Thank you for standing by and welcome to the Hansen Technologies Limited H1 2022 Results Briefing. 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 one on your telephone keypad. I would now like to hand the conference over to Mr. Andrew Hansen, CEO. Please go ahead. All right. Thank you very much and welcome everyone to the call today, which no doubt is probably a busy time in the reporting season. I hope everyone's had a chance now to digest the uploads, what we've got, and I'm joined here with Graeme Taylor and our CFO, and Graeme and I will walk through our results. We're gonna first tell you guys it's a great six months and we're very, very excited to be able to once again present another record year for the business in among what has been still some challenging conditions with COVID around the world. You know, travel still being restricted, a lot of the places, customers not willing to have us come on-site, et cetera, but once again, we're very, very happy. Clearly of note is our revenues at just shy of AUD 149 million at 4.7% increase up. Great to see that EBITDA once again, and Graeme will go into a little bit more detail, which continues to go well while we're having some of those costs coming back into our business, but maintain a high level of margin, which is our goal going forward. Net profit after tax, you know, AUD 31.8 million up 7.4%. You know, I think these numbers speak for themselves in these sorts of times. I point out once again our revenue derived from our own IP that we're not resellers, et cetera. It's important to note that our revenues all come from things which Hansen own because we're distributing our own products and with a customer churn of less than 2%. Hansen goes for 30-odd years now has been very, very fortunate to build out a software deck which people want and don't wanna leave us from going forward. Earnings per share up to AUD 0.159, 6.7% increase, which is great. Dividends, I think the board always takes a view on the dividend, et cetera. In this case, we've given a AUD 0.05 dividend and AUD 0.02 once again, the cash is our shareholders cash in the event, which gives us plenty of chance for our own working capital by paying down debt, et cetera, and looking for opportunities to acquire. We've always said it's your money, so increase the dividend by a couple cents. The net debt now down to AUD 41 million, which just continues to show the strength of this company's cash generation. I think as always, look at the EBITDA, and Graeme will go shortly through just what we're doing with our cash. This is a real cash generative business which we're very, very proud about. A bit of a slide there which we continue to point to only because one day we do envisage we'll find another lane to swim in. Basically, the geographics of our business is EMEA is just over 50% of our business with APAC and EMEA making up the full 100%. The verticals is almost line ball now between what is the telecommunication sector and the energy sector. Across that, you know, over 550 are all tier one or tier two customers. We don't have many small customers at all. We have software operating in some 80 countries around the world. I know we've made those points before, but in times of uncertainty, it's also good probably to reinforce some of those things there. Graeme, I might ask you to drop in a little bit more detail on results, please. Thank you, Andrew. Look, great results for the half and first turning to revenue. I think it's important to note that this has been a period where we've been busy delivering to some new customers, as well as executing on various initiatives from within the existing customer base. This, you know, really is quite a strong trend within the Hansen business as we partner our customers through their digital journey. Revenues have gone from, in the same corresponding period, AUD 142.2 up to AUD 148.9. In that, you know, we've seen some AUD 5 million worth of license revenue. That's an increase on the prior period by that amount, which continues to drive the underlying margins and EBITDA. Staff retention and recruitment initiatives are starting to bring some sort of stability into our numbers, although it continues to be a little bit of a risk as we see, you know, that global mass resignation impacting industries across the globe. A great EBITDA result for the period up by 4% to AUD 54.2 million. The other point as we look further down underlying NPATA profits have moved and into different tax jurisdictions. We've seen the APAC region see a little bit more activity, which together with utilization of tax losses, means that we've seen a slightly higher underlying tax rate to 22.7%. Despite with cost control and so on flowing through, we're seeing our net profit increase to AUD 31.8 for the period. Continuing on to the next slide. Adjusted EPSA, I think Andrew talked to that a little bit. Obviously, with the improved margins, we're seeing that up some 7%. As I said, driven really by a lot of additional license revenue, some AUD 5 million when you look at a half-on-half comparison. Of course, license revenues, as we know, are pretty margin rich for our business driving EPSA. Dividends per share. Look, Andrew mentioned this in his opening address. Having some strong business fundamentals means that profit converts to quite a high level of cash. Our strong cash flows have allowed for both a distribution to our shareholders while maintaining all of our abilities to execute on our future initiatives. It's great to be able to return some cash to our shareholders as we move forward into a more sustainable position. Finally, net debt. Well, what a great story here. Net debt position has reduced from AUD 153 million back in the H1 of 2020 to now some AUD 41.5 million. You go a long way to find a business generates the sort of cash to allow that sort of retiring of debt. Look, I think that really does put us in a strong position as we look to move forward with a great balance sheet. Also, you know, cash that allows us to fund future debt as we expect interest rates will increase a little bit into the future. Finally, slide nine. We've broken up there the underlying cash for the business. You know, gross cash flows represent some 93% of our reported EBITDA, which shows some really strong ability for this business to keep converting profit to cash, which is, you know, one of our really strong business fundamentals that underpins the Hansen business. You know, we simply don't believe in profitless prosperity, and certainly generating that cash, as I mentioned before, allows us to continue our investment in our products to planned levels, pay our shareholders some dividends, and of course, continue to reset that balance sheet as we look for future investment opportunities. Andrew, over to you. Look, I'll just take a bit of time just to outline one of the key themes of our business. Once again, we're sitting on top of fantastic results, but it's probably always worthwhile understanding below that. Look, there's no doubt that Hansen is a very strong business which has, you know, impeccable public financial performance over such a long period of time in what has been a challenging economic backdrop. It's not as challenging so much, but it just is. I know people get distracted or confused or think of other things to think about, and COVID is such a big part of the conversation. We've got a proven cost control. I think that's one of the things which we'd like to think and know. I apologize, guys. We're not some double-digit company who doesn't make money. Unfortunately, the focus of Hansen has always been, you know, profit and cash generation, et cetera, and cost control is at the very heart of our business. Also probably currency hedge. A lot of you would have heard this before. We try to match our costs where we are sitting, where our expenses are. We tend to have this nice hedge inside of our business, so we're not really moving currencies around the place. It's just got the additional, which is that nice global spread of costs in our business. In other words, we don't really have a single country or region or customer or cost which could cause us great harm or bring us down. Historically, we've always spoken about our EBITDA being margins, and I think the history of like some 20 years has been sitting between 20% and 30%. There's no doubt that our margins have improved, and some of that has been because some of our expenses aren't in the business. Some has happened because some of the investment we've actually made in our systems are paying through at the moment now. Where we sit at the moment now, we believe ongoing, our margins will exceed 30% going forward. Now, you know, we can always have changes to that, but we just think the way we're running our business at the moment now, we should be able to get that. Long-term relationships with customers. Such a small churn of customers is, it's just fantastic to run a business where you know where your revenues are coming from. Also the significant new business expansions and upgrades we get from existing customers. It's not about just having existing customers. These customers are undertaking upgrades and getting refreshed with technology all the time. It's not as though it's aging technology. It's actually very, very fresh technology, which really goes to just how smart probably our teams are about investing in R&D going forward. That whole high customer entrenchment is making also additional sales into our customers. I'll touch on in a moment now about that, whereas, you know, they take one lot of products from us and they look to us to, for further solutions. We continue to have some good strategic customer wins, and we'd like to think that will continue going forward and look for more announcements to be coming out on top of our organic growth. We also win a lot from regulatory changes. Once again, our customers look very much to Hansen to help them navigate industry change, et cetera. Some of those industry changes, we've just done a big industry change in Finland. Well, that was announced three years ago. You know, 20 or 30 customers in Finland which need to deal with brand-new market changes and work with our customers so they can hit that on time without any delay and on budget. It is a great sign of the strength of character of our staff along the way. Part of that is the digital transformation, which is happening at the moment now all through 5G and smart energy renewables, that we are at the forefront of where our customers are going, and they look to us to help them take it down that journey. Look, there's a lot of talk sometimes about technology. You know, you've got to be SaaS, you've got to be cloud. We have a much more open philosophy around that. You know, having so many customers in so many areas, we have customers who very much believe in on-premises. They want the application run in their own site. But we also have people which do want it as a SaaS and wanna be paying as a service. We have people who wanna be in our own cloud or in a public cloud. All of our products, we like to support across all those disciplines. We don't have a single mindset, which should be one versus the other, because we know that we don't want to just have a single product and all companies have to fit it. We believe that all customers must have that flexibility. I think that's why that very open to innovation is working so well with our customers going forward. We do have a lot which are transitioning to cloud, et cetera, but just as many go to cloud, we've got just as many also wanna stay on premises, et cetera, as we're going forward. They've been really what are those themes. A little bit in here, one of the decks you've got there to read, which is just really part of that customer momentum. I've spoiled a little bit, but, you know, that cloud native, which is very important, which is the next step up from cloud, is to go cloud native. The people like DISH and Telefónica and Virgin, which just have, are aspirationally driving towards, that cloud native transformation. Modular product. You know, the days where these were great big enterprise assets are no longer applicable anymore. People are looking to buy modules. Our applications now are made up of probably about 12 individual modules. So we don't need to win all. We're also happy with customers who might wanna take one specific module, which is the latest technology by and keeping some of their older software, their heritage software going forward. A lot more around, service innovation enablement. This is with companies now looking to sell more than their original discipline, you know, with 5G or even in energy markets now, the Internet of Things and third-party services. There's a lot more now working with customers to go away from their original discipline to look to sell more than what they were selling before, and people like what we're doing for DISH and Verizon, Vodafone is a sign of that. Also energy transition to solar. Some big investments being made, and it was all in the press about, you know, AGL and the people looking to take that out. That similar sort of thing is looking to transition now from old ways into solar and other renewable energy sources. Hansen's right at the start of all that. I think where we sit at the moment now, you know, we've got applications which is always important to us that our existing customers want, and new customers want to come and join the party as well going forward. I think on capital management, it's probably Graeme, you wanna keep staying to talk? Sure. Look, capital management, I think the message here has been a pretty consistent one, as we look to return to shareholders cash where we have no immediate need for it. I think that, as I mentioned before, quite a powerful story as the company's been able to pay down debt over the period. As a result, with the cash that we've got on hand, the board's chosen to pay not only a 5% dividend, but also a special dividend this period of an additional AUD 0.02. That dividend will be franked to 50%. I think this is quite a strong payout ratio. It's something representing around 60% of the profits over the period. Of course, Hansen's in a fairly unique position, and our position going forward from a capital management policy is that we'll continue to return money to shareholders where we don't have an immediate need for it. Having said that, I think just a little bit of color around, you know, typically what Hansen does with its cash. The balance sheet is very strongly reset, and we continue to be very, very well supported by our bankers, as we continue our search for that next accretive acquisition. Trying to see as the world slowly is opening up, that we're seeing some good assets come to the market. There are certainly people interested to sell the business. There's lots of opportunities out there. Look, I take this opportunity to reiterate, you know, we're quite comfortable and confident that we were looking to do AUD 500 million turnover by 2025. That still continues to be the target that we've set. Look, this is a very disciplined process that Hansen runs. We've got a great business with strong business fundamentals, and so, you know, we're not going to just go out there and buy something that flies in the face of what Hansen has done over many years. We continue to look for the right opportunity, and should it come, or should I say when it comes. You know, I think we're in a unique position with our strong cash flows to service debt, and to continue to service debt in an environment where interest rates are possibly slowly starting to increase. You know, from my point of view, I think that fundamental that drives Hansen is quite a strong one, that we're in a position to execute on, Andrew, as we move forward. Thanks, Graeme. Look, in conclusion, guys, we understand we're all looking at the marketplace, the global markets have uncertain times over these last few months. I'd like to think your interest in Hansen or your investment in Hansen is one because we offer stability. We actually make money, which converts to cash. Not all companies actually do that. There's no smoke and mirrors in this Hansen business. For those who've been on the journey, we've appreciated your support. We'd like to think that we do provide that stability going forward to all of you. From a customer point of view, our customers' average tenure is like 10 years. It's just amazing that in a technology world that where we can continue to refresh that relationship with our customers and relationship, with their technology they're using. You only get that because you've got what they want, but also a high customer satisfaction because the customers are renewing and staying with us. Look, often, guys, this is going to the marketplace. They're going out to tender, they're seeing what else is in the marketplace, and then to win again is just a further chime. That very low churn, which we're dealing with, we're rather excited about. I did note back at the AGM, and this is probably an issue with a lot of companies have been talking about, you know, the great resignation, and we're suffering across all industries. It's not about IT. It doesn't matter if you're a teacher, you're a doctor, you're even in the financial services. Our churn has waned a little bit now. We've countered a number of programs at the moment to slow down that churn of staff, and that's really working well for us at the moment now. You know, we have taken a view, and it's not for everyone to want to share with everyone, but some of the actions we've taken have worked well for us. You know, this is all about supporting safe and productive home or office for people, whichever is the best for them for flexible working conditions, and we've got a whole bunch of plans around the transition of staff taking forward. The other thing we're doing now is I spoke about at the AGM, is just making onboarding people, and that's about getting them on board and being as productive quicker than what we were in the past. We are a profitable company, guys, and these records show it. The margin improvement we've already touched on continues and our long-term outlook. Now, we do know the long-term outlook, and what Graeme touched on earlier is got to do with M&A. We have been quiet in the last couple of years, and there's been a couple of reasons. Really, and I've mentioned this a few times, the quality of assets coming to marketplace have been slow, and that's probably understandable. If you've got a good house or a good property to sell, you wanna have the best number of bidders bidding for it. We know some of those assets which we had targeted will come to marketplace have been slow to come to marketplace. We do feel with restrictions easing, with travel easing, we will find a slight uptick, and we're probably starting to see the start of that now. An interesting one for people on the call now is that increased interest rates probably help us. You know, there's a lot of them people running around with cheap money and just buying things. We've never bought an asset because money is cheap. We bought an asset because we have business fundamentals which we believe in, which are proven, and that we buy these businesses and we apply the Hansenisation. We don't wanna go and compete with people with cheap money. We want to actually always look to renovate and optimize the business, going forward. That's why we still are strongly believing in that opportunity of being AUD 500 million by fiscal 2025. I think it will most definitely be happening. Where we are at the moment now, we are expecting operating revenue to be marginally improved over, you know, excluding Telefónica, which, as we know, was a big one-off with AUD 20-odd million dumped into it with open arms. We actually took that money, Graeme, didn't we? Absolutely. I don't think we said no. We even gave them the client bank account. Guys, that's the result. We're very happy. For those of you investing in Hansen, you'll be rest assured we are that stable, growing cash generative business, which you've invested in for some time now. On that note, I'm happy to hand back to Amali. If there's any questions, I'll be more than happy to answer them. Thank you very much. Your first question comes from Josh Kannourakis from Barrenjoey. Please go ahead. Hey, Josh. First question, just around, you obviously went through some of the organic growth drivers of the business, and some of the customer contracts you've won recently. Can we just talk about contracts like Telefónica? Is the referenceability of those starting to come through yet? And what are you seeing in terms of, I guess, the funnel for activity levels in, certainly in, those end markets? Yeah, look, there's no doubt, Josh. What I can assure everyone on the call is that it was delivered, you know, our component. Remember, it's a massive, you know, billion-dollar transformational project. Hansen's thing was delivered on time and on budget. I would say we're extremely referenceable. The overall term for what Telefónica is doing, which is really their business to talk about, is that overall transformation of a refresh of all their technology. Just that will still probably be a year or so sitting outside of it, but we know other Telefónica business units have a very close eye on it. I would like to think one of the things about Hansen, mate, we do deliver on time and on budget our projects and across the board referenceable. As far as the pipeline coming through, the pipeline's probably been as strong as ever, Josh, to be perfectly honest with you. Perfect. I guess following on from that in terms of, you know, the issues around labor and acquiring talent, how are you thinking about scaling sort of headcount? Could you give us a bit of context around sort of, you know, how many open positions you have now and where you wanna be by the end of the year? Yeah. Well, we've got open positions at the moment now, which is no hidden secret because you could probably go to any job boards and actually find, I think we have open positions, about 150 open positions at the moment now. Out of that, Josh, there's always this part of that which we know is just dealing with natural churn, but work for people. You know, mate, if we had 100 people joining us three months ago and all productive today, we'd be pretty excited by it. So clearly there is some constraints on us at the moment now on resourcing. We've always had absolute focus on customers as our number one thing, and also maintaining our R&D because we've made promises and commitments to our customers. The third thing is new business. You know, you can't go and pick up. A lot of people make this mistake, you know. I'd say that's a nice problem to have rather than go and close a deal and not have the ability to deliver it on time and on budget, and that smell lasts forever. We're balanced as best we can at the moment now. As I said, I'd probably like some more staff if we could get them. Fantastic. If I can just add to that a little bit, Josh. We've got a very targeted approach to our recruitment now. We've put on some particular specialist recruiters to assist in bringing new people on board. That's been a successful program. Of course, as we indicated at the AGM, we were working on some initiatives around retention. It's an interesting thing. We successfully transitioned up to 1,500 people working away from the office. I think Andrew and certainly our HR team have been working very hard to push the Hansen culture into that remote environment, and we're seeing that helping with our retention as well. There's lots of little programs that all just add a little bit to the puzzle, but they seem to be working very, very well. Fantastic. Final one for me, just with regard to the guidance, obviously very strong H1, and you did mention some of the benefits of the upfront licenses in the period. Perhaps you could just, you know, Graeme or Andrew, just talk us through a little bit into the H2, how you're thinking about that moving part. Also in terms of, you know, labor and the like, has the inflation in that area perhaps not been as much as you were previously expecting or? I'm just trying to get some context into the H2. That'd be fantastic. Yeah. Well, look, Josh, you know, mate, we're one month into from looking at our financials where we are at the moment now. Look, we think that the churn has slowed, but it hasn't stopped inside the business, so we do need some more. We would like to think we'll close a couple of new deals, which the market will be happy about. Look, the fact is, you've got COVID. I think the other distraction at the moment now is perhaps what's happening with Russia at the moment, which doesn't really affect our business. I don't have any business in Russia, et cetera. It just takes the oxygen out of the room sometimes when people start to look at it. Look, we're so lucky to have a revenue stream which is dependable and reliable, et cetera, at the moment now, Josh. Look, we, as I've put out there and just reinforce, we're expecting it to be marginally improved over the corresponding period. Okay, I'll give someone else a go. Thanks very much. Great result, guys. All right. Thank you very much, Josh. Thank you. The next question comes from Jules Cooper from Shaw and Partners. Please go ahead. Thanks, guys, for taking my question. One, Graeme, probably for you and then one for Andrew. Just the strong cash receipts this period. Now, that obviously reflects, I would think in part Telefónica, but is there an expectation that the Telefónica transaction will impact the H2, Graeme? Or is it largely captured here in the H1? Well, I think we made it. We did report at the AGM that the way Telefónica worked from a cash flow point of view, those monies were due to come in by the 31 December, and they're certainly in the cash flow. They honored the payment. You know, Jules, I think as Andrew mentioned, we've very much met and exceeded, I think, Telefónica's expectations, which is reinforced by the fact that they paid the bill. Paid the bill. Certainly, you know, Telefónica's in this cash flow from that perspective. I think probably, Graeme, it's probably of note now. Because of the new accounting treatment, how we have to bring licenses forward, probably going forward will be quite interesting, where we'll have revenues coming forward reported, but the collection comes after it. I think that ongoing Hansen cash conversion will still be pretty high, won't it, Graeme? Oh, look, yeah, look, there is definitely a bit of blurring of the lines from that perspective, but still. Until the next accounting change. Yeah, exactly right. Yeah. To your point, Telefónica's certainly in these numbers and, you know, that's certainly assisted, but as is, to Andrew's point, as is the revenue. We've Mm. We've got a continuation of that flow of cash. Yeah. Excellent. Just the last one, just on the margin guidance. I think you're sort of talking now to exceeding 30%. I just wanted to ask, if we go back to FY 2021, I think you were talking 32%-35% on your long-term sort of number. I just wondered, is that language now, you know, reflecting sort of the near term? Is it reflecting a change in that long term? Or, you know, how should we just read that sort of slight change in language, you know, both in the near term and the long term, I suppose is the question. Yeah. Look, appreciate the question. And you can probably understand that, like, giving guidance is one of the hardest things you actually do. I think I know in some of your own questions, you've actually spoken to Jules has been about, you know, the people returning to offices and people traveling, you know, whether we would revert back to that 25%-30%. And there's been, I know a lot of investors and some on the call now have been a bit focused on what will be a cost coming back into Hansen. And what I was trying to address is, I think that I was trying to probably do it more the longer term, but we think we should be able to stay above 30%, all things being equal. We don't see, you know, travel going back to the same way. We don't see office occupancy going back to the same way. We think some of those investments we've made in our HR and our financial systems, we'll see some of those benefits. It was really I was really trying to address the question a number of people have been asking is, were we in fact going back to 25%-30% by giving a bit more confidence staying above the 30% is what I was trying to do. Got it. Very clear. Thank you very much. Thanks, mate. Thanks, Jules. Amali, are you there? Yeah. Thank you. The next question is from Nicolas Burgess from Ord Minnett. Please go ahead. Thanks. Thanks very much. Morning, Andrew. Morning, Graeme. That was a bit of a dramatic pause. Just a couple of follow-up questions. Telefónica, was there any revenue from any residual revenue from Telefónica in the H1? Not worth mentioning, mate. All right. Very small. Little bit of project stuff, but nothing that's material. Yeah. Okay. Then sort of back onto the margin discussion, I sort of might see if I can push you just a little bit, Andrew, in terms of the H2. I mean, I guess underlying margin of 36% in the H1 and then guiding to the 30% or more in the H2, you know, there's a fairly wide gulf between those two numbers. Are there sort of planned investments or things that are gonna happen in the H2 that would significantly drag the margin down when you say return to that sort of trend? Any sort of color in terms of H2 margin performance at this point would be helpful. Yeah. I think Graeme, I know Graeme touched on it, Virgo. It was about the licenses, and this is the accounting treatment. You know, we had to bring forward what was the license ...value for about AUD 5 million in the H1. Yeah, ...that we, you know, we. As you know, one of the things that challenges us is a little bit, Nicolas, is what deal is gonna get recognized across a reporting period or the other. You know, at the moment we've got AUD 5 million this half that may not be covered, carried into the H2. The revenue number will be there, but it might be replaced with services revenue, for example. Yeah. I think, which is slightly lower margin. I think without probably putting too many cards on the table, because of the accounting treatment, it's a bit of a global thing, we are for the first time finding customers start to talk to us, Graeme, aren't we? Looking to actually, you know, capitalize and bringing the license forward, which actually goes against, you know, people who want SaaS, who just want an operational cost at the moment now. It's a bit of a. It doesn't affect our numbers demonstrably, but we have got people which are asking questions about prepaying at the moment now, which will change our numbers around and the way the margin comes forward. I know you're after probably a more specific answer, but that was a really good example when, you know, AUD 5 million of license fee hits in December. It could have hit in January. Yeah. Okay. It was a prepayment. To answer your question directly, there's no increased level of investment or anything like that that's going to happen in the H2, right? Yeah. This is not a case of us having to do something in the H2 that changes those numbers. In fact, the only thing is a bit of travel, Nicolas. I've got. I can't believe we're doing it. We've got a global executive meeting, which is gonna be in a week's time in L.A., so everyone's got to singly fly in there. There's a bit of an expense we haven't done. Mate, I've not been anywhere for nearly two and a half years, and you've known me for a long time, Nicolas, and I'm pretty involved in the business. There is. That's a one-off. I think while we're traveling there, the most important thing, the senior executives at Hansen, and you know, the top, like, 40 executives run the business, have all been in the business, and we had no resignations during the last COVID period, which is just amazing to keep them. There will be a few costs coming, but as Graeme said, there's no big capital plans at all. Yeah. Okay. All right. That's helpful. Just lastly, just on the staff retention and turnover issues that you mentioned, particularly in some of the development centers, going back to your AGM comments. Mm-hmm. The performance of the margin, though, in the H1, and I know, you know, there's license fee revenue and everything. It doesn't appear as though those issues gonna hit the margin at all, which I guess ordinarily you might expect that would be the case. Yeah, any comments around how you've been able to protect margin with that sort of headwind going on? And just some of the remedial action, maybe some of the sort of measures to improve the staff retention. Any detail on that would be helpful. Yeah. We've had such slow churn in this business forever. Nicolas, people join Hansen, stay for a long time. We respect people can go get jobs. I read some data from National Australia Bank the other day which showed the numbers of churn in different industries. I don't know if you actually looked at that. You know, the best thing about looking at that data is I went, "Oh, we're only half as bad as what their industry was." We were probably quite concerned for ourselves. The churn is not. We're not sitting on like, you know, National Australia Bank talking IT. I think it was like 30% or 36%. We're nowhere near that sort of churn inside our business. That was probably an interesting one. Also the way we look at churn, there's no doubt there's countries like in India, which naturally, before COVID, have always sat between 25%-30% churn. Now we've got an Indian operation, Nicolas, and you know we've got a big 20% of churn probably sitting in there. Therefore, you then flow on. The churn really has not affected. We also do our own recruitment. If we were to go and say we've hired 300 people in the last two years, we would have only had to pay recruitment fees on 2%-3% of that because we have a recruitment division inside Hansen, which has worked really, really well for us. We don't have some of those recruitment costs. Our training of people, our onboarding is well documented. Look, costs. We're always trying to keep on improving to get people up to speed. I think some of those costs, and so then you come down to the last one, Nicolas, is inflation, and wage increases. Well, we budget for these things in advance. We have some reprieve from our customers where we also get a CPI increase, so it's matched. You know, I think your observation's quite good. I think we've managed exceptionally well with employees and our cost of employees during this difficult time. Okay, thanks very much. Thanks, Nic. Thank you. Your next question comes from Godfrey Ng from RBCCM. Please go ahead. Hi. Godfrey. Hi, thanks for taking our questions. Just a quick one from myself. In terms of acquisitions into H2 FY 2022, did you have any further color in terms of likely kind of size or scale of the acquisitions that you're assessing and any common sense of timing around transactions? Yeah, look, we don't really give a specific commentary out there, Godfrey, because there are so many different deals which we would consider and look at and some targets which we would go after. All of them have to be based on the fundamentals that we can actually improve the margin over two or three years to the same level of margin as Hansen is doing at the moment. Rather than pencil in, it's all part of that plan of the AUD 500 million is where we're actually going from. Look, there are some strategic deals turning over AUD 10 million, which are probably interesting to us, and some more bulky ones turning over AUD 150 million, which would also be attractive to us at the moment. Once again, we spend our shareholders' and my own money extremely wisely and not necessarily wasting it on deals 'cause we don't have to do it. We have a very patient approach to do it. With no direct answer, we will be doing new deals, and they will be in all sizes, going forward. And there's no doubt we've got it. I think, as I said to you at the start of this, some of the deal flow, things we thought would have come to market, you know, owned by private equity, you know, owned for eight years and trying to sell the asset. Now they've just elected to hold onto the asset a little bit longer, and we're just gonna be patient. There's no use knocking on their door and trying to pay a big premium to unlock it. We'll wait for them to put the for sale sign up. Great. Thanks. I appreciate it. Thanks, mate. Thank you. Your next question is from the line of Shuo Yang from Microequities. Please go ahead. Hi, good morning. Just on the capital management slide, in previous years, I think you've noted a propensity to go to 3x-3.5x net debt to EBITDA for M&A, and I think it's been left off the slide this time. Is the board still comfortable with that gearing level? Yeah, look, without a doubt. To tell you the truth, I think the banks have been very supportive. I think the consortium of about 10 banks which were involved in the syndication of our debt when we bought the Sigma business, it's fair to say all those banks have seen not only us paying their interest, but rapidly paying down their loans quicker than most companies ever done. A few of them say in record pace. It's fair to say we'd have more than one suitor, which is looking to lend money to us. As far as the board's concerned, and just looking at the cash generation, that's a funny sort of thing we said before, but, you know, interest rates going up is not a deterrent from us in buying a business. Those ratios, 3.5, I would say at the moment is very, very comfortable for us to achieve. Naturally enough, we would also like to think we have cash. We'd also like to think along the way that our scrip has a value in it we could use as well. You know, if you add all those things together, you can quickly work out the size of our appetite. There's probably not a deal we would do which we probably can't afford to do. Yeah. Okay. No, that's great. Thanks. Second question, just in terms of price increases, on in contracts with your customers, you know, what's your, you know, willingness and ability to push that lever harder if there, if you do face cost inflation? Well, look, a lot of companies talk about pricing power, which is a bit of an odd one sometimes. It just talks about your ability to extract money from a customer. You've got to have a bit of a balance to that going forward. Most of our contracts have the ability to increase its CPI or renegotiation at the end of their term. Our contracts also limit the number of people getting access to our software being seats, but also the number of meters or devices off them. So, you know, we talk about Telefónica. Telefónica prepay, you know, AUD 20 million worth of individual transactions from us. So all of our contracts actually follow that at the moment now. I think you've got to be very careful with pricing power because you never want to force upon anyone, an increase which you can't justify. I'd much prefer to talk about CPI. I'd much prefer to talk about upgrades, et cetera, as a way of maintaining our margin, rather than us being ineffective managers and expecting our customers to actually pay our inefficiencies. Okay. Great. Thanks. Thanks so much. Thank you. Thank you. Once again, if you wish to ask a question, please press star one on your telephone. A reminder, if you wish to ask a question, please press star one on your telephone. Ladies and gentlemen, as there are no further questions at this time, I will now hand back to Mr. Hansen for closing remarks. Once again, look, I'd like to thank everyone for listening in. I hope it's been educational, a great result for Hansen in these challenging times in the stock market. All I can say is, for those which may be looking to invest, we're a bit of a safe hands and a safe company which makes money and has a fantastic future ahead of it. Thank you very much for your time. Bye. Thank you very much. Ladies and gentlemen, that does conclude our conference for today. Thank you for participating. You may now disconnect.