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Operator: Thank you for standing by, and welcome to Navigator Global Investments Limited HY '26 Interim Results. [Operator Instructions] I would now like to hand the conference over to Mr. Stephen Darke, CEO. Please go ahead. Stephen Darke: Thank you, operator, and welcome to everyone joining the call this morning to discuss Navigator's half year results for the 2026 financial year. I'm Stephen Darke, Navigator's CEO. I'm joined today, as per usual, by my colleagues, Ross Zachary, Navigator's CIO and Head of NGI Strategic Investments; and Amber Stoney, Navigator's Group CFO. Turning to Slide 4, the company snapshot. Navigator is the only ASX-listed company focused exclusively on partnering with leading alternative asset managers. We provide growth capital and strategic engagement to a diverse portfolio of 11 managers. As of 31 December, at the Partner Firm level, Navigator's affiliates manage over USD 84 billion, up 6% over the past 12 months. This AUM is managed across 42 investment strategies and invested via 197 products. These strategies typically have low correlation to global equity and fixed income markets and to one another. Turning to a summary of Navigator's first half 2026 financial results on Slide 5. I'm pleased to report that NGI continued to see strong top line growth and earnings momentum. Our ownership adjusted AUM increased 5% during the period to $29 billion. Higher management fees with higher fee rates and continued strong risk-adjusted investment performance, leading to higher performance fees drove Navigator's first half revenue to USD 108.3 million, up 17% during the period. The group's adjusted EBITDA was USD 48.2 million, a 17% increase from first half '25, leading to a 7% increase in adjusted EPS. On Slide 6, you can see Navigator's ownership-adjusted AUM over the last 12 months and since 2021. The consistent AUM growth over the past 5 years continues. Over the past 12 months, we saw a 7% increase in ownership-adjusted AUM, meaning an additional USD 1.9 billion of AUM. During 2025, we saw marginal net inflows across NGI, with the growth in AUM driven by continued investment performance from both business segments, but particularly across the range of Lighthouse strategies, which have performed strongly in volatile markets. Given the 2025 investment performance, recent and prospective new product launches across NGI's portfolio, more positive sentiment from capital allocators and a generally improving fundraising environment across the industry, we expect to see higher net inflows across NGI's Partner Firms in 2026. Turning to Slide 7. Alternative asset managers who aim to generate positive absolute returns for their investors across all market cycles have a strong alignment of interest in the economic performance of their strategies and the returns they generate for their investors. For Navigator's portfolio of managers, this is typically reflected in higher and more sustainable fee yields, which Navigator and our shareholders are a direct beneficiary of. Here, we show Navigator's underlying revenue composition, taking Navigator's share of the revenues of our Partner Firms, including Lighthouse on a calendar year basis. It's these underlying revenues that ultimately drive earnings for our Partner Firms and result in higher distributions to Navigator, but predominantly -- the latter predominantly occurring in the second half of every financial year. 2025 adds yet another year of strong underlying revenue performance to this chart, further illustrating the power and predictability of Navigator's resilient and growing model over the short, medium and longer term. After a very strong year in CY '24, total underlying revenues were up again in calendar year '25, with a higher relative contribution from base management fees and a lower contribution from performance fees. The average total fee yield, the light blue dotted line, over 5 years increased by 5 basis points to 1.14%, driven by higher management fees and relatively stable performance fees. NGI's Partner Firms have shown consistent growth in recurring management fee revenues, the dark blue bars, in line with higher AUM. The average management fee yield is 74 basis points within the range of 72 basis points to 75 basis points over that 5-year period, reflecting a marginally higher average fee yield than the prior corresponding period. Our Partner Firms have a consistent track record of producing strong risk-adjusted investment performance and hence, performance fees across market cycles and over multiple years. As a result of that, Navigator generates resilient underlying performance fee revenues annually as evidenced by the light blue bars. The performance fee yield, as shown by the gold line at the bottom of the chart, has averaged 39 basis points and in a relatively narrow range of 26 basis points to 47 basis points over that period, reflecting the relative stability and expected recurring nature of that revenue stream, especially through challenging investment cycles. The performance fee yield for calendar year '25 was 41 basis points, slightly higher than the long-term average, but lower than the prior year of 47 basis points. Unlike performance fees from strategies that are benchmarked to a market index, the absolute return nature of the strategies managed by our Partner Firms and the structure of their performance fee mechanics as we outlined at our November Investor Day, drive these outcomes and have now done so for longer than 5 years. Moving forward and based on the long-term track record you can see here, we think it is reasonable to expect performance fee revenues within this range, providing a resilient source of recurring income for Navigator. In the appendix, we present the latest numbers on the lack of correlation across the NGI Strategic Partner Firms. On Slide 8, we show the segment revenue composition for NGI Strategic and Lighthouse across management fees and performance fees. In line with growth since calendar year '21 and prior, Navigator has exhibited consistent continued underlying management fee growth across both NGI Strategic and Lighthouse, with an aggregate USD 216 million revenues generated for calendar year '25, up 9% on the prior year and slightly ahead of the 3-year growth rate of 8%. As you can see on the right-hand side chart, the rolling 3-year average performance fee revenue across the business segments has continued to increase and now sits at USD 101 million from USD 94 million in the prior corresponding period. After a historically strong calendar year '24, overall performance fee revenues decreased by 7%, with NGI Strategic generating performance fee revenues more in line with its 5-year average. It was pleasing to see Lighthouse performance fees increase again, up 23% by prior corresponding period and a 16% across the calendar year -- increase across the year -- calendar year. This result reflects an increasing trend towards the growth of Lighthouse's direct hedge fund business, which incorporates a performance fee model for investor alignment rather than a management fee-only model. As investors saw from our Q2 AUM and performance update released last month, rather than the reliance on an outperformance of any one strategy, Lighthouse is exhibiting strong risk-adjusted returns across almost all of its strategies, exceeding their respective 3- and 5-year averages in 2025. The broader diversification of the Lighthouse performance fee revenue stream is encouraging as we enter 2026. With additional new products and a continued supportive environment for delivering strong investment returns, we remain confident in the ongoing success and growth of the Lighthouse platform. Importantly, Navigator continues to see no fee pressure in either base management fee rates or performance fee rates across our Partner Firms. And in fact, we're observing increases across some strategies and new products as investors are prepared to pay managers who can truly generate non-market-linked investment returns across cycles. Amber will address the updated fee rates across our business segments during the presentation of our latest key metrics. Turning to Slide 9. You can see the earnings power of the diversified portfolio. In the first half '26, we saw strong adjusted EBITDA across both business segments. NGI Strategic increased its earnings contributions by 32% to $19.3 million due to higher cash distributions received during the 6 months. Lighthouse generated a record $28.9 million EBITDA during first half, an increase of 9% from prior corresponding period, driven by the higher management and higher performance fees across the platform, with the operating margin in line with PCP. As noted last May, while Navigator continues to benefit from a resilient and diversified earnings base, subject to market conditions and the timing of revenue receipts, Navigator expects full-year adjusted EBITDA to be lower than FY '25. This reflects comparatively lower investment performance in the NGI Strategic segment relative to the prior strong year, which may result in lower profit distributions in the second half compared with yet again a very strong H2 FY '25. We are very pleased with the ongoing consistent investment performance, management and earnings generations by our Partner Firms, which continue to prove to be some of the leading alternative asset managers globally in their respective area of specialty. There has been and there will continue to be material long-term value accruing to Navigator shareholders from the ongoing organic growth of our Partner Firms who continue to generate that performance and launch new strategies and also a focus on reinvesting our operating cash into new Partner Firms that we source the diligence and execute to further diversify and grow the NGI portfolio and increase the scale of our earnings. Ross will talk more about this, but we remain focused on continuing inorganic growth in 2026. Finally, it's particularly important in this investment environment of heightened volatility to recognize the value of diversification that is generated by a portfolio approach like that, that Navigator adopts. This ensures that overall resilience and consistency of earnings should be able to be maintained across market cycles. And secondly, with stable or indeed increasing fee rates and a resilient investment performance from strategies that are benchmark unaware, Navigator's business model can produce growing revenues, higher fee yields and the resulting increased cash earnings over the medium and longer term. Now, I'll hand over to Ross to provide the NGI business update for the half. Ross Zachary: Thank you, Stephen. I'm thrilled to have the opportunity to review more about our business and highlight how Navigator's scale and diversification continue to drive value. On Slide 11, what is clear here is that Navigator operates and partners with large established firms who are leaders across a diverse range of unique alternative investment strategies. These businesses deploy well over $100 billion in time-tested strategies across global markets designed and refined over decades to generate strong risk-adjusted returns. Dispersion within and across asset classes, market volatility, interest rate changes, economic cycles and geopolitical uncertainty, all present opportunities to provide their clients strong risk-adjusted returns. These are scaled but growing firms with an average of over $8 billion of firm-level AUM. In today's industry, it's the scale and the related resources that are more critical than ever to attract and retain talent and generate strong results. Lighthouse and our Partner Firms, all benefit from these attributes. In addition, NGI and our Partner Firms have a clear competitive advantage through our partnership with Blue Owl's GP Strategic Capital division. Their 55-plus person business services platform continues to benefit us across various verticals such as capital introductions, operational and technology best practices as well as very targeted human capital advisory engagement. If you flip to Slide 12, we have a snapshot of the business composition today. Across the NGI Strategic and Lighthouse segments, our earnings are generated from over 40 alternative investment strategies delivered through almost 200 products globally. Not only is the business diversified across liquid alternatives, public and private credit, specialized private equity, real estate capital solutions and a variety of commodity strategies, but it also generates revenues through a wide variety of fee terms and structures. Today, an estimated 33% of ownership-adjusted AUM in the NGI Strategic segment or 13% across the entire Navigator business is in long-duration products with highly visible sticky revenues. We expect this contribution from this high-quality and stable earnings stream to continue over time as we add Partner Firms and the existing Partner Firms further evolve their product set. We cannot emphasize enough that the diversification available to us by partnering with independent firms has and will continue to benefit the company and our shareholders as we execute our growth initiatives. Please flip to Slide 13. We'll provide a few select highlights of activity during the period. Our Partner Firms continue to be at the forefront of their respective strategies and prove out why they are leaders in the alternative investment industry globally. During the period, we have seen our partners at 1315 Capital continue to deploy capital into innovative, growing health care companies as well as realize existing portfolio companies in a difficult environment. Another private markets Partner Firm, Marble Capital continues to illustrate their leadership position in a large, highly fragmented asset class with their unique strategy as they specialize in providing capital solutions to high-quality real estate sponsors in regions of America that are experiencing strong, resilient economic growth, coupled with an undersupply of housing. They recently announced that they deployed over $350 million in new investments in 2025 across over 8,300 units, illustrating their impressive ability to execute a focused and differentiated strategy at scale. Similarly, Invictus Capital Partners' highly differentiated approach to residential real estate credit continues to attract the most sophisticated long-term oriented institutional clients in the world. This is evidenced by a recently publicly announced mandate for Moore Capital. CFM, one of the Partner Firms acquired in the NGI Strategic portfolio, has continued to demonstrate their clear leadership position in the global hedge fund industry. With over $20 billion of firm-level AUM today, their investment results have remained exceptionally strong, which, as you can see here, continues to result in winning several industry awards in this past year. Please flip to Slide 14, and we can review the overall growth of the business this year. On Slide 14, you will see that excluding the sale of Bardin Hill, which closed in October, both the NGI Strategic and the Lighthouse segments generated positive organic growth in the period. We are very pleased to report this 5% increase in ownership-adjusted AUM or 7% when adjusting for the Bardin Hill sale in a challenging backdrop for the industry. Our private market Partner Firms are in the process of raising capital for their flagship funds, and we expect to see additional contribution from these efforts in the second half of our fiscal year. Lighthouse continues to demonstrate their long-term proven track record of innovation by creating and offering new hedge fund products, which leverage the breadth and sophistication of their platform to meet both existing and new client demand. It is important to remember that the underlying returns of Lighthouse, our Partner Firms and the public markets show very little correlation to one another. And therefore, we continue to see investment performance across the group as a key driver of AUM and revenue growth. Please turn to Slide 15 to review a cross-section of recent investment performance. This slide summarizes certain indicative performance across both segments. The NGI Strategic composite is comprised of flagship strategies in the NGI Strategic portfolio. And although it generated lower performance in calendar year '25 as compared to recent history, you'll see the 3- and 5-year performance not only illustrates the strength of the track record across this business, but also how well positioned they are for continued growth and performance. At Lighthouse, performance was particularly strong in 2025, with hedge fund products delivering attractive risk-adjusted returns and a broad contribution across their teams and sectors. From what we see, the environment to generate strong returns remains in 2026. This performance data clearly illustrates the power of our model and how Partner Firms that show low correlation to one another can generate the continued durable results for NGI shareholders over time. If you go next to Slide 16, we can touch briefly on our growth strategy and our focus on continued growth through acquisition. The criteria you see on Slide 16 are informed by our deep experience in partnering with, investing in and operating alternative investment management firms for over 20 years. We continue to build and work through a very active pipeline of established and growth-oriented firms who are acutely focused on positioning themselves for sustainable long-term growth. Today, this pipeline is broad and includes both firms that specialize in areas of private market alternatives that we believe our partnership may add value to, as well as certain liquid alternative firms that we think may provide diversification benefit and present the potential to enhance the growth profile of our business. Although we increasingly recognize a trend of larger alternative asset managers capturing investor market share, we are focused on a wide universe of specialized proven businesses that will capture share and add tangible value to their clients over time. When identifying new potential Partner Firms, our goal is to continue to increase the stability, durability and growth profile of NGI's earnings, which in turn strengthens our competitive position to make further acquisitions over time. Thank you. Amber, I'll turn it over to you for the financial results. Amber Stoney: Thanks, Ross. As Stephen and Ross have covered, we've seen continued momentum across the business, and I'll now take you through the financial results for the first half of FY '26. I'll focus on 3 things: earnings outcomes, what drove them and the strength of the balance sheet supporting our strategy. As outlined on Slide 18, adjusted EBITDA increased 17% on the prior comparative period to $48.2 million, driven by a combination of very strong Lighthouse performance fees, solid management fee growth and higher distributions received from our NGI Strategic Partner Firms. Lighthouse performance fees were $39 million for the half, up from $31.7 million in the prior period, reflecting strong investment performance across the Lighthouse platform. Lighthouse management fees also grew by 8% on prior comparative period, consistent with its higher AUM. From NGI Strategic, we have received $22.3 million of distributions compared to $16.6 million last period. The majority of the increase came from our private market Partner Firms. These revenue increases were partially offset by higher costs. Employee expenses increased by $6 million, largely reflecting the higher bonus accruals tied to lighthouse performance fees. Other operating expenses increased by $4.4 million, driven by higher IT spend, third-party distribution costs and professional fees. In terms of the balance sheet, net assets were $795 million as at 31 December 2025, which is materially the same as it was at 30 June. On Slide 19, we look at both statutory and non-IFRS performance results. Statutory results show a net loss of $4.3 million compared to a significant profit in the prior period. This outcome is primarily due to movements in fair value of investments recognized through the P&L. Such variation in fair value from period to period is indicative of the significant growth in our balance sheet, with NGI currently holding $670 million in investments in our Partner Firms. Importantly, when we adjust for this significant non-cash item as well as other non-recurring items, adjusted EBITDA increased 17% to $48.2 million, highlighting the underlying strength of the operating performance across both the Lighthouse and NGI Strategic businesses. Adjusted NPAT for the half was up 7% to $29.8 million. While this also reflects improved operating earnings, it is impacted by higher interest costs and tax outcomes relative to the prior period. The adjusted EBITDA and NPAT measures are intended to reflect the underlying operating performance of the business for the half, while the statutory outcome includes items that can introduce significant volatility period-to-period given the size of the assets that we hold. Turning to Slide 20. We take a closer look at segment performance. This table summarizing 3 comparative periods shows how diversification across the NGI Strategic and Lighthouse businesses contributed to group earnings, with both improving on the prior period. Lighthouse delivered improved results from operations, supported by higher management and performance fees, with a small reduction in margin compared to the prior half due to increased operating expenses. NGI Strategic was the key driver of group profitability in half 1, with distribution income increasing 34% on prior comparative period and reflecting resilient receipt of earnings distributions from our Partner Firms, particularly in private markets. Looking ahead to the full year, with NGI Strategic expected to contribute a larger share of earnings in the second half, we expect the group's full-year adjusted EBITDA margin to trend closer to the FY '25 margin of 56% due to the expected lower weighting of Lighthouse in the second half results. Slide 21 focuses on the momentum in revenue growth across our key revenue streams. For NGI Strategic, we've seen strong and improving distribution outcomes over recent years, reflecting the quality and diversity of our Partner Firms and increasing exposure to private market strategies that generate meaningful cash earnings over time. This multi-year growth trend continued into the first half of FY '26, with distributions again increasing compared to the prior comparative period. That said, distributions can vary materially period-to-period depending on Partner Firm performance and operating outcomes, the strategy mix and product-specific fee realization. Total distribution income in FY '25 was particularly strong. And while we saw a further uplift in half 1, we note that distributions received in half 2 may be lower than in the prior comparative period. As Ross noted earlier, calendar year '25 composite performance for the NGI Strategic portfolio is lower than for the prior calendar year, and that is likely to have some impact on distributions received in the second half of our financial year. Given the inherent variability of underlying Partner Firm performance and their distributions, as always, forecasting NGI Strategic income for the remainder of FY '26 is difficult. I've previously noted that once again, Lighthouse has delivered strong performance fee revenues in the first half. We are pleased to see the 8% growth of management fees for Lighthouse. A change in AUM mix has improved the average management fee rate this half from 54 basis points to 56 basis points. And combined with continued AUM growth, this has underpinned this increase in fee revenue. The next slide, Slide 22, summarizes the key financial metrics underpinning profitability across both businesses. Starting with NGI Strategic, ownership-adjusted AUM was $11.7 billion at period end. The average management fee rate is approximately 1.2% per annum, which is up 2 basis points from 30 June. The average performance fee rate and AUM that can earn performance fees have held steady at 17% and 80%, respectively, and the 33% to 43% indicative margin range is slightly down on the prior year. Overall, the metrics for the NGI Strategic business remains strong, with investment performance and AUM growth through net flows being 2 of the key variables to impact future distribution outcomes. For Lighthouse, AUM was $17.3 billion, with an improved average management fee rate of 56 basis points per annum. Approximately 23% of AUM is eligible to earn performance fees as at 31 December, with almost all of that AUM at or above high watermarks. Combined with positive investment performance across key Lighthouse products for the 2025 calendar year, this has led to $39 million of performance fees recognized for Lighthouse in this first half. Across both segments, these metrics reinforce the scalability of the platform and the strong conversion of AUM into earnings and cash flow over time. And I'll finish with the balance sheet on Slide 23. We continue to operate with a strong balance sheet, supporting both organic growth and new partnership opportunities. Net debt to adjusted EBITDA was 0.6x at 31 December, well within our target leverage range of up to 1.5x. The group has access to a $100 million credit facility with a 2029 maturity, providing flexibility to fund growth initiatives as they arise. As announced in November, the Board has suspended dividend payments, with the last dividend payment paid in September 2025. This decision reflects our view that the best use of capital at this point in the cycle is to reinvest in growth opportunities and compound long-term shareholder value. To wrap up my section, we've delivered a solid first half with strong underlying earnings and a balance sheet that keeps us well positioned for the opportunities ahead. And with that, I'll hand over to Stephen to take you through the outlook and closing remarks. Stephen Darke: Thank you, Amber. So as summarized on Slide 25, in the first half of FY '26, we saw consistent and continued financial outperformance driven by a step-up in the Lighthouse business and higher cash distributions received in NGI Strategic during the first half. We saw continued robust investment performance generated across our diversified portfolio of Partner Firms, especially across the Lighthouse strategies. NGI is operating in an environment that continues to benefit leading managers globally with higher volatility and dispersion driving an increased performance by leading alternative asset classes and a greater investor appetite for these strategies. NGI saw an increase in the average management fee rates across our business segments and the maintenance of our flexible balance sheet, the payment of the remaining deferred considerations on the 2022 transactions and the ongoing generation of significant cash flow from our portfolio. NGI is a scaled and diversified platform, which continues to exhibit organic growth across our portfolio of Partner Firms and is positioned for further acquisitive growth. Turning to Slide 26, which you have seen before, it shows how Navigator and its portfolio of Partner Firms have opportunities to drive growth and to compound earnings at a high rate of return. As we do so, the scale, diversification and resilience of our business increases. Navigator's growth will be driven by a number of key factors: one, growth in the broader alternatives industry in which we specialize, increasing demand for our absolute return-focused Partner Firm strategies. The 2026 investor allocation plans by asset class are set out in the appendix at Slide 33, with broad positive net interest in increasing allocations across alternatives, in particular, hedge funds and private equity. There are tailwinds supporting this increased interest and the ability for our leading alternative managers to maintain or increase fee rates, and they include growing investor appetite from wealth management investors and insurance firms globally and our Partner Firms operating in sectors, benefiting from rich trading opportunities and increased volatility, driven by elevated uncertainties in relation to the impact of artificial intelligence, geopolitics and the implementation of fiscal and monetary policies globally. Secondly, continued organic growth and increased scale of our Partner Firms, and that can be generated by strong performance, net inflows, new product launches and increasing their operating margins. Thirdly, such growth could be supplemented opportunistically, and it is by value creation from Navigator and/or Blue Owl's business services platform, which aims to accelerate partner firm trajectory. And not just some of the services that Ross mentioned earlier like capital introduction, there's also a dedicated AI advisory and data science group providing cutting-edge advice to all of our Partner Firms and all of their Partner Firms around how to address artificial intelligence in the new world we all find ourselves in. Finally, there's an addition of new Partner Firms can drive growth to expand the portfolio or indeed, if the opportunity arises to invest additional capital in our existing Partner Firms to support their growth. During 2025, we partnered with 13 Capital, and we have a high-quality pipeline of opportunities, but remain prudently focused on investments that satisfy our criteria. In terms of the outlook for Navigator for FY '26 on Slide 27, we expect our portfolio of firms to continue to perform across market cycles as they have done historically at both the management company level and an investment strategy level. Lighthouse continues to focus on its core mission of generating attractive returns primarily through idiosyncratic risk for its clients, providing relevant and innovative solutions for its clients across array of strategies and aligning as long-term partners for their clients' portfolio managers and other joint ventures. We believe this emphasis will allow Lighthouse to potentially add meaningful scale and diversification to the business in the future. Unlike other listed asset managers in Australia that may benefit from a sustained risk-on period for equity and/or bond markets, NGI's public markets' focused firms show resilience in more difficult time periods, which can provide diversification. In terms of execution of growth strategy, we are focused on acquisitive growth in '26 and to look to add new differentiated Partner Firms that meet our investment criteria and further diversified our earnings. The addition of new firms and the expansion of our portfolio will further Navigator's ambition to be the leading alternatives manager listed on the ASX and a leading partner to asset managers globally. In terms of funding growth opportunities, we're generating strong operating cash flow. As Amber says, we have a flexible credit facility only drawn around 30% currently and all deferred consideration paid during the year on our acquisitions with only an earn-out left in relation to 1315. In terms of our financial outlook, while Navigator continues to benefit from a diversified and resilient earnings base, subject to market conditions and the timing of receipts, we expect FY '26 adjusted EBITDA to be lower than FY '25, and it reflects the comparatively lower investment performance in the NGI Strategic relative to the prior year, which may result in lower profit distributions compared with a strong H2 FY '25. Importantly, though, we remain highly confident in the outlook for Navigator and its Partner Firms to deliver strong returns across the cycle, including during periods of market volatility. Before I conclude and open to questions, I want to revisit on Slide 28, why we think Navigator is a unique and compelling investment proposition as the only pure-play alternatives firm on the ASX. Navigator and our portfolio of global Partner Firms have deep expertise across diverse sectors of the alternative industry and established track records of generating returns. Management continues to focus on acquisitive growth, but on the right terms and with the right Partner Firms. Along with the consistent organic growth across the business segments, we continue our progress towards achieving our 2030 target of over USD 45 billion of high fee-paying AUM. Our portfolio is very well positioned to benefit from the significant structural tailwinds driving alternative asset management and over the medium and longer term to deliver superior performance for its shareholders. In particular, in this world of rapidly changing technology and the advancement of artificial intelligence, Navigator should be expected to benefit both in terms of investment performance, particularly with our underlying quantitative strategies and improved processes and efficiencies that are implemented and will be implemented at our Partner Firms. When advised by leading AI advisory and data science groups by the BSP, these factors have the potential to improve the growth trajectory and operating margins of our Partner Firms and Navigator over the longer term. Thank you for your time, everyone. I would now like to open the call to questions. Operator? Operator: [Operator Instructions] The first question comes from the line of Nick McGarrigle with Barrenjoey. Nicholas McGarrigle: Maybe just a question around, just to clarify the relationship with Blue Owl and so much is there involved with private credit investments. My understanding is that's a completely separate segment to the Dyal business effectively that you're exposed to. I have been getting a few investor questions about that. So, it was worth just getting you guys to clarify the current position that they're in on the private credit side and how that relates to your business? Stephen Darke: Yes. Thank you, Nick. I, obviously, been following a lot of that press. I think everyone understands this. But Blue Owl hold their stake in Navigator by their first GP staking fund owned by institutional investors rather than the Owl balance sheet. That fund does not have an end date. Owl are working with their portfolio companies, including NGI to help maximize value for their own investors like any asset management business. Their manager sourcing and the BSP are all part of that GP staking business. It operates independently and not part of the private credit business. Just stepping back, though, and so really, very little, if any, impact on Navigator. I don't really want to comment on the specific private BDC capital return that's in the press right now as I'm not an employee or a spokesperson or an investor in that vehicle. But I would urge people to review very carefully what has happened. There's a lot of conflicting reports about the facts and the outcomes. But very, very clearly aware of all the noise and it has no impact on Navigator and the way that we work with Blue Owl as frankly, on that GP staking side, without a doubt, the global leader and strategic partner. Just more broadly, though, while we're on that topic, Nick, it's worth talking about Navigator and private credit. And I'll hand over to Ross. But even though, on Slide 12, we referred to sort of the asset class AUM as including public and private credit at sort of 31% of the portfolio, everyone should realize that most of that is really publicly traded fixed income as part of the hedge fund portfolios and maybe we should break it out going further. Marble and Invictus are not private credit. They're specialized real estate credit firms and both performing well in their sector. I think out of all of our managers, Waterfall, who I have an affinity for all the way back to 2005, given their focus on structured credit and ABS, they do have private credit strategies. They represent $13 billion of our $84 billion at a partner firm level. It's been challenging, but they've seen these difficult environments before, and they have a long track record of investing well for their investors. And I know that they're focused on ensuring their assets and portfolios are performing. So Navigator, not a large exposure to that space. And even within it, not every private credit strategy is the same, not every manager is the same. And there are opportunities, frankly, right now in some sectors and challenges in others. So, I just thought it was important to highlight that, Nick. I would say that what's happening, I think, globally around here is just, frankly, evidence of a liquidity mismatch between various GPs putting assets that are illiquid into strategies that are more liquid. There's always going to -- we saw this in the GFC. There's always going to be tension around that structure. Anyway, apologies for the long answer, but I think it's worth dealing with both U.S. private credit as well as Blue Owl in the same breath. Nicholas McGarrigle: That's helpful. And then you've given, I think, the performance fee number for the strategic portfolio in the first half. and then we've guided -- you guided to potentially lower distributions in the second half as a flow-through of that and group EBITDA being down year-on-year. looks to me like the delta on the performance fee is only $15 million, which on a look-through basis doesn't imply that big of a step down for distributions in the second half. can you just talk through the building blocks to the assumption around the second half Strategic profit? Because I guess that has to come down quite a bit given you've had such a strong first half in Lighthouse. Stephen Darke: Yes, there's a lot in there, Nick. Maybe I'll start and then Amber can perhaps address more on the building block side. I think there's a couple of slides in the deck that just -- that indicate. One of them is the composite return slide where you see across the Navigator Strategic portfolio numbers in more of the 6% to 7% net return range, which are, as Ross pointed out, lower than the 3- to 5-year strong averages. We have to remember a couple of things. That's only around $20 billion of the overall AUM that, that represents. Like, for example, the private market firms that we all hold are not represented in that composite return, and they're performing well. Ross can talk about that. The second thing I would say, if you have a look at those indexes at the bottom of the page, the indices there, the 6% is well in ahead because you have to remember, there's very little volatility, mostly alpha ahead of those hedge fund indices and also really ahead of Lighthouse's long-term averages. So, still a great result out of the portfolio. As a result of that, though, given the performance fee mechanics, you do see an impact on expected performance fee revenues that then translates through to earnings. But to your point about quantum, and I will pass over to Amber, out of those performance fee revenues, obviously, then bonuses are paid. And the great thing about the business models is that we have a variable cost base that's linked to revenue. So to the extent you do see top line revenues, performance revenues come down, we will see compensation relevant to those revenues also comes down, which helps buffer the margins and the operating -- the profitability at each of our Partner Firms and then ultimately, also at Navigator level. But Amber, do you want to talk maybe about the building blocks and how we're thinking about the second half? Amber Stoney: Yes. I guess to probably zero in on Nick's point, looking at Slide 8, just the difference between the Strategic going from $87 million to $72 million, with that $15 million delta you referred to, the thing that we don't have the clarity on right now is how that revenue translates into profit distributions to the point. So, comp decisions are still to be made and depending on which managers are contributing to that and how they actually comp their staff in relation to those fees can have a different impact on distributions versus just pure change in revenue. So, we're still waiting to see some of those come through, and we'll have a clearer idea sort of as we normally do come April, May. And as you know, our usual practice is to give an update at that time when we've got more clarity on how that flows through to earnings. Stephen Darke: I'll just supplement on that topic actually, while the operator gets to the next question. Back in May of last year, the investors may remember that during the earnings upgrade that we gave to the market then in relation to FY '25 that we called out that there was particularly strong distributions during that year, not something that can't be repeatable, but we did think there might be a little bit lower distributions in the year and we now find ourselves in a situation where that's the case. But none of it is concerning. And the market consensus, as you know, Nick, is around the $103 million to $106 million. We feel very good about that level. We just have to realize that unlike a lot of the long-only managers where performance fee revenues can go from 100 to 0 extraordinarily quickly, we can see a little bit of variability. And I do love Slide 7 because it shows that sort of range of performance fee yield, and you'll see that we're 41 basis points this year versus 47 last year. So, you've got a 6-point move. To Amber's point, it's got to play out to earnings, which will cut the delta. It won't be 15. It will be way less than that. But regardless, you can't imagine it. You can't expect it to go from the bottom left to the top right every single period. So yes, we feel good about this year in the portfolio, but we have to call out a slightly lower second half distribution versus, we believe, the prior corresponding period. Ross, we've crossed over into a lot to do with NGI Strategic in the second half. Is there anything you want to add to a very important question from Nick? Ross Zachary: No, not too much to add. I think you guys covered it pretty well. My main point would just be to echo what you said, Stephen, which is despite a lower year on a relative basis, still a very strong year across the portfolio as a segment as well as the Lighthouse business, which again just shows the potential as well as this year's model playing out. So, happy to answer further questions though. Operator: Next question comes from the line of Tim Lawson with Macquarie. Tim Lawson: Can you just help us understand -- obviously, at 17% EBITDA -- adjusted EBITDA increase versus the only 7% at the adjusted EPS line, can you just talk about the moving parts across the 2 halves to make that impact? Amber Stoney: Yes. So, below the line from an EBITDA perspective, obviously, the key impacts on that is depreciation, amortization, interest and tax. So, our interest expense is a little higher this period compared to the prior half. We've been more drawn on the loan facility comparatively speaking. So, we've ended up with a higher interest expense, which has contributed to that slight difference. I think our depreciation is also slightly higher. So as we continue to build like, particularly Lighthouse continues to build out its offices around the globe, we spend money on fit-outs and various equipment, and we'll depreciate that over time. So, we have seen a marginal increase in depreciation. And also, our tax outcomes can be a little variable, just the nature of the U.S. income that we get. We basically invest through partnerships that provide underlying information on tax, and that can get trued up from period to period. So, we've just had a bigger impact from a tax expense perspective this year as we've gotten updated underlying information through. So, each of those 3 are slightly higher compared to the prior year, which has created a 7% versus a 17% growth. Tim Lawson: That's great. And just maybe some color on the fact that the facility was drawn more this half. Amber Stoney: Yes. So, I mean, we basically paid out the remainder of the Invictus, which was almost half of what the original investment was in August. So, given our cash flow is always lower in the first half of the year and significantly higher in the second half of the year, we've drawn on the facility just and that's the beauty of the flexibility around that. So, we're continuing to pay it off. We've already paid down some of it. And as and when we get more distributions through, that will be paid down. Tim Lawson: Okay. And then the second question just on the deals pipeline. Can you maybe, Stephen, talk a little bit about how you're seeing opportunities out there and Ross? Stephen Darke: Yes. I'll hand that to Ross actually. Ross Zachary: Tim, thanks so much for the question. I would start off just to say that there's really been no slowdown despite a little bit of choppiness as you guys covered in kind of private credit landscape headlines as well as continued, I would say, both optimism, but uncertainty in kind of private markets and private equity in general. The pipeline is full as ever, with the key theme of diversification. It is concentrated in private market alternatives. So, specialized private equity continues to be an area that we really find attractive to add, but we're also spending time in real assets and some areas in private credit. But as Stephen alluded to in the answer about Blue Owl, areas of private credit that, number one, are very specialized in nature, given our focus. But also we are really not looking at Partner Firms who are targeting the retail alternatives trend or kind of either in the BDCs in the U.S. or other vehicles you're familiar with in Australia to deliver that. These are mostly private credit firms that are both specialized and partnering with institutional firms -- institutional clients such as insurance companies and sovereigns and things like that. So it's attractive. And what I would say is, as Stephen said in the outlook, we think 2026 will be a year where we hope to continue to allocate capital in a similar fashion that's been working as you've seen with the private market alternative firms and the NGI Strategic portfolio. So, remain hard at work at a pretty exciting time right now. Operator: Next question comes from the line of Fraser Noye with UBS. Fraser Noye: Just a couple of questions from me. Stephen, just on the outlook for lower adjusted EBITDA in FY '26, it's consistent with your prior messaging. Can you just give us some color on the Partner Firms or the asset classes which are driving this? I know you've previously spoken about weaker commodities being a factor. Is that still the case? Stephen Darke: Fraser, thanks for the question. As you know, challenging to speak specifically about managers, but I would say, yes, in certain sectors, and you just named one of them, overall, it's just been challenging. Let's just take commodities. Challenging to trade energy, to trade precious metals, to actually make money. I think it's not just one manager, it's a lot of managers across the industry globally. So, I would say that's the case. But like as you can tell by the sort of amount of AUM at Lighthouse that's above high watermark and also Ross can talk about the other strategies. And he also called out that really only one of our Partner Firms has a mainline strategy that's negative. All the others are positive. And I think that really is a good reflection on diversification and resilience. And our M&A, to Ross's point, is going to extend that and to increase that. But yes, there is a little bit of weakness in areas like that, Fraser. Ross, is there anything you want to add on that? Ross Zachary: Yes. I mean, again, I also won't speak to any individual Partner Firms' performance, but mostly not because we can't, but also because it really is a portfolio approach. And we will see in any kind of 3-, 5-year period, a potential year where certain strategies would naturally just have a lower absolute return. Still, as Stephen said, doing their job, generating strong risk-adjusted returns in their particular specialty. But given the diversification across this, that will happen. And then in a year like this year, it just depends on the overall contribution. But just to reiterate, the momentum across these businesses is really strong. The performance outlook from an investment and financial receipts is really strong given the market environment. And we haven't touched on it a lot yet, but the investor appetite and outlook for allocating new capital into the strategies, including the one you guys have mentioned, is also really strong because the opportunity sets there. So it really is just about communicating clearly with yourselves and our other shareholders rather than anything indicative to the future outlook of the company. Amber Stoney: Yes. I was probably also going to say, listening to ourselves, we might be coming across overly cautious, and that's not really meant to be the case. I think we're really just trying to reiterate the previous guidance that you pointed out, where we just want to make sure that we've had a really strong half and that it's a balanced look at the remainder of the year. So... Fraser Noye: Understood. And just secondly, just keen to unpack the fair value adjustment to financial assets and liabilities. I appreciate this can be volatile period-on-period and is non-cash. But can you just give us some color on the assumptions that's driving this over the first half? Amber Stoney: Yes. So, we have a process that every half, we use an external valuer to value the investments for us. They give us a valuation range, and we take a pretty disciplined approach about choosing midpoint unless there's something to indicate otherwise within that range. And one of the key inputs to that is underlying cash flow forecasts. And you can see that from the composite performance, that's one of the key investment performance that feeds into those forecasts. So the fact that we have a slightly lower calendar year '25 composite return versus FY '24 really feeds into how some of those models actually work. So, it's not that it's a long-term expectation of a decrease in value. It's really sort of a bit more of a mathematical function of the inputs that feed into that model from that perspective. And we take a pretty conservative approach. We use pretty discount rates that incorporate a fair bit of risk in them. So, we want to be quite conservative with our valuations from that perspective. And so it just does change period-to-period as some of those inputs change, including other inputs like market multiples, cost of capital, all of those sorts of things vary from half to half. Stephen Darke: And just to add to that. And I'm by no means an accountant, but it's interesting in the Navigator's sort of financial accounts, you've got a number of managers who changes in unrealized valuation go through the P&L. Then you've got some other managers and actually, those managers go through other comprehensive income. Those managers were marked up on our private market side. So, our net assets were flat period-on-period. We want the market to look at this as a portfolio. Adjusted EBITDA -- sorry, statutory EBITDA last year was such a high -- I never quoted the number. I think it was $160 million, but we never used that number. We like to -- you look at a cash flow proxy and look for adjusted EBITDA and adjusted NPAT as a better way to look at the business. So yes, it's just a situation where I think that the reaction to the NPAT situation is not really reflective of the overall performance of the business. But we're very cognizant of the statutory result. Operator: Next question comes from the line of Laf Sotiriou with MST Financial. Lafitani Sotiriou: Just wanted to follow up, Ross, on some of the NGI Strategic portfolio potential acquisitions you're looking at. Could you give us a bit more color? Are there 2 or 3 live transactions that you're possibly looking at? Are any of them towards the latter end of BD, and what's the market environment like? Is it -- is there a shortage of opportunities coming being presented? Or is it price that's the issue? If you could just give us a bit of color about the market environment and just specifics around the number of transactions you're looking at? Ross Zachary: Yes, no, absolutely. And Laf, thanks so much for the question. Maybe I'll start with the second, if that's okay, on market environment. From what we see, not only for ourselves, but across other groups we kind of speak with on a kind of collegial basis in the industry, 2026, there is actually a pickup in activity. I think across real estate firms and areas of real assets, firms are increasingly confident in their existing portfolios and outlook and therefore, seeking partners. Likewise, in specialized private equity, there's been both sector as well as asset class kind of pressure on them. And I think a lot of -- that's always been a big part of our pipeline, but I think we're seeing very strong firms coming out of that looking for a partner and ready to transact in 2026. So, that's quite active as well. And the overall outlook, just given all the uncertainties both I and Stephen mentioned on the call in the general markets have these firms on the front foot. They're speaking with institutional investors and other groups all the time, and they have a lot of demand, and therefore, they want to prepare their business with either balance sheet capital and/or a strategic partner to capitalize on that. So, it remains a really active industry overall in terms of finding strategic partnerships. In terms of our pipeline, like we said, it's probably -- I'm going to use rough numbers. Hopefully, it's helpful to illustrate it. Probably 70-30 private markets versus liquid alternatives, which is a bit of a pickup in liquid alternatives, quite frankly, again, because we're seeing firms in demand and growing and therefore, looking for a partner. And there are some areas such as some more specific sector long/short, some areas of quant that we're not in, some areas of credit, such as areas of credit relative value and also just areas of private/hybrid credit that we don't have represented that are really interesting. So, those are there. We continue to like areas of the private markets that are just specialized. So, that could mean more sector specialists like 1315 Capital in health care. but maybe areas of other broad sectors such as either technology, business services, defense, things like that. Those are the types of sector-specific private equity firms in the pipeline. And then we also like kind of growth and even secondaries when we can access them. So, there's a couple of those. I would say just being fully transparent, there's 2 to 3 opportunities that are developed, but maybe hedging, but also just being completely open and candid with you, Laf. There's always about 2 to 3 that are developed just given we're pursuing things. So, there's really no way for us to know that those will transact, but we're feeling really optimistic for this year that we can add to the portfolio. I hope that helps. Lafitani Sotiriou: No, that does. And can I just follow up on Lighthouse, Stephen, just more so? There's a comment in there that active current pipeline focused on new products and institutional mandates. Does that still extend to possible joint ventures? If you could give us an update on that, please? Stephen Darke: Yes, no, happy to do that, and I'll address the sort of the Fortress joint venture shortly. But yes, we're seeing elevated interest -- or Sean and team are seeing elevated interest at the Lighthouse level and are in advanced pipeline discussions in relation to North Rock's beta 1 product, which is sort of the combination of sort of select beta and alpha for institutional investors, seeing a pipeline of investors interested in investing in that product. Also interestingly, and it's the first time I've sort of heard this, but accelerated interest in some of the offshore hedge fund strategies. So certainly, according to Sean and the team, for those hedge fund platforms that had non-U.S. exposure, non-U.S. strategies, there was actually more alpha to be generated and higher returns for investors in either global strategies. So, for example, Penglai Peak, the Japanese multi-PM strategy that sits within Lighthouse, has seen some pipeline activity and interested investors in that product, which is fantastic. Also, despite the timetable being longer than expected, as you point out, there is continued progress on investor engagement on the Fortress Lighthouse multi-strat product. I think still -- I think it's been a little frustrating. And it's not really in the Lighthouse side, but really important to get that product structured to be able to scale quickly out of the gate. And I know there are cornerstone investors meetings happening, frankly, as we speak. I'd also, I think, you call out some of the customized mandates, a couple of pipeline mandates, large ones. Lighthouse may not win them, but large managed accounts, they're in active RFP process because to be honest, we're seeing, as you saw from that slide in the appendix, hedge funds are now the most sought after sort of allocation for 2026 by institutional investors according to Bank of America. So, I think in that situation, Lighthouse is very well placed to win some of those larger mandates. They're at a slightly lower fee level. They're pretty close to the average fee for Lighthouse, but we should see some of those execute during the course of '26. So on the sort of net inflows, new product side, Laf, that's a couple of touch points. Also, given how well the macro manager, which is quoted on Slide 15, has performed without 13, net, and that's in the normal strategy, the dynamic asset class of that product is actually up closer to 23% that is seeing interest that it hasn't seen for some time. The macro strategies are doing exactly what they should be doing in this climate. So it'd be disappointing not to see investor flow into that strategy. So, that's what really gave credence to the, I guess, more positive outlook during my first session. Next question comes from the line of Nick McGarrigle with Barrenjoey. Nicholas McGarrigle: Just one follow-up. The newer investments, the private market firms, can you just give us an update, Ross, on progress there? Looks like the result there for the half was really strong. Was there a performance fee in that? Or is that now kind of a typical recurring type level of profitability from those firms? And I guess, the intentions or the plans for them to continue growing into '26 in terms of flows? Ross Zachary: Yes, no, I'd be happy to. So if we think about those as Marble, Invictus and 1315 Capital, our newest partnership in aggregate, frankly, not how we designed it, but they all are raising capital right now. So it is hard to comment. They've also seen significant flows in this period. So, that contributed to the positive flow in the NGIC segment, but we do expect it to continue. And so if you think about between now and June 30, we would expect to see all 3 of those firms raise more capital. The distribution increase this year that Amber highlighted was a mix of increased FRE or management fee driven as well as some GP side, but nothing chunky to -- that would be any out of the ordinary. So, we haven't seen kind of a lumpy GP side overinflate that. So, we think the -- you could think of it as kind of a trend upwards as those have now scaled and continue to scale. Operator: Next question comes from the line of Tim Lawson with Macquarie. Tim Lawson: You just talked a little bit in the Directors' Report around the private market Partner Firms' distribution. It's obviously up very strongly for specific at 10.5% versus 5.5%. Can you just expand on the mix of that from crystallization versus distributions? And also any sort of color you can give on the NGI Strategic part, which you get in the annual report, but I don't think we get in the half year. Stephen Darke: Ross, do you want to take that or would you like Amber to? Ross Zachary: Amber, do you want to start and I can elaborate? Amber Stoney: Yes. I mean, it's really consistent with what Ross just said, actually. So it's probably a combination of both, pretty similar on -- in terms of what's coming from, to your point, the distributions from management fee side as well as what's coming from the carry and GP realization. So, that increase is sort of roughly probably about 50-50 on both sides. Stephen Darke: Tim, I was going to just as a follow-up there. I mean, we have received cash distributions after the end of the reporting period up until now of around about $12 million across the portfolio. But given the variability, that doesn't necessarily indicate anything in relation to the second half, but just updating everyone on cash distributions received post end of reporting period. I would also say that in relation, at least to Lighthouse, certainly, the second half of the year or the calendar year of 2026 has kicked off very well across all the strategies. We are seeing performance continue really from last year into this year. And as -- and I'm talking to Sean last week, until we get to midterms or discussions around midterms and the U.S. political seeing sort of second half of this year, the environment is pretty constructive for continued growth in those strategies that take advantage of dispersion and volatility. So, just a little bit of color for everyone in terms of how we're feeling about the environment, obviously, all subject to market conditions. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. Stephen Darke: Thank you, everyone.
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.
Operator: Thank you for standing by, and welcome to the Electro Optic Systems 2025 Full Year Results. [Operator Instructions] I would now like to hand the conference over to Dr. Andreas Schwer, Group CEO. Please go ahead. Andreas Schwer: Good morning, ladies and gentlemen. Welcome to our annual results presentation. I will go through the slide deck, which has been published on ASX this morning. Starting with Page #4 with the agenda. So we will go through the 2025 summary by highlighting the most important aspects of last year. I will give you some aspects in terms of market conditions. I will further explain our growth and expansion strategy. We will focus on the order book and the forthcoming sales pipeline before I will hand over to our CFO, Clive Cuthell, who will give you a detailed overview about our financial performance and the cash flow situation. At the end, I will take over again to lead you through our strategy and to highlight some further growth and strategic market opportunities. Let's switch to Page #5, please. The EOS leadership team is stable, the same as last year with one exception. We have added Lee Kormany. Lee is heading our Defense Systems Australia team. The other people you probably know from last year's presentation. So 2025 summary, Page #7. The markets are not only remaining strong, they are getting stronger and stronger month by month. Thanks to global tensions and some advancements on the technological side, we expect to benefit largely from those kind of superb market conditions. Our strategic focus is absolutely on 2 domains. One is the counter-drone business. We are aiming to become one of the globally leading anti-drone companies. And also, we want to become one of the world-leading space control or space warfare companies. EOS has enhanced its sales capability. We have added significant number of people, in particular, in Europe in order to increase our sales capability and the order book 2025 is a good testimony of that. We have also expanded in terms of geography. We have added new offices and operations in Europe, in France, in U.K., in the Netherlands and Germany to be followed soon. In terms of commercialization, we have succeeded in the high-energy laser weapon domain by EOS, becoming the first company worldwide to sign a 100-kilowatt high-energy laser weapon export contract. That is a breakthrough for EOS, and it's a breakthrough in the laser weapon world. And we are very optimistic to sign further contracts over the next years to come. We also have executed, in a very disciplined way, our M&A strategy. We have divested what is noncore to our business. So you might remember it was SpaceLink in 2022 and 2023. And now we have divested also EM Solutions because it didn't fit or it doesn't fit our long-term strategy. Instead, we have reinvested into something which is absolutely core to our business, into a C2 command and control company, MARSS, which also brings with it AI technology, AI algorithms, which you can easily put into our remote weapon systems and the laser weapons to further increase and improve the performance in terms of drone detection and classification. So all those things, we can tick the box and which makes us very optimistic in terms of future outlook. We move to Page #8. Let's have a look to the highlights of 2025. So the revenue was $128.5 million. It's down compared to '24 because of 2 aspects, obviously, because of the divestment of EM Solutions. and second, some of the major order intakes happened later than we wished to be in 2025. And that had obviously also an impact on the revenue in 2025. We expect in return all that to happen in 2026. The gross margin went up to 63%, which is very positive and very pleasing. The underlying EBITDA with minus $24 million is a result of our revenue, which went down. And you might remember our CFO saying that our breakeven is around AUD 200 million. So obviously, we expect this year to see a change there. If you look to the order book, I think that is the most important aspect here. We have signed last year 18 contracts totaling up to AUD 420 million order intake, which is a significant high number compared to the year before, where we only had $70 million, 6 orders in order intake. This is resulting in an unconditional order book of AUD 459 million, and this unconditional order book does not include the conditional order, which we have signed with a Korean client. Our cash position is very positive with more than $106 million plus the restrained cash sitting for bank guarantees and other activities, and that comes on top of $106 million. In terms of investments, we have opened quite recently our new high-energy laser weapon factory in Singapore, and I will come back at a later point in time on that particular subject. We've announced the acquisition of the C2 command and control company, MARSS, end of last year, beginning of this year. We have opened up facilities in the Netherlands, France, U.K. and Germany will happen also this year. Our total number of employees went up to 436 people. We remain extremely sensitive in terms of adding indirect costs to our organization to keep overall indirect cost and overhead low and to stay very competitive in terms of our pricing structure. Page #9. If you look backwards into 2025, the year was filled up with many positive events, obviously a little bit back-end loaded. I just want to highlight, again, in August, the landmark contract with the Dutch government for the first 100-kilowatt laser weapon, EUR 71 million. We have been successful in bidding with LAND 156, which by the dollar value now is not so large, but it has more than AUD 1 billion order intake perspective as we are now selected with our partners to be the solution provider for the anti-drone systems for Australia. We also signed the LAND 400 Phase 3 contract with more than $100 million in October and towards the end of the year, very important contracts with General Dynamics, one of our key clients, and one of them is opening up the big market towards the U.S. Army as we became the key supplier for the future Abrams main battle tank. I will also come back to that in a minute. So the market conditions are superb. The markets are growing as the budgets are growing. And as long as geopolitical tension continues to be high, we can benefit from that one. This statement is not new. But again, if you see how much budgets are growing over the last few months and how many governments have formally stated to go even higher, this is very promising for Electro Optic Systems. And again, that's the key reason why we want to expand into those markets, in particular, into the European market as in Europe, this super-cycle is extremely dominant. On this chart, again, you can see on the right side, the number of drone attacks, which is extremely growing. The number of missile strikes on Ukraine is rather going down. That has more or less a kind of price or cost structure rationale behind. The anti-drone business, as a consequence of that, will become predominant. The entire warfare situation in Ukraine has changed dramatically. The Ukraine war in the beginning was pretty much a kind of war on the ground between artillery forces on the left and right side. That has changed now drastically. It's now a drone and an anti-drone warfare where the front line is dominated by loitering ammunition falling down and destroying tanks which are high-value target destroyed by drones for a few thousand dollars only in terms of production cost. So this is the key reason why we believe that this drone or anti-drone warfare will be dominant not only in Ukraine, but will also play a dominant role in all the future conflicts to come. And that's the reason why we invest heavily into this kind of technology base and why EOS is well positioned to become a global leader in this particular type of business. Page #12, you can see the different types of effectors being able to defeat drones. You obviously need to have a layered response to tackle the different types of drones attacking your high-value assets. EOS is concentrating on the so-called hard kill. We're concentrating on hard kill as soft kill becomes less and less effective in military context as drones are more and more hardened. In the area of hard kill, EOS has by far the broadest product portfolio globally. Our product portfolio includes remote weapon systems. Here, we are one of the world market leaders. Nobody is as accurate as we are in terms of anti-drone performance on long range. We have added to our portfolio, end of last year, interceptor drones, drones which fly up, which kill the attacking drones by flying into them. That is a new type of effector which we are happily adding to our portfolio and which is predominantly of advantage in commercial or homeland security applications where you cannot use missiles, rockets or canon-based air defense systems. We have added now high-energy laser weapon and our actual architecture allows us to scale those weapons between 50 and 150 kilowatts. And I just want to remind everybody that there's only one other competitor to EOS in the global market. And so the overall competitive situation is very, very favorable to EOS. We have also added rocket systems and various types of missile systems on our multi-carrier platform, so we can offer the full range to be able to defeat any kind of incoming drone threat. And with the acquisition of MARSS and its NiDAR Command & Control system, we are now in a position to offer fully integrated solution. The command and control system is the brain behind any anti-drone system as it identifies the threat as it allocates the various effectors to the threat, and it's the key to make sure that you can defeat large quantities of drones or drone swarms. So now we are in a position as one of the very, very few bidders on the market to offer turnkey solution to any client in the military, in the homeland security and in the civil/commercial context, including operators of airports, for example. Let's move on to Page #13, please. Number 13 is not an exhaustive list of partners and clients. All those companies mentioned here are also clients of Electro Optic Systems. You can see very prominent names, big OEMs worldwide, OEMs which trust EOS, which trust our performance, our quality, our high-end products, and all of them have acquired our products. I just want to highlight one aspect. You can see on the right upper side, a prototype of the M1E3 Abrams main battle tank. This is the breakthrough landmark contract, which we have achieved by end of last year. Even if the dollar value is not so impressive, it is only the very first slice of something which will become very, very big. So after many years of absence from the U.S. Army market, we have succeeded now -- we have been selected by the U.S. government and by General Dynamics to become their sole partner to put our R400 Slinger weapon station in a very autonomous version on top of the Abrams tank, allowing this very important American platform to survive the threats of the modern battlefield. As the U.S. Army is operating thousands of those tanks and as many export clients around the world are operating Abrams tanks, we believe that the total market potential just for this type of integration installation will add up over the next 15 years to up to USD 3 billion. So that's the reason why this contract now, even if it's only the very first slice, is extremely important for Electro Optic Systems. We expect further slices to come in the course of the next years, and this will add up to those large numbers then. Let's move on. Slide #14 is a selection of some partnership agreements which we have signed in the course of the last year, very important ones. So Calidus is a very strategic partner in the Middle East for EOS, not only for remote weapon systems, we aim also partnership in the other product domains with Calidus to open and to secure, for example, the very important UAE market. We've signed, under recommendation by the British government, a partnership agreement with MSI, which opens for us the U.K. market and associated exports market. So MSI will produce our weapon systems under license. We've also entered into a teaming agreement with a world-leading KNDS company, which is this German-French multinational company. KNDS is also highly interested in the partnership with us. We can add up there or we can add and integrate their canons on our weapon stations. And KNDS in return is interested in producing our weapon systems, our remote weapon systems in France for the French market, for example. So very important to penetrate those European markets. And we most recently also signed a strategic partnership agreement with a Turkish company, Roketsan. Roketsan is also a very strong, very large company active in the missile domain today, which has decided to enter into the high-energy laser weapon domain. And with Roketsan, we are in a very comfortable position and very optimistic to conquer also the Turkish and associated export market with high-energy laser weapons. Page #15. So the high-energy laser weapon domain is, for us, the first strategic pillar of growth over and above a remote weapon system market, which is growing by itself. Again, irrespective of whether or not the Ukrainian conflict would come to an end, the remote weapon system market will continue to grow and the laser energy market -- the high-energy laser weapon market will be the first layer above that. As there's only very limited competition in our 100-kilowatt power domain, we expect that we can acquire a large chunk of the non-U.S. international market. In order to be able to serve those huge markets, we've opened up our first, and I think it's the worldwide first serial high-energy laser weapon production facility. It was opened on February 6, so quite recently. It is a 20,000 square feet capability, a factory which allows us to produce 20 laser weapons per year, and we have expansion potential to go up to 40 laser weapons per year there. But even if we can produce 40 laser weapons per year there, we expect that most of our clients will ask us to localize production in their home country. And here, our unique feature comes into play as EOS is the only company worldwide in the laser weapon domain, which owns all the IP relevant to do this kind of development and production. We can offer turnkey solutions, and we can localize the production in each client country, which none of our competitors is able to do so. That's the reason why we strongly believe into this kind of strategic growth area. To give you some update on where we are with the Netherlands contract, so the initial design approval, the first milestones, have been successfully passed. We have passed the so-called PDR on the system. We have passed the CDR on the laser itself, which is a very successful process and progress which we have achieved. The client is extremely happy. We are negotiating now with the clients to increase the scope of the contract and to accelerate the delivery time frame. The client is highly interested in signing further orders with EOS and to make EOS a strong partner -- a strong strategic partner of the Netherlands government. So this is very promising, and it's a world-class testimony of our quality and performance. If you look to the opportunities, our go-to-market strategy depends on the type of client, depends on the region. If you look to the NATO market, and in particular here, the Western European market, it's, in most of the cases, either a direct sale to a government or we go through partners and through teaming arrangements with the respective national champions. If you look to the Middle East, it's either direct sale or it's a partnering model with local producers. In many cases, it's governmentally owned companies. And if you look to other markets like the Korean markets, there are a range of other channels, depending on the specific local market conditions. So we have continued discussions and ongoing negotiations with many countries and many governments related to future high-energy laser weapon sales opportunities. Among those ones are Germany, France, Italy, Turkey, Saudi Arabia, the UAE, India, Korea, Australia and the United States. This list is not exhaustive, but it should give you a little bit of a perspective of how much this kind of weapon system is in demand and how much the market will grow in the future. And again, we are in the pole position because we have been the only company so far being able to sign a 100-kilowatt laser weapon contract to an export client. The conditions of the USD 80 million Korean laser weapon contract we have mentioned before, it's a highly conditional contract. It's not included in our internal planning. We have not spent any money on that one so far, but we expect that the conditions will be concluded in the course of the first quarter this year. But again, no guarantee is coming with that one. Page #16, space warfare, whereas we call our product line for high-energy laser weapons in the anti-drone business domain, Apollo, we have given our product family for space warfare, the name Atlas. Atlas comes in different configuration in fixed installations, like you can see here on the right side of this slide, or it comes in a mobile configuration. It comes in containers, which are coming on the backside of trucks. So the Atlas product range is designed in order to fulfill 3 dedicated missions. The first mission is to blind and dazzle satellite sensors to stop satellites from taking pictures and intelligence from the ground. That's very important in any kind of military context. The second mission is to disable or to defeat satellites. This kind of destruction capability comes by increasing the laser power. So if we include now our high-energy laser weapon capability, the 100-kilowatt effectors, into the kind of optical chain of our telescopes, it will allow us to do those kind of missions. And the third mission is obviously to move satellites and to move space debris. We can even cause atmospheric re-entry if we illuminate those satellites and space debris with our laser weapons. So this is giving our operators, our clients, a huge portfolio of more decisive capabilities. I want to highlight that there's not any other company outside EOS being able to offer this kind of competency and capability to any client. That's the reason why this will become a huge growth opportunity for EOS. And I'm very happy to announce also that we welcome frequently commanders from Tier 1 governments, commanders of space forces coming to Canberra, coming to our Mount Stromlo installation to visit and to witness what we can do in this kind of domain. Page #17. You might remember this slide from the last year. We always had 3 ticks. The tick on markets was there. The tick on product was there as we have launched many new products. We are highly innovative. And we can also tick now the right side of this slide, we can tick sales and marketing, and we can tick the order book as we have increased our order book from $136 million end of 2024 to more than $459 million by end of December 2025. Again, this does not include the USD 80 million order from this Korean client. So this is an extreme success last year. And again, we expect this year to be extremely positive in terms of order intake. We will continue putting focus on order book growth as this will be the baseline for any revenue growth in the future. Page #18. I don't want to go into all the details here. I mentioned some of them before. Important is really that our European footprint is creating now much more value, much more order intake. And if you really look to the development of the unconditional order book, this underlines our statements. It is very strong with $459 million, and we aim to realize about half of this order book value by revenue in 2026, plus all revenue coming in by new orders taking on board over the next few months to come. Page #19. This is an updated pipeline. This pipeline is extremely conservative. So if you go through that one, you will notice that we have not included here order intake for laser weapons in 2026, but we're obviously aiming for achieving order intake for laser weapons in 2026. But even if it would not come hypothetically, the pipeline is very strong and the foundation for a very strong year in terms of revenue is extremely high. So it's -- this contains order intake opportunities from all around the world. It is extremely diversified. It includes lots of opportunities from the Middle East, but also from North America and from Europe. And it should give everybody lots of confidence that the growth strategy of the company is intact, and we are in a very, very healthy and extremely positive outlook position. Page #20, a summary of the MARSS acquisition. MARSS is one of the very few companies in the market, which is offering a highly customized integrated anti-drone solution. It is a company which has fielded more than 60 systems around the globe, a company which is well established, a company which is world-leading in terms of user intuitive C2 systems, a company with which we have collaborated in the past for a long time. And our team always came back and said that the MARSS integration is the most easiest to be done. The MARSS user interface is the best one from a customer perspective. And with MARSS being part of our EOS portfolio once we have completed the deal in a few months or weeks from now, we are in a position to offer turnkey solutions to the client. And again, with this kind of capability, we have also the advantage of including all those AI algorithms into our weapon stations and into our laser weapons to make those weapon systems even more competitive and leading edge by being able to even better discriminate drones and to detect drones. So the transaction summary, we announced that on January 12, there's an upfront cash payment of USD 36 million, plus an earn-out in shares and cash. The earn-out will happen as the order intake is happening and as all those products and all those orders are extremely profitable, we expect that we can pay those kind of earn-outs by the order intake cash flow to come. So I would like to hand over now to Clive to go through the details of the financial results 2025. Clive? Clive Cuthell: Thank you, Andreas. So for those that joined late, my name is Clive, and I'm the CFO and COO. I joined EOS 3 years ago in mid-'22, going on for 4 years. Revenue -- as this slide shows, revenue came in at just over $128 million. That is in line with what we said at the end of January, which was slightly above the guidance range that we issued at the end of the year last year. The lower revenue compared to last year really reflects the end of old contracts and the start of some new ones and a little bit of a gap in between. And obviously, there's been, as Andreas said, a big focus on growing the order book this year to underpin a position next year that hopefully will be more favorable. The gross margin was 63%. This includes 2 main things. One was the benefit of a contract that was finalized in the Middle East. That was already reported back in June, so that's not new news. The second thing that's perhaps more significant is there has been a continued improvement in the base gross margin in our business. We do not expect to achieve 63% gross margin going forward, but we do expect a continuation of the multiyear improvement in gross margin that we have seen consistently between '23, '24 and '25. So we are aiming for continued improvement in '26 on the historical levels, perhaps over 50%. The underlying EBITDA was a loss of $24 million, mainly driven by the lower revenue during the year. The gross margin benefit was offsetting some increase in operating expense as well. The EBIT was impacted by a number of items, including higher depreciation and amortization, a big chunk of which is customer-funded CapEx. We also had 2 nonrecurring items totaling $9 million. These are nontrading, 2/3 of this relates to the ASIC matter penalty in Australia, and the other 1/3 relates to some acquisition costs with MARSS that were expensed during the year. And there are some details in the back of the slide deck on these nonrecurring nontrading items. Finance costs improved. All debt was repaid in January 2025, and EOS today has no borrowings. The expense for finance costs includes the make-whole expense relating to the debt repayment that took place in January 2025. And the total net profit after tax includes the continuing operations, but it also includes the $91 million gain on sale that was recorded in January 2025 following the sale of EM Solutions that Andreas mentioned earlier. Maybe the other thing to note and highlight on this slide is that we have done an awful lot of work, as Andreas said, on revenue diversity. And the graph at the bottom right of the slide shows the split of revenue by geography, and as we said, an increasing emphasis on Europe, not just in the orders secured that Andreas mentioned earlier, but also flowing into revenue this year. So that work going to market in different ways in different parts of the world is going to continue as we -- and we expect the quality and the diversity of the revenue base to continue improving in future years. The next, Page 23, has the segment results for defense and space. The outcomes at segment level here are largely a result of lower defense revenue because of the gap in contract activity during the year. In the space business, pleasingly, that business continued to grow during the year. As Andreas said, this is really developing -- designing, developing and starting to commercialize new products, particularly in the space control area. And it's pleasing to see that Atlas system work includes customer-funded activity, which flows through the revenue line. As we said, a big focus on growing the order book during 2025. And we have said the order book of $459 million, our outlook for this year -- we've not issued revenue guidance, but we have said that between 40% and 50% of that order book of $459 million is what we're aiming to realize in 2026. And that should give you a little bit of a thumbnail sketch as to where revenue could end up. The next page has cash flow on it. Now the cash flow information was largely announced at the end of January already. So some of this is not new news. But as you can see, the operating cash flow was a net $24 million out the door. That's despite the lower revenue during the year. We did have some big receipts from the finalization of the contract in the Middle East. And also in the cash flow, we had the impact of interest in the operating cash flow -- the impact of the make-whole interest that I mentioned earlier. Investing cash flows, which was $130 million coming in, included the disposal proceeds on the sale of EM Solutions as well as some other items. Notably, the level of security deposits on bank guarantees also reduced during the year. which is a positive. Financing cash outflows included the repayment of debt of $48 million that occurred in January with the sale -- January 2025 with the sale of EM Solutions. Maybe just a couple of other things. Cash flow discipline is quite important to us at EOS. At the end of December, we achieved the highest yet, the highest ever position of cash received in advance from customers. So upfront payments from customers at the end of December were $42 million, which is up $18 million on the prior year. And that's because of a consistent focus on this item as we deal with customer contract negotiations at the signing stage. We continue to manage cash carefully. We do make targeted investments in inventory where we can get a source of competitive advantage from reducing long lead times as some of our competitors are not able to supply quickly. And if we make limited investments, we can really improve there. On the balance sheet, as we've announced previously, cash at bank $107 million at the end of December. And we have a committed term loan facility for $100 million with docs being finalized at the moment to help cash flow liquidity protection over the next 12 and 24 months, and particularly as we get into the MARSS acquisition and aim to realize a lot of the growth that we've been mentioning earlier. That's it on cash flow, and I'm going to hand back to Andreas now, who's going to talk a little bit more strategically. Andreas Schwer: Thanks, Clive. Page #26, key strategic achievements. EOS will position itself as the leading counter-drone company worldwide, being able to serve any kind of client, whether it's military or nonmilitary. And in order to do so, we have also increased our portfolio in counter-drone effectors. So beside our R400 Slinger, we are at the last stage now to also include the R800 in anti-drone configuration to the field. And all those systems will be, in the future, equipped with AI-enabled C2 system coming from us, which allows us to be even more effective. I just want to mention one further contract, which we have not announced so far in the -- which we have not outlined here in the paper. It's the German UTF tender. It's probably one of the largest RWS tenders over the next 10 years to come. The German government wants to procure more than 3,000 systems and among -- and we've been among 13 bidders to bid for this first phase of the contract. The German government has down selected 3 bidders to go into the last round of selection, and we are proud to say that our partner Diehl and EOS, we are among those 3 last bidders in a very promising position. So we are very optimistic to make that happen in the course of this year and to announce an order intake on that one, not this year, but the final decision is probably to be made by the German government in 2027. So this is -- this will become then also the next landmark order intake. Again, it's more than 3,000 weapon stations. So that's underlining our growth strategy in remote weapon systems. And as we have now partnership agreements in place with local champions in Germany, in France, in U.K., those markets are widely open for us in the future. The high-energy laser weapon market is just starting now. And again, we are one of the very, very few contenders in this market, only one other company active in the 100-kilowatt domain. This is promising very healthy contracts, very profitable contracts in the future. And with our new laser innovation center, the worldwide first serial production laser center, we should be well positioned there. Space control, to be more commercialized, we have to complete our development on the mobile solution, the mobile Atlas solution, which will put us into a market which is just about to come. It will position us as the unique source outside U.S., and we will be very well positioned to let the company grow in space control then over the next 3 to 10 years. So Page # -- what is that, 27, our growth strategy. Again, we will have a very robust organic growth by RWS by enabling our weapon stations with the AI algorithms and with bringing further counter-drone variants to the market. This will be substantial for our further growth. And then, with the laser weapon and with the MARSS-enabled C2 systems, we'll be in a position to bump our revenues up significantly over the next few years. Before then, space control will kick in with very substantial revenues to become the world market leader in space warfare. So we will continue commercializing our IP assets, our huge inventory of IP and innovation. We will further put effort in developing software. We will continue investing into new features such as mesh network technologies to give our clients a leading edge over anybody else in the market, whilst obviously maintaining our strict capital discipline. So Page #28. The markets will remain very supportive. We are benefiting from a super-cycle. We are perfectly positioned with our counter-drone and space control business segments within those markets. And as our growth strategy and our go-to-market strategy in Europe is already proving that we are highly effective and highly successful, we are very well positioned. And again, with the inclusion of MARSS in our portfolio and our widened product range, we should be able to offer and to reach out to all the homeland security and commercial clients in the future as we expect that most of the airports, most of the civil and commercial infrastructure needs to be protected against drone attacks in the future. EOS wants to be in the middle of this kind of market to become the world-leading anti-drone company. Thank you, ladies and gentlemen, for your interest. We are ready now to answer your questions. Operator: Your first phone question is from Baxter Kirk with Bell Potter. Baxter Kirk: Andreas and Clive, can you hear me? Andreas Schwer: Yes. Baxter Kirk: You've mentioned commercialization of the stationary Atlas product from 2026 onwards. What would the initial contracts look like? Should we expect multiyear development contracts like the laser contracts and then followed by JVs? So how would that work? Andreas Schwer: So the product in terms of stationary fixed asset product is available. We can duplicate our installation on Mount Stromlo. It's a fixed asset, which we are starting now to offer to the market, to clients. So a copy of this kind of system comes in for a price of around about USD 100 million. That is an asset which we can sell instantaneously. There is no further development needed. Development is still continuing for the mobile solution where we expect to be able to have a prototype ready by end '27, 2028. Baxter Kirk: Okay. Great. And since the events that happened last year regarding the drone incursions across Europe, are you seeing an acceleration in procurement cycles, particularly for your counter-drone products? Andreas Schwer: Yes, we can see a growing demand, but obviously, military procurement cycles are long lasting. It goes through a very complex capability definition process on the client side, followed by low quantity orders, and that is what we are seeing today. And as soon as low quantities are delivered, as soon as they have done the incorporation into their overall multilayered ConOps process, we can expect that large quantity orders will follow by that. It's the normal kind of cycle when you introduce a new weapon system to the market. Baxter Kirk: Okay. So there's no sort of -- they're not skipping steps or anything, given the urgency of drone protection. It's just following normal procurement cycles. Andreas Schwer: In most of the cases. Obviously, if there's an emergency demand like to support Ukraine, we can expect quick delivery and quick turnovers, same in the Middle East. So that is still the case. But predominantly the market of the future, the growth market will come through normal type of procurement cycles. Operator: There are no further questions on the phone line at this time. I'll now hand back to address any webcast questions. David Bert: Thanks. We have a number of webcast questions, and we'll try to get to as many of them as we can. There are some related questions, which I'll present relating to the 40% to 50% realization of the $459 million backlog. Could you talk a bit more about what sort of swing factors would affect that range and any weighting that you can provide as well? Clive Cuthell: Thanks, David. So the order book is -- as we said, we're pleased. It's grown a lot to $459 million at the end of December. We -- obviously, we track the tenor or the rollout of that order book quite carefully for our internal management purposes. And today, we have guided that we are aiming for 40% or 50% of that order book to roll into calendar 2026. So that represents something like AUD 180 million to AUD 230 million. Now that's obviously the revenue that we're aiming for that could come from the existing order book. And obviously, on top of that, as Andreas mentioned, would be new orders received, particularly in the first half of the year that are capable of delivery before the end of the year. We do -- what are the factors that impact where we land in that range? Obviously, it depends on -- a little bit on order intake and whether we get short notice orders, but also it depends particularly on delivery. A large amount of delivery is within our control, but some of it involves very close cooperation with customers, but we've been working quite hard for several months now to lock in as much of that 2026 revenue as we can. So it does depend on -- more largely on delivery than on new orders being won. We have not issued revenue guidance. This guidance that we're issuing today in order book rollout is as far as we're going at this stage. But we can say that the revenue is as normal, is more likely to be weighted towards the second half than the first half of the year. And if that changes, we can -- we will be looking to keep the market informed. There is quite a wide range in analyst consensus out there that we are aware of. Some of the analyst numbers assume an exceptionally high level of order intake and I'm not -- being turned into revenue in 2026. I'm not sure that's quite right, but that's as far as we're prepared to go at this stage. So thanks for that question, David. Hopefully, that deals with the 2 or 3 questions that have been asked on this area. David Bert: We have a couple of related questions on the Korean high-energy laser contract. Can you confirm if the deposit has been received yet? And if not, is there a deadline on when this contract would be terminated? Clive Cuthell: Thanks, David. So we've been quite clear in our announcements that the deposit has not yet been received. That was a condition in the contract. And the second condition is for a letter of credit to be finalized, and we've also been clear in our announcements that, that has not occurred yet either. And I'll pass to Andreas for the second part of the question, which is how do we look at this? David Bert: Yes. So is the South Korean contract exclusive? And if so, does the cash deposit have to be provided before -- between the 2 parties? Andreas Schwer: So the South Korean contract, which is signed with a private party is not exclusive. We are in parallel also in discussions with the Korean government and end users. And yes, at any point in time, we can enter into contracts with the government in parallel. David Bert: Another question relating to the high-energy laser facility. You mentioned that you can build up to 20 lasers per year. Why does the current order take up to 2 years to build? Andreas Schwer: It takes more than 2 years to build because of the supply chain. Key components which we have to buy from the market have a long lead time. And that is the key reason as with any other weapon system you sell to the market that simply the delivery time line is usually between 2, 3, 4 years. We try to optimize this time line, and we are in negotiations with the client to bring the delivery forward. If everything works well, it could be as early as end of 2027, which is compared to the procurement of any other weapon system, quite a record time. David Bert: Great. There are a number of questions about the German opportunity with Diehl. Could you just talk a bit more detail on -- and what sort of price points for the products? Andreas Schwer: So the German UTF tender, which is about 3,000 systems, it's related to our R150 weapon station, which we do, and which we produce together with the German partner Diehl. It has a total market potential of more than EUR 1 billion. David Bert: What are the next steps for the M1 Abrams tank integration opportunity? Andreas Schwer: So the contract which we have signed end of last year was about to finalize the integration of the R400 Slinger and a very specific version on the Abrams tank. We expect that to happen in the course of 2026. We expect to get the next slice of orders in the course of this year, 2026, before then, large quantity orders will come in by 2027 onwards. David Bert: Great. An analyst has asked, what are the expectations for capital expenditure in 2026? Clive Cuthell: Yes. Thanks, David. So CapEx -- we don't provide guidance on CapEx, but historically, it has been -- typically it has been less than $20 million. I would emphasize that, within the amounts that we've had historically, very significant portions of our CapEx have been funded by customers under customer contracts with no net cash going out from the business. So we would expect to see that activity continue. We do make selective investments in opportunities where we see near -- modest amounts of development spending being required. But we are very judicious in terms of the level of investment risk we take around technical developments and the amount of money we put at stake, and that is going to continue. So that's -- I'd probably leave it at that, David. David Bert: There's a question here on what kind of opportunities are in front of MARSS in terms of timing, value, type of end products and customers? Clive Cuthell: Thanks, David. So we think the opportunities in front of MARSS over the next 2 to 3 years are exceptional because they provide a route to market in the counter-drone area. MARSS has a pipeline and it has an order book, and as one of the slides said earlier that our pipeline slide and our order book slide do not include any information in relation to the pipeline and order book of the MARSS business. They consistently look at a number of markets and different opportunities. And at the moment, they're looking at opportunities that include anything from EUR 20 million and EUR 30 million per bid to, in a few cases, bids that are much larger, stretching upwards, including EUR 50 million and EUR 100 million per bid. Now the lead time on sales in the MARSS business is -- which sells into defense and homeland security, a bit like us, the lead time is just as elongated in that business as it is in ours. But we are hoping that the business could achieve significant orders in '26 and '27 that could make a potentially very material difference to the EOS order book over the next 12 and 24 months. We are not expecting the MARSS order book to be dilutive to EOS margins in any way. And naturally, we are looking for the right cash flow profile on these orders. I think it's a bit too early to be more specific on the size of the order opportunities, but I'm just going to ask Andreas to make a couple of other comments about how we see the market overall for the MARSS products and the cross-selling opportunities. Andreas Schwer: So the market opportunities are tremendous. Their home market was the Middle East or is the Middle East. And as you can see by the geopolitical tensions and the actual political threat scenario between Iran and the other GCC countries, we expect further push coming from that end. So we hope to be able to sign contracts over the next 12 months in a significant value to protect critical military and governmental infrastructure in countries like the UAE or Saudi Arabia. That is imminent. And again, politics is playing currently in our favor there. We also expect that we will be able to sign contracts in non-Middle Eastern markets, in European markets. But obviously, as we need to reach out now to NATO clients for the MARSS portfolio, which was not done before to a large extent, this will take a little bit more time. But yes, all the protection requirements for critical infrastructure in Eastern and Western Europe, MARSS is made for that. And we believe that, that market on the long run will be extremely substantial for EOS. David Bert: Great. There's a question here about the recent news articles around the German government pausing of the Rheinmetall high-energy laser weapon contract. Can you comment further on this? Andreas Schwer: Yes, sure. So we have to look a little bit backwards in history. So the German government has supported Rheinmetall and MBDA over the last 15 years with more than EUR 150 million subsidized R&D work to develop laser weapon technology. Today, Rheinmetall has reached a level of 20 kilowatts, and they have offered and agreed with the German MoD to get into a development contract to develop a 50-kilowatt solution in the course of the next 5 years for a total budget of EUR 500 million. That is a very tremendous amount of money. And when the German parliament -- so the German government became aware of the Dutch contract, which we have signed for a fraction of the price, and when they have asked us, would you be ready to deliver also to us, to Germany, we obviously said, yes, you can get twice the power for less than half the price in half the time. And with that, the kind of statement and obviously, by then consecutive interactions with leading stakeholders on the German government side, the parliament and the government has decided to stop the further procurement in a sole-source mode with Rheinmetall, but to have a detailed look instead on the EOS capability. And that is happening right now. David Bert: A few questions have come through about what's the future product development pathway for our laser weapon project. Andreas Schwer: So our current technology is scalable between 50 and 150 kilowatts. So we don't need to spend any more money to make that happen. But we are in negotiation with 2 governments and with one of them, we will hopefully sign this year, a contract to develop a 300-kilowatt laser weapon family. which is also scalable. This will enable us to offer to the market something which is not the best solution to kill drones, but which is also very capable to act as a so-called C-RAM type of effector. C-RAM means it can go against any kind of missile rocket and artillery shell. That is opening up an additional market for EOS. And we can also use those 300-kilowatt lasers to extend our space warfare capability to engage not only against satellites flying in low earth orbit, the low earth orbit is up to 1,000, 1,500 kilometers and it includes all the constellations such as Starlink, but the 300-kilowatt will also allow us to engage against higher flying objects such as [ GPS ] or GLONASS navigation satellites or even geostationary satellites, whether it's communication, intelligent satellites or what else. So that will give us the full portfolio. David Bert: Great. I think that's all the questions that we have time for at this time. Thanks, operator. Operator: Thank you. And that does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Thank you for standing by, and welcome to the Austal Limited FY '26 Half Year Results Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. I'd now like to welcome Paddy Gregg, Chief Executive Officer, to begin the conference. Paddy, over to you. Patrick Gregg: Good morning, everybody, and welcome to our 2026 half year results call. I'm Paddy Gregg, the CEO, and I'm joined by our CFO, Christian Johnstone. We will be presenting in the same format as usual with me giving business overview and context, while Christian focuses on the financial details. And as always, we plan to present for no more than 30 minutes to allow time for questions. I think it's been a very exciting half for the company. We've seen the strategic shipbuilding agreement provide the backbone for significant contract awards in Australia with the signing of the Landing Craft Medium contract before Christmas and then last week, the signing of the Landing Craft Heavy contract. These 2 contracts total about $5 billion and take the order book to a record $17.7 billion. That translates to about 76 ships in build or scheduled in our shipyards, providing certainty of jobs and revenue for a decade. And you'll see revenue and employee numbers are growing in line with the order book as programs come online, and that's translating into earnings, too. We announced a revision to guidance a couple of weeks ago that was caused by a forecasting error, very disappointing, but we are still delivering a very strong financial performance this year despite this. The outlook is fantastic, both in the United States and in Australasia. So I'll talk through where the business is today. Christian will take you through the detail of the financials, and I'll finish by updating you on where I see the strategic outlook for the company. So for those of you that are following along in the pack, Austal at a glance, a couple of slides that cover the key facts. For anyone who doesn't know Austal, so we're operating 5 shipyards in 4 countries with 8 service centers in 4 countries, 76 ships under construction or scheduled, 64 vessels under sustainment contracts. And importantly, we've continued to add to the order book, and it stands at a record high. We've received orders for some 22 ships this year and delivered 2. Employee headcount globally is over 4,600 and growing daily and recruiting people to deliver that record order book. And the vast majority of our work is in the defense sector these days, and defense will continue to grow relative to the commercial sector. But interestingly, we'll start to see more balance between the U.S. and the Australian operations. So if I talk about the financial highlights, and as I said, Christian will go into the details. So jumping straight in, we're building sustainable growth, seen through the order book, that was predominantly in the U.S. and now followed in Australia with the signing of those Landing Craft Medium and Heavy contracts. We also signed 2 more Evolved Cape-class vessels before Christmas. And while that used to be big news, I think that was lost due to the size and scale of the Landing Craft announcement. And for me, this is all about us creating long-term value for shareholders. When I look at the results, I see lots of greens across the key financial measures, demonstrating strong business performance with year-on-year improvement and foundation laid for growth. Encouraging EBIT, slightly skewed to the first half, revenue growing in line with forecast as new programs move from design phases into construction with a big increase compared to the previous corresponding period. It's really encouraging as the legacy programs start to tail off. And of course, we saw the delivery of the last LCS last year. And the order book at $17.7 billion, secures revenue for years. It's grown in Australia following the strategic shipbuilding agreement and the Landing Craft Medium and Heavy. There's growth in submarine module production. The commercial yards have got a really sound order book and future potential for growth, particularly in the low emission space. And indeed, in Australia, we expect to start general purpose frigate contract discussions this financial year with the Commonwealth of Australia. Both the submarine module manufacturing facility, MMF3 and the final assembly sheds for the large steel ships, FA2, as we call them, are fully funded and in construction and ready to support future growth. I've put a slide in the pack where you can see the progress on MMF3 and Stage 1 opening is due this financial year, bringing that project online. Of course, cash was projected to be lower than full year due to the capital investment in facilities and an increase in capacity and capability. It was a little bit lower than we expected due to a couple of late milestone payments in December. As announced, we settled the request for equitable adjustment on tax. And for me, that really demonstrates the strength of relationship we have with the customer in the U.S. Interestingly, we're becoming victims of our own success, and we have become the lead yard for that program, and we're in discussions with the customer about the implications of that. And Christian will talk about that a bit more in the financial section. And so looking at the order book slides, we include programs and revenues for those of you who still like to try and build your own financial model. It doesn't include the commercial vessels, but with relatively fewer of these and our ASX announcements, I'm sure you have the information you need to factor those into your forecasting models. For me, it's really pleasing to see those commercial orders have returned following the challenges we saw during COVID and really excited about seeing the Philippines yard ramping up and testing those low-emission technologies ready to be deployed in the defense world as and when necessary. So I'll hand over to Christian now, and he'll talk you through some of the financial highlights. Christian Andrew Johnstone: Thank you, Paddy. Turning to Slide 8. It's my pleasure to present Austal's FY '26 first year first half performance. Before I get into the details, the key message is that we've had double-digit growth across all key financial performance metrics: Revenue, earnings, and NPAT, which represents the results from the focused efforts of our employees across the group to construct and deliver ships, submarine modules, sustainment services, and additive manufacturing to our growing customer base. The balance sheet is stable, and we have a robust cash balance to support the significant capital investment we have underway as we complete 2 key infrastructure growth projects in the U.S.A., which have a combined spend of more than $1 billion. The order book is at all-time high of $17.7 billion, which underpins continued growth over many years. Group revenue increased by 34.4%, which was a solid growth across the group. And pleasingly, all segments experienced growth, which is an exceptional outcome. U.S.A. shipbuilding increased 29% based on increased revenue from the OPC, T-ATS, and submarine contracts, which more than offset the completion of the LCS and EPF programs. It should be noted that the company's auditors had a qualification in their opinion relating specifically to the judgment on the T-ATS and AFDM programs. Whilst the company is in ongoing discussions with its sole customer in the U.S. and is seeking some contractual relief, the company's auditors, Deloitte, included a qualification in their review opinion to reflect the position that whilst the company considers it has sufficient evidence to support the judgments made in respect of the contractual relief for these programs, the auditors have concluded that they need additional evidence above what has been provided and so have qualified on this particular judgment on these particular programs. Further details appear in the notes for the half year report. U.S.A. support revenue increased by 11%, primarily due to additional contribution from the growing additive manufacturing business, which is performing strongly. It was particularly pleasing that Australasia shipbuilding continued its growth with an increase of 83%, which has 2 key drivers being the appointment of Austal as the Commonwealth of Australia's sovereign shipbuilder and the work performed on the first 2 key contracts under this umbrella being the Landing Craft Medium and Landing Craft Heavy contracts with the Australian Army. In addition, the work completed from our Asian shipyards was a strong contributor to this performance. The Australasia support business improved by 27% due to the increase in servicing work driven by an expansion of the fleet requiring sustainment services. It is pleasing to see ships built by Austal continue to be serviced by Austal across our regional service centers. Moving to EBIT. Earnings growth of 41% across the group was extremely pleasing with EBIT of $60 million for the half year. And whilst there are mixed results across key segments, the geographical diversification of the group provides an ability to manage these variances. The standout earnings growth was Australasia shipbuilding at over 600%, which benefited from the work performed on the 2 Landing Craft programs and the commercial shipbuilding activities progressed by our Philippines and Vietnamese yards. Australia support business had an additional throughput from work from patrol boats and sustainment contracts and posting earnings growth over 400%. There was a contraction in earnings from U.S. shipbuilding, primarily driven by the margin compression as a result of the wind down of the LCS and EMS programs, the earlier stages of the windup of the OPC and T-AGOS programs and from 2 onerous contracts that continue to dampen margins. The U.S. support business results were steady in the 6 months. We continue to see strong contributions from the Advanced Manufacturing Center of Excellence facility in Danville. Turning to the segment breakdown. We are now at 96% defense weighted across the group and with the growth in Australasia business, with the geographical contributions are nearing a 70-30 split between U.S.A. and Australasia. On a segment basis, the Shipbuilding segment continues to report tight margins as a result of 2 onerous contracts we have in the U.S. However, it should be noted that this segment is profitable, albeit at a level below our expectations. The Support segment is a key earnings contributor at an EBIT margin of 17.9% across the group, contributing the majority of earnings of $41.1 million for the half. The group's balance sheet was stable with net assets at over $1.3 billion. The group has a significant cash balance of $371.6 million at the close of 2025. And whilst it reduced in the half, this reflects a significant capital investment underway in the U.S. on growth infrastructure. The trade receivable balance was higher by 43% at $211 million, reflecting the growth in production in the 6-months period. Overall cash position decreased by $212 million with $131 million of this comprising the capital expenditure on the ongoing MMF3 and FA2 projects. The cash flow from operations was negative $63 million, which reflected the 2 onerous contracts we have in the U.S. and the late receipt of customer payments. As I highlighted earlier, the trade receivables is $211 million across the group, and the collection of this could have significantly impacted this position. This will be a key focus for management in the second half. I'll now hand back to Paddy. Patrick Gregg: Thanks, Christian. And so focus on strategic outlook. In summary, our key growth pillars are increasing defense expenditure, and this is going to continue to drive positive momentum in the medium-term. We have revenue and earnings growth with the underlying business performing well. And as Christian pointed out, it is especially pleasing to see the Australia business contributing so significantly on the back of the strategic shipbuilding agreement and the associating contracts and all of that work starting to come online. And then also the commercial business as well. No drag from that business and some very exciting projects that we're building there. The order book of $17.7 billion has grown significantly to the record high that we have today. And as I said earlier, that gives us certainty of work for the next decade, a position we've just never been in before as a company. And the greater diversity in the contracts will lower the overall risk profile of the business. We're making significant CapEx investments, and those projects are performing very well. That will enable further growth for the company and increase our capacity and capability. We've got additional opportunities to grow on top of what we're talking about today. The AUKUS agreement, the submarine modules, the technology business, and generally, the world becoming a less safe place is a good time to be in defense shipbuilding. We're capitalizing on those defense spend trends, both in the United States and in Australia. And I think that trend will continue. So overall, the business is performing well and executing the strategy we set out 5 years ago. So with that, thank you, and we're happy to open up for questions. Operator: [Operator Instructions] And your first question comes from the line of Pia Donovan of Argonaut. Pia Donovan: Hello, Paddy and Christian. I just have one question regarding the margin. So obviously, the margins are slightly lower on a half-on-half basis. Just wondering, do you expect the current margins to be going forward into the second half? Or will there be an improvement back to those margins levels of last half? Patrick Gregg: Yes. Good question. I think the -- it was the U.S. shipbuilding business that was slightly lower than we wanted to be for reasons that we've talked about. But as those programs come online, we get stability in that business, yes, I absolutely see that returning. The U.S. has been a massive contributor to our earnings for the last few years, and they will absolutely get back into their stride. And it's been fantastic to see how well the Australian business has done. And the new contracts coming online, I think, are what's very exciting about earnings growth going forward. Pia Donovan: Okay. Yes. Great. So yes, you said about the Australian business growing. Do you expect that trend to continue and the U.S. to also continue or remain relatively flat there? Patrick Gregg: No, I expect them to continue. As the programs really come online and the U.S. gets back into the strides, we'll be up into the 7% to 10% sort of EBIT range that we've often talked about, that is pretty common in defense shipbuilding. Operator: And your next question comes from the line of Sam Teeger of Citi. Sam Teeger: Hello, Paddy, hello, Christian. Well done in securing the Heavy Landing Craft. The pipeline now looks very good. I want to ask about cash. So you called out $105 million of milestone payments that didn't come through in the first half. Have they come through now? Christian Andrew Johnstone: Yes, they've come through now. But it wasn't -- obviously, the balance -- well, that's why there's a bit of spike in trade receivables. So that would have had a different earnings profile from the operating segments that they have come through. So yes, they've come through. Sam Teeger: Okay. And in that cash flow number for the first half, is there tax [ REA ] money in there? Or does that come in the second half? Christian Andrew Johnstone: Tax REA is across the program. So there will be tax REA cash in the first half as well because it's earned through the progress of the whole 3 ships under that program. Sam Teeger: Okay. And then what are you budgeting for cash at the end of the financial year? And maybe just as part of that, is MMF3 and FA2, are those construction projects? Like how they're proceeding versus budget? Christian Andrew Johnstone: So first question, we don't provide cash flow guidance. Second question, they're both in line with budget. Actually, MMF3 is ahead of schedule. So we had always said that that would open at the beginning of next financial year. Phase 1 is targeted to be open in the fourth quarter of this financial year. So look, if that comes to fruition, what we expect, then that's a phenomenal effort by the team in the U.S. to get that large growth infrastructure up and running. If we can then drive some earnings through that for the fourth quarter, that's going to have a boost to the business. So that's really pleasing. But both are on schedule, on time, and then both are in cash flow and their budget cash flow around the cost of them. So we have significant cash. And you can see through our untapped debt lines, we've got a huge amount of debt capacity if we were to meet that for those programs going forward. Operator: [Operator Instructions] And your next question comes from the line of Mitchell Sonogan of Macquarie. Mitchell Sonogan: And sorry, Paddy, I might have missed some of the detail, been jumping around a few different calls this morning. Just on the Landing Craft programs, do you mind just giving a little bit more color just in terms of timing and how that might ramp, particularly in the heavy, I guess, with the visibility you have now, over what time frame would you expect that to get to more of a, I guess, a steadier mature run rate in production? Patrick Gregg: Yes. Good question. So coincidentally, both the Landing Craft Medium and Heavy programs will cut metal towards the back end of this calendar year. So last quarter of this year. We are working through the Landing Craft Medium design and the Landing Craft Heavy design came slightly more mature as it's an existing vessel that is currently in build down and have built one of those before. Yes, so both of them should come online back end of this year and ramp up to steady-state production over about 18 months. And then as we delivered the Guardian Class program and the Cape Class program, we really want to establish a drumbeat and build those programs as efficiently as possible. Mitchell Sonogan: Yes. Thank you. And I know you just made a comment before about the 7% to 9% sort of target shipbuilding margin range over there in the U.S. Just in terms of the Landing Craft programs, I know you've had some high-level details you put out with the announcements about the strategic shipbuilding agreement, et cetera. But yes, is there anything at this point in time, high level you can provide us just in terms of how we should be thinking about margins on these contracts over time? Is it in that typical range that you target? Patrick Gregg: Yes, absolutely. Same sort of range and really driven by government procurement rules and what they find acceptable based on the risk we take in the contracts. So yes, both the U.S. and Australia are targeting to get into that 7%, 8%, 9% range. Mitchell Sonogan: Yes. And just one quick one for Christian. Obviously, you had the earnings guidance update back on the 12th of Feb, just with that incentive payment. And I'm not sure if you covered this during the general presentations before, Christian. But yes, do you mind just giving us a little bit more color, I guess, on how that came about and have they been checked to make sure there's no other particular issues like that on other programs? Christian Andrew Johnstone: Yes. Thanks, Mitch. That was an error. We're going through that, the half year close process with our auditors. And in the U.S. with one particular program, that is an onerous contract position. So it's a bit -- firstly, it's a little bit different from the run-of-the-mill programs that we have. And it was just going through that closing period and a review of the auditors that they had inadvertently double counted because of the requirements to then -- to book the revenue for -- the end revenue to the 6 months to December, but also the forecasted revenue over the program because it's onerous, we have to consider the revenue for the balance of the full program. And it was just an inadvertent error. We are putting in additional internal control checks, program checks, and revenue across each of those programs in the U.S. to ensure that this doesn't happen again. Operator: And you have a follow-up question from Sam Teeger at Citi. Sam Teeger: Just on the $6.7 million of sub-module revenue, what EBIT margin would this be flowing through at? And whatever it is, would that be a good guide as to what we should expect from this going forward? Christian Andrew Johnstone: So it's a bit nuance what the answer is. That $6.7 million is related to the MMF3 program that we have. So it's a bit unusual. We have a contract to build a building. And so our delivery mechanism is the construction of that building. We previously put out a lot of guidance around what we expect the earnings and revenue profile for that. So look, in totality, that's a USD 450 million contract that will flow through the income statement. There's 0 cost related to it. So anything that's revenue recognized through that particular contract will then drop directly to earnings. What's separate to that, though, and is not -- we don't separately disclose is the earnings that we have through construction of submarine modules in the U.S. That sits in as part of the segment around U.S. shipbuilding. So we don't split program by program out, but that's a very profitable part of the business right now and somewhat offset some of the margin compression we have on the onerous contracts that we have in the U.S. Operator: And this does conclude our Q&A session for today, and I'd like to turn the call back over to Paddy for closing remarks. Patrick Gregg: Thanks, everybody, for joining us this morning and asking the questions. As always, we are transparent and happy to answer any questions you've got. So thanks for those of you that were able to get on the call today. Operator: This does conclude today's conference call. Thank you all for joining us. You may now disconnect.
Mark Norwell: Good morning, everyone, and thank you for joining the Perenti FY '26 First Half Results Call. My name is Mark Norwell. And presenting alongside me today is Mike Ellis, our CFO. Today, we'll take you through our first half performance and outlook for the remainder of FY '26. Overall, Perenti has delivered as per expectations and remains well-positioned to continue delivering strong earnings and cash flow for the year. Starting on Slide 3, our diversified portfolio. For those who haven't been following Perenti closely, we are a diversified global mining services group with leading positions in contract mining, drilling services and mining and technology services. For example, our underground mining business, Barminco, is a top 2 global underground hard rock mining contractor. And our drilling division, comprising 5 specialist brands, is a top 3 global drilling business. We believe that a sustainable business is one that consistently delivers for its people, its clients, the communities in which it operates and ultimately delivers enduring value for shareholders. To achieve this purpose, we have built a diverse company with 13 brands operating across 12 countries. Approximately 2/3 of our revenue is generated from underground mines, and currently, our work in hand is strongly weighted to gold projects. Our diversified portfolio, scale and market share creates a resilient business that can deliver consistent performance through market cycles. Turning to the first half financial results on Slide 4. The first half of FY '26 reflects consistent delivery as we continue to evolve our portfolio and strengthen our balance sheet. Revenue was similar to the first half of FY '25 and EBITDA slightly lower, following the conclusion of the Botswana underground project at the end of FY '25. As communicated in our FY '25 results, we successfully sold the fleet in Botswana, delivering a decrease in depreciation, supporting a new half EBITA record of $160 million. EBITA margin improved to 9.3% compared to 9.0% in the first half of '25, demonstrating the improving quality of earnings. Underlying NPATA increased 12.4% compared to the first half of '25 supported by lower net finance costs and improved operating performance. Underlying EPS increased to $0.098 per share, also up 12% from the corresponding period. Normalized free cash flow of $33 million, adjusted for delayed debtor receipts collected in January, also improved on the first half last year. Net leverage reduced to 0.6x compared to 0.9x 12 months earlier. And our gross debt reduced to the lowest point since the acquisition of Barminco in 2018, following the repayment of the remaining 2025 senior unsecured notes in July 2025. As a result, the Board has declared an interim dividend of $0.0325 per share, an 8% increase on the $0.03 dividend in the first half of 2025. On to Slide 5. And as always, the safety of our people remains our first priority. The continuous learning approach that we have adopted requires us to constantly seek ways to improve our safety systems, and ultimately, performance. During the half, we continued to invest in frontline safety leadership and strengthened our company-wide safety leadership framework, which includes clear expectations for what safe work looks like. Divisional critical risk frameworks and verification tools have been updated, and we continue to focus on creating a safe and respectful workplace. We also implemented practical safety enhancements across the business, including in-vehicle monitoring systems, improved operator visibility, upgraded gas monitoring and smart camera exclusion zones and standardized controls for working at height across the drilling fleet. While we continue to make positive progress as a business and as an industry, we need to maintain an unwavering focus on improvement to keep our people safe. Moving to Slide 6, group performance. As mentioned earlier, EBITA increased 3% to a new first half record of $160 million, despite the strength in the Australian dollar at the end of the half, which has continued into the start of the second half. Our EBITA margin improved to 9.3%, driven predominantly by the transition away from the underperforming underground contract in Botswana. As we've outlined previously and as demonstrated in the half-on-half comparisons, earnings and cash flow are weighted to the second half of the year. Contract mining will benefit from several contractual elements flowing through in the second half, and drilling services continues to see demand increasing with margin growth expected in the second half. Turning to our divisions, starting on Slide 7. Contract mining contributed around 70% of group revenue and 74% of underlying EBITA before corporate costs. The significant transition in revenue mix continues in line with our strategy with new and existing projects substituting for projects that have concluded in Burkina Faso and Senegal. As mentioned, the conclusion of the underground contract in Botswana has helped to improve first half EBITA margin to 11.1%. Work in hand remains strong in projects such as Great Fingall in Australia, Goldrush in the U.S.A. and Mana in Africa ramping up. The award of the Dalgaranga contract in July 2025 will also have a greater contribution in the second half. As outlined on Slide 8, Drilling Services delivered revenue of $422 million, up 9% on the first half of '25 with utilization continuing to improve across the division. With drilling demand remaining strong, particularly in gold and copper projects, the division is positioned to benefit from margin expansion as market capacity tightens. Swick, in particular, has seen strong demand, recently winning and mobilizing 3 new projects in North America. The multiple mobilizations temporarily impacted margins during the half. However, margins are expected to improve in the second half and into FY '27 as the new projects move to steady state and the benefit of improving market conditions are realized. On to Slide 9. Mining and technology services has delivered improved performance compared to the first half of '25. The BTP rental fleet saw higher utilization with idle fleet returning to work, although still below historical levels. BTP parts continue to deliver below expectations, presenting an opportunity for improvement in the second half. idoba continued to focus on its underground simulation tool with costs reducing as planned with further reductions forecast in the second half of '26. Overall, our first half results met expectations with our balance sheet continuing to strengthen. I'll now hand to Mike, who will provide more detail on our financial results. Michael Ellis: Thanks, Mark, and good morning to those on the call. Thank you for joining us today. I'll now step through the financials in more detail, starting at Slide 10 at the underlying profit and loss for the half. Our revenue has stayed consistent on the prior corresponding period at $1.73 billion for the half. As you're aware, the underground project in Botswana, which was our largest by revenue contribution in the prior half, at circa $120 million, completed at the end of FY '25. The collective team has done a great job to offset this during the first half of FY '26, driven by new work and scope increases in contract mining at the Great Fingall, Dalgaranga, Goldrush and Mana projects, together with increased revenue within our Drilling Services brands due to improved utilization. Our depreciation has reduced from $168 million in the first half of FY '25 to $157 million or 9% of revenue this recent half. The primary driver was the transitioning portfolio in contract mining. 2 main points on this, selling the large underground fleet to the client in Botswana, which had significant depreciation in the prior corresponding period. Secondly, we had the conclusion of 2 surface mining contracts, Sanbrado and Mako that had higher depreciation compared to underground and drilling projects on a like-for-like basis. Looking forward, all things equal, group depreciation will normalize at low to mid-9%. On to earnings. The EBITA result of $160 million with EBITA margin improvement to 9.3% was a strong result for our first half. It was underpinned by improved performance in contract mining, driven by the portfolio mix and operational delivery, consistent delivery from drilling services and a stronger result from mining and technology services compared to the first half of '25. Interest expense was $28 million for the half, substantially down 20% compared to the first half of FY '25. This was due to the early repayment of the 2025 senior unsecured notes, further lowering our gross debt, providing us balance sheet capacity, but also ongoing earnings per share improvements. Income tax increased marginally by 6% with increased earnings this half, representing an effective tax rate of 30.2% in the half. It should be noted that our effective tax rate for FY '26 is still expected to be 32% for the full year. Our underlying NPATA of $92 million is up 12% with an improved NPATA margin of 5.3%. Lastly and importantly, our underlying earnings per share increased 12% on the prior corresponding period, a great result for the half, driven by the EBIT margin improvements and reduced interest costs. On to Slide 11, the reconciliation of our statutory results to the underlying results. Although pretty straightforward this half, I will provide some further color. Amortization of the customer-related intangibles was $19.6 million during the first half, but is expected to reduce significantly in the second half due to the completion of the Yaramoko underground contract in Burkina Faso in December. This contract formed part of the original Barminco acquisition accounting in 2018. Looking forward, the amortization of customer-related intangibles will be circa $30 million for the full year FY '26 and will further reduce to circa $14 million in FY '27. idoba development costs of $4.7 million were down 30% on the first half of FY '25 following last year's review. They will further reduce in the second half to circa $4 million as the development spend for our simulation product reduces in line with the development milestones. In FY '27, we will account for the development costs in our underlying earnings as the product moves into commercialization and development expenditure is further reduced. Net foreign exchange losses amounted to $4 million and predominantly related to non-cash movements of intercompany loans and tax balances, noting that the first half of FY '25 was an FX gain of $5.3 million. Turning to the cash flow on Slide 12. Operating cash flow before interest and tax was $193 million, lower than the prior period, predominantly due to the timing of debtor receipts and creditor payments upon the completion of various projects in the half. We received $50.3 million of overdue debtor receipts in January, impacting reported free cash flow at period end. As noted in prior calls, our cash conversion at the first half is generally impacted by short delays in client receipts and other temporary working capital movements. This has no impact to our overall liquidity profile. After adjusting for these late receipts, normalized free cash flow was $33.1 million, up 8% on the first half on a like-for-like basis and represented cash conversion of 77%. As flagged in our FY '26 guidance, our free cash flow will be second half weighted in FY '26, which is consistent with the last 3 years of solid free cash flow delivery in the second half of the year. We are confident on delivering cash flow conversion in line with historical averages of greater than 95% for the year. Net interest reduced in line with gross debt reductions and cash tax was down during the period due to the timing of tax payments. Our gross capital expenditure remained in line with the first half of FY '25 at $170.7 million with continued investment into our fleet. We also realized $21.4 million from the sale of assets and investments. This predominantly related to the sale of assets to clients that completed projects, including Yaramoko, Sanbrado and the Mako project. Lastly, you will notice the cash outflow of $135.4 million to repayments of debt as a result of the gross debt reductions previously mentioned. That is a good segue to Slide 13, the balance sheet. As a result of the debt repayments, our cash balances reduced during the half to $275 million and back to normal operating levels, noting that it was elevated at 30 June, 2025 due to the sale of assets at the completed underground project in Botswana, which was received in late June '25. Liquidity remains very strong at $818 million, supported by $543 million of undrawn committed facilities and $275 million of cash, providing significant optionality to pursue growth opportunities that meet our hurdle rates and deliver into the execution of our strategy. During the half, we successfully completed a heavily oversubscribed refinancing of the syndicated debt facility, increasing the facility capacity to $650 million on improved pricing and extending maturities. As part of the process, we also welcomed several new domestic and international lenders to the facility, highlighting the positive support from the debt markets for the scale and the consistency that has been built over the years. The balance sheet remains very strong and robust, offering good flexibility and our disciplined approach to balance sheet management positions Perenti to continue to pursue both organic and inorganic growth into the future. On to Slide 14. Disciplined capital allocation remains our key focus to generate sustainable long-term returns for our shareholders. Since FY '19, we have invested to grow revenue and EBITA, both organically and inorganically, resulting in strong sustainable free cash flow over the past three years. This has enabled us to reduce net debt and leverage from 1.3x in FY '21 to a very comfortable 0.6x at reporting date. With debt well managed, we resumed dividends in FY '24. And during periods of undervalued share price, we have bought back shares, increasing EPS. This balanced approach will continue supporting growth opportunities that meet our investment criteria, consistent sustainable free cash flow generation, regular dividends, share buybacks when suitable and maintaining a robust balance sheet. In closing, earnings remained strong in the first half of FY '26 in a transitional year for contract mining, highlighting the scale that has been built in Perenti over the years. Our balance sheet continues to strengthen with significant available liquidity, creating capacity to continue to execute on our strategy. Thank you. I will now hand back to Mark. Mark Norwell: Thank you, Mike. As detailed on Slide 15, the outlook remains bright for Perenti. Secured work in hand at 31 December, 2025 was $5.8 billion, reflecting a normal drawdown of work executed during the half and partial replacement through some new and expanded projects. The pipeline remains strong at $18.6 billion with North America representing a growing component of that pipeline. This month, Barminco received a letter of intent from Barrick for its Fourmile project in Nevada U.S.A. to undertake limited early work readiness activities. The letter of intent reflects Barrick's continued confidence in Barminco's technical capability and underground development expertise and represents an important step toward progressing the Fourmile project. We'll continue to work together with Barrick toward finalizing scope and contractual arrangements with earnings anticipated to commence mid-FY '27 post formal award in the coming months. This is excellent news and demonstrates ongoing execution of our strategy to grow in North America. With the neighboring Goldrush project also ramping up and the Red Chris mine in Canada currently in the process of finalizing mine expansion plans, North America work in hand could be significantly larger in a short period of time. Overall, the sheer number of opportunities provides confidence in the outlook beyond FY '26, although we will remain disciplined, patient and focused to ensure projects we secure support sustainable delivery of TSR rather than just short-term revenue growth. Building on Slide 14, where Mike outlined our significant earnings growth and net leverage reduction as a result of consistent cash generation, Slide 16 illustrates how we have also evolved our portfolio since 2019. Firstly, the revenue of the business has more than doubled. All divisions have grown while also increasing regional diversification. The Australian portion of revenue has overtaken Africa as the largest contributor to the business, and the growth in the North American market is now gaining momentum for both Barminco and Swick. In 2019, Perenti had no projects in North America. Now we have 8 projects underway today with an ever-increasing pipeline and positive outlook. A glimpse of the future for Perenti can be seen in the relative makeup of the pipeline. In FY '19, the opportunities were predominantly in Africa with the remainder in Australia. Now the opportunities are dominated by Australia first and North America second with new opportunities starting to emerge in the Middle East. Africa will remain a strong region for Perenti, but as always, projects must meet our risk and return hurdles. Overall, we have significant organic growth opportunities across our operating regions and services. Slide 17, outlook and revised FY '26 guidance. The portfolio continues to deliver strong and reliable free cash flow, supported by the scale of the group and the improving quality of earnings. The recent strengthening of the Australian dollar has tempered expectations for the top end of our revenue and EBITA guidance. Conversely, we have increased our free cash flow guidance to greater than $170 million with capital expenditure guidance reduced to $325 million. To achieve these targets, earnings and cash flow will be weighted to the second half of the year, consistent with the performance of FY '25 and prior years. EBITA growth in the second half is anticipated to be bridged in a similar fashion to FY '25. A $10 million to $15 million step-up in contract mining is expected, $5 million to $10 million from Drilling Services and the balance from Mining and Technology Services. In addition, we will continue to see the benefit of our gross debt reduction in the second half in the form of reduced interest payments. To deliver our full year guidance, the priority remains the focus on the safe delivery of services, continued investment in the development and capability of our people and supportive market conditions. Additional focus will remain on winning and extending projects that deliver sustainable value-accretive growth. Revenue growth alone is not the objective. Projects must be secured on terms that support profitability and free cash flow for the long-term success of our business. With several projects ramping up, particularly in Australia and North America, discipline and consistent operational execution will be critical. Activity in the exploration drilling market continues to build, consistent with the early stages of a longer term trend. Consequently, drilling utilization is expected to lift during the remainder of FY '26 and into FY '27. Finally, by maintaining a disciplined and balanced approach to capital allocation to organic and inorganic growth opportunities, Perenti is well positioned to continue delivery of enduring value to our people, clients, communities and shareholders. On to Slide 18. In summary, Perenti has delivered a consistent first half with a new record first half EBITA, EPS growth of 12% and strengthened the balance sheet, positioning the group well for the remainder of FY '26 and beyond. As announced at our AGM last year, this will be my final year with Perenti. While the Board is well progressed in the search for a new MD and CEO, my focus remains on supporting our people to safely deliver FY '26 and in time supporting the Board and the new MD and CEO to transition to new leadership. Details of the transition will be shared when the new MD and CEO is announced. In the meantime, it is business as usual. Thank you all for your time today, and we'll now move to Q&A. Operator: [Operator Instructions] And today's first question will come from Sumeet Ozarde with Citigroup Global Markets. Sumeet Ozarde: The first one, just could you talk about some of the contract mining opportunities, new and renewals that we should be thinking about in the next 12 to 18 months? Mark Norwell: Yes. Thanks, Sumeet. Audio is a bit challenged, but I think you're asking me about contract mining, pipeline. So I guess, firstly, I'd say that the pipeline is significant and certainly very strongly weighted to North America and also Australia and still some very good opportunities in Africa. So the outlook is extremely positive. We know that the [Technical Difficulty] Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. [Technical Difficulty] Pardon me, this is the operator. We would like to resume the question and answer session. [Operator Instructions] Mark Norwell: Well, it's Mark Norwell. I might pick up on Sumeet's question that I was midway through answering. Firstly, apologies for the technical challenges that we've been experiencing this morning. So hopefully. we've still got a few folk on the line. Sumeet's question was regarding the outlook for contract mining, and I'm not sure when it dropped off, so I may repeat some items that we already covered off. Certainly the pipeline is extremely strong in terms of the outlook. The thematics of underground mining, very strong, and obviously, commodity price is very strong as well. In the near term and as announced in our results to date, we are working with Barrick for their Fourmile project in Nevada. We've had a limited notice to proceed for early works there. Expectation for that to come online in FY '27. So we're very excited about the Fourmile opportunity. I visited Nevada a couple of weeks ago and visited the Goldrush project for Nevada Gold Mines. We see some potential expansion there. So really the Nevada region looking strong. Red Chris project with Newmont up in British Columbia. We've been there for several years. Newmont are working through expansion plans currently. And subject to that continuing and getting approval from Newmont, we're well positioned to hopefully secure more work there. We're also in discussions with another client in North America that we're sort of hopeful of for an outcome into FY '27. So very strong there. In Australia, we got a couple of active tenders at the moment for Barminco that we're working through and we still have a number of projects in the pipeline for Africa as well. And finally, with a number of existing clients we've worked with for many, many years, supporting them on expansion plans as well. So in summary, a very strong outlook for contract mining and also a strong outlook for drilling services into FY'27. Operator: [Operator Instructions] There are no questions at this time. I'll now hand back for any closing remarks. Mark Norwell: All right. So maybe due to the technical difficulties, got off easy today. But look, thanks for people bearing with us with the technical challenges, but importantly, thank you for joining the call. Look, we delivered a strong result with our earnings continuing to improve. We are well positioned to deliver another full strong year ahead and we do have a very good line of sight to opportunities across our divisions into the back half of '26 and into '27, particularly with North America. We're getting some really good momentum into North America at the moment. And our collective earnings between North America and Australia have really shifted over the last several years as we've been growing the business and obviously improving the balance sheet. So not only does the outlook look positive, but we also have the strong balance sheet in place to be able to support significant growth in the future. We will maintain discipline with that growth obviously and look for the long term, not just sort of one year, it's sort of many years ahead. So thanks for taking the time to join the call. Enjoy the remainder of your day. Thank you. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Thank you for standing by, and welcome to the Electro Optic Systems 2025 Full Year Results. [Operator Instructions] I would now like to hand the conference over to Dr. Andreas Schwer, Group CEO. Please go ahead. Andreas Schwer: Good morning, ladies and gentlemen. Welcome to our annual results presentation. I will go through the slide deck, which has been published on ASX this morning. Starting with Page #4 with the agenda. So we will go through the 2025 summary by highlighting the most important aspects of last year. I will give you some aspects in terms of market conditions. I will further explain our growth and expansion strategy. We will focus on the order book and the forthcoming sales pipeline before I will hand over to our CFO, Clive Cuthell, who will give you a detailed overview about our financial performance and the cash flow situation. At the end, I will take over again to lead you through our strategy and to highlight some further growth and strategic market opportunities. Let's switch to Page #5, please. The EOS leadership team is stable, the same as last year with one exception. We have added Lee Kormany. Lee is heading our Defense Systems Australia team. The other people you probably know from last year's presentation. So 2025 summary, Page #7. The markets are not only remaining strong, they are getting stronger and stronger month by month. Thanks to global tensions and some advancements on the technological side, we expect to benefit largely from those kind of superb market conditions. Our strategic focus is absolutely on 2 domains. One is the counter-drone business. We are aiming to become one of the globally leading anti-drone companies. And also, we want to become one of the world-leading space control or space warfare companies. EOS has enhanced its sales capability. We have added significant number of people, in particular, in Europe in order to increase our sales capability and the order book 2025 is a good testimony of that. We have also expanded in terms of geography. We have added new offices and operations in Europe, in France, in U.K., in the Netherlands and Germany to be followed soon. In terms of commercialization, we have succeeded in the high-energy laser weapon domain by EOS, becoming the first company worldwide to sign a 100-kilowatt high-energy laser weapon export contract. That is a breakthrough for EOS, and it's a breakthrough in the laser weapon world. And we are very optimistic to sign further contracts over the next years to come. We also have executed, in a very disciplined way, our M&A strategy. We have divested what is noncore to our business. So you might remember it was SpaceLink in 2022 and 2023. And now we have divested also EM Solutions because it didn't fit or it doesn't fit our long-term strategy. Instead, we have reinvested into something which is absolutely core to our business, into a C2 command and control company, MARSS, which also brings with it AI technology, AI algorithms, which you can easily put into our remote weapon systems and the laser weapons to further increase and improve the performance in terms of drone detection and classification. So all those things, we can tick the box and which makes us very optimistic in terms of future outlook. We move to Page #8. Let's have a look to the highlights of 2025. So the revenue was $128.5 million. It's down compared to '24 because of 2 aspects, obviously, because of the divestment of EM Solutions. and second, some of the major order intakes happened later than we wished to be in 2025. And that had obviously also an impact on the revenue in 2025. We expect in return all that to happen in 2026. The gross margin went up to 63%, which is very positive and very pleasing. The underlying EBITDA with minus $24 million is a result of our revenue, which went down. And you might remember our CFO saying that our breakeven is around AUD 200 million. So obviously, we expect this year to see a change there. If you look to the order book, I think that is the most important aspect here. We have signed last year 18 contracts totaling up to AUD 420 million order intake, which is a significant high number compared to the year before, where we only had $70 million, 6 orders in order intake. This is resulting in an unconditional order book of AUD 459 million, and this unconditional order book does not include the conditional order, which we have signed with a Korean client. Our cash position is very positive with more than $106 million plus the restrained cash sitting for bank guarantees and other activities, and that comes on top of $106 million. In terms of investments, we have opened quite recently our new high-energy laser weapon factory in Singapore, and I will come back at a later point in time on that particular subject. We've announced the acquisition of the C2 command and control company, MARSS, end of last year, beginning of this year. We have opened up facilities in the Netherlands, France, U.K. and Germany will happen also this year. Our total number of employees went up to 436 people. We remain extremely sensitive in terms of adding indirect costs to our organization to keep overall indirect cost and overhead low and to stay very competitive in terms of our pricing structure. Page #9. If you look backwards into 2025, the year was filled up with many positive events, obviously a little bit back-end loaded. I just want to highlight, again, in August, the landmark contract with the Dutch government for the first 100-kilowatt laser weapon, EUR 71 million. We have been successful in bidding with LAND 156, which by the dollar value now is not so large, but it has more than AUD 1 billion order intake perspective as we are now selected with our partners to be the solution provider for the anti-drone systems for Australia. We also signed the LAND 400 Phase 3 contract with more than $100 million in October and towards the end of the year, very important contracts with General Dynamics, one of our key clients, and one of them is opening up the big market towards the U.S. Army as we became the key supplier for the future Abrams main battle tank. I will also come back to that in a minute. So the market conditions are superb. The markets are growing as the budgets are growing. And as long as geopolitical tension continues to be high, we can benefit from that one. This statement is not new. But again, if you see how much budgets are growing over the last few months and how many governments have formally stated to go even higher, this is very promising for Electro Optic Systems. And again, that's the key reason why we want to expand into those markets, in particular, into the European market as in Europe, this super-cycle is extremely dominant. On this chart, again, you can see on the right side, the number of drone attacks, which is extremely growing. The number of missile strikes on Ukraine is rather going down. That has more or less a kind of price or cost structure rationale behind. The anti-drone business, as a consequence of that, will become predominant. The entire warfare situation in Ukraine has changed dramatically. The Ukraine war in the beginning was pretty much a kind of war on the ground between artillery forces on the left and right side. That has changed now drastically. It's now a drone and an anti-drone warfare where the front line is dominated by loitering ammunition falling down and destroying tanks which are high-value target destroyed by drones for a few thousand dollars only in terms of production cost. So this is the key reason why we believe that this drone or anti-drone warfare will be dominant not only in Ukraine, but will also play a dominant role in all the future conflicts to come. And that's the reason why we invest heavily into this kind of technology base and why EOS is well positioned to become a global leader in this particular type of business. Page #12, you can see the different types of effectors being able to defeat drones. You obviously need to have a layered response to tackle the different types of drones attacking your high-value assets. EOS is concentrating on the so-called hard kill. We're concentrating on hard kill as soft kill becomes less and less effective in military context as drones are more and more hardened. In the area of hard kill, EOS has by far the broadest product portfolio globally. Our product portfolio includes remote weapon systems. Here, we are one of the world market leaders. Nobody is as accurate as we are in terms of anti-drone performance on long range. We have added to our portfolio, end of last year, interceptor drones, drones which fly up, which kill the attacking drones by flying into them. That is a new type of effector which we are happily adding to our portfolio and which is predominantly of advantage in commercial or homeland security applications where you cannot use missiles, rockets or canon-based air defense systems. We have added now high-energy laser weapon and our actual architecture allows us to scale those weapons between 50 and 150 kilowatts. And I just want to remind everybody that there's only one other competitor to EOS in the global market. And so the overall competitive situation is very, very favorable to EOS. We have also added rocket systems and various types of missile systems on our multi-carrier platform, so we can offer the full range to be able to defeat any kind of incoming drone threat. And with the acquisition of MARSS and its NiDAR Command & Control system, we are now in a position to offer fully integrated solution. The command and control system is the brain behind any anti-drone system as it identifies the threat as it allocates the various effectors to the threat, and it's the key to make sure that you can defeat large quantities of drones or drone swarms. So now we are in a position as one of the very, very few bidders on the market to offer turnkey solution to any client in the military, in the homeland security and in the civil/commercial context, including operators of airports, for example. Let's move on to Page #13, please. Number 13 is not an exhaustive list of partners and clients. All those companies mentioned here are also clients of Electro Optic Systems. You can see very prominent names, big OEMs worldwide, OEMs which trust EOS, which trust our performance, our quality, our high-end products, and all of them have acquired our products. I just want to highlight one aspect. You can see on the right upper side, a prototype of the M1E3 Abrams main battle tank. This is the breakthrough landmark contract, which we have achieved by end of last year. Even if the dollar value is not so impressive, it is only the very first slice of something which will become very, very big. So after many years of absence from the U.S. Army market, we have succeeded now -- we have been selected by the U.S. government and by General Dynamics to become their sole partner to put our R400 Slinger weapon station in a very autonomous version on top of the Abrams tank, allowing this very important American platform to survive the threats of the modern battlefield. As the U.S. Army is operating thousands of those tanks and as many export clients around the world are operating Abrams tanks, we believe that the total market potential just for this type of integration installation will add up over the next 15 years to up to USD 3 billion. So that's the reason why this contract now, even if it's only the very first slice, is extremely important for Electro Optic Systems. We expect further slices to come in the course of the next years, and this will add up to those large numbers then. Let's move on. Slide #14 is a selection of some partnership agreements which we have signed in the course of the last year, very important ones. So Calidus is a very strategic partner in the Middle East for EOS, not only for remote weapon systems, we aim also partnership in the other product domains with Calidus to open and to secure, for example, the very important UAE market. We've signed, under recommendation by the British government, a partnership agreement with MSI, which opens for us the U.K. market and associated exports market. So MSI will produce our weapon systems under license. We've also entered into a teaming agreement with a world-leading KNDS company, which is this German-French multinational company. KNDS is also highly interested in the partnership with us. We can add up there or we can add and integrate their canons on our weapon stations. And KNDS in return is interested in producing our weapon systems, our remote weapon systems in France for the French market, for example. So very important to penetrate those European markets. And we most recently also signed a strategic partnership agreement with a Turkish company, Roketsan. Roketsan is also a very strong, very large company active in the missile domain today, which has decided to enter into the high-energy laser weapon domain. And with Roketsan, we are in a very comfortable position and very optimistic to conquer also the Turkish and associated export market with high-energy laser weapons. Page #15. So the high-energy laser weapon domain is, for us, the first strategic pillar of growth over and above a remote weapon system market, which is growing by itself. Again, irrespective of whether or not the Ukrainian conflict would come to an end, the remote weapon system market will continue to grow and the laser energy market -- the high-energy laser weapon market will be the first layer above that. As there's only very limited competition in our 100-kilowatt power domain, we expect that we can acquire a large chunk of the non-U.S. international market. In order to be able to serve those huge markets, we've opened up our first, and I think it's the worldwide first serial high-energy laser weapon production facility. It was opened on February 6, so quite recently. It is a 20,000 square feet capability, a factory which allows us to produce 20 laser weapons per year, and we have expansion potential to go up to 40 laser weapons per year there. But even if we can produce 40 laser weapons per year there, we expect that most of our clients will ask us to localize production in their home country. And here, our unique feature comes into play as EOS is the only company worldwide in the laser weapon domain, which owns all the IP relevant to do this kind of development and production. We can offer turnkey solutions, and we can localize the production in each client country, which none of our competitors is able to do so. That's the reason why we strongly believe into this kind of strategic growth area. To give you some update on where we are with the Netherlands contract, so the initial design approval, the first milestones, have been successfully passed. We have passed the so-called PDR on the system. We have passed the CDR on the laser itself, which is a very successful process and progress which we have achieved. The client is extremely happy. We are negotiating now with the clients to increase the scope of the contract and to accelerate the delivery time frame. The client is highly interested in signing further orders with EOS and to make EOS a strong partner -- a strong strategic partner of the Netherlands government. So this is very promising, and it's a world-class testimony of our quality and performance. If you look to the opportunities, our go-to-market strategy depends on the type of client, depends on the region. If you look to the NATO market, and in particular here, the Western European market, it's, in most of the cases, either a direct sale to a government or we go through partners and through teaming arrangements with the respective national champions. If you look to the Middle East, it's either direct sale or it's a partnering model with local producers. In many cases, it's governmentally owned companies. And if you look to other markets like the Korean markets, there are a range of other channels, depending on the specific local market conditions. So we have continued discussions and ongoing negotiations with many countries and many governments related to future high-energy laser weapon sales opportunities. Among those ones are Germany, France, Italy, Turkey, Saudi Arabia, the UAE, India, Korea, Australia and the United States. This list is not exhaustive, but it should give you a little bit of a perspective of how much this kind of weapon system is in demand and how much the market will grow in the future. And again, we are in the pole position because we have been the only company so far being able to sign a 100-kilowatt laser weapon contract to an export client. The conditions of the USD 80 million Korean laser weapon contract we have mentioned before, it's a highly conditional contract. It's not included in our internal planning. We have not spent any money on that one so far, but we expect that the conditions will be concluded in the course of the first quarter this year. But again, no guarantee is coming with that one. Page #16, space warfare, whereas we call our product line for high-energy laser weapons in the anti-drone business domain, Apollo, we have given our product family for space warfare, the name Atlas. Atlas comes in different configuration in fixed installations, like you can see here on the right side of this slide, or it comes in a mobile configuration. It comes in containers, which are coming on the backside of trucks. So the Atlas product range is designed in order to fulfill 3 dedicated missions. The first mission is to blind and dazzle satellite sensors to stop satellites from taking pictures and intelligence from the ground. That's very important in any kind of military context. The second mission is to disable or to defeat satellites. This kind of destruction capability comes by increasing the laser power. So if we include now our high-energy laser weapon capability, the 100-kilowatt effectors, into the kind of optical chain of our telescopes, it will allow us to do those kind of missions. And the third mission is obviously to move satellites and to move space debris. We can even cause atmospheric re-entry if we illuminate those satellites and space debris with our laser weapons. So this is giving our operators, our clients, a huge portfolio of more decisive capabilities. I want to highlight that there's not any other company outside EOS being able to offer this kind of competency and capability to any client. That's the reason why this will become a huge growth opportunity for EOS. And I'm very happy to announce also that we welcome frequently commanders from Tier 1 governments, commanders of space forces coming to Canberra, coming to our Mount Stromlo installation to visit and to witness what we can do in this kind of domain. Page #17. You might remember this slide from the last year. We always had 3 ticks. The tick on markets was there. The tick on product was there as we have launched many new products. We are highly innovative. And we can also tick now the right side of this slide, we can tick sales and marketing, and we can tick the order book as we have increased our order book from $136 million end of 2024 to more than $459 million by end of December 2025. Again, this does not include the USD 80 million order from this Korean client. So this is an extreme success last year. And again, we expect this year to be extremely positive in terms of order intake. We will continue putting focus on order book growth as this will be the baseline for any revenue growth in the future. Page #18. I don't want to go into all the details here. I mentioned some of them before. Important is really that our European footprint is creating now much more value, much more order intake. And if you really look to the development of the unconditional order book, this underlines our statements. It is very strong with $459 million, and we aim to realize about half of this order book value by revenue in 2026, plus all revenue coming in by new orders taking on board over the next few months to come. Page #19. This is an updated pipeline. This pipeline is extremely conservative. So if you go through that one, you will notice that we have not included here order intake for laser weapons in 2026, but we're obviously aiming for achieving order intake for laser weapons in 2026. But even if it would not come hypothetically, the pipeline is very strong and the foundation for a very strong year in terms of revenue is extremely high. So it's -- this contains order intake opportunities from all around the world. It is extremely diversified. It includes lots of opportunities from the Middle East, but also from North America and from Europe. And it should give everybody lots of confidence that the growth strategy of the company is intact, and we are in a very, very healthy and extremely positive outlook position. Page #20, a summary of the MARSS acquisition. MARSS is one of the very few companies in the market, which is offering a highly customized integrated anti-drone solution. It is a company which has fielded more than 60 systems around the globe, a company which is well established, a company which is world-leading in terms of user intuitive C2 systems, a company with which we have collaborated in the past for a long time. And our team always came back and said that the MARSS integration is the most easiest to be done. The MARSS user interface is the best one from a customer perspective. And with MARSS being part of our EOS portfolio once we have completed the deal in a few months or weeks from now, we are in a position to offer turnkey solutions to the client. And again, with this kind of capability, we have also the advantage of including all those AI algorithms into our weapon stations and into our laser weapons to make those weapon systems even more competitive and leading edge by being able to even better discriminate drones and to detect drones. So the transaction summary, we announced that on January 12, there's an upfront cash payment of USD 36 million, plus an earn-out in shares and cash. The earn-out will happen as the order intake is happening and as all those products and all those orders are extremely profitable, we expect that we can pay those kind of earn-outs by the order intake cash flow to come. So I would like to hand over now to Clive to go through the details of the financial results 2025. Clive? Clive Cuthell: Thank you, Andreas. So for those that joined late, my name is Clive, and I'm the CFO and COO. I joined EOS 3 years ago in mid-'22, going on for 4 years. Revenue -- as this slide shows, revenue came in at just over $128 million. That is in line with what we said at the end of January, which was slightly above the guidance range that we issued at the end of the year last year. The lower revenue compared to last year really reflects the end of old contracts and the start of some new ones and a little bit of a gap in between. And obviously, there's been, as Andreas said, a big focus on growing the order book this year to underpin a position next year that hopefully will be more favorable. The gross margin was 63%. This includes 2 main things. One was the benefit of a contract that was finalized in the Middle East. That was already reported back in June, so that's not new news. The second thing that's perhaps more significant is there has been a continued improvement in the base gross margin in our business. We do not expect to achieve 63% gross margin going forward, but we do expect a continuation of the multiyear improvement in gross margin that we have seen consistently between '23, '24 and '25. So we are aiming for continued improvement in '26 on the historical levels, perhaps over 50%. The underlying EBITDA was a loss of $24 million, mainly driven by the lower revenue during the year. The gross margin benefit was offsetting some increase in operating expense as well. The EBIT was impacted by a number of items, including higher depreciation and amortization, a big chunk of which is customer-funded CapEx. We also had 2 nonrecurring items totaling $9 million. These are nontrading, 2/3 of this relates to the ASIC matter penalty in Australia, and the other 1/3 relates to some acquisition costs with MARSS that were expensed during the year. And there are some details in the back of the slide deck on these nonrecurring nontrading items. Finance costs improved. All debt was repaid in January 2025, and EOS today has no borrowings. The expense for finance costs includes the make-whole expense relating to the debt repayment that took place in January 2025. And the total net profit after tax includes the continuing operations, but it also includes the $91 million gain on sale that was recorded in January 2025 following the sale of EM Solutions that Andreas mentioned earlier. Maybe the other thing to note and highlight on this slide is that we have done an awful lot of work, as Andreas said, on revenue diversity. And the graph at the bottom right of the slide shows the split of revenue by geography, and as we said, an increasing emphasis on Europe, not just in the orders secured that Andreas mentioned earlier, but also flowing into revenue this year. So that work going to market in different ways in different parts of the world is going to continue as we -- and we expect the quality and the diversity of the revenue base to continue improving in future years. The next, Page 23, has the segment results for defense and space. The outcomes at segment level here are largely a result of lower defense revenue because of the gap in contract activity during the year. In the space business, pleasingly, that business continued to grow during the year. As Andreas said, this is really developing -- designing, developing and starting to commercialize new products, particularly in the space control area. And it's pleasing to see that Atlas system work includes customer-funded activity, which flows through the revenue line. As we said, a big focus on growing the order book during 2025. And we have said the order book of $459 million, our outlook for this year -- we've not issued revenue guidance, but we have said that between 40% and 50% of that order book of $459 million is what we're aiming to realize in 2026. And that should give you a little bit of a thumbnail sketch as to where revenue could end up. The next page has cash flow on it. Now the cash flow information was largely announced at the end of January already. So some of this is not new news. But as you can see, the operating cash flow was a net $24 million out the door. That's despite the lower revenue during the year. We did have some big receipts from the finalization of the contract in the Middle East. And also in the cash flow, we had the impact of interest in the operating cash flow -- the impact of the make-whole interest that I mentioned earlier. Investing cash flows, which was $130 million coming in, included the disposal proceeds on the sale of EM Solutions as well as some other items. Notably, the level of security deposits on bank guarantees also reduced during the year. which is a positive. Financing cash outflows included the repayment of debt of $48 million that occurred in January with the sale -- January 2025 with the sale of EM Solutions. Maybe just a couple of other things. Cash flow discipline is quite important to us at EOS. At the end of December, we achieved the highest yet, the highest ever position of cash received in advance from customers. So upfront payments from customers at the end of December were $42 million, which is up $18 million on the prior year. And that's because of a consistent focus on this item as we deal with customer contract negotiations at the signing stage. We continue to manage cash carefully. We do make targeted investments in inventory where we can get a source of competitive advantage from reducing long lead times as some of our competitors are not able to supply quickly. And if we make limited investments, we can really improve there. On the balance sheet, as we've announced previously, cash at bank $107 million at the end of December. And we have a committed term loan facility for $100 million with docs being finalized at the moment to help cash flow liquidity protection over the next 12 and 24 months, and particularly as we get into the MARSS acquisition and aim to realize a lot of the growth that we've been mentioning earlier. That's it on cash flow, and I'm going to hand back to Andreas now, who's going to talk a little bit more strategically. Andreas Schwer: Thanks, Clive. Page #26, key strategic achievements. EOS will position itself as the leading counter-drone company worldwide, being able to serve any kind of client, whether it's military or nonmilitary. And in order to do so, we have also increased our portfolio in counter-drone effectors. So beside our R400 Slinger, we are at the last stage now to also include the R800 in anti-drone configuration to the field. And all those systems will be, in the future, equipped with AI-enabled C2 system coming from us, which allows us to be even more effective. I just want to mention one further contract, which we have not announced so far in the -- which we have not outlined here in the paper. It's the German UTF tender. It's probably one of the largest RWS tenders over the next 10 years to come. The German government wants to procure more than 3,000 systems and among -- and we've been among 13 bidders to bid for this first phase of the contract. The German government has down selected 3 bidders to go into the last round of selection, and we are proud to say that our partner Diehl and EOS, we are among those 3 last bidders in a very promising position. So we are very optimistic to make that happen in the course of this year and to announce an order intake on that one, not this year, but the final decision is probably to be made by the German government in 2027. So this is -- this will become then also the next landmark order intake. Again, it's more than 3,000 weapon stations. So that's underlining our growth strategy in remote weapon systems. And as we have now partnership agreements in place with local champions in Germany, in France, in U.K., those markets are widely open for us in the future. The high-energy laser weapon market is just starting now. And again, we are one of the very, very few contenders in this market, only one other company active in the 100-kilowatt domain. This is promising very healthy contracts, very profitable contracts in the future. And with our new laser innovation center, the worldwide first serial production laser center, we should be well positioned there. Space control, to be more commercialized, we have to complete our development on the mobile solution, the mobile Atlas solution, which will put us into a market which is just about to come. It will position us as the unique source outside U.S., and we will be very well positioned to let the company grow in space control then over the next 3 to 10 years. So Page # -- what is that, 27, our growth strategy. Again, we will have a very robust organic growth by RWS by enabling our weapon stations with the AI algorithms and with bringing further counter-drone variants to the market. This will be substantial for our further growth. And then, with the laser weapon and with the MARSS-enabled C2 systems, we'll be in a position to bump our revenues up significantly over the next few years. Before then, space control will kick in with very substantial revenues to become the world market leader in space warfare. So we will continue commercializing our IP assets, our huge inventory of IP and innovation. We will further put effort in developing software. We will continue investing into new features such as mesh network technologies to give our clients a leading edge over anybody else in the market, whilst obviously maintaining our strict capital discipline. So Page #28. The markets will remain very supportive. We are benefiting from a super-cycle. We are perfectly positioned with our counter-drone and space control business segments within those markets. And as our growth strategy and our go-to-market strategy in Europe is already proving that we are highly effective and highly successful, we are very well positioned. And again, with the inclusion of MARSS in our portfolio and our widened product range, we should be able to offer and to reach out to all the homeland security and commercial clients in the future as we expect that most of the airports, most of the civil and commercial infrastructure needs to be protected against drone attacks in the future. EOS wants to be in the middle of this kind of market to become the world-leading anti-drone company. Thank you, ladies and gentlemen, for your interest. We are ready now to answer your questions. Operator: Your first phone question is from Baxter Kirk with Bell Potter. Baxter Kirk: Andreas and Clive, can you hear me? Andreas Schwer: Yes. Baxter Kirk: You've mentioned commercialization of the stationary Atlas product from 2026 onwards. What would the initial contracts look like? Should we expect multiyear development contracts like the laser contracts and then followed by JVs? So how would that work? Andreas Schwer: So the product in terms of stationary fixed asset product is available. We can duplicate our installation on Mount Stromlo. It's a fixed asset, which we are starting now to offer to the market, to clients. So a copy of this kind of system comes in for a price of around about USD 100 million. That is an asset which we can sell instantaneously. There is no further development needed. Development is still continuing for the mobile solution where we expect to be able to have a prototype ready by end '27, 2028. Baxter Kirk: Okay. Great. And since the events that happened last year regarding the drone incursions across Europe, are you seeing an acceleration in procurement cycles, particularly for your counter-drone products? Andreas Schwer: Yes, we can see a growing demand, but obviously, military procurement cycles are long lasting. It goes through a very complex capability definition process on the client side, followed by low quantity orders, and that is what we are seeing today. And as soon as low quantities are delivered, as soon as they have done the incorporation into their overall multilayered ConOps process, we can expect that large quantity orders will follow by that. It's the normal kind of cycle when you introduce a new weapon system to the market. Baxter Kirk: Okay. So there's no sort of -- they're not skipping steps or anything, given the urgency of drone protection. It's just following normal procurement cycles. Andreas Schwer: In most of the cases. Obviously, if there's an emergency demand like to support Ukraine, we can expect quick delivery and quick turnovers, same in the Middle East. So that is still the case. But predominantly the market of the future, the growth market will come through normal type of procurement cycles. Operator: There are no further questions on the phone line at this time. I'll now hand back to address any webcast questions. David Bert: Thanks. We have a number of webcast questions, and we'll try to get to as many of them as we can. There are some related questions, which I'll present relating to the 40% to 50% realization of the $459 million backlog. Could you talk a bit more about what sort of swing factors would affect that range and any weighting that you can provide as well? Clive Cuthell: Thanks, David. So the order book is -- as we said, we're pleased. It's grown a lot to $459 million at the end of December. We -- obviously, we track the tenor or the rollout of that order book quite carefully for our internal management purposes. And today, we have guided that we are aiming for 40% or 50% of that order book to roll into calendar 2026. So that represents something like AUD 180 million to AUD 230 million. Now that's obviously the revenue that we're aiming for that could come from the existing order book. And obviously, on top of that, as Andreas mentioned, would be new orders received, particularly in the first half of the year that are capable of delivery before the end of the year. We do -- what are the factors that impact where we land in that range? Obviously, it depends on -- a little bit on order intake and whether we get short notice orders, but also it depends particularly on delivery. A large amount of delivery is within our control, but some of it involves very close cooperation with customers, but we've been working quite hard for several months now to lock in as much of that 2026 revenue as we can. So it does depend on -- more largely on delivery than on new orders being won. We have not issued revenue guidance. This guidance that we're issuing today in order book rollout is as far as we're going at this stage. But we can say that the revenue is as normal, is more likely to be weighted towards the second half than the first half of the year. And if that changes, we can -- we will be looking to keep the market informed. There is quite a wide range in analyst consensus out there that we are aware of. Some of the analyst numbers assume an exceptionally high level of order intake and I'm not -- being turned into revenue in 2026. I'm not sure that's quite right, but that's as far as we're prepared to go at this stage. So thanks for that question, David. Hopefully, that deals with the 2 or 3 questions that have been asked on this area. David Bert: We have a couple of related questions on the Korean high-energy laser contract. Can you confirm if the deposit has been received yet? And if not, is there a deadline on when this contract would be terminated? Clive Cuthell: Thanks, David. So we've been quite clear in our announcements that the deposit has not yet been received. That was a condition in the contract. And the second condition is for a letter of credit to be finalized, and we've also been clear in our announcements that, that has not occurred yet either. And I'll pass to Andreas for the second part of the question, which is how do we look at this? David Bert: Yes. So is the South Korean contract exclusive? And if so, does the cash deposit have to be provided before -- between the 2 parties? Andreas Schwer: So the South Korean contract, which is signed with a private party is not exclusive. We are in parallel also in discussions with the Korean government and end users. And yes, at any point in time, we can enter into contracts with the government in parallel. David Bert: Another question relating to the high-energy laser facility. You mentioned that you can build up to 20 lasers per year. Why does the current order take up to 2 years to build? Andreas Schwer: It takes more than 2 years to build because of the supply chain. Key components which we have to buy from the market have a long lead time. And that is the key reason as with any other weapon system you sell to the market that simply the delivery time line is usually between 2, 3, 4 years. We try to optimize this time line, and we are in negotiations with the client to bring the delivery forward. If everything works well, it could be as early as end of 2027, which is compared to the procurement of any other weapon system, quite a record time. David Bert: Great. There are a number of questions about the German opportunity with Diehl. Could you just talk a bit more detail on -- and what sort of price points for the products? Andreas Schwer: So the German UTF tender, which is about 3,000 systems, it's related to our R150 weapon station, which we do, and which we produce together with the German partner Diehl. It has a total market potential of more than EUR 1 billion. David Bert: What are the next steps for the M1 Abrams tank integration opportunity? Andreas Schwer: So the contract which we have signed end of last year was about to finalize the integration of the R400 Slinger and a very specific version on the Abrams tank. We expect that to happen in the course of 2026. We expect to get the next slice of orders in the course of this year, 2026, before then, large quantity orders will come in by 2027 onwards. David Bert: Great. An analyst has asked, what are the expectations for capital expenditure in 2026? Clive Cuthell: Yes. Thanks, David. So CapEx -- we don't provide guidance on CapEx, but historically, it has been -- typically it has been less than $20 million. I would emphasize that, within the amounts that we've had historically, very significant portions of our CapEx have been funded by customers under customer contracts with no net cash going out from the business. So we would expect to see that activity continue. We do make selective investments in opportunities where we see near -- modest amounts of development spending being required. But we are very judicious in terms of the level of investment risk we take around technical developments and the amount of money we put at stake, and that is going to continue. So that's -- I'd probably leave it at that, David. David Bert: There's a question here on what kind of opportunities are in front of MARSS in terms of timing, value, type of end products and customers? Clive Cuthell: Thanks, David. So we think the opportunities in front of MARSS over the next 2 to 3 years are exceptional because they provide a route to market in the counter-drone area. MARSS has a pipeline and it has an order book, and as one of the slides said earlier that our pipeline slide and our order book slide do not include any information in relation to the pipeline and order book of the MARSS business. They consistently look at a number of markets and different opportunities. And at the moment, they're looking at opportunities that include anything from EUR 20 million and EUR 30 million per bid to, in a few cases, bids that are much larger, stretching upwards, including EUR 50 million and EUR 100 million per bid. Now the lead time on sales in the MARSS business is -- which sells into defense and homeland security, a bit like us, the lead time is just as elongated in that business as it is in ours. But we are hoping that the business could achieve significant orders in '26 and '27 that could make a potentially very material difference to the EOS order book over the next 12 and 24 months. We are not expecting the MARSS order book to be dilutive to EOS margins in any way. And naturally, we are looking for the right cash flow profile on these orders. I think it's a bit too early to be more specific on the size of the order opportunities, but I'm just going to ask Andreas to make a couple of other comments about how we see the market overall for the MARSS products and the cross-selling opportunities. Andreas Schwer: So the market opportunities are tremendous. Their home market was the Middle East or is the Middle East. And as you can see by the geopolitical tensions and the actual political threat scenario between Iran and the other GCC countries, we expect further push coming from that end. So we hope to be able to sign contracts over the next 12 months in a significant value to protect critical military and governmental infrastructure in countries like the UAE or Saudi Arabia. That is imminent. And again, politics is playing currently in our favor there. We also expect that we will be able to sign contracts in non-Middle Eastern markets, in European markets. But obviously, as we need to reach out now to NATO clients for the MARSS portfolio, which was not done before to a large extent, this will take a little bit more time. But yes, all the protection requirements for critical infrastructure in Eastern and Western Europe, MARSS is made for that. And we believe that, that market on the long run will be extremely substantial for EOS. David Bert: Great. There's a question here about the recent news articles around the German government pausing of the Rheinmetall high-energy laser weapon contract. Can you comment further on this? Andreas Schwer: Yes, sure. So we have to look a little bit backwards in history. So the German government has supported Rheinmetall and MBDA over the last 15 years with more than EUR 150 million subsidized R&D work to develop laser weapon technology. Today, Rheinmetall has reached a level of 20 kilowatts, and they have offered and agreed with the German MoD to get into a development contract to develop a 50-kilowatt solution in the course of the next 5 years for a total budget of EUR 500 million. That is a very tremendous amount of money. And when the German parliament -- so the German government became aware of the Dutch contract, which we have signed for a fraction of the price, and when they have asked us, would you be ready to deliver also to us, to Germany, we obviously said, yes, you can get twice the power for less than half the price in half the time. And with that, the kind of statement and obviously, by then consecutive interactions with leading stakeholders on the German government side, the parliament and the government has decided to stop the further procurement in a sole-source mode with Rheinmetall, but to have a detailed look instead on the EOS capability. And that is happening right now. David Bert: A few questions have come through about what's the future product development pathway for our laser weapon project. Andreas Schwer: So our current technology is scalable between 50 and 150 kilowatts. So we don't need to spend any more money to make that happen. But we are in negotiation with 2 governments and with one of them, we will hopefully sign this year, a contract to develop a 300-kilowatt laser weapon family. which is also scalable. This will enable us to offer to the market something which is not the best solution to kill drones, but which is also very capable to act as a so-called C-RAM type of effector. C-RAM means it can go against any kind of missile rocket and artillery shell. That is opening up an additional market for EOS. And we can also use those 300-kilowatt lasers to extend our space warfare capability to engage not only against satellites flying in low earth orbit, the low earth orbit is up to 1,000, 1,500 kilometers and it includes all the constellations such as Starlink, but the 300-kilowatt will also allow us to engage against higher flying objects such as [ GPS ] or GLONASS navigation satellites or even geostationary satellites, whether it's communication, intelligent satellites or what else. So that will give us the full portfolio. David Bert: Great. I think that's all the questions that we have time for at this time. Thanks, operator. Operator: Thank you. And that does conclude our conference for today. Thank you for participating. You may now disconnect.
S&P 500: Best Case Scenario? Another Failed Rally (Technical Analysis)
Operator: Thank you for standing by, and welcome to the Chorus HY '26 Results. [Operator Instructions] I would now like to hand the conference over to Mr. Mark Aue, CEO. Please go ahead. Mark Aue: Good morning, everyone, and welcome to Chorus' results presentation for the 6 months ended 31 December 2025. I'm Mark Aue, Chief Executive; and joining me is Drew Davies, our Chief Operating Officer. I'll begin with an overview of our results for the half year and cover some of the progress we're making on our strategy, having just entered our next phase into Horizon 2. Drew will then take you through the financials and FY '26 guidance, and I will close out with the outlook for the second half and long term. For the past 2 years, we've noted the economic downturn and its material impact across our country. We'd recognize economic recovery is at best still lumpy. Over the same period, we've continued to highlight the resilience of fibre more seemingly as an essential service, and so I'm pleased to be reporting another robust result for the first half. From a results perspective, comparing half-on-half, total fibre connections were up 3% at over 1.1 million, with uptake lifting to 72.4% and fibre revenues growing by 7%. Our ongoing focus on simplicity and efficiency has reduced operating expenses by 3%. Per previous thematic, this is despite inflationary pressures and non-tradable costs, such as rent rates and electricity. EBITDA of $357 million is $11 million ahead of the comparative half with underlying operating cash flows in line with prior year. Gross CapEx was $158 million with sustaining CapEx of $79 million, driven in part by life cycle planning and project timing shifts into the second half. Finally, the Board has declared an unimputed interim dividend of $0.24 for the half. In our last results announcement, I was pleased to speak to the foundations and groundwork we've laid to set us up across our 10-year outlook. Now 6 months into Horizon 2, focus continues shifting to growth, simplicity, and efficiency. We continue to build capability through new leadership and remain optimistic about fibre growth. Likewise, we're alive to adjacent infrastructure opportunities, evaluating several and discounting a number, but we'd also recognize these take time to commercialize and bring to market. Brand fibre messaging continues to land, raising awareness of comparative differences in technology. Research trends continue to move favorably with fibre's preference as first choice interconnect connection now over 67% compared to 12% for fixed wireless customers. Our accelerated retirement of copper continues at pace with just 3,000 lines remaining in UFB areas. This opens material opportunity through recycling, and we see positive pathways to regulatory change as only a question of time. Turning to performance across our 4 strategic LEAP pillars. In Lead, we lifted fibre uptake to 72.4%. UFB2 areas increased to 63% and original UFB1 areas are at 75%. Encouragingly, we are seeing pockets where fibre has already exceeded our 80% target, while others like Auckland and Nelson are at 76% already. In the past, copper withdrawal provided a pipeline to fibre growth. But as the right-hand chart shows, we're maintaining fibre connection growth without the copper tailwind and are unlocking other growth pools. Our plan mix remains positive with over 4 out of 5 customers on a 500-megabit plan or higher. Total churn as an off-net greater than 4 weeks is reducing with indications fixed wireless is plateauing. At the top end, demand for 1 gigabit plans is stable with hyperfibre adding roughly 500 connections per month now. There is often discussion about our home fibre starter plan. I'd say we remain resolute. The introduction of our 50-megabit plan and subsequent boost initiatives to 100 and 500 megabits were the right decisions. Overlay high cost of living pressure, these provided optionality, and we're confident has opened us to markets and customers that existing fibre plans did not appeal to previously. Profiling shows in the main, these are distinct customer groups with lower usage and they have greater churn and reactivation rates than higher tier plans. Whilst we saw initial downgrades from higher plans, this was also exacerbated by some retailers moving pricing at the same time in Q1. Now this has settled, we've seen encouraging trends over the past quarter in particular. Demand for the 100-megabit plans is strong with circa 75% of that growth coming from off-net and 25% from downgrades. Even more favorably, we're seeing a material shift in uptake for long-term inactive fibre premises with a 24% increase from premises off-net greater than 3 months, 32% from off-net greater than a year, and 62% from premises off-net greater than 2 years. Our hypothesis being the previous 50-megabit plan didn't appeal and/or the previous 300-megabit plan was too much. And that was also part of our boost rationale to create clear air between fibre and fixed wireless plans. Downgrades of the 500-meg plan have now stabilized post boost with overall churn also reducing. We're also increasingly seeing upgrades into the 500-megabit plan with customers wanting either more speed or those customers who may have downgraded previously, but are now returning back to the 500-meg plan. Finally, we'd note intention to switch research continues to highlight fibre's tenure over fixed wireless. Fibre at 6.7%, even for the 100-megabit plan, versus 23.6% for fixed wireless. Data demand continues to accelerate. Average monthly usage at 699 gigabytes in December increased even further to 722 in January, up 12% from a year ago. Across our base, 20% of fibre customers now use more than a terabyte of data each month. Peak events also continue to grow with a 14% average increase in peak usage. In part, that's also reflective of both the number and quality of connected devices, which has almost doubled over the past 5 years to 25 and is expected to do the same again over the next 5. We see this only playing to fibre's strength of resilience, quality, and the scalability of the network. Turning to our Expand pillar. We continue to see opportunities for new infrastructure growth, but we'll take a disciplined approach to investment where the returns must be scalable to reach our Horizon 2 aspirations. These relate specifically to natural adjacencies with several we are exploring now, and expect to have a more fulsome update at our full year results. In our core, while property sector has continued to see subdued activity, our new property development volumes have continued in line with pre-COVID levels. We delivered 11,000 lots in the first half and our pipeline continues to support our estimates of 20,000 to 25,000 lots per annum. Encouragingly, consenting volumes have grown 9% off the cyclical lows. And while early days, this is starting to show up again in incoming NPD volumes. Mobile infrastructure connectivity continues to grow with 7% growth [Technical Difficulty]. Broader opportunities in connectivity of data center are also now being realized. Our new product, Express Connect is now in 5 data centers and has materially enhanced our go-to-market proposition and delivery, with plans to double the number of DCs served by end of this financial year. Our Adapt pillar is a key lever of Horizon 2 in driving operational excellence. During the half, we've continued our focus on simplification and efficiency, refining our operating model. This has seen a realignment of teams, processes, and a 12% reduction of roles whilst building new leadership and capability in customer retention, data and analytics and AI integration. Copper retirement is progressing well, enabling us to power down over 400 cabinets in the half with an intent to accelerate that in H2. We also continue to see positive regulatory pathways developing, having collaboratively worked with government and broader industry stakeholders. We're hopeful a decision relating to copper deregulation and the related TSO review within Q3. Likewise, a decision from the Ministry for Regulation review over a similar time frame. Finally, to our Pioneer pillar. As I noted, just 3,000 copper lines remain within UFB areas, and we're on track to retire this fully by end of June. In non-fibre areas, copper connections have declined by 26,000 over the last year with only 54,000 lines now remaining. Relatedly, we've seen a $4 million reduction in reactive fault spend, with a 22% reduction in truck rolls. The copper network itself remains free cash flow positive but we continue to highlight our imperative with government to shift regulation and enable a pathway to a full exit of legacy technology that has been far superseded by alternatives. To other strategic opportunities copper recycling remains positively on track. We're transitioning out of trial now into final contract phase of a fully operationalized work stream. With metals pricing at historic highs, our estimates for returns are now at the top end of the $30 million to $50 million range. To fibre expansion, we were encouraged the Infrastructure Commission had endorsed our fibre expansion plan to 95% of the population. However, the reality of funding and competing government priorities during an election period have forced us to refocus. Whilst we maintain New Zealand would benefit significantly, both financially and societally, it is clear even joint funding and partnership is not viable in the short term. We've instead shifted greater focus to our other large opportunity pool as brownfields infill, where roughly 200,000 premises have previously been passed with fibre during the initial UFB rollout but were not installed or connected. Finally, to property optimization, where alternatives are enabled as we retire and exit from the copper network. We continue to review high sites and how these may be broken into tranches as a test case, and we have several parties interested. I'll now hand over to Drew, to take us through the financials. Andrew Davies: Thank you, Mark, and hello, everyone. Overall, as Mark said earlier, we delivered robust results in a challenging economy and we continue to see solid fibre revenue growth annually, offset by the continuing copper legacy revenue reductions. Turning firstly to our overall income statement. EBITDA was $357 million, up $11 million from half year '25. Revenues of $506 million were up by a net $6 million. For operating expenses, we made cost savings from the changed operating model, incurred lower consulting fees and made good progress on reducing legacy costs. That helped us absorb inflation and a number of cost lines. Having completed the accelerated depreciation on our copper assets in Chorus UFB areas in the prior period, depreciation and amortization was $216 million in the half, down $19 million from half year '25. As a reminder, copper cables and copper-related ducts and poles in local fibre company areas will be fully depreciated by June this year. Those in non-fibre areas will be fully depreciated by June 2030. Net finance expense was $6 million higher half-on-half. While our weighted average interest rate on debt reduced from 5.7% to 4.9%, we repaid the majority of our EUR 300 million notes early with EUR 9 million of settlement costs. Income tax expense of $11 million is up $4 million from half year '25, primarily driven from our higher profits. Overall, this meant we recorded $15 million of net profit after tax for the half year compared to a loss of $5 million in half year '25. Looking in more detail at our revenue categories. Our fibre broadband revenues were up 7% or $26 million from the prior year, driven by fibre connections up 31,000 lines, along with an approximate 4% increase in ARPU to end at $57.73 for the year. With total copper connections down 60,000 or almost 50%, this resulted in combined copper broadband, voice, and data revenues being down $18 million or 43% lower annually as we continue to execute our multiyear copper exit strategy. We continue to see copper connections and revenue declining in the second half similar to the first half. Field service revenues were down slightly, primarily driven by lower new property development activity, as Mark spoke to earlier, and was partly offset by higher revenue from new connections and brownfields projects. Other revenues were stable annually and were lower on a sequential basis as the prior half included approximately a $3 million net gain from copper cable recycling sales based on the trial we conducted in that fiscal year. Based on the learnings from that trial, we have completed a tender process with vendors and expect in the second half of this fiscal year to implement this program to realize a similar level of net sales from copper recycling in the low single millions. As I've spoken about previously, we intend to adopt the new accounting standard, IFRS 18 for this financial year, reporting to June 30. The new structure allows us to be more prescriptive in our income statement, and we're currently working through what this will look like in our full year results. Total operating expenses were $149 million for the half year and were $5 million or 3% lower than the comparative period. We continue to drive strong cost management disciplines to offset the persistent inflationary pressures, which rose in the half year, mainly from nontradables, such as rent and rates. Labor costs were $41 million, down approximately 4% annually as a result of our new operating model with about 100 fewer roles in the business. The labor capitalization rate reduced from 45% to 42% as network build activities declined versus prior periods, primarily from fewer fibre footprint expansion projects. For network maintenance, costs were down $7 million half year on half year. The key drivers were lower copper fault volumes to premises as copper connections continue to decline, resulting in a 22% reduction in truck rolls, partly offset by network-related fault costs. This has been complemented by improved cost efficiency programs implemented across maintenance activities. For half 2, network maintenance costs will not decline as much as prior periods as contractual CPI increases occur along with the seasonal increase in weather-related faults, which impact network-related fault volumes, especially in more rural areas. IT expenses were up slightly as a result of some one-off cloud-based system implementation costs included in this half. Other network costs were $5 million higher than HY '25. This was mainly due to higher payments to service companies from better service levels this year, higher engineering activity as a result of weather events. We also saw timing differences on project spend annually, including the one-off copper cabinet shutdown costs we incurred to power down each cabinets. Electricity expense was up $1 million annually. And while our electricity consumption continues to decline annually by approximately 6%, this favorable trend was more than offset by higher lines charges. Consultant expense was down $4 million annually as the prior year consultant spend included investments to explore the potential new revenue opportunity in the trans-Tasman subsea cable. Advertising expenses of $5 million are traditionally lower for Chorus in the first half, and we expect this will increase in the second half, similar to prior years. Moving now to CapEx. Gross CapEx for the half year was $158 million, down $41 million from the prior half. Within gross CapEx, $79 million was sustaining and $79 million was for growth. Gross CapEx was supported by $20 million of customer contributions for roadworks, new property development and rural broadband upgrades. While CapEx was lower during the first half, we see an uplift in CapEx spend in H2 as a result of our planned project expenditures during this financial year. This includes phasing of large national fibre build projects underway, major network property refurbishment projects, and large IT project deliveries. This slide shows CapEx using regulated categories for the fibre regulated asset base, RAB. CapEx attributable to investing in the RAB, which excludes capital contributions, is estimated to be about $125 million for the half year. For the non-RAB CapEx, as you can see, copper CapEx was $3 million, down annually and was mainly funded -- third-party funded. Total RAB increased by $73 million over the calendar year to $5.98 billion, with core RAB increasing to $5.11 billion, up $203 million, offset by the financial loss asset declining by $130 million to $0.86 billion as the FLA depreciates further. Our total net debt as of December 31st was $3.2 billion, up approximately $100 million from June 30th, primarily as a result of issuing $400 million in euro notes in November. Proceeds were used to repay EUR 243 million of the EMTN 300 notes due in December '26, along with paying down entirely the revolving credit facility. We have 2 rating agencies that issue credit opinions on our leverage, Moody's and S&P. Moody's rates Chorus as Baa2 stable with a threshold of 5.25x debt-to-EBITDA down driver, which we are currently at approximately 4.8x. S&P rates Chorus as BBB positive outlook. As we have updated previously, S&P introduced a new digital infrastructure rating criteria covering tower companies, fibre companies such as Chorus and data centers. This new criteria uses the funds from operations to debt ratio for its leverage calculations and have set a threshold of 9%. Chorus is currently well above this threshold at 17%. This new leverage criteria is equivalent to 7x down driver of debt to EBITDA when using the prior methodology. As I will speak to shortly on the status of the NIFFCo security sale, the final determination by S&P on their leverage calculations and final down driver metrics will depend on the outcome of the NIFFCo security sale later this year. The table on this page provides our bank covenant calculation using the revolving credit facility, which has remained at no greater than 5.5x senior debt-to-EBITDA ratio, and we're currently at 4.49x. While S&P have changed the methodology, importantly, Moody's have made no change to their threshold of 5.25x. So this is our leverage down driver that is our focus for our capital management policy. Lastly, about 70% of our interest rate exposure is fixed for the next 3 years. Turning to the next slide. In December, the New Zealand government announced the sale process will proceed for its bespoke Crown funding securities provided to Chorus. The key terms of the securities are set on the right-hand side of the slide. And the face value of the combined securities is $1.16 billion, of which $683 million are classified as equity securities. Chorus will not participate in buying these NIFFCo securities in the current government sale process. And importantly, if securities are sold to a third party and transit from the Crown, the terms of the securities to Chorus cannot be altered without Chorus' agreement. If the sale process does conclude later this year and depending on the acquirer, S&P may reclassify the $683 million of equity securities as debt rather than as equity as they currently treat them in their leverage calculations. On a pro forma basis, if S&P treat all of the NIFFCo equity as debt, this would mean the S&P leverage calculation would be increased to approximately 6x net debt to EBITDA. So still well below the current 7x down driver. On an FFO to debt basis, this would be approximately 13%. We will not know the final S&P leverage calculations of course until later this year, until after the NIFFCo sale process is complete. But in all scenarios, we are below the leverage thresholds. Finally, on dividend and guidance, we've announced an interim dividend of $0.24 unimputed to be paid in April. The DRP is not available. Dividend guidance for the full financial year remains $0.60 unimputed and reflects the ongoing positive trend in cash flows. Net cash flows from operating activities were pro forma $257 million on the same basis as last year as we note that a $29 million payment from one customer missed the cutoff for half year results and was paid in early January. FY '26 EBITDA guidance remains at $710 million to $730 million, and we now expect to be in the upper half of this EBITDA range. And we base this expectation to be in the upper half based on increasing fibre connection growth and corresponding revenue increases and continuing disciplined cost management. CapEx guidance for fiscal '26 also remains at $375 million to $415 million, and we now expect to be in the lower half of this range. Correspondingly, our sustaining CapEx guidance range of $195 million to $215 million for fiscal year '26 also remains, and we expect to be in the lower half of this range. This reflects the capital project deliveries in the second half that I spoke to earlier. Overall, we continue to track well, and we're pleased with the progress we are making in this early phase of our strategic objectives for Horizon 2 through 2030. I'll now hand back to Mark to run through the outlook. Mark Aue: Thanks, Drew. I've spoken previously to our overarching purpose for Chorus, and this is anchored in enabling better futures for Aotearoa at an intergenerational level, in many cases, a driving role we play through connectivity. So we're proud to be launching an Equity Fibre product designed to provide affordable and accessible connectivity at a time where we know nearly 400,000 households cannot afford a package of meaningful digital access in New Zealand. Our Equity Fibre product is a key tool in our digital inclusion efforts. It's shaped through extensive research and deep collaboration with community partners and is now available for retailers to activate. Given the inherent complexity of hardship, our trusted community partners will be vital in helping to identify and connect eligible families. And we're encouraged by an initial interest from smaller community-focused RSPs and we're working towards broader retailer participation. Digital inclusion is a shared challenge. And whilst ideally, we'd have a national government-funded program that isn't realistic in the short term. Instead, as Chorus, we're taking it upon ourselves to drive initial change, prove this is feasible, show how digital connectivity materially improves lives and develop a use case for this to be scaled nationally. We're not waiting for someone else to make a difference. Turning to our focus for the remainder of FY '26. As we step further into our Horizon 2, we're certainly on a fast track to being an all-fibre business. Under Lead, formal pricing changes across our products came into effect from January 1, although retailers had previously revised pricing. The connection trends I noted earlier are encouraging and we expect the run rate uplift in half 2. Awareness and preference of fibre over other technologies is clear. Broader industry thematics of connected devices, growing usage, need for resilience, evolving content quality and an AI revolution, all aligned to fibre's superiority. We retain our 80% uptake aspiration and our conviction of growth opportunities in our core fibre business through underpenetrated pools. We expect improving data and analytics capability will also reshape our execution with retailers through smarter and more efficient means. Likewise, that analysis will inform our approach to brownfields fibre infill to premises passed by fibre but not yet installed. We've shown through our prior Frontier initiative, bringing fibre to almost 10,000 new addresses. This can be executed at pace and a faster conversion to connections. We're good at building fibre and we'll have qualified rollout intentions for infill over the course of H2. To expand, core product growth continues, leveraging existing fibre assets and an expected uplift in NPD greenfield volumes as property developers ramp back up. Earlier, I noted we're assessing several infrastructure-related initiatives over H2 and we'll provide a more substantive update at the full year results. There is some commercial sensitivity to these given market competition and the provision of infrastructure services. To adapt regulatory focus and driving formal decisions to outstanding reviews is a priority for us. But as we've noted, through ongoing collaboration, we see favorable pathways emerging. Cost discipline will continue as will the drive for simplification and efficiency, which will lead in turn to further savings. In Pioneer, we're accelerating copper retirement and the exit of cabinets over H2. UFB will be completely retired by July, and we're still estimating LFC areas by end of calendar year '26. H2 will see our copper recycling program in full operational mode with delivery partners and expected returns in year of low single-digit millions. Development of extraction plans and timing will also be completed by the full year results. We would also hope to confirm an exit approach to our noncore high sites by full year, and we'll work with interested parties over the coming months. More broadly, exchange footprints could also yield beneficial outcomes in coming years with alternative asset owners or lease models to space in desirable transport locations. As a worst-case scenario, this represents a material cost-out opportunity for what become noncore assets. So to wrap, we're pleased with another robust set of results, again, reflective of the resilience of fibre. Economic recovery is still lumpy but improvements will only be favorable to our uptake and mix. Equally, we're pleased with the foundational groundwork laid in Horizon 1 that enabled us to step into the first 6 months of Horizon 2. We have a clear aspiration. And whilst the benefits of change will be realized progressively out to 2030 in our plans, we can already see a shift in focus, capability and execution. Horizon 2 is focused on growth, simplicity and efficiency. We're clear on growth opportunity pools. And paired with the superior fibre technology, it really comes down to execution. Today, we're already delivering greater simplicity, efficiency and savings. Exiting legacy copper technology is tangibly in sight and opens new opportunities to optimize our portfolio of assets. We've shown our discipline, leveraged our superior fibre assets and sought to exit from noncore ones. Investments will be core to our business or natural adjacencies but they must be scalable on returns. As we've said many times, an investment in digital infrastructure is both for today and the future. And our fundamental belief that fibre is technologically superior in every way that matters holds firm. Thank you all, and let's go to the questions on the phone line, please, operator. Operator: [Operator Instructions] Your first question comes from Entcho Raykovski with E&P. Entcho Raykovski: So my first question is around the guidance. You've moved EBITDA guidance to the top half of the range. I'm just curious whether that means that you're seeing any improvement in underlying economic conditions or whether you're seeing perhaps some better mix than what you expected back in August. I'm just conscious that the fibre connections trajectory is not dissimilar to the trend in FY '25, and you spoke back in August about being in the bottom half if economic weakness persisted. So is there something in particular that you're seeing in the outlook which is more encouraging, or is it mix? I mean, that's my first question. I've got a couple of others, but I might hold off on those for now. Mark Aue: Thanks, Entcho. I'll start with that. I mean, clearly, H1, I think, is still a tough economy. I think there's no doubt that it was challenges. I wouldn't say that we're seeing significant changes in H2. But as we spoke to NPD, consents to build are increasing. So that's opportunity. The way we look at our connections growth, we have targeted incentives with all of our retail service partners. And as we look forward into H2, we're seeing initiatives take hold with their plans. So that's why we spoke to increasing connections growth and the corresponding revenue. So that's where we see some opportunities there. And we've also been very disciplined in cost management in H1. We did see inflationary pressures. And as I spoke to there, we have seen some areas that we brought down. Other areas have gone up as the inflation effects have taken hold in rent, electricity and rates. So we feel very good about managing through that and continuing into that to the second half. Andrew Davies: Yes. Maybe just to add to that, too, Entcho, I think for our Q3 uplift, you referenced the connections as well for the first half. We're quite encouraged by Q3. Our January result was the strongest for -- I think since mid-2024. And again, we talked to some of those encouraging trends on mix. So we're seeing churn actually come down that we're stabilizing on the volumes of downgrades we've seen previously as well. And then equally starting to see the reactivation rates from premises that have been off-net longer term, which for us, the hypothesis being the 100-meg fibre plan in particular, is appealing to customers and premises that the 50 megabit plan didn't previously. It's been a distinct shift in the reactivation rates that have been off-net for over a year, over 2 years even and one that we hope obviously continues. Entcho Raykovski: Great. And you sort of touched on OpEx, but I'm wondering if you can give us an idea of what the underlying OpEx growth was in the first half ex any one-offs in the PCP. I think you incurred about $9 million of one-off costs for the entire FY '25. So I don't know if you can break that down first half, second half. And just as a follow-on to that, do you still expect to see low single-digit growth in OpEx on a net basis in FY '26 from -- I think you've spoken to about $300 million net in FY '25? Mark Aue: Yes. I mean to speak to H1 '25, there was the $4 million that we -- in consulting fees that we incurred that half. And so that's what I spoke to in the consulting fees were down $4 million. So you can see that pretty clearly as -- the rest of it would be organic in the sense that our operating model change. That did take hold after H2, so you can see the impact of that in our H1 '26 results. Inflationary factors, it's pretty clear in terms of some of those line items in terms of rent rates and electricity where we've seen some of that increase. In other network costs, that's where we have our copper cabinet power down costs. And so while we've -- and I did call out that we'd increase that in H2 as we continue to get customers off cabinets, work with the retail service partners and the lines companies to coordinate together to get those cabinets powered down. So that will increase slightly. I did call out that the reduction in network maintenance costs will not be as great as what we've seen before, primarily as we've gotten more customers off the premises-based copper connections to network faults. So we've seen -- we still see that stabilize. So hopefully, that provides enough color. And I did call out advertising. It's always seasonality and that would be up approximately $2 million in H2. Entcho Raykovski: Final one, I mean, you've spoken about the updated S&P criteria for digital infrastructure assets. I guess, is it too early to say how it may impact your capital management policy given it's now being applied to Chorus? I mean, as you said, under all scenarios, you have plenty of headroom. And I mean, perhaps as part of that answer, do you expect Moody's will make any changes to their methodology or is just S&P specific? Mark Aue: Well, let me answer -- so it's a capital management policy that was set for RP2, which says a growing sustainable dividend at real rates. And so that's where we set the $0.60 this year. So we've achieved that, and we're very happy -- the Board is very happy with that. Under S&P, there are so many moving parts in terms of the NIFFCo sale and what that will do ultimately based on the owner. And again, if you take the 2 scenarios for S&P, the security sell, the equity is treated as debt, we're at 6x pro forma leverage with a 7x down driver. If the NIFFCo securities don't sell, S&P has called out in their credit notes that they would increase this to BBB positive that would reduce the down driver to 6x approximately, as well as reduce the FFO to debt to increase to 13%. So the amount of headroom is not as much as people see just based on where we stand today based on that uncertainty of the NIFFCo security sale. For Moody's, there's been no change. And they've always treated the equity as debt essentially for their calculations with -- they've been ambivalent to the owner of the securities. So there's no change coming from them. Their down driver is 5.25x. We have our annual credit opinion discussion at the end of March. There have been no indications that they're changing that criteria at all. So I would expect that, that would be remaining as our down driver at 5.25x, which now sets for our capital management policy, what we manage to. Operator: Your next question comes from Ben Crozier with Forsyth Barr. Benjamin Crozier: Just one question on sort of the infrastructure revenue. I think at the Investor Day just over a year ago, you talked to that infrastructure revenue in aggregate was sort of $155 million and you're targeting $180 million to $200 million. Can you give us sort of an update on how that's progressing in terms of an aggregate and where that sort of revenue sits today? Mark Aue: Yes. Look, it's probably at similar levels today. I think we've also spoken to some of the legacy products that over time will be retired. So that drops down before then going back up. So you drop below the $150-odd mark and our aspirations for Horizon 2 would get to $180 million to $200 million of revenue. So as I said, we're continuing to look at a number of initiatives, several that we're actively looking at right now. We've discounted a number -- you may have seen already that from the LoRaWAN IoT that we were exploring as a trial and we've actually moved away from that. So we don't believe that's a scalable opportunity for Chorus in the current market at the moment. So we'd rather put that investment and resources, et cetera, into areas where we think they can be scalable. And there is some commercial sensitivity to several of the options that we're looking at, hence, my reference to a more substantive update at the full year result. Benjamin Crozier: Perfect. Second, just on sort of the MAR or regulatory revenue achieved in the first half. I think at the full year, you sort of gave an indication of how much of the total revenue was regulatory. I don't know if you have that idea. And presumably, you've underearned your MAR, a decent amount in this first calendar year of the second regulatory period, as expected, given the meaningful step-up in the MAR. Sort of -- can you also sort of talk to when do you expect that gap to close? Are we sort of at the end of the second regulatory period and then the rest to be caught on a washout? Mark Aue: Yes. I mean, so we're in year 1 of RP2. And so you're correct, we earned under the MAR, but that's deliberate to give us time to grow into it. And so we don't have the final numbers that will be produced as part of our ID reporting comes out in end of May. But in essence, we will continue to focus on how much we want to close the MAR over the next 3 calendar years. So we do factor that in, Ben, as a function of connections and price increases and so forth and mix. So we're very focused on and closing a gap. And did what we did in RP1, which we got within $1 million of the MAR at that point. So we need headroom at the beginning and will increase over the next 3 years. Benjamin Crozier: Maybe last just on sort of satellite and Starlink. Do you think -- have any data or have any inclination of -- are they sort of attacking some of these sort of fringe suburban areas where fibre is available, but maybe Starlink as well is sort of getting a bit of an uptake, or do you think Starlink is pretty much just a rural product at the moment? Mark Aue: I think primarily, it's still an option for customers and premises that can't access fibre. So more of the non-fibre areas or rural New Zealand. That said, we wouldn't say that there is no Starlink in any of the metro areas. Some of the multi-dwelling units that may not have had fibre installed at the time of build, they create optionality for those premises that are looking at fixed wireless or satellite. So there is likely some in metro areas. But predominantly, we still see it as areas where there's not fibre available. Operator: Your next question comes from Arie Dekker with Jarden. Arie Dekker: Just firstly, just maybe a little bit more color on these infrastructure opportunities, and I appreciate you talked to the commercial sensitivity. But could you just sort of give perhaps an indication of the extent to which -- and you said, I think there were several that they utilize your existing infrastructure and also whether any of those opportunities would involve you acquiring existing infrastructure already in place? Mark Aue: Look, yes, there is some commercial sensitivity to them. We've always been really clear that they would need to be either core or natural adjacencies to our core. And I can say they're all in that camp. They're all scalable opportunities. We're really defining what the opportunity is and not wanting to invest or spend our resource time on areas that we don't think we have a natural right to play. But they are all natural adjacencies. To your -- and look, timing-wise, I think as I said, what we would recognize is they take longer to bring to market and to commercialize. It's a competitive market. But we certainly see that there are opportunities where we have a natural right to play. To your second point on inorganic opportunities, yes, absolutely. We're looking at both, whether we can build the capability internally into our own infrastructure network or likewise, whether there's something that could be acquired into our existing infrastructure as well. Arie Dekker: Great. Then just with regards to the fibre infill build where you're turning your attention given the lack of government support for expansion and you sized the 200. Could you just talk a little bit about how you'll go about assessing that, whether you see the opportunity sort of a more dense urban as more attractive than sort of more on the fringes. Just how you're looking at the assessment and where you think the best opportunity will be for you? Mark Aue: Sure. So look, the 200,000 premises are premises already that were passed and they have a premise on them. It's about 70,000 or so premises that we do pass with fibre but they're vacant lots, right? So we know that there's roughly 200,000 and there is a home there. Obviously, they split up between single dwelling units and multi-dwelling units. Equally opportunities with retirement villages, with second homes and holiday homes as well. I think the opportunity for us and where I've really wanted to drive our focus is leveraging better data analytics, being smarter about our execution. There's some opportunity to be a bit smarter, too, with AI and look at where -- if you were to take, say, like Fibre Frontier, where are the next 10,000 premises out of 200, where is the second 10, the third 10, et cetera. So wanting to filter them rather than a mass market type approach and actually being a lot smarter about how we engage with retailers as well and looking at products that they themselves in many cases, are offering. So I think the short version of that, Arie, is that we're looking to be a lot smarter with our tools and execution where it's a lot more targeted. Arie Dekker: Then just on the -- a little bit further on the 80% aspiration in that. And I think you've talked at various points on the call about what you're doing on that. But I guess just firstly, just in terms of your conviction, like would that still sit at the same sort of level as just over a year ago when you introduced it? Or do you think that your conviction level on getting to that point is a little bit lower now than it was a year ago? And then also just of the various initiatives, what would be, I guess, the 1 or 2 key ones you would call out as being the focus in the next 12 months or so to lift the penetration rates, which are sort of stabilizing even in some of your higher penetration areas like Auckland? Mark Aue: Sure. Okay. So my conviction, yes, absolutely unwavering on 80%, even a year on. I think the learnings from a year on that, as I've just talked to around being smarter on the execution, using AI, using data analytics, being more targeted in our approaches I'd say that, that's more broadly how we will execute. I think we gave a figure that broadly we needed to be at about 40,000 new net fibre connections each year over our Horizon 2. But that was more as a -- look, on average, you need to do that. The work we did in Horizon 1, the foundational piece, building capability, building organization structure, being clear around the aspiration, having that clarity and specificity of where we would go, we needed to do all that work. So my sense is that it's going to take a little bit of time to build up. So some years might be lower, some might be -- would need to be higher. But my conviction remains at the 80%. I think that is achievable, looking at the underpenetrated pools that we have. And to talk to those in the main if we start at a holistic level, there's 200,000 premises as brownfields infill. They're in our denominator. We need to do something with those. And I think there's real opportunity here when the fibre passed the premise previously. But for whatever reason, either it wasn't eligible for a subsidized build of fibre back then or the premise didn't exist back then. I think we can go back and relook at that because the fibre that's running past the premise is essentially a sunk cost today. So I think that gives us the ability to think about the economics in a different way for a further build-out. So that's 200,000. The other large pool holistically is the inactive on -- they are intact, but inactive. That's another 200,000, right? Now between those 2 pools, there's lots of crossover to fixed wireless, obviously. So that's inherent on us around execution. And how do you keep raising that awareness and the differences on fibre to other technologies. I think the trends in the market are going to exacerbate that anyway. But the INTAGs are an opportunity for us. The fibre is already there, right? So actually, again, working with retailers in a smarter way, what our go-to-market execution is, that's inherent on us. But I'll stop at the 2 large pools because between them, you have 400,000 premises essentially that are potential, half of which already have fibre installed today. Arie Dekker: Yes. Then just last one for me, just going a little bit further with the Starlink. I mean you talked to metro. But I guess just interested in your view on where the extent of competition you're seeing in those areas where in the rural or in the fibre extensions, some of those smaller settlements where I think in RBI -- sorry, UFB2 and the extension, your penetration is sort of mid-60s or so. Like do you notice -- is there a lot of Starlink there? And are you sort of thinking about working with retailers on initiatives there to sort of tackle Starlink? Mark Aue: I think to work backwards from that, absolutely working with retailers and whatever means that we need to where we're seeing competition. As I said, look, I said metro and I think it is relatively low. I think it's a fair point that on fringes, of large areas or small settlements, then there could well be penetration of Starlink. We wouldn't say that there's not at all. I think ultimately, though, we look at the broad thematics where usage is developing, content is developing, AI is developing and think that, again, I know we're biased, but we only see fibre as a technology that will actually manage that future demand. Operator: Your next question comes from Wade Gardiner with Craigs Investment Partners. Wade Gardiner: You mentioned briefly weather impacts. Can you sort of talk to -- are you seeing anything in the second half, particularly around the recent really poor weather that we've had? And maybe also around that, just split out the maintenance costs into sort of copper versus fibre? Mark Aue: Well, fibre faults are significantly lower than copper. So they're nowhere near. And so it's not -- we don't give the dollars, but fault rates are substantially lower than copper. And yes, there have been weather events, as you can read the news. And so we kind of deal with it. We have a team that stand up and get react quickly. So those -- but that's normal for our course of business in terms of seasonality. Andrew Davies: I don't think, Wade, to add to that, but copper is an aging technology. And given the severity and frequency of these weather-related events we're having, copper just doesn't perform. The fault rates are significantly higher than fibre. I think at the same time, though, the positives we take out of it is our ability to respond quickly as an industry. We are looking at resilience, obviously, all the time, but you can't plan for these things where the next event is actually going to show up. But it's always inherent in our cost assumptions. Wade Gardiner: If I go back to August, I think there was 755 FTEs at that stage, and you were sort of talking about 30 vacancies. So that looks like it's changed now. You're down to 751. And what's the vacancy situation like? Andrew Davies: Well, we still have vacancies at BAU, and I'd say it's still around -- it's a little bit lower than that now. So we filled some of those roles. Mark Aue: But equally driving further simplicity and efficiency. So I think we did -- what we'd recognized as part of that Horizon 1 was a very deliberate shift. Looking at organization structure, the way we establish value streams for infrastructure and for access, they were really deliberate. I think what we're seeing now over time is where we're investing in further capability and leadership; so I think to AI, to data analytics, customer retention, things that Chorus didn't have as mature frameworks previously. So we're still investing in those. But at the same time, where some of these projects that we're either shelving or moving away from, we're continuing to see a lot more efficiency in our base that becomes more BAU. Wade Gardiner: So any thoughts on what that FTE number will go to? Mark Aue: No, not -- I guess, what I would say is we're not about to do another deliberate shift. I think we're comfortable with the Horizon 1 foundations that we've built, the organization structure that we've got. We've got a clear strategy, clear aspiration and purpose that we can anchor to our execution around, our prioritization and the way our projects are, we're clear on. So one of the references I said in my opening that it really does come down to execution now. So I'm not -- I don't foresee that there is another substantive shift down again. Wade Gardiner: Just in terms of the down trading that we saw that, say, 6 months ago or longer. And you mentioned in your presentation that it was sort of 25% of the additions into the 100-megawatt -- 100 megabit bucket with sort of downgrades. But you also mentioned some people upgrading. So is that 25% a net number? Mark Aue: Roughly speaking, yes. Encouragingly, we are seeing some of those trends. So we're seeing more upgrades go from the 100 into the 500, some of which are -- we can see our premises that had downgraded previously and have gone back. Wade Gardiner: Right. But in total, it's still a net down trading that you're seeing... Mark Aue: Broadly... Wade Gardiner: That continued in recent months or... Mark Aue: Yes. Look, I mean, it's improving a little bit on that. But yes, broadly speaking, about 25%. I mean, previously, it was about 1/3, I think, when we were sort of talking 2/3 of off-net growth and 1/3 of down trades. Certainly saw post the boost initiative and change in mid last year or start of Q1 for us, it was -- those downgrades were exacerbated by a lot of the pricing changes that a number of the retailers have put through. So I think we've seen that stabilize now as well. So you'd hope to see over time, ideally for us seeing below that 25% is coming from downgrades. Wade Gardiner: Just finally for me, you mentioned, I think it was positive pathways to regulatory change. Where do you get that confidence from? Mark Aue: Look, I could be wrong, but I think we've got -- we've been really open and really transparent. From a copper deregulation as an example, and you look at the TSO, we've been really collaborative, really open. We want to work with all of the stakeholders, setting our time line at 2030 was as much about putting us all on notice, all stakeholders and how do we all work backwards collectively so that we can find and confirm a pathway to exiting copper technology, right? So I just -- I think we're so far into fibre now. We look at the rates that copper connections are dropping off. You look at the Commerce Commission's own reporting on rural connectivity. There's just this bow wave that I would say that actually, I can't see any pathway other than copper actually disappearing. It's just a question on timing for deregulation. But we've been really supportive in working with the government and other agencies around how we do that in the best way where customers are essentially protected regardless of the fact that actually already 97% can access 1 of 3 other technologies other than copper. Wade Gardiner: Right. So you're talking more around deregulation around copper than anything to do with a change to the fibre building blocks... Mark Aue: I think, yes. No, good point to qualify. Yes, I'm talking more about copper, exiting legacy technology. I think -- and that's those legacy constructs. I think we've had a number of discussions around. The share cap ownership is the other that's being reviewed by Ministry for Regulation. I think on the fibre input methodologies, that happens over the coming couple of months. But I wouldn't be in a position to suddenly say that we think we know what the outcome is going to be. We've got to work through that. Operator: Your next question comes from Brian Han with Morningstar. Brian Han: You said somewhere that Chorus doesn't care who owns the NIFFCo equity shares. But do you know whether the government is as ambivalent as you are with respect to who buys the securities? Andrew Davies: Well, thanks, Brian. So since it's not our process, I can't speculate as to who the government would want to sell the securities to. I mean when I say that, it's because the terms are set. And so we know we're very comfortable with the payments, which is 2030, 2033 and 2036, 0 coupon debt. So that's where we see very comfortable in that construct. Again, it's a government's process and we'll kind of wait to get further updates on them as the year goes on. Brian Han: Drew, while you're there, just more on labor costs. As you simplify and become more efficient, is there a ratio or a target you guys are looking to with respect to labor costs as opposed to FTEs? Andrew Davies: Well, I mean, if you can look at our $41 million, which is at a 42% cap labor rate, I'd say without the fibre expansion programs underway, you'd see capital labor rates around that low 40% range. I think we're just too early to say of any AI changes, as Mark spoke to, earlier FTEs, we have no big programs to change. So in the medium term, we expect them to be at the same level. Operator: Your next question comes from Philip Campbell with UBS. Philip Campbell: Just a few questions from me. The first one, just on the government's kind of regulatory reviews. I think, Drew, you said you're expecting third quarter. Is that third quarter fiscal or are we looking more kind of third quarter calendar for an update from the government? Andrew Davies: I would -- I'm hoping for and would really like a decision by our Q3. So from a calendar year Q1, I guess. But this is a process that has been going for a long time, a lot of engagement. Our priority is getting confirmation, particularly on an exit pathway to legacy technology. So I would really hope that we get confirmation by the end of this -- of our financial year at the latest. But obviously, anything before that is an advantage. Philip Campbell: Just a follow-up to that on the TSO. Like obviously, in Australia, we've had a lot of issues around the Triple Zero problems with mobile and so forth. Is that -- I'm assuming that was obviously feeding into this -- any decision on the TSO? Andrew Davies: Well, I mean, I think we've always said the TSO kind of goes hand-in-hand with a view on property regulation anyway because the TSO only applied to a subset of customers back in the early 2000. So as far as the Triple Zero outage in Australia, we've done a thorough investigation here as well and I can say that more broadly for the telco sector as well. And we don't have the same risks that were inherent in Australia. Philip Campbell: Just on the S&P situation, assuming that the Crown securities are sold, and then they treat the Crown securities as debt. My understanding was that they count the debt as the PV of the debt. So I end up with a lower number than 6x. So I just wanted to check if that's your understanding or do you think they bring in the face value of the debt in that calculation? Andrew Davies: Well, S&P and Moody's treated differently from Moody's does on the PV basis. When you read the November credit note from S&P, they basically make and further treat all of it as debt on a total basis. And that's how they even calculate around 6x down driver. Philip Campbell: Just another question for you, Drew. Just again on the balance sheet, just with the retained earnings being a negative balance. Like is there any plans to like try and revalue the fibre network at some point? Andrew Davies: Well, we've indicated previously that certainly asset reval is in our strategy. Certainly, Phil, I think in August, we'll have much more definitive update on that. So I'd say if you want to wait until August results, we can get more specific on the numbers. Philip Campbell: Then just the last one for me was just, obviously, with Sky launching the 4K product. Are you kind of noticing any increased usage as a result of that or is it pretty minimal at this stage? Mark Aue: Pretty minimal at this stage, I think Phil would be the answer. I think because it was essentially isolated to 2 events with the Ashes and the Australian Open. You can see a difference in the usage profiles because obviously, it needs more bandwidth given the content quality. But versus the whole network, you need to see that running at multiple channels where it becomes more like your standard as 4K. Operator: That does conclude our question-and-answer session. I will now hand back for any closing remarks. Mark Aue: Great. Well, thank you again. And as always, thanks for your time, and we appreciate you joining. Hopefully, we've been able to answer your questions with color. And we look forward to seeing many of you over the coming days. Take care, and enjoy the rest of your day. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Aaron Gray: Good morning, everyone, and thank you for joining Mayne Pharma's 1H Fiscal '26 Results Presentation. Today, we will cover the group financial outcome for the half, then take you through each segment -- Women's Health, Dermatology and International -- before finishing with our fiscal '26 focus and outlook. As investors will appreciate, we have already provided a set of our unaudited numbers within our presentation at the company's 2025 Annual General Meeting on 29 January 2026. Before we begin the formal aspects of today's presentation, as we announced to the market this morning, Mayne Pharma is undertaking a planned and orderly leadership transition with Shawn Patrick O'Brien stepping down as Chief Executive Officer and Managing Director; and with me having been appointed Chief Executive Officer, both effective from February 21. This transition is part of the Board's structured succession process and is designed to maintain momentum and execution with continuity of strategy, governance and financial discipline. Importantly, the business remains stable with a strong experienced leadership team in place across our key functions and business units, and we are continuing to operate exactly as planned with a focus on performance, outcomes and disciplined allocation of capital. I want to acknowledge and thank Shawn for his contribution and partnership with me through a period of meaningful change, and I'm pleased that he will remain available to the Board in an advisory capacity to support an orderly transition for me as CEO. I would now like to turn over to Shawn, who is with me on today's call to make some remarks on the transition. Shawn OBrien: Thanks, Aaron. It's been a pleasure to work with you over the last 3.5 years at Mayne Pharma. Investors should note, this is a planned succession process, and the Board and I have been very deliberate about continuity. Aaron has consistently demonstrated deep knowledge of the business and our industry, and he's been central to the progress we've made together over the last 3.5 years. As a team, we've delivered a genuine turnaround. We've transformed Mayne from a predominantly generic CDMO profile into a U.S. branded growth company focused on Women's Health and Dermatology, while also turning around the Salisbury facility and completing its modernization. We have strengthened the fundamentals, people, process and products, building sharper capabilities, clear execution discipline and stronger business cases behind key initiatives, including the expansion of our Women's Health portfolio and our recent Dermatology acquisitions. Just as importantly, we've built durable relationships with Australian and U.S. investors, and fostered a culture where people care and take accountability and stay focused on the outcome for our patients. From my perspective, I'm incredibly proud of what we've achieved economically, culturally and how we've satisfied our customers. And I'm confident the company is in a strong position to maintain the momentum and improve upon it under Aaron's leadership as I exit the business. I will now turn it back to Aaron. Aaron Gray: Thank you, Shawn. Looking ahead, Mayne Pharma is in a strong position to capitalize on the opportunities in front of us. We have a differentiated portfolio, improving commercial execution and clear strategic priorities across Women's Health, Dermatology and International, underpinned by continued focus on operational delivery and cash discipline. The company has also commenced a formal process to appoint a new Chief Financial Officer to replace my role. And in the interim, we will maintain governance and reporting continuity through internal arrangements with ongoing Board oversight. We appreciate the continued support of our shareholders, and we remain focused on delivering sustainable growth and improved returns over time. Next slide, please. For Slide 2, please take a moment to read the disclaimer regarding forward-looking statements and the use of non-IFRS measures. Today's comments should be read in conjunction with our audited financial statements and ASX disclosures. Next slide, please. Turning to the headline numbers for the half. Revenue was $212.1 million, broadly flat year-on-year, while gross margin increased to 65.3%, up from 61.4% in the prior corresponding period. Underlying EBITDA was $28.6 million, down 8%, and total direct segment contribution increased to $68.1 million. Adjusted operating cash flow from continuing operations was $16.9 million, and we closed the half with $67.4 million (sic) [ $67.3 million ] in cash and marketable securities. I will now cover off our group financial performance before turning to our 3 segments. Turning to Slide 5. We are separating what we delivered operationally from items that are nonrecurring or noncash so investors can compare period-to-period performance. Reported EBITDA includes a number of one-offs and accounting movements. Our half year underlying EBITDA excludes a $54.5 million noncash earn-out reassessment and $21.3 million of diligence, business development, litigation and restructuring charges. Adjusted operating cash flow from continuing operations was $16.9 million, highlighting that the core business continues to be cash flow positive. The main volatility sits outside underlying operations, driven by discrete legal and transaction costs and earn-out style payments. The takeaway is that the underlying earnings base remained resilient with disciplined margin management and execution across the portfolio despite the uncertainty and distraction associated with the Cosette transaction process. Turning to Slide 6. This slide shows how we improved total contribution even with revenue flat for the half. Gross profit improved by 6%, driven primarily by a positive mix effect in Dermatology, and that supported a $3.1 million increase in direct contribution, up 5% to $68.1 million. Direct operating expenses increased by $4.6 million or 7%, reflecting targeted investments, most notably increased Women's Health promotional activity and higher International sales and marketing expense following the NEXTSTELLIS Pharmaceutical Benefits Scheme, or PBS, listing in Australia. This increased operating expenses. The key point is that we are being deliberate, investing where returns are attractive while continuing to lift the quality of gross profit through mix and channel strategy. Turning now to Slide 7. On EBITDA, reported results were driven by scheme-related legal costs, including litigation as well as the noncash earn-out reassessment in Women's Health. Underlying EBITDA was down 8% versus PCP, reflecting lower Women's Health contribution from additional sales investment, offset by higher Dermatology direct contribution from strong margin growth. On cash, the business generated positive $16.9 million of underlying cash flow from continuing operations, excluding transaction and litigation costs. Against that, scheme-related transaction and litigation costs were $20.7 million. We also made earn-out payments comprising $7.3 million in royalties and $10.3 million related to the TWYNEO and EPSOLAY intangible acquisition costs. In addition, discontinued operations cash outflows were $5.1 million and earn-outs from discontinued operations were $3.1 million. Finally, investing and financing movements included capital leases of minus $1.7 million, net CapEx of minus $1.3 million and other items of minus $0.5 million. The overall message is that the underlying business remains cash generative with the half impacted by discrete transaction, litigation and earn-out payments. Turning now to the specific performance of our segments in further detail. Slide 9 steps down into segment performance. Total direct contribution increased by $3.1 million to $68.1 million in 1H fiscal '26 versus the PCP. The biggest driver was Dermatology, up strongly on margin and mix, while Women's Health delivered solid top line growth but with higher planned investment. International reflected an investment phase post PBS approval. In aggregate, what's encouraging is that direct contribution grew despite flat revenue, which speaks to the quality of earnings improving, particularly in Dermatology, where mix and channel economics are doing real work. It also reinforces that our strategy is not just about chasing revenue, but also building durable margin and cash conversion. The other point here is balance. Women's Health is delivering demand growth and is in an intentional investment phase. Dermatology is delivering margin-led contribution growth and International is positioned for additional value as we leverage our infrastructure to generate growth and the PBS for approval in Australia for NEXTSTELLIS. Together, that creates a more resilient group profile across different periods. Turning now to Women's Health. The first half delivered a solid outcome with continued momentum across the portfolio, translating into sustained demand and share gains. We've improved the cadence and effectiveness of prescriber engagement, and we're benefiting from favorable macro tailwinds in menopause, which supports BIJUVA and IMVEXXY in particular. Women's health continues to be a category tailwind business for us, and our focus is translating that into sustained share gains through field effectiveness, targeting and patient access because those are the controllables that determine whether demand becomes filled prescriptions. Importantly, we are building a franchise with multiple pillars: NEXTSTELLIS, IMVEXXY, BIJUVA and ANNOVERA. So performance is not reliant on a single product. That supports stability in earnings and gives us more levers to optimize promotional mix and payer strategy. Financially, Women's Health delivered revenue of $96.5 million, up 2% versus the PCP. Within the portfolio, NEXTSTELLIS continued to build steadily with demand cycles up 16% and net sales up 4% to USD 23.4 million. Importantly, we also saw strength across the menopause-driven products. IMVEXXY total prescriptions were up 3% with net sales up 2% to USD 15.6 million and BIJUVA TRx up 26% with net sales up 23% to USD 8.2 million, which reinforces that the momentum is broad-based, not reliant on a single product. On the other hand, ANNOVERA showed a mixed picture. TRx was up 2%, but net sales were down 9% to USD 14.4 million. So while prescription demand held up, the net sales outcome reflects net realization dynamics from inventory returns rather than volume weakness. From a profitability perspective, gross profit was $76.2 million, down 1%, and gross margin was 79%, down 3% versus the PCP. That margin movement, combined with the planned investment, explains the contribution result. Specifically, direct OpEx increased to $40 million or 6% growth on PCP, reflecting our deliberate choice to invest behind the franchise. And direct contribution was $36.2 million, down 8% versus PCP. In summary, for Women's Health, top line held and demand strengthened, especially in our core menopause products. Gross margin moderated, and we chose to reinvest, which temporarily weighs on direct contribution during the half. Turning now to Slide 12 on NEXTSTELLIS. This chart shows the trajectory in NEXTSTELLIS demand cycles. The key message is that demand growth remains strong and we achieved all-time high levels during the half. We are layering in refreshed marketing materials and ongoing sales force optimization to sustain and extend that momentum. From here, the focus is to convert demand into the best possible net economics, reducing abandonment, improving prescription stickiness through repeats and keeping the patient journey smooth through access and affordability programs. That's where we see the next step in durable, repeatable growth. On net sales, growth in NEXTSTELLIS is being supported by steady net selling price alongside continued volume growth. Importantly, new coverage decisions effective 1 January expanded access, adding approximately 25 million additional covered lives in the United States. Access is a major driver of whether demand translates into filled prescriptions and the step-up in covered lives supports that conversion. The addition of those 25 million covered lives reduces friction in the demand to revenue pathway. From a financial standpoint, broader patient access supports lower abandonment rates, improved net revenue per script and greater predictability in revenue. It also reduces volatility in rebates and contracting dynamics, which helps stabilize gross margin performance. Slide 13 shows demand continuing to build across our menopause-led products. IMVEXXY delivered total prescription growth of 3% on PCP, translating to USD 15.6 million in net sales. BIJUVA is the standout with total prescription volumes up 26% for the half versus PCP and USD 8.2 million in net sales, reinforcing that momentum is broad-based across the portfolio. For ANNOVERA, demand was steady, up 2% for the half, with USD 14.4 million in net sales. The key nuance is that first half net sales were impacted by around USD 1.7 million of product returns. So that's more of a period-specific adjustment than a change in underlying demand. However, this product return profile is unsatisfactory, and we are working with our partners to improve the returns profile. Slide 14 shows the future drivers for our Women's Health segment. Looking forward, our growth levers are clear. Number one, drive market penetration from our low single-digit market share of the competitive sets, share being approximately 1% for BIJUVA, 3% for IMVEXXY and NEXTSTELLIS, and 2% for ANNOVERA. Number two, defend portfolio runways through our long-dated intellectual property. Three, keep sharpening commercial execution through targeting and field effectiveness. And finally, four, continue to improve access through payer contracting and patient programs. Turning now to the performance of our Dermatology segment for the half. Slide 16 provides the operating and financial highlights for Dermatology. This segment continues to demonstrate the benefits of mix, channel strategy and execution. We are building a more resilient earnings profile through a higher percentage of branded sales and leverage of our channel to improve patient access and conversion. Dermatology is demonstrating what we mean by quality of revenue. Even when the top line is not accelerating, mix and channel strategy can materially change the profitability outcome, and that is exactly what we are seeing. In the half, Dermatology revenue was $78.6 million, down 3% on the PCP, but profitability improved meaningfully. Gross margin expanded to 65%, up 12 percentage points, driving direct contribution up 35% to $29.8 million. That's a strong example of operating leverage and favorable mix even in the face of top line pressure. We've shown that profitability can improve materially through mix and improved conversion of our channel. What we are finding exciting is that we're now moving from building the ecosystem to scaling it. Each incremental prescription routed through our disintermediated pathway improves both patient access and the profitability profile of the segment. We will soon be launching the next leg of our disintermediation strategy with that launch planned for Q3 fiscal '26. Slide 17 shows very clearly that Dermatology's earnings improvement is being driven by mix. Branded revenue increased to $51.2 million or 65% of the mix, up from $44.5 million or 55% of the mix in the PCP. Investors should note the contribution of TWYNEO and EPSOLAY given their relaunch by Mayne Pharma was responsible for part of the increase. All other Dermatology products we sell reduced to 35% of the mix from 45% in the PCP. That is the core driver of the profitability uplift. This drove the gross margin improvement and when combined with flat segment OpEx, provided solid operating leverage to contribution, which grew 35% for the half. Turning to Slide 18 on future drivers for Dermatology. Having delivered continued improvement in margin and contribution, the priorities now are about making those improvements repeatable and scalable. First, we continue to scale the disintermediation and specialty ecosystem because when more scripts move through the pathway we control, this supports better patient access and improved conversion outcomes, which also then leads to higher profitability. Second, we'll continue to expand and refresh the Dermatology portfolio through capital-efficient accretive arrangements, specifically targeted business development of new FDA-approved brands and products that broaden addressable segments. Third, we'll keep lifting execution, sales force capability upgrades and refresh marketing. So we rebuild and accelerate demand while protecting the improved gross margin profile created from the mix and channel shift. Turning now to our final segment, International. Operationally, there were 3 key highlights. First, PBS approval for NEXTSTELLIS in Australia, and we have commenced promotion post PBS approval. Second, we inaugurated the completed Salisbury facility upgrade, which was an $18 million investment, including $4.8 million from the Modern Manufacturing Initiative grant. Third, we received external recognition for export performance, which supports partner confidence and demand. Financially, revenue was $36.9 million, minus 1% versus PCP. But importantly, gross profit increased to $11.3 million, plus 7%, and gross margin improved to 30.5%, plus 3%. So unit economics are moving in the right direction. Direct OpEx was $9.2 million, plus 32%, reflecting primarily the planned investment phase related to NEXTSTELLIS. And as a result, direct contribution was $2.1 million, minus 42% versus PCP. The message is we're seeing improving margin and gross profit while we invest to build the pipeline for future scale and operating leverage. Slide 21 sets out how we convert that investment into improved performance. The first lever is capacity and reliability from Salisbury post upgrade, enabling higher output, better service levels and improved DIFOT to support export and partner growth. This is the pathway to better utilization and improved fixed cost absorption. Second, the PBS listing is already showing early traction as access and affordability improve. We have seen 118% growth in 3-pack volumes of NEXTSTELLIS in December 2025, immediately following the PBS decision. That's a meaningful early indicator that promotion plus access can translate into volume growth. The objective now is to compound those leading indicators into repeatable revenue and ultimately improved contribution alongside expanded supply agreements and partnerships through the network. Turning to our outlook on Slide 22. For Women's Health, we aim to continue our market share growth with dedicated people who are 100% focused on Women's Health, drive our refreshed marketing and product access solutions, and protect our strong intellectual property for our best-in-class products. We will make targeted investments to drive growth and focus on sustainable cost leverage. For Dermatology, we will take the next step in our disintermediation strategy to fully leverage the ecosystem we have built to improve access and patient outcomes for Dermatology and pursue expansion into other therapeutic areas. We look forward to updating investors with our new strategy as well this quarter. For International, we have focused activities to unlock the value created by the investments that have been made in the international business via NEXTSTELLIS PBS listing, the $18 million CapEx infusion and growing international supply agreements. We intend to enforce our agreements and reserve all of Mayne Pharma's rights and balancing these costs with shareholder value in mind. As you have seen, we have commenced proceedings in the Supreme Court of New South Wales against Cosette and related parties, Avista and David Burgstahler. Mayne Pharma is seeking substantial damages on behalf of Mayne Pharma shareholders and on its own behalf. Finally, from a capital perspective, we continue to evaluate a variety of capital allocation priorities, including share repurchases, targeted asset acquisitions and expanding our promotional activities across our segments. That concludes the formal part of today's conference call. I will now turn the call over to the operator for the question-and-answer session. Please go ahead. Operator: [Operator Instructions] As there are no phone questions at this time, I'll now hand back over to Mr. Gray to address any questions submitted to management. Aaron Gray: Thank you. Tom, have we received -- I believe we received a couple of questions from investors that this might be a good time to address. Thomas Duthy: Yes, we have Aaron. I'll just read them out. First question is, what is the ability of the company to continue to drive revenue growth and script growth in Women's Health? Aaron Gray: Okay. So compared to the PCP, 1H fiscal '26 saw solid Rx growth, demand growth and -- but our revenue was relatively flat. That was a function of a couple of things. We were weighed down by the returns on ANNOVERA, which I talked about in the presentation. We also had in the PCP, so in the first half of fiscal '25, we had a number of credits that we recognized due to our conservative GTN methodology. We've continued to refine our GTN methodology, basically continuous improvement, improving every period. And so the amount of buffer that we carry has reduced over the period. Basically, we got a credit in the first half of fiscal '25 that didn't repeat in the first half of fiscal '26. So I would expect once that is normalized out and in the rearview mirror, we should see revenue growth at the same or higher rate that we would see TRx growth looking forward. Thomas Duthy: Okay. Second question, what is the current status of emerging competition for RHOFADE in 2026? Aaron Gray: So RHOFADE -- we acquired RHOFADE out of a bankruptcy proceeding. This was an extremely good acquisition. It paid for itself in several months. And we've obviously continued to realize revenues and profit and cash from it. RHOFADE, when we acquired the asset, we knew that it was not a long-lived asset. The previous owner had reached a settlement on the introduction of competing generic products, which happens at the end of our fiscal year '26. And so we do expect there will be some competitors launching at the end of our fiscal '26. We will also be taking our own steps and taking measures to make sure that we protect and maintain our share of the market there. Thomas Duthy: And third question, what is the company's view of the adjustments to the underlying EBITDA on a go-forward basis, particularly legal costs and discontinued operations? Aaron Gray: So with respect to the discontinued operations, obviously, our 1H fiscal '26 was heavily impacted by costs associated with the Cosette transaction. That was a very -- it was an extremely extensive effort. We would expect the costs of an appeal to be significantly reduced compared to what we've already expended. We would also then expect the cost of pursuing the damages claim that I mentioned to be reduced compared to the initial spend as well as then depending on time frame, these costs could spread over a longer period of time. That said, we incurred significant legal costs related to defense of some of our intellectual property. That weighed down EBITDA to the tune of more than $2 million in the first half. We are working diligently to put those behind us and to reach some kind of an agreement on those. I can't comment more. But I would expect going forward that we would not see those -- there will be a point where we will not see those expenses continue at the same rate. The other item that we had was we had a significant step-up in cost related to FDA post-approval studies, which are required for the Women's Health products. We've stepped up about $2.6 million compared to the prior fiscal first half in those FDA costs, and we expect those to step down to a level that's something below the fiscal year '25 run rate looking forward into fiscal '27. So those costs will continue across the second half of fiscal '26. However, we expect them to step down beginning in fiscal '27 as those studies have been completed. Thomas Duthy: Right. I have some other questions here for you, Aaron. One of the investors have asked if you could give a little more granularity and color around ANNOVERA product returns and how you will wind this back in or wind it back down so the level of inventory returns are not sort of at that same rate moving forward. Aaron Gray: Yes. So ANNOVERA returns come -- returns come when we use the big 3, the channel, which is we call it the big 3, the large 3 wholesalers. They have a fairly liberal right to return, and they do so when it's to their advantage to do so, as you would expect. ANNOVERA is a challenging product from a logistics perspective. It's a multi-month prescription. It's a relatively high-priced product, and it risks seeing higher abandonment. So scripts can't just be -- scripts cannot just be put into the channel, assuming they're going to be filled. We need to have a bit more of a targeted dedicated handheld process across the access solution to make sure that ANNOVERA gets filled. We also, to the extent we have existing customers, are working to understand why abandonment for that product is higher than we would -- than we experience on other products. And we are looking at changes to the supply side. Certain of our customers that are supplied through the big 3, we have the option to contract with other wholesalers who do not have quite the same right to return. And so it's basically a multipronged approach through everything added to make sure we drive that rate back down to where it should be. Thomas Duthy: Okay. Terrific. And just following up from that in Women's Health, was there anything particular which drove BIJUVA momentum for the half? Aaron Gray: BIJUVA has seen just a significant lift based on, I think, general awareness in hormone replacement therapy. There's been other products that have spent the millions of dollars per minute to advertise at the Super Bowl. There's been much more conversation and discussion around hormone replacement therapy. And in fact, the U.S. government removed the black box warning from certain hormone replacement therapy products, among them BIJUVA and IMVEXXY. And so that -- I think that's triggered a conversation around HRT, which hasn't happened, which is changing rather in the United States. So I think attitudes and thoughts around HRT are changing fundamentally. And the black box warning, while the government -- the U.S. government made the decision to remove the black box warning, we haven't completed the update of our label yet. That's in process. So we expect to see those attitudes and opinions continue to change. Thomas Duthy: Perfect. If I could ask the operator to flick to Slide 33, which is one of the appendices in the main deck. Aaron, we had a question on this slide in particular, just whether you could expand on how you see the opportunity for Dermatology moving forward. It's a macro-derived slide. I'm not sure if you can see that now in front of you. Aaron Gray: I can't see it, but I can talk on the opportunity for Dermatology. Dermatology -- dermatological conditions are not being cured. So there's a populus that still has a need for care. There's not an awful lot of new development in small molecule medical derm. And most companies following the traditional pharma model of make money on covered scripts to lose money on cash scripts simply doesn't work because the coverage profile for small molecule medical derm is fairly poor relative to other products. And so that requires a completely different model. Hence, the years that the Mayne Pharma team has spent trying to set up this alternative distribution. The opportunity continues to pick up assets in a capital-light structure where companies are -- because of this -- because of the traditional model, companies have the inability to remain profitable the way they do business. Instead, they may benefit from handing the assets over to us in some kind of a structured transaction. So anybody who's in small molecule medical derm, there could be a partnership there that's mutually beneficial. That's what we've seen as we've picked up a number of products in partnership with Galderma, and there are other companies out there that we can also work with on that. So there are further product acquisition opportunities. The coverage is not going to fundamentally change. If anything, the coverage is going to deteriorate on small molecule medical derm products. And our solution, our access solution provides -- it provides access for the patient. It provides a frictionless experience for the provider. It provides cost certainty at the time the script is written, whether a patient has insurance or not. And it basically has no switching, no prior authorizations required and the medicine shows up at the patient's door. So I think the market has not contracted for Dermatology. The need is still there. Anybody who's in a position that can meet that access need has the potential to capture significant amounts of share there. Thomas Duthy: Thanks, Aaron. That concludes the questions from investors. I'll turn back to the operator.
Operator: Thank you for standing by, and welcome to Navigator Global Investments Limited HY '26 Interim Results. [Operator Instructions] I would now like to hand the conference over to Mr. Stephen Darke, CEO. Please go ahead. Stephen Darke: Thank you, operator, and welcome to everyone joining the call this morning to discuss Navigator's half year results for the 2026 financial year. I'm Stephen Darke, Navigator's CEO. I'm joined today, as per usual, by my colleagues, Ross Zachary, Navigator's CIO and Head of NGI Strategic Investments; and Amber Stoney, Navigator's Group CFO. Turning to Slide 4, the company snapshot. Navigator is the only ASX-listed company focused exclusively on partnering with leading alternative asset managers. We provide growth capital and strategic engagement to a diverse portfolio of 11 managers. As of 31 December, at the Partner Firm level, Navigator's affiliates manage over USD 84 billion, up 6% over the past 12 months. This AUM is managed across 42 investment strategies and invested via 197 products. These strategies typically have low correlation to global equity and fixed income markets and to one another. Turning to a summary of Navigator's first half 2026 financial results on Slide 5. I'm pleased to report that NGI continued to see strong top line growth and earnings momentum. Our ownership adjusted AUM increased 5% during the period to $29 billion. Higher management fees with higher fee rates and continued strong risk-adjusted investment performance, leading to higher performance fees drove Navigator's first half revenue to USD 108.3 million, up 17% during the period. The group's adjusted EBITDA was USD 48.2 million, a 17% increase from first half '25, leading to a 7% increase in adjusted EPS. On Slide 6, you can see Navigator's ownership-adjusted AUM over the last 12 months and since 2021. The consistent AUM growth over the past 5 years continues. Over the past 12 months, we saw a 7% increase in ownership-adjusted AUM, meaning an additional USD 1.9 billion of AUM. During 2025, we saw marginal net inflows across NGI, with the growth in AUM driven by continued investment performance from both business segments, but particularly across the range of Lighthouse strategies, which have performed strongly in volatile markets. Given the 2025 investment performance, recent and prospective new product launches across NGI's portfolio, more positive sentiment from capital allocators and a generally improving fundraising environment across the industry, we expect to see higher net inflows across NGI's Partner Firms in 2026. Turning to Slide 7. Alternative asset managers who aim to generate positive absolute returns for their investors across all market cycles have a strong alignment of interest in the economic performance of their strategies and the returns they generate for their investors. For Navigator's portfolio of managers, this is typically reflected in higher and more sustainable fee yields, which Navigator and our shareholders are a direct beneficiary of. Here, we show Navigator's underlying revenue composition, taking Navigator's share of the revenues of our Partner Firms, including Lighthouse on a calendar year basis. It's these underlying revenues that ultimately drive earnings for our Partner Firms and result in higher distributions to Navigator, but predominantly -- the latter predominantly occurring in the second half of every financial year. 2025 adds yet another year of strong underlying revenue performance to this chart, further illustrating the power and predictability of Navigator's resilient and growing model over the short, medium and longer term. After a very strong year in CY '24, total underlying revenues were up again in calendar year '25, with a higher relative contribution from base management fees and a lower contribution from performance fees. The average total fee yield, the light blue dotted line, over 5 years increased by 5 basis points to 1.14%, driven by higher management fees and relatively stable performance fees. NGI's Partner Firms have shown consistent growth in recurring management fee revenues, the dark blue bars, in line with higher AUM. The average management fee yield is 74 basis points within the range of 72 basis points to 75 basis points over that 5-year period, reflecting a marginally higher average fee yield than the prior corresponding period. Our Partner Firms have a consistent track record of producing strong risk-adjusted investment performance and hence, performance fees across market cycles and over multiple years. As a result of that, Navigator generates resilient underlying performance fee revenues annually as evidenced by the light blue bars. The performance fee yield, as shown by the gold line at the bottom of the chart, has averaged 39 basis points and in a relatively narrow range of 26 basis points to 47 basis points over that period, reflecting the relative stability and expected recurring nature of that revenue stream, especially through challenging investment cycles. The performance fee yield for calendar year '25 was 41 basis points, slightly higher than the long-term average, but lower than the prior year of 47 basis points. Unlike performance fees from strategies that are benchmarked to a market index, the absolute return nature of the strategies managed by our Partner Firms and the structure of their performance fee mechanics as we outlined at our November Investor Day, drive these outcomes and have now done so for longer than 5 years. Moving forward and based on the long-term track record you can see here, we think it is reasonable to expect performance fee revenues within this range, providing a resilient source of recurring income for Navigator. In the appendix, we present the latest numbers on the lack of correlation across the NGI Strategic Partner Firms. On Slide 8, we show the segment revenue composition for NGI Strategic and Lighthouse across management fees and performance fees. In line with growth since calendar year '21 and prior, Navigator has exhibited consistent continued underlying management fee growth across both NGI Strategic and Lighthouse, with an aggregate USD 216 million revenues generated for calendar year '25, up 9% on the prior year and slightly ahead of the 3-year growth rate of 8%. As you can see on the right-hand side chart, the rolling 3-year average performance fee revenue across the business segments has continued to increase and now sits at USD 101 million from USD 94 million in the prior corresponding period. After a historically strong calendar year '24, overall performance fee revenues decreased by 7%, with NGI Strategic generating performance fee revenues more in line with its 5-year average. It was pleasing to see Lighthouse performance fees increase again, up 23% by prior corresponding period and a 16% across the calendar year -- increase across the year -- calendar year. This result reflects an increasing trend towards the growth of Lighthouse's direct hedge fund business, which incorporates a performance fee model for investor alignment rather than a management fee-only model. As investors saw from our Q2 AUM and performance update released last month, rather than the reliance on an outperformance of any one strategy, Lighthouse is exhibiting strong risk-adjusted returns across almost all of its strategies, exceeding their respective 3- and 5-year averages in 2025. The broader diversification of the Lighthouse performance fee revenue stream is encouraging as we enter 2026. With additional new products and a continued supportive environment for delivering strong investment returns, we remain confident in the ongoing success and growth of the Lighthouse platform. Importantly, Navigator continues to see no fee pressure in either base management fee rates or performance fee rates across our Partner Firms. And in fact, we're observing increases across some strategies and new products as investors are prepared to pay managers who can truly generate non-market-linked investment returns across cycles. Amber will address the updated fee rates across our business segments during the presentation of our latest key metrics. Turning to Slide 9. You can see the earnings power of the diversified portfolio. In the first half '26, we saw strong adjusted EBITDA across both business segments. NGI Strategic increased its earnings contributions by 32% to $19.3 million due to higher cash distributions received during the 6 months. Lighthouse generated a record $28.9 million EBITDA during first half, an increase of 9% from prior corresponding period, driven by the higher management and higher performance fees across the platform, with the operating margin in line with PCP. As noted last May, while Navigator continues to benefit from a resilient and diversified earnings base, subject to market conditions and the timing of revenue receipts, Navigator expects full-year adjusted EBITDA to be lower than FY '25. This reflects comparatively lower investment performance in the NGI Strategic segment relative to the prior strong year, which may result in lower profit distributions in the second half compared with yet again a very strong H2 FY '25. We are very pleased with the ongoing consistent investment performance, management and earnings generations by our Partner Firms, which continue to prove to be some of the leading alternative asset managers globally in their respective area of specialty. There has been and there will continue to be material long-term value accruing to Navigator shareholders from the ongoing organic growth of our Partner Firms who continue to generate that performance and launch new strategies and also a focus on reinvesting our operating cash into new Partner Firms that we source the diligence and execute to further diversify and grow the NGI portfolio and increase the scale of our earnings. Ross will talk more about this, but we remain focused on continuing inorganic growth in 2026. Finally, it's particularly important in this investment environment of heightened volatility to recognize the value of diversification that is generated by a portfolio approach like that, that Navigator adopts. This ensures that overall resilience and consistency of earnings should be able to be maintained across market cycles. And secondly, with stable or indeed increasing fee rates and a resilient investment performance from strategies that are benchmark unaware, Navigator's business model can produce growing revenues, higher fee yields and the resulting increased cash earnings over the medium and longer term. Now, I'll hand over to Ross to provide the NGI business update for the half. Ross Zachary: Thank you, Stephen. I'm thrilled to have the opportunity to review more about our business and highlight how Navigator's scale and diversification continue to drive value. On Slide 11, what is clear here is that Navigator operates and partners with large established firms who are leaders across a diverse range of unique alternative investment strategies. These businesses deploy well over $100 billion in time-tested strategies across global markets designed and refined over decades to generate strong risk-adjusted returns. Dispersion within and across asset classes, market volatility, interest rate changes, economic cycles and geopolitical uncertainty, all present opportunities to provide their clients strong risk-adjusted returns. These are scaled but growing firms with an average of over $8 billion of firm-level AUM. In today's industry, it's the scale and the related resources that are more critical than ever to attract and retain talent and generate strong results. Lighthouse and our Partner Firms, all benefit from these attributes. In addition, NGI and our Partner Firms have a clear competitive advantage through our partnership with Blue Owl's GP Strategic Capital division. Their 55-plus person business services platform continues to benefit us across various verticals such as capital introductions, operational and technology best practices as well as very targeted human capital advisory engagement. If you flip to Slide 12, we have a snapshot of the business composition today. Across the NGI Strategic and Lighthouse segments, our earnings are generated from over 40 alternative investment strategies delivered through almost 200 products globally. Not only is the business diversified across liquid alternatives, public and private credit, specialized private equity, real estate capital solutions and a variety of commodity strategies, but it also generates revenues through a wide variety of fee terms and structures. Today, an estimated 33% of ownership-adjusted AUM in the NGI Strategic segment or 13% across the entire Navigator business is in long-duration products with highly visible sticky revenues. We expect this contribution from this high-quality and stable earnings stream to continue over time as we add Partner Firms and the existing Partner Firms further evolve their product set. We cannot emphasize enough that the diversification available to us by partnering with independent firms has and will continue to benefit the company and our shareholders as we execute our growth initiatives. Please flip to Slide 13. We'll provide a few select highlights of activity during the period. Our Partner Firms continue to be at the forefront of their respective strategies and prove out why they are leaders in the alternative investment industry globally. During the period, we have seen our partners at 1315 Capital continue to deploy capital into innovative, growing health care companies as well as realize existing portfolio companies in a difficult environment. Another private markets Partner Firm, Marble Capital continues to illustrate their leadership position in a large, highly fragmented asset class with their unique strategy as they specialize in providing capital solutions to high-quality real estate sponsors in regions of America that are experiencing strong, resilient economic growth, coupled with an undersupply of housing. They recently announced that they deployed over $350 million in new investments in 2025 across over 8,300 units, illustrating their impressive ability to execute a focused and differentiated strategy at scale. Similarly, Invictus Capital Partners' highly differentiated approach to residential real estate credit continues to attract the most sophisticated long-term oriented institutional clients in the world. This is evidenced by a recently publicly announced mandate for Moore Capital. CFM, one of the Partner Firms acquired in the NGI Strategic portfolio, has continued to demonstrate their clear leadership position in the global hedge fund industry. With over $20 billion of firm-level AUM today, their investment results have remained exceptionally strong, which, as you can see here, continues to result in winning several industry awards in this past year. Please flip to Slide 14, and we can review the overall growth of the business this year. On Slide 14, you will see that excluding the sale of Bardin Hill, which closed in October, both the NGI Strategic and the Lighthouse segments generated positive organic growth in the period. We are very pleased to report this 5% increase in ownership-adjusted AUM or 7% when adjusting for the Bardin Hill sale in a challenging backdrop for the industry. Our private market Partner Firms are in the process of raising capital for their flagship funds, and we expect to see additional contribution from these efforts in the second half of our fiscal year. Lighthouse continues to demonstrate their long-term proven track record of innovation by creating and offering new hedge fund products, which leverage the breadth and sophistication of their platform to meet both existing and new client demand. It is important to remember that the underlying returns of Lighthouse, our Partner Firms and the public markets show very little correlation to one another. And therefore, we continue to see investment performance across the group as a key driver of AUM and revenue growth. Please turn to Slide 15 to review a cross-section of recent investment performance. This slide summarizes certain indicative performance across both segments. The NGI Strategic composite is comprised of flagship strategies in the NGI Strategic portfolio. And although it generated lower performance in calendar year '25 as compared to recent history, you'll see the 3- and 5-year performance not only illustrates the strength of the track record across this business, but also how well positioned they are for continued growth and performance. At Lighthouse, performance was particularly strong in 2025, with hedge fund products delivering attractive risk-adjusted returns and a broad contribution across their teams and sectors. From what we see, the environment to generate strong returns remains in 2026. This performance data clearly illustrates the power of our model and how Partner Firms that show low correlation to one another can generate the continued durable results for NGI shareholders over time. If you go next to Slide 16, we can touch briefly on our growth strategy and our focus on continued growth through acquisition. The criteria you see on Slide 16 are informed by our deep experience in partnering with, investing in and operating alternative investment management firms for over 20 years. We continue to build and work through a very active pipeline of established and growth-oriented firms who are acutely focused on positioning themselves for sustainable long-term growth. Today, this pipeline is broad and includes both firms that specialize in areas of private market alternatives that we believe our partnership may add value to, as well as certain liquid alternative firms that we think may provide diversification benefit and present the potential to enhance the growth profile of our business. Although we increasingly recognize a trend of larger alternative asset managers capturing investor market share, we are focused on a wide universe of specialized proven businesses that will capture share and add tangible value to their clients over time. When identifying new potential Partner Firms, our goal is to continue to increase the stability, durability and growth profile of NGI's earnings, which in turn strengthens our competitive position to make further acquisitions over time. Thank you. Amber, I'll turn it over to you for the financial results. Amber Stoney: Thanks, Ross. As Stephen and Ross have covered, we've seen continued momentum across the business, and I'll now take you through the financial results for the first half of FY '26. I'll focus on 3 things: earnings outcomes, what drove them and the strength of the balance sheet supporting our strategy. As outlined on Slide 18, adjusted EBITDA increased 17% on the prior comparative period to $48.2 million, driven by a combination of very strong Lighthouse performance fees, solid management fee growth and higher distributions received from our NGI Strategic Partner Firms. Lighthouse performance fees were $39 million for the half, up from $31.7 million in the prior period, reflecting strong investment performance across the Lighthouse platform. Lighthouse management fees also grew by 8% on prior comparative period, consistent with its higher AUM. From NGI Strategic, we have received $22.3 million of distributions compared to $16.6 million last period. The majority of the increase came from our private market Partner Firms. These revenue increases were partially offset by higher costs. Employee expenses increased by $6 million, largely reflecting the higher bonus accruals tied to lighthouse performance fees. Other operating expenses increased by $4.4 million, driven by higher IT spend, third-party distribution costs and professional fees. In terms of the balance sheet, net assets were $795 million as at 31 December 2025, which is materially the same as it was at 30 June. On Slide 19, we look at both statutory and non-IFRS performance results. Statutory results show a net loss of $4.3 million compared to a significant profit in the prior period. This outcome is primarily due to movements in fair value of investments recognized through the P&L. Such variation in fair value from period to period is indicative of the significant growth in our balance sheet, with NGI currently holding $670 million in investments in our Partner Firms. Importantly, when we adjust for this significant non-cash item as well as other non-recurring items, adjusted EBITDA increased 17% to $48.2 million, highlighting the underlying strength of the operating performance across both the Lighthouse and NGI Strategic businesses. Adjusted NPAT for the half was up 7% to $29.8 million. While this also reflects improved operating earnings, it is impacted by higher interest costs and tax outcomes relative to the prior period. The adjusted EBITDA and NPAT measures are intended to reflect the underlying operating performance of the business for the half, while the statutory outcome includes items that can introduce significant volatility period-to-period given the size of the assets that we hold. Turning to Slide 20. We take a closer look at segment performance. This table summarizing 3 comparative periods shows how diversification across the NGI Strategic and Lighthouse businesses contributed to group earnings, with both improving on the prior period. Lighthouse delivered improved results from operations, supported by higher management and performance fees, with a small reduction in margin compared to the prior half due to increased operating expenses. NGI Strategic was the key driver of group profitability in half 1, with distribution income increasing 34% on prior comparative period and reflecting resilient receipt of earnings distributions from our Partner Firms, particularly in private markets. Looking ahead to the full year, with NGI Strategic expected to contribute a larger share of earnings in the second half, we expect the group's full-year adjusted EBITDA margin to trend closer to the FY '25 margin of 56% due to the expected lower weighting of Lighthouse in the second half results. Slide 21 focuses on the momentum in revenue growth across our key revenue streams. For NGI Strategic, we've seen strong and improving distribution outcomes over recent years, reflecting the quality and diversity of our Partner Firms and increasing exposure to private market strategies that generate meaningful cash earnings over time. This multi-year growth trend continued into the first half of FY '26, with distributions again increasing compared to the prior comparative period. That said, distributions can vary materially period-to-period depending on Partner Firm performance and operating outcomes, the strategy mix and product-specific fee realization. Total distribution income in FY '25 was particularly strong. And while we saw a further uplift in half 1, we note that distributions received in half 2 may be lower than in the prior comparative period. As Ross noted earlier, calendar year '25 composite performance for the NGI Strategic portfolio is lower than for the prior calendar year, and that is likely to have some impact on distributions received in the second half of our financial year. Given the inherent variability of underlying Partner Firm performance and their distributions, as always, forecasting NGI Strategic income for the remainder of FY '26 is difficult. I've previously noted that once again, Lighthouse has delivered strong performance fee revenues in the first half. We are pleased to see the 8% growth of management fees for Lighthouse. A change in AUM mix has improved the average management fee rate this half from 54 basis points to 56 basis points. And combined with continued AUM growth, this has underpinned this increase in fee revenue. The next slide, Slide 22, summarizes the key financial metrics underpinning profitability across both businesses. Starting with NGI Strategic, ownership-adjusted AUM was $11.7 billion at period end. The average management fee rate is approximately 1.2% per annum, which is up 2 basis points from 30 June. The average performance fee rate and AUM that can earn performance fees have held steady at 17% and 80%, respectively, and the 33% to 43% indicative margin range is slightly down on the prior year. Overall, the metrics for the NGI Strategic business remains strong, with investment performance and AUM growth through net flows being 2 of the key variables to impact future distribution outcomes. For Lighthouse, AUM was $17.3 billion, with an improved average management fee rate of 56 basis points per annum. Approximately 23% of AUM is eligible to earn performance fees as at 31 December, with almost all of that AUM at or above high watermarks. Combined with positive investment performance across key Lighthouse products for the 2025 calendar year, this has led to $39 million of performance fees recognized for Lighthouse in this first half. Across both segments, these metrics reinforce the scalability of the platform and the strong conversion of AUM into earnings and cash flow over time. And I'll finish with the balance sheet on Slide 23. We continue to operate with a strong balance sheet, supporting both organic growth and new partnership opportunities. Net debt to adjusted EBITDA was 0.6x at 31 December, well within our target leverage range of up to 1.5x. The group has access to a $100 million credit facility with a 2029 maturity, providing flexibility to fund growth initiatives as they arise. As announced in November, the Board has suspended dividend payments, with the last dividend payment paid in September 2025. This decision reflects our view that the best use of capital at this point in the cycle is to reinvest in growth opportunities and compound long-term shareholder value. To wrap up my section, we've delivered a solid first half with strong underlying earnings and a balance sheet that keeps us well positioned for the opportunities ahead. And with that, I'll hand over to Stephen to take you through the outlook and closing remarks. Stephen Darke: Thank you, Amber. So as summarized on Slide 25, in the first half of FY '26, we saw consistent and continued financial outperformance driven by a step-up in the Lighthouse business and higher cash distributions received in NGI Strategic during the first half. We saw continued robust investment performance generated across our diversified portfolio of Partner Firms, especially across the Lighthouse strategies. NGI is operating in an environment that continues to benefit leading managers globally with higher volatility and dispersion driving an increased performance by leading alternative asset classes and a greater investor appetite for these strategies. NGI saw an increase in the average management fee rates across our business segments and the maintenance of our flexible balance sheet, the payment of the remaining deferred considerations on the 2022 transactions and the ongoing generation of significant cash flow from our portfolio. NGI is a scaled and diversified platform, which continues to exhibit organic growth across our portfolio of Partner Firms and is positioned for further acquisitive growth. Turning to Slide 26, which you have seen before, it shows how Navigator and its portfolio of Partner Firms have opportunities to drive growth and to compound earnings at a high rate of return. As we do so, the scale, diversification and resilience of our business increases. Navigator's growth will be driven by a number of key factors: one, growth in the broader alternatives industry in which we specialize, increasing demand for our absolute return-focused Partner Firm strategies. The 2026 investor allocation plans by asset class are set out in the appendix at Slide 33, with broad positive net interest in increasing allocations across alternatives, in particular, hedge funds and private equity. There are tailwinds supporting this increased interest and the ability for our leading alternative managers to maintain or increase fee rates, and they include growing investor appetite from wealth management investors and insurance firms globally and our Partner Firms operating in sectors, benefiting from rich trading opportunities and increased volatility, driven by elevated uncertainties in relation to the impact of artificial intelligence, geopolitics and the implementation of fiscal and monetary policies globally. Secondly, continued organic growth and increased scale of our Partner Firms, and that can be generated by strong performance, net inflows, new product launches and increasing their operating margins. Thirdly, such growth could be supplemented opportunistically, and it is by value creation from Navigator and/or Blue Owl's business services platform, which aims to accelerate partner firm trajectory. And not just some of the services that Ross mentioned earlier like capital introduction, there's also a dedicated AI advisory and data science group providing cutting-edge advice to all of our Partner Firms and all of their Partner Firms around how to address artificial intelligence in the new world we all find ourselves in. Finally, there's an addition of new Partner Firms can drive growth to expand the portfolio or indeed, if the opportunity arises to invest additional capital in our existing Partner Firms to support their growth. During 2025, we partnered with 13 Capital, and we have a high-quality pipeline of opportunities, but remain prudently focused on investments that satisfy our criteria. In terms of the outlook for Navigator for FY '26 on Slide 27, we expect our portfolio of firms to continue to perform across market cycles as they have done historically at both the management company level and an investment strategy level. Lighthouse continues to focus on its core mission of generating attractive returns primarily through idiosyncratic risk for its clients, providing relevant and innovative solutions for its clients across array of strategies and aligning as long-term partners for their clients' portfolio managers and other joint ventures. We believe this emphasis will allow Lighthouse to potentially add meaningful scale and diversification to the business in the future. Unlike other listed asset managers in Australia that may benefit from a sustained risk-on period for equity and/or bond markets, NGI's public markets' focused firms show resilience in more difficult time periods, which can provide diversification. In terms of execution of growth strategy, we are focused on acquisitive growth in '26 and to look to add new differentiated Partner Firms that meet our investment criteria and further diversified our earnings. The addition of new firms and the expansion of our portfolio will further Navigator's ambition to be the leading alternatives manager listed on the ASX and a leading partner to asset managers globally. In terms of funding growth opportunities, we're generating strong operating cash flow. As Amber says, we have a flexible credit facility only drawn around 30% currently and all deferred consideration paid during the year on our acquisitions with only an earn-out left in relation to 1315. In terms of our financial outlook, while Navigator continues to benefit from a diversified and resilient earnings base, subject to market conditions and the timing of receipts, we expect FY '26 adjusted EBITDA to be lower than FY '25, and it reflects the comparatively lower investment performance in the NGI Strategic relative to the prior year, which may result in lower profit distributions compared with a strong H2 FY '25. Importantly, though, we remain highly confident in the outlook for Navigator and its Partner Firms to deliver strong returns across the cycle, including during periods of market volatility. Before I conclude and open to questions, I want to revisit on Slide 28, why we think Navigator is a unique and compelling investment proposition as the only pure-play alternatives firm on the ASX. Navigator and our portfolio of global Partner Firms have deep expertise across diverse sectors of the alternative industry and established track records of generating returns. Management continues to focus on acquisitive growth, but on the right terms and with the right Partner Firms. Along with the consistent organic growth across the business segments, we continue our progress towards achieving our 2030 target of over USD 45 billion of high fee-paying AUM. Our portfolio is very well positioned to benefit from the significant structural tailwinds driving alternative asset management and over the medium and longer term to deliver superior performance for its shareholders. In particular, in this world of rapidly changing technology and the advancement of artificial intelligence, Navigator should be expected to benefit both in terms of investment performance, particularly with our underlying quantitative strategies and improved processes and efficiencies that are implemented and will be implemented at our Partner Firms. When advised by leading AI advisory and data science groups by the BSP, these factors have the potential to improve the growth trajectory and operating margins of our Partner Firms and Navigator over the longer term. Thank you for your time, everyone. I would now like to open the call to questions. Operator? Operator: [Operator Instructions] The first question comes from the line of Nick McGarrigle with Barrenjoey. Nicholas McGarrigle: Maybe just a question around, just to clarify the relationship with Blue Owl and so much is there involved with private credit investments. My understanding is that's a completely separate segment to the Dyal business effectively that you're exposed to. I have been getting a few investor questions about that. So, it was worth just getting you guys to clarify the current position that they're in on the private credit side and how that relates to your business? Stephen Darke: Yes. Thank you, Nick. I, obviously, been following a lot of that press. I think everyone understands this. But Blue Owl hold their stake in Navigator by their first GP staking fund owned by institutional investors rather than the Owl balance sheet. That fund does not have an end date. Owl are working with their portfolio companies, including NGI to help maximize value for their own investors like any asset management business. Their manager sourcing and the BSP are all part of that GP staking business. It operates independently and not part of the private credit business. Just stepping back, though, and so really, very little, if any, impact on Navigator. I don't really want to comment on the specific private BDC capital return that's in the press right now as I'm not an employee or a spokesperson or an investor in that vehicle. But I would urge people to review very carefully what has happened. There's a lot of conflicting reports about the facts and the outcomes. But very, very clearly aware of all the noise and it has no impact on Navigator and the way that we work with Blue Owl as frankly, on that GP staking side, without a doubt, the global leader and strategic partner. Just more broadly, though, while we're on that topic, Nick, it's worth talking about Navigator and private credit. And I'll hand over to Ross. But even though, on Slide 12, we referred to sort of the asset class AUM as including public and private credit at sort of 31% of the portfolio, everyone should realize that most of that is really publicly traded fixed income as part of the hedge fund portfolios and maybe we should break it out going further. Marble and Invictus are not private credit. They're specialized real estate credit firms and both performing well in their sector. I think out of all of our managers, Waterfall, who I have an affinity for all the way back to 2005, given their focus on structured credit and ABS, they do have private credit strategies. They represent $13 billion of our $84 billion at a partner firm level. It's been challenging, but they've seen these difficult environments before, and they have a long track record of investing well for their investors. And I know that they're focused on ensuring their assets and portfolios are performing. So Navigator, not a large exposure to that space. And even within it, not every private credit strategy is the same, not every manager is the same. And there are opportunities, frankly, right now in some sectors and challenges in others. So, I just thought it was important to highlight that, Nick. I would say that what's happening, I think, globally around here is just, frankly, evidence of a liquidity mismatch between various GPs putting assets that are illiquid into strategies that are more liquid. There's always going to -- we saw this in the GFC. There's always going to be tension around that structure. Anyway, apologies for the long answer, but I think it's worth dealing with both U.S. private credit as well as Blue Owl in the same breath. Nicholas McGarrigle: That's helpful. And then you've given, I think, the performance fee number for the strategic portfolio in the first half. and then we've guided -- you guided to potentially lower distributions in the second half as a flow-through of that and group EBITDA being down year-on-year. looks to me like the delta on the performance fee is only $15 million, which on a look-through basis doesn't imply that big of a step down for distributions in the second half. can you just talk through the building blocks to the assumption around the second half Strategic profit? Because I guess that has to come down quite a bit given you've had such a strong first half in Lighthouse. Stephen Darke: Yes, there's a lot in there, Nick. Maybe I'll start and then Amber can perhaps address more on the building block side. I think there's a couple of slides in the deck that just -- that indicate. One of them is the composite return slide where you see across the Navigator Strategic portfolio numbers in more of the 6% to 7% net return range, which are, as Ross pointed out, lower than the 3- to 5-year strong averages. We have to remember a couple of things. That's only around $20 billion of the overall AUM that, that represents. Like, for example, the private market firms that we all hold are not represented in that composite return, and they're performing well. Ross can talk about that. The second thing I would say, if you have a look at those indexes at the bottom of the page, the indices there, the 6% is well in ahead because you have to remember, there's very little volatility, mostly alpha ahead of those hedge fund indices and also really ahead of Lighthouse's long-term averages. So, still a great result out of the portfolio. As a result of that, though, given the performance fee mechanics, you do see an impact on expected performance fee revenues that then translates through to earnings. But to your point about quantum, and I will pass over to Amber, out of those performance fee revenues, obviously, then bonuses are paid. And the great thing about the business models is that we have a variable cost base that's linked to revenue. So to the extent you do see top line revenues, performance revenues come down, we will see compensation relevant to those revenues also comes down, which helps buffer the margins and the operating -- the profitability at each of our Partner Firms and then ultimately, also at Navigator level. But Amber, do you want to talk maybe about the building blocks and how we're thinking about the second half? Amber Stoney: Yes. I guess to probably zero in on Nick's point, looking at Slide 8, just the difference between the Strategic going from $87 million to $72 million, with that $15 million delta you referred to, the thing that we don't have the clarity on right now is how that revenue translates into profit distributions to the point. So, comp decisions are still to be made and depending on which managers are contributing to that and how they actually comp their staff in relation to those fees can have a different impact on distributions versus just pure change in revenue. So, we're still waiting to see some of those come through, and we'll have a clearer idea sort of as we normally do come April, May. And as you know, our usual practice is to give an update at that time when we've got more clarity on how that flows through to earnings. Stephen Darke: I'll just supplement on that topic actually, while the operator gets to the next question. Back in May of last year, the investors may remember that during the earnings upgrade that we gave to the market then in relation to FY '25 that we called out that there was particularly strong distributions during that year, not something that can't be repeatable, but we did think there might be a little bit lower distributions in the year and we now find ourselves in a situation where that's the case. But none of it is concerning. And the market consensus, as you know, Nick, is around the $103 million to $106 million. We feel very good about that level. We just have to realize that unlike a lot of the long-only managers where performance fee revenues can go from 100 to 0 extraordinarily quickly, we can see a little bit of variability. And I do love Slide 7 because it shows that sort of range of performance fee yield, and you'll see that we're 41 basis points this year versus 47 last year. So, you've got a 6-point move. To Amber's point, it's got to play out to earnings, which will cut the delta. It won't be 15. It will be way less than that. But regardless, you can't imagine it. You can't expect it to go from the bottom left to the top right every single period. So yes, we feel good about this year in the portfolio, but we have to call out a slightly lower second half distribution versus, we believe, the prior corresponding period. Ross, we've crossed over into a lot to do with NGI Strategic in the second half. Is there anything you want to add to a very important question from Nick? Ross Zachary: No, not too much to add. I think you guys covered it pretty well. My main point would just be to echo what you said, Stephen, which is despite a lower year on a relative basis, still a very strong year across the portfolio as a segment as well as the Lighthouse business, which again just shows the potential as well as this year's model playing out. So, happy to answer further questions though. Operator: Next question comes from the line of Tim Lawson with Macquarie. Tim Lawson: Can you just help us understand -- obviously, at 17% EBITDA -- adjusted EBITDA increase versus the only 7% at the adjusted EPS line, can you just talk about the moving parts across the 2 halves to make that impact? Amber Stoney: Yes. So, below the line from an EBITDA perspective, obviously, the key impacts on that is depreciation, amortization, interest and tax. So, our interest expense is a little higher this period compared to the prior half. We've been more drawn on the loan facility comparatively speaking. So, we've ended up with a higher interest expense, which has contributed to that slight difference. I think our depreciation is also slightly higher. So as we continue to build like, particularly Lighthouse continues to build out its offices around the globe, we spend money on fit-outs and various equipment, and we'll depreciate that over time. So, we have seen a marginal increase in depreciation. And also, our tax outcomes can be a little variable, just the nature of the U.S. income that we get. We basically invest through partnerships that provide underlying information on tax, and that can get trued up from period to period. So, we've just had a bigger impact from a tax expense perspective this year as we've gotten updated underlying information through. So, each of those 3 are slightly higher compared to the prior year, which has created a 7% versus a 17% growth. Tim Lawson: That's great. And just maybe some color on the fact that the facility was drawn more this half. Amber Stoney: Yes. So, I mean, we basically paid out the remainder of the Invictus, which was almost half of what the original investment was in August. So, given our cash flow is always lower in the first half of the year and significantly higher in the second half of the year, we've drawn on the facility just and that's the beauty of the flexibility around that. So, we're continuing to pay it off. We've already paid down some of it. And as and when we get more distributions through, that will be paid down. Tim Lawson: Okay. And then the second question just on the deals pipeline. Can you maybe, Stephen, talk a little bit about how you're seeing opportunities out there and Ross? Stephen Darke: Yes. I'll hand that to Ross actually. Ross Zachary: Tim, thanks so much for the question. I would start off just to say that there's really been no slowdown despite a little bit of choppiness as you guys covered in kind of private credit landscape headlines as well as continued, I would say, both optimism, but uncertainty in kind of private markets and private equity in general. The pipeline is full as ever, with the key theme of diversification. It is concentrated in private market alternatives. So, specialized private equity continues to be an area that we really find attractive to add, but we're also spending time in real assets and some areas in private credit. But as Stephen alluded to in the answer about Blue Owl, areas of private credit that, number one, are very specialized in nature, given our focus. But also we are really not looking at Partner Firms who are targeting the retail alternatives trend or kind of either in the BDCs in the U.S. or other vehicles you're familiar with in Australia to deliver that. These are mostly private credit firms that are both specialized and partnering with institutional firms -- institutional clients such as insurance companies and sovereigns and things like that. So it's attractive. And what I would say is, as Stephen said in the outlook, we think 2026 will be a year where we hope to continue to allocate capital in a similar fashion that's been working as you've seen with the private market alternative firms and the NGI Strategic portfolio. So, remain hard at work at a pretty exciting time right now. Operator: Next question comes from the line of Fraser Noye with UBS. Fraser Noye: Just a couple of questions from me. Stephen, just on the outlook for lower adjusted EBITDA in FY '26, it's consistent with your prior messaging. Can you just give us some color on the Partner Firms or the asset classes which are driving this? I know you've previously spoken about weaker commodities being a factor. Is that still the case? Stephen Darke: Fraser, thanks for the question. As you know, challenging to speak specifically about managers, but I would say, yes, in certain sectors, and you just named one of them, overall, it's just been challenging. Let's just take commodities. Challenging to trade energy, to trade precious metals, to actually make money. I think it's not just one manager, it's a lot of managers across the industry globally. So, I would say that's the case. But like as you can tell by the sort of amount of AUM at Lighthouse that's above high watermark and also Ross can talk about the other strategies. And he also called out that really only one of our Partner Firms has a mainline strategy that's negative. All the others are positive. And I think that really is a good reflection on diversification and resilience. And our M&A, to Ross's point, is going to extend that and to increase that. But yes, there is a little bit of weakness in areas like that, Fraser. Ross, is there anything you want to add on that? Ross Zachary: Yes. I mean, again, I also won't speak to any individual Partner Firms' performance, but mostly not because we can't, but also because it really is a portfolio approach. And we will see in any kind of 3-, 5-year period, a potential year where certain strategies would naturally just have a lower absolute return. Still, as Stephen said, doing their job, generating strong risk-adjusted returns in their particular specialty. But given the diversification across this, that will happen. And then in a year like this year, it just depends on the overall contribution. But just to reiterate, the momentum across these businesses is really strong. The performance outlook from an investment and financial receipts is really strong given the market environment. And we haven't touched on it a lot yet, but the investor appetite and outlook for allocating new capital into the strategies, including the one you guys have mentioned, is also really strong because the opportunity sets there. So it really is just about communicating clearly with yourselves and our other shareholders rather than anything indicative to the future outlook of the company. Amber Stoney: Yes. I was probably also going to say, listening to ourselves, we might be coming across overly cautious, and that's not really meant to be the case. I think we're really just trying to reiterate the previous guidance that you pointed out, where we just want to make sure that we've had a really strong half and that it's a balanced look at the remainder of the year. So... Fraser Noye: Understood. And just secondly, just keen to unpack the fair value adjustment to financial assets and liabilities. I appreciate this can be volatile period-on-period and is non-cash. But can you just give us some color on the assumptions that's driving this over the first half? Amber Stoney: Yes. So, we have a process that every half, we use an external valuer to value the investments for us. They give us a valuation range, and we take a pretty disciplined approach about choosing midpoint unless there's something to indicate otherwise within that range. And one of the key inputs to that is underlying cash flow forecasts. And you can see that from the composite performance, that's one of the key investment performance that feeds into those forecasts. So the fact that we have a slightly lower calendar year '25 composite return versus FY '24 really feeds into how some of those models actually work. So, it's not that it's a long-term expectation of a decrease in value. It's really sort of a bit more of a mathematical function of the inputs that feed into that model from that perspective. And we take a pretty conservative approach. We use pretty discount rates that incorporate a fair bit of risk in them. So, we want to be quite conservative with our valuations from that perspective. And so it just does change period-to-period as some of those inputs change, including other inputs like market multiples, cost of capital, all of those sorts of things vary from half to half. Stephen Darke: And just to add to that. And I'm by no means an accountant, but it's interesting in the Navigator's sort of financial accounts, you've got a number of managers who changes in unrealized valuation go through the P&L. Then you've got some other managers and actually, those managers go through other comprehensive income. Those managers were marked up on our private market side. So, our net assets were flat period-on-period. We want the market to look at this as a portfolio. Adjusted EBITDA -- sorry, statutory EBITDA last year was such a high -- I never quoted the number. I think it was $160 million, but we never used that number. We like to -- you look at a cash flow proxy and look for adjusted EBITDA and adjusted NPAT as a better way to look at the business. So yes, it's just a situation where I think that the reaction to the NPAT situation is not really reflective of the overall performance of the business. But we're very cognizant of the statutory result. Operator: Next question comes from the line of Laf Sotiriou with MST Financial. Lafitani Sotiriou: Just wanted to follow up, Ross, on some of the NGI Strategic portfolio potential acquisitions you're looking at. Could you give us a bit more color? Are there 2 or 3 live transactions that you're possibly looking at? Are any of them towards the latter end of BD, and what's the market environment like? Is it -- is there a shortage of opportunities coming being presented? Or is it price that's the issue? If you could just give us a bit of color about the market environment and just specifics around the number of transactions you're looking at? Ross Zachary: Yes, no, absolutely. And Laf, thanks so much for the question. Maybe I'll start with the second, if that's okay, on market environment. From what we see, not only for ourselves, but across other groups we kind of speak with on a kind of collegial basis in the industry, 2026, there is actually a pickup in activity. I think across real estate firms and areas of real assets, firms are increasingly confident in their existing portfolios and outlook and therefore, seeking partners. Likewise, in specialized private equity, there's been both sector as well as asset class kind of pressure on them. And I think a lot of -- that's always been a big part of our pipeline, but I think we're seeing very strong firms coming out of that looking for a partner and ready to transact in 2026. So, that's quite active as well. And the overall outlook, just given all the uncertainties both I and Stephen mentioned on the call in the general markets have these firms on the front foot. They're speaking with institutional investors and other groups all the time, and they have a lot of demand, and therefore, they want to prepare their business with either balance sheet capital and/or a strategic partner to capitalize on that. So, it remains a really active industry overall in terms of finding strategic partnerships. In terms of our pipeline, like we said, it's probably -- I'm going to use rough numbers. Hopefully, it's helpful to illustrate it. Probably 70-30 private markets versus liquid alternatives, which is a bit of a pickup in liquid alternatives, quite frankly, again, because we're seeing firms in demand and growing and therefore, looking for a partner. And there are some areas such as some more specific sector long/short, some areas of quant that we're not in, some areas of credit, such as areas of credit relative value and also just areas of private/hybrid credit that we don't have represented that are really interesting. So, those are there. We continue to like areas of the private markets that are just specialized. So, that could mean more sector specialists like 1315 Capital in health care. but maybe areas of other broad sectors such as either technology, business services, defense, things like that. Those are the types of sector-specific private equity firms in the pipeline. And then we also like kind of growth and even secondaries when we can access them. So, there's a couple of those. I would say just being fully transparent, there's 2 to 3 opportunities that are developed, but maybe hedging, but also just being completely open and candid with you, Laf. There's always about 2 to 3 that are developed just given we're pursuing things. So, there's really no way for us to know that those will transact, but we're feeling really optimistic for this year that we can add to the portfolio. I hope that helps. Lafitani Sotiriou: No, that does. And can I just follow up on Lighthouse, Stephen, just more so? There's a comment in there that active current pipeline focused on new products and institutional mandates. Does that still extend to possible joint ventures? If you could give us an update on that, please? Stephen Darke: Yes, no, happy to do that, and I'll address the sort of the Fortress joint venture shortly. But yes, we're seeing elevated interest -- or Sean and team are seeing elevated interest at the Lighthouse level and are in advanced pipeline discussions in relation to North Rock's beta 1 product, which is sort of the combination of sort of select beta and alpha for institutional investors, seeing a pipeline of investors interested in investing in that product. Also interestingly, and it's the first time I've sort of heard this, but accelerated interest in some of the offshore hedge fund strategies. So certainly, according to Sean and the team, for those hedge fund platforms that had non-U.S. exposure, non-U.S. strategies, there was actually more alpha to be generated and higher returns for investors in either global strategies. So, for example, Penglai Peak, the Japanese multi-PM strategy that sits within Lighthouse, has seen some pipeline activity and interested investors in that product, which is fantastic. Also, despite the timetable being longer than expected, as you point out, there is continued progress on investor engagement on the Fortress Lighthouse multi-strat product. I think still -- I think it's been a little frustrating. And it's not really in the Lighthouse side, but really important to get that product structured to be able to scale quickly out of the gate. And I know there are cornerstone investors meetings happening, frankly, as we speak. I'd also, I think, you call out some of the customized mandates, a couple of pipeline mandates, large ones. Lighthouse may not win them, but large managed accounts, they're in active RFP process because to be honest, we're seeing, as you saw from that slide in the appendix, hedge funds are now the most sought after sort of allocation for 2026 by institutional investors according to Bank of America. So, I think in that situation, Lighthouse is very well placed to win some of those larger mandates. They're at a slightly lower fee level. They're pretty close to the average fee for Lighthouse, but we should see some of those execute during the course of '26. So on the sort of net inflows, new product side, Laf, that's a couple of touch points. Also, given how well the macro manager, which is quoted on Slide 15, has performed without 13, net, and that's in the normal strategy, the dynamic asset class of that product is actually up closer to 23% that is seeing interest that it hasn't seen for some time. The macro strategies are doing exactly what they should be doing in this climate. So it'd be disappointing not to see investor flow into that strategy. So, that's what really gave credence to the, I guess, more positive outlook during my first session. Next question comes from the line of Nick McGarrigle with Barrenjoey. Nicholas McGarrigle: Just one follow-up. The newer investments, the private market firms, can you just give us an update, Ross, on progress there? Looks like the result there for the half was really strong. Was there a performance fee in that? Or is that now kind of a typical recurring type level of profitability from those firms? And I guess, the intentions or the plans for them to continue growing into '26 in terms of flows? Ross Zachary: Yes, no, I'd be happy to. So if we think about those as Marble, Invictus and 1315 Capital, our newest partnership in aggregate, frankly, not how we designed it, but they all are raising capital right now. So it is hard to comment. They've also seen significant flows in this period. So, that contributed to the positive flow in the NGIC segment, but we do expect it to continue. And so if you think about between now and June 30, we would expect to see all 3 of those firms raise more capital. The distribution increase this year that Amber highlighted was a mix of increased FRE or management fee driven as well as some GP side, but nothing chunky to -- that would be any out of the ordinary. So, we haven't seen kind of a lumpy GP side overinflate that. So, we think the -- you could think of it as kind of a trend upwards as those have now scaled and continue to scale. Operator: Next question comes from the line of Tim Lawson with Macquarie. Tim Lawson: You just talked a little bit in the Directors' Report around the private market Partner Firms' distribution. It's obviously up very strongly for specific at 10.5% versus 5.5%. Can you just expand on the mix of that from crystallization versus distributions? And also any sort of color you can give on the NGI Strategic part, which you get in the annual report, but I don't think we get in the half year. Stephen Darke: Ross, do you want to take that or would you like Amber to? Ross Zachary: Amber, do you want to start and I can elaborate? Amber Stoney: Yes. I mean, it's really consistent with what Ross just said, actually. So it's probably a combination of both, pretty similar on -- in terms of what's coming from, to your point, the distributions from management fee side as well as what's coming from the carry and GP realization. So, that increase is sort of roughly probably about 50-50 on both sides. Stephen Darke: Tim, I was going to just as a follow-up there. I mean, we have received cash distributions after the end of the reporting period up until now of around about $12 million across the portfolio. But given the variability, that doesn't necessarily indicate anything in relation to the second half, but just updating everyone on cash distributions received post end of reporting period. I would also say that in relation, at least to Lighthouse, certainly, the second half of the year or the calendar year of 2026 has kicked off very well across all the strategies. We are seeing performance continue really from last year into this year. And as -- and I'm talking to Sean last week, until we get to midterms or discussions around midterms and the U.S. political seeing sort of second half of this year, the environment is pretty constructive for continued growth in those strategies that take advantage of dispersion and volatility. So, just a little bit of color for everyone in terms of how we're feeling about the environment, obviously, all subject to market conditions. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. Stephen Darke: Thank you, everyone.
Operator: Thank you for standing by, and welcome to the Chorus HY '26 Results. [Operator Instructions] I would now like to hand the conference over to Mr. Mark Aue, CEO. Please go ahead. Mark Aue: Good morning, everyone, and welcome to Chorus' results presentation for the 6 months ended 31 December 2025. I'm Mark Aue, Chief Executive; and joining me is Drew Davies, our Chief Operating Officer. I'll begin with an overview of our results for the half year and cover some of the progress we're making on our strategy, having just entered our next phase into Horizon 2. Drew will then take you through the financials and FY '26 guidance, and I will close out with the outlook for the second half and long term. For the past 2 years, we've noted the economic downturn and its material impact across our country. We'd recognize economic recovery is at best still lumpy. Over the same period, we've continued to highlight the resilience of fibre more seemingly as an essential service, and so I'm pleased to be reporting another robust result for the first half. From a results perspective, comparing half-on-half, total fibre connections were up 3% at over 1.1 million, with uptake lifting to 72.4% and fibre revenues growing by 7%. Our ongoing focus on simplicity and efficiency has reduced operating expenses by 3%. Per previous thematic, this is despite inflationary pressures and non-tradable costs, such as rent rates and electricity. EBITDA of $357 million is $11 million ahead of the comparative half with underlying operating cash flows in line with prior year. Gross CapEx was $158 million with sustaining CapEx of $79 million, driven in part by life cycle planning and project timing shifts into the second half. Finally, the Board has declared an unimputed interim dividend of $0.24 for the half. In our last results announcement, I was pleased to speak to the foundations and groundwork we've laid to set us up across our 10-year outlook. Now 6 months into Horizon 2, focus continues shifting to growth, simplicity, and efficiency. We continue to build capability through new leadership and remain optimistic about fibre growth. Likewise, we're alive to adjacent infrastructure opportunities, evaluating several and discounting a number, but we'd also recognize these take time to commercialize and bring to market. Brand fibre messaging continues to land, raising awareness of comparative differences in technology. Research trends continue to move favorably with fibre's preference as first choice interconnect connection now over 67% compared to 12% for fixed wireless customers. Our accelerated retirement of copper continues at pace with just 3,000 lines remaining in UFB areas. This opens material opportunity through recycling, and we see positive pathways to regulatory change as only a question of time. Turning to performance across our 4 strategic LEAP pillars. In Lead, we lifted fibre uptake to 72.4%. UFB2 areas increased to 63% and original UFB1 areas are at 75%. Encouragingly, we are seeing pockets where fibre has already exceeded our 80% target, while others like Auckland and Nelson are at 76% already. In the past, copper withdrawal provided a pipeline to fibre growth. But as the right-hand chart shows, we're maintaining fibre connection growth without the copper tailwind and are unlocking other growth pools. Our plan mix remains positive with over 4 out of 5 customers on a 500-megabit plan or higher. Total churn as an off-net greater than 4 weeks is reducing with indications fixed wireless is plateauing. At the top end, demand for 1 gigabit plans is stable with hyperfibre adding roughly 500 connections per month now. There is often discussion about our home fibre starter plan. I'd say we remain resolute. The introduction of our 50-megabit plan and subsequent boost initiatives to 100 and 500 megabits were the right decisions. Overlay high cost of living pressure, these provided optionality, and we're confident has opened us to markets and customers that existing fibre plans did not appeal to previously. Profiling shows in the main, these are distinct customer groups with lower usage and they have greater churn and reactivation rates than higher tier plans. Whilst we saw initial downgrades from higher plans, this was also exacerbated by some retailers moving pricing at the same time in Q1. Now this has settled, we've seen encouraging trends over the past quarter in particular. Demand for the 100-megabit plans is strong with circa 75% of that growth coming from off-net and 25% from downgrades. Even more favorably, we're seeing a material shift in uptake for long-term inactive fibre premises with a 24% increase from premises off-net greater than 3 months, 32% from off-net greater than a year, and 62% from premises off-net greater than 2 years. Our hypothesis being the previous 50-megabit plan didn't appeal and/or the previous 300-megabit plan was too much. And that was also part of our boost rationale to create clear air between fibre and fixed wireless plans. Downgrades of the 500-meg plan have now stabilized post boost with overall churn also reducing. We're also increasingly seeing upgrades into the 500-megabit plan with customers wanting either more speed or those customers who may have downgraded previously, but are now returning back to the 500-meg plan. Finally, we'd note intention to switch research continues to highlight fibre's tenure over fixed wireless. Fibre at 6.7%, even for the 100-megabit plan, versus 23.6% for fixed wireless. Data demand continues to accelerate. Average monthly usage at 699 gigabytes in December increased even further to 722 in January, up 12% from a year ago. Across our base, 20% of fibre customers now use more than a terabyte of data each month. Peak events also continue to grow with a 14% average increase in peak usage. In part, that's also reflective of both the number and quality of connected devices, which has almost doubled over the past 5 years to 25 and is expected to do the same again over the next 5. We see this only playing to fibre's strength of resilience, quality, and the scalability of the network. Turning to our Expand pillar. We continue to see opportunities for new infrastructure growth, but we'll take a disciplined approach to investment where the returns must be scalable to reach our Horizon 2 aspirations. These relate specifically to natural adjacencies with several we are exploring now, and expect to have a more fulsome update at our full year results. In our core, while property sector has continued to see subdued activity, our new property development volumes have continued in line with pre-COVID levels. We delivered 11,000 lots in the first half and our pipeline continues to support our estimates of 20,000 to 25,000 lots per annum. Encouragingly, consenting volumes have grown 9% off the cyclical lows. And while early days, this is starting to show up again in incoming NPD volumes. Mobile infrastructure connectivity continues to grow with 7% growth [Technical Difficulty]. Broader opportunities in connectivity of data center are also now being realized. Our new product, Express Connect is now in 5 data centers and has materially enhanced our go-to-market proposition and delivery, with plans to double the number of DCs served by end of this financial year. Our Adapt pillar is a key lever of Horizon 2 in driving operational excellence. During the half, we've continued our focus on simplification and efficiency, refining our operating model. This has seen a realignment of teams, processes, and a 12% reduction of roles whilst building new leadership and capability in customer retention, data and analytics and AI integration. Copper retirement is progressing well, enabling us to power down over 400 cabinets in the half with an intent to accelerate that in H2. We also continue to see positive regulatory pathways developing, having collaboratively worked with government and broader industry stakeholders. We're hopeful a decision relating to copper deregulation and the related TSO review within Q3. Likewise, a decision from the Ministry for Regulation review over a similar time frame. Finally, to our Pioneer pillar. As I noted, just 3,000 copper lines remain within UFB areas, and we're on track to retire this fully by end of June. In non-fibre areas, copper connections have declined by 26,000 over the last year with only 54,000 lines now remaining. Relatedly, we've seen a $4 million reduction in reactive fault spend, with a 22% reduction in truck rolls. The copper network itself remains free cash flow positive but we continue to highlight our imperative with government to shift regulation and enable a pathway to a full exit of legacy technology that has been far superseded by alternatives. To other strategic opportunities copper recycling remains positively on track. We're transitioning out of trial now into final contract phase of a fully operationalized work stream. With metals pricing at historic highs, our estimates for returns are now at the top end of the $30 million to $50 million range. To fibre expansion, we were encouraged the Infrastructure Commission had endorsed our fibre expansion plan to 95% of the population. However, the reality of funding and competing government priorities during an election period have forced us to refocus. Whilst we maintain New Zealand would benefit significantly, both financially and societally, it is clear even joint funding and partnership is not viable in the short term. We've instead shifted greater focus to our other large opportunity pool as brownfields infill, where roughly 200,000 premises have previously been passed with fibre during the initial UFB rollout but were not installed or connected. Finally, to property optimization, where alternatives are enabled as we retire and exit from the copper network. We continue to review high sites and how these may be broken into tranches as a test case, and we have several parties interested. I'll now hand over to Drew, to take us through the financials. Andrew Davies: Thank you, Mark, and hello, everyone. Overall, as Mark said earlier, we delivered robust results in a challenging economy and we continue to see solid fibre revenue growth annually, offset by the continuing copper legacy revenue reductions. Turning firstly to our overall income statement. EBITDA was $357 million, up $11 million from half year '25. Revenues of $506 million were up by a net $6 million. For operating expenses, we made cost savings from the changed operating model, incurred lower consulting fees and made good progress on reducing legacy costs. That helped us absorb inflation and a number of cost lines. Having completed the accelerated depreciation on our copper assets in Chorus UFB areas in the prior period, depreciation and amortization was $216 million in the half, down $19 million from half year '25. As a reminder, copper cables and copper-related ducts and poles in local fibre company areas will be fully depreciated by June this year. Those in non-fibre areas will be fully depreciated by June 2030. Net finance expense was $6 million higher half-on-half. While our weighted average interest rate on debt reduced from 5.7% to 4.9%, we repaid the majority of our EUR 300 million notes early with EUR 9 million of settlement costs. Income tax expense of $11 million is up $4 million from half year '25, primarily driven from our higher profits. Overall, this meant we recorded $15 million of net profit after tax for the half year compared to a loss of $5 million in half year '25. Looking in more detail at our revenue categories. Our fibre broadband revenues were up 7% or $26 million from the prior year, driven by fibre connections up 31,000 lines, along with an approximate 4% increase in ARPU to end at $57.73 for the year. With total copper connections down 60,000 or almost 50%, this resulted in combined copper broadband, voice, and data revenues being down $18 million or 43% lower annually as we continue to execute our multiyear copper exit strategy. We continue to see copper connections and revenue declining in the second half similar to the first half. Field service revenues were down slightly, primarily driven by lower new property development activity, as Mark spoke to earlier, and was partly offset by higher revenue from new connections and brownfields projects. Other revenues were stable annually and were lower on a sequential basis as the prior half included approximately a $3 million net gain from copper cable recycling sales based on the trial we conducted in that fiscal year. Based on the learnings from that trial, we have completed a tender process with vendors and expect in the second half of this fiscal year to implement this program to realize a similar level of net sales from copper recycling in the low single millions. As I've spoken about previously, we intend to adopt the new accounting standard, IFRS 18 for this financial year, reporting to June 30. The new structure allows us to be more prescriptive in our income statement, and we're currently working through what this will look like in our full year results. Total operating expenses were $149 million for the half year and were $5 million or 3% lower than the comparative period. We continue to drive strong cost management disciplines to offset the persistent inflationary pressures, which rose in the half year, mainly from nontradables, such as rent and rates. Labor costs were $41 million, down approximately 4% annually as a result of our new operating model with about 100 fewer roles in the business. The labor capitalization rate reduced from 45% to 42% as network build activities declined versus prior periods, primarily from fewer fibre footprint expansion projects. For network maintenance, costs were down $7 million half year on half year. The key drivers were lower copper fault volumes to premises as copper connections continue to decline, resulting in a 22% reduction in truck rolls, partly offset by network-related fault costs. This has been complemented by improved cost efficiency programs implemented across maintenance activities. For half 2, network maintenance costs will not decline as much as prior periods as contractual CPI increases occur along with the seasonal increase in weather-related faults, which impact network-related fault volumes, especially in more rural areas. IT expenses were up slightly as a result of some one-off cloud-based system implementation costs included in this half. Other network costs were $5 million higher than HY '25. This was mainly due to higher payments to service companies from better service levels this year, higher engineering activity as a result of weather events. We also saw timing differences on project spend annually, including the one-off copper cabinet shutdown costs we incurred to power down each cabinets. Electricity expense was up $1 million annually. And while our electricity consumption continues to decline annually by approximately 6%, this favorable trend was more than offset by higher lines charges. Consultant expense was down $4 million annually as the prior year consultant spend included investments to explore the potential new revenue opportunity in the trans-Tasman subsea cable. Advertising expenses of $5 million are traditionally lower for Chorus in the first half, and we expect this will increase in the second half, similar to prior years. Moving now to CapEx. Gross CapEx for the half year was $158 million, down $41 million from the prior half. Within gross CapEx, $79 million was sustaining and $79 million was for growth. Gross CapEx was supported by $20 million of customer contributions for roadworks, new property development and rural broadband upgrades. While CapEx was lower during the first half, we see an uplift in CapEx spend in H2 as a result of our planned project expenditures during this financial year. This includes phasing of large national fibre build projects underway, major network property refurbishment projects, and large IT project deliveries. This slide shows CapEx using regulated categories for the fibre regulated asset base, RAB. CapEx attributable to investing in the RAB, which excludes capital contributions, is estimated to be about $125 million for the half year. For the non-RAB CapEx, as you can see, copper CapEx was $3 million, down annually and was mainly funded -- third-party funded. Total RAB increased by $73 million over the calendar year to $5.98 billion, with core RAB increasing to $5.11 billion, up $203 million, offset by the financial loss asset declining by $130 million to $0.86 billion as the FLA depreciates further. Our total net debt as of December 31st was $3.2 billion, up approximately $100 million from June 30th, primarily as a result of issuing $400 million in euro notes in November. Proceeds were used to repay EUR 243 million of the EMTN 300 notes due in December '26, along with paying down entirely the revolving credit facility. We have 2 rating agencies that issue credit opinions on our leverage, Moody's and S&P. Moody's rates Chorus as Baa2 stable with a threshold of 5.25x debt-to-EBITDA down driver, which we are currently at approximately 4.8x. S&P rates Chorus as BBB positive outlook. As we have updated previously, S&P introduced a new digital infrastructure rating criteria covering tower companies, fibre companies such as Chorus and data centers. This new criteria uses the funds from operations to debt ratio for its leverage calculations and have set a threshold of 9%. Chorus is currently well above this threshold at 17%. This new leverage criteria is equivalent to 7x down driver of debt to EBITDA when using the prior methodology. As I will speak to shortly on the status of the NIFFCo security sale, the final determination by S&P on their leverage calculations and final down driver metrics will depend on the outcome of the NIFFCo security sale later this year. The table on this page provides our bank covenant calculation using the revolving credit facility, which has remained at no greater than 5.5x senior debt-to-EBITDA ratio, and we're currently at 4.49x. While S&P have changed the methodology, importantly, Moody's have made no change to their threshold of 5.25x. So this is our leverage down driver that is our focus for our capital management policy. Lastly, about 70% of our interest rate exposure is fixed for the next 3 years. Turning to the next slide. In December, the New Zealand government announced the sale process will proceed for its bespoke Crown funding securities provided to Chorus. The key terms of the securities are set on the right-hand side of the slide. And the face value of the combined securities is $1.16 billion, of which $683 million are classified as equity securities. Chorus will not participate in buying these NIFFCo securities in the current government sale process. And importantly, if securities are sold to a third party and transit from the Crown, the terms of the securities to Chorus cannot be altered without Chorus' agreement. If the sale process does conclude later this year and depending on the acquirer, S&P may reclassify the $683 million of equity securities as debt rather than as equity as they currently treat them in their leverage calculations. On a pro forma basis, if S&P treat all of the NIFFCo equity as debt, this would mean the S&P leverage calculation would be increased to approximately 6x net debt to EBITDA. So still well below the current 7x down driver. On an FFO to debt basis, this would be approximately 13%. We will not know the final S&P leverage calculations of course until later this year, until after the NIFFCo sale process is complete. But in all scenarios, we are below the leverage thresholds. Finally, on dividend and guidance, we've announced an interim dividend of $0.24 unimputed to be paid in April. The DRP is not available. Dividend guidance for the full financial year remains $0.60 unimputed and reflects the ongoing positive trend in cash flows. Net cash flows from operating activities were pro forma $257 million on the same basis as last year as we note that a $29 million payment from one customer missed the cutoff for half year results and was paid in early January. FY '26 EBITDA guidance remains at $710 million to $730 million, and we now expect to be in the upper half of this EBITDA range. And we base this expectation to be in the upper half based on increasing fibre connection growth and corresponding revenue increases and continuing disciplined cost management. CapEx guidance for fiscal '26 also remains at $375 million to $415 million, and we now expect to be in the lower half of this range. Correspondingly, our sustaining CapEx guidance range of $195 million to $215 million for fiscal year '26 also remains, and we expect to be in the lower half of this range. This reflects the capital project deliveries in the second half that I spoke to earlier. Overall, we continue to track well, and we're pleased with the progress we are making in this early phase of our strategic objectives for Horizon 2 through 2030. I'll now hand back to Mark to run through the outlook. Mark Aue: Thanks, Drew. I've spoken previously to our overarching purpose for Chorus, and this is anchored in enabling better futures for Aotearoa at an intergenerational level, in many cases, a driving role we play through connectivity. So we're proud to be launching an Equity Fibre product designed to provide affordable and accessible connectivity at a time where we know nearly 400,000 households cannot afford a package of meaningful digital access in New Zealand. Our Equity Fibre product is a key tool in our digital inclusion efforts. It's shaped through extensive research and deep collaboration with community partners and is now available for retailers to activate. Given the inherent complexity of hardship, our trusted community partners will be vital in helping to identify and connect eligible families. And we're encouraged by an initial interest from smaller community-focused RSPs and we're working towards broader retailer participation. Digital inclusion is a shared challenge. And whilst ideally, we'd have a national government-funded program that isn't realistic in the short term. Instead, as Chorus, we're taking it upon ourselves to drive initial change, prove this is feasible, show how digital connectivity materially improves lives and develop a use case for this to be scaled nationally. We're not waiting for someone else to make a difference. Turning to our focus for the remainder of FY '26. As we step further into our Horizon 2, we're certainly on a fast track to being an all-fibre business. Under Lead, formal pricing changes across our products came into effect from January 1, although retailers had previously revised pricing. The connection trends I noted earlier are encouraging and we expect the run rate uplift in half 2. Awareness and preference of fibre over other technologies is clear. Broader industry thematics of connected devices, growing usage, need for resilience, evolving content quality and an AI revolution, all aligned to fibre's superiority. We retain our 80% uptake aspiration and our conviction of growth opportunities in our core fibre business through underpenetrated pools. We expect improving data and analytics capability will also reshape our execution with retailers through smarter and more efficient means. Likewise, that analysis will inform our approach to brownfields fibre infill to premises passed by fibre but not yet installed. We've shown through our prior Frontier initiative, bringing fibre to almost 10,000 new addresses. This can be executed at pace and a faster conversion to connections. We're good at building fibre and we'll have qualified rollout intentions for infill over the course of H2. To expand, core product growth continues, leveraging existing fibre assets and an expected uplift in NPD greenfield volumes as property developers ramp back up. Earlier, I noted we're assessing several infrastructure-related initiatives over H2 and we'll provide a more substantive update at the full year results. There is some commercial sensitivity to these given market competition and the provision of infrastructure services. To adapt regulatory focus and driving formal decisions to outstanding reviews is a priority for us. But as we've noted, through ongoing collaboration, we see favorable pathways emerging. Cost discipline will continue as will the drive for simplification and efficiency, which will lead in turn to further savings. In Pioneer, we're accelerating copper retirement and the exit of cabinets over H2. UFB will be completely retired by July, and we're still estimating LFC areas by end of calendar year '26. H2 will see our copper recycling program in full operational mode with delivery partners and expected returns in year of low single-digit millions. Development of extraction plans and timing will also be completed by the full year results. We would also hope to confirm an exit approach to our noncore high sites by full year, and we'll work with interested parties over the coming months. More broadly, exchange footprints could also yield beneficial outcomes in coming years with alternative asset owners or lease models to space in desirable transport locations. As a worst-case scenario, this represents a material cost-out opportunity for what become noncore assets. So to wrap, we're pleased with another robust set of results, again, reflective of the resilience of fibre. Economic recovery is still lumpy but improvements will only be favorable to our uptake and mix. Equally, we're pleased with the foundational groundwork laid in Horizon 1 that enabled us to step into the first 6 months of Horizon 2. We have a clear aspiration. And whilst the benefits of change will be realized progressively out to 2030 in our plans, we can already see a shift in focus, capability and execution. Horizon 2 is focused on growth, simplicity and efficiency. We're clear on growth opportunity pools. And paired with the superior fibre technology, it really comes down to execution. Today, we're already delivering greater simplicity, efficiency and savings. Exiting legacy copper technology is tangibly in sight and opens new opportunities to optimize our portfolio of assets. We've shown our discipline, leveraged our superior fibre assets and sought to exit from noncore ones. Investments will be core to our business or natural adjacencies but they must be scalable on returns. As we've said many times, an investment in digital infrastructure is both for today and the future. And our fundamental belief that fibre is technologically superior in every way that matters holds firm. Thank you all, and let's go to the questions on the phone line, please, operator. Operator: [Operator Instructions] Your first question comes from Entcho Raykovski with E&P. Entcho Raykovski: So my first question is around the guidance. You've moved EBITDA guidance to the top half of the range. I'm just curious whether that means that you're seeing any improvement in underlying economic conditions or whether you're seeing perhaps some better mix than what you expected back in August. I'm just conscious that the fibre connections trajectory is not dissimilar to the trend in FY '25, and you spoke back in August about being in the bottom half if economic weakness persisted. So is there something in particular that you're seeing in the outlook which is more encouraging, or is it mix? I mean, that's my first question. I've got a couple of others, but I might hold off on those for now. Mark Aue: Thanks, Entcho. I'll start with that. I mean, clearly, H1, I think, is still a tough economy. I think there's no doubt that it was challenges. I wouldn't say that we're seeing significant changes in H2. But as we spoke to NPD, consents to build are increasing. So that's opportunity. The way we look at our connections growth, we have targeted incentives with all of our retail service partners. And as we look forward into H2, we're seeing initiatives take hold with their plans. So that's why we spoke to increasing connections growth and the corresponding revenue. So that's where we see some opportunities there. And we've also been very disciplined in cost management in H1. We did see inflationary pressures. And as I spoke to there, we have seen some areas that we brought down. Other areas have gone up as the inflation effects have taken hold in rent, electricity and rates. So we feel very good about managing through that and continuing into that to the second half. Andrew Davies: Yes. Maybe just to add to that, too, Entcho, I think for our Q3 uplift, you referenced the connections as well for the first half. We're quite encouraged by Q3. Our January result was the strongest for -- I think since mid-2024. And again, we talked to some of those encouraging trends on mix. So we're seeing churn actually come down that we're stabilizing on the volumes of downgrades we've seen previously as well. And then equally starting to see the reactivation rates from premises that have been off-net longer term, which for us, the hypothesis being the 100-meg fibre plan in particular, is appealing to customers and premises that the 50 megabit plan didn't previously. It's been a distinct shift in the reactivation rates that have been off-net for over a year, over 2 years even and one that we hope obviously continues. Entcho Raykovski: Great. And you sort of touched on OpEx, but I'm wondering if you can give us an idea of what the underlying OpEx growth was in the first half ex any one-offs in the PCP. I think you incurred about $9 million of one-off costs for the entire FY '25. So I don't know if you can break that down first half, second half. And just as a follow-on to that, do you still expect to see low single-digit growth in OpEx on a net basis in FY '26 from -- I think you've spoken to about $300 million net in FY '25? Mark Aue: Yes. I mean to speak to H1 '25, there was the $4 million that we -- in consulting fees that we incurred that half. And so that's what I spoke to in the consulting fees were down $4 million. So you can see that pretty clearly as -- the rest of it would be organic in the sense that our operating model change. That did take hold after H2, so you can see the impact of that in our H1 '26 results. Inflationary factors, it's pretty clear in terms of some of those line items in terms of rent rates and electricity where we've seen some of that increase. In other network costs, that's where we have our copper cabinet power down costs. And so while we've -- and I did call out that we'd increase that in H2 as we continue to get customers off cabinets, work with the retail service partners and the lines companies to coordinate together to get those cabinets powered down. So that will increase slightly. I did call out that the reduction in network maintenance costs will not be as great as what we've seen before, primarily as we've gotten more customers off the premises-based copper connections to network faults. So we've seen -- we still see that stabilize. So hopefully, that provides enough color. And I did call out advertising. It's always seasonality and that would be up approximately $2 million in H2. Entcho Raykovski: Final one, I mean, you've spoken about the updated S&P criteria for digital infrastructure assets. I guess, is it too early to say how it may impact your capital management policy given it's now being applied to Chorus? I mean, as you said, under all scenarios, you have plenty of headroom. And I mean, perhaps as part of that answer, do you expect Moody's will make any changes to their methodology or is just S&P specific? Mark Aue: Well, let me answer -- so it's a capital management policy that was set for RP2, which says a growing sustainable dividend at real rates. And so that's where we set the $0.60 this year. So we've achieved that, and we're very happy -- the Board is very happy with that. Under S&P, there are so many moving parts in terms of the NIFFCo sale and what that will do ultimately based on the owner. And again, if you take the 2 scenarios for S&P, the security sell, the equity is treated as debt, we're at 6x pro forma leverage with a 7x down driver. If the NIFFCo securities don't sell, S&P has called out in their credit notes that they would increase this to BBB positive that would reduce the down driver to 6x approximately, as well as reduce the FFO to debt to increase to 13%. So the amount of headroom is not as much as people see just based on where we stand today based on that uncertainty of the NIFFCo security sale. For Moody's, there's been no change. And they've always treated the equity as debt essentially for their calculations with -- they've been ambivalent to the owner of the securities. So there's no change coming from them. Their down driver is 5.25x. We have our annual credit opinion discussion at the end of March. There have been no indications that they're changing that criteria at all. So I would expect that, that would be remaining as our down driver at 5.25x, which now sets for our capital management policy, what we manage to. Operator: Your next question comes from Ben Crozier with Forsyth Barr. Benjamin Crozier: Just one question on sort of the infrastructure revenue. I think at the Investor Day just over a year ago, you talked to that infrastructure revenue in aggregate was sort of $155 million and you're targeting $180 million to $200 million. Can you give us sort of an update on how that's progressing in terms of an aggregate and where that sort of revenue sits today? Mark Aue: Yes. Look, it's probably at similar levels today. I think we've also spoken to some of the legacy products that over time will be retired. So that drops down before then going back up. So you drop below the $150-odd mark and our aspirations for Horizon 2 would get to $180 million to $200 million of revenue. So as I said, we're continuing to look at a number of initiatives, several that we're actively looking at right now. We've discounted a number -- you may have seen already that from the LoRaWAN IoT that we were exploring as a trial and we've actually moved away from that. So we don't believe that's a scalable opportunity for Chorus in the current market at the moment. So we'd rather put that investment and resources, et cetera, into areas where we think they can be scalable. And there is some commercial sensitivity to several of the options that we're looking at, hence, my reference to a more substantive update at the full year result. Benjamin Crozier: Perfect. Second, just on sort of the MAR or regulatory revenue achieved in the first half. I think at the full year, you sort of gave an indication of how much of the total revenue was regulatory. I don't know if you have that idea. And presumably, you've underearned your MAR, a decent amount in this first calendar year of the second regulatory period, as expected, given the meaningful step-up in the MAR. Sort of -- can you also sort of talk to when do you expect that gap to close? Are we sort of at the end of the second regulatory period and then the rest to be caught on a washout? Mark Aue: Yes. I mean, so we're in year 1 of RP2. And so you're correct, we earned under the MAR, but that's deliberate to give us time to grow into it. And so we don't have the final numbers that will be produced as part of our ID reporting comes out in end of May. But in essence, we will continue to focus on how much we want to close the MAR over the next 3 calendar years. So we do factor that in, Ben, as a function of connections and price increases and so forth and mix. So we're very focused on and closing a gap. And did what we did in RP1, which we got within $1 million of the MAR at that point. So we need headroom at the beginning and will increase over the next 3 years. Benjamin Crozier: Maybe last just on sort of satellite and Starlink. Do you think -- have any data or have any inclination of -- are they sort of attacking some of these sort of fringe suburban areas where fibre is available, but maybe Starlink as well is sort of getting a bit of an uptake, or do you think Starlink is pretty much just a rural product at the moment? Mark Aue: I think primarily, it's still an option for customers and premises that can't access fibre. So more of the non-fibre areas or rural New Zealand. That said, we wouldn't say that there is no Starlink in any of the metro areas. Some of the multi-dwelling units that may not have had fibre installed at the time of build, they create optionality for those premises that are looking at fixed wireless or satellite. So there is likely some in metro areas. But predominantly, we still see it as areas where there's not fibre available. Operator: Your next question comes from Arie Dekker with Jarden. Arie Dekker: Just firstly, just maybe a little bit more color on these infrastructure opportunities, and I appreciate you talked to the commercial sensitivity. But could you just sort of give perhaps an indication of the extent to which -- and you said, I think there were several that they utilize your existing infrastructure and also whether any of those opportunities would involve you acquiring existing infrastructure already in place? Mark Aue: Look, yes, there is some commercial sensitivity to them. We've always been really clear that they would need to be either core or natural adjacencies to our core. And I can say they're all in that camp. They're all scalable opportunities. We're really defining what the opportunity is and not wanting to invest or spend our resource time on areas that we don't think we have a natural right to play. But they are all natural adjacencies. To your -- and look, timing-wise, I think as I said, what we would recognize is they take longer to bring to market and to commercialize. It's a competitive market. But we certainly see that there are opportunities where we have a natural right to play. To your second point on inorganic opportunities, yes, absolutely. We're looking at both, whether we can build the capability internally into our own infrastructure network or likewise, whether there's something that could be acquired into our existing infrastructure as well. Arie Dekker: Great. Then just with regards to the fibre infill build where you're turning your attention given the lack of government support for expansion and you sized the 200. Could you just talk a little bit about how you'll go about assessing that, whether you see the opportunity sort of a more dense urban as more attractive than sort of more on the fringes. Just how you're looking at the assessment and where you think the best opportunity will be for you? Mark Aue: Sure. So look, the 200,000 premises are premises already that were passed and they have a premise on them. It's about 70,000 or so premises that we do pass with fibre but they're vacant lots, right? So we know that there's roughly 200,000 and there is a home there. Obviously, they split up between single dwelling units and multi-dwelling units. Equally opportunities with retirement villages, with second homes and holiday homes as well. I think the opportunity for us and where I've really wanted to drive our focus is leveraging better data analytics, being smarter about our execution. There's some opportunity to be a bit smarter, too, with AI and look at where -- if you were to take, say, like Fibre Frontier, where are the next 10,000 premises out of 200, where is the second 10, the third 10, et cetera. So wanting to filter them rather than a mass market type approach and actually being a lot smarter about how we engage with retailers as well and looking at products that they themselves in many cases, are offering. So I think the short version of that, Arie, is that we're looking to be a lot smarter with our tools and execution where it's a lot more targeted. Arie Dekker: Then just on the -- a little bit further on the 80% aspiration in that. And I think you've talked at various points on the call about what you're doing on that. But I guess just firstly, just in terms of your conviction, like would that still sit at the same sort of level as just over a year ago when you introduced it? Or do you think that your conviction level on getting to that point is a little bit lower now than it was a year ago? And then also just of the various initiatives, what would be, I guess, the 1 or 2 key ones you would call out as being the focus in the next 12 months or so to lift the penetration rates, which are sort of stabilizing even in some of your higher penetration areas like Auckland? Mark Aue: Sure. Okay. So my conviction, yes, absolutely unwavering on 80%, even a year on. I think the learnings from a year on that, as I've just talked to around being smarter on the execution, using AI, using data analytics, being more targeted in our approaches I'd say that, that's more broadly how we will execute. I think we gave a figure that broadly we needed to be at about 40,000 new net fibre connections each year over our Horizon 2. But that was more as a -- look, on average, you need to do that. The work we did in Horizon 1, the foundational piece, building capability, building organization structure, being clear around the aspiration, having that clarity and specificity of where we would go, we needed to do all that work. So my sense is that it's going to take a little bit of time to build up. So some years might be lower, some might be -- would need to be higher. But my conviction remains at the 80%. I think that is achievable, looking at the underpenetrated pools that we have. And to talk to those in the main if we start at a holistic level, there's 200,000 premises as brownfields infill. They're in our denominator. We need to do something with those. And I think there's real opportunity here when the fibre passed the premise previously. But for whatever reason, either it wasn't eligible for a subsidized build of fibre back then or the premise didn't exist back then. I think we can go back and relook at that because the fibre that's running past the premise is essentially a sunk cost today. So I think that gives us the ability to think about the economics in a different way for a further build-out. So that's 200,000. The other large pool holistically is the inactive on -- they are intact, but inactive. That's another 200,000, right? Now between those 2 pools, there's lots of crossover to fixed wireless, obviously. So that's inherent on us around execution. And how do you keep raising that awareness and the differences on fibre to other technologies. I think the trends in the market are going to exacerbate that anyway. But the INTAGs are an opportunity for us. The fibre is already there, right? So actually, again, working with retailers in a smarter way, what our go-to-market execution is, that's inherent on us. But I'll stop at the 2 large pools because between them, you have 400,000 premises essentially that are potential, half of which already have fibre installed today. Arie Dekker: Yes. Then just last one for me, just going a little bit further with the Starlink. I mean you talked to metro. But I guess just interested in your view on where the extent of competition you're seeing in those areas where in the rural or in the fibre extensions, some of those smaller settlements where I think in RBI -- sorry, UFB2 and the extension, your penetration is sort of mid-60s or so. Like do you notice -- is there a lot of Starlink there? And are you sort of thinking about working with retailers on initiatives there to sort of tackle Starlink? Mark Aue: I think to work backwards from that, absolutely working with retailers and whatever means that we need to where we're seeing competition. As I said, look, I said metro and I think it is relatively low. I think it's a fair point that on fringes, of large areas or small settlements, then there could well be penetration of Starlink. We wouldn't say that there's not at all. I think ultimately, though, we look at the broad thematics where usage is developing, content is developing, AI is developing and think that, again, I know we're biased, but we only see fibre as a technology that will actually manage that future demand. Operator: Your next question comes from Wade Gardiner with Craigs Investment Partners. Wade Gardiner: You mentioned briefly weather impacts. Can you sort of talk to -- are you seeing anything in the second half, particularly around the recent really poor weather that we've had? And maybe also around that, just split out the maintenance costs into sort of copper versus fibre? Mark Aue: Well, fibre faults are significantly lower than copper. So they're nowhere near. And so it's not -- we don't give the dollars, but fault rates are substantially lower than copper. And yes, there have been weather events, as you can read the news. And so we kind of deal with it. We have a team that stand up and get react quickly. So those -- but that's normal for our course of business in terms of seasonality. Andrew Davies: I don't think, Wade, to add to that, but copper is an aging technology. And given the severity and frequency of these weather-related events we're having, copper just doesn't perform. The fault rates are significantly higher than fibre. I think at the same time, though, the positives we take out of it is our ability to respond quickly as an industry. We are looking at resilience, obviously, all the time, but you can't plan for these things where the next event is actually going to show up. But it's always inherent in our cost assumptions. Wade Gardiner: If I go back to August, I think there was 755 FTEs at that stage, and you were sort of talking about 30 vacancies. So that looks like it's changed now. You're down to 751. And what's the vacancy situation like? Andrew Davies: Well, we still have vacancies at BAU, and I'd say it's still around -- it's a little bit lower than that now. So we filled some of those roles. Mark Aue: But equally driving further simplicity and efficiency. So I think we did -- what we'd recognized as part of that Horizon 1 was a very deliberate shift. Looking at organization structure, the way we establish value streams for infrastructure and for access, they were really deliberate. I think what we're seeing now over time is where we're investing in further capability and leadership; so I think to AI, to data analytics, customer retention, things that Chorus didn't have as mature frameworks previously. So we're still investing in those. But at the same time, where some of these projects that we're either shelving or moving away from, we're continuing to see a lot more efficiency in our base that becomes more BAU. Wade Gardiner: So any thoughts on what that FTE number will go to? Mark Aue: No, not -- I guess, what I would say is we're not about to do another deliberate shift. I think we're comfortable with the Horizon 1 foundations that we've built, the organization structure that we've got. We've got a clear strategy, clear aspiration and purpose that we can anchor to our execution around, our prioritization and the way our projects are, we're clear on. So one of the references I said in my opening that it really does come down to execution now. So I'm not -- I don't foresee that there is another substantive shift down again. Wade Gardiner: Just in terms of the down trading that we saw that, say, 6 months ago or longer. And you mentioned in your presentation that it was sort of 25% of the additions into the 100-megawatt -- 100 megabit bucket with sort of downgrades. But you also mentioned some people upgrading. So is that 25% a net number? Mark Aue: Roughly speaking, yes. Encouragingly, we are seeing some of those trends. So we're seeing more upgrades go from the 100 into the 500, some of which are -- we can see our premises that had downgraded previously and have gone back. Wade Gardiner: Right. But in total, it's still a net down trading that you're seeing... Mark Aue: Broadly... Wade Gardiner: That continued in recent months or... Mark Aue: Yes. Look, I mean, it's improving a little bit on that. But yes, broadly speaking, about 25%. I mean, previously, it was about 1/3, I think, when we were sort of talking 2/3 of off-net growth and 1/3 of down trades. Certainly saw post the boost initiative and change in mid last year or start of Q1 for us, it was -- those downgrades were exacerbated by a lot of the pricing changes that a number of the retailers have put through. So I think we've seen that stabilize now as well. So you'd hope to see over time, ideally for us seeing below that 25% is coming from downgrades. Wade Gardiner: Just finally for me, you mentioned, I think it was positive pathways to regulatory change. Where do you get that confidence from? Mark Aue: Look, I could be wrong, but I think we've got -- we've been really open and really transparent. From a copper deregulation as an example, and you look at the TSO, we've been really collaborative, really open. We want to work with all of the stakeholders, setting our time line at 2030 was as much about putting us all on notice, all stakeholders and how do we all work backwards collectively so that we can find and confirm a pathway to exiting copper technology, right? So I just -- I think we're so far into fibre now. We look at the rates that copper connections are dropping off. You look at the Commerce Commission's own reporting on rural connectivity. There's just this bow wave that I would say that actually, I can't see any pathway other than copper actually disappearing. It's just a question on timing for deregulation. But we've been really supportive in working with the government and other agencies around how we do that in the best way where customers are essentially protected regardless of the fact that actually already 97% can access 1 of 3 other technologies other than copper. Wade Gardiner: Right. So you're talking more around deregulation around copper than anything to do with a change to the fibre building blocks... Mark Aue: I think, yes. No, good point to qualify. Yes, I'm talking more about copper, exiting legacy technology. I think -- and that's those legacy constructs. I think we've had a number of discussions around. The share cap ownership is the other that's being reviewed by Ministry for Regulation. I think on the fibre input methodologies, that happens over the coming couple of months. But I wouldn't be in a position to suddenly say that we think we know what the outcome is going to be. We've got to work through that. Operator: Your next question comes from Brian Han with Morningstar. Brian Han: You said somewhere that Chorus doesn't care who owns the NIFFCo equity shares. But do you know whether the government is as ambivalent as you are with respect to who buys the securities? Andrew Davies: Well, thanks, Brian. So since it's not our process, I can't speculate as to who the government would want to sell the securities to. I mean when I say that, it's because the terms are set. And so we know we're very comfortable with the payments, which is 2030, 2033 and 2036, 0 coupon debt. So that's where we see very comfortable in that construct. Again, it's a government's process and we'll kind of wait to get further updates on them as the year goes on. Brian Han: Drew, while you're there, just more on labor costs. As you simplify and become more efficient, is there a ratio or a target you guys are looking to with respect to labor costs as opposed to FTEs? Andrew Davies: Well, I mean, if you can look at our $41 million, which is at a 42% cap labor rate, I'd say without the fibre expansion programs underway, you'd see capital labor rates around that low 40% range. I think we're just too early to say of any AI changes, as Mark spoke to, earlier FTEs, we have no big programs to change. So in the medium term, we expect them to be at the same level. Operator: Your next question comes from Philip Campbell with UBS. Philip Campbell: Just a few questions from me. The first one, just on the government's kind of regulatory reviews. I think, Drew, you said you're expecting third quarter. Is that third quarter fiscal or are we looking more kind of third quarter calendar for an update from the government? Andrew Davies: I would -- I'm hoping for and would really like a decision by our Q3. So from a calendar year Q1, I guess. But this is a process that has been going for a long time, a lot of engagement. Our priority is getting confirmation, particularly on an exit pathway to legacy technology. So I would really hope that we get confirmation by the end of this -- of our financial year at the latest. But obviously, anything before that is an advantage. Philip Campbell: Just a follow-up to that on the TSO. Like obviously, in Australia, we've had a lot of issues around the Triple Zero problems with mobile and so forth. Is that -- I'm assuming that was obviously feeding into this -- any decision on the TSO? Andrew Davies: Well, I mean, I think we've always said the TSO kind of goes hand-in-hand with a view on property regulation anyway because the TSO only applied to a subset of customers back in the early 2000. So as far as the Triple Zero outage in Australia, we've done a thorough investigation here as well and I can say that more broadly for the telco sector as well. And we don't have the same risks that were inherent in Australia. Philip Campbell: Just on the S&P situation, assuming that the Crown securities are sold, and then they treat the Crown securities as debt. My understanding was that they count the debt as the PV of the debt. So I end up with a lower number than 6x. So I just wanted to check if that's your understanding or do you think they bring in the face value of the debt in that calculation? Andrew Davies: Well, S&P and Moody's treated differently from Moody's does on the PV basis. When you read the November credit note from S&P, they basically make and further treat all of it as debt on a total basis. And that's how they even calculate around 6x down driver. Philip Campbell: Just another question for you, Drew. Just again on the balance sheet, just with the retained earnings being a negative balance. Like is there any plans to like try and revalue the fibre network at some point? Andrew Davies: Well, we've indicated previously that certainly asset reval is in our strategy. Certainly, Phil, I think in August, we'll have much more definitive update on that. So I'd say if you want to wait until August results, we can get more specific on the numbers. Philip Campbell: Then just the last one for me was just, obviously, with Sky launching the 4K product. Are you kind of noticing any increased usage as a result of that or is it pretty minimal at this stage? Mark Aue: Pretty minimal at this stage, I think Phil would be the answer. I think because it was essentially isolated to 2 events with the Ashes and the Australian Open. You can see a difference in the usage profiles because obviously, it needs more bandwidth given the content quality. But versus the whole network, you need to see that running at multiple channels where it becomes more like your standard as 4K. Operator: That does conclude our question-and-answer session. I will now hand back for any closing remarks. Mark Aue: Great. Well, thank you again. And as always, thanks for your time, and we appreciate you joining. Hopefully, we've been able to answer your questions with color. And we look forward to seeing many of you over the coming days. Take care, and enjoy the rest of your day. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Aaron Gray: Good morning, everyone, and thank you for joining Mayne Pharma's 1H Fiscal '26 Results Presentation. Today, we will cover the group financial outcome for the half, then take you through each segment -- Women's Health, Dermatology and International -- before finishing with our fiscal '26 focus and outlook. As investors will appreciate, we have already provided a set of our unaudited numbers within our presentation at the company's 2025 Annual General Meeting on 29 January 2026. Before we begin the formal aspects of today's presentation, as we announced to the market this morning, Mayne Pharma is undertaking a planned and orderly leadership transition with Shawn Patrick O'Brien stepping down as Chief Executive Officer and Managing Director; and with me having been appointed Chief Executive Officer, both effective from February 21. This transition is part of the Board's structured succession process and is designed to maintain momentum and execution with continuity of strategy, governance and financial discipline. Importantly, the business remains stable with a strong experienced leadership team in place across our key functions and business units, and we are continuing to operate exactly as planned with a focus on performance, outcomes and disciplined allocation of capital. I want to acknowledge and thank Shawn for his contribution and partnership with me through a period of meaningful change, and I'm pleased that he will remain available to the Board in an advisory capacity to support an orderly transition for me as CEO. I would now like to turn over to Shawn, who is with me on today's call to make some remarks on the transition. Shawn OBrien: Thanks, Aaron. It's been a pleasure to work with you over the last 3.5 years at Mayne Pharma. Investors should note, this is a planned succession process, and the Board and I have been very deliberate about continuity. Aaron has consistently demonstrated deep knowledge of the business and our industry, and he's been central to the progress we've made together over the last 3.5 years. As a team, we've delivered a genuine turnaround. We've transformed Mayne from a predominantly generic CDMO profile into a U.S. branded growth company focused on Women's Health and Dermatology, while also turning around the Salisbury facility and completing its modernization. We have strengthened the fundamentals, people, process and products, building sharper capabilities, clear execution discipline and stronger business cases behind key initiatives, including the expansion of our Women's Health portfolio and our recent Dermatology acquisitions. Just as importantly, we've built durable relationships with Australian and U.S. investors, and fostered a culture where people care and take accountability and stay focused on the outcome for our patients. From my perspective, I'm incredibly proud of what we've achieved economically, culturally and how we've satisfied our customers. And I'm confident the company is in a strong position to maintain the momentum and improve upon it under Aaron's leadership as I exit the business. I will now turn it back to Aaron. Aaron Gray: Thank you, Shawn. Looking ahead, Mayne Pharma is in a strong position to capitalize on the opportunities in front of us. We have a differentiated portfolio, improving commercial execution and clear strategic priorities across Women's Health, Dermatology and International, underpinned by continued focus on operational delivery and cash discipline. The company has also commenced a formal process to appoint a new Chief Financial Officer to replace my role. And in the interim, we will maintain governance and reporting continuity through internal arrangements with ongoing Board oversight. We appreciate the continued support of our shareholders, and we remain focused on delivering sustainable growth and improved returns over time. Next slide, please. For Slide 2, please take a moment to read the disclaimer regarding forward-looking statements and the use of non-IFRS measures. Today's comments should be read in conjunction with our audited financial statements and ASX disclosures. Next slide, please. Turning to the headline numbers for the half. Revenue was $212.1 million, broadly flat year-on-year, while gross margin increased to 65.3%, up from 61.4% in the prior corresponding period. Underlying EBITDA was $28.6 million, down 8%, and total direct segment contribution increased to $68.1 million. Adjusted operating cash flow from continuing operations was $16.9 million, and we closed the half with $67.4 million (sic) [ $67.3 million ] in cash and marketable securities. I will now cover off our group financial performance before turning to our 3 segments. Turning to Slide 5. We are separating what we delivered operationally from items that are nonrecurring or noncash so investors can compare period-to-period performance. Reported EBITDA includes a number of one-offs and accounting movements. Our half year underlying EBITDA excludes a $54.5 million noncash earn-out reassessment and $21.3 million of diligence, business development, litigation and restructuring charges. Adjusted operating cash flow from continuing operations was $16.9 million, highlighting that the core business continues to be cash flow positive. The main volatility sits outside underlying operations, driven by discrete legal and transaction costs and earn-out style payments. The takeaway is that the underlying earnings base remained resilient with disciplined margin management and execution across the portfolio despite the uncertainty and distraction associated with the Cosette transaction process. Turning to Slide 6. This slide shows how we improved total contribution even with revenue flat for the half. Gross profit improved by 6%, driven primarily by a positive mix effect in Dermatology, and that supported a $3.1 million increase in direct contribution, up 5% to $68.1 million. Direct operating expenses increased by $4.6 million or 7%, reflecting targeted investments, most notably increased Women's Health promotional activity and higher International sales and marketing expense following the NEXTSTELLIS Pharmaceutical Benefits Scheme, or PBS, listing in Australia. This increased operating expenses. The key point is that we are being deliberate, investing where returns are attractive while continuing to lift the quality of gross profit through mix and channel strategy. Turning now to Slide 7. On EBITDA, reported results were driven by scheme-related legal costs, including litigation as well as the noncash earn-out reassessment in Women's Health. Underlying EBITDA was down 8% versus PCP, reflecting lower Women's Health contribution from additional sales investment, offset by higher Dermatology direct contribution from strong margin growth. On cash, the business generated positive $16.9 million of underlying cash flow from continuing operations, excluding transaction and litigation costs. Against that, scheme-related transaction and litigation costs were $20.7 million. We also made earn-out payments comprising $7.3 million in royalties and $10.3 million related to the TWYNEO and EPSOLAY intangible acquisition costs. In addition, discontinued operations cash outflows were $5.1 million and earn-outs from discontinued operations were $3.1 million. Finally, investing and financing movements included capital leases of minus $1.7 million, net CapEx of minus $1.3 million and other items of minus $0.5 million. The overall message is that the underlying business remains cash generative with the half impacted by discrete transaction, litigation and earn-out payments. Turning now to the specific performance of our segments in further detail. Slide 9 steps down into segment performance. Total direct contribution increased by $3.1 million to $68.1 million in 1H fiscal '26 versus the PCP. The biggest driver was Dermatology, up strongly on margin and mix, while Women's Health delivered solid top line growth but with higher planned investment. International reflected an investment phase post PBS approval. In aggregate, what's encouraging is that direct contribution grew despite flat revenue, which speaks to the quality of earnings improving, particularly in Dermatology, where mix and channel economics are doing real work. It also reinforces that our strategy is not just about chasing revenue, but also building durable margin and cash conversion. The other point here is balance. Women's Health is delivering demand growth and is in an intentional investment phase. Dermatology is delivering margin-led contribution growth and International is positioned for additional value as we leverage our infrastructure to generate growth and the PBS for approval in Australia for NEXTSTELLIS. Together, that creates a more resilient group profile across different periods. Turning now to Women's Health. The first half delivered a solid outcome with continued momentum across the portfolio, translating into sustained demand and share gains. We've improved the cadence and effectiveness of prescriber engagement, and we're benefiting from favorable macro tailwinds in menopause, which supports BIJUVA and IMVEXXY in particular. Women's health continues to be a category tailwind business for us, and our focus is translating that into sustained share gains through field effectiveness, targeting and patient access because those are the controllables that determine whether demand becomes filled prescriptions. Importantly, we are building a franchise with multiple pillars: NEXTSTELLIS, IMVEXXY, BIJUVA and ANNOVERA. So performance is not reliant on a single product. That supports stability in earnings and gives us more levers to optimize promotional mix and payer strategy. Financially, Women's Health delivered revenue of $96.5 million, up 2% versus the PCP. Within the portfolio, NEXTSTELLIS continued to build steadily with demand cycles up 16% and net sales up 4% to USD 23.4 million. Importantly, we also saw strength across the menopause-driven products. IMVEXXY total prescriptions were up 3% with net sales up 2% to USD 15.6 million and BIJUVA TRx up 26% with net sales up 23% to USD 8.2 million, which reinforces that the momentum is broad-based, not reliant on a single product. On the other hand, ANNOVERA showed a mixed picture. TRx was up 2%, but net sales were down 9% to USD 14.4 million. So while prescription demand held up, the net sales outcome reflects net realization dynamics from inventory returns rather than volume weakness. From a profitability perspective, gross profit was $76.2 million, down 1%, and gross margin was 79%, down 3% versus the PCP. That margin movement, combined with the planned investment, explains the contribution result. Specifically, direct OpEx increased to $40 million or 6% growth on PCP, reflecting our deliberate choice to invest behind the franchise. And direct contribution was $36.2 million, down 8% versus PCP. In summary, for Women's Health, top line held and demand strengthened, especially in our core menopause products. Gross margin moderated, and we chose to reinvest, which temporarily weighs on direct contribution during the half. Turning now to Slide 12 on NEXTSTELLIS. This chart shows the trajectory in NEXTSTELLIS demand cycles. The key message is that demand growth remains strong and we achieved all-time high levels during the half. We are layering in refreshed marketing materials and ongoing sales force optimization to sustain and extend that momentum. From here, the focus is to convert demand into the best possible net economics, reducing abandonment, improving prescription stickiness through repeats and keeping the patient journey smooth through access and affordability programs. That's where we see the next step in durable, repeatable growth. On net sales, growth in NEXTSTELLIS is being supported by steady net selling price alongside continued volume growth. Importantly, new coverage decisions effective 1 January expanded access, adding approximately 25 million additional covered lives in the United States. Access is a major driver of whether demand translates into filled prescriptions and the step-up in covered lives supports that conversion. The addition of those 25 million covered lives reduces friction in the demand to revenue pathway. From a financial standpoint, broader patient access supports lower abandonment rates, improved net revenue per script and greater predictability in revenue. It also reduces volatility in rebates and contracting dynamics, which helps stabilize gross margin performance. Slide 13 shows demand continuing to build across our menopause-led products. IMVEXXY delivered total prescription growth of 3% on PCP, translating to USD 15.6 million in net sales. BIJUVA is the standout with total prescription volumes up 26% for the half versus PCP and USD 8.2 million in net sales, reinforcing that momentum is broad-based across the portfolio. For ANNOVERA, demand was steady, up 2% for the half, with USD 14.4 million in net sales. The key nuance is that first half net sales were impacted by around USD 1.7 million of product returns. So that's more of a period-specific adjustment than a change in underlying demand. However, this product return profile is unsatisfactory, and we are working with our partners to improve the returns profile. Slide 14 shows the future drivers for our Women's Health segment. Looking forward, our growth levers are clear. Number one, drive market penetration from our low single-digit market share of the competitive sets, share being approximately 1% for BIJUVA, 3% for IMVEXXY and NEXTSTELLIS, and 2% for ANNOVERA. Number two, defend portfolio runways through our long-dated intellectual property. Three, keep sharpening commercial execution through targeting and field effectiveness. And finally, four, continue to improve access through payer contracting and patient programs. Turning now to the performance of our Dermatology segment for the half. Slide 16 provides the operating and financial highlights for Dermatology. This segment continues to demonstrate the benefits of mix, channel strategy and execution. We are building a more resilient earnings profile through a higher percentage of branded sales and leverage of our channel to improve patient access and conversion. Dermatology is demonstrating what we mean by quality of revenue. Even when the top line is not accelerating, mix and channel strategy can materially change the profitability outcome, and that is exactly what we are seeing. In the half, Dermatology revenue was $78.6 million, down 3% on the PCP, but profitability improved meaningfully. Gross margin expanded to 65%, up 12 percentage points, driving direct contribution up 35% to $29.8 million. That's a strong example of operating leverage and favorable mix even in the face of top line pressure. We've shown that profitability can improve materially through mix and improved conversion of our channel. What we are finding exciting is that we're now moving from building the ecosystem to scaling it. Each incremental prescription routed through our disintermediated pathway improves both patient access and the profitability profile of the segment. We will soon be launching the next leg of our disintermediation strategy with that launch planned for Q3 fiscal '26. Slide 17 shows very clearly that Dermatology's earnings improvement is being driven by mix. Branded revenue increased to $51.2 million or 65% of the mix, up from $44.5 million or 55% of the mix in the PCP. Investors should note the contribution of TWYNEO and EPSOLAY given their relaunch by Mayne Pharma was responsible for part of the increase. All other Dermatology products we sell reduced to 35% of the mix from 45% in the PCP. That is the core driver of the profitability uplift. This drove the gross margin improvement and when combined with flat segment OpEx, provided solid operating leverage to contribution, which grew 35% for the half. Turning to Slide 18 on future drivers for Dermatology. Having delivered continued improvement in margin and contribution, the priorities now are about making those improvements repeatable and scalable. First, we continue to scale the disintermediation and specialty ecosystem because when more scripts move through the pathway we control, this supports better patient access and improved conversion outcomes, which also then leads to higher profitability. Second, we'll continue to expand and refresh the Dermatology portfolio through capital-efficient accretive arrangements, specifically targeted business development of new FDA-approved brands and products that broaden addressable segments. Third, we'll keep lifting execution, sales force capability upgrades and refresh marketing. So we rebuild and accelerate demand while protecting the improved gross margin profile created from the mix and channel shift. Turning now to our final segment, International. Operationally, there were 3 key highlights. First, PBS approval for NEXTSTELLIS in Australia, and we have commenced promotion post PBS approval. Second, we inaugurated the completed Salisbury facility upgrade, which was an $18 million investment, including $4.8 million from the Modern Manufacturing Initiative grant. Third, we received external recognition for export performance, which supports partner confidence and demand. Financially, revenue was $36.9 million, minus 1% versus PCP. But importantly, gross profit increased to $11.3 million, plus 7%, and gross margin improved to 30.5%, plus 3%. So unit economics are moving in the right direction. Direct OpEx was $9.2 million, plus 32%, reflecting primarily the planned investment phase related to NEXTSTELLIS. And as a result, direct contribution was $2.1 million, minus 42% versus PCP. The message is we're seeing improving margin and gross profit while we invest to build the pipeline for future scale and operating leverage. Slide 21 sets out how we convert that investment into improved performance. The first lever is capacity and reliability from Salisbury post upgrade, enabling higher output, better service levels and improved DIFOT to support export and partner growth. This is the pathway to better utilization and improved fixed cost absorption. Second, the PBS listing is already showing early traction as access and affordability improve. We have seen 118% growth in 3-pack volumes of NEXTSTELLIS in December 2025, immediately following the PBS decision. That's a meaningful early indicator that promotion plus access can translate into volume growth. The objective now is to compound those leading indicators into repeatable revenue and ultimately improved contribution alongside expanded supply agreements and partnerships through the network. Turning to our outlook on Slide 22. For Women's Health, we aim to continue our market share growth with dedicated people who are 100% focused on Women's Health, drive our refreshed marketing and product access solutions, and protect our strong intellectual property for our best-in-class products. We will make targeted investments to drive growth and focus on sustainable cost leverage. For Dermatology, we will take the next step in our disintermediation strategy to fully leverage the ecosystem we have built to improve access and patient outcomes for Dermatology and pursue expansion into other therapeutic areas. We look forward to updating investors with our new strategy as well this quarter. For International, we have focused activities to unlock the value created by the investments that have been made in the international business via NEXTSTELLIS PBS listing, the $18 million CapEx infusion and growing international supply agreements. We intend to enforce our agreements and reserve all of Mayne Pharma's rights and balancing these costs with shareholder value in mind. As you have seen, we have commenced proceedings in the Supreme Court of New South Wales against Cosette and related parties, Avista and David Burgstahler. Mayne Pharma is seeking substantial damages on behalf of Mayne Pharma shareholders and on its own behalf. Finally, from a capital perspective, we continue to evaluate a variety of capital allocation priorities, including share repurchases, targeted asset acquisitions and expanding our promotional activities across our segments. That concludes the formal part of today's conference call. I will now turn the call over to the operator for the question-and-answer session. Please go ahead. Operator: [Operator Instructions] As there are no phone questions at this time, I'll now hand back over to Mr. Gray to address any questions submitted to management. Aaron Gray: Thank you. Tom, have we received -- I believe we received a couple of questions from investors that this might be a good time to address. Thomas Duthy: Yes, we have Aaron. I'll just read them out. First question is, what is the ability of the company to continue to drive revenue growth and script growth in Women's Health? Aaron Gray: Okay. So compared to the PCP, 1H fiscal '26 saw solid Rx growth, demand growth and -- but our revenue was relatively flat. That was a function of a couple of things. We were weighed down by the returns on ANNOVERA, which I talked about in the presentation. We also had in the PCP, so in the first half of fiscal '25, we had a number of credits that we recognized due to our conservative GTN methodology. We've continued to refine our GTN methodology, basically continuous improvement, improving every period. And so the amount of buffer that we carry has reduced over the period. Basically, we got a credit in the first half of fiscal '25 that didn't repeat in the first half of fiscal '26. So I would expect once that is normalized out and in the rearview mirror, we should see revenue growth at the same or higher rate that we would see TRx growth looking forward. Thomas Duthy: Okay. Second question, what is the current status of emerging competition for RHOFADE in 2026? Aaron Gray: So RHOFADE -- we acquired RHOFADE out of a bankruptcy proceeding. This was an extremely good acquisition. It paid for itself in several months. And we've obviously continued to realize revenues and profit and cash from it. RHOFADE, when we acquired the asset, we knew that it was not a long-lived asset. The previous owner had reached a settlement on the introduction of competing generic products, which happens at the end of our fiscal year '26. And so we do expect there will be some competitors launching at the end of our fiscal '26. We will also be taking our own steps and taking measures to make sure that we protect and maintain our share of the market there. Thomas Duthy: And third question, what is the company's view of the adjustments to the underlying EBITDA on a go-forward basis, particularly legal costs and discontinued operations? Aaron Gray: So with respect to the discontinued operations, obviously, our 1H fiscal '26 was heavily impacted by costs associated with the Cosette transaction. That was a very -- it was an extremely extensive effort. We would expect the costs of an appeal to be significantly reduced compared to what we've already expended. We would also then expect the cost of pursuing the damages claim that I mentioned to be reduced compared to the initial spend as well as then depending on time frame, these costs could spread over a longer period of time. That said, we incurred significant legal costs related to defense of some of our intellectual property. That weighed down EBITDA to the tune of more than $2 million in the first half. We are working diligently to put those behind us and to reach some kind of an agreement on those. I can't comment more. But I would expect going forward that we would not see those -- there will be a point where we will not see those expenses continue at the same rate. The other item that we had was we had a significant step-up in cost related to FDA post-approval studies, which are required for the Women's Health products. We've stepped up about $2.6 million compared to the prior fiscal first half in those FDA costs, and we expect those to step down to a level that's something below the fiscal year '25 run rate looking forward into fiscal '27. So those costs will continue across the second half of fiscal '26. However, we expect them to step down beginning in fiscal '27 as those studies have been completed. Thomas Duthy: Right. I have some other questions here for you, Aaron. One of the investors have asked if you could give a little more granularity and color around ANNOVERA product returns and how you will wind this back in or wind it back down so the level of inventory returns are not sort of at that same rate moving forward. Aaron Gray: Yes. So ANNOVERA returns come -- returns come when we use the big 3, the channel, which is we call it the big 3, the large 3 wholesalers. They have a fairly liberal right to return, and they do so when it's to their advantage to do so, as you would expect. ANNOVERA is a challenging product from a logistics perspective. It's a multi-month prescription. It's a relatively high-priced product, and it risks seeing higher abandonment. So scripts can't just be -- scripts cannot just be put into the channel, assuming they're going to be filled. We need to have a bit more of a targeted dedicated handheld process across the access solution to make sure that ANNOVERA gets filled. We also, to the extent we have existing customers, are working to understand why abandonment for that product is higher than we would -- than we experience on other products. And we are looking at changes to the supply side. Certain of our customers that are supplied through the big 3, we have the option to contract with other wholesalers who do not have quite the same right to return. And so it's basically a multipronged approach through everything added to make sure we drive that rate back down to where it should be. Thomas Duthy: Okay. Terrific. And just following up from that in Women's Health, was there anything particular which drove BIJUVA momentum for the half? Aaron Gray: BIJUVA has seen just a significant lift based on, I think, general awareness in hormone replacement therapy. There's been other products that have spent the millions of dollars per minute to advertise at the Super Bowl. There's been much more conversation and discussion around hormone replacement therapy. And in fact, the U.S. government removed the black box warning from certain hormone replacement therapy products, among them BIJUVA and IMVEXXY. And so that -- I think that's triggered a conversation around HRT, which hasn't happened, which is changing rather in the United States. So I think attitudes and thoughts around HRT are changing fundamentally. And the black box warning, while the government -- the U.S. government made the decision to remove the black box warning, we haven't completed the update of our label yet. That's in process. So we expect to see those attitudes and opinions continue to change. Thomas Duthy: Perfect. If I could ask the operator to flick to Slide 33, which is one of the appendices in the main deck. Aaron, we had a question on this slide in particular, just whether you could expand on how you see the opportunity for Dermatology moving forward. It's a macro-derived slide. I'm not sure if you can see that now in front of you. Aaron Gray: I can't see it, but I can talk on the opportunity for Dermatology. Dermatology -- dermatological conditions are not being cured. So there's a populus that still has a need for care. There's not an awful lot of new development in small molecule medical derm. And most companies following the traditional pharma model of make money on covered scripts to lose money on cash scripts simply doesn't work because the coverage profile for small molecule medical derm is fairly poor relative to other products. And so that requires a completely different model. Hence, the years that the Mayne Pharma team has spent trying to set up this alternative distribution. The opportunity continues to pick up assets in a capital-light structure where companies are -- because of this -- because of the traditional model, companies have the inability to remain profitable the way they do business. Instead, they may benefit from handing the assets over to us in some kind of a structured transaction. So anybody who's in small molecule medical derm, there could be a partnership there that's mutually beneficial. That's what we've seen as we've picked up a number of products in partnership with Galderma, and there are other companies out there that we can also work with on that. So there are further product acquisition opportunities. The coverage is not going to fundamentally change. If anything, the coverage is going to deteriorate on small molecule medical derm products. And our solution, our access solution provides -- it provides access for the patient. It provides a frictionless experience for the provider. It provides cost certainty at the time the script is written, whether a patient has insurance or not. And it basically has no switching, no prior authorizations required and the medicine shows up at the patient's door. So I think the market has not contracted for Dermatology. The need is still there. Anybody who's in a position that can meet that access need has the potential to capture significant amounts of share there. Thomas Duthy: Thanks, Aaron. That concludes the questions from investors. I'll turn back to the operator.
Mark Norwell: Good morning, everyone, and thank you for joining the Perenti FY '26 First Half Results Call. My name is Mark Norwell. And presenting alongside me today is Mike Ellis, our CFO. Today, we'll take you through our first half performance and outlook for the remainder of FY '26. Overall, Perenti has delivered as per expectations and remains well-positioned to continue delivering strong earnings and cash flow for the year. Starting on Slide 3, our diversified portfolio. For those who haven't been following Perenti closely, we are a diversified global mining services group with leading positions in contract mining, drilling services and mining and technology services. For example, our underground mining business, Barminco, is a top 2 global underground hard rock mining contractor. And our drilling division, comprising 5 specialist brands, is a top 3 global drilling business. We believe that a sustainable business is one that consistently delivers for its people, its clients, the communities in which it operates and ultimately delivers enduring value for shareholders. To achieve this purpose, we have built a diverse company with 13 brands operating across 12 countries. Approximately 2/3 of our revenue is generated from underground mines, and currently, our work in hand is strongly weighted to gold projects. Our diversified portfolio, scale and market share creates a resilient business that can deliver consistent performance through market cycles. Turning to the first half financial results on Slide 4. The first half of FY '26 reflects consistent delivery as we continue to evolve our portfolio and strengthen our balance sheet. Revenue was similar to the first half of FY '25 and EBITDA slightly lower, following the conclusion of the Botswana underground project at the end of FY '25. As communicated in our FY '25 results, we successfully sold the fleet in Botswana, delivering a decrease in depreciation, supporting a new half EBITA record of $160 million. EBITA margin improved to 9.3% compared to 9.0% in the first half of '25, demonstrating the improving quality of earnings. Underlying NPATA increased 12.4% compared to the first half of '25 supported by lower net finance costs and improved operating performance. Underlying EPS increased to $0.098 per share, also up 12% from the corresponding period. Normalized free cash flow of $33 million, adjusted for delayed debtor receipts collected in January, also improved on the first half last year. Net leverage reduced to 0.6x compared to 0.9x 12 months earlier. And our gross debt reduced to the lowest point since the acquisition of Barminco in 2018, following the repayment of the remaining 2025 senior unsecured notes in July 2025. As a result, the Board has declared an interim dividend of $0.0325 per share, an 8% increase on the $0.03 dividend in the first half of 2025. On to Slide 5. And as always, the safety of our people remains our first priority. The continuous learning approach that we have adopted requires us to constantly seek ways to improve our safety systems, and ultimately, performance. During the half, we continued to invest in frontline safety leadership and strengthened our company-wide safety leadership framework, which includes clear expectations for what safe work looks like. Divisional critical risk frameworks and verification tools have been updated, and we continue to focus on creating a safe and respectful workplace. We also implemented practical safety enhancements across the business, including in-vehicle monitoring systems, improved operator visibility, upgraded gas monitoring and smart camera exclusion zones and standardized controls for working at height across the drilling fleet. While we continue to make positive progress as a business and as an industry, we need to maintain an unwavering focus on improvement to keep our people safe. Moving to Slide 6, group performance. As mentioned earlier, EBITA increased 3% to a new first half record of $160 million, despite the strength in the Australian dollar at the end of the half, which has continued into the start of the second half. Our EBITA margin improved to 9.3%, driven predominantly by the transition away from the underperforming underground contract in Botswana. As we've outlined previously and as demonstrated in the half-on-half comparisons, earnings and cash flow are weighted to the second half of the year. Contract mining will benefit from several contractual elements flowing through in the second half, and drilling services continues to see demand increasing with margin growth expected in the second half. Turning to our divisions, starting on Slide 7. Contract mining contributed around 70% of group revenue and 74% of underlying EBITA before corporate costs. The significant transition in revenue mix continues in line with our strategy with new and existing projects substituting for projects that have concluded in Burkina Faso and Senegal. As mentioned, the conclusion of the underground contract in Botswana has helped to improve first half EBITA margin to 11.1%. Work in hand remains strong in projects such as Great Fingall in Australia, Goldrush in the U.S.A. and Mana in Africa ramping up. The award of the Dalgaranga contract in July 2025 will also have a greater contribution in the second half. As outlined on Slide 8, Drilling Services delivered revenue of $422 million, up 9% on the first half of '25 with utilization continuing to improve across the division. With drilling demand remaining strong, particularly in gold and copper projects, the division is positioned to benefit from margin expansion as market capacity tightens. Swick, in particular, has seen strong demand, recently winning and mobilizing 3 new projects in North America. The multiple mobilizations temporarily impacted margins during the half. However, margins are expected to improve in the second half and into FY '27 as the new projects move to steady state and the benefit of improving market conditions are realized. On to Slide 9. Mining and technology services has delivered improved performance compared to the first half of '25. The BTP rental fleet saw higher utilization with idle fleet returning to work, although still below historical levels. BTP parts continue to deliver below expectations, presenting an opportunity for improvement in the second half. idoba continued to focus on its underground simulation tool with costs reducing as planned with further reductions forecast in the second half of '26. Overall, our first half results met expectations with our balance sheet continuing to strengthen. I'll now hand to Mike, who will provide more detail on our financial results. Michael Ellis: Thanks, Mark, and good morning to those on the call. Thank you for joining us today. I'll now step through the financials in more detail, starting at Slide 10 at the underlying profit and loss for the half. Our revenue has stayed consistent on the prior corresponding period at $1.73 billion for the half. As you're aware, the underground project in Botswana, which was our largest by revenue contribution in the prior half, at circa $120 million, completed at the end of FY '25. The collective team has done a great job to offset this during the first half of FY '26, driven by new work and scope increases in contract mining at the Great Fingall, Dalgaranga, Goldrush and Mana projects, together with increased revenue within our Drilling Services brands due to improved utilization. Our depreciation has reduced from $168 million in the first half of FY '25 to $157 million or 9% of revenue this recent half. The primary driver was the transitioning portfolio in contract mining. 2 main points on this, selling the large underground fleet to the client in Botswana, which had significant depreciation in the prior corresponding period. Secondly, we had the conclusion of 2 surface mining contracts, Sanbrado and Mako that had higher depreciation compared to underground and drilling projects on a like-for-like basis. Looking forward, all things equal, group depreciation will normalize at low to mid-9%. On to earnings. The EBITA result of $160 million with EBITA margin improvement to 9.3% was a strong result for our first half. It was underpinned by improved performance in contract mining, driven by the portfolio mix and operational delivery, consistent delivery from drilling services and a stronger result from mining and technology services compared to the first half of '25. Interest expense was $28 million for the half, substantially down 20% compared to the first half of FY '25. This was due to the early repayment of the 2025 senior unsecured notes, further lowering our gross debt, providing us balance sheet capacity, but also ongoing earnings per share improvements. Income tax increased marginally by 6% with increased earnings this half, representing an effective tax rate of 30.2% in the half. It should be noted that our effective tax rate for FY '26 is still expected to be 32% for the full year. Our underlying NPATA of $92 million is up 12% with an improved NPATA margin of 5.3%. Lastly and importantly, our underlying earnings per share increased 12% on the prior corresponding period, a great result for the half, driven by the EBIT margin improvements and reduced interest costs. On to Slide 11, the reconciliation of our statutory results to the underlying results. Although pretty straightforward this half, I will provide some further color. Amortization of the customer-related intangibles was $19.6 million during the first half, but is expected to reduce significantly in the second half due to the completion of the Yaramoko underground contract in Burkina Faso in December. This contract formed part of the original Barminco acquisition accounting in 2018. Looking forward, the amortization of customer-related intangibles will be circa $30 million for the full year FY '26 and will further reduce to circa $14 million in FY '27. idoba development costs of $4.7 million were down 30% on the first half of FY '25 following last year's review. They will further reduce in the second half to circa $4 million as the development spend for our simulation product reduces in line with the development milestones. In FY '27, we will account for the development costs in our underlying earnings as the product moves into commercialization and development expenditure is further reduced. Net foreign exchange losses amounted to $4 million and predominantly related to non-cash movements of intercompany loans and tax balances, noting that the first half of FY '25 was an FX gain of $5.3 million. Turning to the cash flow on Slide 12. Operating cash flow before interest and tax was $193 million, lower than the prior period, predominantly due to the timing of debtor receipts and creditor payments upon the completion of various projects in the half. We received $50.3 million of overdue debtor receipts in January, impacting reported free cash flow at period end. As noted in prior calls, our cash conversion at the first half is generally impacted by short delays in client receipts and other temporary working capital movements. This has no impact to our overall liquidity profile. After adjusting for these late receipts, normalized free cash flow was $33.1 million, up 8% on the first half on a like-for-like basis and represented cash conversion of 77%. As flagged in our FY '26 guidance, our free cash flow will be second half weighted in FY '26, which is consistent with the last 3 years of solid free cash flow delivery in the second half of the year. We are confident on delivering cash flow conversion in line with historical averages of greater than 95% for the year. Net interest reduced in line with gross debt reductions and cash tax was down during the period due to the timing of tax payments. Our gross capital expenditure remained in line with the first half of FY '25 at $170.7 million with continued investment into our fleet. We also realized $21.4 million from the sale of assets and investments. This predominantly related to the sale of assets to clients that completed projects, including Yaramoko, Sanbrado and the Mako project. Lastly, you will notice the cash outflow of $135.4 million to repayments of debt as a result of the gross debt reductions previously mentioned. That is a good segue to Slide 13, the balance sheet. As a result of the debt repayments, our cash balances reduced during the half to $275 million and back to normal operating levels, noting that it was elevated at 30 June, 2025 due to the sale of assets at the completed underground project in Botswana, which was received in late June '25. Liquidity remains very strong at $818 million, supported by $543 million of undrawn committed facilities and $275 million of cash, providing significant optionality to pursue growth opportunities that meet our hurdle rates and deliver into the execution of our strategy. During the half, we successfully completed a heavily oversubscribed refinancing of the syndicated debt facility, increasing the facility capacity to $650 million on improved pricing and extending maturities. As part of the process, we also welcomed several new domestic and international lenders to the facility, highlighting the positive support from the debt markets for the scale and the consistency that has been built over the years. The balance sheet remains very strong and robust, offering good flexibility and our disciplined approach to balance sheet management positions Perenti to continue to pursue both organic and inorganic growth into the future. On to Slide 14. Disciplined capital allocation remains our key focus to generate sustainable long-term returns for our shareholders. Since FY '19, we have invested to grow revenue and EBITA, both organically and inorganically, resulting in strong sustainable free cash flow over the past three years. This has enabled us to reduce net debt and leverage from 1.3x in FY '21 to a very comfortable 0.6x at reporting date. With debt well managed, we resumed dividends in FY '24. And during periods of undervalued share price, we have bought back shares, increasing EPS. This balanced approach will continue supporting growth opportunities that meet our investment criteria, consistent sustainable free cash flow generation, regular dividends, share buybacks when suitable and maintaining a robust balance sheet. In closing, earnings remained strong in the first half of FY '26 in a transitional year for contract mining, highlighting the scale that has been built in Perenti over the years. Our balance sheet continues to strengthen with significant available liquidity, creating capacity to continue to execute on our strategy. Thank you. I will now hand back to Mark. Mark Norwell: Thank you, Mike. As detailed on Slide 15, the outlook remains bright for Perenti. Secured work in hand at 31 December, 2025 was $5.8 billion, reflecting a normal drawdown of work executed during the half and partial replacement through some new and expanded projects. The pipeline remains strong at $18.6 billion with North America representing a growing component of that pipeline. This month, Barminco received a letter of intent from Barrick for its Fourmile project in Nevada U.S.A. to undertake limited early work readiness activities. The letter of intent reflects Barrick's continued confidence in Barminco's technical capability and underground development expertise and represents an important step toward progressing the Fourmile project. We'll continue to work together with Barrick toward finalizing scope and contractual arrangements with earnings anticipated to commence mid-FY '27 post formal award in the coming months. This is excellent news and demonstrates ongoing execution of our strategy to grow in North America. With the neighboring Goldrush project also ramping up and the Red Chris mine in Canada currently in the process of finalizing mine expansion plans, North America work in hand could be significantly larger in a short period of time. Overall, the sheer number of opportunities provides confidence in the outlook beyond FY '26, although we will remain disciplined, patient and focused to ensure projects we secure support sustainable delivery of TSR rather than just short-term revenue growth. Building on Slide 14, where Mike outlined our significant earnings growth and net leverage reduction as a result of consistent cash generation, Slide 16 illustrates how we have also evolved our portfolio since 2019. Firstly, the revenue of the business has more than doubled. All divisions have grown while also increasing regional diversification. The Australian portion of revenue has overtaken Africa as the largest contributor to the business, and the growth in the North American market is now gaining momentum for both Barminco and Swick. In 2019, Perenti had no projects in North America. Now we have 8 projects underway today with an ever-increasing pipeline and positive outlook. A glimpse of the future for Perenti can be seen in the relative makeup of the pipeline. In FY '19, the opportunities were predominantly in Africa with the remainder in Australia. Now the opportunities are dominated by Australia first and North America second with new opportunities starting to emerge in the Middle East. Africa will remain a strong region for Perenti, but as always, projects must meet our risk and return hurdles. Overall, we have significant organic growth opportunities across our operating regions and services. Slide 17, outlook and revised FY '26 guidance. The portfolio continues to deliver strong and reliable free cash flow, supported by the scale of the group and the improving quality of earnings. The recent strengthening of the Australian dollar has tempered expectations for the top end of our revenue and EBITA guidance. Conversely, we have increased our free cash flow guidance to greater than $170 million with capital expenditure guidance reduced to $325 million. To achieve these targets, earnings and cash flow will be weighted to the second half of the year, consistent with the performance of FY '25 and prior years. EBITA growth in the second half is anticipated to be bridged in a similar fashion to FY '25. A $10 million to $15 million step-up in contract mining is expected, $5 million to $10 million from Drilling Services and the balance from Mining and Technology Services. In addition, we will continue to see the benefit of our gross debt reduction in the second half in the form of reduced interest payments. To deliver our full year guidance, the priority remains the focus on the safe delivery of services, continued investment in the development and capability of our people and supportive market conditions. Additional focus will remain on winning and extending projects that deliver sustainable value-accretive growth. Revenue growth alone is not the objective. Projects must be secured on terms that support profitability and free cash flow for the long-term success of our business. With several projects ramping up, particularly in Australia and North America, discipline and consistent operational execution will be critical. Activity in the exploration drilling market continues to build, consistent with the early stages of a longer term trend. Consequently, drilling utilization is expected to lift during the remainder of FY '26 and into FY '27. Finally, by maintaining a disciplined and balanced approach to capital allocation to organic and inorganic growth opportunities, Perenti is well positioned to continue delivery of enduring value to our people, clients, communities and shareholders. On to Slide 18. In summary, Perenti has delivered a consistent first half with a new record first half EBITA, EPS growth of 12% and strengthened the balance sheet, positioning the group well for the remainder of FY '26 and beyond. As announced at our AGM last year, this will be my final year with Perenti. While the Board is well progressed in the search for a new MD and CEO, my focus remains on supporting our people to safely deliver FY '26 and in time supporting the Board and the new MD and CEO to transition to new leadership. Details of the transition will be shared when the new MD and CEO is announced. In the meantime, it is business as usual. Thank you all for your time today, and we'll now move to Q&A. Operator: [Operator Instructions] And today's first question will come from Sumeet Ozarde with Citigroup Global Markets. Sumeet Ozarde: The first one, just could you talk about some of the contract mining opportunities, new and renewals that we should be thinking about in the next 12 to 18 months? Mark Norwell: Yes. Thanks, Sumeet. Audio is a bit challenged, but I think you're asking me about contract mining, pipeline. So I guess, firstly, I'd say that the pipeline is significant and certainly very strongly weighted to North America and also Australia and still some very good opportunities in Africa. So the outlook is extremely positive. We know that the [Technical Difficulty] Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. [Technical Difficulty] Pardon me, this is the operator. We would like to resume the question and answer session. [Operator Instructions] Mark Norwell: Well, it's Mark Norwell. I might pick up on Sumeet's question that I was midway through answering. Firstly, apologies for the technical challenges that we've been experiencing this morning. So hopefully. we've still got a few folk on the line. Sumeet's question was regarding the outlook for contract mining, and I'm not sure when it dropped off, so I may repeat some items that we already covered off. Certainly the pipeline is extremely strong in terms of the outlook. The thematics of underground mining, very strong, and obviously, commodity price is very strong as well. In the near term and as announced in our results to date, we are working with Barrick for their Fourmile project in Nevada. We've had a limited notice to proceed for early works there. Expectation for that to come online in FY '27. So we're very excited about the Fourmile opportunity. I visited Nevada a couple of weeks ago and visited the Goldrush project for Nevada Gold Mines. We see some potential expansion there. So really the Nevada region looking strong. Red Chris project with Newmont up in British Columbia. We've been there for several years. Newmont are working through expansion plans currently. And subject to that continuing and getting approval from Newmont, we're well positioned to hopefully secure more work there. We're also in discussions with another client in North America that we're sort of hopeful of for an outcome into FY '27. So very strong there. In Australia, we got a couple of active tenders at the moment for Barminco that we're working through and we still have a number of projects in the pipeline for Africa as well. And finally, with a number of existing clients we've worked with for many, many years, supporting them on expansion plans as well. So in summary, a very strong outlook for contract mining and also a strong outlook for drilling services into FY'27. Operator: [Operator Instructions] There are no questions at this time. I'll now hand back for any closing remarks. Mark Norwell: All right. So maybe due to the technical difficulties, got off easy today. But look, thanks for people bearing with us with the technical challenges, but importantly, thank you for joining the call. Look, we delivered a strong result with our earnings continuing to improve. We are well positioned to deliver another full strong year ahead and we do have a very good line of sight to opportunities across our divisions into the back half of '26 and into '27, particularly with North America. We're getting some really good momentum into North America at the moment. And our collective earnings between North America and Australia have really shifted over the last several years as we've been growing the business and obviously improving the balance sheet. So not only does the outlook look positive, but we also have the strong balance sheet in place to be able to support significant growth in the future. We will maintain discipline with that growth obviously and look for the long term, not just sort of one year, it's sort of many years ahead. So thanks for taking the time to join the call. Enjoy the remainder of your day. Thank you. Operator: That does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Thank you for standing by, and welcome to the Austal Limited FY '26 Half Year Results Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. I'd now like to welcome Paddy Gregg, Chief Executive Officer, to begin the conference. Paddy, over to you. Patrick Gregg: Good morning, everybody, and welcome to our 2026 half year results call. I'm Paddy Gregg, the CEO, and I'm joined by our CFO, Christian Johnstone. We will be presenting in the same format as usual with me giving business overview and context, while Christian focuses on the financial details. And as always, we plan to present for no more than 30 minutes to allow time for questions. I think it's been a very exciting half for the company. We've seen the strategic shipbuilding agreement provide the backbone for significant contract awards in Australia with the signing of the Landing Craft Medium contract before Christmas and then last week, the signing of the Landing Craft Heavy contract. These 2 contracts total about $5 billion and take the order book to a record $17.7 billion. That translates to about 76 ships in build or scheduled in our shipyards, providing certainty of jobs and revenue for a decade. And you'll see revenue and employee numbers are growing in line with the order book as programs come online, and that's translating into earnings, too. We announced a revision to guidance a couple of weeks ago that was caused by a forecasting error, very disappointing, but we are still delivering a very strong financial performance this year despite this. The outlook is fantastic, both in the United States and in Australasia. So I'll talk through where the business is today. Christian will take you through the detail of the financials, and I'll finish by updating you on where I see the strategic outlook for the company. So for those of you that are following along in the pack, Austal at a glance, a couple of slides that cover the key facts. For anyone who doesn't know Austal, so we're operating 5 shipyards in 4 countries with 8 service centers in 4 countries, 76 ships under construction or scheduled, 64 vessels under sustainment contracts. And importantly, we've continued to add to the order book, and it stands at a record high. We've received orders for some 22 ships this year and delivered 2. Employee headcount globally is over 4,600 and growing daily and recruiting people to deliver that record order book. And the vast majority of our work is in the defense sector these days, and defense will continue to grow relative to the commercial sector. But interestingly, we'll start to see more balance between the U.S. and the Australian operations. So if I talk about the financial highlights, and as I said, Christian will go into the details. So jumping straight in, we're building sustainable growth, seen through the order book, that was predominantly in the U.S. and now followed in Australia with the signing of those Landing Craft Medium and Heavy contracts. We also signed 2 more Evolved Cape-class vessels before Christmas. And while that used to be big news, I think that was lost due to the size and scale of the Landing Craft announcement. And for me, this is all about us creating long-term value for shareholders. When I look at the results, I see lots of greens across the key financial measures, demonstrating strong business performance with year-on-year improvement and foundation laid for growth. Encouraging EBIT, slightly skewed to the first half, revenue growing in line with forecast as new programs move from design phases into construction with a big increase compared to the previous corresponding period. It's really encouraging as the legacy programs start to tail off. And of course, we saw the delivery of the last LCS last year. And the order book at $17.7 billion, secures revenue for years. It's grown in Australia following the strategic shipbuilding agreement and the Landing Craft Medium and Heavy. There's growth in submarine module production. The commercial yards have got a really sound order book and future potential for growth, particularly in the low emission space. And indeed, in Australia, we expect to start general purpose frigate contract discussions this financial year with the Commonwealth of Australia. Both the submarine module manufacturing facility, MMF3 and the final assembly sheds for the large steel ships, FA2, as we call them, are fully funded and in construction and ready to support future growth. I've put a slide in the pack where you can see the progress on MMF3 and Stage 1 opening is due this financial year, bringing that project online. Of course, cash was projected to be lower than full year due to the capital investment in facilities and an increase in capacity and capability. It was a little bit lower than we expected due to a couple of late milestone payments in December. As announced, we settled the request for equitable adjustment on tax. And for me, that really demonstrates the strength of relationship we have with the customer in the U.S. Interestingly, we're becoming victims of our own success, and we have become the lead yard for that program, and we're in discussions with the customer about the implications of that. And Christian will talk about that a bit more in the financial section. And so looking at the order book slides, we include programs and revenues for those of you who still like to try and build your own financial model. It doesn't include the commercial vessels, but with relatively fewer of these and our ASX announcements, I'm sure you have the information you need to factor those into your forecasting models. For me, it's really pleasing to see those commercial orders have returned following the challenges we saw during COVID and really excited about seeing the Philippines yard ramping up and testing those low-emission technologies ready to be deployed in the defense world as and when necessary. So I'll hand over to Christian now, and he'll talk you through some of the financial highlights. Christian Andrew Johnstone: Thank you, Paddy. Turning to Slide 8. It's my pleasure to present Austal's FY '26 first year first half performance. Before I get into the details, the key message is that we've had double-digit growth across all key financial performance metrics: Revenue, earnings, and NPAT, which represents the results from the focused efforts of our employees across the group to construct and deliver ships, submarine modules, sustainment services, and additive manufacturing to our growing customer base. The balance sheet is stable, and we have a robust cash balance to support the significant capital investment we have underway as we complete 2 key infrastructure growth projects in the U.S.A., which have a combined spend of more than $1 billion. The order book is at all-time high of $17.7 billion, which underpins continued growth over many years. Group revenue increased by 34.4%, which was a solid growth across the group. And pleasingly, all segments experienced growth, which is an exceptional outcome. U.S.A. shipbuilding increased 29% based on increased revenue from the OPC, T-ATS, and submarine contracts, which more than offset the completion of the LCS and EPF programs. It should be noted that the company's auditors had a qualification in their opinion relating specifically to the judgment on the T-ATS and AFDM programs. Whilst the company is in ongoing discussions with its sole customer in the U.S. and is seeking some contractual relief, the company's auditors, Deloitte, included a qualification in their review opinion to reflect the position that whilst the company considers it has sufficient evidence to support the judgments made in respect of the contractual relief for these programs, the auditors have concluded that they need additional evidence above what has been provided and so have qualified on this particular judgment on these particular programs. Further details appear in the notes for the half year report. U.S.A. support revenue increased by 11%, primarily due to additional contribution from the growing additive manufacturing business, which is performing strongly. It was particularly pleasing that Australasia shipbuilding continued its growth with an increase of 83%, which has 2 key drivers being the appointment of Austal as the Commonwealth of Australia's sovereign shipbuilder and the work performed on the first 2 key contracts under this umbrella being the Landing Craft Medium and Landing Craft Heavy contracts with the Australian Army. In addition, the work completed from our Asian shipyards was a strong contributor to this performance. The Australasia support business improved by 27% due to the increase in servicing work driven by an expansion of the fleet requiring sustainment services. It is pleasing to see ships built by Austal continue to be serviced by Austal across our regional service centers. Moving to EBIT. Earnings growth of 41% across the group was extremely pleasing with EBIT of $60 million for the half year. And whilst there are mixed results across key segments, the geographical diversification of the group provides an ability to manage these variances. The standout earnings growth was Australasia shipbuilding at over 600%, which benefited from the work performed on the 2 Landing Craft programs and the commercial shipbuilding activities progressed by our Philippines and Vietnamese yards. Australia support business had an additional throughput from work from patrol boats and sustainment contracts and posting earnings growth over 400%. There was a contraction in earnings from U.S. shipbuilding, primarily driven by the margin compression as a result of the wind down of the LCS and EMS programs, the earlier stages of the windup of the OPC and T-AGOS programs and from 2 onerous contracts that continue to dampen margins. The U.S. support business results were steady in the 6 months. We continue to see strong contributions from the Advanced Manufacturing Center of Excellence facility in Danville. Turning to the segment breakdown. We are now at 96% defense weighted across the group and with the growth in Australasia business, with the geographical contributions are nearing a 70-30 split between U.S.A. and Australasia. On a segment basis, the Shipbuilding segment continues to report tight margins as a result of 2 onerous contracts we have in the U.S. However, it should be noted that this segment is profitable, albeit at a level below our expectations. The Support segment is a key earnings contributor at an EBIT margin of 17.9% across the group, contributing the majority of earnings of $41.1 million for the half. The group's balance sheet was stable with net assets at over $1.3 billion. The group has a significant cash balance of $371.6 million at the close of 2025. And whilst it reduced in the half, this reflects a significant capital investment underway in the U.S. on growth infrastructure. The trade receivable balance was higher by 43% at $211 million, reflecting the growth in production in the 6-months period. Overall cash position decreased by $212 million with $131 million of this comprising the capital expenditure on the ongoing MMF3 and FA2 projects. The cash flow from operations was negative $63 million, which reflected the 2 onerous contracts we have in the U.S. and the late receipt of customer payments. As I highlighted earlier, the trade receivables is $211 million across the group, and the collection of this could have significantly impacted this position. This will be a key focus for management in the second half. I'll now hand back to Paddy. Patrick Gregg: Thanks, Christian. And so focus on strategic outlook. In summary, our key growth pillars are increasing defense expenditure, and this is going to continue to drive positive momentum in the medium-term. We have revenue and earnings growth with the underlying business performing well. And as Christian pointed out, it is especially pleasing to see the Australia business contributing so significantly on the back of the strategic shipbuilding agreement and the associating contracts and all of that work starting to come online. And then also the commercial business as well. No drag from that business and some very exciting projects that we're building there. The order book of $17.7 billion has grown significantly to the record high that we have today. And as I said earlier, that gives us certainty of work for the next decade, a position we've just never been in before as a company. And the greater diversity in the contracts will lower the overall risk profile of the business. We're making significant CapEx investments, and those projects are performing very well. That will enable further growth for the company and increase our capacity and capability. We've got additional opportunities to grow on top of what we're talking about today. The AUKUS agreement, the submarine modules, the technology business, and generally, the world becoming a less safe place is a good time to be in defense shipbuilding. We're capitalizing on those defense spend trends, both in the United States and in Australia. And I think that trend will continue. So overall, the business is performing well and executing the strategy we set out 5 years ago. So with that, thank you, and we're happy to open up for questions. Operator: [Operator Instructions] And your first question comes from the line of Pia Donovan of Argonaut. Pia Donovan: Hello, Paddy and Christian. I just have one question regarding the margin. So obviously, the margins are slightly lower on a half-on-half basis. Just wondering, do you expect the current margins to be going forward into the second half? Or will there be an improvement back to those margins levels of last half? Patrick Gregg: Yes. Good question. I think the -- it was the U.S. shipbuilding business that was slightly lower than we wanted to be for reasons that we've talked about. But as those programs come online, we get stability in that business, yes, I absolutely see that returning. The U.S. has been a massive contributor to our earnings for the last few years, and they will absolutely get back into their stride. And it's been fantastic to see how well the Australian business has done. And the new contracts coming online, I think, are what's very exciting about earnings growth going forward. Pia Donovan: Okay. Yes. Great. So yes, you said about the Australian business growing. Do you expect that trend to continue and the U.S. to also continue or remain relatively flat there? Patrick Gregg: No, I expect them to continue. As the programs really come online and the U.S. gets back into the strides, we'll be up into the 7% to 10% sort of EBIT range that we've often talked about, that is pretty common in defense shipbuilding. Operator: And your next question comes from the line of Sam Teeger of Citi. Sam Teeger: Hello, Paddy, hello, Christian. Well done in securing the Heavy Landing Craft. The pipeline now looks very good. I want to ask about cash. So you called out $105 million of milestone payments that didn't come through in the first half. Have they come through now? Christian Andrew Johnstone: Yes, they've come through now. But it wasn't -- obviously, the balance -- well, that's why there's a bit of spike in trade receivables. So that would have had a different earnings profile from the operating segments that they have come through. So yes, they've come through. Sam Teeger: Okay. And in that cash flow number for the first half, is there tax [ REA ] money in there? Or does that come in the second half? Christian Andrew Johnstone: Tax REA is across the program. So there will be tax REA cash in the first half as well because it's earned through the progress of the whole 3 ships under that program. Sam Teeger: Okay. And then what are you budgeting for cash at the end of the financial year? And maybe just as part of that, is MMF3 and FA2, are those construction projects? Like how they're proceeding versus budget? Christian Andrew Johnstone: So first question, we don't provide cash flow guidance. Second question, they're both in line with budget. Actually, MMF3 is ahead of schedule. So we had always said that that would open at the beginning of next financial year. Phase 1 is targeted to be open in the fourth quarter of this financial year. So look, if that comes to fruition, what we expect, then that's a phenomenal effort by the team in the U.S. to get that large growth infrastructure up and running. If we can then drive some earnings through that for the fourth quarter, that's going to have a boost to the business. So that's really pleasing. But both are on schedule, on time, and then both are in cash flow and their budget cash flow around the cost of them. So we have significant cash. And you can see through our untapped debt lines, we've got a huge amount of debt capacity if we were to meet that for those programs going forward. Operator: [Operator Instructions] And your next question comes from the line of Mitchell Sonogan of Macquarie. Mitchell Sonogan: And sorry, Paddy, I might have missed some of the detail, been jumping around a few different calls this morning. Just on the Landing Craft programs, do you mind just giving a little bit more color just in terms of timing and how that might ramp, particularly in the heavy, I guess, with the visibility you have now, over what time frame would you expect that to get to more of a, I guess, a steadier mature run rate in production? Patrick Gregg: Yes. Good question. So coincidentally, both the Landing Craft Medium and Heavy programs will cut metal towards the back end of this calendar year. So last quarter of this year. We are working through the Landing Craft Medium design and the Landing Craft Heavy design came slightly more mature as it's an existing vessel that is currently in build down and have built one of those before. Yes, so both of them should come online back end of this year and ramp up to steady-state production over about 18 months. And then as we delivered the Guardian Class program and the Cape Class program, we really want to establish a drumbeat and build those programs as efficiently as possible. Mitchell Sonogan: Yes. Thank you. And I know you just made a comment before about the 7% to 9% sort of target shipbuilding margin range over there in the U.S. Just in terms of the Landing Craft programs, I know you've had some high-level details you put out with the announcements about the strategic shipbuilding agreement, et cetera. But yes, is there anything at this point in time, high level you can provide us just in terms of how we should be thinking about margins on these contracts over time? Is it in that typical range that you target? Patrick Gregg: Yes, absolutely. Same sort of range and really driven by government procurement rules and what they find acceptable based on the risk we take in the contracts. So yes, both the U.S. and Australia are targeting to get into that 7%, 8%, 9% range. Mitchell Sonogan: Yes. And just one quick one for Christian. Obviously, you had the earnings guidance update back on the 12th of Feb, just with that incentive payment. And I'm not sure if you covered this during the general presentations before, Christian. But yes, do you mind just giving us a little bit more color, I guess, on how that came about and have they been checked to make sure there's no other particular issues like that on other programs? Christian Andrew Johnstone: Yes. Thanks, Mitch. That was an error. We're going through that, the half year close process with our auditors. And in the U.S. with one particular program, that is an onerous contract position. So it's a bit -- firstly, it's a little bit different from the run-of-the-mill programs that we have. And it was just going through that closing period and a review of the auditors that they had inadvertently double counted because of the requirements to then -- to book the revenue for -- the end revenue to the 6 months to December, but also the forecasted revenue over the program because it's onerous, we have to consider the revenue for the balance of the full program. And it was just an inadvertent error. We are putting in additional internal control checks, program checks, and revenue across each of those programs in the U.S. to ensure that this doesn't happen again. Operator: And you have a follow-up question from Sam Teeger at Citi. Sam Teeger: Just on the $6.7 million of sub-module revenue, what EBIT margin would this be flowing through at? And whatever it is, would that be a good guide as to what we should expect from this going forward? Christian Andrew Johnstone: So it's a bit nuance what the answer is. That $6.7 million is related to the MMF3 program that we have. So it's a bit unusual. We have a contract to build a building. And so our delivery mechanism is the construction of that building. We previously put out a lot of guidance around what we expect the earnings and revenue profile for that. So look, in totality, that's a USD 450 million contract that will flow through the income statement. There's 0 cost related to it. So anything that's revenue recognized through that particular contract will then drop directly to earnings. What's separate to that, though, and is not -- we don't separately disclose is the earnings that we have through construction of submarine modules in the U.S. That sits in as part of the segment around U.S. shipbuilding. So we don't split program by program out, but that's a very profitable part of the business right now and somewhat offset some of the margin compression we have on the onerous contracts that we have in the U.S. Operator: And this does conclude our Q&A session for today, and I'd like to turn the call back over to Paddy for closing remarks. Patrick Gregg: Thanks, everybody, for joining us this morning and asking the questions. As always, we are transparent and happy to answer any questions you've got. So thanks for those of you that were able to get on the call today. Operator: This does conclude today's conference call. Thank you all for joining us. You may now disconnect.
Unknown Executive: Okay. Ladies and gentlemen, welcome to the Kogan First Half Results for FY '26. This morning, we are joined by Ruslan and David, and we will begin with a short presentation, and this will be followed by Q&A. [Operator Instructions] I'm handing over now to Ruslan and David. Ruslan Kogan: Good morning, everyone, and thank you for joining us for the Kogan Group's First Half FY '26 Results Presentation. It's a pleasure to be here with David Shafer, our CFO, COO and Executive Director. This morning, we'll take you through the company's results for the first half of FY '26, which demonstrated the strength of the Kogan.com platform. We delivered growth, strong cash generation and improved operating leverage, with Kogan.com once again leading the group's performance. At the same time, meaningful progress was made in optimizing Mighty Ape, with the foundations now firmly in place to support a return to sustainable profitability under our One Group strategy. To begin, let's dive straight into the highlights for the half. The Kogan Group results are split into 2 reporting segments: Kogan.com and Mighty Ape. Kogan.com is firing on all cylinders. We drove gross sales past $0.5 billion, growing 21% on the prior corresponding period, while revenue grew by 17%. And we didn't just grow sales, we also expanded our profitability. The top line growth translated into $27.6 million in adjusted earnings, an 18% increase on the prior corresponding period. You can see the benefit of our operating leverage with adjusted earnings margins expanding to 11.9%. Regarding Mighty Ape, we are seeing good progress. The performance is improving. The inventory reset is largely complete, and the team is now fully integrated into the group structure. This is part of our One Group strategy, under which we expect Mighty Ape performance to progressively recover. Importantly, the Kogan.com earnings result delivered strong cash generation with the Kogan Group producing $45.1 million of free cash flow this half, up 2% on the prior corresponding period. Overall, we delivered double-digit sales growth, margin discipline and strong cash generation. Let's now delve deeper into the results. I'll hand over to David to present the financial update. David Shafer: Thanks, and good morning, everyone. It's great to have you with us today. Here, we have broken out the results of our 2 reporting segments to highlight the drivers of performance. The story of this half is clear, Kogan.com is doing the heavy lifting. Let's look at the top row first. Kogan.com, which also includes our core retail brands like Dick Smith, Matt Blatt and Brosa delivered an outstanding performance. We saw revenue increase 17%. Importantly, we also delivered at the bottom line, too. Gross profit climbed 16% to nearly $100 million, and adjusted EBITDA grew 18% to $27.6 million. This is the operating leverage Ruslan mentioned. As we scale, our platform model ensures that incremental sales translate into meaningful earnings growth. Now looking at the middle row, Mighty Ape. As expected, this was a transition half. We are deep in the execution of a strategic reset towards our One Group strategy, which aims to align our procurement verticals, marketplace and loyalty strategies across the group. Revenue was down 25%, which reflected our deliberate move to reset inventory levels and tighten procurement as we commenced the rebuild of inventory with greater focus on exclusive products. While this resulted in an adjusted EBITDA loss of $3.2 million for the half, we believe this is temporary and was necessary. We have stripped back the cost base and are streamlining operations to ensure Mighty Ape returns to sustainable profitability in the second half through the One Group strategy I mentioned earlier, bringing it together at the group level on the bottom row. Despite the drag from the Mighty Ape reset, the sheer strength of the Kogan.com business drove total group revenue up 5% to $287.6 million. While group adjusted EBITDA dipped slightly by 3%, the underlying health of our primary business remains exceptionally strong. Moving to Slide 6. This is where you see the quality of our earnings. We aren't just generating profit, we are building a defensive moat around it. The headline figure here is 72%. That is the percentage of our gross profit that came from our exclusive products and services, areas where we own the IP, control the supply chain and dictate the margin. These are products and services customers can only purchase through us. Looking at the breakdown of that moat, Kogan.com products contributed 30.8% of total gross profit. This is our exclusive brand strategy, unbeatable value for customers but with end-to-end control for us. The loyalty programs also delivered 28.3% of total gross profit. This is recurring subscription revenue that has compounded over time. Then you have the Marketplaces division contributing 18.7%. This is a scalable capital-light revenue stream, offering huge customer choice with minimal working capital requirements. The takeaway is diversification of revenue streams, all connected through the one brand and loyalty program. We are not reliant on a single product category or a single revenue stream. We have a balanced mix of recurring subscriptions, high-margin exclusive products and asset-light marketplace revenue. That is what we call a durable earnings base. This mix of revenue streams is unified for consumers through the Kogan.com channel and loyalty program, seamlessly bringing together many different offerings under the one umbrella. Turning to Slide 7. This is the financial highlight of the half. This is the definition of operating leverage. Look at the table on the left, it tells the story of a scalable platform. Double-digit revenue growth of 16.9%, gross margin held steady at 42.9% and delivered margin improving to 38.9%, showing we are becoming more efficient at getting products to customers. We also invested for the future by increasing our marketing to drive our top line and community of shoppers. Further, our fixed costs as a percentage to sales dropped to 11.3%. This is the discipline we promised. We are growing the top line without adding weight to the cost base. Now look at the charts on the right. That efficiency flows straight through to the margins. Adjusted EBITDA margin increased to 11.9% and adjusted EBIT margin climbed to 9.7%. This is the model working as designed. We drive top line growth, control the fixed costs and deliver the difference as expanded margin. Turning now to Mighty Ape. The theme is reset and rebuild under One Team and One Global Strategy. This half was about making the hard decisions to fix the foundations and set the business up for success over the long term. First, the inventory reset. We started this work last year, and this half, we largely completed it. We executed a comprehensive optimization program, reducing our stock holdings by 32%. This addressed the legacy inventory and released working capital, meaning our range is now strictly focused on what our customers want. As we rebuild inventory under our One Group strategy, we will deliver a greater focus on exclusive products. At the same time, we overhauled our operating model. We stripped out complexity and tightened our cost controls. As a result, we have seen a material reduction in operating costs as a percentage of revenue. The business is simply leaner and faster than it was 6 months ago. Most importantly, you can see this in the trajectory. We started the half with adjusted EBITDA margins in double-digit negative territory in July. But as these changes took hold, we climbed month-on-month, crossing into positive territory by December, but we're not calling victory yet. The New Zealand retail environment remains challenging, and the major reset is a work in progress. Inventory has been optimized. The cost base has been structurally reduced, and the business is now positioned for a sustainable recovery. Turning now to the group's capital position. If you look at the cash flow column to the right, you'll see our earnings converted efficiently into $46.9 million in operating cash flow. That flowed almost entirely through to free cash flow, which was $45.1 million for the half. This was bolstered by our discipline on inventory, where we released $7.1 million year-on-year, largely due to the Mighty Ape reset. This performance has left our balance sheet in good condition. We ended the half with $71.8 million in total cash. That is an increase of over $4 million year-on-year, and we remain completely debt-free. This financial strength allowed us to return capital to shareholders. In this half alone, we returned $5.8 million net of the DRP in dividends and another $4.8 million through our on-market share buyback. We are liquid, we are flexible, and we have the capital to invest aggressively in growth while continuing to return value to you. For those who want the line-by-line statutory details, you can find them in the annexes. Turning to Slide 10. Let's talk about returns. Because of the strong cash generation and capital position I just walked through, we are in a position to step up the dividend. The Board has declared an interim dividend of $0.080 per share fully franked. The increased dividend is a direct reflection of our confidence in the group's balance sheet and our ability to generate consistent free cash flow. For those looking to reinvest, our dividend reinvestment plan remains active, offering shares at a 2.5% discount to the market price. Key dates are on the right. We will be paying this out on the 30th of April. That wraps up the financials. I'll now hand back to Ruslan to take us through the business update and outlook. Ruslan Kogan: Thanks, David. I'll now take you through our business update, which focuses on the performance of our various divisions. Before we get into the details, let us step back and briefly revisit the strategy that drives this group. Our strategy is built on 2 complementary strategies, the product division and our platform-based sales. On the product side, we are relentless about value. Through our exclusive brands, we control the supply chain end-to-end direct from the warehouse to the customer. Combined with our globally sourced third-party range, this allows us to price highly competitively and deliver unbeatable value. Then we have platform-based sales. This is where we leverage our scale. This includes loyalty programs that drive recurring revenue, our verticals and advertising platform. Importantly, our marketplaces operate here with a capital-light business model. These 2 sides fuel the flywheel you see on the right. More product sales drive more subscribers and platform engagement. That generates higher profitability and customer retention, which gives us the ability to lower prices even further. It is a self-reinforcing loop. We use recurring revenues and attractive margins to drive strong profitability, ensuring the business is resilient and ready for long-term growth. So that's the group strategy that has been built and refined over more than 2 decades. It is designed for delighting customers and sustainable cash-generating growth, which brings us to our next slide, One Global Team, One Group strategy. We have an incredible opportunity to take the proven Kogan.com success story and replicate it at Mighty Ape. The graphs on the right show the levers we are pulling. Right now, Kogan.com is a relatively mature platform-first business, generating 64% of its gross sales and 65% of its gross profit from high-margin platform streams. Mighty Ape is sitting at roughly 30% for both. It is where Kogan.com was years ago. That gap is a massive runway for quality earnings growth. The graph on the left demonstrates the potential upside. There is a stark difference in unit economics between the Kogan.com model and the current Mighty Ape model. Kogan.com gross margin is at 42.9%, while Mighty Ape is at 26.2%. When it comes to contribution margin, Kogan.com retains 22.3%, nearly double Mighty Ape's 11.6%. This gap represents our opportunity. By executing the proven Kogan.com strategy, shifting to platform sales and attractive margin verticals, we can bridge this gap. We aren't guessing if this strategy works. We have the blueprint and have been executing on it for over 2 decades at Kogan.com. Now let's look at our platform-based sales. The chart on the left tells the story of a consistent upward trajectory. We grew this revenue stream by 16.6% to achieve $68.9 million for the half. I cannot overstate the importance of this number. This isn't just revenue. It is smart revenue that delights customers. It is capital light, it is scalable. And crucially, it carries 0 inventory risk and generates high margins. Because of that, it delivers superior unit economics and enhances our cash flow efficiency. It creates a powerful network effect. As we add more buyers and sellers, the platform itself becomes more valuable and our customer relationships get deeper. Now while this revenue stream is well established at Kogan.com for Mighty Ape, we are just getting started under our one group strategy. We have already launched Mighty Mobile and the marketplace. In May 2025, we rolled out Mighty Ape Travel Insurance. And just last month, January 2026, we expanded that vertical into Mighty Ape Insurance, covering travel, pet and car. We expect platform-based sales to grow in Mighty Ape over the coming years. Zooming in on Kogan Marketplace, which forms an important component of platform-based sales. We continued our strong momentum and accelerated. We delivered a record half with revenue increasing 31.6% to $19.5 million. This performance is the result of the flywheel effect mentioned previously as we delight more customers and deepen our relationships with high-quality sellers and integrate them into our ecosystem. Crucially, this is the capital-light strategy at its best. We are scaling this revenue with no inventory exposure and minimal working capital. As our traffic grows, this division grows naturally alongside it. It's the ultimate win-win-win. It's a win for customers through broader choice, a win for sellers through access to our platform and loyalty ecosystem and a win for the group through high-quality scalable earnings. Now to highlight the performance of Kogan FIRST, another important component of platform-based sales. FIRST continues to be a core driver of group performance. We grew subscription revenue by 7.6% to $30.3 million in the half. But the key highlight for me is on the top right. Approximately 50% of our product gross sales at Kogan.com were driven by First members. Think about that. A loyal group of subscribers is driving half of our entire product volume. That is the definition of high-quality recurring demand. And because these subscriptions are prepaid, we have built up $11.2 million in deferred income, an increase of 13.7%, which gives us good visibility on revenue over the next 11 months. Under our One Group strategy, we expect to apply many of the learnings we have at Kogan FIRST to Mighty Ape's PRIMATE loyalty program over the coming year. Next up is Kogan Verticals, another vital component of platform-based sales. The headline remains the same, another record half. Revenue climbed 8.8% to $12.3 million. Two standout performers drove this result, Kogan Mobile and Kogan Internet. Kogan Mobile grew 13%, continuing to win market share in a highly competitive environment. Kogan Internet surged 40%, reflecting the incredible uptake of our improved pricing and NBN plans. But it's not just about volume, it's about quality. If you look to the right, you'll see we are consistently winning awards for value. We are delivering essential services at unbeatable prices and customers are voting with their wallets. Strategically, this division is so important. It embeds us into the daily lives of our customers. When a customer trusts us with their essential services, they engage more frequently, they shop more across the platform, and they become far more valuable to the group over the long term. We'll now turn to Kogan Products, the division the business started with over 2 decades ago. It's clear that profitability is outpacing revenue. While revenue grew a very healthy 19% to $167.9 million, look at the chart below it. Gross profit increased 26.4% to $35.1 million. Our gross margin increased by 1.2 percentage points to 20.9%. Two things drove this: a more favorable product mix and continued growth of our exclusive brands. The average price per item sold jumped 11% to $179 as customers bought more televisions, appliances and home and living items. And over 70% of our revenue came from our own brands. That means we control the supply chain and we keep the margin. Our strategy of devoting your trusted capital to higher-value exclusive products is working. And as our scale in this division grows, so does our importance with critical manufacturing partners. This reinforces why we are so confident in the Mighty Ape reset under the One Group strategy. We aren't guessing how to fix margins. We are simply applying the exact same discipline that delivered these results for Kogan.com. Moving on from the first half FY '26, I'm pleased to provide a January 2026 trading update. For the month of January 2026, the group continued its strong performance with gross sales up 10% to $88.1 million. Group revenue was also up 8%. Again, you can see the 2 performances of the group. Kogan.com performed strongly with gross sales up 13%, while Mighty Ape was down 13%. With the ongoing implementation of our One Group strategy under One Global Team, we expect to return to positive performance in Mighty Ape in second half FY '26. We expect group adjusted earnings margins to be in the range of 6% to 9% for the full year 2026 as we look to continue growth initiatives, navigate the economic headwinds in New Zealand and work through the ongoing Mighty Ape optimization under our One Group strategy. Slide 21 sets out the path to long-term value. First, look at the profit driver, platform-based sales. We are already hitting our stride here. Margins expanded to approximately 52% this half, putting us firmly inside our medium-term target range. Second, group product sales. You can see a small dip here to minus 5%. This is purely the impact of the Mighty Ape reset we discussed. We are taking a short-term hit now to fix the foundation, but here is the most important signal. Despite that temporary drag, the total group margins still improved, climbing from 7.5% in FY '25 to 8.5% this half. That proves the resilience of our model. Even with the reset, the overall strategy is strong enough to lift the whole group. Looking to the right, we have our ultimate aspiration. As we scale those high-margin platform revenues and bring product sales back to breakeven, we see a clear path to group adjusted margin of over 20% in the long term. The formula remains simple: grow the platform, remain disciplined on products and let the operating leverage deliver the returns. This concludes our presentation. Before we open for Q&A, I want to leave you with one final thought. You've heard us talk a lot today about efficiency, scalability and operating leverage. Well, we practice what we preach. Once again, we have used AI to assist in delivering today's presentation. This isn't just about using the latest tech. It is a practical demonstration of the Kogan.com DNA. We are constantly finding smarter, faster and more cost-effective ways to operate. Whether it is in our logistics, our marketing or our Investor Relations, innovation isn't just what we sell, it is how we operate. On behalf of the Board and our team, thank you all for your interest in Kogan.com today. We look forward to meeting with many of our shareholders over the coming weeks. For those of you who have any questions or are interested in hearing more, please stay with us for the Q&A. Unknown Executive: Okay. Thank you, Ruslan and David. Perhaps I can start with a question around the market that you're operating in. How have you perhaps benefited from MyDeal and Catch leaving the marketplace? And what are you seeing from Amazon and Temu in the marketplace? Ruslan Kogan: Well, you can see from our results that we're winning significant market share in the market. We often have our blinkers on and focus on our customers and how we can deliver more and more value to our customers. So where exactly are we winning that market share from? That's hard to tell. But there would be some internal factors there, and there would be some external factors. Internal factors would be that it's -- nobody can afford not to be a Kogan FIRST member these days. That program is doing really well. Our product range is expanding. Our business is becoming more efficient, and we can pass a lot of those cost savings on to our customers. We're in a market where there are cost of living pressures that typically causes customers to do a bit more research, and now they've got more and more tools to do that research. If you want to compare 2 products, AI can do it for you, Chuck it into Grok, Gemini, ChatGPT, that can do a price scan for you, that can compare specifications. You can do it old school way of opening a browser and opening a few tabs and comparing for yourself. And the more and more customers that do that, the more it's going to drive customers to our products because we are a value leader. So there's a lot of internal things that are winning market share for us. And externally, yes, we're going to be celebrating our 20th birthday in a few weeks. In that time, we've seen a lot of competitors come and go. And one thing that's remained constant for us is that if we keep delivering value to our customers, they reward us with their patronage. So yes. Unknown Executive: Thanks, Rus. Just a reminder participation on the call are welcome to ask questions. If you could please put those into the Q&A function in the zoom webinar. The next question we had relates to the performance of the Australian business, which appears to be going from strength to strength. How much of that is dependent or determined by the November, December peak period? And is that broadening out to be more full year? David Shafer: I'll take that one. So thanks for the question. We had a very strong November, December peak period. Our shareholders will be aware that we did a market update at the AGM in November for the half year up to the end of October. So this result really updates on the performance of November and December, which was among the strongest profit result we've ever had as a business. And that's being driven by Kogan.com, as we've just discussed in the presentation. So Kogan.com is firing on all cylinders. What we mean by that is, all of the different elements of the Kogan.com business are themselves achieving almost record results. It's really the culmination of many years of work by the team at perfecting their different parts of the business. And I think that bodes well for the future of the Kogan.com business when you see strong growth in marketplace, exceptional growth and profitability in Kogan products driven by new product ranges and disciplined execution. Ongoing growth in Kogan FIRST, which is obviously very important as a driver for general demand in the business and recurring customers and also Kogan Verticals, which brings hundreds of thousands of customers into our business every day of the year through essential services and keeps reminding them of the value that we provide on a daily basis. So with Kogan.com firing on all cylinders, that does bode well not only for the November, December period, which we've just delivered, which was very strong, but it does set us up well for the second half. Unknown Executive: Thanks, David. The next question relates to New Zealand. Could you run us through some of the initiatives you're taking to integrate the Australian and New Zealand businesses under the One Group strategy? David Shafer: Sure. The most important change that we've implemented over the last few months is that we have formed One Global Team. So previously, we had a Kogan.com team with the Kogan.com leadership, and we had a separate Mighty Ape team with a separate Mighty Ape CEO. And the reporting structure included a report from the Mighty Ape CEO up to the Kogan.com leadership. But the other elements of the Mighty Ape business were all reporting to the Mighty Ape CEO and under that person's leadership. That has been changed to reduce or remove the separate structure such that the entire team across the globe is under one team, which the practical implications of that are that we're operating off the same KPIs, the same metrics of success and failure, the same things that will cause a product to be ordered or reordered or killed off, the same metrics for marketing, the same metrics for logistics efficiency are standardized across the business. So it sounds like it's just one word, but it has hundreds of different implications on a daily basis, that change in our team structure. And the practical implication of that, that we've seen already is the fact that we have reduced inventory in Mighty Ape significantly. It's at the lowest inventory level we've had for many, many years. And that's preparing the business for an inventory rebuild, which will be premised on exclusive products, exclusive brands and the known winners that we've seen in the Australian business over the last years. So that's one thing that we can expect to see over the coming months. In addition to this greater push towards platform-based sales. So the marketplace has launched in Mighty Ape and is growing quite nicely. The PRIMATE business has launched and is growing, but there's lots of learnings from the Kogan FIRST business that will be implemented within PRIMATE in the current half as well as the launch of other verticals and the scaling of Mighty Mobile, which is currently the largest vertical in New Zealand. Unknown Executive: Okay. A follow-up question in relation to New Zealand. I think you might have answered the first part of it. Do you expect the changes in New Zealand to extend to the range of products on offering and potentially the brand? And then the second part of the question is around profitability breakeven in the second half. Do you expect that to be delivered in the Mighty Ape business? David Shafer: So Kogan already operates under the Kogan brand in New Zealand. It's a smaller business than Mighty Ape. Mighty Ape was acquired during COVID in 2020 by Kogan.com because of its -- the strength of its brand. It's got a very known well-known, well-trusted brand in New Zealand. It was organically grown for many, many years and built a cult following. And we're looking to retain and enhance that brand. So Aussies might not know the brand that well, but New Zealanders definitely know the brand Mighty Ape. And we're looking to preserve the core foundation of the Mighty Ape brand while adding in a lot of the juice that makes Kogan.com so successful in Australia. So the practical implication will be we'll continue to offer the products and services that Mighty Ape is known and loved, but in a more limited targeted way, while supplementing that with a good range of private label products of known winners from Australia and obviously, the millions of products that are available on the Mighty Ape marketplace already. And in terms of what we expect for profitability in the second half for Mighty Ape, we've said that we expect to return to positive performance in the second half. You can see the month-by-month trajectory of adjusted EBITDA margins in the presentation. It's heading in the right direction, but we're cautiously optimistic, but we're not making any definite predictions as to what will happen. We do believe we will get to positive performance, but it's obviously highly volatile, and we're cautious in that suggestion. Unknown Executive: Thanks, David. And a follow-up question just around that exact chart you were referring to on Page 8. How much of the improved margin performance in New Zealand was because of the peak trading period? And how much was the changes you're making in the business in New Zealand? David Shafer: Great question. It was partially both. So in the peak trading period, when you've got more revenue coming through, it's obviously a higher profitability part of the year. So that definitely drove part of the adjusted EBITDA margin improvement in December and November. Having said that, we've also shown that we've drastically reduced operating costs as a percentage of revenue. We're standardizing marketing performance and logistics performance. and we've drastically reduced inventory, including underperforming inventory. So all of those things are internal within the business and will set us up for a good opportunity to deliver a profitable second half. Unknown Executive: It seems to be a trend of questions regarding New Zealand. Should we expect working capital to increase with the rebuild in inventory in New Zealand? David Shafer: We will be deploying some working capital to grow the inventory in New Zealand. It's at almost an all-time low of inventory at the moment for the period of our ownership of Mighty Ape. And we've mentioned we will be rebuilding that with a focus on exclusive products. So that will take some of the working capital. But Kogan.com is producing a heap of free cash flow, and we believe that in the scheme of the overall cash generation of the business, it's going to be not that significant and will not impact our ability to continue returning capital to shareholders in the form of dividends and buybacks. And importantly, it's not going to impact the ongoing growth potential of Kogan.com as we continue to invest in marketing and growing the asset. So this is a growing business at Kogan.com, double-digit growth. We intend for that to continue. We intend to invest in Kogan.com and to grow the jewel in the crown. Unknown Executive: And just a question in relation to the New Zealand retail environment more broadly. Are you seeing any improvement in trading conditions across the ditch because they've been through a pretty tough time in the last 12 months or so. David Shafer: To be honest, there are so many internal changes happening with the way that we're operating Mighty Ape. It's very difficult to identify one part of the business' performance as being driven by the general retail economy versus the internal changes that we're making. So there's no doubt that the New Zealand retail environment does play a factor in the performance of Mighty Ape, but it's very difficult to segment which part is responsible for which. So it's playing a role, but we don't know to what extent. Ruslan Kogan: In general, I think that no matter what the wider market is doing, there's good retailers and poor retailers in all economies. And it's a retailer's job to be there to service the needs and demands of customers. I think the major opportunity we highlight in the presentation for Mighty Ape, and that is Kogan is about to celebrate its 20th birthday. We have been the most profitable Australian online retailer consistently over that 20 years. And we have a reason for that, and that is the business model that we have developed. It's a business model that has a lot of subscription recurring revenue. It's a business model that doesn't only rely on inventory. It's a business model that has very strong metrics around it. And we are taking that playbook and implementing it in New Zealand for Mighty Ape. And we think that, that will reward Mighty Ape's customers, and it will make the business bigger and better than it's ever been. There are slides in the presentation where we talk to this and we talk about the opportunity and where we are in that journey because if you compare the Mighty Ape metrics now to what metrics we're seeing in Australia, just that alone paints the picture of what the opportunity there for the business is. So we're quite confident and bullish about the long-term opportunities there no matter what the macro environment is going to do, because people will still need to buy stuff, and they'll want to buy quality things at the right price. And our business is designed to deliver that. Unknown Executive: Thanks, Rus. A question back in Australia. How have the changes to Kogan FIRST changed the membership growth and/or churn over time? Ruslan Kogan: Well, we report Kogan FIRST revenue, which you get to see the money that the Kogan FIRST program brings in. The price for Kogan FIRST hasn't changed now for almost 2 years. And the program continues to grow. There's more and more offers for the program. We're providing more and more benefits to our customers, bigger benefits. So if you're moving house or moving into a new apartment and you need to buy a bed, a fridge, a dishwasher, a washing machine, laptop, new phone, whatever it is, you can't afford not to be a Kogan FIRST subscriber. So there's more and more benefits coming online. There's more and more benefits from our verticals across Kogan Mobile, Kogan Energy. If you're a Kogan FIRST customer and you're in Victoria, New South Wales and/or Queensland, you're getting better energy rates than any other provider. So if you use electricity and you're in those Eastern states, you can't afford not to be a Kogan FIRST customer on Kogan Energy. So the offering is getting bigger and broader and the program is growing. It's providing -- it's a real win-win-win situation whereby it's a win for the business. It's a win for the stakeholders of the business and most importantly, a win for the customers. And the numbers in it speak for itself because we've got this dynamic at play, the growth continues, and it's a pillar of our business. Unknown Executive: [Operator Instructions] We have one more question to go after which, Rus, I might ask you to make some concluding comments if there are no more. The last question goes to the medium-term aspirations, and it refers to the 8.5% EBITDA -- adjusted EBITDA margins just delivered for the group. And the question is, if Mighty Ape returns to profitability in the second half, should we see this adjusted EBITDA margin build over time? And what is the outlook for the medium-term 8% to 12% range that you have specified? David Shafer: Well, thank you for raising a question on that slide because it's an important point to zoom out and to understand what is the overall pricing and profitability strategy and margin strategy of the business. Our overall structure is inspired by the Costco model, where they effectively make all of their profitability from the membership program. Similarly, we're looking to effectively make all of our profitability from platform-based sales and to run the products business over the long term, fully costed on an EBITDA basis at breakeven. That will enable us to offer on an ongoing basis, the absolute best prices in the market. It will make us unbeatable on product while delivering ongoing very strong earnings results for our shareholders. And you can see that in that outlook. So currently, we're producing 8.5% EBITDA margins overall, which is heavily driven by platform-based sales and Kogan Products running at an EBITDA loss fully costed. Over time, we can see the adjusted EBITDA margin from the Products division heading towards breakeven, while the adjusted EBITDA margin of the platform-based sales heading towards -- heading northwards. And that will translate eventually to 20% EBITDA margins plus. In terms of the current half, yes, the products margin went backwards due to the inventory reset at Mighty Ape. We believe that, that will obviously improve this half in the second half and beyond. and that will head us towards the upper end of our medium-term aspirations over the coming 12, 18 months. But one of the features of the current result is the fact that even though the products margin went backwards temporarily due to the Mighty Ape reset, overall, the group result still improved. And that is a demonstration of the strength of the operating model of how these 2 parts of the business work together harmoniously and the diversification in the business means it's very robust. So that's a long way of saying, yes, when Mighty Ape improves in profitability, overall adjusted EBITDA margins will improve through product margins heading in the right direction. Unknown Executive: Thank you, David. A question in relation to the appreciation of the Aussie dollar. What's the impact on the business been and in particular, on margins? Ruslan Kogan: Yes. The Aussie dollar has appreciated in the last few months. We don't typically take a view on currency. So we do hedge on an order-by-order basis to know what price certain products are going to land at, but we don't take a view on the currency. I know some retailers do, but if we knew what the currency was going to do, running this retailer would not be the best use of our capital. We would find other ways to make money. But the dollar has appreciated. It typically takes 3 to 6 months to see that come through in landed costs of products. So I guess that hasn't really flowed through yet, but it will mean things are a little bit cheaper. So a stronger Aussie dollar means a lower landed cost for goods when they do come through the pipeline and the new inventory is landed, which will mean prices will get a bit cheaper for consumers, and we should be able to see some improvement in demand. Unknown Executive: Okay. That brings us to the end of questions that have been lodged by the Q&A function. Thank you, Rus. Thank you, David, and thank you, everybody, for attending. Rus, if you have any final closing remarks, please go ahead now. Ruslan Kogan: Yes. Thank you for your interest, everyone. As you've seen, the Kogan.com part of the business is firing on all cylinders. It's the strategy we've been talking about for years. There's nothing majorly changed. It's us delivering on exactly what we've been talking about in the business. We do have some challenges with Mighty Ape that we're working through. We think that while there are challenges there, there are also huge opportunities in implementing the proven strategy and business model of Kogan.com over the last 20 years. And that is exactly what we plan to do. So we're very proud of the team in how they're executing on the strategy and where we're getting the business to. It's -- it's been a very, very exciting 20 years and the opportunities that are in front of us right now are very exciting as well. So we look forward to being able to continue to deliver for our customers and our shareholders. And thank you very much for your interest in the business and looking forward to seeing many of you over the coming days. David Shafer: Thanks, everyone. Unknown Executive: Thank you. That brings today's webinar to a close.
Operator: Thank you for standing by, and welcome to the Nuix Limited First Half '26 Results Conference Call. [Operator Instructions] I would now like to hand the conference call over to Mr. John Ruthven, CEO. Please go ahead. John Ruthven: Welcome, everyone, and thank you for joining us for Nuix's half year 2026 results presentation. I'm John Ruthven, Nuix's Interim CEO. And with me today is our Chief Financial Officer, Peter McClelland. I'll begin today with our key messages and metrics for the half, then discuss Nuix Neo and our strategic positioning in the AI era. Peter will then walk through our financial results in detail. After that, I'll provide our outlook before taking questions. Let me start with the highlights from the half. We've delivered ACV growth of 8.4% to $234.4 million. Neo performance has been strong. ACV grew 148% on PCP to reach $46.8 million, now representing 20% of our ACV. Revenue grew 15.2% to $121.2 million, driving adjusted management EBITDA to $19.1 million, up 42.6%, demonstrating significant operating leverage. We've achieved a material lift in cash generation with positive underlying and overall cash flow, finishing with a closing cash balance of $57.8 million. We've launched a comprehensive Nuix Neo migration program to systematically transition our customer base to the modern platform and drive ACV growth. We'll spend some time shortly talking about how Nuix Neo plus AI creates amplified capabilities, incorporating our BYO AI framework. This powerful combination of large-scale forensic data analysis and LLM integration flexibility creates a structural advantage for Nuix. And we'll take the opportunity to reaffirm today our full year ACV guidance range of $240 million to $260 million, excluding any ACV associated with the Linkurious acquisition. As we've seen, ACV finished at $234.4 million, up 8.4% on PCP and revenue at $121.2 million was up 15.2%. Net dollar retention was 101%, down from 109.6% PCP. This metric is not where we want it to be, and we'll come to this in more detail shortly. Adjusted management EBITDA and statutory EBITDA saw strong growth as we realized further operating leverage in the business. And we maintained a strong balance sheet with a net cash of $57.8 million, up 88.4% on this time last year, providing flexibility to execute on our strategic priorities. At the AGM last November, we highlighted near-term priorities across sales, product and operations. We've made strong progress in each area, refining our go-to-market approach, building out Neo capabilities and driving operational efficiency. Most significantly, we've launched our comprehensive Neo migration program. Before we get into the detailed financials, I want to spend a moment on the AI landscape and how Nuix is positioned. The enterprise software landscape is being reshaped by AI and large language models. A market segmentation is emerging between LLM plug-ins for routine tasks and enterprise-ready platforms like Nuix Neo for large-scale forensic analysis. This creates significant opportunities for Nuix. Neo represents a powerful combination of forensic data analysis and LLM integration flexibility. LLMs handle ad hoc analysis of small data sets effectively. The enterprise scale data sets with forensic integrity requirements, a platform such as Nuix Neo is a required necessity. Our BYO AI framework integrates seamlessly with customer selected LLMs, allowing them to leverage best-in-class AI models while maintaining enterprise governance and defensibility. Our customers must balance AI innovation with accuracy and defensibility. Their outcomes must withstand legal scrutiny and regulatory examination. This is where Nuix Neo plus AI tools deliver real commercial value. Customers can plug in any AI model, while our forensic grade governance layer ensures defensibility. The platform integrates new AI models as they emerge. Most importantly, this delivers amplified ROI, enterprise scale processing, combined with advanced AI reasoning provides both speed and defensibility. This creates a strong structural advantage as the AI ecosystem evolves. We're successfully delivering releases in line with our R&D road map, which was outlined at last year's Investor Day. This includes our critical investments into AI advancements. We remain on track for our key deliverables for this year and look forward to expanding capabilities across a range of areas, as you can see here, to further uplift our commercial offering. Turning now to Nuix Neo outcomes and customer migration. As we've said, Nuix Neo growth was strong during the half, hitting $46.8 million at 101 customers. This growth has been driven by new customers, new sales to existing customers, upsells and migrations. We've seen particularly strong performance in EMEA. Investigations and foundation have been key drivers. Importantly, when customers migrate from components to Neo, we typically see a 30% to 50% ACV uplift and new Neo sales are typically 2 to 3x the size of non-Neo sales. The growth in Nuix Neo is driving a significant mix shift across our customer base. As we've said at the AGM, we've now brought Nuix Neo Discover into the Neo suite given its expanded capabilities. Combined, Neo and Nuix Neo Discover now represent 40% of total ACV and are positioned to become the majority in the medium term. This migration of customers from components to Nuix Neo will be the defining characteristic of our customer base over the medium term. We know that Nuix Neo delivers significant tangible benefits to customers. The customer benefits are real and significant, faster processing, easier workflows, smarter AI-enriched analytics, strong financial ROI and zero business disruption during migration. It's critical that we demonstrate these benefits effectively to our customers to help facilitate migration to our new platform. That's why we've designed the Nuix Neo migration program to make the pathways attractive and easy for our customers. Our job is to remove friction, provide clear value and ensure customers can transition smoothly to realize these benefits. Systematizing this migration is critical for Nuix, particularly given the weaker NDR outcome. This program has 3 strategic objectives: secure the future by transitioning customers to our modern platform, drive ACV growth by unlocking expansion opportunities and enhance retention through superior Neo capabilities. This is a structured, predictable and well-governed journey for customers to move to Nuix Neo, designed to systematically address migration and NDR challenges we've experienced and unlock the significant value that Neo delivers. We've structured this as a 3-phased approach. Phase 1 completed customer segmentation and readiness assessment. Phase 2 is building our migration factory with standardized playbooks and partner capabilities. This is happening right now. Phase 3 executes at scale through FY '30. This is a disciplined systematic approach to accelerating customer transition to Nuix Neo and further value realization. Before I hand over to Peter, let me briefly touch on Linkurious. As a reminder, we announced in December that we had signed an agreement to acquire Linkurious, an existing Nuix Neo technology partner. This acquisition enhances Neo with graph visualization and investigation technology, which strengthens our platform capabilities. We're still waiting on French regulatory approvals and have no further information to add at this time. We will update the market when we do. I'd now like to hand over to Peter to discuss the financial results in more detail. Peter McClelland: Thank you, John, and good morning, everybody. As John mentioned, ACV finished the half at $234.4 million, representing an 8.4% growth on the prior corresponding period or 7.8% growth on a constant currency basis. ACV growth was driven by new customers with new customer's ACV growth offsetting a lower growth rate in the existing customer base as reflected in the net dollar retention, which we'll come to shortly. As John has already taken you through, Nuix Neo was a key contributor to growth on the prior corresponding period. And Nuix Neo Discover, which now incorporates Neo capabilities, grew by a further $6.5 million. Component ACV declined by $18.3 million due to the net downsell in the component customer base and the migration to Nuix Neo solutions. Net dollar retention of 101% reflects the lift in ACV achieved from our existing customer base. As you've heard earlier, this has fallen on the PCP and since the FY '25 result. It is just worth noting that new customer growth is not captured in the NDR. This decline reflects downsell in a small number of large clients, offsetting the upsell in other areas. A significant proportion of this downsell was driven by the ordinary project cycles of clients with a number of key projects ending. There was some competitive activity, including one significant client that is winding down while moving to a competitor. This was flagged at the AGM. While there is not one major driver of this downsell, it is fair to say that NDR is not where we want it to be and underscores the importance of a systematic structured approach to migrating our customer base to Nuix Neo. Customer churn improved to 5.9%, down from 7.1% at FY '25. Looking at regional performance, EMEA led with ACV up 18.8%. This was driven by sustained government sector growth, new logo acquisition in Central Europe and a strong Nuix Neo performance. North America ACV increased by 10.8% with continued adoption of foundation and investigation solutions and new wins in the service providers and financial services sectors. Asia Pac ACV declined by 8.6% with lower new customer numbers and a large legal sector client loss as was flagged at the AGM. Turning to our statutory revenue. This came in at $121.2 million, up 15.2% or 12.9% in constant currency. This performance was driven by multiyear deal renewals with key accounts and strong new customer growth, particularly in Nuix Neo sales. Multiyear deals represented 33% of revenue, up from 22% in the prior period. We continue to invest in our product and customers with total research and development spend of $28.8 million, up 0.7% and representing 24% of revenue. The capitalized component of this spend was 43%, declining compared to the prior period. Importantly, R&D continues to be funded from our underlying cash flows, demonstrating the sustainability of our investment in product development. Adjusted management EBITDA rose by 42.6% to $19.1 million with the margin expanding from 12.7% to 15.8%. Adjusted management EBITDA is our key internal profitability measure as it adds back the R&D costs that are capitalized and best represents how management is utilizing the total cost pool. This increase was driven by the revenue growth that we've already mentioned and disciplined cost management, demonstrating expanding operating leverage. Our EBITDA waterfall shows the path for the adjusted management EBITDA in the first half '25 through to first half of '26 outcome of $19.1 million, once more showing the operating leverage as being evident. To the right of the $19.1 million, you can see the pathway to our statutory EBITDA outcome for the half of $26.5 million. I won't spend too much time here on our income statement, especially considering we've talked about the operating leverage already. Nonoperating legal costs of $3.3 million were significantly lower than the prior period. And you can see here, we flagged the costs associated with the Linkurious acquisition. Impacting the NPAT line, the group received a tax benefit of $8.6 million, primarily arising from the partial recognition of tax assets relating to historical option cancellations. A further $33.8 million of tax assets was not recognized during the period, but remains available to the company for future periods. Turning to cash flow. We achieved a material lift in both underlying and overall cash flow. Underlying cash flow was $28.4 million compared to $7 million in 1H '25, and the overall free cash flow was $20.4 million compared to the negative $7.4 million in 1H '25. The free cash flow conversion ratio was 149% calculated as underlying free cash flow divided by the adjusted management EBITDA. Lower nonoperating legal costs associated with the court cases contributed to the overall cash flow, and we finished the half with a net cash position of $57.8 million. Our bank facility has been upsized to $50 million, which remains undrawn other than $1.3 million utilized for bank guarantees. It is worth noting that $20 million of this facility is specifically restricted to the funding of the Linkurious acquisition. I'll now hand back to John to discuss our outlook. John Ruthven: Thanks, Peter. Looking ahead, we reaffirm the full year guidance we provided at the AGM for ACV of $240 million to $260 million, which doesn't include any ACV associated with the Linkurious acquisition. As we said at the AGM, ACV will be weighted to the second half, in line with previous years and in line with the profile of our renewals book. Our focus areas for FY '26 remain: continue to deliver on our business transformation strategy, drive ACV growth through Nuix Neo, ensure revenue growth exceeds operating cost growth and maintain positive underlying cash flow for the full year. As you have seen, these focus areas are features of today's half year results. Before we move to questions, let me reflect on the half. The results demonstrate continued momentum in our business transformation. ACV growth of 8.4% and Nuix Neo growth of 148% show strong market response to our offering. The lift in adjusted management EBITDA and the associated margin clearly illustrates the operating leverage in our business model. While net dollar retention is not where we want it to be, the Neo migration program provides a clear strategy to address this through systematic customer transition to our modern platform. And lastly, we're incredibly excited about Nuix's positioning in the AI era. Our Bring Your Own AI approach, combined with enterprise-grade governance and scale positions us uniquely to help customers harness AI power while maintaining forensic defensibility. With that, I'll now hand back to the operator for Q&A. Operator: [Operator Instructions] Our first question comes from Sinclair Currie from Moelis Australia. Sinclair Currie: I was just looking at your product road map. And I was interested if you could highlight any parts of that, which you think are particularly important to driving business growth in the medium term? John Ruthven: Yes. We've shared with you a pretty comprehensive road map that takes us out to the end of this fiscal. The BYO AI models, I think, in this AI era are going to continue to drive strong growth for us. We also have planned in this half, the prework for our launch of our Neo SaaS platform, and we're very excited and confident about that taking us forward. But as you can see, it's a pretty comprehensive set of capabilities that we're bringing to market. I think in March, we'll have 2.1 drop. So that will be our next release of that Neo platform, which will continue to drive momentum in the market. Sinclair Currie: Brilliant. And just one last question, if I can. Just I think you spoke to some investment in the sales team and marketing team. Just be interested to understand what sort of maturity you think is required to start generating more productivity, if that's something that you can elaborate on the sort of productivity measures within your team? John Ruthven: A lot of that investment has been around sales enablement and embedding our ICP or Ideal Client Profile so that we have a sales organization that's very focused on the most lucrative part of the market. We also have our new CEO joining us at the start of next month. And when she comes on board, she'll be very focused on driving account-based marketing, targeting that item and having field programs and campaigns that will drive lead and top of funnel activity for us. Operator: Our next question comes from Jennifer Xu from Jefferies. Jennifer Xu: A couple of questions from me. The first one is NDR 101%, particularly downsell in a small number of large contracts. Any color or comments on this? Peter McClelland: Yes. it's a good question. I mean, clearly, NDR is not in our target range. But first of all, I'll point out that any new business growth doesn't fall part of those numbers. So we are happy with where we're seeing the new business growing to. Within NDR, again, churn has actually improved. So we're pleased with churn. But there were a couple of larger accounts really split across 3 different areas that impacted in the half. The largest amount of that downsell actually relates to normal client project activity that had finished during the period. So this is where clients are representing on projects that have now come to the end of their course and no longer need the product for that specific project. There was within our global -- some of our global advisories that buy under global partnership arrangements, some areas where some of the participating businesses, they opt in or out of those programs and some of the businesses are deciding to deal direct rather than through global procurement. And then there was one large advisory business that we updated the market with on the AGM in the legal sector in ANZ that was lost from competitive drive, and that's what's impacting on those results. So quite diverse across all the different regions being driven by different reasons. Jennifer Xu: Yes. That makes sense. Another one is Nuix Neo and the Nuix Neo Discover together accounted for 40% of total ACV with Nuix Neo is around $46 million. So that implies Neo Discover should be around $46 million as well. Is that correct? And also, is there any specific reason why presenting Neo and the Neo Discover separately and if that's intended the reporting approach going forward? John Ruthven: Yes. So your calculations are broadly in line. And the reason that we still break them out is just we believe that it's important for us to be totally transparent on the mix and makeup. Jennifer Xu: All right. So -- and we expect to going forward also do it separately, right? John Ruthven: Yes, for the foreseeable future. Jennifer Xu: Yes. Last one for me is with the sales transformation underway, are there any changes in the sales channel? Will be like greater rely on the direct sales or still more distribution? John Ruthven: There's no planned changes to the mix. We have a blended go-to-market model covering both direct sales and then leveraging channel and partners. And that partner or indirect part has several flavors, including large advisory firms, channel partners, partners that resell and implement. There's no clear planned change to the mix of our go-to-market. Jennifer Xu: I see. And for the distribution channel, how do we think about the margin there compared to ex sales? John Ruthven: Obviously, we pay a partner margin that would be confidential to us in terms of our commercials, but they range based on the contribution or the role that, that partner plays, ranging from purely a referral partner right through to a resale partner that would carry the transaction through the [ rotation ]. Operator: Our next question comes from Andrew Johnston from MST Access. Andrew Johnston: First up, John, you talked about ICP definition. Can you talk about how that's changing the target customers that Nuix is now pursuing compared with previously? John Ruthven: Andrew, I wouldn't say it's changing. What it is doing is it's focusing the go-to-market on the most lucrative part of the market. If you look at where the company has been successful and where our value proposition is strongest, it's in large-scale, highly regulated industries ranging from government agencies like regulators, tax authorities, law enforcement as well as large corporates that have internal capability around investigations, et cetera. So it's not really a change of focus. It's refining our go-to-market to be myopically focused on that specific part of the market for us. Andrew Johnston: Okay. So does that partly explain the increase in multiyear deals? And should we expect to see that the higher proportion of multiyear deals and of course, the impact that has on revenue growth versus ACV growth. But should we expect to see that higher proportion of multiyear deals continue in the future? John Ruthven: We don't currently have a view that, that percentage would increase dramatically. That said, the part of the market or our ICP being large enterprises and government agencies, they tend to have a preference or leaning to longer-term deals. So it's not something that we're driving more, we're responding to commercial requirements from ICP. Andrew Johnston: Okay. And finally, what's in Neo 2.1 that's new compared to 2.0? John Ruthven: On the road map slide there, you can see the piece of work that has come through with things like semantic search, some of our UI uplifts in terms of the usability of our product, also our local deployment. So the ability to accelerate time to value through our local environment that you have customers on. Operator: And I'm showing no further questions at this time. I would like to hand the floor back over to Mr. Ruthven for closing remarks. John Ruthven: Thanks, operator. As we've said, we're pleased with our first half result with ACV up over 8%, also the evidence of good operating leverage inside our business. Not happy from an NDR perspective, and we've spoken about that, and I can assure you that we have a focus on turning that around. Our Neo migration continues to go well and is gaining momentum, driven by a systematic program of work that we're driving inside the company. I'd also make the comment that I think we're well positioned in this AI era where we're combining the power of our Neo platform with our open BYO AI approach. So with those key messages, I'd like to thank you for attending today's call and look forward to catching up with a number of you individually over the next few days. Thank you, operator. Operator: Thank you. That does conclude our conference for today. We do thank everyone for participating. You may now disconnect your lines.
Operator: Thank you for standing by, and welcome to the Nuix Limited First Half '26 Results Conference Call. [Operator Instructions] I would now like to hand the conference call over to Mr. John Ruthven, CEO. Please go ahead. John Ruthven: Welcome, everyone, and thank you for joining us for Nuix's half year 2026 results presentation. I'm John Ruthven, Nuix's Interim CEO. And with me today is our Chief Financial Officer, Peter McClelland. I'll begin today with our key messages and metrics for the half, then discuss Nuix Neo and our strategic positioning in the AI era. Peter will then walk through our financial results in detail. After that, I'll provide our outlook before taking questions. Let me start with the highlights from the half. We've delivered ACV growth of 8.4% to $234.4 million. Neo performance has been strong. ACV grew 148% on PCP to reach $46.8 million, now representing 20% of our ACV. Revenue grew 15.2% to $121.2 million, driving adjusted management EBITDA to $19.1 million, up 42.6%, demonstrating significant operating leverage. We've achieved a material lift in cash generation with positive underlying and overall cash flow, finishing with a closing cash balance of $57.8 million. We've launched a comprehensive Nuix Neo migration program to systematically transition our customer base to the modern platform and drive ACV growth. We'll spend some time shortly talking about how Nuix Neo plus AI creates amplified capabilities, incorporating our BYO AI framework. This powerful combination of large-scale forensic data analysis and LLM integration flexibility creates a structural advantage for Nuix. And we'll take the opportunity to reaffirm today our full year ACV guidance range of $240 million to $260 million, excluding any ACV associated with the Linkurious acquisition. As we've seen, ACV finished at $234.4 million, up 8.4% on PCP and revenue at $121.2 million was up 15.2%. Net dollar retention was 101%, down from 109.6% PCP. This metric is not where we want it to be, and we'll come to this in more detail shortly. Adjusted management EBITDA and statutory EBITDA saw strong growth as we realized further operating leverage in the business. And we maintained a strong balance sheet with a net cash of $57.8 million, up 88.4% on this time last year, providing flexibility to execute on our strategic priorities. At the AGM last November, we highlighted near-term priorities across sales, product and operations. We've made strong progress in each area, refining our go-to-market approach, building out Neo capabilities and driving operational efficiency. Most significantly, we've launched our comprehensive Neo migration program. Before we get into the detailed financials, I want to spend a moment on the AI landscape and how Nuix is positioned. The enterprise software landscape is being reshaped by AI and large language models. A market segmentation is emerging between LLM plug-ins for routine tasks and enterprise-ready platforms like Nuix Neo for large-scale forensic analysis. This creates significant opportunities for Nuix. Neo represents a powerful combination of forensic data analysis and LLM integration flexibility. LLMs handle ad hoc analysis of small data sets effectively. The enterprise scale data sets with forensic integrity requirements, a platform such as Nuix Neo is a required necessity. Our BYO AI framework integrates seamlessly with customer selected LLMs, allowing them to leverage best-in-class AI models while maintaining enterprise governance and defensibility. Our customers must balance AI innovation with accuracy and defensibility. Their outcomes must withstand legal scrutiny and regulatory examination. This is where Nuix Neo plus AI tools deliver real commercial value. Customers can plug in any AI model, while our forensic grade governance layer ensures defensibility. The platform integrates new AI models as they emerge. Most importantly, this delivers amplified ROI, enterprise scale processing, combined with advanced AI reasoning provides both speed and defensibility. This creates a strong structural advantage as the AI ecosystem evolves. We're successfully delivering releases in line with our R&D road map, which was outlined at last year's Investor Day. This includes our critical investments into AI advancements. We remain on track for our key deliverables for this year and look forward to expanding capabilities across a range of areas, as you can see here, to further uplift our commercial offering. Turning now to Nuix Neo outcomes and customer migration. As we've said, Nuix Neo growth was strong during the half, hitting $46.8 million at 101 customers. This growth has been driven by new customers, new sales to existing customers, upsells and migrations. We've seen particularly strong performance in EMEA. Investigations and foundation have been key drivers. Importantly, when customers migrate from components to Neo, we typically see a 30% to 50% ACV uplift and new Neo sales are typically 2 to 3x the size of non-Neo sales. The growth in Nuix Neo is driving a significant mix shift across our customer base. As we've said at the AGM, we've now brought Nuix Neo Discover into the Neo suite given its expanded capabilities. Combined, Neo and Nuix Neo Discover now represent 40% of total ACV and are positioned to become the majority in the medium term. This migration of customers from components to Nuix Neo will be the defining characteristic of our customer base over the medium term. We know that Nuix Neo delivers significant tangible benefits to customers. The customer benefits are real and significant, faster processing, easier workflows, smarter AI-enriched analytics, strong financial ROI and zero business disruption during migration. It's critical that we demonstrate these benefits effectively to our customers to help facilitate migration to our new platform. That's why we've designed the Nuix Neo migration program to make the pathways attractive and easy for our customers. Our job is to remove friction, provide clear value and ensure customers can transition smoothly to realize these benefits. Systematizing this migration is critical for Nuix, particularly given the weaker NDR outcome. This program has 3 strategic objectives: secure the future by transitioning customers to our modern platform, drive ACV growth by unlocking expansion opportunities and enhance retention through superior Neo capabilities. This is a structured, predictable and well-governed journey for customers to move to Nuix Neo, designed to systematically address migration and NDR challenges we've experienced and unlock the significant value that Neo delivers. We've structured this as a 3-phased approach. Phase 1 completed customer segmentation and readiness assessment. Phase 2 is building our migration factory with standardized playbooks and partner capabilities. This is happening right now. Phase 3 executes at scale through FY '30. This is a disciplined systematic approach to accelerating customer transition to Nuix Neo and further value realization. Before I hand over to Peter, let me briefly touch on Linkurious. As a reminder, we announced in December that we had signed an agreement to acquire Linkurious, an existing Nuix Neo technology partner. This acquisition enhances Neo with graph visualization and investigation technology, which strengthens our platform capabilities. We're still waiting on French regulatory approvals and have no further information to add at this time. We will update the market when we do. I'd now like to hand over to Peter to discuss the financial results in more detail. Peter McClelland: Thank you, John, and good morning, everybody. As John mentioned, ACV finished the half at $234.4 million, representing an 8.4% growth on the prior corresponding period or 7.8% growth on a constant currency basis. ACV growth was driven by new customers with new customer's ACV growth offsetting a lower growth rate in the existing customer base as reflected in the net dollar retention, which we'll come to shortly. As John has already taken you through, Nuix Neo was a key contributor to growth on the prior corresponding period. And Nuix Neo Discover, which now incorporates Neo capabilities, grew by a further $6.5 million. Component ACV declined by $18.3 million due to the net downsell in the component customer base and the migration to Nuix Neo solutions. Net dollar retention of 101% reflects the lift in ACV achieved from our existing customer base. As you've heard earlier, this has fallen on the PCP and since the FY '25 result. It is just worth noting that new customer growth is not captured in the NDR. This decline reflects downsell in a small number of large clients, offsetting the upsell in other areas. A significant proportion of this downsell was driven by the ordinary project cycles of clients with a number of key projects ending. There was some competitive activity, including one significant client that is winding down while moving to a competitor. This was flagged at the AGM. While there is not one major driver of this downsell, it is fair to say that NDR is not where we want it to be and underscores the importance of a systematic structured approach to migrating our customer base to Nuix Neo. Customer churn improved to 5.9%, down from 7.1% at FY '25. Looking at regional performance, EMEA led with ACV up 18.8%. This was driven by sustained government sector growth, new logo acquisition in Central Europe and a strong Nuix Neo performance. North America ACV increased by 10.8% with continued adoption of foundation and investigation solutions and new wins in the service providers and financial services sectors. Asia Pac ACV declined by 8.6% with lower new customer numbers and a large legal sector client loss as was flagged at the AGM. Turning to our statutory revenue. This came in at $121.2 million, up 15.2% or 12.9% in constant currency. This performance was driven by multiyear deal renewals with key accounts and strong new customer growth, particularly in Nuix Neo sales. Multiyear deals represented 33% of revenue, up from 22% in the prior period. We continue to invest in our product and customers with total research and development spend of $28.8 million, up 0.7% and representing 24% of revenue. The capitalized component of this spend was 43%, declining compared to the prior period. Importantly, R&D continues to be funded from our underlying cash flows, demonstrating the sustainability of our investment in product development. Adjusted management EBITDA rose by 42.6% to $19.1 million with the margin expanding from 12.7% to 15.8%. Adjusted management EBITDA is our key internal profitability measure as it adds back the R&D costs that are capitalized and best represents how management is utilizing the total cost pool. This increase was driven by the revenue growth that we've already mentioned and disciplined cost management, demonstrating expanding operating leverage. Our EBITDA waterfall shows the path for the adjusted management EBITDA in the first half '25 through to first half of '26 outcome of $19.1 million, once more showing the operating leverage as being evident. To the right of the $19.1 million, you can see the pathway to our statutory EBITDA outcome for the half of $26.5 million. I won't spend too much time here on our income statement, especially considering we've talked about the operating leverage already. Nonoperating legal costs of $3.3 million were significantly lower than the prior period. And you can see here, we flagged the costs associated with the Linkurious acquisition. Impacting the NPAT line, the group received a tax benefit of $8.6 million, primarily arising from the partial recognition of tax assets relating to historical option cancellations. A further $33.8 million of tax assets was not recognized during the period, but remains available to the company for future periods. Turning to cash flow. We achieved a material lift in both underlying and overall cash flow. Underlying cash flow was $28.4 million compared to $7 million in 1H '25, and the overall free cash flow was $20.4 million compared to the negative $7.4 million in 1H '25. The free cash flow conversion ratio was 149% calculated as underlying free cash flow divided by the adjusted management EBITDA. Lower nonoperating legal costs associated with the court cases contributed to the overall cash flow, and we finished the half with a net cash position of $57.8 million. Our bank facility has been upsized to $50 million, which remains undrawn other than $1.3 million utilized for bank guarantees. It is worth noting that $20 million of this facility is specifically restricted to the funding of the Linkurious acquisition. I'll now hand back to John to discuss our outlook. John Ruthven: Thanks, Peter. Looking ahead, we reaffirm the full year guidance we provided at the AGM for ACV of $240 million to $260 million, which doesn't include any ACV associated with the Linkurious acquisition. As we said at the AGM, ACV will be weighted to the second half, in line with previous years and in line with the profile of our renewals book. Our focus areas for FY '26 remain: continue to deliver on our business transformation strategy, drive ACV growth through Nuix Neo, ensure revenue growth exceeds operating cost growth and maintain positive underlying cash flow for the full year. As you have seen, these focus areas are features of today's half year results. Before we move to questions, let me reflect on the half. The results demonstrate continued momentum in our business transformation. ACV growth of 8.4% and Nuix Neo growth of 148% show strong market response to our offering. The lift in adjusted management EBITDA and the associated margin clearly illustrates the operating leverage in our business model. While net dollar retention is not where we want it to be, the Neo migration program provides a clear strategy to address this through systematic customer transition to our modern platform. And lastly, we're incredibly excited about Nuix's positioning in the AI era. Our Bring Your Own AI approach, combined with enterprise-grade governance and scale positions us uniquely to help customers harness AI power while maintaining forensic defensibility. With that, I'll now hand back to the operator for Q&A. Operator: [Operator Instructions] Our first question comes from Sinclair Currie from Moelis Australia. Sinclair Currie: I was just looking at your product road map. And I was interested if you could highlight any parts of that, which you think are particularly important to driving business growth in the medium term? John Ruthven: Yes. We've shared with you a pretty comprehensive road map that takes us out to the end of this fiscal. The BYO AI models, I think, in this AI era are going to continue to drive strong growth for us. We also have planned in this half, the prework for our launch of our Neo SaaS platform, and we're very excited and confident about that taking us forward. But as you can see, it's a pretty comprehensive set of capabilities that we're bringing to market. I think in March, we'll have 2.1 drop. So that will be our next release of that Neo platform, which will continue to drive momentum in the market. Sinclair Currie: Brilliant. And just one last question, if I can. Just I think you spoke to some investment in the sales team and marketing team. Just be interested to understand what sort of maturity you think is required to start generating more productivity, if that's something that you can elaborate on the sort of productivity measures within your team? John Ruthven: A lot of that investment has been around sales enablement and embedding our ICP or Ideal Client Profile so that we have a sales organization that's very focused on the most lucrative part of the market. We also have our new CEO joining us at the start of next month. And when she comes on board, she'll be very focused on driving account-based marketing, targeting that item and having field programs and campaigns that will drive lead and top of funnel activity for us. Operator: Our next question comes from Jennifer Xu from Jefferies. Jennifer Xu: A couple of questions from me. The first one is NDR 101%, particularly downsell in a small number of large contracts. Any color or comments on this? Peter McClelland: Yes. it's a good question. I mean, clearly, NDR is not in our target range. But first of all, I'll point out that any new business growth doesn't fall part of those numbers. So we are happy with where we're seeing the new business growing to. Within NDR, again, churn has actually improved. So we're pleased with churn. But there were a couple of larger accounts really split across 3 different areas that impacted in the half. The largest amount of that downsell actually relates to normal client project activity that had finished during the period. So this is where clients are representing on projects that have now come to the end of their course and no longer need the product for that specific project. There was within our global -- some of our global advisories that buy under global partnership arrangements, some areas where some of the participating businesses, they opt in or out of those programs and some of the businesses are deciding to deal direct rather than through global procurement. And then there was one large advisory business that we updated the market with on the AGM in the legal sector in ANZ that was lost from competitive drive, and that's what's impacting on those results. So quite diverse across all the different regions being driven by different reasons. Jennifer Xu: Yes. That makes sense. Another one is Nuix Neo and the Nuix Neo Discover together accounted for 40% of total ACV with Nuix Neo is around $46 million. So that implies Neo Discover should be around $46 million as well. Is that correct? And also, is there any specific reason why presenting Neo and the Neo Discover separately and if that's intended the reporting approach going forward? John Ruthven: Yes. So your calculations are broadly in line. And the reason that we still break them out is just we believe that it's important for us to be totally transparent on the mix and makeup. Jennifer Xu: All right. So -- and we expect to going forward also do it separately, right? John Ruthven: Yes, for the foreseeable future. Jennifer Xu: Yes. Last one for me is with the sales transformation underway, are there any changes in the sales channel? Will be like greater rely on the direct sales or still more distribution? John Ruthven: There's no planned changes to the mix. We have a blended go-to-market model covering both direct sales and then leveraging channel and partners. And that partner or indirect part has several flavors, including large advisory firms, channel partners, partners that resell and implement. There's no clear planned change to the mix of our go-to-market. Jennifer Xu: I see. And for the distribution channel, how do we think about the margin there compared to ex sales? John Ruthven: Obviously, we pay a partner margin that would be confidential to us in terms of our commercials, but they range based on the contribution or the role that, that partner plays, ranging from purely a referral partner right through to a resale partner that would carry the transaction through the [ rotation ]. Operator: Our next question comes from Andrew Johnston from MST Access. Andrew Johnston: First up, John, you talked about ICP definition. Can you talk about how that's changing the target customers that Nuix is now pursuing compared with previously? John Ruthven: Andrew, I wouldn't say it's changing. What it is doing is it's focusing the go-to-market on the most lucrative part of the market. If you look at where the company has been successful and where our value proposition is strongest, it's in large-scale, highly regulated industries ranging from government agencies like regulators, tax authorities, law enforcement as well as large corporates that have internal capability around investigations, et cetera. So it's not really a change of focus. It's refining our go-to-market to be myopically focused on that specific part of the market for us. Andrew Johnston: Okay. So does that partly explain the increase in multiyear deals? And should we expect to see that the higher proportion of multiyear deals and of course, the impact that has on revenue growth versus ACV growth. But should we expect to see that higher proportion of multiyear deals continue in the future? John Ruthven: We don't currently have a view that, that percentage would increase dramatically. That said, the part of the market or our ICP being large enterprises and government agencies, they tend to have a preference or leaning to longer-term deals. So it's not something that we're driving more, we're responding to commercial requirements from ICP. Andrew Johnston: Okay. And finally, what's in Neo 2.1 that's new compared to 2.0? John Ruthven: On the road map slide there, you can see the piece of work that has come through with things like semantic search, some of our UI uplifts in terms of the usability of our product, also our local deployment. So the ability to accelerate time to value through our local environment that you have customers on. Operator: And I'm showing no further questions at this time. I would like to hand the floor back over to Mr. Ruthven for closing remarks. John Ruthven: Thanks, operator. As we've said, we're pleased with our first half result with ACV up over 8%, also the evidence of good operating leverage inside our business. Not happy from an NDR perspective, and we've spoken about that, and I can assure you that we have a focus on turning that around. Our Neo migration continues to go well and is gaining momentum, driven by a systematic program of work that we're driving inside the company. I'd also make the comment that I think we're well positioned in this AI era where we're combining the power of our Neo platform with our open BYO AI approach. So with those key messages, I'd like to thank you for attending today's call and look forward to catching up with a number of you individually over the next few days. Thank you, operator. Operator: Thank you. That does conclude our conference for today. We do thank everyone for participating. You may now disconnect your lines.
Unknown Executive: Okay. Ladies and gentlemen, welcome to the Kogan First Half Results for FY '26. This morning, we are joined by Ruslan and David, and we will begin with a short presentation, and this will be followed by Q&A. [Operator Instructions] I'm handing over now to Ruslan and David. Ruslan Kogan: Good morning, everyone, and thank you for joining us for the Kogan Group's First Half FY '26 Results Presentation. It's a pleasure to be here with David Shafer, our CFO, COO and Executive Director. This morning, we'll take you through the company's results for the first half of FY '26, which demonstrated the strength of the Kogan.com platform. We delivered growth, strong cash generation and improved operating leverage, with Kogan.com once again leading the group's performance. At the same time, meaningful progress was made in optimizing Mighty Ape, with the foundations now firmly in place to support a return to sustainable profitability under our One Group strategy. To begin, let's dive straight into the highlights for the half. The Kogan Group results are split into 2 reporting segments: Kogan.com and Mighty Ape. Kogan.com is firing on all cylinders. We drove gross sales past $0.5 billion, growing 21% on the prior corresponding period, while revenue grew by 17%. And we didn't just grow sales, we also expanded our profitability. The top line growth translated into $27.6 million in adjusted earnings, an 18% increase on the prior corresponding period. You can see the benefit of our operating leverage with adjusted earnings margins expanding to 11.9%. Regarding Mighty Ape, we are seeing good progress. The performance is improving. The inventory reset is largely complete, and the team is now fully integrated into the group structure. This is part of our One Group strategy, under which we expect Mighty Ape performance to progressively recover. Importantly, the Kogan.com earnings result delivered strong cash generation with the Kogan Group producing $45.1 million of free cash flow this half, up 2% on the prior corresponding period. Overall, we delivered double-digit sales growth, margin discipline and strong cash generation. Let's now delve deeper into the results. I'll hand over to David to present the financial update. David Shafer: Thanks, and good morning, everyone. It's great to have you with us today. Here, we have broken out the results of our 2 reporting segments to highlight the drivers of performance. The story of this half is clear, Kogan.com is doing the heavy lifting. Let's look at the top row first. Kogan.com, which also includes our core retail brands like Dick Smith, Matt Blatt and Brosa delivered an outstanding performance. We saw revenue increase 17%. Importantly, we also delivered at the bottom line, too. Gross profit climbed 16% to nearly $100 million, and adjusted EBITDA grew 18% to $27.6 million. This is the operating leverage Ruslan mentioned. As we scale, our platform model ensures that incremental sales translate into meaningful earnings growth. Now looking at the middle row, Mighty Ape. As expected, this was a transition half. We are deep in the execution of a strategic reset towards our One Group strategy, which aims to align our procurement verticals, marketplace and loyalty strategies across the group. Revenue was down 25%, which reflected our deliberate move to reset inventory levels and tighten procurement as we commenced the rebuild of inventory with greater focus on exclusive products. While this resulted in an adjusted EBITDA loss of $3.2 million for the half, we believe this is temporary and was necessary. We have stripped back the cost base and are streamlining operations to ensure Mighty Ape returns to sustainable profitability in the second half through the One Group strategy I mentioned earlier, bringing it together at the group level on the bottom row. Despite the drag from the Mighty Ape reset, the sheer strength of the Kogan.com business drove total group revenue up 5% to $287.6 million. While group adjusted EBITDA dipped slightly by 3%, the underlying health of our primary business remains exceptionally strong. Moving to Slide 6. This is where you see the quality of our earnings. We aren't just generating profit, we are building a defensive moat around it. The headline figure here is 72%. That is the percentage of our gross profit that came from our exclusive products and services, areas where we own the IP, control the supply chain and dictate the margin. These are products and services customers can only purchase through us. Looking at the breakdown of that moat, Kogan.com products contributed 30.8% of total gross profit. This is our exclusive brand strategy, unbeatable value for customers but with end-to-end control for us. The loyalty programs also delivered 28.3% of total gross profit. This is recurring subscription revenue that has compounded over time. Then you have the Marketplaces division contributing 18.7%. This is a scalable capital-light revenue stream, offering huge customer choice with minimal working capital requirements. The takeaway is diversification of revenue streams, all connected through the one brand and loyalty program. We are not reliant on a single product category or a single revenue stream. We have a balanced mix of recurring subscriptions, high-margin exclusive products and asset-light marketplace revenue. That is what we call a durable earnings base. This mix of revenue streams is unified for consumers through the Kogan.com channel and loyalty program, seamlessly bringing together many different offerings under the one umbrella. Turning to Slide 7. This is the financial highlight of the half. This is the definition of operating leverage. Look at the table on the left, it tells the story of a scalable platform. Double-digit revenue growth of 16.9%, gross margin held steady at 42.9% and delivered margin improving to 38.9%, showing we are becoming more efficient at getting products to customers. We also invested for the future by increasing our marketing to drive our top line and community of shoppers. Further, our fixed costs as a percentage to sales dropped to 11.3%. This is the discipline we promised. We are growing the top line without adding weight to the cost base. Now look at the charts on the right. That efficiency flows straight through to the margins. Adjusted EBITDA margin increased to 11.9% and adjusted EBIT margin climbed to 9.7%. This is the model working as designed. We drive top line growth, control the fixed costs and deliver the difference as expanded margin. Turning now to Mighty Ape. The theme is reset and rebuild under One Team and One Global Strategy. This half was about making the hard decisions to fix the foundations and set the business up for success over the long term. First, the inventory reset. We started this work last year, and this half, we largely completed it. We executed a comprehensive optimization program, reducing our stock holdings by 32%. This addressed the legacy inventory and released working capital, meaning our range is now strictly focused on what our customers want. As we rebuild inventory under our One Group strategy, we will deliver a greater focus on exclusive products. At the same time, we overhauled our operating model. We stripped out complexity and tightened our cost controls. As a result, we have seen a material reduction in operating costs as a percentage of revenue. The business is simply leaner and faster than it was 6 months ago. Most importantly, you can see this in the trajectory. We started the half with adjusted EBITDA margins in double-digit negative territory in July. But as these changes took hold, we climbed month-on-month, crossing into positive territory by December, but we're not calling victory yet. The New Zealand retail environment remains challenging, and the major reset is a work in progress. Inventory has been optimized. The cost base has been structurally reduced, and the business is now positioned for a sustainable recovery. Turning now to the group's capital position. If you look at the cash flow column to the right, you'll see our earnings converted efficiently into $46.9 million in operating cash flow. That flowed almost entirely through to free cash flow, which was $45.1 million for the half. This was bolstered by our discipline on inventory, where we released $7.1 million year-on-year, largely due to the Mighty Ape reset. This performance has left our balance sheet in good condition. We ended the half with $71.8 million in total cash. That is an increase of over $4 million year-on-year, and we remain completely debt-free. This financial strength allowed us to return capital to shareholders. In this half alone, we returned $5.8 million net of the DRP in dividends and another $4.8 million through our on-market share buyback. We are liquid, we are flexible, and we have the capital to invest aggressively in growth while continuing to return value to you. For those who want the line-by-line statutory details, you can find them in the annexes. Turning to Slide 10. Let's talk about returns. Because of the strong cash generation and capital position I just walked through, we are in a position to step up the dividend. The Board has declared an interim dividend of $0.080 per share fully franked. The increased dividend is a direct reflection of our confidence in the group's balance sheet and our ability to generate consistent free cash flow. For those looking to reinvest, our dividend reinvestment plan remains active, offering shares at a 2.5% discount to the market price. Key dates are on the right. We will be paying this out on the 30th of April. That wraps up the financials. I'll now hand back to Ruslan to take us through the business update and outlook. Ruslan Kogan: Thanks, David. I'll now take you through our business update, which focuses on the performance of our various divisions. Before we get into the details, let us step back and briefly revisit the strategy that drives this group. Our strategy is built on 2 complementary strategies, the product division and our platform-based sales. On the product side, we are relentless about value. Through our exclusive brands, we control the supply chain end-to-end direct from the warehouse to the customer. Combined with our globally sourced third-party range, this allows us to price highly competitively and deliver unbeatable value. Then we have platform-based sales. This is where we leverage our scale. This includes loyalty programs that drive recurring revenue, our verticals and advertising platform. Importantly, our marketplaces operate here with a capital-light business model. These 2 sides fuel the flywheel you see on the right. More product sales drive more subscribers and platform engagement. That generates higher profitability and customer retention, which gives us the ability to lower prices even further. It is a self-reinforcing loop. We use recurring revenues and attractive margins to drive strong profitability, ensuring the business is resilient and ready for long-term growth. So that's the group strategy that has been built and refined over more than 2 decades. It is designed for delighting customers and sustainable cash-generating growth, which brings us to our next slide, One Global Team, One Group strategy. We have an incredible opportunity to take the proven Kogan.com success story and replicate it at Mighty Ape. The graphs on the right show the levers we are pulling. Right now, Kogan.com is a relatively mature platform-first business, generating 64% of its gross sales and 65% of its gross profit from high-margin platform streams. Mighty Ape is sitting at roughly 30% for both. It is where Kogan.com was years ago. That gap is a massive runway for quality earnings growth. The graph on the left demonstrates the potential upside. There is a stark difference in unit economics between the Kogan.com model and the current Mighty Ape model. Kogan.com gross margin is at 42.9%, while Mighty Ape is at 26.2%. When it comes to contribution margin, Kogan.com retains 22.3%, nearly double Mighty Ape's 11.6%. This gap represents our opportunity. By executing the proven Kogan.com strategy, shifting to platform sales and attractive margin verticals, we can bridge this gap. We aren't guessing if this strategy works. We have the blueprint and have been executing on it for over 2 decades at Kogan.com. Now let's look at our platform-based sales. The chart on the left tells the story of a consistent upward trajectory. We grew this revenue stream by 16.6% to achieve $68.9 million for the half. I cannot overstate the importance of this number. This isn't just revenue. It is smart revenue that delights customers. It is capital light, it is scalable. And crucially, it carries 0 inventory risk and generates high margins. Because of that, it delivers superior unit economics and enhances our cash flow efficiency. It creates a powerful network effect. As we add more buyers and sellers, the platform itself becomes more valuable and our customer relationships get deeper. Now while this revenue stream is well established at Kogan.com for Mighty Ape, we are just getting started under our one group strategy. We have already launched Mighty Mobile and the marketplace. In May 2025, we rolled out Mighty Ape Travel Insurance. And just last month, January 2026, we expanded that vertical into Mighty Ape Insurance, covering travel, pet and car. We expect platform-based sales to grow in Mighty Ape over the coming years. Zooming in on Kogan Marketplace, which forms an important component of platform-based sales. We continued our strong momentum and accelerated. We delivered a record half with revenue increasing 31.6% to $19.5 million. This performance is the result of the flywheel effect mentioned previously as we delight more customers and deepen our relationships with high-quality sellers and integrate them into our ecosystem. Crucially, this is the capital-light strategy at its best. We are scaling this revenue with no inventory exposure and minimal working capital. As our traffic grows, this division grows naturally alongside it. It's the ultimate win-win-win. It's a win for customers through broader choice, a win for sellers through access to our platform and loyalty ecosystem and a win for the group through high-quality scalable earnings. Now to highlight the performance of Kogan FIRST, another important component of platform-based sales. FIRST continues to be a core driver of group performance. We grew subscription revenue by 7.6% to $30.3 million in the half. But the key highlight for me is on the top right. Approximately 50% of our product gross sales at Kogan.com were driven by First members. Think about that. A loyal group of subscribers is driving half of our entire product volume. That is the definition of high-quality recurring demand. And because these subscriptions are prepaid, we have built up $11.2 million in deferred income, an increase of 13.7%, which gives us good visibility on revenue over the next 11 months. Under our One Group strategy, we expect to apply many of the learnings we have at Kogan FIRST to Mighty Ape's PRIMATE loyalty program over the coming year. Next up is Kogan Verticals, another vital component of platform-based sales. The headline remains the same, another record half. Revenue climbed 8.8% to $12.3 million. Two standout performers drove this result, Kogan Mobile and Kogan Internet. Kogan Mobile grew 13%, continuing to win market share in a highly competitive environment. Kogan Internet surged 40%, reflecting the incredible uptake of our improved pricing and NBN plans. But it's not just about volume, it's about quality. If you look to the right, you'll see we are consistently winning awards for value. We are delivering essential services at unbeatable prices and customers are voting with their wallets. Strategically, this division is so important. It embeds us into the daily lives of our customers. When a customer trusts us with their essential services, they engage more frequently, they shop more across the platform, and they become far more valuable to the group over the long term. We'll now turn to Kogan Products, the division the business started with over 2 decades ago. It's clear that profitability is outpacing revenue. While revenue grew a very healthy 19% to $167.9 million, look at the chart below it. Gross profit increased 26.4% to $35.1 million. Our gross margin increased by 1.2 percentage points to 20.9%. Two things drove this: a more favorable product mix and continued growth of our exclusive brands. The average price per item sold jumped 11% to $179 as customers bought more televisions, appliances and home and living items. And over 70% of our revenue came from our own brands. That means we control the supply chain and we keep the margin. Our strategy of devoting your trusted capital to higher-value exclusive products is working. And as our scale in this division grows, so does our importance with critical manufacturing partners. This reinforces why we are so confident in the Mighty Ape reset under the One Group strategy. We aren't guessing how to fix margins. We are simply applying the exact same discipline that delivered these results for Kogan.com. Moving on from the first half FY '26, I'm pleased to provide a January 2026 trading update. For the month of January 2026, the group continued its strong performance with gross sales up 10% to $88.1 million. Group revenue was also up 8%. Again, you can see the 2 performances of the group. Kogan.com performed strongly with gross sales up 13%, while Mighty Ape was down 13%. With the ongoing implementation of our One Group strategy under One Global Team, we expect to return to positive performance in Mighty Ape in second half FY '26. We expect group adjusted earnings margins to be in the range of 6% to 9% for the full year 2026 as we look to continue growth initiatives, navigate the economic headwinds in New Zealand and work through the ongoing Mighty Ape optimization under our One Group strategy. Slide 21 sets out the path to long-term value. First, look at the profit driver, platform-based sales. We are already hitting our stride here. Margins expanded to approximately 52% this half, putting us firmly inside our medium-term target range. Second, group product sales. You can see a small dip here to minus 5%. This is purely the impact of the Mighty Ape reset we discussed. We are taking a short-term hit now to fix the foundation, but here is the most important signal. Despite that temporary drag, the total group margins still improved, climbing from 7.5% in FY '25 to 8.5% this half. That proves the resilience of our model. Even with the reset, the overall strategy is strong enough to lift the whole group. Looking to the right, we have our ultimate aspiration. As we scale those high-margin platform revenues and bring product sales back to breakeven, we see a clear path to group adjusted margin of over 20% in the long term. The formula remains simple: grow the platform, remain disciplined on products and let the operating leverage deliver the returns. This concludes our presentation. Before we open for Q&A, I want to leave you with one final thought. You've heard us talk a lot today about efficiency, scalability and operating leverage. Well, we practice what we preach. Once again, we have used AI to assist in delivering today's presentation. This isn't just about using the latest tech. It is a practical demonstration of the Kogan.com DNA. We are constantly finding smarter, faster and more cost-effective ways to operate. Whether it is in our logistics, our marketing or our Investor Relations, innovation isn't just what we sell, it is how we operate. On behalf of the Board and our team, thank you all for your interest in Kogan.com today. We look forward to meeting with many of our shareholders over the coming weeks. For those of you who have any questions or are interested in hearing more, please stay with us for the Q&A. Unknown Executive: Okay. Thank you, Ruslan and David. Perhaps I can start with a question around the market that you're operating in. How have you perhaps benefited from MyDeal and Catch leaving the marketplace? And what are you seeing from Amazon and Temu in the marketplace? Ruslan Kogan: Well, you can see from our results that we're winning significant market share in the market. We often have our blinkers on and focus on our customers and how we can deliver more and more value to our customers. So where exactly are we winning that market share from? That's hard to tell. But there would be some internal factors there, and there would be some external factors. Internal factors would be that it's -- nobody can afford not to be a Kogan FIRST member these days. That program is doing really well. Our product range is expanding. Our business is becoming more efficient, and we can pass a lot of those cost savings on to our customers. We're in a market where there are cost of living pressures that typically causes customers to do a bit more research, and now they've got more and more tools to do that research. If you want to compare 2 products, AI can do it for you, Chuck it into Grok, Gemini, ChatGPT, that can do a price scan for you, that can compare specifications. You can do it old school way of opening a browser and opening a few tabs and comparing for yourself. And the more and more customers that do that, the more it's going to drive customers to our products because we are a value leader. So there's a lot of internal things that are winning market share for us. And externally, yes, we're going to be celebrating our 20th birthday in a few weeks. In that time, we've seen a lot of competitors come and go. And one thing that's remained constant for us is that if we keep delivering value to our customers, they reward us with their patronage. So yes. Unknown Executive: Thanks, Rus. Just a reminder participation on the call are welcome to ask questions. If you could please put those into the Q&A function in the zoom webinar. The next question we had relates to the performance of the Australian business, which appears to be going from strength to strength. How much of that is dependent or determined by the November, December peak period? And is that broadening out to be more full year? David Shafer: I'll take that one. So thanks for the question. We had a very strong November, December peak period. Our shareholders will be aware that we did a market update at the AGM in November for the half year up to the end of October. So this result really updates on the performance of November and December, which was among the strongest profit result we've ever had as a business. And that's being driven by Kogan.com, as we've just discussed in the presentation. So Kogan.com is firing on all cylinders. What we mean by that is, all of the different elements of the Kogan.com business are themselves achieving almost record results. It's really the culmination of many years of work by the team at perfecting their different parts of the business. And I think that bodes well for the future of the Kogan.com business when you see strong growth in marketplace, exceptional growth and profitability in Kogan products driven by new product ranges and disciplined execution. Ongoing growth in Kogan FIRST, which is obviously very important as a driver for general demand in the business and recurring customers and also Kogan Verticals, which brings hundreds of thousands of customers into our business every day of the year through essential services and keeps reminding them of the value that we provide on a daily basis. So with Kogan.com firing on all cylinders, that does bode well not only for the November, December period, which we've just delivered, which was very strong, but it does set us up well for the second half. Unknown Executive: Thanks, David. The next question relates to New Zealand. Could you run us through some of the initiatives you're taking to integrate the Australian and New Zealand businesses under the One Group strategy? David Shafer: Sure. The most important change that we've implemented over the last few months is that we have formed One Global Team. So previously, we had a Kogan.com team with the Kogan.com leadership, and we had a separate Mighty Ape team with a separate Mighty Ape CEO. And the reporting structure included a report from the Mighty Ape CEO up to the Kogan.com leadership. But the other elements of the Mighty Ape business were all reporting to the Mighty Ape CEO and under that person's leadership. That has been changed to reduce or remove the separate structure such that the entire team across the globe is under one team, which the practical implications of that are that we're operating off the same KPIs, the same metrics of success and failure, the same things that will cause a product to be ordered or reordered or killed off, the same metrics for marketing, the same metrics for logistics efficiency are standardized across the business. So it sounds like it's just one word, but it has hundreds of different implications on a daily basis, that change in our team structure. And the practical implication of that, that we've seen already is the fact that we have reduced inventory in Mighty Ape significantly. It's at the lowest inventory level we've had for many, many years. And that's preparing the business for an inventory rebuild, which will be premised on exclusive products, exclusive brands and the known winners that we've seen in the Australian business over the last years. So that's one thing that we can expect to see over the coming months. In addition to this greater push towards platform-based sales. So the marketplace has launched in Mighty Ape and is growing quite nicely. The PRIMATE business has launched and is growing, but there's lots of learnings from the Kogan FIRST business that will be implemented within PRIMATE in the current half as well as the launch of other verticals and the scaling of Mighty Mobile, which is currently the largest vertical in New Zealand. Unknown Executive: Okay. A follow-up question in relation to New Zealand. I think you might have answered the first part of it. Do you expect the changes in New Zealand to extend to the range of products on offering and potentially the brand? And then the second part of the question is around profitability breakeven in the second half. Do you expect that to be delivered in the Mighty Ape business? David Shafer: So Kogan already operates under the Kogan brand in New Zealand. It's a smaller business than Mighty Ape. Mighty Ape was acquired during COVID in 2020 by Kogan.com because of its -- the strength of its brand. It's got a very known well-known, well-trusted brand in New Zealand. It was organically grown for many, many years and built a cult following. And we're looking to retain and enhance that brand. So Aussies might not know the brand that well, but New Zealanders definitely know the brand Mighty Ape. And we're looking to preserve the core foundation of the Mighty Ape brand while adding in a lot of the juice that makes Kogan.com so successful in Australia. So the practical implication will be we'll continue to offer the products and services that Mighty Ape is known and loved, but in a more limited targeted way, while supplementing that with a good range of private label products of known winners from Australia and obviously, the millions of products that are available on the Mighty Ape marketplace already. And in terms of what we expect for profitability in the second half for Mighty Ape, we've said that we expect to return to positive performance in the second half. You can see the month-by-month trajectory of adjusted EBITDA margins in the presentation. It's heading in the right direction, but we're cautiously optimistic, but we're not making any definite predictions as to what will happen. We do believe we will get to positive performance, but it's obviously highly volatile, and we're cautious in that suggestion. Unknown Executive: Thanks, David. And a follow-up question just around that exact chart you were referring to on Page 8. How much of the improved margin performance in New Zealand was because of the peak trading period? And how much was the changes you're making in the business in New Zealand? David Shafer: Great question. It was partially both. So in the peak trading period, when you've got more revenue coming through, it's obviously a higher profitability part of the year. So that definitely drove part of the adjusted EBITDA margin improvement in December and November. Having said that, we've also shown that we've drastically reduced operating costs as a percentage of revenue. We're standardizing marketing performance and logistics performance. and we've drastically reduced inventory, including underperforming inventory. So all of those things are internal within the business and will set us up for a good opportunity to deliver a profitable second half. Unknown Executive: It seems to be a trend of questions regarding New Zealand. Should we expect working capital to increase with the rebuild in inventory in New Zealand? David Shafer: We will be deploying some working capital to grow the inventory in New Zealand. It's at almost an all-time low of inventory at the moment for the period of our ownership of Mighty Ape. And we've mentioned we will be rebuilding that with a focus on exclusive products. So that will take some of the working capital. But Kogan.com is producing a heap of free cash flow, and we believe that in the scheme of the overall cash generation of the business, it's going to be not that significant and will not impact our ability to continue returning capital to shareholders in the form of dividends and buybacks. And importantly, it's not going to impact the ongoing growth potential of Kogan.com as we continue to invest in marketing and growing the asset. So this is a growing business at Kogan.com, double-digit growth. We intend for that to continue. We intend to invest in Kogan.com and to grow the jewel in the crown. Unknown Executive: And just a question in relation to the New Zealand retail environment more broadly. Are you seeing any improvement in trading conditions across the ditch because they've been through a pretty tough time in the last 12 months or so. David Shafer: To be honest, there are so many internal changes happening with the way that we're operating Mighty Ape. It's very difficult to identify one part of the business' performance as being driven by the general retail economy versus the internal changes that we're making. So there's no doubt that the New Zealand retail environment does play a factor in the performance of Mighty Ape, but it's very difficult to segment which part is responsible for which. So it's playing a role, but we don't know to what extent. Ruslan Kogan: In general, I think that no matter what the wider market is doing, there's good retailers and poor retailers in all economies. And it's a retailer's job to be there to service the needs and demands of customers. I think the major opportunity we highlight in the presentation for Mighty Ape, and that is Kogan is about to celebrate its 20th birthday. We have been the most profitable Australian online retailer consistently over that 20 years. And we have a reason for that, and that is the business model that we have developed. It's a business model that has a lot of subscription recurring revenue. It's a business model that doesn't only rely on inventory. It's a business model that has very strong metrics around it. And we are taking that playbook and implementing it in New Zealand for Mighty Ape. And we think that, that will reward Mighty Ape's customers, and it will make the business bigger and better than it's ever been. There are slides in the presentation where we talk to this and we talk about the opportunity and where we are in that journey because if you compare the Mighty Ape metrics now to what metrics we're seeing in Australia, just that alone paints the picture of what the opportunity there for the business is. So we're quite confident and bullish about the long-term opportunities there no matter what the macro environment is going to do, because people will still need to buy stuff, and they'll want to buy quality things at the right price. And our business is designed to deliver that. Unknown Executive: Thanks, Rus. A question back in Australia. How have the changes to Kogan FIRST changed the membership growth and/or churn over time? Ruslan Kogan: Well, we report Kogan FIRST revenue, which you get to see the money that the Kogan FIRST program brings in. The price for Kogan FIRST hasn't changed now for almost 2 years. And the program continues to grow. There's more and more offers for the program. We're providing more and more benefits to our customers, bigger benefits. So if you're moving house or moving into a new apartment and you need to buy a bed, a fridge, a dishwasher, a washing machine, laptop, new phone, whatever it is, you can't afford not to be a Kogan FIRST subscriber. So there's more and more benefits coming online. There's more and more benefits from our verticals across Kogan Mobile, Kogan Energy. If you're a Kogan FIRST customer and you're in Victoria, New South Wales and/or Queensland, you're getting better energy rates than any other provider. So if you use electricity and you're in those Eastern states, you can't afford not to be a Kogan FIRST customer on Kogan Energy. So the offering is getting bigger and broader and the program is growing. It's providing -- it's a real win-win-win situation whereby it's a win for the business. It's a win for the stakeholders of the business and most importantly, a win for the customers. And the numbers in it speak for itself because we've got this dynamic at play, the growth continues, and it's a pillar of our business. Unknown Executive: [Operator Instructions] We have one more question to go after which, Rus, I might ask you to make some concluding comments if there are no more. The last question goes to the medium-term aspirations, and it refers to the 8.5% EBITDA -- adjusted EBITDA margins just delivered for the group. And the question is, if Mighty Ape returns to profitability in the second half, should we see this adjusted EBITDA margin build over time? And what is the outlook for the medium-term 8% to 12% range that you have specified? David Shafer: Well, thank you for raising a question on that slide because it's an important point to zoom out and to understand what is the overall pricing and profitability strategy and margin strategy of the business. Our overall structure is inspired by the Costco model, where they effectively make all of their profitability from the membership program. Similarly, we're looking to effectively make all of our profitability from platform-based sales and to run the products business over the long term, fully costed on an EBITDA basis at breakeven. That will enable us to offer on an ongoing basis, the absolute best prices in the market. It will make us unbeatable on product while delivering ongoing very strong earnings results for our shareholders. And you can see that in that outlook. So currently, we're producing 8.5% EBITDA margins overall, which is heavily driven by platform-based sales and Kogan Products running at an EBITDA loss fully costed. Over time, we can see the adjusted EBITDA margin from the Products division heading towards breakeven, while the adjusted EBITDA margin of the platform-based sales heading towards -- heading northwards. And that will translate eventually to 20% EBITDA margins plus. In terms of the current half, yes, the products margin went backwards due to the inventory reset at Mighty Ape. We believe that, that will obviously improve this half in the second half and beyond. and that will head us towards the upper end of our medium-term aspirations over the coming 12, 18 months. But one of the features of the current result is the fact that even though the products margin went backwards temporarily due to the Mighty Ape reset, overall, the group result still improved. And that is a demonstration of the strength of the operating model of how these 2 parts of the business work together harmoniously and the diversification in the business means it's very robust. So that's a long way of saying, yes, when Mighty Ape improves in profitability, overall adjusted EBITDA margins will improve through product margins heading in the right direction. Unknown Executive: Thank you, David. A question in relation to the appreciation of the Aussie dollar. What's the impact on the business been and in particular, on margins? Ruslan Kogan: Yes. The Aussie dollar has appreciated in the last few months. We don't typically take a view on currency. So we do hedge on an order-by-order basis to know what price certain products are going to land at, but we don't take a view on the currency. I know some retailers do, but if we knew what the currency was going to do, running this retailer would not be the best use of our capital. We would find other ways to make money. But the dollar has appreciated. It typically takes 3 to 6 months to see that come through in landed costs of products. So I guess that hasn't really flowed through yet, but it will mean things are a little bit cheaper. So a stronger Aussie dollar means a lower landed cost for goods when they do come through the pipeline and the new inventory is landed, which will mean prices will get a bit cheaper for consumers, and we should be able to see some improvement in demand. Unknown Executive: Okay. That brings us to the end of questions that have been lodged by the Q&A function. Thank you, Rus. Thank you, David, and thank you, everybody, for attending. Rus, if you have any final closing remarks, please go ahead now. Ruslan Kogan: Yes. Thank you for your interest, everyone. As you've seen, the Kogan.com part of the business is firing on all cylinders. It's the strategy we've been talking about for years. There's nothing majorly changed. It's us delivering on exactly what we've been talking about in the business. We do have some challenges with Mighty Ape that we're working through. We think that while there are challenges there, there are also huge opportunities in implementing the proven strategy and business model of Kogan.com over the last 20 years. And that is exactly what we plan to do. So we're very proud of the team in how they're executing on the strategy and where we're getting the business to. It's -- it's been a very, very exciting 20 years and the opportunities that are in front of us right now are very exciting as well. So we look forward to being able to continue to deliver for our customers and our shareholders. And thank you very much for your interest in the business and looking forward to seeing many of you over the coming days. David Shafer: Thanks, everyone. Unknown Executive: Thank you. That brings today's webinar to a close.
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.
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