Thank you for standing by, welcome to the FleetPartners Group Limited HY 23 half year results conference call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the 1 on your telephone keypad. I would now like to hand the conference over to your speakers today, Mr. Damien Berrell, CEO, and Mr. James Owens, CFO. Please go ahead. Thank you, Carmody. Good morning, and thank you for joining the FleetPartners FY23 first half results presentation. The name change to FleetPartners in March clearly reflects our absolute focus on core purpose and business. We are pleased to report that these results confirm strong underlying commercial activity and how well FleetPartners is positioned for growth in any environment. I'll cover the highlights shortly and then hand across to James to go through the financials, including the segment results. We will then briefly update on our outlook before taking questions. Turning now to slide 5 on the performance highlights. Let's start with UMOF. That's the fundamental driver of our income and ultimately the group's earnings. In the first half, UMOF was up 2%, which is a strong result given the backdrop of a challenging supply environment. The bottleneck in vehicle supply now extends to shipping shortages, biosecurity measures, and as a result, port congestion. These supply delays also act as a handbrake on new business writings, which were AUD 322 million, only slightly down versus PCP. Another pleasing aspect of our performance, in addition to the UMOF growth, is the growth we achieved in orders taken. This metric looks beyond the impact on supply delays and reflects the underlying commercial activity of the group. In the first half, we saw a record level of orders taken by the business. It was up 1.3 times pre-COVID levels. That outcome validates Strategic Pathways, which I'll talk to shortly. Another highlight of today's result is our continued success at cost management. At AUD 41.5 million, the full year OpEx outlook is to increase by only 3% versus PCP in an inflationary environment that's running at twice this rate. We are really pleased with this outcome. EOL remains elevated at AUD 7,658 per vehicle. Our view on EOL is unchanged. We expect it to normalize once new car supply comes back online. NOI pre-EOL provisions is 7.7%. This result is in line with the normalized range we first highlighted during our 2H 2021 results presentation. The sum of the parts is an NPATA of AUD 42.6 million and a cash conversion of 141%. As a result of today's strong financial performance, we are announcing an AUD 43 million share buyback for the second half of 2023. Excluding the amount carried forward from the most recent program, this share buyback equates to a 90% payout ratio. This is indicative of our confidence in the group's outlook and balance sheet. For taking stock of the highlights on this page, we are clearly pleased with the performance of the group and its ability to execute strategic priorities. Let's turn to slide 6. With respect to delivering ongoing EPS growth, the group has 4 key sources. The first one is Strategic Pathways. The foundations for this go-to-market strategy are now established and primed for growth. There is no better evidence for this than orders growing at 1.3x pre-COVID levels. The second driver is the Accelerate program. In short, this program is expected to deliver annualized OpEx savings of AUD 6 million by mid FY25. The third driver is our ongoing share buyback program. This program has permanently canceled 18% of share capital to date, with more to come. Finally, as they arise, we are well placed to pursue M&A opportunities as the fourth EPS growth driver. Let's now take a look at the performance of these EPS drivers in the context of our first half results, starting on slide 7. To recap, Strategic Pathways is designed to grow new business in 3 under-penetrated target markets of corporate, small fleets, and Novated. In this half, we continue to make strong progress in each of these segments. We won new customers and retained existing ones. We delivered several new technology offerings, and we helped a growing number of customers with their transition to EVs. The record level of orders taken I called out on slide 6 is great validation of the Strategic Pathways program. Let's now turn to slide eight and look at that in some more detail. Orders taken is a metric unimpacted by new car supply delays. For that reason, it provides a good proxy for New Business Writings in a non-constrained supply environment. It is therefore encouraging to see the record level of orders taken in 1H 2023 at 1.3 times pre-COVID levels. With that said, we are, however, operating in an environment where supply is constrained. This means orders simply take longer to convert into New Business Writings, which were AUD 322 million for the first half. You can see this in the middle chart. Noting at AUD 322 million, New Business Writings is down only 3% versus PCP to supply the supply challenges. In a scenario where orders outpace new business writings, it follows that the backlog for new business writings will continue to grow. This is exactly what we see in the third chart on the right. The order pipeline sits at record high and three times pre-COVID levels. Once new car supply normalizes, this record order pipeline will help underwrite future UMOF growth for the group. My final point on this slide is that electric vehicles are playing a role in driving the record level of demand we see here. I wanna talk to that in a bit more detail on slide nine. The key takeaway from this slide is that the transition to low and zero-emission vehicles has emerged as an opportunity for FleetPartners on several fronts. From a policy standpoint, New Zealand is the most progressed. They have legislated two key initiatives designed to make low and zero-emission vehicles more affordable and to increase their availability. Today, these eligible vehicles in New Zealand's order pipeline make up around 50%. What does this mean for Australia? We expect the same growth is coming for corporate and small fleets Australia. The Australian government has already introduced the Clean Car Discount to address affordability. They have commenced a consultation around measures to also help with availability. Across Australia and New Zealand, since the introduction of these policies, we have seen a 2.1 times increase in orders. We also expect the EV transition to be a catalyst for more outsourcing of fleet management to FMOs. This is due to in-house fleet management teams lacking the technical know-how required to oversee the transition, along with their uncertainty around EV obsolescence. As the leading FMO in New Zealand, FleetPartners is leveraging its expertise in NZ to give us a competitive advantage in Australia. In Novated, the growth rate in EV orders is even more profound. Orders have grown to 27 times 2021 levels. They also represent 17% of orders taken overall, and the average lease value now stands at $71,000. Interestingly, we've also seen an increase in the overall demand for Novated in general. While it is too early to say, there does appear to be a halo effect occurring. This is driven by a greater awareness of the Novated product, thanks to the publicity around the Electric Car Discount. Let's now turn to the second EPS driver on slide 10, being the Accelerate program. Accelerate is a business transformation program that will deliver an annualized OpEx savings of $6 million by mid FY 2025. It's still early days, however, pleasingly, the project is on time and within budget. We have successfully transitioned FleetPlus into FleetPartners in New Zealand, rebranded the group name from Eclipx to FleetPartners, and we've launched our new website. There are some smaller milestones remaining under wave one, and in parallel, several wave two milestones are now underway. Overall, we are happy with the progress being made and the positive impact these achievements have had on the group, including our people. Let's now take a look at the third EPS driver, our share buyback program. We have permanently canceled 18% of share capital since the start of the program two years ago. Today, we are announcing a further 7% or $43 million to be bought back. $28 million relates to the top end of our capital payout ratio, being 65% of NPATA. A further AUD 10 million relates to a special buyback. This is equivalent to another 25% of NPAT-A. In total today, we are announcing a payout ratio of 90%. The final AUD 5 million relates to the residual from the second half 2022 program that wasn't completed. The share buyback is considered the optimal form of capital distribution in the absence of franking credits. To the extent the AUD 43 million cannot be completed in the second half, the board will consider alternative options for returning the remaining amount to shareholders. Let's turn to slide 12. I think it neatly sums up the first half achievements. We've made good progress across our EPS growth drivers in the first half. Strategic Pathways has delivered record amounts of orders, record pipeline levels, and EV as an emerging driver. The Accelerate program is on time and within budget, Set to deliver AUD 6 million of annualized OpEx savings by mid FY25. The share buyback delivers a 90% payout ratio plus AUD 5 million carry forward, Once complete, it'll total 25% of shares bought back since May 2021. In summary, we have a clear strategy to maintain strong EPS growth and the effective execution to deliver it. Before I hand over to James to go through the financials, let me touch briefly on our recent ESG achievements on slide 13. ESG and sustainability are central to the group's strategy and values. As an organization, we are proud of our achievements. In November last year, the group published its inaugural sustainability report. It aligns our goals to the UN Sustainable Development Goals. The group retains its Australian active and New Zealand Toitū carbon-reduced statuses. Being the first and only FMO with both sets of climate certifications is a strong statement to our customers. Many look to our initiatives and our leadership in this area for their own vehicle emission goals. More recently, the group proudly released its inaugural Reflect Reconciliation Plan, which is endorsed by Reconciliation Australia. Beyond our sector, our team feels passionate and proud of our ESG progress in recent years and the leadership position we have taken across the ASX 300. In summary, I am really pleased with FleetPartners performance again for this half. This has been achieved through the combined experience of our team and their ability to execute our strategic plan. I'll now pass across to James to talk through the financial performance. Thank you, Damien. Good morning, everyone. I'll start by talking about UMOF's performance on slide 15. As Damien has discussed, UMOF grew 2%. Looking more closely, this was underpinned by strong balance sheet funded UMOF growth. By that, I mean leases funded through our warehouses and ABS. That was up 5% as we direct more new business writings into our funding structures and away from PNA. As a result, balance sheet funded UMOF reached AUD 1.3 billion at March 2023, up from AUD 1.2 billion at September 2022. We expect this trend to continue. The recent migration of FleetChoice Novated customers to FleetPartners will further reduce our exposure to expensive Novated PNA funding. Moving to our income statement on slide 16. As we previously indicated, the 1H 2023 results reflect a number of COVID-related tailwinds experienced in prior periods that are now normalizing. NOI pre-EOL and provisions margin has also returned within the normalized range of 7.5%-7.75%, in line with our expectations. The primary driver of this is the utilization of customer fleets. This has returned to more typical levels post-COVID lockdowns. Together with some maintenance cost inflation, this has seen maintenance profits normalize. End of lease income remains strong at AUD 35.6 million, with profit per unit at AUD 7,658 per unit. That's in line with the level seen in the second half of FY 2022. Whilst profit per unit was strong, the number of units disposed reduced 20% on PCP. This is because vehicle leases were extended while customers waited for replacements. We believe that used car pricing will continue to reduce from the peak seen in February 2022. For now, pricing remains substantially above pre-COVID levels. Last year, provisions benefited from the release of COVID overlays. They are now back to typical levels. Overall, NOI was AUD 108.6 million, down 19% on PCP. That's primarily due to lower EOL from fewer units sold. Pleasingly, OpEx was AUD 41.5 million for the half and on track with our expectations for the full year. This OpEx result demonstrates our strong cost discipline against a backdrop of significant inflationary pressure in both Australia and New Zealand recently. Putting all those components together, EBITDA was AUD 67.1 million, down 29%, and NPATA was AUD 42.6 million, down 31%, as per our expectations. Let's take a look at NOI pre-EOL and provisions margin on slide 17. As Damien highlighted in previous results presentations, NOI pre-EOL and provisions margin has been running higher than normal due to the benefits of a number of COVID tailwinds. We always expected these to dissipate over time. A key element of this was elevated maintenance profits. During 1H 2023, maintenance activity normalized as customer fleet utilization returned to pre-COVID levels. We have also seen an element of maintenance cost inflation come through. As a result, maintenance profits are returning to more normalized levels. The NOI pre-EOL and provisions margin for 1H 2023 was 7.7%, within the normalized range of 7.5%-7.75% we called out previously. We expect margins to sit in that range over the longer term. Management fees remain elevated will unwind as supply constraints ease and extended leases are replaced with new vehicles. This should be offset by higher net margin on deals in the pipeline as the September 2022 funding margin increase is passed through the back book as it's replaced. In summary, margin is performing as we expected it to. Moving to slide 18 and our funding and liquidity. There are 3 key points to take away from this slide. First, our funding margins are locked in until September 2023. This means no interest rate exposure on our portfolio until then. Second, our cash balance is higher than our variable corporate borrowings, so any upward movement in rates provides us with a net benefit to PBT. Third, we have sufficient funding capacity to meet our requirements without the need to access public funding markets for another 12 to 18 months. We could do so opportunistically if attractive conditions present. Stepping into the detail. Our long-standing and diversified funding platform remains a key differentiator, providing access to private warehouses, ABS markets, and PNA funding. Exposure to interest rates for our portfolio is limited. For PNA funded leases, there is no interest rate exposure, and for warehouse and ABS funded leases, base rates are hedged at lease inception. For ABS, funding margins are locked for the life of a deal, whereas for warehouses, funding margins are reset annually. Following the warehouse extension in September 2022, funding margins are now set until the next extension in September 2023. As a result, changes in interest rates don't impact the back book. New business is priced to reflect prevailing interest rates and funding margins. In terms of other interest rate exposures, AUD 45 million of our corporate debt is exposed to variable rates, but our cash balance of around AUD 230 million-AUD 250 million also earns interest at a variable rate. Therefore, any increase in rates is a net positive. For every 25 basis point increase in rates, there is an annualized half a million benefit to PBT. In terms of liquidity, we successfully executed an AUD 350 million Australian ABS deal in March 2023. This was priced at the lowest cost of funds for a deal of this type since May last year. As a result, we have sufficient capacity to meet our funding needs. We won't need to access ABS markets for another 12-18 months. This provides us with the flexibility to be opportunistic. Together with our net cash position of AUD 39.4 million, undrawn AUD 78 million revolver, and no corporate debt maturities until October 2024, our balance sheet is in a very strong position. That means we're well-placed as we approach our next warehouse extension in September this year. Let's take a look at portfolio credit quality on page 19. We remain very comfortable with the composition and credit performance of our portfolio, whilst remaining alert to any early signs of deterioration given the current economic environment. The assets we finance are business critical for our corporate customers, and for our Novated customers, payments are made directly by the employer. This drives strong credit performance over time and through the cycle. 90-day arrears remain in line with the longer-term average, sitting at 35 basis points as at March 2023, and reducing to 26 basis points over April. This compares to an average of 37 basis points since September 2016. Arrears have increased slightly since September 2022, but that reflects normalization following the lows experienced through COVID due to government stimulus. Nevertheless, they remain very low and below the average for ADI prime mortgages, another safe asset class, which is at 49 basis points. In terms of our portfolio composition, 76% of the exposure to our top 20 customers is investment-grade, and our exposure to industries such as building construction, food services, and retail is limited. Putting all these factors together, we remain pleased with the composition of the portfolio and its performance. Turning to slide 20 at end of lease performance. Used car pricing remains well above pre-COVID levels, but peaked in February 2022 and is gradually reducing, now around 25% below the peak. We still expect pricing to revert to around FY 2019 levels over time. However, EOL per unit remains strong in 1H 2023 at $7,658 per vehicle, broadly the same level as 2H 2022. As Damien has noted, the number of units sold was down as more customers reaching the end of their leases extend while they wait for replacements. This reduces the number of vehicles available for disposal. As a result, units disposed for the half was around 1,000 lower than typical. As supply normalizes and used car pricing reduces, we expect EOL per unit to return to around AUD 2,200-AUD 2,500 per unit and EOL to be around AUD 30 million per annum. However, predicting the timing of when new car supply and used car pricing will normalize remains challenging. Let's take a look at our OpEx performance over the last 5 years on page 21. Looking at OpEx over this longer timeframe on a like-to-like basis, excluding non-core businesses, gives some context to the strength of the OpEx result in 1H 23. OpEx is on track with the full year expected range of AUD 82 million-AUD 83 million. At the top end of that range, OpEx is only AUD half a million higher than it was in FY 19. Over the last five years, the group has clearly and successfully managed OpEx with discipline and focus. That discipline continues to deliver benefits, even against the backdrop of significant inflationary pressure in both Australia and New Zealand today. Just to put this in perspective, if the FY19 OpEx figure had increased in line with Australian CPI, it would have been AUD 91 million in FY22 instead of the AUD 80 million achieved, demonstrating how well OpEx has been contained. Moving to the balance sheet on slide 22, which remains very strong. Cash is up 13% to AUD 114.4 million. Net cash is up 49% to AUD 39.4 million. This is after buying back AUD 32.4 million of shares and gives us flexibility to pursue organic and inorganic opportunities as they emerge. I'd like to call out inventory, which is down 11% to AUD 12.6 million due to the lower number of EOL units available for disposal. Now turning to slide 23 and another pleasing element of FleetPartners operations today, cash generation. After adding back non-operational items such as CapEx and movement in shared capital relating to the buyback, the organic cash generated by the business increases to AUD 62 million. Comparing that against an adjusted NPATA of AUD 44.1 million, the cash conversion for the half equals 141%. The main driver for cash conversion being north of 100% is the tax shield driven by temporary full expensing of lease assets. This is expected to provide a cash flow benefit to the business until at least late FY 2026. Wrapping up the financials, FleetPartners has achieved a strong set of underlying results in 1H 2023, even as a number of COVID tailwinds receded as we expected they would. The business is very well positioned for the remainder of the year ahead and equally well positioned when vehicle supply eases. Moving to the operating segment now, I'll briefly take you through what we're seeing in terms of underlying demand compared to pre-COVID levels, how that's translating to new business writings in our pipeline and our asset growth. Let's start with Fleet Australia on slide 25. Demand has remained strong with orders in line with 1H 2019 levels, the last financial year before COVID. The delays we are seeing with new vehicle supply have meant that this demand hasn't translated to new business writings in the period. New business reduced by 10% compared to PCP, excluding sale and leasebacks. This continues to create an order backlog with the order pipeline growing to 2.5x FY19 levels. As we have noted, UMOF has remained stable despite these challenges, as extensions continue to buffer the impact of constrained New Business Writings. Balance sheet funded UMOF increased 1% as less New Business Writings were PNA funded. Turning to slide 26. Pleasingly, FleetPartners New Zealand has seen a strong increase in order activity in 1H23. It reached 1.9x the level in 1H19, a significant achievement. This was a result of a number of contract wins, but it was also supported by our work assisting customers with their transition to lower emission fleets, where FleetPartners is a market leader in New Zealand. This growth in order activity hasn't yet translated to new business writings, which decreased by 4% compared to PCP due to vehicle supply. It does demonstrate the growing backlog that will flow through to new business writings as supply normalizes. This can be seen in the pipeline, which has reached another record of 5.1 times pre-COVID levels. Fleet New Zealand's UMOF was up 7% and balance sheet funded UMOF was up 8%. A very strong result given the supply dynamics we've discussed. Turning to slide 27. Novated has also achieved a significant increase in orders. They were 1.8 times the level achieved in 1H19. This growth was partly a result of the Electric Car Discount legislation, which has seen a 27-fold increase in EV orders compared to 1H 2021, with EVs representing 17% of 1H 2023 orders. The legislation has also created a halo effect for Novated more broadly. Orders have also benefited from increased commercial focus in the Novated team following a leadership refresh during 1H 2023. Pleasingly, new business increased by 12% despite the supply constraints. Given the level of orders taken, the pipeline increased significantly to 4.9 times pre-COVID levels. While UMOF reduced 1% overall, balance sheet funded UMOF increased 5%. The mix of UMOF will continue to shift towards balance sheet funding. FleetChoice customers who were previously PNA funded have been migrated to FleetPartners and will be warehouse funded going forward. In summary, we have seen strong order activity across the business during 1H 2023. This is driving elevated pipelines across all segments. In turn, this is expected to support future asset and revenue growth as the supply chain normalizes. I'll hand back to Damien to take you through the outlook. Thanks, James. Let's turn to slide number 29 to look at how the first half performance impacts our expectations for the full year. Compared to the most recent expectations that we presented at our AGM in January, only one item being NOI pre-EOL and provision has changed. We finished the first half down 7% versus PCP, slightly above the expected decline we called out in January. We expect that gap to close and be down no more than 5% by year-end. That's because in the second half, higher priced leases that are currently in our pipeline will convert into new business writings. This will act to offset some of the headwinds being faced. These headwinds include delays in New Business Writings experienced in the first half, the normalization of maintenance, and the timing impact from moving the funding for new FleetChoice leases away from PNA and into our warehouse. All other expectations remain the same. Let's turn to slide 30 to wrap up today's presentation and then open the line for questions. A question from Jim. Above all, we are very happy with the strength of this result, the financial position, and the FleetPartners Group's strategic direction. The operating environment remains good, and our customers continue to be very active. This is no more evident than the record number of orders taken this half and the record level of the order pipeline. This now stands at 3 times pre-COVID levels. Supply remains a challenge, but despite this, UMOF continues to grow. Once supply does normalize, our record pipeline will help underwrite future UMOF growth and therefore recurring income. As it relates to EOL, we continue to believe this will steadily reduce over the next few years to a recurring annual run rate of about AUD 30 million. Our strategic priorities are clear, and we are delivering on them. Strategic Pathways is embedded with a focus of maximizing the profits generated on every vehicle we manage. Our leading position in New Zealand has us well positioned to benefit from the EV transition and the opportunities it presents in both New Zealand and Australia. This is across all three of our corporate, small fleets and Novated segments. The Accelerate business transformation program will deliver AUD 6 million of annualized OpEx savings by mid FY2025. Our share buyback program continues. By the end of this year, we expect it to have bought back 25% of shares since the program began. As always, M&A is firmly in our strategic priorities, and we are well positioned if the right opportunity arises. Finally, we are demonstrating that what we stand for from an ESG perspective is important to our organization, it is important to our people, our board, and our investors. FleetPartners today is exceptionally well-positioned to manage any environment. We have clearly defined EPS growth drivers, very predictable annuity-like earnings. We have a disciplined approach to delivering cost management across the inflationary cycle. Our balance sheet and liquidity positions have never been stronger, and our credit risk remains low. The group has seen an incredible transformation over the last three years, where we have been focused on strengthening the balance sheet, simplifying our operations, and developing our go-to-market strategy. While this will continue, we are now on the front foot in terms of growing the business in three targeted markets. Finally, we have a team with a proven track record that will deliver on this exciting outlook as we have in the past. I will now hand over to Carmody to manage your questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Tim Lawson from Macquarie. Please go ahead. Hi, gentlemen. Thanks for taking my questions. Just on supply, you called out sort of port issues and biosecurity, but maybe looking forward, can you sort of break down the supply issues into, maybe production versus, you know, delivery channel type issues like that port and biosecurity and where those two in particular are at now? Yeah, sure, Tim. Good morning. Thanks for joining. Yeah, that's probably a good way to think about it. When you first of all look at sort of the start of the supply chain with production, that does seem to be getting back to sort of pre-COVID levels. If you look at a lot of the analyst reports, that they are expecting in Australia, at least globally in terms of production, they're expecting to get to that sort of 80 million vehicle level in terms of global production, which would be at sort of circa FY19 levels. That seems to be sort of playing through this year. In terms of when you then you go further down the supply chain, when you talk about the shortage of vessels, and then also into Australia and New Zealand specifically with all the biosecurity measures and port congestion, that's a lot less clearer in terms of how long it'll take to resolve itself. Okay. Just on the capitalization you're putting through, in the intangibles, can you just talk about the sort of profile of that looking out, obviously with the strategic investment you're making in the cost reduction? Sure. Hi, Tim, it's James here. Yeah, we've spent AUD 5 million on Accelerate during the first half of 2023, and as we think about the phasing of that AUD 25 million capital spend, we're expecting it'll be around about AUD seven and a half million in the second half, AUD seven and a half million in the first half, and then AUD 5 million in the second half of 2024. Yep. Okay. That's great. Just two more quick ones. Are you seeing any sort of yield benefit from EVs coming into that Novated book yet, or is that too early? I see you've called out the sort of average price being sort of higher than, I suspect what a normal Novated vehicle is. Yeah. The benefit that we call out on that EV page is just the fact that the annual lease value is $71,000, Tim. That is a lot higher than what our typical novated lease is. Dollar-wise, certainly, yeah, we get a lot higher NIM from these EVs than we would on a typical novated vehicle. Is there enough vehicles in that sort of actual deliveries to sort of impact the yield yet, or is that more likely to come in future periods? Yeah, I think it's to come. We called out that 17% of our orders in the first half were EV, that's starting to get up to those levels where it's gonna have an impact. Those orders haven't been delivered yet, obviously not until we take delivery will they hit the balance sheet and then the P&L. Yep. Yep. Just last question from me. I suspect you won't be able to say a great deal on this, but can you add any color to that strategic party comment you had in the on-market buyback release? No, that's right. Yeah. love to probably provide, to elaborate further, but no, you're right. We can't actually add any further comments to that one for now. Okay. Thank you. That's all. No problems. Thanks, Tim. Thank you. Your next question comes from Scott Hudson from MST. Please go ahead. Hi, Scott. Yeah. Good Good morning, gentlemen. A couple of quick ones. Could you maybe just sort of talk about, I guess Fleet Australia new business orders? I mean, 1 times pre-COVID levels seem to be, I guess, lagging New Zealand Novated. Is there anything that sort of is key, the driver of that, I guess, relative weakness in new business writings when you order? Sure, Scott. Absolutely. I think the one thing you just need to consider when you go back to FY19, we did have a bit of a different strategy there. We used to participate a lot on what they call panels within the industry. Obviously, that's when there's multi FMOs all bidding for particular tranches with those customers. They're typically low margin type arrangements. During FY19, with the new leadership, we decided to sort of to remove ourselves from that market. We no longer did that. That certainly would have elevated the number of orders in 19 that we wouldn't have, obviously, in later years. The mix of that new business orders in 2023 is significantly better than the 2019 mix? That's another way of looking at it, absolutely. Yeah. Yeah. The one for one is different in that they're more profitable in this, in 23 than they were in 19 because of those panel arrangements. Correct. Is there any evidence yet of EV legislation, driving any further outsourcing opportunities, from an FMO perspective? Yeah, we've got a couple on the go at the moment, where there's large, they're large fleet, fleets where they look after in-house at the moment, and they're having conversations with us around helping them outsource it to us through the EV transition. Yeah, we haven't landed a big one yet, but, you know, there's a lot of signs out there that we, you know, we'll start to see this pick up a lot more. Thanks. Just the last one. Your sort of longer term guidance on yield with sort of 7.5% to 7.75%, that was obviously, put out pre-EV legislation in Australia. Does that sort of still hold as we sort of see this increase in EV penetration, particularly into sort of Novated books? Yes, Scott. I think it does. We're still comfortable with that range of 7.5% to 7.75%. There's obviously a few kind of puts and takes in terms of the revenue we make from an EV versus an ICE vehicle, and there's a slide in the appendix that just talks to that. Obviously as Damien touched on before, we make a higher dollar NIM, just given the higher asset value, typically a little bit less on the maintenance and the rebates. I think we're still very comfortable with that range that we talked about previously. That range also captures I guess the increased prioritization on warehouse funding as opposed to PNA funding. Yeah, correct. That's all I have for now, thanks. Thank you. Your next question comes from Richard Unland from CLSA. Please go ahead. Hey, morning Richard. Hi, good morning, guys. good morning. just had a quick question regarding the PNA financing strategy. The mix hasn't really changed over the years, in the context that you guys have had, generated a lot of surplus capital. have you spent any time sort of, you know, thinking about rather than, you know, deploying surplus capital back to shareholders, you know, increasing the financing book? Yeah, look, I think Richard, the strategy is very much to kind of build our on-balance sheet funding book over time as we work through Accelerate, and we'll have the optionality at a lease level to decide whether it's balance sheet funded, or PNA funded. That'll provide us with that flexibility, and we see a far higher proportion of new business writings being directed to the balance sheet when we can do that. How far... Well, what's optimal in terms of maintaining, you know, some degree of visibility into the PNA market and keeping everyone honest versus, you know, you know, doing, you know, promoting your own financing capabilities? Yeah, Richard, on the Novated side, certainly I think that the most we do in the warehouse is better for us. On the corporate side, there will always be an element of PNA. That's because simply when you look at some customers where their credit rating is, say, single credit, single A and above, it's better for us to partner up with one of the banks to do the PNA versus us doing it in our warehouse. We're always gonna have a certain element of PNA in there on our corporate side. Okay. The... What you're saying there is that the really strong corporate customers are you know, the best, most efficient form of financing is banks, you'll continue to do that. Absolutely. Yep. Okay. All right. Fair enough. Thank you. No problem. Thanks, Richard. Thank you. Your next question comes from Chenny Wang from Morgan Stanley. Please go ahead. Yeah. Hey, morning, guys. Just a few ones from me. Just firstly maybe on portfolio quality. I mean, arrears are still low and below history, but they have been increasing and I think they added, call it 20 BPS, this half. I saw that you guys also added, you know, food services and retail to that portfolio exposure, pie chart as well. Maybe you can just help us understand some of the drivers there and kind of unpack what's been happening around some of those movements. Yeah, sure. Thanks, Chenny. Yeah, look, I mean, the 35 basis points as at March, we're still very comfortable with. It's in line with the longer term average through the cycle. We've actually extended that comparison in terms of looking at that average to go back pre-COVID in terms of what it looked like before then. That average now goes back to 2016. In fact, the area is actually reduced in April down to 26 basis points. There's always a little bit of up and down in that, but we're really seeing no, or very minimal, stress in the portfolio at the moment. In terms of the sectors that we've called out there, we called out building construction before. We've added in food services and retail just because they're some sectors that, you know, are getting a bit of focus from our credit team, but our exposures to those are very minimal. Obviously, for all of these exposures, we have security over the underlying vehicle. Got it. I don't know if this is the right link to make, but I wanted to sort of dig into some of the color around the PNA funding environment, and then obviously you guys looking to prioritize warehouse a bit more. When did that PNA bit change for you guys? 'Cause I don't think that was exactly in the books at FY22. You know, maybe it was just me that missed it. Also, I guess given that we are talking about, you know, portfolio quality, did that have any, I guess, impact on that PNA decision? Chenny, in terms of how long it's been going on for, on the Novated side, yeah, it has been sort of gradual over the last couple of years. Largely it's just from a more of a back office technical standpoint as to why we couldn't direct all that Novated into the warehouse versus PNA. It's something that, you know, we've got our arms around in more recent time, and we'll just gradually start to build that up in terms of more to the warehouse. Less than PNA. The reason for it was purely just to do with the fact that, it's more profitable for us to put in a warehouse versus use a PNA third party when it comes to Novated. Okay, got it. Then maybe just one last one from me. Just on Australian Fleet and maybe piggybacking off a previous question. I was wondering if you could help us understand those orders, maybe on a more like for like basis. Obviously, you called out pre-COVID, there was those panel arrangements. Yeah, like on a kind of like for like basis, do you have that number in terms of what the NBW orders look like? not offhand, Jenny. We'll have to probably come back to you on that one, just to sort of strip out back in 19 from an orders perspective what related to panel versus non-panel. Okay. All good. Thanks, guys. No problem. Thanks, Jenny. Thank you. Your next question comes from Phillip Chippindale from Ord Minnett. Please go ahead. Hey, morning, Phil. Morning, James. Thanks for your time. Just a couple of questions from me. You've given us the average EV value on the Novated side. I think it was around AUD 71,000 mark. Can you just to help us sort of understand what that impact is compared to the rest of your business. You know, what's a typical average vehicle value there, you know, excluding EVs? Yeah, in Novated it's around that sort of 50-55 range, typically. Okay, thank you. Just on the order book. you know, you've spoken about, the quantum now being what, 3x. Can you just talk to, you know, what does that actually represent from a, from an order, you know, AUD million sort of figure? Yeah. It's nothing we've disclosed in the past, Phil, in terms of the dollar amount of that. A good way to think about it is when we look at our pipeline today, it's more than 6 months worth of new business, right? Is it less than 12? Okay, thanks. Final one from me. It's just on the Novated business. You know, the shift to warehouse or more of the warehouse. You know, ultimately, like, do you envisage a situation where, almost all of your business in the Novated side of things goes through the warehouse? Is it that attractive to you? Or is there still some benefit to having, some PNA business in that Novated book? No, correct. It's, you know, ideally the vast majority would be in the warehouse, if not all of it. Okay, thanks. That's all from me. Thanks, Phil. Thank you. Once again, if you wish to ask a question, please press star one on your telephone and wait for your name to be announced. Your next question comes from Scott Hudson from MST. Please go ahead. Yes, guys, just a quick follow-up. The AUD 6 million of cost savings on Accelerate, is that a gross number or a net number after inflation? It's gross. Yeah. Even if you go back to last year's full year results, Scott, we've got a table in the back there which just looks at what the cost of the organization would be with and without Accelerate, lay it across different asset levels or UMoF levels, and that gives you an idea in terms of how we're sort of thinking about that. Okay. All right. Thank you very much. No problem. Thanks, Scott. Thank you. There are no further questions at this time. I'll now hand back to Mr. Berrell for closing remarks. Thanks, Harmony. Thanks, everybody, again for joining us this morning. Thanks for your ongoing support. James and I look forward to catching up with each of you over the next week or so. Have a great morning. That does conclude our conference for today. Thank you for participating. You may now disconnect.