Thank you for standing by, and welcome to the Smartgroup Corporation Half Year 2024 Results Release. 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'll need to press the star key followed by the number one on your telephone keypad. I'd now like to hand the conference over to Mr. Scott Wharton, the CEO. Please go ahead. Great. Thank you, and good morning, everyone, and thank you for joining us on the call today. My name is Scott Wharton, and I am the Managing Director and CEO of Smartgroup. Joining me on the call today is Jason King, our Chief Financial Officer. First, I would like to acknowledge the traditional owners of the land on which I'm speaking to you, the Gadigal people of the Eora Nation. As this event is broadcast nationally, I would also like to acknowledge the traditional custodians of the various lands on which you all join this call. I recognize their continuing connection to land, waters, and culture, and pay my respects to their elders, past and present. Turning to slide three. Today, I'll start by providing some of the key highlights for the first half of 2024, and a recap of Smartgroup's investment proposition. I will then talk through the progress we have been making across our strategic priorities. Jason will then take you through the first half performance in more detail. To conclude, I will provide a quick trading update. Now, let's turn to slide five of the investor presentation. Smartgroup delivered solid financial and operational performance in the first half of 2024. Revenue increased 27% versus the first half of 2023 to AUD 148.5 million. This was underpinned by high novated leasing volumes, driven by demand-generating actions we delivered and improving vehicle supply. Through a strong customer experience, Smartgroup continues to retain clients and increasingly attract new ones. Our service proposition has positioned the group to renew a significant number of long-standing clients during the period. Targeted increase in costs enabled Smartgroup to generate and meet additional novated leasing demand and further improve customer experience. We are also making considered investments to deliver Smartgroup's strategic priorities. This includes our digital assets and simplification of processes. Cost efficiency is a focus for Smartgroup, while balancing investments to continue to differentiate, drive efficiencies, and further strengthen our competitive position. EBITDA of AUD 56.2 million was up 20% on PCP, and EBITDA margin, excluding costs associated with the South Australian Government contract implementation, was 40% in the half. This was a slight margin improvement, half on half. NPAT increased by 16% to AUD 34.1 million in the first half. Smartgroup also delivered operating cash flow conversion at 108% of NPAT. Our solid financial performance and high level of cash generation have enabled the board to declare an interim dividend of AUD 0.175 per share, fully franked, representing 69% of first half 2024 NPAT. We also continued to grow salary packaging customer numbers, novated leases under management, and fleet managed vehicles. Jason will expand on this shortly. In the first half of 2024, we continued to experience robust demand for novated leasing for. EVs now account for 42% of our total new car orders, including plug-in hybrids at 10%. While the EV share of our novated lease portfolio is growing, ICE vehicles remain an important part of our business. In the first half of 2024, the number of ICE vehicles ordered increased compared to the second half of 2023. Pleasingly, yield increased 14% versus the first half of 2023, driven by a higher proportion of new car leases versus refinances, vehicle mix, and supply chain renegotiations. Yield was stable compared to the second half of 2023 and will be an ongoing focus. Jason will provide further details of our financial and operational performance later in the presentation. We are also making steady progress against our strategic priorities, and I will speak about this later. But in short, we are well on track to achieve our ambition of delivering smarter benefits for a smarter tomorrow. During the period, we were pleased to receive from Sustainalytics an 8.6 ESG risk rating, placing Smartgroup at the 98th percentile globally. We were also ranked in the 92nd percentile worldwide in the S&P Global Sustainability Assessment. In addition, Smartgroup was again recognized as an employer of choice for gender equality by Workplace Gender Equality Agency. We have held this citation since 2021. These outcomes are a recognition of the importance of ESG and diversity and inclusion to Smartgroup. We are very proud of our results. Overall, we are pleased with all that we achieved in the first half of the year. We executed our financial and strategic priorities while implementing the South Australian Government contract successfully. Moving to slide six. We believe our investment proposition is compelling. Smartgroup is uniquely placed to continue to deliver strong growth and sustainable shareholder returns. Smartgroup is a leading employee management services business, with a client base that employs around 2 million Australians. Our existing client base represents a significant growth opportunity. In the first half of 2024, we serviced over 400,000 of those 2 million people, and managed just over 95,000 vehicles across novated leasing and fleet. The group has significant recurring revenues and long-term contracts with clients in attractive and growing segments like government, hospitals, education, and not-for-profit. Our offerings are even more relevant to our customers during tough economic times, when customers are looking for ways to make the most of their take-home salaries. The corporate segment represents 3% of our active salary packaging customers, and it is an opportunity for Smartgroup, given the growing uptake of novated leases. We have a track record of strong revenue growth and a resilient and scalable earnings base with strong cash flow conversion. Smartgroup's investment proposition to shareholders is underpinned by our capital light business model. This model means that we carry minimal residual value risk. Combined with our strong balance sheet and high free cash flows, this means that we can pay fully franked dividends to shareholders while investing for growth. The operating environment is favorable to Smartgroup, with vehicle delivery timeframes starting to improve and the federal government electric car discount policy accelerating the adoption of electric vehicles. Both of these factors bode well for Smartgroup, which is well positioned to help Australians on this journey easily and efficiently. Finally, we have articulated a clear set of strategic priorities to drive growth into the future. We will focus on our customers and our core businesses of salary packaging, novated leasing and fleet, while investing in digital and technology to accelerate growth and deliver on scale efficiencies. Turning to slide eight. Before I provide an update on our strategic priorities, I'd like to remind you of our context. Smartgroup's products and services have never mattered more to our clients and their employees. Cost of living pressures are impacting many Australians, and Smartgroup's products and services are well positioned to help Australians with those pressures. Our employer clients are trying to manage their costs, too, while at the same time competing for talent. Through Smartgroup's products, they can offer an extensive range of benefits to their employees in a cost-effective manner. More and more, we are seeing employers using salary packaging to attract and retain talent. Our employer clients are also working hard to help Australia transition to a more sustainable future. Smartgroup's EV novated leasing products are helping our clients meet their carbon emission targets. Customer and client needs continue to evolve. Customers are looking for e-mobility solutions beyond a vehicle. Home chargers are one example. Customer expectations continue to rise, with many wanting a fully digital experience. When taken together, this is a very different context from six or seven years ago, when Smartgroup grew through acquisition and organic growth was harder to come by. We now find ourselves at a point where, with the right investments and a key focus on our core business, the organic growth opportunities are significant. Slide nine recaps Smartgroup's strategic priorities and focus areas communicated in February. First, Smartgroup will focus on delivering an efficient and digital salary packaging offering that makes the most of our scale. To do that, we are investing in simplifying and consolidating our core technologies and processes, including moving to a single brand, Smart. Second, we will extend our leadership in novated leasing, including through EVs, meeting the increased demand and interest as we continue to enhance our market-leading proposition. Third, we are innovating our proposition to meet the changing needs of our customers and clients. We're doing this by expanding our offering to unlock more value for our clients and customers. We're also scaling our benefits program to provide more ways for customers to improve their financial well-being. Finally, we are continuing to invest in fleet capabilities and our balance sheet funding pilot for fleet vehicles. Through this pilot, we are meeting a key need of our clients. We will continue to closely monitor residual values, in particular, given current elevated vehicle values and the changes to fleet happening across Australia. These areas of focus will position Smartgroup strongly for the opportunities ahead. One of Smartgroup's strengths is how deeply we care about our customers. We continue to build on that and create a culture that is relentlessly focused on enhancing client and customer experience. With that strong culture, and by harnessing technology, we are delivering smarter experiences and smarter products for our customers and clients, and continually finding ways to work smarter, to be more agile and responsive to their needs. Turning to slide 10, since we announced our strategic priorities in February, we have been working hard to deliver on these priorities, and I'm pleased to report that in the first half of 2024, we are making steady progress as we position Smartgroup strongly for the opportunities ahead. We are keenly focused on growing our customer numbers, as well as leasing and fleet uptake. In the first half, we grew our novated leases under management by 11% compared to the first half of 2023. We enhanced our car leasing portal, delivering improved customer experience through a seamless end-to-end digital experience from quote to credit application, making it easier to customize quotes. Feedback on the enhanced portal has been positive. We are further improving our employee benefits offering through partnerships with companies like CBA and Qantas, which we announced a few months ago. In the half, we started rolling out our new Smart brand, which will enable business simplification and better digital engagement. The first customers to experience the new brand were South Australian Government employees, and it was well received. We will continue to progress the brand rollout over the coming year. We also appointed new executives to bring additional depth and skills as part of an operating model reset. Our new operating model will drive further focus on performance, growth, and the company's strategic priorities. Importantly, our investments are enabling more rapid digitization and technology enablement of our services. This includes rolling out GenAI broadly across our contact centers, which is delivering a range of improvements, including increased speed of call resolution and reduced time to competency for new team members. We divested our payroll business in February, and in July, we also sold our share in Health-e Workforce Solutions. While neither business unit was material from a revenue or earnings perspective, these divestments will allow us to further focus on our core businesses of salary packaging, novated leasing, and fleet that present a large growth opportunity. And finally, adjusting for South Australian Government onboarding costs, we started to see a slight improvement in EBITDA margin half-on-half. This remains an area of focus. The investments that we are making will enable us to scale and lower our cost to serve and cost to acquire in the medium to long term, while maintaining our leading product and service offerings. Turning to slide 11. On July 1, we went live with the South Australian Government contract. I thought it would be relevant to provide you with a quick summary of our implementation. The South Australian Government is one of the largest employers in the country, employing over 110,000 people. The implementation went according to plan, and operating costs associated with the contract were AUD 3 million in the half, in line with expectations. As also noted in the full year results, in AGM, no material profit contribution is expected from this contract in 2024. In July, we added 36,500 salary packages and 5,600 novated leases from this contract. As I mentioned, the South Australian Government employees were the first customers to experience the Smart brand. We continue to work with the South Australian Government to increase uptake of our services among their employees. This implementation has demonstrated our ability to transition large clients effectively. It also cements our position as a leading provider of salary packaging and novated leasing to both state and federal governments. I'll now hand it over to Jason to talk through our performance in more detail. Thank you, Scott. Good morning to everybody on the call. We're pleased to report that we delivered revenue growth of 27% and NPAT-A growth of 16%, underpinned by strong settlement volumes and a targeted increase in operating expenses. I'll go through the financials in detail shortly, but before, let me take you through some of the key drivers of this financial performance. Turning to slide 13. In the first half of 2024, we delivered growth across all our key product lines. Salary packages increased 4% to 402,000 in June, and as Scott mentioned, an additional 36,500 packages also transitioned in July from the South Australian Government contract. Novated leases under management continue to grow, reaching 64,600 leases under management, an increase of 11% year-on-year. In addition, we transitioned 5,600 leases in July related to the South Australian Government contract. Our fleet business is performing well, reaching 37,600 managed vehicles. Our funded leasing pilot program is resonating with our clients, and we expanded the pilot from around 300 vehicles in June 2023 to around 600 vehicles. During this pilot, we'll continue to closely monitor residual values while supporting our existing clients' needs. On Slide 14, you can see that EV orders made up an increasing proportion of our new car orders in the first half and represented 42% of orders. As flagged previously, the government policy is increasing EV demand, and we continue to see strong interest in the first half of 2024. A broader range of EVs is becoming available in Australia, with more affordable EVs gaining traction in the market, which is leading to increased demand across all our segments, including education, hospital, and PBI. It should be noted that from the April 1st, 2025, plug-in hybrid vehicles will no longer be exempt from FBT under the government EV policy. We will monitor the effect of this change on demand, noting, though, that plug-in hybrids will continue to be available for novated leasing. Importantly, the EV legislation is bringing awareness and activating interest from client and customer groups that have traditionally been non-committal towards novated leasing. Smartgroup is very well positioned to help our customers as they look to make the transition to EVs. Our investments in customer experience are intended to make novated leasing easy and simple. Moving to Slide 15. Our novated leasing business has shown strong growth. For the first half of 2024, new lease vehicle orders were up 31%, and settlements were up 27% year-on-year. Last year, we took some deliberate steps to differentiate our service offering, including stronger engagement with our clients, uplifting digital marketing, and strengthening service levels in our contact centers and vehicle sales teams, and these are all delivering great results. Financing an EV through novated leasing is a very compelling proposition. Therefore, our focus has been on investing to educate clients and their employees about the government's EV policy and building awareness of Smartgroup services. Supply chain renegotiations, vehicle mix, and a higher proportion of new car leases resulted in a 14% improvement in yields year-on-year. This resulted from measures we implemented in the second half of 2023. In the first half, we have sustained these yield levels, and this will be an ongoing focus. Now, briefly turning to Slide 16. Delivery timeframes are improving, but they remain above historical levels. Some large manufacturers have long delivery lead times, and until we see that change, we're unlikely to see a meaningful reduction in our order pipe. Our pipeline of future revenue is AUD 14 million at the end of June 2024, remaining well above pre-COVID levels of AUD 4 million. Turning to the P&L on Slide 17, you can see that half one NPAT-A increased 16% to AUD 34.1 million off the back of strong revenue growth. We were able to increase revenue as a result of both volume growth and yield improvements. In the first half, revenue grew 27% to AUD 148.5 million. Total expenses increased to AUD 85.7 million. This is primarily driven by specific investments to generate demand, increase capacity to support higher volumes, and further strengthen customer service. During the half, we also progressed our strategic priorities and implemented the South Australian Government contract. We will continue to adjust resourcing levels to meet demand levels as required, while driving for efficiency and scalability. EBITDA grew 20% to AUD 56.2 million, including around AUD 3 million of implementation costs associated with the South Australian Government contract. Excluding these costs, EBITDA margin was 40%, a slight improvement half-on-half. Depreciation and amortization expenses increased 37% in the half as a result of higher capitalized IT development costs and growth in our balance sheet fleet pilot. As mentioned in the full year results, the amortization of acquired intangibles is now negligible. Slide 18 highlights our strong cash conversion at 108% of NPAT-A, which is in line with expectations. Capitalized IT development costs were AUD 8.5 million in the first half, as we invested in digital and technology to deliver our strategic priorities. While the delivery of the South Australian Government contract accelerated some of these initiatives, the delivery of these initiatives will benefit the business more broadly. As previously flagged, we expect 2024 CapEx to be in the range of AUD 11 million-AUD 13 million. As part of our balance sheet funding pilot for fleet vehicles, we increased the number of clients we are funding to 32 in half one, and have increased the number of funded vehicles to 621. We continue to carefully monitor this pilot in the context of changing motor vehicle residual values. Our fleet offerings are resonating with our clients, and we continue to invest in our capabilities here. Our balance sheet on slide 19 shows that we ended the year with a conservative net debt position of AUD 55.7 million at 0.5 times leverage. This follows the payment of AUD 21.2 million of special dividends in March, and an additional funding directed to our on-balance sheet fleet pilot. During the period, we successfully refinanced our revolving credit facility and increased it by AUD 35 million to AUD 120 million. The facility was also extended to September 2028. The business is well positioned at the half year. Our low net debt and strong cash generation provides us the flexibility to invest for growth, while delivering dividends to shareholders as per our stated policy. As a reminder, slide twenty articulates our capital allocation approach to ensure that we deliver long-term sustainable growth and maximize shareholder value. Our approach here is simple: Our strategic priorities and renewed focus provide significant opportunities for Smartgroup's medium and long-term growth. To ensure we make the most of these opportunities, we will continue to invest in core and digital technologies, as well as customer experience improvement initiatives. These necessitate allocating sufficient capital to ensure we can execute well. Similarly, we will maintain flexibility to take advantage of potential acquisitions, partnership opportunities, and other organic growth opportunities. This includes our fleet funding pilot, which is an important learning opportunity for us. We will continue to fund this for the near term. It is our intention to pay fully franked dividends in line with our current policy of returning 60%-70% of NPAT-A, and we will look to return excess capital to shareholders whenever appropriate. In the short term, we expect CapEx to remain at current levels as we deliver our strategic priorities before returning to a more normalized level. In line with this approach, we have announced a dividend for the half year of AUD 0.175. This represents 69% of NPAT-A, and a 13% increase compared to the first half of 2023. With that, I'll hand back to Scott. Great. Thank you, Jason. Moving to slide 22 and in summary. In the first half of 2024, Smartgroup again delivered strong operational and financial results. As Jason mentioned, our solid financial performance and strong cash flows have enabled the board to declare an interim fully franked dividend of AUD 0.175 per share. We made progress on our strategic priorities and successfully implemented the South Australian Government contract, cementing our position as a leading provider of salary packaging and novated leasing to both state and federal governments. Turning to slide 23, we made good progress in the first half of 2024. Moving forward, we'll continue to focus on Smartgroup's chief priorities and invest in core technology and capability to drive growth. Although these investments impact costs, they will lead to even better customer experience and client retention and attraction. Over time, they will also enable us to scale and lower our cost to serve and cost to acquire. Importantly, we will remain focused on margin, including through productivity initiatives. In July, leasing and salary packaging demand remained robust, with orders and settlements up on PCP. While macroeconomic pressures have not impacted demand, we continue to monitor customer sentiment and the broader economic environment. We remain focused on initiatives that enhance efficiency and strengthen Smartgroup's market position in all economic conditions. Importantly, and to conclude, Smartgroup is well positioned to compete and differentiate in customer service. We operate in attractive segments of the market, and our business remains highly relevant in the current economic environment. A big thanks to Smartgroup's customers, partners, and of course, our team. Thank you also to our investors for your ongoing support. I will now hand back to Darcy for questions. Thank you. If you wish to ask a question, please press star one on your telephone and wait for your name to be announced. If you wish to cancel your request, please press star two. If you're on a speakerphone, please pick up the handset to ask your question. Your first question comes from Scott Murdoch, from Morgans. Please go ahead. Thank you. Morning, Scott and Jason. Just initially, maybe a multifaceted question. On the just on the cost base, obviously, I think your message is that you've put the costs up in line with the demand that you've seen. Just interested in, I guess, what you're seeing in lead conversion, what you think you need to do to that cost base and what it's bringing through on lead conversion, and how ultimately you're looking at that margin delivery. I think you said there was a small incremental uplift, half on half. Great. Thanks, Scott. Great, great question. So, yeah, firstly, yeah, what you're suggesting is correct, that we have carefully monitored our resourcing levels as we touched on previously. At the moment, as a big generalization, our cost base is one where if there's increased demand, we need to increase resourcing to meet that demand. We've carefully done that in the first half. Obviously, now moving forward, as we also discussed, this goes to the second part of your question on margin. In the short term, as I said before, 40% we view as a threshold range, all else being equal in the environment we operate in. We wanna keep to as far as the EBITDA margin. But in the medium term, the medium being around the next two to three years, we do wanna target margin improvement for the business. On lead conversion, as we touched on in the presentation today, a number of steps we've taken as part of our priorities around our customer service proposition, how our contact centers operate, and importantly, our digital proposition, novated leasing. And, and, yep, our lead generation is where I want it to be. It's holding up well. Okay, thank you. Just a question around the dynamics around the order taken settlements, if I can, and obviously that feeds into yield. I think we've seen orders in this half above settlements on a half-on-half basis, but also the revenue, excess revenue pipeline ran off. So just interested in the dynamics there. Does that imply that the orders that you're taking are on lower car values as those lower EVs price points come through? And how does that feed into the July update, where orders are up, does that necessarily mean that revenue is following those orders, or are we seeing a different price point impact? Yeah, so Scott, I think in terms of, you know, vehicle size, we're not seeing any material shift in that. So it, it's not vehicle size that's leading into it. There's probably an element of, you know, timing associated with that, as we've kind of ramped up orders. And sorry, what was the second half of the question? Just if that dynamic is relevant into July, I guess, but sounds like there's not a lot of change in terms of the yield price point perspective. Yeah, yeah, as Scott said, definitely, the latest update we have into July is that things still remain relatively robust and similar to what we've seen in the first half as well. Yeah. And just to add to that, Scott, you know, critical point is that the yield's holding. So, you know, we did, as we touched on, took actions in the last half of last year to improve yield, in the half, taken actions to sustain yield. So we're seeing that yield is holding. Okay, thank you. Just the last one, just a simple one around the South Australian contract ramp-up. Clearly, you get the salary packaging revenue up front. Are we expecting that you are, you know, straight away writing novated leases, and are you accepting the sort of the renewal profile of the previous provider? How does that sort of ramp up in novated leasing work, with the South Australian contract start? Yeah, no, good question. Yes, so, the answer is that, you know, we commenced servicing that contract from July 1, and supporting both salary packaging and novated leasing orders. And yes, obviously, part of that is supporting the current novated leasing book and supporting any of the South Australian government employees who want to refinance that. We've been working with the South Australian government on that since day one. Okay, thank you. I'll give others a chance. Cheers. Thank you. Your next question comes from Phil Chippendale from Ord Minnett. Please go ahead. Hi, gents, thanks for your time. Firstly, just wanna touch on the yield. I think it was a 14% increase versus PCP. I think it was stable half-on-half. But just wondering if we could talk about the average amount financed per vehicle. Presumably, this was a little bit of a headwind in the June half versus the December half. So perhaps you could give us sort of the percentage terms, what sort of a headwind that was? And then obviously that's been more than offset by, you know, the net impact from the renegotiation. Have I got that sort of... Have I got that correct? Oh, yeah. Thanks, thanks for the question, Phil. As I mentioned before, actually, the average amount of finance has actually held up pretty well. It's sort of moderately ahead across the whole book, so it's probably 1% up, half-on-half. Okay, thanks. Maybe just switching over to the July performance. You've said orders and settlements are up. Can you give us any indications of, broadly speaking, what the percentage terms are there? Sorry, just to qualify that, percentage terms for over what period, Phil? For July, you've said that orders and settlements are up- Oh, right. No. -PCP. Yeah, no, I think the key point there is we're seeing that, obviously we won't break that down. But in July, you know, the demand remains robust from our perspective. Okay. Maybe we can just pivot to the advertising and marketing. Just looking at the costs there, they have increased sort of noticeably over the last 12 months. I mean, presumably that, you know, dovetails into your earlier point about when there's the opportunity to drive some growth and to get some leads. You're clearly spending some additional money in that channel. Can you just talk to, you know, expectations going forward, you know, what we should be expecting there? Yeah, that, thanks, thanks for raising that. Yeah, look, over the past year, we've looked carefully at our approach in marketing. We've taken steps to more proactively engage with our clients, to work with them on educating their employees around both novated leasing and salary packaging. We've also taken steps to improve our approach to digital marketing in and around channels like social media. Also, improved our focus on how we analyze the impact of our marketing spend and target that. So, yeah, suffice to say, as touched on the results, that is one of the drivers of successful demand generation that we've created in the half. That will be an ongoing focus for us, but what I would say, though, is we're very focused on making sure there's a good return on that investment, and we measure and watch that very carefully. Okay, thanks. Just the last one, the balance sheet funding pilot. It's been going for some time, but you're still referring to it as a pilot program. What's the group's vision for the size of that ultimately? I think what we're intending to do there is, through the course of next year, we'll be in a better position to assess the success of the pilot as we get more fully through the full life cycle of the vehicles that have been funded, so we'll be coming back to assess the success of the pilot and what we're looking to do in the future in terms of ramping up. We haven't made any commitments to do that yet. We need to get a little bit further down the track and see what plays out in terms of the end of life on that pilot. Okay, thanks. I'll jump back in the queue. Thanks, Paul. Thank you. Your next question comes from Tim Lawson, from Macquarie. Please go ahead. Hi, guys. Thanks for taking my questions. Just sticking with the sort of yield theme, you talked about how you're sort of focused on it, and you're trying to sort of obviously maintain yield. But can you talk about the yield on, say, a AUD 40,000 EV versus a AUD 60,000 EV, as that sort of range comes more into play, and then also comparing it to what the equivalent ICE vehicles would be? Yeah, I'll- Yeah. I'll take that one, and maybe add to the commentary. Yeah, I think on the obviously, you know, as a general principle, higher NAF equals higher yields. So, and yeah, EVs, as a general rule, have obviously a higher price point. That obviously will change progressively as new makes and models come to market. And as I've touched on before, as I related to point, as more makes and models come to market that are more affordable, that's good from our standpoint when you look at our customer base, Tim. As you know, we're strong in government, health, education, not-for-profit, all resilient employee segments, but also segments who are interested in the price point of the vehicle that they're getting, and wanna optimize for what they can buy within their budget. So yeah, full circle back to the point, though, I think the way I think about it is that you know, the high NAF vehicles will drive high yield. So as we have a skew at the moment towards EVs, that trend will continue, but we'll need to monitor that carefully as the mix of EV flows through, to my point, on new makes and models coming to market. Yep, um- Yeah, I guess just to- Yeah. I think as we've always said, EVs generally have a higher price point, probably offers a little bit less opportunity for add-on yield. So in terms of comparisons to not as large as what the NAF would suggest. Yep. Yep, and then just with the... You've called out the increase in new cars in the mix. So you talk about supply chain and mix helping yield, and if that historical sort of relationship that, you know, every 1% move towards a new vehicle in the mix helps yields by about 1%, is that fair to be saying that of that 14% expansion, half was mix and half was supply chain? And can you talk more about what you did on the supply chain renegotiation? Yeah, so on supply chain renegotiation, as we've again previously flagged, we've got a panel of leasing providers now and other close relationships with many key suppliers. What we look to do there is, you know, develop, you know, deep commercial partnerships where we can be aligned with them from an operational standpoint. Look to drive efficiency, and ultimately get more commercial value out of those relationships from both sides. Meaning, in part, we are earning higher yield from some of those relationships. So that is part of it. The other part is the shift, as you say, the shift to a higher proportion of new vehicles versus refi. Yeah. But I mean, and look, but broadly, let's say drivers be at about 40% supply chain, broadly 30% NAF and mix, and 30% new car, as a- Okay. As drivers. Yep, yep, that's helpful. And then just with the sort of underlying margin comment, around 40%, obviously, you've called out the South Australian costs, and it's likely to sort of be a break-even proposition this calendar year. Is there anything to suggest that in the South Australian contract, that as that sort of gets to full sort of run rate with supply time shortening, that that wouldn't support a 40% margin in calendar year 2025? Oh, look, as I said before, yeah, Tim, won't give targets, but yeah, obviously we review 40% as a threshold we wanna keep to. But, as we look forward, yeah, we'll be looking at all we can do to make the most of the South Australian Government contract, especially into next year. So, but that, that's probably the key points. Yep, and just last question from me. You sort of broadly talked in the past about sort of half upfront, half ongoing, in terms of revenue mix. Is that still sort of accurate, or are we seeing a bit more of a shift to upfront as the supply chain clears a bit, and yields are quite high, which obviously more related to deliveries rather than sort of ongoing admin fees, for example? Yeah, Tim, so I think just, with the shape of the numbers at the moment, because we have had good growth in terms of new settlements, it is shifting a little bit more towards upfront. Yeah. Are you, are you happy to call out a number? I wouldn't wanna put an exact number on it, no. Okay. Thank you. Thank you. Your next question comes from- Thanks ... Jack Jack Dunn from Citi. Please go ahead. Hi, Jack. Morning, guys, thanks for taking my questions. Just a couple of quick follow-up ones. Just on the orders in the first seven weeks, I know you said it's up on the PCP, but are you able to give us a feel for what is probably up on first half 2024? And also, is it total orders as well, to get a sense of that? I'd just say that, I go back to the point I made before, Jack, which is that we're happy with where demand's sitting at the moment as we step into the half. Obviously, we're monitoring closely the overall macroeconomic conditions and customer sentiment. But if you look at what we're seeing in our numbers at the moment, demand remains robust, and which is not surprising in the context of the nature of who our customers are. Okay, perfect. And just, another follow-up on, lead conversion. I know you mentioned you're pretty happy with where it's going, but are you able to give us a sense of, like, how much you improved in that first half versus second half 2023, on both digital and phone leads? I think I touched briefly before, but yeah, look, take a step back, yeah, overall, think I've said before, from my perspective, it's overall a volume game. And when I drop down to looking at our leads, at the moment, across various metrics, and broader, say, our lead conversion is holding. Okay, thank you. And sorry, I must have missed a couple of slides. And just on your outlook statement, you mentioned competitive pressures. Are you able to unpack if that's referring to upcoming contract renewals and admin fee pricing areas, or is it other areas? Yeah, we do continue to see competition for new contract renewals, so it's something that we're not complacent about. We've been quite successful in achieving contract renewals recently. So, in terms of an outlook, we do have some coming down the pipe. We're obviously very, very mindful of the need to continue to provide great service and to those clients to achieve that renewal. Yeah, and I'd just to add to that, you know, just to underscore, I've been really pleased in the half with the contract renewals, and for that matter, also attraction of new clients, and I think that comes down to a range of factors, including the strengths of our service delivery, as well as the steps that we've been taking in our technology investments, so you know, for example, the continuing enhancements to our car leasing portal. Okay. Thanks, guys. Appreciate you taking my questions. Thank you. Your next question comes from Paul Dyer from Canaccord Genuity. Please go ahead. Oh, morning, Scott, Jason. Look, my- Hey. My first question. Hi, hi. First question, at the risk of kicking the dead horse to death, I guess, 'cause there's been a few questions on it. I mean, you guys have been really- Yeah ... clear on, on NAF, and how, I guess, you know, it's held for you. The problem for me is I'm still struggling to understand it. Maybe just put context for me in terms of brands. You know, Tesla and BYD obviously can be called out in the context of EVs, because they've been so significant. And in the last six months, it's not a case of sort of if these prices start coming down, Tesla has come down a lot, obviously, and BYD has come in at a lower price point. And certainly, you've seen competitors already impacted by that. Now, again, that doesn't mean what a competitor feels, you know, you guys necessarily feel, but I guess that's why I'm still just struggling to understand how you actually haven't seen any of that impact yet. Conclusion might be that you, you know, just your mix of vehicles and your customer base has protected you from that. But I just wanted to sort of unpick it a little bit more, because at this stage, it's a little bit hard to reconcile. Yeah, again, overarching sort of principle, and I go back to, again, the nature of our customer base, health, education, government, not-for-profit, obviously starting to build in corporate more. But, I'd say that the general principle would be that, you know, our customers in that segment, when you speak to them, that they buy the car that they can afford. So, you know, people purchase for a, a budget, and, what's happening, on the flip side is, as price points lowering in certain makes and models, that then just changes the mix of the makes and models, doesn't change the customer framework of, they buy the car, the best, but the best car that they can afford. If that makes sense? Yeah, it does. Thank you. I mean, I think, yep, that does make sense. It's the customer base, I think, is probably the key, the key difference there, and then, Scott, just in terms of your overall thinking on the cost base, and again, you've been very clear on your margin threshold, but just obviously in terms of cost base, it has grown a lot for a bunch of reasons, including demand, but also you know, bulking up and infrastructure and capabilities. Is the idea that the cost base into the medium term stays at this level, and effectively that targeted medium-term margin uplift comes from revenue growth? Or is there also a component whereby as your efficiencies increase, and that may be digital or otherwise, that you actually pull some cost out? Just wanted to get an idea of how you see that playing out. Yeah. So, no, great, great, great question. I think, you know, suffice to say, our objective will be to both increase revenue and also look for ways to drive scalability in the cost base. If we stand back and as I touched on before, look at the medium term, so the medium term being around the next two to three years, we'll be stepping through careful changes in our brand architecture. So simplifying from multi-brand down to the Smart brand, that's going to support us to take steps to simplify our operational processes, especially in contact centers. And that will be coupled with us also taking careful steps on modernization to use the jargon, modernization of our technology estate in the back end. All of that, again, it's a nirvana, we'll never completely get there, but, what I want us to drive towards, we will drive towards the level of volume and sensitivity in our cost base so that we are more scalable with changing demand, in our operating environment. So, the forecast forward, the next two to three years, as far as objectives for the company, absolutely, we'll continue to take steps to grow our client base, grow penetration, into our current 2 million potential customers. As I touched on, we service about a quarter of those at the moment. I wanna service all of them. So we'll continue to take steps to find clever ways to educate and activate those customers to our great products and services, in addition to going and acquiring new clients. So that will help facilitate revenue growth. On the flip side, as I touched on, we'll be taking very careful steps through the architecture of our business and our cost base to look at driving efficiency and scalability in our costs. Thank you. That's helpful. And then quickly on the balance sheet funding pilot, just want to get a sense. It's obviously a lot of vehicles, but the mix within those between EVs and ICE. I don't know if you've got any EVs within that mix or if it's only ICE. We have no EVs in that pilot. It's only ICE. Okay. Okay. Which will obviously make RVs easier to deal with at this stage. And then last one, just you just did call out towards the end, you know, potential partnership or kind of growth opportunities. Just curious to know your thinking there, given you've actually just made a couple of divestments to increase kind of focus on the core, what might be the kind of opportunity you'd consider there? Yeah. Look, great question, and, yeah, taking a step back, our focus will be on doubling down on salary packaging and around salary packaging, and strengthen our employee benefits proposition. And if you stand back from it, you know, we sit in the middle of transacting a very high volume of payments in our salary packaging business. Elements of that are where what I'd describe as passive transactors versus taking a proactive role at finding ways to help our customers get more for their money and get access to better benefits in and around what their salary package. So that will be a focus for us. As we touched on, yes, we've got partnerships that we've launched this year. There are others that we're exploring to really strengthen the salary packaging offering as an employee benefits proposition. Novated leasing similarly, again, a strong focus on looking at what partnerships, in particular, in and around the EV lifestyle, as I describe it. We can look to set up to support the overall transition of our customers progressively from ICE vehicles to EVs. And with that in mind, it's all within the frame of us doubling down on our core business of salary packaging, novated leasing, and fleet. As to the divestment, as you touched on, you know, we divested those businesses for a range of reasons, including that they weren't tied directly to our core business that I just described. Yeah, that being said, as touched on in the capital allocation slide that Jason went through, certainly, we have a strong balance sheet, and our Anthenra will be up in due course if there's logical opportunities around future M&A. We're in a position to look at those, but we're not looking at anything right now. Got it. Thanks. Thanks, guys. That's all from me. Thank you. Your next question comes from Scott Hudson from MST. Please go ahead. Good morning, gentlemen. I will not pick the yield curve any further. I was just wondering if you could give me some thoughts on EV penetration and whether or not you'd need to see further EV penetration to drive volume growth over the near to medium term. Yeah, it's been a really interesting eighteen months to watch the customer trends around ICE and the EV mix. Scott, I mean, what I wanna point to again is that, yeah, pleasingly, in the half, we've seen an increase in the number of ICE orders that we've had, but also obviously growth in EVs. You know, obviously, in the medium to long term, you know, we will continue to see our customers migrate to EV. The government policy, as you know, is supporting that quite nicely. One of our key objectives is to obviously do all we can to support the government in executing that policy. With that, I think over the coming years, we'll continue to see EV volumes grow. As what sort of supports my view on that is, as we studied more mature markets overseas with respect to EV adoption, once markets get through that, the 10% of new order volume, just generally speaking, word of mouth advertising, for want of a better term, helps acceleration of EV adoption further. So, as I stand back from it, I'm to answer your question, I'm optimistic on continued demand for EV, especially as word of mouth picks up, further supported by the government policy. But on the flip side, I'd also say that as the demand generating initiatives have been focused on, our ICE orders are holding up well at the same time. That's great. Thanks. I guess in relation to new customer wins through the period, could you give us a sense of which segments those new customer wins are weighted toward? Across the board. So, if you look at where we've had wins, it's been. It's actually been across the board, across all customers, all industry segments, and pleasingly, though, we have had some good wins in the corporate segment in the first half. Thanks. In relation to the, I guess, new benefit partnerships you've got with CBA and Qantas, could you give us a sense of, I guess, any economic benefits associated with those partnerships and/or what the initial response has been? Yeah. Great, great, great questions. Yeah, again, with those two partnerships, early stage, and we're working actively with them on evolving those partnerships. So a few things. One, client feedback has been good, and again, back to our client proposition, employee to client proposition, it has been helpful. Secondly, you know, we have seen across the various partnerships and rewards offers, we have good uptake in the first half. And what I'd say is that that has been helpful in and around uptake of... We're supporting uptake of salary packaging. And back to my, you know, broader point before on our objective being to get to about two million potential customers and adopt them all to salary packaging and novated leasing progressively, that has been helpful also just in piquing interest and activating the broader customer opportunity that we have, which is support of both the novated leasing as well as the salary packaging uptake in the half. Just the last one. I guess the cost associated with the South Australian Government in the first half, is that the cost base that supports that contract going forward? Or is there sort of some cost relief that comes out in the, some of that temporary and comes out in the second half? Yeah, we typically don't talk to individual contracts, Scott, but yeah, the AUD 3 million we called out was related to the implementation costs, and obviously, that was a sizable contract. It's one of the largest contracts in the land, and that's why we thought it appropriate to call out specifically the implementation cost of the half. Thanks. Maybe asking the question slightly differently, is the second half margin profile expected to be more in line with the underlying margin that you experienced through the first half? Yeah, Scott, I think what we've said is that for the full year, we're not expecting any material contribution from the contract overall. So there will be an improvement in the second half, as we start to see some revenue come through on that contract. I suppose back to you, Scott, you know, again, you know, in the short term, we're focused on the threshold range of around 40% EBITDA margin in the short term. But again, that we expect to improve in the medium term, which is around the two to three-year window. Very clear. Thank you. Thank you. Your next question comes from Jack Dunn from Citi. Please go ahead. Thanks, guys. Just a quick follow-up here. Just on your plug-in hybrids, can you give us a sense of what its contribution was to your new vehicle orders in that first half and maybe even in July, given I'm guessing it's increasing? Yeah, well, you're going to- Yeah, in the first half, it was 10% of the vehicle orders, you know, as a subset of the 42% that we already quoted on EVs, and as we said before, like, trading, we haven't got specific breakdowns for July, but trading is very similar. Okay, perfect. And so just one more on the EBITDA margin outlook here. Obviously, the second quarter was a lot stronger than your first quarter and even above your second half 2023. Would that second quarter be a good way to think about your margin, excluding the SA Government contract into the second half? The SA Government contract effectively went live on the July 1st. So there isn't really any inference there on the revenue side for the SA Government contract, if that's your question. It's no more excluding the SA Government contract, if we take the second quarter of 2024 as a guide for your second half of 2024. Yeah, I don't think we're providing guidance for the second half of 2024, Jack. Okay, no worries. Thanks, guys. Thanks. Thank you. Thank you. There are no further questions at this time. I'll now hand back to Mr. Wharton for closing remarks. Great. Thanks, Darcy, and, yeah, thank you, everyone, for the great questions this morning. And thank you also for your interest in Smartgroup, and look forward to speaking with many of you further in the coming days. Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect.