Good morning. My name is Krista, and I'll be your conference operator today. At this time, I would like to welcome everyone to the PeopleIN fiscal year 2024 half-year results. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question-and-answer session. If you would like to ask a question during that time, simply press star followed by the number one on your telephone keypad. If you'd like to withdraw your question, again, press star one. We do ask that you limit yourself to one question, and for any follow-ups, please re-queue. I would now like to turn the conference over to Ross Thompson, Chief Executive Officer. Ross, you may begin your conference. Krista, thank you very much, and welcome everyone. Thank you for attending PeopleIN's first half results for financial year 2024. I'm joined by our new CFO, Adam Leake. So as you're all aware, we're a major people business, and our purpose is to inspire excellence in our people, both our internal staff and also the 15,000 people that we provide employment to every week. So now to the highlights of our results. So we've continued to grow our revenue, which is positive, but earnings are down due to a shift in contract worker mix and also permanent recruitment being down, especially off the high of half-year financial year 2023. Revenue was AUD 602.7 million, 1% up on last half. Normalised EBITDA is in line with consensus at AUD 20.3 million, which is down 37%. Our Net Debt to Normalized EBITDA is 1.86 x, and that's based on our bank covenant calculation. Normalized EPS of 10.9% and a fully franked interim dividend of AUD 0.03. This equates to a 4.8% yield, which is similar to the full year and really reflects a prudent capital management approach taken by our board and the executive. Our return on equity is very solid at 17%. Now a bit more detail on our highlights. As we flagged at the AGM and our full-year results, challenging economic environment, and that's continued in H1 2024, driven by high inflation and interest rates and, in turn, low business confidence generally across Australia. As I said previously, we've continued to grow our revenue, delivering AUD 602 million, up 1% compared to H1 FY 2023. This is vital to our strong sales culture and ability to take market share, especially in resilient operational sectors like food services and infrastructure construction, albeit lower-margin roles, which has had an impact on our EBITDA, which is down 37% to AUD 20.3 million. I said primarily due to this shift in contract mix, but also a significant reduction in permanent recruitment, especially off historic highs in H1 FY 2023. That's really been driven by low business confidence across Australia. As planned, and for a couple of years now, we continue to drive efficiencies across the business by leveraging our scale and streamlining systems and processes, and our costs are down AUD 4.7 million on H1 last year. Sustainable capital management with low levels of debt gearing and adequate covenant hedging, our net debt to normalised EBITDA of 1.86x. But an evolution of our banking facility, and we've appointed CBA as our new bank, which will enhance our capital efficiencies, allowing for future growth. As you're all aware, there's been a lot of noise in the media around the new IR, industrial relations changes. But on balance, these present an opportunity for PeopleIN. And I've talked about this previously. You know, what these changes will do is that will add more complexity, especially for our small to medium clients to deal with. And they don't have the internal infrastructure and capability to deal with this complexity, so they'll look to businesses like PeopleIN, large, reputable staffing businesses, to solve that complexity for them. So I'd say on balance, we see that as an opportunity. So given our sector diversity, our strong sales culture, and our efficient operations, we're confident we'll quickly return to a strong growth footing when interest rates stabilize and business confidence rebounds. So now we'll just delve into the results in a bit more detail. So this slide compares our performance between H1 FY 2022, 2023, and 2024, and there's two main callouts. The first is the exceptional performance in H1 FY 2023. The majority of our markets were running hot. The second point I wanna call out is we've returned to FY 2022 performance in really challenging economic conditions. And we're still delivering a profit, a solid profit, and this is due to that predictable base load of operational workers, albeit at a lower margin. And this second slide, I'll go through this point around base load in more detail. You know, we're growing this resilient base load. So I'll pick up on the graph bottom left, which is our industrial business. This graph shows their billable hours, and that's over the past couple of years, so H1 FY 2022 through to H1 FY 2024. The green is all of our industrial businesses, apart from FIP, which is represented in black. You can see those industrial hours are really stable over the period, and that gives us predictability of earnings within our ISS division. Then pleasantly, when you look at FIP - and we've actually used pre-acquisition numbers for FY 2022 H1 and FY 2022 H2 - to show the growth in the FIP business. They're significantly growing, and this is in the food services space, so it's resilient operational roles that provide that predictability of earnings, so a really solid acquisition for the business. We'll go to the chart in the middle. So that's our healthcare and community business. So the grey is our government work, and the green is our private work. So overall, hours are down in H1 FY 2024 by just over 9%, and that's really been driven by a decrease in private hours. But our public health and our community hours are up, and you can see that slight increase there, which is a really good sign. However, that public work and the community work is at a lower margin, but it's stable and it's predictable. And then going to the last graph on the far right, that's our professional services contract hours. And again, so it highlights that high in H1 FY 2023 and then coming off in H1 FY 2024, but still up on what we saw in financial year 2022. So what's the overall takeaway from this slide? You know, we're growing our predictable base load of resilient operational work, albeit at a lower margin. But when business confidence improves, we'll be able to quickly return to growth, and we'll have a higher base load, which with which the higher margin work will come on top of that. And also, we've got a lower cost base as well. So that gives us confidence that we can return to a strong growth footing when that business conditions, business confidence improves. Now I'll hand over to Adam to take you through the finances in more detail. Thank you, Ross. We'll now look at our financial performance for the half year. A big thank you to you and your executive group. That certainly allowed me to hit the ground running ahead of this presentation. As Ross has outlined, the business has performed well in changing economic conditions. Consistent base load demand for labor hire has seen revenues for the six months to December 2023 grow to AUD 602.7 million, up 1% from this time last year. This result is underpinned by the continued demand for our Industrial and Specialist Services resources, in particular our food industry expertise under the FIP brand. Revenues in our health and professional services brands have both come off from their highs. As was flagged in our FY 2023 full-year results and at the annual general meeting, the favorable economic conditions of FY 2023 have reduced demand in these sectors. These business conditions have also seen clients trend towards lower-rate and lower-margin labor hire activities. Our normalized EBITDA for the half is AUD 20.3 million, down 37.7% from the previous half and down AUD 8.5 million from the second half of FY 2023. This results in a statutory net profit after tax of AUD 5.7 million. A full reconciliation of statutory profit before tax through to normalized EBITDA is included in the appendices. Focusing in on some of the components of our results on page eight. Total billed hours reduced slightly from the highs of the first half of FY 2023, down 1.2% to 10.9 million hours, Industrial and Specialist Services being the strongest area of growth, up 1%. Unfortunately, the business has seen a reduction in net margins across all divisions. This has been a combination of higher client demand in lower-rate operational roles away from higher-margin skilled work. Growth has continued in our lower-margin business units of industrial and food away from the higher-margin units of health and professional services, contributing to a reduction in overall gross profit margins for the half. Of most significant impact has been the reduction in permanent recruitment in the half. This decline was flagged in the previous half result and has continued to fall from the peaks experienced in the first half of FY 2023. This has contributed a AUD 6.9 million decline in earnings for the period. Changes in government policy have also seen a reduction in available employment subsidies. The business has been quite proactive in its operations, finding ways to reduce its overhead costs in the economic environment. This has seen the reduction of overhead costs across most categories by AUD 4.7 million in the half. As we moved our operating cash flows, a strength in our operations continues to be its cash collections and its use of cash. As flagged at the annual general meeting, despite the lower earnings for the period, cash collection to normalized EBITDA was in line with our 90% guidance. Our debtor days remained steady at 31 days, reflecting the quality of the clients in the portfolio. A couple of items I would like to call out here. Many of you are aware of a AUD 9.1 million set of payments that missed the 30th of June 2023 cutoff and increased our cash balances. These were paid in this half, reducing overall balances. There was also a callout made of AUD 14 million of additional receipts on the 30th of June 2023. This is a bit of an anomaly in the sense that most receipts occur on a Friday, thus inflating this FY 2023 result. After recognizing that impact, our collection is in line with our target levels. Also, there is a material difference between our tax paid in cash and the income tax expense for the half. The cash paid is based upon the installment rates from last year's profit activity. With the lower earnings in the half, these installments have now been revised down significantly for the next six months and will favorably assist cash balances for the rest of the year. With lower earnings across the half, we have ensured we maintain sustainable and appropriate capital management strategies for the group. Net debt levels increased to AUD 80.3 million at the end of the half, marginally higher than the previous trends. This increase was due to payments for the third consideration in the FIP acquisition. Overall net debt to normalized EBITDA is at 1.86 x. This is a level that the board remains very comfortable with and conservative to our peers. Further, this is well below our covenant levels. Since joining in November, I've had the opportunity to review our banking facilities to ensure they're the right fit for the group. I'm pleased to announce new banking facilities have been negotiated with the Commonwealth Bank. These facilities give us further capacity to grow, unlock some capital and operational efficiencies, and further improve our covenants. This further de-risk capital raise concerns and allows even greater capital management strategies to the group as the business conditions improve. And with this, I'll turn back to Ross. Great. Thanks very much indeed, Adam. So we're well positioned for growth when business conditions and investor confidence rallies. And we've got a couple of graphs and a table on this slide. So on the far left, we've got the NAB's latest sort of business conditions report, and you can see that decline, you know, from really January 2023 to where we are now, and conditions are now below the long-term average. So we need to see that tick up again, you know, get confidence back in the market. And then when we see that, we'll get back on our growth footing and say we have confidence that we can return to that growth footing quickly. And the reason why we highlight quickly really goes to the terms that we have with the majority of our clients. They are Master Service Agreements, so they can be turned off quickly, but they can be turned on quickly as well. And that can change in the space of where of one week. So I'd say when that confidence returns, then we expect to see that that pickup in hours or pickup in permanent recruitment, and particularly in those higher margin areas where we've seen the decline in H1. The next graph in the middle is from the ABS, and that shows job vacancies. So still high and still a lot higher than 2019. There's a lot of vacancies. There's a lot of demand there. But because of this lack of confidence, then we're seeing a delay or a pause on processes until those conditions improve. But when they do, then there's a built-up demand for talent, a built-up demand for people. We have the people to be able to supply. So again, supports us getting back on that growth footing. And then the table on the far right, that breaks it down into sectors and where you see those sort of more growth, high-demand sectors, then we have exposure to those sectors. So we are well positioned for growth when conditions improve. Then a couple of key takeaways. The first, you know, sustainable capital management. Adam's also talked about that in a lot of detail this morning. You know, net debt to normalized EBITDA 1.86 x. So plenty of headroom for us. And with a new bank facility as well, it will support future growth. Second point I wanna make around IR changes. So a lot of noise over the past six months, but we believe this is an opportunity for a large referral staffing business like PeopleIN, given the complexities that this will bring, particularly around casuals. We are set up. You know, we have leading infrastructure to really support our clients to navigate and solve that complexity. Then last point around that well position for growth. You know, given our sector diversity, given our strong sales culture, which is proven, you know, it's a tough market out there, but we're continuing to grow our revenue, albeit lower margin work, but the sales teams are out there and hungry. You know, we're driving efficiencies, and Adam talked about that as well. You know, AUD 4.7 million down in the half, a cost base. You know, we're confident that we'll quickly return to a growth footing when that business confidence rebounds. Thank you very much indeed for your time this morning, and we will now move to Q&A. Thank you. As a reminder, if you would like to ask a question, please press star followed by the number one on your telephone keypad. We also ask that you limit yourself to one question, and for any additional questions, please re-queue. Your first question comes from the line of Ben Wilson from Wilsons Advisory. Please go ahead. Thank you. Good morning, Ross and Adam. Well done. Looks like conditions have sort of stabilized a little lot at the group level. Just firstly, the baseload hours slide was very helpful. Thank you. Good to see that. Slightly hard to sort of prioritize the questions, but I might just ask about the cost out. Can you just expand on that a little bit? Firstly, I'm pretty sure it is an underlying cost out given the normalized EBITDA bridge slide. But can you just firstly confirm that's unaffected by the sort of statutory gain on the fair value movement? And then sort of more importantly, can you just elaborate or break that cost out down a little bit by segment? Looks like you've consolidated management in the health and community segment. But if you can just sort of expand a little bit on how sustainable that cost out is. Thanks very much. Yeah. Thank you, Ben. You're right. The AUD 4.7 million cost out, as Ross pointed out, Ross and I have pointed out, is for the six months. It is a coming across all our different categories. So this includes all discretionary areas but also much more structural areas. We are becoming more efficient in people terms, more efficient using all of our different resources. As for sectors, again, they're across all three sectors. Our ISS is obviously our biggest sector, so it has probably seen higher proportion of those costs. But the change in management structures we've put in place has seen a much more operationally efficient organization. So, we're pretty confident they'll continue on into the future. Yeah. Ben, and if you go to the appendix, we've got a slide there on the health business and our professional services business, and that talks more around those structural changes. But for both divisions, we now have a national leadership team that sits across a number of brands. And as Adam said, their points, you know, as driving sort of efficiencies. But it's also driving our cross-sell initiative as well. You know, you've got a monthly management meeting with those leaders around the table that represent a number of brands, and there's a lot more sharing, a lot more collaboration in our client engagement initiatives, etc. So benefits to the cost base but also benefits at the revenue line as well. Great. Thanks, guys. Your next question comes from the line of Liam Schofield from Morgans Financial. Please go ahead. Good morning, guys. Just on the underlying adjustments, just those write-off of receivables and the restructuring cost, AUD 3.5 million there. Can you just talk us through those two items? Yeah, of course, Liam. So let me start with the write-off of receivables. So when we acquired the FIP business, sort of just over 12 months ago, there was a number of client receivables that we had to collect back from the customers; they were sort of written off as part of the acquisition. We saw this as a problem when we acquired the business, but that is fully recoverable against the sellers of FIP. So what's happened is we have written off those client receivables, but we've also taken a equal and opposite deduction in the deferred acquisition payment that was required to be made. On the restructuring cost. Perfect. Yes. On the restructuring cost, yes, there's, circa AUD 1 million worth of restructuring costs. That some of that about AUD 100,000 of that are residual, costs coming out of the Project Augment, but most of it is people-related costs that happened earlier in the year to help try and drive those structural changes and structural cost outs that were that were received. Perfect. Thanks. Your next question comes from the line of Ian Munro from Ord Minnett. Please go ahead. Hi, Ross. Hi, Adam. Thanks for taking my question. Just in terms of the commentary in your presentation, sort of a few references back to sort of FY22, we're sort of thinking that that is more like a normalized year for PPE plus obviously what FIP contributes, once conditions get back to normal. And just with the new banking facility, can you please just help us understand what if any changes in covenants are included in that? Thank you very much. Yeah. No, thanks. Thanks, Ian. And I'll take the first part off that. Look, we make the point around FY 2022, and more of that point that, you know, we've reduced to that set level of performance in a really challenging market. But that's my comment isn't flagging what's that sort of low moving forward or, the performance moving forward, for us. You know, it's still too early as we're working through. You know, still more opportunities for cost efficiencies. There's more opportunities for revenue growth as well. So yeah, not flagging that as the base performance forward under a more stable market condition. The point is more we've reduced to that in a very challenging market. And I'll hand to Adam on the covenants question. Yes. On the covenants, look, we've worked with the Commonwealth Bank to come up with a set of covenants that are not materially different to what we have now but are much more flexible, much more in line with the growing business that we have. They're more modern in their interpretation of how we've approached things. So each of those sort of give us a little bit more headroom, but the materiality or the material issues around the total size of debt and the covenant levels haven't changed significantly. And just with respect to the level of costs taken out of the business, you know, sort of haven't seen much in terms of the outlook for the second half in terms of, you know, quantitative guidance. Yeah, but it just. Yeah. Just a query as to how you've kind of been tracking post-balance date and, you know, some of the gives and takes in the outlook for the second half. Thank you. Yep. Absolutely. Deliberately. Haven't given any quantitative guidance on the second half of the year. You know, it's gonna continue to be challenging. You know, I don't expect that business confidence to pick up until we get into the new financial year at the earliest. January is always a challenge month just because of people on leave. So it's always hard to sort of take that as a base and then, you know, form a view for the next five months. You know, we've got a couple of weeks of our data for February. And in some areas, we've seen a pickup, but in some areas have been impacted by the wet weather on the East Coast, whether that, you know, be our outdoor work in construction, etc. So yeah, we're very much focused in on that and obviously driving performance, but we're not at a point to give any formal guidance on the outlook for the second half of the year. Thanks, Ross. Appreciate the response. Cheers, Ian. Thank you. Your next question comes from Miriam Lee, who is a private investor. Please go ahead. Oh, good morning. I hope I can have two sort of related ones. I'm just an ordinary person, so they'll probably see me next. Anyway, you've actually done pretty well controlling expenses. It's better than I expected. One relates to the occupancy being down. Is that because of being able to combine places of work or something to have fewer offices? That's right, Miriam. That's been a plan for the past couple of years. You know, it helps collaboration as well. But it wasn't something that we've just started to focus on because market conditions have been challenged. It's more part of our overall plan to drive better collaboration but drive efficiencies across all of our brands. So yeah, absolutely, that's, that's part of that, cost efficiency that we've called out this morning. Right. And the other one, I actually spoke to you on the phone a few months ago about what the depreciation and amortization referred to. And you said we didn't have a lot of capital expenses, but it referred a lot to computer programs and software and trying to get some of the businesses that you'd taken over up to speed with that. And I've sort of noticed also that you've got software expenses down. And sort of how does that all fit in with the businesses that you're trying to get up to speed on computer systems and yet the software spend is down there? Yeah. And absolutely still committed to that programme of bringing all of our businesses onto a common platform, that be an accounting system, a payroll system, and a workforce management system. We are getting to more the tail end of that programme of work. So we've seen a reduction in the cost. You know, it's still a significant investment for us, but we have seen a reduction as we, you know, really narrow in and drive efficiencies through that team that is delivering the project. But it is key. You know, a number of businesses that we've acquired, you know, they've brought their own legacy systems that are coming to the end of their life. But also being on a common platform, a more contemporary platform, will also help us drive revenue growth as well. Well, that sounds all very good. Okay. Thanks. Thank you. Your next question comes from the line of Ken Wagner from Petra Capital. Please go ahead. Thank you. Good morning, Ross. Good morning, Adam. Good morning, Ken. Just returning to your waterfall chart on slide eight. The AUD 3.4 million reduction from contract rates. Was that across the board, or was that in specific areas? And if so, which areas did you see that sort of rate reduction coming through? And also, was that consistent across the half? Should we expect a similar number in the second half? Yes. That AUD 3.4 million is coming from all three different business verticals. So we are experiencing contract mix to lower-margin clients in all three. So it really is this shift from the higher, more skilled workers in ISS to more hours going into the food area, which are at slightly lower margins. In health, we talked about a cost shift, we talked about a shift away from the private; the public hours are staying quite stable, in fact, growing slightly, but private hours are coming down, and those private hours are slightly higher margins. And we are seeing a shift in professional services. You know, the really high-end, IT worker is coming down and being less hours in that area into a much more stable base load of professional services hours. So it's really just the mix of hours happening inside of each one of those divisions. It's been pretty stable. It's probably stabilized a little bit more in the last couple of months. So we did see probably the bigger reductions earlier, but it has come down each in it has come down across the period. So it's not coming from charging lower rates just to individual customers. It's more a mixed question? Is that, Yeah. Absolutely. Yes. Absolutely. Okay. It's more just a client-based mix. It's not, it's not a reducing cost new reducing price conversation. Right. Okay. So I'm just a bit. I'm not sure how much that goes in a divisional mix and how much is in contract rates. And also the permanent one you've mentioned as well, that sort of I would have thought they'd be picked up in the 6.9. So, I guess it's all sort of lumped together. Yeah. Ken, just to clarify, with Adam's points on professional services, that's the contractors that we've got in professional services, and yeah, Perm has picked up in that 6.9. Right. Okay. No, that's helpful. Thank you. I guess similar question on employment subsidies. Do we expect a similar number second half for that, the 3.9? Yeah. Look, with that, it'll probably be a reduced number because the changes in government took effect in the second half of the year. What exactly that number is, you know, we're still sort of working through that. But, yeah, the biggest impact would have been in that first half. So this was a government change that was made and had an impact on us. Great. Thank you. That's helpful. Your next question comes from the line of Ben Wilson from Wilsons Advisory. Please go ahead. Yeah. Hold on. Ben, you're on for a second one. Yeah. That's right. Can't keep a good man down. Just look, just one follow-up. Promise it won't be a third. Just on the health and community side, and the shift more towards the government sector, I understand that the private hospital sector has been looking to bring more nursing recruitment in-house. Is that likely, in your view, to be a sort of permanent shift, or is it more of a temporary sort of cost-out initiative on their part that might unwind sometime soon? Yep. Yeah. Look, I'd say it's temporary from my side. You know, there is such a shortage of healthcare workers in Australia, so you need every tool or support you can get hold of if you're running a hospital to bring those workers in. And, you know, I've spent the last few months engaging with those private health businesses, well, to really understand what they're looking to do strategically, both in the short term and longer term. So I think, again, comes to business confidence that private health hasn't been immune to the slowdown in the economy here. So what we've seen in that first half is where they can just slow on spend, and especially given that all the cost items are up. But we expect that to come back. And again, you know, we're growing our government work, so we're growing the base load. So when that private health work comes back, then, you know, we'll get back on that growth footing and be in a better position than we were going into this economic downturn. Thanks, Ross. And sorry, just also on the health and community side, can you just expand on the UK recruitment pipeline? Or maybe you said, the You+Aus campaign, looks like it's a good campaign, but I think by PeopleIN's own admission, it was probably rolled out a little bit too late last year to sort of capture that winter or post-winter exodus from the UK. Yep. Do you think you're positioned to get a much better integration inflow this year this time around? Yeah. Absolutely. And, you know, whether that's meeting government demand or private sector demand, you know, there's a long-term shortage of healthcare workers and community workers, and that's not gonna change. And Australia is not unique either. You know, you have Canada, U.K., the U.S. all vying for those resources. So the fact that we're investing in that international recruitment, and particularly the U.K., where what we've found is there's a lot of healthcare workers that wanna come to Australia, better conditions, better pay. So we've got a solid database, you know, a fresh database now of those candidates. Over 7,000 people have expressed interest coming across. So when we see that demand pick up, we're well positioned. And I believe You+Aus is industry-leading, so it will give us a competitive advantage over the competition. But also, it's been a really good discussion point with those private healthcare companies that I talked about previously. You know, I've been meeting with them, and one of the leading discussions is how we can help them with that international piece because some of them just can't afford to run international programs. You know, we've done that. We've got a good brand, and we can actually help them, deliver on their sort of international recruitment, objectives as well. Okay. Thanks, Ross. Cheers. Your next question comes from the line of Miriam Lee, who is a private investor. Please go ahead. Oh, yes. Hello again. Just about the cash flow being negative. That's not a question of bad debtors, I suppose. Is it just a question of delay because it's over Christmas or something? Yeah. You're absolutely right. We haven't had any significant write-offs in our, in our clients and our client debtors. The first six months are seasonally a little bit slower, and we get that Christmas delay in lower slightly lower work in December and collecting those funds. So, no, it's just a bit of a seasonal thing. First six months is always a little bit lower than the second six months. Right. Okay. Thank you. We have no further questions in our queue at this time. With that, that does conclude today's conference call. Thank you for your participation, and you may now disconnect.