Webjet Group Ltd

Good morning, everybody, and thank you for your time this morning. And first up, let me address a few things. Firstly, apologies for the delayed start. What was the trading halt? It took ASX a little bit more time this morning to upload from 7.30 when we posted. So let me just address that trading halt before we get into today's agenda, the FY26 results. In terms of, I can confirm the trading halt has been lifted. And there's been a release that has just been released to ASX this morning, where we voluntarily requested the trading halt to ensure that we had sufficient time to get to certainty on a material commercial issue. As per the release, and I'll let you read that at your leisure, Virgin Australia, one of our key partners, has advised us that with effect from the 1st of July, they will substantially reduce their commission streams and commercial arrangements with us. but still a valued partner, but this does have a significant impact on our future commercials. To give it some context and size, you'll see in the release that we've said had this been implemented at the beginning of FY26, it would have had an impact of approximately $3 million to underlying revenue. So I'll leave that there. I'm sure there'll be questions on it. But what I'd like to do now is present our FY26 results And joining me in the room today is Leighton Shanoff, our group CFO. So let's get started. All right. So I'd like to set the scene with, I think, three themes that really underpin today's result and presentation. And the first is that we've delivered a balanced execution in what remains a fairly challenging and dynamic macro environment. We've also continued to execute on our planned priorities around capital management with shareholder returns underway as promised. And lastly, we've made meaningful progress, really starting to deliver on our strategic growth plan through disciplined and targeted investment and a lot of effort. Firstly, look at the first one. There's the key number there for you. Our group EBITDA was $28.1 million. Look, it was a tough year and with softer trading than expected in patches. And we've made planned one-off strategic investments in brand, technology, and also investments in people and talent. And this has been somewhat offset by the higher than usual variable revenue items. But more importantly, we've got through the year with balancing out all of these thematics and getting to a good result. Cars and motorhome, we had a great story. We focused on that business and we've delivered a significant turnaround during the year with EBITDA increasing material on FY25 to 4.3 million. This follows a successful restructuring and the efficiency and automation initiatives we've been driving in there. We've also maintained a very strong balance sheet. So we'll end the year with net cash of 93.9 million, no borrowings and net assets of 138.4 million. This provides us the flexibility, to continue to invest in growth, but also ensuring we're financially disciplined with that. The second piece, capital management. This was a really big thematic and commitment from the management team. And you'll be pleased to see in our announcement this morning that we've announced a fully franked dividend of two cents per share. That brings the total for FY26 to four cents a share. And that's above 100% of underlying impact. as part of our commitment to maximise distribution of capital as franking credits became available. We also commenced our much anticipated on-market share buyback, although execution has been constrained at times, given corporate activity and blackout periods. Thirdly, we've made really meaningful progress against our strategic growth plan and all the key priorities among that. I'm going to go through to a lot of detail on each of these in the following pages, but I think the key highlights for the year would be the relaunch of the Webjet OTA brand, continued optimization of our OTA products, but also our pricing proposition around that, and all that supporting our focus, one of our key focuses on growing our share of international flight bookings. One of our key pillars was moving further into the business travel space. And we acquired Locomote and have integrated that. So now we have de-risked our business and now have a business travel business within our own portfolio. We've delivered significant cost savings, as I said, across the cars and motorhome business, and have really started to movement on the top line growth. Organizational capability has significantly lifted. There's been significant investment in talent and technology along with AI. So as I said, we'll go through these in detail. But I think I'd summarize, and the key takeaway is here, look, the macro environment remains really challenging. And we've certainly had some internal challenges as well. But we are making extremely strong progress against our things, the right priorities to support long-term growth and increase shareholder value. So I turn to page four for those of you following along with the presentation. Here are the key metrics of the group. For those who can't see, FY26 bookings, across all divisions was 1.4 million. TTV was 1.5 billion. Revenue, 136.4 million, with a revenue margin of 9.4%. And underlying EBITDA, and throughout when I refer to EBITDA, I'm only referring to underlying EBITDA, with 28.1 million as mentioned. It's been an investment year, as I said. But this is reflective of sort of two parts. There's definitely been trading headwinds. And obviously, this is a strategic investment year. And I'll talk further about how that occurred in each of the individual units. Coming to page five, you'll remember the strategic growth plan that we set out in February, just over a year ago. And that had four kind of key pillars that we need to invest in for the future of this brand so that it is as strong for the next 27 years as it has been for the last. That's being the leading brands in each of our categories, capturing more of the travel wallet, expanding our TAN, the total addressable market, and as always, doing what we do well, operational excellence. I've listed under here really the key progress we've made against each of these pillars. If I strip it back to the five things that really drive value in this business and we've really focused on this year, and some of those are highlighted in red, and I'll go through the other details in later pages. But really, this is about growing our international flight share. We're a domestic-led business, so growing international has been a core focus. That's one of the key levers, and we've grown that as a percentage of total flights. It was about expanding and capturing more of that travel wallet, particularly around our hotels and packages. So non-air ancillaries have grown as a percentage of total revenue. Second, third piece was launching scaled business travel offering. We serve business travel offerings and we've laid out a plan to build this capability. But what we did was acquire a business and that accelerated our movement into that market by approximately three years at a more cost-effective and less risky process. And we're really pleased with how that is performing. Lastly, refreshing the brand. Refreshing the brand for the Webjet has been critical. The last time we did that was over 15 years ago, and this has been critical to ensure that the brand is fresh, contemporary, and relevant. And I've already spoken about the last best piece being making sure that the cars in the motorhome business washes its face and is now we've really delivered and continue to drive that transformation. So we've made meaningful progress against each of these four pillars. and I'll cover them more in detail, particularly around some of the metrics as we go through. So let's focus on our Webjet OTA, the largest part of our business. Clicking straight through to page seven for the key metrics for this business. So OTA delivered 1.1 million bookings, TTV at 1.2 billion, revenue of 115.3 million, and EBITDA at 38.7 million. OTA has continued to deliver against its priorities this year. I'll talk more about how the year panned out. So if we go on to the next page, page eight, there's all the high-level metrics in detail there, and I won't go into the detail here. You can read that at your leisure. I'll talk to the drivers behind it. So I think the story for OTA is there's two parts to this story. There's a macro environment and the internal forces. So if we start at the start of the financial year, and we covered this a lot in November at our first half results, the macro environment for our first quarter was fairly challenged. Trump tariffs, we had an unusual Easter Anzac holiday period, elevated domestic airfares as the other airlines had exited the market, we started to see increasing in airline pressures. The cost of living pressures and geopolitical tensions all contribute to a softer and well reported across the entire industry of a softer consumer environment, particularly in domestic leisure. Quarter two for us saw a recovery. However, then we were impacted as appropriately by our ACCC infringement notice that was on our side between August and September. We reacted and responded to that, reduced our marketing activity when we saw that that was having a big impact and our spend. But it also meant that we delayed our brand relaunch. So that had a real impact for us across quarter two. Quarter three was where we really started investing in the brand. Now, we did have some hangover from the ACCC leading into October and November. But this is where we started to really focus the business on its future and launched and drove the revitalized brand and marketing campaigns. launching all our new products. And Q4 was excellent. We had really started to see the benefits beginning to emerge. And then came the Middle East and the fuel crisis. We took advantage of that, I think, a little bit in February with customers pivoting towards short haul destinations rather than cancelling. And there was also a lot of rebooking. And so that preserved some booking volumes. But ultimately, Unfortunately, we saw that great momentum build across Q3 and Q4 start to fall away. We're focused on what we can control and adapt and pivot to what we can't control. So as a result, our total bookings are down for the year, disappointingly. Domestic's down 10%, and that's really very much reflecting the cost of living pressures and the elevated fares, which impact our mass market average mortgage-belt WebJet customer. International bookings are up, and that growth is now slightly skewed to short-haul destinations in recent months, particularly around the Asia-Pacific destinations, which carry and bring forward to the P&L lower average booking value and lower TTV compared to long-haul. The revenue, despite all that, remained broadly flat. And of course, we're focusing on capturing the whole travel wallet, but also we benefited from some customary and inherently variable revenue items. And I'll talk to more recent trading conditions in April and May at the end of the presentation. In terms of expenses, expenses are up, but this was planned and deliberate. The investment has been critical for this business on brand, technology, and talent. and that has been a levelling up that has been required to deliver on the strategic growth plan. A lot of these items are one-off, including the brand relaunch and then a new step up in talent, but we're also rounded out by some higher costs from the demerger-related IT synergies that we've spoken about at length before and the general cost of doing business on a financial basis. At the same time, offsetting that, You know, we really this year started to see the real benefit of our automation and AI deployment across the business, which is increasing productivity and efficiency. It's making us faster and offsetting some expenses that I'll cover. I know AI is such a huge topic right now and it's a core focus of ours, so I'll cover that in a bit more detail. Regardless, we're very pleased to have a very strong EBITDA margin this year at 33.6%, despite it being a difficult macro and internal trading year and significant strategic investment. To give you a bit more detail on some of the product initiatives, I'm now on page nine. There's three things that we really need to do in the OTA. That is continue to broaden our product so that we can access that fuller tan. Continue to enhance our value proposition to our customers. And that's about having better, more unique product at competitive pricing. It's also about connecting with our customer and ensuring that we deliver a full value proposition to them. And then lastly, about improving our revenue from our ancillary expansion. So international flight, that now you'll see a call-out box on the right-hand side of the of the chart page nine for those of you who are viewing the presentation. We're continuing to grow international as a percentage of our total flight bookings. This is the area where we can most easily leverage the strength of the brand. International is always the land of bricks and mortar. As we develop and as we're using these more AI tools and making this easier to do, it will be increasingly become a more focused online business. We've continued expanding our content and getting access to better content through additional NDC integrations. And I can cover NDC later for those who aren't familiar with the new distribution capability across airlines. We're also enhancing ourselves and expanding content by integrating a new LCC, so low-cost carrier flight aggregator. So we spent a lot of work on that this year, which is very shortly to be launched. We've had great traction in dynamic packages. So this is where somebody buys, I might buy my flight and my hotel, I might buy my flight and my hotel and my car, and we're seeing a 10% increase on that, a really lovely green shoot. Booking's up 10% year on year since the brand launch and since we started investing in this. Underpinning all of that is significant investment in our underlying technology platform and our data foundations, our CRM foundations, to further scale our hotels and packages experience. The middle column there really focuses about how do we deliver better product, more unique product at better competitive pricing. And here, the key tool we're using is machine learning and AI. So this year, we launched a predictive AI solution across all our flight searches that allows us to anticipate pricing and then move our pricing to continue to enhance our conversion rate, but also better prices. And this is delivering real pricing, competitive pricing for our customers. And that's all done with a predictive AI solution. We've integrated TripNinja, our own internal AI center of excellence across our long haul mix and match. And we're also, we built a proprietary machine learning dynamic pricing engine to see how we can further take advantage of the moving and dynamic pricing that is available in our products, primarily green flights. Lastly, ancillaries. It's been about paid seats. You'll remember, golly, when I was first started the role, we had zero paid seats. Well, we did 18 last year, and now we're up to 50 airlines that we allow paid seat selection for. It's customer experience, but it's also a revenue stream. Paid bags and the development of that has been a huge behind the scenes investment across FY26. And now, pleasingly, non-air ancillary revenue is a share of our total OTA revenue of 33%. This continues to diversify our revenue base. Turning now to some of the marketing initiatives. As I said, this brand Refresher Webjet was one of the most significant strategic achievements we've made in recent years. And this was the first time we've done a deep dive, many, many years, done a deep dive on customers, our customers, the market, what do they want? And what we came up with and then tested that was a new, fresh and contemporary and modern Webjet. And it's a really important part of repositioning Webjet as a multi-product travel platform. a destination for Aussies and Kiwis, to trust a destination for Aussies and Kiwis to buy their full travel solution. Now, we took a disciplined approach to that investment and we've talked about this a lot. We talked about a one-off below the line. We did not put this as a one-off, but we included it in as OPEX, an original budget of $6 million to support this. Given the challenges we saw in Q3, We managed that and pulled that back slightly and moderated just to ensure that we're being disciplined with capital. What we have now got, and you'll see here across these four key buckets, is the improvement in not just the brand, but the way that we do marketing. What we needed for our marketing was a serious maturation. And if we're honest with ourselves, we were behind the eight ball on this. And I'm pleased to say with a new CMO and a fantastic team, we have matured within one year our marketing strength and capability, which was already good. We now have a strong multi-channel strategy. So if we before, Webjet was a, we were kind of an email billboard and a bit of YouTube. Now we are TV, BVOD, SVOD, podcasts, influencers, social media platforms. And what that means is increased exposure. When I'm seeing Webjet and I'm seeing it more times, this brings it to the front of mind of Australians and Kiwis again, and that is what we wanted to do. And this has been driving our conversion propensity. We've talked about in the past upgrading our MarTech or our customer engagement platform, Braze. So this capability is now live and continuing to release new features as we continue to grow in this capability. So as I said before, we were mainly a push email communication. Now, that's really effective for us, but now, we also do push on SMS, push notifications, in-app messages, in addition to email. What's coming and we're starting to do is more personalization, more behavior-driven communications to meet customers with the right offer at the right time and the right channel. Now, what this all does, along with us, you know, simple thing, we're using AI to transform our content production to become more efficient in visual, but also copy, et cetera. All this drives to efficiency gains across our entire performance marketing and our entire marketing team. This has delivered real results. And this is the results that set ourselves up for strong years to come. Firstly, the campaign reach. Again, across multiple channels. This increased our exposure significantly across different mediums that we haven't played in for a long time. You can see the numbers there, 23.7 million reach on TV, cinema, and other screens, so BVOD, SVOD. 15.4 million on social media. And our 17.5 on billboards, but we also added digital displays, bus stops, et cetera, to this. You need both offline and online to increase that reach and that familiarity with the brand. And that was the ambition of this. And you can see the results in that. We now test our brand health every month. And what we have seen since we launched this brand campaign is an eight percentage point increase in our packages brand awareness. So Webjet as a solution for your holidays and 5% on our flights. For those of you who aren't in live or die by marketing metrics, these are extremely good results. That leads into improvements in your performance marketing dollar. So despite the fact that we have actually spent more money on brand, we have had to spend more money on performance marketing to fit that in and be disciplined with our expenditure. But these figures are extraordinary. So the improvements in our performance marketing, driven by the brand awareness and campaign, you can see there across generic performance marketing or our branded performance marketing, significant improvements in conversion, CPA improvement and CPC. So that's our cost per acquisition improvement up 29% and 17% up on our cost per click and 33% up on conversions from our generic. These are... Every CEO loves it when their CMO can deliver by numbers and show measurable improvement. This also meant that our full funnel across the efficiency, so our cost per acquisition, our cost per search increased as our media investment increased, but then normalized after that. But more importantly, it's bringing new customers to the brand and 9.7% increasing new customers to the site And we're reactivating dormant customers. Now, both these two metrics, new and dormant, have been in decline for a long time. So by starting to bring new customers to the business and bring younger customers and also reactivating dormant customers is what is setting us up for long-term growth. Dormant customers, particularly, they logically respond sooner than new customers. And that is really returning, getting more return on investment we spent in the past. Most importantly, this is exactly what we expected after doing a brand investment of this nature. And these early results reinforce the strategic rationale of our big investment into this space and a shift towards more brand-led marketing. Let's talk to customer service now. So I'm on page 12. I'm still on OTA. Customer service and our experience. You know, we are a digital business, but You've always got our 24-7 customer experience to back up for when things fail or you just want to talk to a human. And this remains a core part of our strategy. But it is a significant cost advantage of ours that we have invested so much in our digital experience. What we have done during FY26 is continue to make sure that our service is the best that it can be. Everybody outsources to BPOs. What we've done is that we have some BPOs, but what we've done is create a scalable, a center of excellence in Manila where they are Webjet employees. They are dressed in red. They are our employees and not contractors. And that means that we've had far more dedicated training and capability. And shout out to our incredible team in the Philippines because they, along with our team in Australia, have led to these extraordinary growth and customer metrics. I'm just gonna look at the little gray box on the bottom right-hand corner here. This is the first time that we've actually shared openly the exact customer metrics that we achieved. We've always just shared the year-on-year improvement. This year, the year-on-year improvement's great. 4% up on first contact resolution, 2% up on agent satisfaction, 2% up on Net Promoter. But what's outstanding about these is these are very, very high scores. They're outstanding. that is a full credit to the investment that our huge operations, huge investment in operations and improving that has led. A lot of this has been underpinned by focusing on automation and workflow improvements with AWS Connect that's reduced manual handling. It's improved our customer convenience, if you will, and self-service, and it allows our team to focus on more higher value or more complex customer interactions. As I said, improving our self-service has helped reduce our contacts per booking and allowed simpler inquiries to be resolved. And obviously, AI is playing a huge part in this area. We've always had AI implemented across the last two years, helping us with quality assurance. This year, we launched a great agent-facing AI chatbot that's for our internal agents that rapidly improves their response speed and accuracy. I guess it would be remiss of me also not to note that we were very proud and very humbled to receive two of the most sought-after awards this year in terms of recognition from external bodies. But the number one recognition we need is coming from our customers, and I think I've covered that, how these metrics, whilst we're building a scalable customer service platform, these metrics are what we hang our hat on. Turn now to Trip Ninja, so I'm on page 14. So Trip Ninja, just to refresh you, is very much a Canadian-based company that Webjet Group acquired a few years ago that has very much become our internal center of AI excellence. And one of the key customers, obviously, is the Webjet OTA, and it's more than paper itself within Webjet OTA. In terms of the focus for this year for this business, we've continued to sell and we continue to serve our customers. But one of the key choices that we took was to ensure that we really deliver the value here and to ensure that this business is delivering to its most important customers has been to right size this business and to drive a leaner, more efficient operating model. And we'll continue to play an essential role for the group, but we've integrated it into our Webjet OTA digital team. It is doing projects for our Webjet business travel team and also our New Zealand team. But by integrating it, focusing it on our OTA and existing customers, this allows us to really accelerate our execution and better leverage this. It's a shift of focus and we're continuing to service our core customers, but we are increasing our focus and embedding it within OTA where it's really delivering significant and unique product using the AI tools it develops. So this will be the last time that we'll report on this as an individual unit. Moving now to our cars and motorhomes business. And for those of you who are new shareholders, this consists of a brand airport rentals and a brand motorhome republic, two individual sites. with two individual backends and one team based out of New Zealand. And as a reminder, 50% of the business almost for these two brands comes from own brand and 50% comes from affiliates. Let's look at the key figures for this business this year. I'm on page 16. Bookings are at $260,000. TTV is $189 million. Revenue at $19.5 million. And I'd like to call out EBITDA at 4.3 million and the revenue, sorry, the EBITDA margin lifting to 21.6. As I said earlier, this is one of our strongest operational turnaround stories in the business this year. It's a small business, but it shows that we're doing, and we can do, we've got proven history now of going into a business, doing the right things and turning it around. So this outcome is a result of deliberate strategic and operational action taken throughout the year. And more importantly, this business was not immune from patches of softness in the market impacts from international fuel crisis is certainly going to certainly, uh, start to affect this business. Uh, but we've made and shifted strategy to take account for that. So this is summarized. We restructure the cost base, simplified the operations, leveraged automation, and improved our overall execution, particularly with respect to our marketing. Our performance marketing activity, you'll see there that you would have expected, okay, well, I would have thought bookings would have been much higher now. What we have turned off is any booking and focused on much higher quality and more profitable bookings rather than purely pursuing booking volume growth. So yes, this has impacted overall bookings in TTV, but it's materially improved our profitability and setting us up for this business for the future. Next page on page 17 has the full details there. And I'll let you read those at your leisure just to call out the key points. As I said, bookings are down and TTV is down, but the expense is down 15%. Most importantly, really strong as everything started to deliver coming through in that second half. If I look at how we did that, I'm looking at page 18. Having done the operational turnaround, the margin improvement, it was about, okay, where else do we need to focus? We need to improve the product and the customer experience. We've got to push that brand awareness and customer acquisition as a feature for the whole group, and then the scale and diversification. So the key highlights here, we've rolled out a 24-7 chatbot to really help with our automation and our customer service. Most importantly for the cars, we launched a new app. And this is about driving down our cost of acquisition and keeping them within our network. Now, the app, we developed a soft launcher, but it was hard launched in February. And in just that time, to the end of March, our app share of bookings increased to 7%. This is going to be a focus. This equals keeping people within our ecosystem and keeping them coming back. We expect further opportunity to grow that within the year. Motorhomes, the story here was very much about making sure we were turning off those unprofitable bookings. And we importantly expanded our affiliate network here, introducing a significant number of new affiliates and four major new affiliates. This was crucial because it allowed us, when we got softer here in Australia and New Zealand, to quickly switch and focus on the northern hemisphere markets of Europe and North America. So we've modernized here, we've done the brand work, and now we're scaling the platform. Really looking forward to seeing how this business is improving over the next year. Tuning now to Webjet Business Travel. As I said, this is one of our big four moves. We knew that we had customers in this space and on our research, people said they really wanted an online digitally led travel corporate solution that was not old world. So we were about to build that, but we didn't. We found one and went, this is actually going to accelerate our movement into this space with a great team, with customers and already with the Salesforce. So this transaction has been completed. We've completely integrated into the group, rebranded it, increased the sales force and started marketing for this business. One of the key highlights about this, it's a beautiful stack. It's a solution that doesn't require, like most other corporate heaps of plugins from other different systems, it's all contained. And it's incredibly rapid in terms of product development, using significant amount of AI to do that. So that's why we've been able to deliver over 90 new improvements to the product or features to the product within the first six months. But the results underpinning the why for this acquisition are here on the page. 271% increase in our sales pipeline, 255% increase in our deals win, and 100% up on our TTV ones. FY27 will be an investment year. It's a really unique time in corporate travel, and we're going to take advantage of that. Most importantly, our customers love us. Our customer satisfaction remains well above 90%. H21 has got the key figures here. Not much to see here, but pleasingly, EBITDA is a loss as it's an investment year, and we did the integration and the synergies are starting to come through. But is it the favourable of our expectations? But importantly, I'd like to call out in the second half, our direct-to-business TTV was up 41% on prior period pre-acquisition. With that, what I'm going to do now is hand over, I'll come back at the end and cover off our future trading. But what I'd like to do now is hand over to Leighton Schenner, our Group CFO, to cover the financials in more detail.

Thanks, Katrina, and good morning to everyone on the call. All right, turning now to slide 23. And again, look, just before we get into the detail here, as we disclose the half-year results, I'll just briefly recap on the accounting policy change that came into effect during the year relating to the recognition of gift card breakage. So previously breakage was recognised based on historical redemption patterns, but under the revised policy and aligned with prevailing industry practice, we now only recognise breakage once a gift card has actually expired, which under Australian consumer law currently occurs after three years. So in line with accounting standards, this change has been applied retrospectively, meaning our prior periods have been restated as if the new policy had always been in place. Just in terms of impact, FY25 revenue and EBITDA were both reduced by $4.4 million, and you'll find the full details in the appendix at the back of this presentation. Importantly, this change is purely a timing adjustment and there's no cash impact. But what it does do is really improve the comparability and consistency of our reporting, as it's no longer the estimation element that was previously used. And just for context, on a like-for-like basis under the revised policy, breakage recognised in the FY26 result is circa $900,000 compared to $600,000 in that revised FY25 result. With the increase year on year, they're really simply reflecting the growth in gift card sales over time. So with that context, let's turn our attention to the FY26 financials. Now, consistent with our standard presentation of these results, the difference between the statutory result and underlying operations here, that simply reflects the share-based payments expense, a few one-off non-recurring operating expenses, which I'll walk through on the next slide and some impairments that I'll touch on shortly as well. So despite lower bookings in TTV and FY26, total revenue increased to $136.4 million, which is up $1.1 million and also includes a $1.2 million contribution from Webjet Business Travel there in the second half. Now, as Katrina briefly touched on, the composition of revenue this year does include some variability, which is quite typical for our business model. So in addition to the impact of underlying trading performance, FY26 benefited from a few customary items, including loyalty payments linked to the renewal of some longstanding supplier agreements, as well as the release of some old surplus provisions. Now, these items tend to be quite lumpy in nature and fluctuate from year to year, depending on timing. So some years will naturally see a greater contribution than others, as was the case in FY26. Underlying EBITDA came in at $28.1 million compared with $35 million in FY25. And aside from that trading performance, that really reflects the planned step up in strategic investment OPEX, which we'd previously outlined, including that slightly moderated one-off $4.5 million marketing investment for the OTA brand relaunch. Moving down the page, depreciation and amortization increased by $1.2 million, largely reflecting the addition of Webjet business travel assets and in line with our expectations. Now, we also recorded a $3.3 million of impairment in the period, with $3 million of that tied to the TripNinja technology platforms that have been discontinued following the recent restructure there, and a further $300,000 from writing off our investment into Gucci marketing. Net interest was $3.8 million, driven by interest earned on our strong cash balance. Still no debt and no related party interest expense, which you can still see there in the FY25 comparative, which ceased at the time of demerger. In terms of tax, the statutory effective tax rate in FY26 was circa 40%. And look, that was impacted by some non-deductible costs, specifically relating to the locomote acquisition. But look, as I've previously flagged, we expect this to normalise back around the 30% mark. just in line with our Australian-based earnings profile there. And finally, on this page, underlying net profit after tax for FY26 came in at $13.6 million and statutory MPAT was $3.7 million, up 85%. Let's move on now to the next slide and take a look at corporate overheads and non-operating expenses. Starting with corporate overheads, which came in at 11.2 million for the year, only slightly up on FY25, despite the inflationary backdrop we're seeing, but below prior guidance. And that really reflects no short-term incentive payments to executive KMP, given the financial performance for the year. And look, importantly here, we really continue to maintain a strong and disciplined focus on cost control right across the business. In terms of the non-operating expenses for FY26, and look, just to reiterate here, all of these items are one-off, non-recurring in nature, and we exclude them in underlying operations so we can present a clear view of ongoing performance of the business. Now, the key items here are, firstly, due diligence costs associated with the locomote acquisition, along with the related earn-out accrual, And look, that will flow through over the next few reporting periods in line with the three year earn out term tied to that. There's also some residual costs linked to the ACCC proceedings, which we settled on back in July last year. And the balance there relates to a mix of one off items, including some strategic and defence advisory costs, redundancy costs from the recent trip injury structure. and the final staff payments associated with the demerger. Turning now to the balance sheet, that's on slide 25. Cash reduced over the year, which is in line with expectations, and that predominantly reflects the net cash outflow of $13.9 million for the locomotive acquisition, which I'll touch on shortly. The $9.1 million payment made to the ACCC during the period, along with our inaugural dividend payment and corporate tax payments. As we move down the page here, non-current assets increased by $19.2 million, and that was largely driven by the technology platform recognised as part of the locomote acquisition. The reduction in trade payables and other liabilities here, look, that reflects two things. Firstly, the ACCC payment made in August, And secondly, the timing of our BSP payments are similar to the first half. Now again, for those less familiar with BSP, BSP relates to our air ticket sales, where payments for these are direct debited weekly from our bank account and represent our single largest supplier outflow. So what does that mean? So depending on where the reporting cutoff falls, we can have anywhere from seven to 14 days of sales outstanding at period end. And you'll see the corresponding impact of that in the restricted cash balance, which is directly correlated and decreased from 30.8 million to 20 million between periods. Other current liabilities declined during the period, primarily reflecting a reduction in gift card liabilities, which was largely driven by customer redemptions, And non-current liabilities increased mainly due to the locomotive and out accrual I mentioned earlier. So overall we remain debt free. We've got net cash of 94 million as at 31 March. And just to be clear that net cash figure excludes the 20 million of restricted cash. So look, there remains a very robust balance sheet and we'll continue to take a disciplined approach to capital management. while continuing to execute on our strategic priorities. All right, let's move on to cash flow. Now, operating cash flow and the change in working capital you see here, look, that simply reflects the ACCC payment and the timing of those BSP settlements I just discussed. So once you adjust for those two large lumpy items, along with the non-operating expenses and the locomote acquisition, Underlying cash conversion for the year came in at 102%, just above our 100% guidance mark. In terms of investing and financing activities, I'll cover off capex in a bit more detail in the next slide, but the asset acquisition here relates to the locomote acquisition with a net cash outflow of $13.9 million. And that reflects $15.7 million of upfront cash consideration, which was partially offset by $1.8 million of cash acquired at completion. And there's also a further $1.5 million in retention consideration payable by 31 March 2027, and it's subject to no unresolved claims. Dividends paid reflect the inaugural FY26 interim dividend payment we made in December, along with a Search Republic dividend paid during the year. And now, as Katrina mentioned earlier, we're very pleased to have declared a final FY26 fully franked dividend of two cents per share again, and that represents a total payout ratio greater than 100% of underlying MPAT, which is certainly well above our stated target range of 40 to 60%, and really reflects the board's intent to maximise the distribution of franking credits as and when they become available. And lastly here, as Katrina also noted, the share buyback, now that commenced briefly in March with just over $200,000 worth of shares brought back and is expected to resume following these results. Finally, turning the page now, let's take a quick look at CapEx. Now, as previously flagged, FY26 marked the first year of our three-year strategic investment phase. Total CapEx for the year was $16.7 million, which includes $2.9 million of investment capex linked to the strategic growth plan, as well as $600,000 in the second half for Webjet business travel. Now, pleasingly, underlying capex remained broadly flat, and that's largely the result of the New Zealand restructure that was completed back at the tail end of FY25. Now, the detail by business unit is there on the slide, but right across the group, investment in all of our technology platforms really continues to be focused on three things, really. Driving greater automation, improving customer outcomes, and supporting scalable long-term growth. And lastly, just on the strategic capex spend, we'd previously indicated around $5 million for that in FY26. Now, that figure assumed we would internally build the business travel initiative. So with the acquisition of Locomo, that requirement has largely fallen away, which is why that strategic capex investment has come in lower than originally planned. So overall, we're continuing to invest where it matters, but doing so in a way that's disciplined and aligned to our strategic priorities. And with that, thank you, and I'll hand back to Katrina.

Thank you, Lyson. All right, so that's a very fulsome wrap for what happened in FY26. Let's move forward to FY27. And I want to start with a thematic. I'm on page 29 now, which has been so important for us this year in unlocking productivity and speed and customer experience and is going to attract a lot of our attention going forward, and that's AI. Previously, investors and... Analysts have asked us, okay, well, how are you using AI? We've put there for you a list of just a short list of how we use AI across the business. It's being used everywhere. Importantly, we are taking the governance of this very crucially, and we've strengthened our AI internal governance, our data privacy, our security, and our fraud monitoring across the group with significant investments in security and fraud monitoring as well. But how we're seeing AI, it's about productivity, speed, and great customer experience. I'll talk to the predictive models we're using within our engines to deliver better pricing and deliver better products. But I thought just two examples I'll talk to. Across OTA, Webjet Business Travel, for example, A majority of our code now is either being deployed or deleted by AI development tools. So anywhere between 60% to 80%, depending on the unit that we're developing. And what that really does is free up our engineering capacity to focus on core architecture, scalability, and innovation, and the work that we need to do to lift this and be ready in an AI world. We've got huge productivity gains across operational and customer-facing tools. You know, one that our team demoed to me the other day, previously if a customer says, hey, I bought this, and we would have to go through back all these logs to prove that they had actually bought Y. Now we've used AI to crunch that and to deliver it within seconds in terms of what actually their pathway through our site was. So there's multiple practical ways that we're using this to improve our marketing, for example, and taking out costs there. But mainly for us, it's about embedding the capability across the organization. One key one we released last week, two weeks ago. Goodness, I don't know. But this has been in development and we're really proud to be one of the first OTAs to launch a chat GPT app in Australia. And this is enabling our travelers to search and compare flights and hotels directly within the world's most widely used AI platform. So now you can use natural language to explore. So the question has always been, well, isn't this going to replace? I mean, I like, I'm sure most of my listeners spend a lot of time reading about this and across industries within our industry. And we see AI as really augmenting the customer experience rather than replacing it. Trust and trusted brands is the ultimate currency in AI. And that's so important in a world where you can play off to anything. For us though, We see this developing, but our launch of our chat GPT app is another example of how we're continuing to go where the eyeballs are. Google has been the source of eyeballs for so many years. Now it's shifting to AI. We need to know how to play smart in both and be wherever our customers are. And this is about us engaging early, learning quickly and evolving in an agentic commerce world. So really pleased with how that is going. So formally on to outlook. Look, we are not immune, and I really wish that solved some things in the northern hemisphere, but the operating environment is extremely fluid and challenging. And with the geopolitical conflicts causing inflationary pressures here, another rate rise, consumer confidence, as we all know, I think is at fourth lowest of all time. So this is placing significant pressures on our industry. But travel is like water, like one mentor said, it finds a way. But what we know from COVID and what we know from all our customer research is this is not a discretionary item and it bounces back and it will bounce back strong. But most importantly, we're doing the right things now to ensure that we're set up for that. Fy 27 as announced this morning, especially is going to be challenged as the industry is challenged and we will be impacted by lower airline commissions alongside some changes in the RBA surcharging regulations. Now this is not new news, shifts like this have happened in the past and what Webjet does extremely well is pivot, adapt and solve and that's what we'll be doing. Just to give you some exact figures from our trading performance since the 17th of May compared to prior period, bookings in TTV and OTA are down 12% and 15% respectively. Cars and motorhomes that moderated TTV and bookings are down 5%. That's because we immediately pivoted to focus on the Northern Hemisphere. And webjet business travel, however, is up. A unique opportunity, I said, and we're really leaning into that. But there is some moderating as businesses are putting do not travel warnings out to their businesses. And the ABV is moderating as international things are following. Now, to us, those are not attractive results. But when I look at the Australian market and the BSP statistics, et cetera, I'm seeing significantly scarier figures than that. So we are holding ourselves very well in a market which I think is doing worse than what our figures are showing. Looking ahead, our strategic priorities remain unchanged. How we execute, we're always going to pivot. And we will need to, our mission to double our TTV is unchanged, but we are reviewing the execution and the timing of that in light of what we can't control and prevailing market conditions. But as I said, we're focused on doing the right things, and we've done that this year, despite the ever-challenging macro environment and dynamic year that we've had. And we're going to continue to strengthen those foundations to set up for long-term shareholder growth and value. And that's about, for us, capturing that full travel wallet, growing WebJet business travel, increasing our use of automation and AI, disciplined execution, and preserving our balance sheet strength. So lastly, before we go to questions, I would like to thank our shareholders for your continued support, your patience and your engagement across what has been a transformative year for the group, but also a very dynamic one. Mostly importantly, I'd like to thank our customers. We love the fact that you love us and we're so excited to be bringing new customers to the brand. And I'd really like to acknowledge and thank our people across the group in Australia, New Zealand, Canada and the Philippines. Guys, the pace of change, transformation, execution and the external demands on us over the last year have been significant and nothing of what we've spoken about today, the incredible progress that's made against our priorities, despite the results, is possible without all your passion, your commitment and your resilience. So thank you. On a personal note, I will be preparing to transition. I'm preparing to transition from the business shortly. I'd like to say it has been an absolute privilege to lead this with a very specific mandate through a very important period of transformation. I'm proud of what we've achieved as a team. So with that, I'll hand over to you, Harmony, for questions from our listeners.

Thank you. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. If you wish to cancel your request, please press star two. And if you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Ksenia Chadeva from Jarden. Please go ahead.

Thanks for taking my question. Can you please share whether any of your prior FY30 targets are still in place, like 3.2 billion TTV and margin improvement aspirations? What are the key assumptions underpinning those and should we expect them to change with management changes?

So two questions there, I think, is your FY30 targets, et cetera. We came out with a FY30 target of doubling our TTV. As I just said, we are reviewing the timing of that. The strategy remains unchanged in the priorities. Execution is always going to pivot, but the key drivers to drive growth and future shareholder value remain unchanged. But we are reviewing the timing in light of, you know, this is an unprecedented time in the world right now. And the travel industry is being hit hard. So we need to adjust for that particular timing. I think the second question you said was in terms of management changes. Look, change is good for an organization. It's changes everywhere is good, and particularly for a web jet. You know, we've seen excellent results from various changes across the year. we are having change in Chair and in myself. But as I said, the levers to drive value don't change.

Thank you. And secondly, on revenue margins, it seems like you delivered good results this time. What was driver of your better revenue margin and can you share any long-term aspirations for both EBITDA and revenue margins?

Hey, Ksenia Slayton here. I'll jump in. Obviously, like I said, revenue this year benefited from some of those large lumpy contributions. But as we've previously telegraphed, we sort of over the longer term, we expect revenue margin to normalise at that circa 8% to 9% moving forward. And then from obviously an EBITDA margin perspective, that we'll have that compression during the investment phase, but then again, sort of normalise at or above current levels in the longer term.

Thanks, Ksenia.

Thank you. Once again, if you wish to ask a question, please press star one. Your next question comes from Wei Wang from RBC Capital Markets. Please go ahead.

Hi, everyone. Hey, how are you? So I'm not sure if this is a question for management or your interim chair. I'm not sure if Gary's on the line, but how should we view changes in management and the board as it relates to kind of the strategic direction of the company? And maybe can we get an update on the CEO succession and how that's going?

Yeah, sure. I'll answer the second question first. In terms of CEO succession, the board are well progressed on a search And, you know, we're in the middle of that process right now. And I expect the board will make an update on that in due course. In terms of how you should think about... Gary is not in the room. I think he's on other board meetings today. Sends his best wishes. But he... In terms of the change, you know, Don has served this business incredibly with passion and with incredibly good governance. in his various roles across the last 18 years. So he is looking forward to retirement and in two days is off on a delightful trip to Europe. So we need an interim chair and as Gary had recently come on the board and his hand was put up for that. In terms of how this affects ongoing strategy, as I said before, the strategic levers to drive value in this business don't change. We're having to adapt and pivot all the time Okay, right, fuel crisis is hitting Australia and New Zealand harder. Okay, let's pivot to Europe and North America for motorhomes. All right, no one's buying international long haul. Okay, let's pivot to focus on short haul Asia and focus all our flights and package deals on that. the levers to drive the value in this business don't change. Like any new CEO, I'm sure they'll come in and they'll do their assessment and they'll make their change. But my mandate was very much, we demerge this business. The business had been, you know, significantly cash producing business and contributed to the group in a different way in the past. And the opportunity of the demerger remains, which is to take this iconic Australian New Zealand brand, do the investment and do the right things to drive growth. So those levers won't change. How it is executed is always up to incoming new management.

Cool, thanks, thanks. And then just on the Virgin sort of announcement as well today, three mil impact. One, do we assume this just drops through to EBITDA as well, the $3 million? And I calculate that Virgin was about 20% of last year's TTV. Is that kind of ballpark? And then I guess looking forward, you guys don't really switch sales so much being kind of like a comparison site. So should we assume that this proportional impact sort of carries through to FY27 or are there ways that you can mitigate this by the ways you display results or whatever to sort of funnel people away from Virgin?

Sure. So a few questions in that. I think you're sneaking in about three or four there, Weiwei. So the first one, I can't make forward statements. That's why we've assessed it to be about $3 million if it had been impacted in FY26. But I think you're thinking about that the right way in terms of it will drop through and it should drop straight through to the bottom line. Now, Virgin is a very important partner of ours and it's been a long-term partner and we still value that partnership and we'll continue to do marketing campaigns with them and targeted, et cetera. However, you know, there's a shift in the economics in that relationship. Same as five, six years ago when all airline commissions, you know, airline commissions dropped 80% out of COVID. And what we did as an organisation was adjust and pivot. So we will be, you know, adjusting and pivoting on commercial, on strategy, on focus to ensure that we optimise. It's not, it's a short timeframe, but nonetheless, same as the RBA changes, we can do things to mitigate this loss.

Yeah, okay. I have a few more questions, but I'll maybe jump into the back of the queue then.

Thanks, Irene. Thank you. Your next question comes from Patrick Cockrell from Ordmanat. Please go ahead.

Katrina, hey, team. First one from me, can you guys quantify the RBA surcharging impact? And I guess as well, what were the lower variable revenue items this year?

Hey, Pat, it's late and I'll jump in. So look, just in terms of the RBA surcharges, so obviously they're going to present a headwind, particularly in the OTA business. They come into effect on 1 October, so that'll be second half, 27 onwards. Obviously it's still early in the process, right? So a lot of the non-card payment providers are sort of yet to confirm their approach under the new regs, even though they're outside the scope. But what I will tell you is that roughly sort of two thirds of Webjet OTAs, TTV, is currently transacted through credit cards, so will be impacted. But that said, we have a diverse mix of payment options, right? we'll actively pursue mitigation strategies to manage the impact as much as we can. In terms of your second question, just around the variable, was it variable revenue or variable costs? Other variable revenue items. Yeah, so look, there's lots of moving parts in there, so I won't go into specifics, but just to give you an indication for context. So over the past five years, revenue of this sort of nature has on average has been circa 5 million. And that has ranged anywhere from sort of just under a million to up towards 10 million. So FY26 was towards the upper end of that range.

Awesome. Thank you.

Thank you. Once again, if you wish to ask a question, please press star one. You have a follow-up question now from Wei Wang from RBC Capital Markets. Please go ahead.

Hi, just one question now because Patrick asked my other question, but your trading update for FY27, do you get the sense that that's how the broader market is tracking and it's specifically in kind of leisure?

Look, I can't comment to how competitors or peers, et cetera. What I can do is look at, you know, the information that we get from our GDS in terms of the total GDS markets and our shares, and I look at the Australian BSP for the market, and the market is doing it very tough, and our figures, I think, are much better than market.

Yeah, so in summary, you guys feel like even though the market's down, you guys are actually gaining shares still?

I think the whole market is down, Wei-Wing. It is a very tough executionary market and there's pockets that are doing well, like corporate, for example, is doing really well. High-end, you know, those cash-out baby boomers doing those 50 ABV average booking value, you know, they are still finding a way. And people who had booked to travel across February, March, sorry, February through to sort of May, still went. They actually rebooked. And then your diehards absolutely said, okay, well, we have to have our one holiday this year. So we're not going to go to LA or we're not going to go to Europe. We're going to go to Thailand this year. So that pace. But I can see from the data that, you know, pretty much across leisure and what I can see on a ticketed basis, you know, the double-digit figures that are down. And, you know, we're reflective of that and in terms of some cases doing a little better. But I would say that nobody's immune and we're all in a cup of one. This is a tough, tough year. And we're using this time to strengthen our foundations, do the right things to build long-term value.

Yeah. Cool. And then actually one last question, actually. Just hearing that the government might maybe lift, I guess, their travel advice to avoid the Middle East, how material would that be for you guys if that happened?

Look, I think it is a material for the industry. Obviously, you know, we are a majority domestic business. And I think that's, you know, this is the whilst our strategy is to balance that out and leverage our brand into international bookings further to almost mitigate that risk. This is where that is a strength. But for us, that would, you know, it takes more than one, I think, drop of that to change people's behaviours, particularly given people plan, you know, the travel for European and North American summer, that is booked sometime between November to sort of February. You know, and that really affects the booking periods for those long hauls across that period. Booking horizons absolutely shifted since COVID and compressed and there's a lot more last minute bookings. So that would be, it's always helpful for that to drop. For us, you know, we would switch focus back again and I think it's going to be an exciting market when, you know, more Middle East capacity does open up because I think it'll be a competitive space. But right now, across all airlines, we're seeing, you know, capacity cutbacks. When it gets over 5%, that's a real concern. And, you know, most airlines have done that or have cut routes and, you know, to work on their, to focus on their own strategic priorities. So that's where I think it will be helpful, but it doesn't happen overnight. Same with a rate cut. We've seen that in the past that it, you know, it slowly drops consumer confidence and it takes a while to get back.

Oh, thanks. That's all for me.

Thanks, Irene. Thank you. Your next question is a follow-up from Ksenia Chadeva from Jaden. Please go ahead.

Thank you for taking the follow-up. Yeah, thank you. Can you please share how your OTA brand is tracking, how your relaunch has done, and what did you do on loyalty program? Like, did you manage to get back your customers that you lost during September last year?

So let me talk, look to you about that. Yeah, look, you know, the ACCC was, you know, the issue kicked off a long time ago and we resolved it this year. But that came with us doing appropriate management of that. And that really affected us across August and September. But it doesn't just affect those bookings of that month. It affects the leads going in. So we saw softer leads coming through in September, October, sorry, in October and November. And that's what we use, the brand campaign to reset the brand and the minds of the Australian and New Zealand consumer and bring back customers. Now, there's your core, there's those that are acquired on a new basis and then there's dormant customers. The brand has helped us reignite or, you know, reactivate dormant customers. And that's grown, our reactivation has grown year on year in March as we've improved that figure. Our new customers, that hit our strongest year-on-year figure, and new customers by quarter four as a result of the brand campaign. So new customers have been declining over many years, and this campaign has served to hit our highest new customer volume. New customers come into the brand and into the ecosystem, and we've got there by Q4. So that is how we see the success of this. It takes a long time to fall through, But reach brings you to top of mind, brings you to top of consideration, brings you through eventually to bookings. Did I miss a part of your question there?

No, it's all good.

Thank you.

Great. Thank you. That does conclude our time for questions. I now hand back to Katrina Barry for any closing remarks.

Thank you everybody again for joining today and apologies for the late start. Look, in summary, five things. This is an excellent business, iconic brand, and now that brand is fresh, contemporary and relevant for our major asset. Second asset, we turned it around. It is now profitable and doing a great job. There is, it's been a challenging year and sometimes distracting, but the business is focused on doing the right things setting up the foundations for growth. And that is where the long-term value of this business is. Not in this year's results. It's in the foundational work that we're creating value for long-term. Thank you again to all our shareholders, our team, and our customers. That's all for today.