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Bitcoin fell more than 5% to below $65,000 after President Donald Trump announced plans to raise global tariffs to 15%. Nastco | Getty Bitcoin fell more than 5% to below $65,000 on Monday after U.S. President Donald Trump announced plans to raise global tariffs to 15%, rattling risk sentiment.
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Bridget Coates: Kia ora koutou katoa. Good morning, and thank you all for joining us today. I'm Bridget Coates, our Chair of the Comvita Board. I'd like to warmly welcome you to this online meeting, where we will provide you with an update on Comvita's Interim Results for the 6 months ended 31st of December 2025. Today's presentation will be led by myself, our Chief Executive Officer, Karl Gradon; and our Chief Financial Officer, Mandy Tomkins-Dancey. I would also like to acknowledge my fellow directors who are in attendance, Mike Sang, Chair of our Audit and Risk Committee; Bob Major and Alfred Luk, representing Yawen Wu from China Resources. Yawen Wu and Greg Barclay send their apologies for today. Before we begin, I would like to wish those in our Asian markets a very happy Lunar New Year, Gong Xi Fa Cai. Comvita is a global business with the majority of our staff based offshore and a significant proportion in Asia. Our team in this important region are working hard through Lunar New Year, a critical trading period for Comvita, and we thank them for their efforts, innovation and passion that they are bringing at this time. It's been so great to see the innovative marketing activations and locally tailored products that have been developed for Lunar New Year launch in the market. Our connection to Asia remains an important part of Comvita's story. The year of the horse symbolizes energy, resilience and forward momentum, a fitting moment to reflect on the progress we have made in the last 6 months and on our priorities for the remainder of the year. I will start the session today with a high-level performance overview and recapitalization update. Karl will then provide an operational and market update, and Mandy will follow Karl to talk to our financial performance for the half year and update on our full year forecasts. Then Karl will return at the end to give you an update on our strategy looking forward before we move to question-and-answer session. Before we step through the detailed results, I'd like to briefly frame the first half. The period reflects disciplined execution and clear progress in stabilizing our business. We delivered against our first half objectives, which were returning to profitability, generating positive operating cash flow and reducing both net debt and inventory. Important work has continued to strengthen the foundations of the business, building leadership capability, sharpening our strategic focus and improving execution discipline. The company has also managed risk and strengthened resilience by shifting focus towards higher growth regions, while maintaining discipline in markets, where conditions remain softer. The impact of these initiatives is clearly evident in the results the team will take you through today. Our full year FY '26 forecasts remain consistent with the prior guidance that we have given you. Normalized EBIT of $14.3 million or $13.5 million pre-IFRS 16, as communicated at our Annual Shareholders Meeting in December. This is, of course, subject to trading execution and market conditions, which we are monitoring closely -- we are monitoring closely the key value drivers that underpin the full year result. Meaningful progress has been made over these past 6 months. Comvita is moving in the right direction again. And in saying this, we remain mindful of the work still ahead to fully restore our financial strength and to deliver a sustainable long-term performance. Today, I'm very pleased to report improvements across all of Comvita's key financial metrics. Revenue growth, profitability, cash flow, net debt and inventory reduction are all on or ahead of our targets. As you can see, they also show significant improvement relative to the first half of FY '25. This result reflects decisive action, disciplined execution and a clear focus on restoring financial strength, driven by an experienced leadership team, which is committed to returning the business to sustainable growth and restoring shareholder value. Mandy will speak to our financial performance shortly. The recapitalization of the company remains the top priority for the Board. We continue to engage constructively with our lending syndicate regarding extension of banking facilities beyond April 2026, subject to completion of the recapitalization. The Board would like to take this opportunity to acknowledge the continued support of our banking partners. The recapitalization process is progressing according to plan, with the Board focused on its core objectives, which are creating certainty, ensuring participation for all eligible shareholders and minimizing dilution. We have confirmed credible expressions of interest from both existing and prospective investors to support and potentially to underwrite the capital raise, including interest at pricing levels, which are above the current market. This does include interest from an offshore strategic investor in the food and beverage sector to underwrite a capital raise at a share price of $0.80 per share and a level and a quantum materially above the minimum $25 million, which is required to position the company appropriately, and that would provide the company with additional financial flexibility. The ultimate shareholding of the strategic investor would be determined by the participation of existing shareholders in the cap raise and may require shareholder approval and overseas investment office consent. The Board is carefully assessing these various options alongside continued constructive engagement with the company's lenders regarding the potential extension of lending facilities. Given the stage of the process, we are not in a position to provide you with further detail today. The Board is progressing this work at pace, though, and we'll update shareholders as soon as it is appropriate to do so, in line with our continuous disclosure requirements. Current timing for the recapitalization is aligned with the April 2026 banking facility expiry. I would now like to hand over to Karl Gradon, Comvita's CEO, to provide you with more detailed update on the operational progress delivered and how our markets are performing. Karl, thank you. Karl Gradon: Thank you very much, Bridget. Kia ora koutou, good morning and Gong Xi Fa Cai, Happy Lunar New Year. It's a pleasure to be here today to present significant progress against our H1 priorities. Before I get into detail, though, I would like to firstly acknowledge the strength and passion of our leadership team and the dedication of our entire global team. The energy, focus, commitment and passion for this very special brand and business are the force behind the improvements we have delivered over the past 6 months. I'd like to reiterate what I said at the ASM in December. Consistent delivery of results is how we earn and maintain the trust and support of our shareholders and stakeholders. We have continued to build on the hard decisions and foundational work undertaken over the past 18 months. We've worked with ongoing focus and discipline, and we are on track to deliver against our FY '26 priorities and financial targets. Our debt and inventory levels continue to fall and are now further reduced from the time at the end of the financial year. While doing this, we have implemented new sales strategies in the Chinese, American and Southeast Asian markets, and we are seeing these benefits flow through. We've continued to maintain our premium positioning, supported by a focused innovation pipeline and strengthening of our global brand framework. At the same time, we have continued to deliver locally relevant innovation and new products and offerings. We'll talk about a few of these examples shortly. We are delighted with the results from our club retail partnership in North America, and we are also continuing to work on how we diversify risk across our key markets, customers and economic cycles. Having the right leadership capability and experience has been our key priority. We have our Chief Financial Officer, our Chief Operating Officer and Chief People and Culture Officer in place with further announcements for key positions shortly. The benefits of cost savings initiatives we started in 2025 are continuing to flow through into the '26 results, and we are continuing to work on optimizing our business model, our operations and improving our risk management. And last but definitely not least, we are working hard and continuing to see the benefits from lifting our global connection, alignment and engagement. I'm very proud of our dedicated team and how they continue to lift their performance, while still being very realistic and grounded that this is an ongoing journey. I'll now provide an update on the progress, challenges and what our key focus areas are in some of our key markets. Within the Greater China region, China continues to be a challenging market with mixed results and uneven economic performance. While GDP grew in 2025, mainly through strong exports, there is still relatively weak consumer confidence and sluggish domestic demand. Comvita continues to maintain its #1 brand position and lead in China online channels despite ongoing weaker demand and commoditization and lower UMF grades. We continue to outperform at the higher UMF end of the market. While our sales are down, we are starting to stabilize our net contribution even with the challenging market environment. I need to be very clear that this has been no mean feat and is a testament to the strength of the team in market. We continue to work on differentiating our brand and leveraging innovation beyond Honey and Anjeer to a position in the category and put ourselves on a new growth curve. We remain focused on reducing exposure to economic cycles in particular markets. We are also exploring volume opportunities in large-scale retail and online and continue to ensure our existing channels and store footprints are optimized to deliver maximum profit. In North America, as previously mentioned, it is absolutely clear that they are now the world's largest Manuka honey market, and Comvita has been part of this growth through its club retail relationship. This relationship has delivered significant sales growth and also an increase in net contribution for the half year. While the net contribution percentage has declined, this excludes the positive benefit to manufacturing efficiency we have gained in New Zealand from the increased volumes. In FY '26 H1, we have also seen strong market growth in the natural retail channels. Aggressive e-commerce competition and relatively low consumer awareness and household penetration are challenges, but we are seeing these as opportunities. Alongside our strategy to maximize these opportunities, we are actively exploring other large retail and product format opportunities to further strengthen Comvita's market position. Winning in the large North American Manuka honey market and doing this profitably remains top priority for the team, and we are excited by the progress seen to date. The performance in our other markets across Asia, Australia, New Zealand, U.K. and Europe has been mixed, but overall, it has improved from H1 2025. Sales, net contribution and net contribution percentage are all up across all markets apart from ANZ. Our Singapore performance has significantly lifted through a focus on operational improvement, and this key market continues to provide a gateway to further growth in Southeast Asia. Business model improvements and cost reductions have also improved performance in other markets. We definitely see intensifying competition in all our markets and our ANZ market remains challenging. The Asian health channel continues to underperform due to a heavy reliance on China's economic recovery, although we have seen some growth return due to increasing tourist traffic. Moving forward, we will continue to focus on our channel optimization and look for strategic and targeted geographical expansion opportunities. Before I finish, I would like to share with you some recent examples of how we are using innovation informed by consumer intelligence and market trends for brand differentiation and growth. Lozenges are a key growing product group for Comvita and serve an important role in recruiting new consumers to our brand given the affordable price point. Market access for lozenges is also relatively straightforward, enabling launches to be scaled across multiple markets. We have recently added 2 new fresh and modern flavors to our pure Manuka honey range with -- Manuka with Yuzu and Manuka with Ginger. Sales for the total range, including the new products, are forecast to grow over 60% this financial year. Locally relevant innovation is key. As you know, we are currently in the Lunar New Year period in Asia, a key gifting occasion driving sales across many of our markets. Every year, we continue to lift the bar with contemporary and aspirational gift boxes and supporting marketing activation. This is an image of one of our beautiful gift sets and boxes for the celebration this year, which is the year of the horse. I will now hand over to Mandy, our CFO, to provide a financial update. Thank you, Mandy. Mandy Tomkins-Dancey: Ata marie, good morning, everyone. We are pleased to have delivered on our H1 objectives with a solid first half year performance. Strong U.S. club retail wholesale channel performance drove improved volume, sales, profitability and supported overhead recovery. This strong performance offset sales challenges in the U.S. club retail digital channel and ANZ markets. Performance across other markets largely balanced out overall. Ongoing disciplined cost management and the flow-through of cost-out initiatives in the financial year '25 have reduced our operating costs compared to prior periods. Specific examples include delivering procurement formulation and freight efficiencies, streamlining leadership, simplifying our organizational structure and reducing staff numbers to align with operational realities and strategic priorities. Cost savings have been achieved in the first half of the financial year, notwithstanding the inclusion of transaction costs of $1.4 million in our half year '26 results. While trading conditions remain mixed across regions and channels, EBIT performance has stabilized overall, reflecting the diversification benefits of the U.S. club retail channel. During half year '26, we have further reduced our inventory and net debt levels. Excess inventory has been an issue for Comvita, and we have now completed our inventory normalization program, reducing inventory from prior levels of $145.8 million at December '23, down to $68.3 million at 31 December '25. In addition to delivering our half year operating profit, improved cash conversion cycles from 484 days to 239 days, primarily from excess inventory sell-through, enabled us to reduce our debt further and faster than we had planned. Further working capital improvements are not expected to the same level in the second half of the financial year. At the first half of the financial year, our net debt was sitting at $48.7 million, a further significant reduction from the net debt of $62.4 million at the end of financial year 2025 and $81.6 million at the same time last year. As Bridget mentioned earlier, our normalized EBIT forecast for the full financial year remains at $14.3 million or normalized EBIT pre-IFRS 16 of $13.5 million as shared at our ASM in December. While we've had a solid H1, important seasonal and commercial drivers, which we've signaled previously to you, sit ahead of us in our third quarter. As such, we are maintaining our full year guidance, and we continue to monitor, manage and reassess these factors as they are delivered. Headwinds from ANZ and FX are challenges, which are currently being offset by solid performance in other markets and areas. We expect this to continue. A key driver of our H1 performance was the demand and sell-through of our club retail partner in the U.S.A. As already mentioned, this is currently in line with forecasts. The Manuka honey season, like our summer, has been mixed, not as settled, calm and warm as we would like. We had forecast for an okay season, and this is now playing out with yields likely to be in line with our baseline assumptions. The Lunar New Year sales period is well underway, but results are not yet known. Our China and wider Asian team are supporting this with comprehensive promotional plans and are focused on managing this key sales period for maximum profitability. Finally, given that China and the U.S. experienced cold and flu season and several key trading and gifting moments in H1, our H2 outlook reflects the seasonal cadence of our business. While there are still some uncertainties, I'd like to reiterate the comments I made at the ASM. What gives me confidence in our future is the tangible progress that has already been made as demonstrated by our financial metrics and the clarity on our key drivers. We are clear on our priorities and the further work required this year and moving forward to enable sustainable profits and deliver increased value.. I will now hand back to Karl to talk to our strategy and growth opportunities. Karl Gradon: Thank you, Mandy. The Manuka Honey category continues to evolve, and our success will depend on how effectively we adapt to these changes, while positioning our business for sustainable long-term performance. The category remains significant and continues to grow overall with total value reaching a new peak in 2025. North America is currently the fastest-growing market, while Greater China has been more challenging. At the same time, the average price per kilo has declined, reflecting surplus supply, increased competition and ongoing commoditization, particularly at the lower UMF end of the Honey and Anjeer segment. These dynamics create both challenges and opportunities. While the environment is more competitive, the long-term category opportunity is substantial, and it is one that we are very excited about. To capture this opportunity, market and channel diversification, innovation, clear brand differentiation and disciplined execution are critical. This work underway today is strengthening our foundations, not only to support sustainable growth, but to position Comvita to lead the next phase of category development. We have confirmed our current strategic priorities, which remain consistent with what we shared at the ASM. Key to our strategy is diversification to ensure resilience across economic cycles and spread risk across major geographies, channels and customers. Our strategic imperatives are clear. We firstly need to grow share and volume, particularly in the lower UMF categories through market diversification, distribution extension and customer and business partnerships. Secondly, we need to clearly differentiate our brand and products from our competitors through the consumer benefits we deliver, innovating in formats and strengthening our science. The U.S.A. continues to be a key market for us, and we are focused on both online and offline growth alongside diversification in these channels. We need to continue to optimize and leverage our business model and continue to improve our cost structures to compete effectively, maintain our value proposition and deliver our profitable growth. With our highly capable team, our consumer and scientific understanding and our digital marketing capability, we have the right ingredients in place to deliver against these goals. Most importantly, we are committed to ensuring that every day, our decisions and our activities are managed with strong commercial discipline and rigor to avoid the mistakes of the past and to support prioritization and most importantly, focus. We have a clear mandate. As I have said previously, we need to fix what's broken, protect what's strong and deliver with discipline. Alongside disciplined capital allocation and operational excellence, we are focused on successfully maximizing the key value drivers that we have identified. These are winning with brand and innovation differentiation. They are success in key digital and e-commerce channels; and thirdly, leveraging the growth in private label and major club retail, while building strong customer partnerships. These priorities are shaping how we operate every day. They are practical, focused and aligned to the areas, where we see the greatest opportunity for long-term sustainable value. The next 6 months are about ruthless execution, delivering our promise, which is our financial commitments to you for FY '26, continuing to strengthen the business and converting the momentum we are building into sustained performance and long-term shareholder value. I would now like to hand back to Bridget, who will oversee the Q&A session. Thank you very much. Bridget Coates: Thank you, Karl and Mandy, for those updates, excellent updates. really, really helpful, I'm sure. Before we move on to the question-and-answer session, I wanted to thank my fellow Board members for their ongoing efforts in helping position Comvita for a more successful future. Also critical to our progress are Karl and the rest of the senior leadership team and the wider global Comvita team, who remain focused on delivering our objectives and listing Comvita's performance. We are grateful to you. We are now ready for questions. Please click the Ask a Question box to send in your questions. We have allocated 20 minutes for questions. We will endeavor to answer as many questions as we can in this time. But if we do run out of time, we will provide you with a response after the presentation. We ask that questions are limited to 2 per attendee, and we remind you of our earlier comments about not being able to share any further information on the capital raise today. Thank you very much. Now over to the questions. Kate Walsh: Thank you, Bridget. So a few questions coming here with similar themes, so we'll combine them. We'll start with shareholder dividend. Given the company's current financial improvements, what is your forecast hope for a shareholder dividend? Bridget Coates: Thank you for the question. It is clearly a priority of the Board to return to a dividend-paying entity as soon as we possibly can. At the moment, though, we are still working hard on the recapitalization, as you would know, and on restoring our company to a strong financial position. So it is not something that the Board is considering in the near future. Nevertheless, it is a priority as soon as we are able to do so. Kate Walsh: Thank you, Bridget. Another one for you. In the new capital raising, what is expected the net share dilution outcome would be? Bridget Coates: As I indicated, we can't make any statements about that at this stage. We're still working to finalize the exact parameters of the capital raise and to indicate -- we will be able to indicate this to you in hopefully in short order. As I said, the -- in the announcement, the intention is that the underwrite should be positioned at $0.80. So we will see whether that is what happens in the fullness of time. It's certainly very -- our Board is very mindful of dilution and of protecting the position of our existing loyal and patient shareholders. Kate Walsh: Karl, a question for you. Do you have a plan in place over the next 12 months to travel overseas and visit major clients in North America, China and Europe, i.e., to share the same [ air ] with them? Karl Gradon: Great question. So I've made significant plans for the next 12 months already. I will be in North America in the coming days to the Expo West show, and we'll continue to visit the relevant markets. I'm off to China at the next month and was in Brisbane with the team just last week. So talking with our key customers is absolute priority. I was recently in North America only 3 weeks ago, talking with one of our key customers. So it is absolutely critical to our business success that we listen. And the best place to listen is to the marketplace. And as a result, we need to front not just myself, but the entire team to understand exactly how we can adapt our offering to what the marketplace demands. Good question. Thank you. Kate Walsh: Thank you, Karl. Another one for you. Is the huge U.S. market growth in Manuka Honey sales sustainable? Do you anticipate more growth or reduction in sales for Comvita in the short to midterm? Karl Gradon: The U.S. market certainly has grown significantly. The key piece of the puzzle for us is that we see the [indiscernible] household penetration is still very low. So there is certainly room to grow. But as always, for us, it's about working with the right customers, and we're very fortunate with the profile of retail footprint we have in North America today that happens to be targeting the exact demographic that we -- our brand is positioned against. So not only are we happy with the growth of the U.S. market, but we've actually positioned ourselves exceptionally well to harness that growth by entering into that marketplace aligned to the right profile of consumer group that our brand attracts. Kate Walsh: Thank you, Karl. And another one on the U.S. actually. With the NZ dollar expected to rise and the issues with the U.S. dollar, what risks have been considered? Karl Gradon: I am happy to say that our hedge policy is being complied to today, and we are fortunate that we have taken advantage of where we had been previously seeing the marketplace. However, as everything, you don't know the future. We have taken a mature position and very prudent risk-averse approach to managing FX volatility over the coming months, and I'm not expecting to see any surprises this financial year. Kate Walsh: Thank you. And just while we're on North America, now that inventory is normalized, would you expect H1 '26 sales into the club channel to be sustained? Or is this part of the result of wanting to liquidate higher inventory? Karl Gradon: There were several strategic reasons to enter the club channel in North America. One of them was to ensure that the inventory was carefully managed. However, as I mentioned earlier, it was actually to target the key demographic that we were after in North America. It's very important that we do not place our brand in channels that don't serve our target consumer group, and that club channel does serve that group. You have a cyclical nature of any wellness product such as ours, which delivers immunity benefits. That means leading into the winter period, you will tend to get an uptick in sales. So the seasonal nature is strong across any Northern Hemisphere sales channel. And what we have seen is that that's certainly played out with very strong winter sales in North America that we would not expect to see as they head into their summer months. So H1 is likely to be softer, but against our expectations that we had budgeted for. Kate Walsh: Awesome. Karl, has Comvita and other New Zealand suppliers under the UMF designation considered a combined market strategy to hedge against Australian Manuka supplies. And this -- the person, who's asked the question has said they are looking at a Fonterra model or something similar. Karl Gradon: Look, I think we need to work with all of our partners to ensure that the brand integrity of not just Manuka but New Zealand Inc. is sustained and enduring. We'll work with government entities. We'll work with our -- in a pre-competitive way to ensure that the entire sector in the Manuka sector thrives. So we have the Manuka Charitable Trust, which we do support. certainly out there defending Manuka and the word Manuka and the way that it's positioned globally. So we're proud of their work. We'll continue to support them. And as long as it's pre-competitive, I think the sector should be working extremely closely together to ensure that happens. Kate Walsh: Thank you. And I'm going to pass to Mandy for a moment. So if we could bring Mandy up on screen, that would be great. Mandy, what is the gross margin trajectory for H1 FY '26? FY '25 was 43% down from 54% in the prior year. Mandy Tomkins-Dancey: Thanks, Kate. So our gross margin percentage, our guidance remains in line with our IAR and those that we shared at the ASM. Our expectations are that gross margins will return to around 51%, and that's our expectation for the medium term. Kate Walsh: Thank you, Mandy. How much cash is coming from operations rather than balance sheet release, so aging inventory? Mandy Tomkins-Dancey: So as Karl has spoken into, we had an inventory normalization program that leveraged our club retail channel. And that is the key driver for that inventory reduction. It is not related to really a disposal of aged inventory, although it has allowed us to work that through. We are really pleased to say that our inventory has normalized, not through heavy discounting, not through seasonal fluctuations and not through significant challenges in dumping of aged inventory. We are in a good position and we're pleased to share that with you. Kate Walsh: Thank you, Mandy. What is the target sustainable level of inventory as a percentage of annual sales to maintain? Karl Gradon: I'll pick that one up, Kate. The inventory levels are cyclical, and it is within a range. And right now, we are operating within that range of ideal levels for our business at this time of the season. It's too early for us to say what our own harvest is, let alone what the harvest is for the entire sector. So with that in mind, it's impossible to tell you what the ideal target inventory is. However, I think we're in a very strong position today compared to where we have been in the past 3 years. Kate Walsh: Thank you, Karl. Bridget, one for the Board. Based on guidance commentary, year-end net debt-to-EBITDA seems likely to be close to or below 2x. Why does the Board believe this to be excessive? Bridget Coates: I'm not sure that we have said that it's excessive. We are, as you know, undergoing the recapitalization with the bank to position ourselves for a stronger balance sheet going forward and the maintenance of a good sound net debt position is very much a part of that. We -- this is a cyclical business. We are not keen to get back into the cyclicality, the financial exposure that we had in previous years. And we do believe that a conservative and prudent debt position is very, very much a part of our future, and the Board is very committed to that. Kate Walsh: Thank you, Bridget. Karl, I'm going to come back to you. You have touched on this a little bit already, but this does relate specifically to the scheme booklet, so I'm going to run through it. Can you talk a little bit more about the expected seasonality in your FY '26 outlook? The implied sales number by region in the scheme booklet suggests meaningful slowdown in the U.S. and the gross margin assumption assumes a big lift in the second half. Are these both still relevant? Karl Gradon: The margin assumptions were based on the fact that we would be pushing through inventory that we had procured at higher prices. And as a result, as that flows through the system, our gross margin is certainly in line with the expectations we had published in the IAR. The growth rates in the U.S. also reflect -- that we put into the IAR are also reflected in our current assumptions. So for us, the U.S. market continues on track, both at a margin level and at a volume level. And the great thing for me is we are seeing encouraging progress across our non-club retail reset and our online channels as well, which gives me reason to believe that the club retail partnerships is paying dividends beyond that particular channel. Kate Walsh: Thank you, Karl. Another one for you. How is Comvita using YouTube to promote the brand, noting a recent YouTube post put Comvita #3 with an Australian Manuka brand achieving #1. Karl Gradon: Look, I'm unaware of any post that you're referring to there. However, I would also say that when it comes to any brand integrity measure that I've ever seen, Comvita is ranked #1. And don't believe everything you see online. I'm sure there is science behind many methodologies. I'll stick to the tried and true in the published facts and hope to see us continuing to punch above our weight when it comes to our brand. I can't comment on something I'm not aware of, sorry. Kate Walsh: Another one for you, Karl. Can we have a comment on the Olive Leaf business? And how much does it contribute to the business profitability-wise? Karl Gradon: Look, Olive Leaf is a great product. The extract is demonstrable in terms of its health benefits and the science backing it is absolutely credible beyond what I even understood coming into this business. So that's the first place I'll start. Has it been nurtured in the way that we probably could have? No. Is it going to continue to play an important role in our portfolio? Absolutely. The reason I say that is because the margins that we can extract through being a vertically integrated business with our operations that I visited for the first time in Brisbane -- outside of Brisbane just last week, give me real hope that this and expectation that this business is able to set this up well with the best value proposition for our consumers that expect great quality, great science and great provenance to ensure the integrity of that brand. So I can't tell you exactly what it's going to make up in terms of numbers, but let's just say it's my expectation is that we will be seeing it much improved over the course of the next 2 to 3 years. Kate Walsh: And Karl, are you able to elaborate more on how the honey season is panning out given the weather issues that have occurred this summer? Karl Gradon: It is too early for us to say. But our early indications are that we're tracking in line with our initial expectations. There are some geographies that others have had good seasons, other geographies, which have been challenging. So we'll net out and we'll see how it goes, but it's way too early for us to say right now. Kate Walsh: Thank you, Karl. Just to note, there is a few quite detailed questions in here and a couple of questions from reporters. We will deal with those off-line. Karl, final one for you. Does the CEO believe he has sufficient edge to complete a successful turnaround of the business? And how do you think you are different from the many other immediate past CEOs? Karl Gradon: What a great question. Thanks to whoever asked that. Do I believe I've got an edge? I absolutely do. The reason for that is I'm ruthlessly focused. I am looking to bring a team together with transparency, and I am looking to surround myself with the best possible people I can find out there. And I'm very proud of what we've achieved in that exact area. People sets the culture, the culture sets performance, and I'm very confident that with the right people around the table, not for me, but for the business to thrive, we're set up for success. So do I have the edge? I'm extremely competitive when it comes to the right things, and I'm looking forward to competing head-to-head with everyone out there in the marketplace today. I think my experience of leading turnarounds in several of the business has proven itself, and I'm just really enjoying what I do right now and working with a wonderful bunch of people from the Board right the way through to our global team and of course, our customers. So great question. I guess, the results will tell the test of time. Kate Walsh: We've just got a few more filtering through. We will wrap up questions very shortly. So if you do have a question, please pop it in now. Karl, further details of the management of your Manuka forest, which appear to be below expectations. Karl Gradon: I think the Manuka plantations have always set ourselves a very long-term horizon in terms of where they're taking our business, but they have been a very key strategic enabler. One of the things that is quite unique is the genetic profile of those particular trees and the production of some of the key components that will underpin our future strategy. I'm not entirely at liberty to talk to that today, but just say that the innovation plans that we do have that value both provenance and the science-based quality claims that we've got are going to be underpinned by our plantations, and we're very happy with where they sit today. Kate Walsh: Thank you, Karl. And Bridget, I don't have any further questions through at this time. So I'll hand back to you. Bridget Coates: Excellent. Could I just say thank you to everybody for attending this call. Karl, you gave some outstanding answers, especially to the most recent question about focus and leadership. And we are, as a Board, absolutely delighted with the team that you are assembling and with the way that you have led the business since you started, which was only 6 months ago, and the improvement has been notable. We are very grateful and look forward to a continuation of the strong performance that you are leading. Thanks to everybody on the call. Really appreciate your attendance and look forward to seeing you again at the time of the full year announcement in August. Thank you.
Operator: Welcome to the Imdex Limited First Half '26 Results Presentation. [Operator Instructions]. Press the Documents icon to see copies of today's announcement and presentation. Select document to open it, you can still listen to the meeting while you read. [Operator Instructions] I will now hand over to IMDEX Managing Director and CEO, Paul House. Paul House: Welcome, everyone, to IMDEX's results for the first half of FY '26. Today, I am joined by Linda Lim, our Chief Financial Officer; Shaun Southwell, our Chief of Exploration and Production; and Michelle Carey, our Chief of Digital Earth Knowledge. The first half has been a record for IMDEX and has featured some outstanding results across all facets of the business, and I'm delighted to be able to share with you the detail that has delivered this result. Throughout this call, we will be referring to the 2026 half year results presentation released on the ASX this morning. At the conclusion of our presentation, along with Linda and myself, both Shaun and Michelle will also be available for questions. Our agenda on Slide 3 outlines the focus areas for today. We will walk you through our record first half performance. We'll provide an operating outlook for our major regions around the world, and we will recap our corporate strategy and the key focus areas as we look ahead. Bringing your attention to Slide 5. At IMDEX, our purpose is to efficiently and sustainably unlock the earth's value by enabling customers to find, define and optimize the subsurface environment with confidence and speed. We achieve this through the development and deployment of technology that drives smarter, faster decision-making for our customers. While our heritage is in mining, our technologies are increasingly being applied across the broader earth science end markets. Critically, our technologies first originate subsurface data and then enrich it by delivering that data to our customers wherever they are in the world through software solutions that allow them to make that next decision. The MINEPORTAL visualization on the slide in front of you demonstrates how we bring our purpose to life, turning complex subsurface data into real-time insights that drive better decisions. So let's turn to Slide 6, where we can speak to the strong financial highlights for the half. Our 1H '26 financial performance was the strongest first half in IMDEX history. We delivered record revenue, record EBITDA normalized and [Technical Difficulty] NPATA normalized $247 million was up 16% on 1H '25. Importantly, this growth has been led by strong market share gains and supported by an increase in exploration activity on established projects across all regions. Later in the presentation, we'll expand upon where our strategy and our technologies continue to create further opportunities for growth, both within mining and the adjacent earth science markets. Normalized EBITDA increased 22% to $78 million, with margins expanding 32%, a clear demonstration of the operating leverage [Technical Difficulty] that is in line with 1H '25 at $74 million, noting that the 1H '25 result included a one-off gain of $9 million. These results reflect positive demand for all products in all regions. They are particularly strong and pleasing results having regard to the ongoing industry challenges. That includes both geopolitical uncertainty and the rising cost environment I referred to earlier. Turning now to Slide 7. Cash discipline remains an ongoing strength of our business. Normalized cash conversion was strong at 86%, evidence of our disciplined working capital management while delivering on the growing demand for our next-generation sensors. Net debt increased to $27 million following the completion of the Earth Science Analytics acquisition in August. Our leverage ratio at period end was just 0.2x. We clearly have ample capacity and have used that capacity to fund the Datarock, ALT and MSI completions post the half year end date. And finally, the Board has declared an interim fully franked dividend of $0.0169 per share, consistent with our approach to capital management being a 30% payout of NPAT normalized. This is a record interim dividend for IMDEX shareholders. Turning now to Slide 8 and the strategic highlights for the half. Starting with Drill Site Technologies. IMDEX continued to strengthen its position as a global leader in drilling optimization and downhole intelligence [Technical Difficulty] per $100 of exploration spend, up from $2.10 in 1H '25 and $2.20 for FY '25, reflecting the continued adoption of IMDEX's integrated solutions. Our Integrated Field Services, which is a combination of Directional Core Drilling and IMDEX Managed Solutions, saw its revenue increase by 28% on pcp. Notably, our operating footprint grew by 12% globally as new customers adopt the Integrated Field Services model. Our HUB-IQ connected revenue, which highlights the strong connection between our hardware sensors and our software solutions to form that integrated system grew by a very pleasing 22%. Our Mining Production segment continued to scale with IMDEX Mining Technologies revenue up 47%. This was led by faster growth in underground applications and extending IMDEX's presence further downstream into that mining life cycle. Within Digital Earth Knowledge, our Datarock business grew 90% on pcp, reflecting strong demand for AI-enabled geological interpretation. Completion of the Earth Science Analytics acquisition strengthens our overall AI-driven geoscience offering with the EarthNET platform being highly complementary to our HUB-IQ and Datarock applications. I'll now hand over to Linda, who will take us through the key financial metrics and performance drivers for the half. Linda Lim: Thanks, Paul. Turning to Slide 10. I'll focus on the quality and sustainability of the first half financial performance. In 1H '26, we normalized our results for nonrecurring integration and transaction costs associated with the acquisitions of Earth Science Analytics, Datarock and Krux. Before stepping into the detail in the following slides, I'm pleased to highlight 3 outcomes that reflect the strength of our operating model. First, a record normalized operating cash flow of $67 million; second, a record interim fully franked dividend of $0.0169 per share; and third, a low leverage ratio of 0.2x following the ESA acquisition. Importantly, had we not acquired ESA, the group would have ended the half in a net debt cash position, having fully repaid the debt used to fund the Devico acquisition in under 3 years. Turning to Slide 11. As Paul outlined, half year revenue of $247 million represents a 16% increase on pcp, continuing IMDEX's track record of outperforming underlying exploration markets. Sensors, services and software is up 20%, representing 68% of group revenue. This continues the fast growth of our higher-value, higher-margin solutions. Sale of goods grew 9% with strong growth in fluids, which is tracking above market growth. Over the past 5 years, IMDEX has delivered a revenue CAGR of 15%, nearly double the growth rate of global exploration budgets, underscoring the resilience, scalability and structural strength of the IMDEX business model through the cycle. Turning to Slide 12. Our record first half revenue was driven by growth across all regions. Americas are up 20%, driven by strong U.S. activity and expanding operations across South America and Canada. Canada saw the biggest drop during the downturn, and activity there is still around 20% below its prior peak. Funding conditions have improved and the full benefit of increased activity is still ahead of us. APAC is up 9%, underpinned by strong sensor demand in Western Australia and signs of recovery across Asia. Europe, Middle East and Africa is up 17%, supported by technology-led growth and increasing adoption of Integrated Field Services. Importantly, the Americas and Europe, Middle East and Africa both delivered record first half revenue. Turning to Slide 13. Normalized EBITDA increased 22% to $78 million with margins expanding to 32%, a clear demonstration of the operating leverage that is a feature of our business model and disciplined cost management. Our discipline around cost management -- sorry, is in 2 key areas: First, reorganizing our operational spend to make existing operations more efficient and scalable; and second, continuing to invest in the areas that support growth and responding to expanding customer demand. Turning to Slide 14. There are 3 key messages I'd like to highlight on R&D. Firstly, we have continued to invest consistently in R&D through the cycle, and that sustained investment is clearly reflected in the performance delivered this half. Second, our R&D program is strongly customer-led. Projects are prioritized based on customer needs, and we retain the flexibility to adjust investment as those needs evolve. And third, our focus in 1H '26 has been on HORIZON 1 initiatives, continuing to build out our sensor and digital ecosystem with machine learning solutions increasingly embedded directly into customer workflows. Our disciplined approach to R&D investment and capitalization remains unchanged. We ensure clear pathways from innovation to commercial outcomes. Moving to Slide 15. We are sharing the capital expenditure by half year for the first time. Our intention is to highlight 2 key things. First, forecast and deliver into customer demand for current and next-generation sensors that will deliver revenue in the near term. We can clearly see this in the slide with the increase in CapEx for 2H '25 and the resulting step-up in revenue realized in 1H '26. Second is to show the blend between our capital investment in sensors and capital investment in software, again, in response to customer demand. This is increasingly important as customers take system. Turning to Slide 16, where we delivered operating cash flow of $65 million, resulting in a strong normalized cash conversion of 86%. This outcome reflects disciplined working capital management while supporting double-digit revenue growth and increased deployment of next-generation technologies. We closed the period with healthy liquidity and a $49 million cash balance, providing the flexibility to continue investing for growth, fund innovation and acquisitions and maintain our balance sheet strength. Importantly, this level of cash generation underpins our ability to execute the strategy while preserving capital discipline through the cycle. Turning to Slide 17. Our balance sheet remains strong. Returns have continued to improve with higher ROE and ROCE. However, I do note that 2H '26 will reflect an increase in acquired intangible assets. This balance sheet strength provides the flexibility to fund growth initiatives, including the completion of the Datarock, ALT, MSI and Krux acquisitions in 2026. Turning to Slide 18. Our capital management is underpinned by strong operating cash flow, disciplined investment through the cycle and a consistent 30% payout of normalized NPAT. This provides flexibility to reduce debt and reinvest in R&D, capital expenditure and selective M&A whilst balancing growth and shareholder returns. I will now hand back to Paul. Paul House: Thank you, Linda. Turning to Slide 20. I'd like to spend some time sharing the current outlook in the major regions around the world. The Americas remain IMDEX's strongest engine of growth, delivering record first half revenue. In North America, activity continues to be supported by extended drilling programs, particularly in the U.S. market, where near mine and brownfields work remains resilient. The FAST-41 program is improving project visibility and demand for integrated solutions that improve drilling productivity, which continues to grow. As Linda mentioned, activity in Canada is improving, yet remains well below its prior peak. However, the improvement in junior funding conditions over recent months is encouraging. Exploration programs are therefore increasingly well-funded, and we expect this to translate into higher drilling activity as the year progresses, most likely in the back half of calendar year '26. South America continues to operate at elevated levels, driven primarily by copper. Chile, Argentina and Peru remain very active, supported by long-term energy transition fundamentals and gold activity is on the rise, although cost pressures are leading to the demand for productivity-enhancing technologies, which is favorable to IMDEX. Overall, the Americas remains the most attractive market for growth as we look forward, driven by a combination of critical metals, government policy and that demand for improved productivity. Moving to Slide 21. In Europe, activity is supported by brownfields exploration and policy-led investment, covering defense, resources and infrastructure and therefore, a demand for metals. While Scandinavia remains slightly softer, this is being offset by growth in the Balkan region, where demand for drilling optimization is leading the majority of conversations with customers. In Africa, near-mine work for major miners, predominantly gold and copper, is driving the growth. While parts of West Africa remain challenging, this continues to be offset by emerging opportunities across Zambia, Eastern Africa and Saudi Arabia. Moving to Slide 22. Western Australia continues to show strong gold drilling activity, partially offsetting softer conditions in Queensland and New South Wales. The adoption of IMDEX mining technologies remains strong, and the pipeline for Integrated Field Services continues to build in this market and has significant headroom ahead of it. Importantly, the focus for Australian customers is a combination of productivity and real-time decision-making. This, in turn, is driving adoption of our next-generation sensors and our integrated HUB-IQ solutions. Outside of Australia, activity in the rest of Asia has been low for a long period of time. Increasingly, the outlook is positive, and this presents significant headroom for growth in this part of APAC. Turning now to our strategic outlook on Slide 24. Industry signals have continued to improve since our October AGM with key macro indicators strengthening. The supply/demand imbalance that sets the scene for exploration demand remains firmly in place as does the overall decline in proven reserves. That in turn is forcing exploration deeper and into more complex ore bodies, structurally increasing the need for advanced subsurface intelligence, most evident in commodities like copper, where supply is tightening despite the strong demand. M&A activity, including consolidation in the gold sector, is reinforcing industry momentum, and this is expected to act as a catalyst for future exploration activity. That said, overall exploration budgets remain well below prior cycle peaks. However, visibility is increasingly improving. We expect exploration budgets to increase by double digits in the calendar year 2026. Capital raisings have increased significantly across junior intermediate explorers. And remembering there is a typical 6- to 9-month lag between funds being raised and drilling activity commencing. We, therefore, expect a step-up in exploration activity through the back half of calendar year '26, subject, of course, to geopolitical and regulatory constraints. For IMDEX, these signals all point towards a continued strengthening in global exploration activity. We would regard 1H '26 as the swing period where we have moved from 3 years of decline in exploration towards a net growth in drilling activity. We are already seeing this uptake on established drilling programs. And at IMDEX, our sensors on hire are increasing across all regions. In summary, industry signals continue to align in support of higher market growth ahead. This higher growth in the exploration drilling market from Slide 24 connects to the right-hand side of the image on Slide 25. IMDEX's ability to deliver growth regardless of market conditions has been a strategic priority and a highlight of our progress in recent years. We have achieved that through strong progress in the 3 levers that we control outside of general exploration market activity. First, our growth in the share of exploration spend. By expanding our offering through targeted R&D, complementary M&A, and embedding AI across our physical and digital portfolio, we have been able to increase our share of exploration spend. Second, our market share. Driven by having technical leadership in each product family, which is reflected in the uptake of our next-generation of sensor technologies, and our ability to deliver fully integrated hardware-software solutions. Third, market expansion. Both geographically and into the Mining Production market segment and further afield into adjacent earth science markets. We continue to expand geographically with our global network presence continuing to grow to support customers where they operate in the world. These 3 pillars work to drive growth regardless of market conditions. As we look forward, our recent acquisitions complement all 3 of these growth pillars. Finally on Slide 26, I would like to draw together the key elements that position IMDEX to deliver sustainable returns. First, we have a market-leading, integrated physical & digital system, with technologies that work together to meet customer needs and embed IMDEX deeply into workflows. Second, we deliver high quality earnings supported by a technology led, capital light model, delivering structurally higher margins, exhibiting strong operating leverage and consistently high cash conversion. Third, our disciplined investment through the cycle has been a long-standing feature of our business and has again delivered value in the most recent period, while positioning us to benefit from a multi-year exploration upcycle that is ahead of us. Together, these strengths underpin IMDEX's leadership position and support the continued growth of a high quality, scalable earnings base. That concludes our presentation today and will hand back to the moderator for Q&A. Operator: [Operator Instructions] Our first question comes from Nicholas Rawlinson from Morgans. Nicholas Rawlinson: Congrats on the results. Sensors and software revenue was up 15% in the first quarter, and it's now up 20% for the half. So that implies around 25% in 2H. Is that a good way to think about the exit rate in tools? And just for fluids, now that we're lapping comps where those large contracts, which finished are out of the picture, is that also a useful proxy for fluids growth going forward? Or are there sort of different dynamics to call out in the fluids business? Paul House: Yes. I might -- thanks, Nick. I might start with your second question first. We've always said that we thought fluids was more directly responsive to changes in actual drilling activity. And so I think you're right now that those -- we have lapped those comps where we had a couple of significant contracts come off. I think looking forward, the drilling outlook or the drilling optimization outlook looks pretty solid. Of course, beyond fluids, we think of drilling optimization is including the DCD side of our business, which is obviously exhibiting much stronger growth in the half. The sensors revenue, I think, is a combination of the growth in activity, but also the next-generation technologies coming through. And so that pace can be not quite so linear. It can have to do with how quickly the size of projects that are taking on new technologies, but we still expect it to be pretty strong as we look forward. So double digits is pretty safe. So somewhere in between that 15% and 25% that you called out. Operator: The next question is from Evan Karatzas from UBS. Evan Karatzas: Can I just ask one around the headcount, please? Pretty impressive keeping that up to just like 2% first back in June, just given the revenue growth you're delivering. Just keen to talk through how you're thinking about headcount now for the second half, including obviously the acquisitions that are coming through, just the core IMDEX business, that outlook for headcount? Paul House: Yes. Okay. So I think we mentioned at the FY '25 result that we had been continuing to be trimming the business, including a slight reorganization to set up for Drill Site Technologies and Digital Earth Knowledge as we finished FY '25. And so that headcount discipline is partly a reflection of the work taken at the back end of FY '25. There -- we do add heads, of course, as we bring in the recently acquired companies. And I think the previous announcements show what that margin profile looks like. We can provide a bit more guidance later on around the FTEs that are being added from those acquisitions. Within the core business, however, we will continue to add people in customer-facing roles, sales roles, service roles in response to the market demand. But obviously, we get good leverage in that business model being predominantly a dry hire business. So without giving you a specific on the number of heads, we think about it in terms of what is the incremental headcount we need in the core business, what is the additional headcount that comes from M&A, but the rest of the business should have good leverage. Evan Karatzas: Yes. Okay. That was what I was trying to get to, right? You should expect some decent growth [Technical Difficulty] in the second half. Paul House: Yes, that's right, Nick. Evan Karatzas: Okay. And then just around the juniors, you obviously made some interesting comments regarding the raisings, but it's also yet to be seen on the ground. Do you want to just run through how you're thinking about the juniors coming into the market over the next 6 to 12 months and how IMDEX is preparing for that given it's been a pretty benign environment. You sort of shifted the business a fair bit away to the majors. Just how you're thinking about their contribution in the next 6 to 12 months? Paul House: Yes. I might answer that first, and we have Shaun Southwell on the call, and I'll get him to add a further comment at the end if I've missed anything. But certainly, we've seen the initial uptake being on established projects where there are clear targets, there's established permitting and adding extra drill rigs onto established projects is slightly easier. The junior capital raisings have set records month-on-month for a period of time coming through that sort of July, August, September period. Historically, it takes 6 to 9 months for that to go into the ground. And so we haven't really seen a significant uptake in that area yet, a little bit in WA, a little bit in Canada, but really not reflective of the amount of capital raisings. So I think that upside is all ahead of us. Canada today is circa 20% below its prior peak still. And if that gives you some indication of the headroom ahead of it. I think the only caution we have around that 6- to 9-month lag is simply around a lot of boardrooms are just a little cautious around deploying capital with geopolitical uncertainty. So if they can deploy it closer to home, that's fine. And although there's been a lot of talk about removing or improving regulations and environmental restrictions, we're not seeing a lot of that play through very quickly. We think the intent is real, but we just think that this -- it's still a bit near term, and there's still a little bit of risk that, that holds up deploying some of the capital. Other than that, I think it's just that 6- to 9-month lag coming off Q1, Q2 raisings will play through later this year. I probably should have handed over to Shaun then in case there was actually another comment you wanted to add. Shaun? Shaun Southwell: Yes. Probably the only other one would be a lot of the junior activity, particularly in Canada, is in BC. When the raisings came through, they're still waiting for their season. So their seasonal start as they come into the Canadian summer where this time of year, they don't do a lot of activity in the BC region. So we are seeing those delays and then you've still got to take into consideration the seasonal timing as well. Paul House: Yes, good point. Thanks Shaun. Operator: Our next question is from Mitchell Sonogan from Macquarie. Mitchell Sonogan: Apologies, I've just been jumping between a few, so I missed a few of your comments earlier. Just in terms of the EBITDA margin at 32% there, can you maybe just give us a thought of how you're thinking about that in the next 6 or 18 months or so? Clearly, you're expecting to see a stronger uptick in industry activity. But I guess you've previously talked about maintaining it around these levels here. So yes, just keen to understand how you're thinking about that in terms of up cycle versus ongoing growth in the business. Linda Lim: Thanks, Mitch. So the way -- when we came out of the FY '25, we did say that FY '26 is really a transitional year for us, especially with the cycle turning. So we always say about 30% EBITDA normalized margin is our guide for FY '26. We have realized operational leverage uplift for the first half, and we'll continue to obviously look at our OpEx cost base and making sure we're making good inroads in terms of keeping that disciplined approach and scaling our business. However, we are really conscious that we do -- the growth is happening and especially in our Integrated Field Services area. So we will need to invest, as we had alluded to at the end of the last financial year into our labor resources for that revenue. And also with the acquisitions coming in, there is a bit of margin pressure just purely due to the nature of those businesses. Mitchell Sonogan: Yes. And probably a pretty similar question really just for the Americas revenue up 20%. EBITDA margins were broadly flat. Any color you can give to the outlook in that region in terms of the revenue growth versus ongoing costs you might have to put into it to support that growth? Linda Lim: So the cost initiatives and cost discipline occurs across all of our regions, Mitch. And so we are looking to that scalability globally. And with Americas growing, obviously, we will be looking for making sure we've got the right resources and the right infrastructure to make sure we can deliver into that high revenue opportunity. And so yes, but there will be scalability opportunities across the whole globe. So we would be -- I'd be reluctant to guide anything different at this stage. Paul House: I think as I said -- I did make a comment on the call, Mitch, that we did see the Americas and, in particular, the U.S. still presents probably one of the most attractive growth markets for us looking forward. Operator: Our next question is a written question from William Park from Citi. Could we get some sense around competitive dynamics across your footprint and businesses as exploration levels continue to trend upward? Paul House: Yes. Thank you. Thanks, Will. Look, the broad statement I would make is probably 3 things. We don't think the overall competitive landscape has shifted too significantly. Importantly, we do continue to win market share, and we have some very good internal numbers that support that. But as we look forward, we expect that competitive intensity to remain. I think we are heading into, hopefully, a pretty attractive environment. And certainly, the industry's demands for -- or the cost pressures that it faces is going to see a focus on things like productivity. So I expect it will be -- the customer-led side will be seeking technologies that somehow speak to improved productivity, and that opens up the market for both IMDEX, but also its competitors wherever that can be demonstrated. That's not a bad thing. That's a good thing. Operator: A second question from William Park from Citi. How are you thinking about earnings trajectory with the strengthening AUD for the remainder of FY '26? Linda Lim: Yes. So there's -- yes, thank you, Will. There's definitely headwinds when it comes to FX. So with the strengthening Australian dollar, as we've spoken to before, our FX exposure on the revenue side is 50% U.S. dollar or U.S. dollar-linked revenue. So that will create quite a headwind for us. We -- our usual FX management structure remains in place, and we'll continue to monitor it. I think for the second half, the rough exposure for us on AUD/USD revenue exposure is about $1.5 million for 1% movement in the FX rate. Operator: The next question is from Gavin Allen from Euroz Hartleys. Gavin Allen: Congratulations on the numbers. Look, apologies if you've discussed this, I have been hopping around a little bit as well this morning. But you didn't -- you mentioned growth and in particular, in front of market growth in established projects. I'm just wondering if you could provide some flavor on the opportunity or the headroom available to you outside of established projects and what you -- how we think about the go-to-market plan on that front? Paul House: Yes. I think to be very clear, we have a footprint anywhere in the world where our customers might want to go, whether it's greenfield, brownfield, et cetera. So our network is well positioned to meet the demand wherever it comes from. The distinction between established projects is really to say that the ease of increasing rig activity on projects that are already drilling targets and you're just adding -- already have permitting, already compliant with whatever the regulations are, adding rigs on those projects -- established projects is a little faster. And so both juniors and [Technical Difficulty] intermediates and major projects or continuing to increase established projects. And so it really comes down to what the exploration budget focus looks like for intermediates and majors, which we expect S&P to publish some commentary on in the first week in March. And it all comes down to how quickly juniors do deploy what has been a period of record capital raisings. That's the headroom, I think, if that answers your question. Operator: The next question is from Josh Kannourakis from Barrenjoey. Josh Kannourakis: First one, just with regard to the split in terms of customers. Can you talk a little bit more, especially in North America about some of the success you've had with regard to going direct with the resource companies? How much that's had to play with some of the growth in that region in terms of taking a broader solution and whether you think that model is replicatable to that extent in other regions of the world over time? Paul House: Yes, I might answer that initially, and then I'll hand over to Shaun Southwell again. I think, very important, we recognize the drilling customer group as a distinct group and the resource customer group as a distinct group. Our portfolio of solutions can add value to each. Historically, what we have felt we've missed is where we had resource company-specific solutions to unlock value, we have been underweight in that area historically. But all of those integrated solutions that we've been talking about, the IMS portfolio, requires a collaboration between IMDEX and the driller and the resource company. And that is how we've been looking to advance that market. That started in the U.S., as you pointed out. Shaun and his team have already expanded that to other regions around the world. I think I'll ask Shaun to speak to what we've seen out of that 16% top line revenue growth. I think Shaun has some guidance on how much of it was that Integrated Managed Solutions offering. But Shaun, can I throw to you? Shaun Southwell: Yes. Thanks, Paul. Yes, we see activity pretty much in all of our regions around IMS. It's very dependent on the drilling conditions the customer is experiencing, which is why in the Americas, both in North and South, it is a strong business model because of the difficulty in drilling conditions there compared to places like in Australia or in Africa, where the complexity of the geology is far less. We've seen a double-digit growth in our field services, I think more than that actually, probably closer to 25% growth in our field services, and we expect that to continue. That's a combined of our IMS and DCD, which is actually when we completely supply all projects with all the technologies. Paul House: Yes. Thanks, Shaun. I think it was -- 28% was the Integrated Field Services uplift. Josh Kannourakis: That's great. Appreciate it. And second question, just with regard to CapEx. Obviously, there's a few moving parts given the additional new businesses in there. But Linda, would you be able to give us some context of how we should be thinking about maybe the core IMDEX business CapEx profile that you're thinking about into the second half and into '27? Linda Lim: Yes. Sure, Josh. So the CapEx guidance we gave remains whole. So we expect to see the second half to be consistent with the first half in terms of that CapEx. Josh Kannourakis: Got it. And just in terms of underlying that, like you mentioned the new products. I guess I'm just trying to understand a little bit more in terms of where you're spending the dollar and how we should be thinking about what's going in terms of new higher-margin products versus maybe some of the existing core and how much is available, I guess, within the existing fleet that you've got that isn't utilized at the current point in time? Linda Lim: Sure. So the way we think about CapEx at the moment in terms of the spread is we usually have about 20% is general CapEx. Then we say there's about 40%, which is growth CapEx and the rest is sustaining CapEx on the existing tool fleet. Operator: The next question is from Jakob Cakarnis from Jarden. Jakob Cakarnis: Just 2 for me, please. Could you just talk to the earnings skew that you're expecting for FY '26, just noting typically, you'd had a first half weighting at least over the last 2 years. But if I go back to the prior cycle, you've actually had stronger second half than your first. Could you just make some commentaries around that? Obviously, M&A will come in for a full contribution in the second half, too, please? Paul House: Yes, I'll start, and I'll hand over to Linda. You're quite right. So during the 3 years of exploration down cycle, H1 was stronger than H2 being reflective, I guess, of that down cycle. And you're right, in an up cycle, H2 is normally stronger than H1. And so as we go through -- we do think that the H1 '26 is a little bit of a swing period as we come out of that 3 years of decline. So I think we are sitting here despite some of the -- there's still some uncertainties as you go through that swing phase, but we would expect us to resume a period where H2 is stronger than H1. Could you add to that Linda? Linda Lim: I would -- no -- consistent. I mean, we still are expecting seasonality, though as well. We would normally expect to see Q3 to be consistent with Q2 and then Q4 to see that step up as we run into FY '27. So our seasonality guidance still holds. Paul House: And I think in terms of the acquired businesses, our focus is always -- and we're very consistent about this. Our focus is always in year 1 to not put too many demands on top line revenue growth. The value unlock comes from a very deliberate focused integration of the teams and the products and the networks, and that sets the tone then for growth in years 2 and 3 onwards. And I think there's only -- can you -- do you want to refresh on the number of months, where... Linda Lim: Yes. So we provided -- when we announced ESA and also ALT and MSI, we provided guidance as to FY '26 revenue contribution. And so also as Datarock and Krux are fully owned, and so we'll see their results actually instead of being in the share of associates line, it will be throughout the P&L. And so you'll see Datarock will bring 5 months of contribution and Krux bringing in 3 months of contribution going forward. Jakob Cakarnis: And just while you've got the mic, just on the working capital swing, I know you [Technical Difficulty] on cash conversion. Does that working capital unwind through the second half? And do we get back to kind of levels that you guys see historically, please? Linda Lim: Sorry, Jakob, I missed the first part of that question. Could you please repeat? Jakob Cakarnis: Okay. My headphones just decided that they pick up the Bluetooth again. I was just talking about the cash conversion in the first half, a little bit less than probably what you thought there was an uptick in working capital. Do we just assume that, that unwinds through the second half and you get back to where you have been historically on cash conversion, please? Linda Lim: So our -- so our guidance is 70% cash conversion, and that still stays. I mean, we have disciplined working capital movement to support double-digit revenue growth. So we are still very happy with the way we're managing working capital. We've made a lot of inroads to make sure that's as efficient and effective as it can be. And I think that's reflected in the 86% cash conversion. Paul House: Yes. I think in a growth phase, that 70% rule has been our historical practice. It is better than that in this half in spite of that top line growth. So I think that's a really good feature. A little bit of that will have to do with the shifting portfolio mix of sensors versus fluids, Jakob. Operator: The next question is from Lindsay Bettiol from Goldman Sachs. Lindsay Bettiol: Apologies if this question has been asked. I think a lot of mine have, but I was kind of cutting in and out. Just Krux and Datarock, like if I look at maybe the last update you gave us for FY '25, Krux' growth was circa 90%, Datarock was 60-ish. And the update today, it looks like Krux is like 80% growth and Datarock is kind of reaccelerating to 90%. So it just feels like the growth rates in both those businesses have taken very different parts in the past 6 months. Like firstly, can you just confirm if that's the right read? And if it is, like maybe just talk about the kind of differing trajectories of Krux and Datarock, please? Paul House: Yes. I mean happy to answer that, Lindsay. They're 2 very different digital businesses and being start-up businesses, their revenue trajectory can be a little bit lumpy. I think the difference being, Krux is a much more infield operations-focused business that goes through probably slightly harder sales cycles to get embedded and Datarock probably spends more of its time at the front end building the platform before it rolls out. And that's what you're seeing that shift in revenue growth. So I would expect -- and Michelle Carey is with me, but I would expect the Datarock business probably continues to compound at a higher rate in the periods ahead. And we think that the growth trajectory for Krux starts to benefit from being integrated into the Drill Site Technologies business under Shaun, which will happen post completion. So we still see significant headroom in growth for both of them, but they're just very different products. And as they go through that start-up phase, it just -- it's a little bit lumpy. But nothing has fundamentally changed in terms of overall expectations of either of those technologies. I might ask Michelle Carey if she wanted to add anything else to the Datarock. Michelle Carey: No. Maybe just the last comment to support what Paul said is, obviously, we were also aware from the start that Datarock were a little bit further -- not quite as far along in their journey as Krux and both of them are growing from a relatively low basis. So you can see a little bit of that as the growth rates evolve as well. Operator: I will now hand back to Paul as there are no further questions. Paul House: Wonderful. Thanks, Michelle. In closing, 1H '26 has obviously been an important period for IMDEX, particularly as we turn the corner on 3 years of very tough exploration conditions. The result has reinforced the strength of our strategy and the quality of the IMDEX operating model. Delivering record above-market growth, strong cash generation and the discipline that we've shown through the cycle has been a pleasing feature of the half. Our global network and our global team, both are unrivaled in the marketplace. And so we're very well positioned to benefit from a multiyear exploration cycle ahead and continuing to deliver long-term value to our shareholders. I'd like to extend my thanks to our team, our Board and our shareholders all, and I look forward to speaking with many of you in the week ahead. Thanks very much for your time today. Linda Lim: Thank you.