Thank you for standing by, and welcome to the G8 Education Limited CY 2022 full year investor call. All participants are in a listen-only mode. There will be a presentation followed by a question and answer session. If you wish to ask a question, you will need to press the star key followed by the number one on your telephone keypad. I would now like to hand the conference over to Mr. Pejman Okhavat, CEO. Please go ahead. Good morning, everyone, and welcome to the 2022 full-year results presentation for G8 Education Limited. My name is Pejman Okhavat, and I'm the CEO and Managing Director of G8 Education. I'm joined today by our Group CFO, Sharyn Williams, and Tracey Wood, our Chief Legal Quality and Risk Officer. Sharyn and I will have the pleasure of walking you through the investor presentation that was posted on the ASX earlier this morning, and then provide time for questions. I'd like to begin this meeting by acknowledging the Gadigal of Eora Nation, who are the traditional custodians of the land on which we are conducting this presentation today. We respect their spiritual relationship with the Country, and we pay our respects to their elders past, present, and emerging. I extend our respect to any Aboriginal and Torres Strait Islander people joining us today. I would also like to acknowledge the dedication, skill, and commitment of the entire G8 Education team for their outstanding efforts during the year. We continue to respond to a highly challenging and rapidly changing operating environment while continuing to deliver on our purpose every day, which is creating the foundations for learning for life. This morning we will cover the financial performance for the CY 2022, an overview of how our strategy is flowing through to operating results, and finally, the macro environment and our view of the medium-term outlook and current trading. I joined the group at the beginning of January, I would like to take a very short couple of moments to provide some context on my background and my first seven weeks. I joined the G8 on the background of 29 years in the retail sector, working across U.K., New Zealand, and Australia within large and well-known organizations. Since 2012, I've held several MD and CEO roles in large distributed network and complex organizations and led them through turnaround growth through M&A consolidations, business and agile transformations, which all have led to adding value to all the stakeholders. I've had an incredibly warm and fast start. I'm very grateful to our G8 team and wider stakeholders in assisting my immersion and learning journey into our organization and early childhood sector. I will be continuing on this journey for the next couple of months until I am completed my immersion program. Turning to slide seven, an overview of the calendar year 2022. To start with some key highlights. In our core occupancy of 71%, quality improvement of 3% compared to previous year at 89%, inquiries up 10% and operating EBIT of AUD 80.3 million were a very pleasing and solid set of results that we achieved in 2022. The year was a tale of two halves, with the first half impacted by Omicron and floods, resulting in closures, capacity issues, team shortages and higher agency usage. The operating environment was challenging and had a significant impact on occupancy and earnings. To respond to these challenges, the group implemented a cost out program to augment the savings generated by transitioning from the improvement program to an integrated business as usual model. During the second half, we saw a solid rebound in occupancy, resulting in the gap to CY levels being closed further and CY levels being exceeded. This occupancy recovery translated into earnings performance as operational disciplines in workforce planning and intentional investment in centralized support for our teams mitigated the impact of higher agency usage. We know this performance while pleasing, was in an environment of continuing sector team challenges, so we are cautious in our optimism for the coming year. Execution of the group's strategic priorities progressed well during the year, with quality across the G8 portfolio now in line with the broader sector results. You may recall last year we were slightly behind, so this improvement is pleasing to see and reflects on the dedication and the focus of our team in delivering quality services to our children and their families. A significant amount of resources and focus is being directed towards navigating the great challenge facing our sector regarding the workforce shortages. We are working hard on team attraction, retention and workforce planning and metrics, particularly in our vacancy profile relative to the broader sector, and are encouraging and suggestive that these efforts are yielding results. At the same time, we continue to work on optimizing our network. The group has a strong balance sheet that facilitated capital management initiatives totaling AUD 68.5 million through an on-market buyback and fully franked dividends. Whilst the long-term fundamentals of the sector continue to be encouraging from both the demand and somewhat supply perspective, we remain cautious given the significant challenges relating to team shortages, inflationary pressures on the economy overall, and the significant amount of regulatory activities relating to the sector over the next 12 months-24 months. Whilst early to understand the full impact of the inquiries, and how significant they may be, we will expand on these later in the presentation. As outlined on Slide eight, despite occupancy for the year being flat on prior year, revenues grew and cost management discipline, allowing these revenues to flow through to operating EBIT. From a strategic perspective, non-operating items such as non-cash gains and losses, restructuring costs, and software development costs resulted in impact reducing compared to prior year. Slides nine and 10 outline the drivers of occupancy, including quality, team, and portfolio optimization, strong operational execution, and broader growth in demand. The simple rule of thumb for us is that the stable, engaged teams provide high quality learning and care, drive high levels of family engagement that in turn lead to sustainably higher levels of occupancy. We are showing some promising signs across these areas, particularly in the current environment of the sector-wide team shortages. However, we remain cautious that we are not where we need to be, particular occupancy, so we have a journey ahead of us to convert initial green shoots into occupancy and continued earning growth. Quality continued to improve for the group to now be in line with the sector quality levels for centers meeting and exceeding, reflecting the investment made in around center support and increased training and development as we continue to work towards our goal of achieving 95%. Moving now to our most pressing and urgent short and medium-term challenge, team. We are currently in an acute workforce shortage, which is being felt sector-wide. Across our team, we see engagement in the mid-70%s and mid-80%s for our center managers. Although retention as a group reduced versus CY 2019, it was pleasing to see our CMs improve this slightly to 79%. In a year where there was a step change in sector vacancies, G8 recruited more roles than the prior year and reduced its number of vacancies. This outcome was driven by our centralized recruitment team and additional HR business partners supporting our center network. Similar to the rest of the sector, navigating these shortages remains G8's key focus in CY 2023 and beyond. We expect this challenge to continue to constrain occupancy growth to some degree. During the year to improve our team experience, we increased support for our center managers, provided dedicated teacher registration support for Early Childhood Teachers, and continued to tweak our REM and benefits in both of these key roles. From a broader educator perspective, leveraging our system to provide enhanced flexibility and increasing development opportunities has been a focus. Given our scale, G8 has the opportunity to build a pipeline by growing our own talent. It is pleasing to see that circa 1,100 team members enrolled in Certificate III and diploma courses and over 200 enrolled in the bachelor study programs. From a sector and G8 demand perspective, we continue to see a strong demand reflecting the relative elevated higher inquiry levels. A large portion of these inquiries relate to centers that have higher occupancy already, and therefore limited, as well as centers where team shortages are a constraint for occupancy. The upcoming CCS changes will improve affordability, and we expect consistent with the recent subsidy changes, like the sibling subsidy, will increase demand. This will likely manifest through increased frequency of bookings and through new families entering the sector. This reinforces G8's focus on team as the government changes to stimulate demand, the critical factor that will dictate whether families can access extra days will be the ability for operators to staff this demand. G8 is continuing along the journey of optimizing the location of our services with a number of centers closed. Six centers opened and waiting to CBD centers continuing to reduce. The progress of Greenfield pipeline has markedly slowed, with developers being impacted by inflation and supply chain challenges as well as their own staffing shortages. On the supply side of question, supply growth remains subdued compared to prior year in CY 2022, driven predominantly by increased construction and funding costs and longer construction timelines due to labor shortages. It is uncertain if this is a sustainable decrease in supply, as recent Department of Education flagged they are receiving an increased number of service approval applications. We are cautious in how supply might look as we go forward. The final driver occupancy is operational excellence. G8 continues to focus on execution, and we are seeing more early positive results in rostering disciplines and our in-center work routines in particular. Given the reliance on a stable team in a service business in the current environment, consistent and sustainable operational performance requires more focus and oversight. It was pleasing to see our progress along our ESG journey with key achievement in CY 2022 being the quality of improvements across the portfolio, the sustainability-linked loan being renewed, and an emission target being set and largely driven by installation of solar in a number of our centers during 2023 and revision of our vehicle fleet. The group also has a commitment to implement a Reconciliation Action Plan to foster community shared value, goals, and common language when it comes to reconciliation and continue to pilot allied health services to broaden our support for children's outcome. I will now hand over to Sharyn to provide a detailed overview of the group's operating and financial performance. Thank you, Pejman. Turning to slide 14, the group's performance was solid on the back of the strongest second half result, ending broadly in line with CY 2021 in terms of occupancy, operating earnings, and margins. The core centers delivered higher earnings in the prior year and a stable margin. This is a pleasing result, particularly in light of the very weak first quarter that was impacted by Omicron and floods. While occupancy was flat year-on-year, revenue increased, driven by fee reviews in both January and July, the latter a necessary response to inflation. Our largest cost base area, wages, was managed well in a year where inflation and agency usage impacted the wage rate. This reflects our increased investment to centrally support our teams, to manage rosters, and share our valuable team resources across locations. Rent is another material cost base for our business. Rental rate increases for the year were 5.4%, including market reviews of 6.6%. However, noting our continual focus on the locations of our centers, the non-renewal of a number of leases resulted in rent payments being flat on prior year and an improvement in the quality of our portfolio. Greenfield centers performed in line with expectations, noting importantly, the comparison to prior year does not reflect the same group of 16 centers, with the current year including six new centers, where start-up costs are higher. Significant achievement for the year was support office costs being flat on the prior year, despite significant inflationary pressure across insurance, wages, and other cost areas. You may recall during our prior year results, we outlined a temporary government funding stream relating to apprentice wages. This funding was put in place by the government to aid the economic recovery from COVID-19 in both CY 2021 and CY 2022. G8 used $5 million and $7 million respectively to increase trainees as part of our workforce shortage response. This subsidy will not repeat in CY 2023. Support office costs should be adjusted due to the absence of that temporary subsidy. Our group margins being broadly stable year-on-year demonstrated the effectiveness of cost disciplines and our active management of inflation while still continuing to deliver quality care and value for our families. We will maintain our focus and disciplines as the expectation for the coming year is inflationary pressures will continue, not only for G8's cost base, but also for our families who are also feeling inflationary pressures. Moving on to occupancy performance. What is really interesting about slide 15 is the trend of occupancy through the year. The overall occupancy was flat year-on-year at 71%, but there was a steady trend of improvement, with occupancy closing the gap on CY 2019 and slightly exceeding the CY 2021 occupancy levels by year-end. This occupancy outcome was driven by our strategic change programs and the reestablishment of the seasonal uplift trend. In addition, we have seen a further increase in days in care in response to increased childcare subsidies to improve affordability. The recent change improved affordability for families with multiple children and also removed the annual subsidy cap. It would be remiss of me not to mention that sector workforce shortages continue to impact occupancy levels, with a portion of the network remaining constrained by team member availability. From a state-by-state perspective, Queensland is our best overall performing state, and regional centers continue to outperform metropolitan and CBD. To provide further context on nuances by state, New South Wales, Western Australia, and the ACT have been relatively more impacted by workforce challenges. Our metropolitan centers in Victoria, Queensland, and South Australia are predominantly driving the reduction compared to CY 2019. With these states having material variances between regional and metro areas, particularly those centers that are within approximately 30 km of cities. We're finding that families in those areas, potentially commuting to a city for work, are likely choosing a center closer to home rather than commuting to work each day. Our final call-out on location variances is our CBD locations. We continually to proactively rationalize these locations given the structural changes in demand. In relation to wages, we've controlled the controllables. A highlight of the year was our response to increased agency usage and wage inflation. Active management in our new HRIS system, which facilitates improved analytics in rostering and compliance activities, partially mitigated the higher impact of agency costs. Labor inflation for the year was 7.8%, slightly higher than the 7% we'd anticipated at the half year. The internal wage rate increase was 4.7%. Agency usage comprised the remainder, given the higher cost to access this temporary labor. Agency costs continue to be elevated at 4.7% of total wage hours, up from 2.7% in the prior year. This increase has been offset by internal team hours, resulting in better wage efficiency. From a practical perspective, we've achieved this through flexible rostering, recruiting more part-time and casual team members and sharing our resources across our network to better utilize the people we have, a benefit of operating multiple centers. This improved wage hours per booking partially offsets the higher rate paid for agency team members. Slide 17 reflects the continual active management of the portfolio, where 16 centers were exited during the period and six new centers were opened. The impaired cohort of centers have improved performance since CY 2019 through not only the divestment program we've undertaken, but also improved operational performances. These losses, ignoring any impairment benefits, so apples with apples, are now reduced from AUD 12 million from the 2019 year to AUD 4 million, a significant improvement. The group's greenfield portfolio has slowed due to developer challenges with supply chain and inflation. We'll continue to take a very commercial lens on this pipeline, particularly in the current environment. Changing tack now to the group's cash conversion, which was 94%. The variation to prior year is largely driven by timing, where we carried additional creditors into early CY 2022 due to the cut over to our new financial system, and these unwind in CY 2022. During the year and outlined on slide 19, CapEx and SaaS costs were AUD 65 million, in line with expectations. This investment in property CapEx in particular has driven positive momentum in quality, with 96% of centers achieving meetings for QA3 area property. We've also seen improvements in family satisfaction relating specifically to physical facilities and resources. The targeted total CapEx and SaaS for the coming year is circa AUD 65 million, predominantly focused on property improvements, information technology and systems, and educational resources. All investments are to improve team engagement, family retention, and child outcomes. The group's balance sheet is well-positioned, as outlined on Slide 20, with conservative leverage of 0.8x and net debt being flat on the half due to stronger seasonal second-half cash flows. A fully franked dividend of AUD 0.02 per share has been declared and payable in April, taking the total dividends for the year to AUD 0.03. This is a 68% payout ratio within our target pay-payout ratio range of 50%-70% of net profit after tax. We continue on our journey to optimize our finance costs with the benefit to the refinance evident in reduced interest cash outflows. These reduced from AUD 11 million in CY 2021 to AUD 9 million in CY 2022. We do note that interest expense of 13.8 recorded in the accounts for CY 2022 includes AUD 2 million of non-cash capitalized borrowing costs written off relating to the junior facility refinance and extending our senior facility. The remaining finance costs comprise commitment fees, drawn interest costs, and borrowing costs expense. The combination of these are expected to be circa AUD 13 million in CY 2023 based on current BBSW rates. We are mindful that interest rates may continue to increase. We've reduced our facility size in our recent refinance from AUD 350 million to AUD 306 million to reduce commitment fees on unused facilities. As announced today and flagged at the half, we've completed a non-cash reduction of our share capital. This transaction involved no reduction to net equity and no change in the number of shares on issue. It purely simplifies our balance sheet presentation to more closely reflect our net equity. Pleasingly, the AUD 40 million on-market buyback is complete, with AUD 38 million of shares purchased, and our buyback objectives to support conservative leverage while enhancing shareholder returns and preserving funding reserves have been achieved. Sharyn will now walk through the strategy update. Thanks, Sharyn. We will now turn to the medium-term outlook for G8 and the broader market, as well as the current trading update and outlook for the balance of the year. Turning to slide 22, with the strong fundamentals in place that support long-term demand growth, the sector has historically benefited from bipartisan government support, with this support increasing further in July 2024. We have also seen the number of days our G8 families are using childcare increasing over the past years, and this trend has continued into early January, reflecting the positive impact of subsidy changes on days in care. The further changes being made to CCS percentages by incoming brackets potentially also support increased days. Our internal analysis suggests that these changes will make a difference to some of our families. In this current inflationary environment, where families could be looking to take on extra hours of work to help fund rising cost of living, the ability for this extra day of work to not to be spent on childcare fees will aid affordability. Some families, though, will choose to retain these savings and the current days in care to restore family budgets. This is reinforced in the chart on the left-hand side that shows the net out-of-pocket cost for families over time and the government affordability measures to assist out-of-pocket costs for families. In the December quarter, though, there has been a material increase in these out-of-pockets, or what the sector terms gap fees. The changes to subsidies in July 2023 will help with these out-of-pocket fees. Importantly, these extra costs can only be realized if we have the team to support the growth. The trend in female workforce participation rate and the reestablishment of positive net migration will also provide a meaningful tailwind as this normalizes to historical values. Turning to labor supply side of the equation and our greatest sector challenge, workforce shortages, which we discuss in more detail on slide 24. Like other parts of the economy, the early childhood sector has been impacted by increased workforce vacancy rate. In the case of ECTs, the workforce challenges has been exacerbated by increased demand due to new regulations in New South Wales and Victoria, as well as the pausing of the immigration over the last two years due to COVID. These factors have resulted in ECT vacancies increasing by over 30% over the last three years. Government have responded by introducing funding and scholarship programs to reduce the cost of both vocational and tertiary qualifications, while also providing accelerated degrees to fast-track ECT qualifications. We are seeing some very early signs that the enrollment numbers are increasing in response to these programs, which are really pleasing to see. G8 has also responded with various initiatives, including remuneration and benefits, the scholarships, funding and enhanced professional development programs. The results for center managers have been heartening, retention levels improving against prior periods. However, in the ECT and educators, we have seen a retention reduce. We continue to improve the attractiveness of G8 in this ECT area, leveraging off the state-based kindly funding for three and four-year-olds, given these roles are hardly contested by primary schools and early education providers. We are seeing more regulatory activities in the sector with a number of government reviews and inquiries having commenced or are due to commence in this calendar year. The ACCC inquiry has commenced with a draft report due by June and final report by December, focusing on the drivers of costs and the variability of these costs by provider and how these relate to fees within the sector. The Productivity Commission's review, which commences in March 2023, is expected to leverage off the findings of the ACCC inquiry. The terms of reference have been released and are focused on support, supporting affordability, accessible, equitable and high-quality early childhood education and care. The Royal Commission in South Australia into Early Childhood is releasing its interim report in April, with a final paper due in August, and also the New South Wales IPART inquiry again in 2023. A more broader regulatory change across Australia is the multi-employer bargaining, with one of the stated aims of these reforms being to address the undervalued work in the care sector and address the gender gap. G8 looks forward to working collaboratively with unions, peak bodies, and government to commence the planning process in relation to multi-employer bargaining and advocating for government funding in relation to wage increases. Turning to current trading and outlook as per slide 26. Current core occupancy, week ending 19th of February is 1.8% higher than CY 2022 and 1.5% lower than CY 2019, and broadly in line with our December trading update. Fee increases of circa 6% implemented in January in response to the current inflationary environment. Wage management disciplines continue this year. Further wage inflation is expected in CY 2023 due to agency usage remaining as one of the staffing shortage solutions, combined with general increase to sector wages anticipated with the award changes mid-year. The group balance sheet remains strong following the completion of the circa AUD 40 million on-market buyback as part of the group's capital management strategy. Moving now to outlook. Demand outlook for the early childhood sector is improving and is expected to be further stimulated by the cheaper Child Care bill scheduled for July 2023. New center supply response is still unknown. Supply in CY 2022 was subdued. Approval requests have increased in January 2023. Chronic workforce shortages remain the sector's key challenge, constraining occupancy, conversion, and sustained improvements. Inflation will continue to play a role for our families, affordability, and our cost-based management. Regulatory focus on the sector will potentially have significant reforms ahead, which will require careful navigation and significant resource and time and attention from us. G8's focus in the near term is attracting and retaining the team to support a seasonal occupancy growth and assist families in benefiting from the upcoming CCS changes. I'm going to pause here and hand back to the moderator to start the Q&A session, and at the end, I will come back with some final remarks. Thank you. If you wish to ask a question, you will need to press the star key followed by the one on your telephone keypad. If you wish to cancel your request, please press star 2. If you're on a speakerphone, please pick up the handset to ask your question. We ask that you please limit yourself to one question per person, after which you may then rejoin the queue. Your first question comes from Tim Plumbe with UBS. Please go ahead. Hi, guys. My question is just about labor constraints. Pejman, I know you've spoken about it. In a fair amount of detail during the presentation, but can you maybe just touch on industry discussions that are currently being held with the government, in particular around ECTs? I mean, it's positive seeing those numbers coming through from university admissions, but realistically that takes four years for them to work their way through the pipeline. Importing that talent is probably gonna be critical. Just further to that, maybe broadly, how you're thinking about labor inflation in calendar year 2023, given those constraints. Thank you. Great start to the questions. In terms of how we're working and what are we observing from the sector and other providers, you know, we are a member of the ELACCA. We've been having regular conversations with ELACCA, particularly on this topic, and we are all, in a similar way, united in the fact that we are facing the same shortage challenges. To give you a data point, when we had our ELACCA meeting in January, the CEO of ELACCA mentioned that within the ELACCA members, which are roughly about 25%-30% representation of the sector. You know, we ended the year in December and coming to January, roughly about 5,000 vacancies. If you kind of multiply that out, you know, within the sector, there's anything between, I would say 18,000 to 20,000 vacancies currently out there. Everyone's in the same boat. We're all trying our best to deploy tactical activities and the strategies that we feel right and is appropriate for each of our own businesses and organizations. At the same time, we're also really advocating for government to really look at this really critical workforce and recognize the importance of early childhood services that we provide for the families, the children, and of course, subsequently, the economy. You know, myself and the ELACCA members are actually in Canberra next Monday and having a conversation about that with the government to see what are the potential opportunities in terms of recognizing the sector and partially also about multi-employer bargaining. We have increased our own focus and attention on how do we navigate these workforce shortages, because they're just not gonna go away any short. To your point, you know, it takes time to educate people. We have increased our recruitment support, both from our central support and of course our centralized programs. We have deployed HR field partners that are actually budding up geographically to making sure we're recruiting and attracting talent as much as we can. We have looked into our REM and benefits. You know, we improved our holiday pay by two weeks for our ECTs last year to six weeks, which is, you know, we feel incredibly pleased about being able to offer that. Working towards Bachelor can continue in some states, which is really, really important for us. The other things that we're also looking at is flexibility of hours, provisioning that, and also working within geographical areas to pool talent. 'Cause, you know, as I said, we're gonna have to find some new ways of addressing some of these challenges. Your next question comes from [Marnie Loughnan] with Macquarie Capital. Please go ahead. Good morning, team. Just a quick one from me. Just on, like I think December, the kind of P&L contribution. I'd just like to understand. It seems to have come in a bit stronger than what, say, December calendar year 2021 did. I'd just like to understand the drivers of that. Thank you. That, yes, you are right. We were pleased with that December performance. I think at a high level, you know, we continued the momentum from H2. Our occupancy was higher. Average fees were higher. You know, better wage, particularly around agency cost management, were the key contributing factors. I'll now also hand to Sharyn in case she's got any other further colors to add. Yeah. Only thing I'd add, [Marnie], is each year we do a reconciliation of our kindergarten funding from our state governments. So in December, we did have around an AUD 1 million contribution where we'd been a bit conservative during the year on that number. Just to follow up on that, kind of the kindergarten funding reconciliation, is there anything to expect that could be different next December or next year? Oh, sorry, calendar year 2023. Certainly state governments, particularly Victoria, Queensland, New South Wales, are investing more in the three and four-year-olds. Now of course, that funding needs to be 100% invested through our cost base. In terms of ECTs, we're focusing a lot of that spend on our kindergarten teachers. As Pejman mentioned, increasing the leave in particular. You will see kindy funding lifts, but of course, that will flow through our cost base and not a net benefit to the group. Although it will help us with our team challenges. Moderator, before we go to the next question, I omitted in answering Tim's final part of the question, which was about what do we anticipate that the wage increase this year might be? To be honest with you, Tim, we don't know. You know, last year was over 5% when the award was reviewed in mid-year. We don't know. One thing we are guaranteed, it will be reviewed, and I think we can probably say that it will be an increase, but the quantum of it, we don't know, and we have no indication. Moderator, back to yourself. Thank you. Your next question comes from Wei-Weng Chen with RBC Capital Markets. Please go ahead. Hi, guys. Just first question from me. Just on your medium-term targets, just quantitatively speaking, can you maybe share how we should think about, you know, when you guys get to the point of that 80% occupancy, you know, what might that mean for G8's profitability? What should, you know, I'm sorry, post-lease EBIT look like at that point? Well, when you might recall at the half year, we did give a bit of color around the earnings opportunity when centers are at higher level of sub occupancy. You will see it is a material uplift once they're particularly over 90%. At this stage, we won't be confirming an earnings equivalent for an 80% occupancy. We are confident that those building blocks we've outlined there around quality, team, getting our locations right and being operationally excellent are our building blocks towards 80%. When we get to that stage, you would certainly see margin being more positive, although we won't be putting a number on it today. All right, thanks. Your next question comes from Cameron Bell with Canaccord Genuity. Please go ahead. Sorry about that. Yeah, sorry about that. Got stuck on mute. Guys, I'm just trying to ask about, I saw you made those comments about like-for-like occupancy, but just maybe, some broader commentary about the re-enrollments process, how you've seen the first, you know, seven or eight weeks of this year, particularly, you know, possibly if you could flesh out where you think occupancy might be if you didn't have these issues around labor. Couple of high-level comments, Cameron. The pattern of occupancy coming into January has followed the same lines of the last couple of years, although with some positives and downsides. As I explained, you know, we've seen our occupancy grow against CY 2022. Our occupancy gap to CY 2019 has broadly stayed similar to what we said in December, which was around 1.3%, and we're currently about 1.5% gap to CY 2019. There are a couple of positives in terms of where we are. If I look back in December or that last part of quarter four, we had circa 80+ of our centers that had cap on occupancy due to significant team member shortages. Right here, right now, you know, we started January with around the 40s and 50s. Right now we're actually under 30 centers with a cap put in place due to that. The other pattern that we are seeing from our own team members is the increase actually against the last two years, probably, on the level of leave taken and also unpaid leave. I think partly, again, this is our own view, is that, you know, over the last two and a half years, not many people due to COVID were able to take extended leave and go see families. You know, we've seen definitely this year as the traveling situation has stabilized a bit more and it's not been disrupted. People have taken longer leave. Also some of our... You gotta remember, some of our own team members are parents themselves, and they're balancing the cost of coming to work and also putting their children in care. Some of them have probably decided to stay a little bit longer in January and spend more quality time at home with the kids. The patterns are the same. We are better than CY 2022, but we still got a gap that we're working and focusing on against CY 2019. Thanks. Once again, if you wish to ask a question, please press star one on your telephone keypad. Your next question comes from Wei-Weng Chen with RBC Capital Markets. Please go ahead. Hi there. My next question, just on the non-trading income and expenses. Just wondering if you could bridge us from, I guess, the first half to the full year. Looking at the accounts, you appeared to have sort of stepped up software spending in the second half. Also in the first half, you had AUD 2.7 million of income. At the full year, that number's now halved. Just how do we go from sort of first half stepping up and also for software spending, how should we be thinking about that going into 2023? Those non-trading expenses fall into a couple of buckets. Restructuring costs, which were part of our restructure. They were more heavily weighted to the second half there. The material amounts though really relate to where we're exiting centers, and they relate to non-cash gains and losses on the lease assets and liabilities. Since the introduction of AASB 16, we are seeing a lot of movement in that space when you do make changes to your center portfolio. We make sure that we do carve them out so that the operating numbers aren't impacted by the noise around those leases. When we have a gain on a lease, it's not a cash gain in terms of a profit as such on sale that realizes in cash. It's purely around the carrying value of those leases and property plant and equipment. Yeah. Okay. Can you just confirm, of that, was it AUD 13 million of non-trading items? How much of that was cash? In terms of cash? Yeah. No, you're better off to refer to the cash flow statement in terms of costs to look at exiting centers. The large majority of those non-operating items around leases would be non-cash. The restructuring costs are around AUD 3 million. They would be cash. They relate to some of our team changes we've made during the year. Yeah. Okay, thanks. Your next question comes from Tim Plumbe with UBS. Please go ahead. Hi, guys. Just a follow-up from me, if possible, please. Just in relation to the greenfields, you guys got a pipeline of 12 centers. Presumably that's for the, for the next 12 months for current year 2023. If not, like, how should we be thinking about, you know, ongoing annualized fees in that greenfield space, please? Thanks, Tim. Number one, clarifying the time period. Those 12 in the pipeline are across a longer period than CY 2023. I believe they are over the next three years. The specific timing of those, we are working very closely with all our developers and landlords. As I explained earlier, most of our landlords and developers have had challenges for all the obvious reasons, and we're working with them to see when there's a possibility of them coming to fruition. That's the first one. What was the second part of your question? Just remind me. I think you just answered, but how we should be thinking about kind of annualized run rate. Apologies if you've already answered this. I was doing two results at the one time. Yeah, no problem, Tim. In terms of the greenfields in their coming year, we'd certainly be looking for the newly opened greenfields to continue increasing occupancy, and we have seen that in the early stages of the year. As that occupancy increases, you would understand better than most, given you've followed the company for some time, that those earnings will improve from that group of centers. The unknown portion is how many of those 12 will open in this year. We will know more in terms of the half year around those 12 new centers that might be coming. We can't really give a full year number at this stage, but in terms of the ones that are open, we would look to be reducing some of those losses that are currently there. Got it. Thanks, guys. Your next question comes from Peter Drew with Carter Bar Securities. Please go ahead. Good morning. Just a question on support costs. I think the annualized second half run rate is about AUD 54 million. Sharyn, you made some comments about that apprentice funding not, you know, being in 2023. I'm just wondering, you know, if you can give us some guidance around what support costs might be, I guess, at this stage, at least, for 2023, please. Sure, Peter. You are right in terms of the apprentice subsidy being added back onto that annualized number you have. You'd be working then from a base of around the 60, low 60s to add CPI, et cetera, on. The main drivers of CPI, we have been seeing the hardening of the insurance markets. We're continuing to see costs coming through insurance. We're doing a bit more in the IT cyber space as other companies are doing, and then wage inflation for the coming year. There will be a little bit of annualization in wages as well. I'd certainly be working from the number you were referring to in the low 60s and then adding some inflation to that. Okay, thanks. There are no further questions at this time. I'll now hand back to Mr. Okhovat for closing remarks. Thank you for all your questions. In concluding the presentation, I'd like to just confirm that, you know, G8, we're incredibly committed to living our purpose, which is creating the foundation for learning for life. Our key strategic programs continue to be centered in terms of better outcomes and experience for our children and their families, with our focus on our team and continuing to drive quality across the G8 network. Our operational disciplines and execution will ensure sustainability in our progress for all our stakeholders. Executing our strategic imperatives remain our key focus to ensure medium to long-term progress. We do remain optimistic about the next horizon in terms of certainty as the demand continues to grow. We do have a cautious lens on the macro challenges. That concludes our presentation today. Thank you again for your interest in attending. That does conclude our conference for today. Thank you for participating, and you may now disconnect.