at for success within that UK market?

Yeah, no, no, thanks. In financial year 22, as you know, it's the design, build and test of the platform focused on basic refinance. So that's the first plan. We'll have a greater clarity of the next results in six months in terms of what that progress looks like. But I would be expecting that two points. It would give you an update in terms of what the design looks like. and also, ideally, more in terms of a test partner. Really, in the second half of Financial Year 2022, we will be able to more advance in terms of the progress of the platform so that, ideally, in the following financial year, we've actually got a transaction or transactions from refi in the market. There will have to be timelines.

Okay, great. Thanks very much, Chris. Thank you.

Mr. King, there are no further questions. Would you like to make some closing comments?

Thanks, Larry. Look, probably a couple of things again. I just want to say it's been a remarkable financial year 21. We delivered in line or seated on a financial year 21 perspective financials, but also delivered either in line or seated in terms of our business performance generally. I just want to say a thank you to... all shareholders, our partners, our customers and our concerned people for a strong Financial Year 21. Richard and I are proud to be part of the organisation and we're proud to represent also the side of Brookings and also on behalf of the board. So thank you very much and we look forward to Financial Year 22.

Thank you. That concludes today's call. You may now disconnect your line.