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Alexander Bevis: So welcome to our interim results call. Thanks, everyone, for making the time to join us this evening -- this morning. [Operator Instructions] So I will pass over to Jo to introduce herself, and then we'll run through some of the numbers. So over to you, Joe. Johanna Cooke: Thank you, Alex. I hope everybody can hear me. Well, welcome, everybody, and this is my first time talking to you as CEO. So I thought it would be good to give you a little bit of background into my experience, both in the games industry, but also at Frontier. So 30-plus, I don't like to say the number, but I started the games industry working on magazines, which at the time were the only way that people could communicate with players. And in fact, developers were still printing code so that people in their bedrooms could play games by typing them in. I've always been player first. In that time, the players you send in bags of posts in order for us to know what they really think about the games that we were talking about. In the early days, the first games I worked on were IP games. So games like Terminator 2, RoboCop, the Simpsons and actually the first Jurassic Park game, which is a nice full circle for me. But those games were -- the emphasis was on the IP, and it was only when I moved to Maxis, which was one of the first developers of creative sim games or management sims as they were at the time. That's when developer input and understanding what the players wanted and feeding that back into the game to improve on the game became a really essential part of my job, even so far as getting people to create cities and send us in floppy disk so that we can use them to share content. And that's sort of the early stages of my massive interest in working in developers, not just within publishers. But over the time, the industry went through so many changes, which I experienced in publishers, developers and NDs, multiple formats, loads are different. At one time, we were doing 8 different formats on games, which is quite complex. Now we have digital distribution, which has really enabled us to build relationships with players rather than being at the mercy of a retailer deciding how many units to take. And we're in a good place for that. So that gives you a bit of background of my kind of industry experience. I've always been active in the industry. I was on the U.K. Board. I've twice been nominated and recognized as the industry by one of the top women in games. So a little bit of flag waving about me there. But when it comes to Frontier, this may be a new role, but I'm not new to Frontier. I played a big role in bringing Frontier direct to players when we launched Elite Dangerous, which is what attracted me to Frontier in the first place, we had 50,000 players, 50,000 interested kickstarters, and we had to do something with them. And that was the start of our publishing team. I built the best-in-class I thought at the time, and I really still believe it, publishing team engaging directly with them in new ways, and we created our first early influencer creator programs. When Frontier is at its best and at its most successful, it's when we invest in those relationships that help us make much better games. So I will be doubling down on this in the future, and you'll probably get bored of me saying the word player, but I will keep doing it because that, at the end of the day, is how we make our money. I returned in the summer -- CMO. And what we did was reignited that importance. And that has played a critical role in the launch of JWE3, which we'll be talking about as we go on. So a bit about me. I'm happy to take questions at the end if there's anything more that you need to know. Alexander Bevis: Thanks, Chair. Over back to you for some headlines. Johanna Cooke: Yes. Okay. So I'm going to recap on the strategy on the next slide. Johnny reset the strategy, but the top headline here is that it's working. I'm committed to delivering against that strategy. We will continue to do so. We're in a really strong position to continue to grow. JWE3 has played a big part in our results today with H1 revenue up at 26% and adjusted operating profit at 76%. So we've raised our guidance to around GBP 100 million of revenue and adjusted profit of GBP 11 million. When we announced we were working on a sequel to Planet 2, which is part of our continued CMS strategy -- sorry, to Planet Zoo. We did it with a video that celebrated our players. This is to set the scene for how we're going to engage with those players going forward. They responded in kind, returning to the game. I think we saw a 10% increase on the previous 3 weeks average game play. And the speculation has been really important for us to be able to work out, give us a chance to add things into the game or just what we're doing and refine our game going forward, which is exactly what we did with Jurassic World Evolution 3 in the summer. Our studio in Canada is busy working on another game to be released in FY '27. And we have an unannounced CMS game scheduled for '28, which will help us continue with this strategy. So we're in a good position financially. Alex will talk about all this later. He likes to talk about the numbers, and I like to talk about the players. So that's how you should see us. And -- but we have our costs under control, and we have money in the bank. I just want to end this slide with some fun facts. In 2025, the number of players playing Frontier titles was up by 34% year-on-year. So we must be doing something right to excite them. And the number of hours played of our games was up by 25% year-on-year. So that to us is -- aside from all these great numbers, it's a recognition that we're doing the right thing. So next slide. So I'm just going to read through this slide because I want to absolutely emphasize what we've already said, and Johnny has said it a lot in the last few calls, but our strategy is delivering. Select, develop, launch, nurture is what we're doing. So one major launch per year. We're going to develop those games over a longer time period. That gives us time to listen to players, to look at what we're doing and make sure we're doing the right thing. We're prioritizing the CMS genre, creative management sims. And also importantly is to nurture what we have. We have strong franchises. You'll see that from the numbers as we go through it. But we want to continue to nurture those franchises, which gives us a lot more certainty in what we're doing. It gives us a lot more confidence in what we're doing because we keep engaging with those players, and we're able to monetize over a longer period of time. Our PDLC is clearly working. We're seeing some really good numbers from what we're doing with Planet Coaster 2 and what we're doing with Planet -- Jurassic franchise overall. And we continue to have good relationship with the platform holders, so subscriptions, promotions, all of those things are working in our favor right now. Next slide. Okay. I've said it before, but Elite Dangerous was the reason why I joined Frontier. And here we are now, since 2014, we now have 5.8 million units sold and 141 million in revenue. It started with 50,000 highly engaged players who kick started the game. And they need -- we needed to build a publishing team and a marketing team off the back of it. And those players helped to shape the game that we have today. It's a really good example of nurturing and monetizing. In the last 12 months, we've started selling ships. This has allowed our players to reignite with the game. The franchise is delivering revenue growth of over 50% versus H1 last year. We've also continued to release free content, and we've grown the narrative. We're constantly talking about that narrative, which is what keeps people playing the game. And sentiment and player engagement has grown as well. Monetization, we'll continue to look at things and see what works. In December, we had the record-breaking month for Arx, which is the currency that people buy in order to spend in game. And Elite Dangerous is well positioned for the future. It's a great brand, and there's a lot of brand equity there that we can continue to take advantage of. Planet Coaster, that's the second game I launched at Frontier actually in November [ 2016 ]. Absolutely love this game. It was, as I've said before, I have a love of creative management games. And with that, we really focused on how can we get players to create content, which is why Steam Workshop was installed in the game at the time. I initiated, in the summer, a return to thinking about what player is doing. We had coaster heads in 2016. A lot of them continue to engage with us now. Over the last -- since the launch of Planet Coaster 2, we have released 8 free major updates. All of those have been improvements in the game and things that players have wanted, focusing on what they're requesting. We've also released 3 PDLCs. The Sorcery Pack was released in September and the Toy Pack in December. Both of them had great attachment rate. And actually, both those PDLCs have higher attachment rate than those that we released with Planet Coaster 1 after 30 days. But what's really important is that the review sentiment has improved. Our overall ratings are at 71%, but we're now at 80% for most recent reviews. So we're seeing a lot of momentum with Planet Coaster 2. Jurassic World Evolution well, the sales speak for themselves, but the important thing here is to know how our players responded to the game. One of the things that we did a little bit differently was to expose this game early so that we could work out whether we were doing something right quite often with the game release, there's a lot of uncertainty about how it's going to be received on day of launch and you go in there with everything crossed and worried. We did an event a couple of months out of our release. And at that event, we invited all our key stakeholders, so we could measure and see how they play the games, and we could see whether there was anything, give ourselves a chance to make any changes before launch. We had 500 members of the public, so 500 players sitting, playing the game for 1.5 hours. We also had press and we had influencers. So watching them over that 1.5 hours gives us a really good idea of what to expect on day of release. And that was great comfort taking us into that time, and we were able to speak to our platform holders and talk to them about that. And I think that helped us with gaining really valuable promotional featuring. So player reaction has been extremely positive, 93% positive rating on Steam. We've got a Metacritic steam score of 81%. So our strongest engagement of building these relationships with creators has resulted in so much organic content, which has been very good for us because that is high engagement content and low cost. The franchise has had such a good start to overall -- the whole franchise to H2 FY '26, so where we are now through the promotional period at Christmas. And we've also launched Wetlands, which is the first PDLC. Plus we have really, really good strong sales on Jurassic World 2 over the summer through all the promotions. So we're in a good place with that franchise. We're very pleased about it, and we're very excited for the future. Now Planet Zoo sales have now exceeded over GBP 150 million, which is our highest selling franchise, highest selling game actually. And that still remains a 91% positive review on Steam. We continue to sell. It's achieved an excellent sustained rate of 82% versus H1 of last year. And that's even -- that's not even including any additional PDLC. We haven't released any additional PDLC this year. Planet Zoo is for us a benchmark of how we want to move forward. It's how we see CMS franchises in the future, and there's so much to build on. We're constantly enhancing the player experience, and that has been a really big part of its success today. So a couple of nice player stats for you. Over 200 million hours have been played in Planet Zoo, and that is 3.3 billion animals born in the game and 8.6 million franchisees created and 505 million animals released. That is all adds up to just a huge amount of enjoyment for our players. And the sequel to Planet Zoo has already been announced, and we're going to be releasing that in FY '27. That is going to help us build on this best-selling game. And I really think it's going to be an exciting year for us. So finally, FY '28, we have another CMS in development. We won't be saying anything more about it, but that also is something that we're already working on. Over to you, Alex. Alexander Bevis: Thanks, Jo. So just picking up some of the points that Jo made, this is a nice pie chart showing the Half 1 revenue split. So you can see there just how strong that Jurassic World Evolution franchise was just over 60% of total revenue. As Jo mentioned, Jurassic World Evolution 3 has done incredibly well, very pleased with its performance in Half 1 and over Christmas, actually in December as well. In the summer last year, we had really strong performance with Jurassic World Evolution 2 in price promotions. So -- and as Jo has already said, the Jurassic World Evolution franchise is in great shape. Planet Zoo was the next biggest franchise with 15%. So bear in mind there, as Jo says, we had actually a PDLC right at the start of the financial year. But in terms of new content, it's quite limited. So to achieve an 80% plus sustain rate is a great performance. I'm very pleased with where Planet Zoo is and obviously very much looking forward to the sequel. And then Planet Coaster there, 11%. So if you look at those 3 CMS franchises all together, they actually represented about 90% of total revenue. So you can see the strength from the strategy that we've reset a couple of years ago. Elite Dangerous, although it's 6% there, small revenue, but pretty mighty in terms of its profit contribution and also its brand status, as Jo mentioned. So very pleased to see that growing. The ship monetization has proved to be a big hit, and we grew Half 1 to Half 1 by over 50% with that franchise. So really pleased with that performance. Just then turning to a few more stats on Jurassic World Evolution 3. I thought it was helpful to show a revenue chart for each of the 3 games, and this is cumulative revenue for the first full 12 months. So the green line is the first game we launched back in June 2018. The blue line is the second game, launched ahead of the movie in '21. And then Jurassic 3 launched behind the movie. The movie came out in June. So each of those periods is a little bit different. Jurassic World Evolution 2 and Jurassic World Evolution 3, quite similar in terms of an autumn launch. But the first 3 months for Jurassic World Evolution 2 are November, December and January. So January being the end of often the Steam winter sale and maybe the start of some other promotions in January tends to be quite a strong month. So we do expect that Jurassic World Evolution 3 by month 4 will be clear of Jurassic World Evolution 2. It's a great start to the franchise. As you might have seen from the stats, if you look back at the stats that we said for the second game, we've actually generated more revenue with fewer units, and we've been a bit more cautious with the amount of price discounting we did at Christmas. So really pleased with how that franchise is doing. The second game did benefit from a Game Pass deal and obviously, the film. So that's the blue sort of tick up you see in month 6, month 7, month 8. We are obviously talking to all the platforms about deals, as you'd expect, nothing to announce at this stage. But we fully expect that by the end of the financial year, Jurassic World Evolution 3 should be north of GBP 40 million, maybe even mid GBP 40 million in terms of cumulative revenue. So great performance. Looking then at our overall revenue franchise performance. And again, this is adding up all of the revenue across the multiple games in each franchise from the very start of the first launch. So you can see there the strength of that uptick for Jurassic World Evolution 3. You can also see that nice Christmas performance for Planet Zoo. We did a 90% discount on Steam and what we sort of term a mega sale on Steam. They give us lots of featuring in return for that discount, and that's proved to be really popular. We did that for Jurassic World Evolution 2 a couple of times, and that worked really well for Zoo over Christmas to bring more people in. You also see the Christmas uptick for Planet Coaster and Elite Dangerous, that uptick over time has been very good from that monetization. So all of the franchises in really good shape there. Moving then to look at our cash profit performance. So this is adding -- deducting, sorry, all of the costs as they're incurred. We retrospectively, since Jurassic World Evolution 3 came out, put all the costs back in. So you might remember that we didn't put any costs in until that launch happened. So that's why it sort of flattened out as we were investing in the game. Then we launched and you see such a strong tick up in the cash there. That's obviously very pleasing to see. So over -- getting on for GBP 140 million of cash profit for the franchise across the 3 games. Jo already mentioned just how strong the performance is on a revenue basis for Planet Zoo. On a cash profit basis, it's even more startling in terms of the contribution that single game has made. So over GBP 90 million of cash profit now from that single game, launching first on PC and then coming to console. Planet Coaster 2, you can see the tick up there, and this is a great illustration of the drop-through we get from revenue from our own games in particular, in terms of that profitability. And then Elite Dangerous also ticking up nicely. You can see the profit that we're able to build in from a relatively small team working on that game, building monetization and doing free updates. So cash profit, again, on a franchise basis, looking to be in really, really good shape. Just sipping then through some of the numbers on the income statement. We're focusing on the adjusted operating profit measure. Just a reminder of how that works. So we look at total OpEx, but we take out capitalization, we take out amortization, we take out share charges to get back to a sort of cash spend type of number. We also, within the R&D, adjust for the benefit of the tax credits that we expect to see. So we don't do that on a cash basis. We do it on an expenditure basis. So if we expect to get, say, GBP 5 million for the spend that we are investing in R&D this year, we'll record that in this year against this particular measure. So it gets back to what we think is a nice clean cash profitability measure for the company. So starting at the top then, we've got revenue of almost GBP 60 million with the guidance of around GBP 100 million, it means GBP 40 million for the second half. Having delivered a really nice December performance over those Christmas sales, we think it is achievable for us to now beat that GBP 100 million or be around that GBP 100 million. We'd be pretty disappointed if we didn't just go north of that GBP 100 million number. But the guidance we've put out today is around GBP 100 million. Gross margin in Half 1, 64%, that reflects the success of that Jurassic game because we have royalties within cost of sales as well as distribution costs to people like Steam, Microsoft and Sony. So second half, we'll see that reverse a little bit more as the sort of franchises balance out. I think for full year, we're probably expecting maybe 65%, maybe slightly higher than that for the full year in terms of a gross profit margin number. OpEx in the first half, sales and marketing a little bit higher because of course we launched Jurassic World Evolution 3. General and admin, that includes the bonus accrual with the guidance here that adjusted op profit for the year will be around GBP 11 million. We've obviously banked almost GBP 10 million of that in the first half, and we accrue the cash profit, the all-staff cash profit -- cash bonus, sorry, plan against that profitability. So we'll see sales and marketing and general and admin probably reduce a little bit in the second half. So I expect OpEx to be on this basis around maybe mid-50s. So that's how we're feeling about the numbers. Obviously, a very good performance versus last year. Looking then at cash flow. We started the period at GBP 42.5 million. You can see on there the GBP 10 million of buyback plus a small number of fees, so just over GBP 10 million for the buyback. We finished at just over GBP 40 million. We ended the calendar year at the end of December at just over GBP 43 million, so in a great cash position. The adjusted operating measure that we have flows pretty nicely through to cash. We've got some working capital build in the first half because, of course, we launched Jurassic World Evolution 3 towards the end of that period. But very pleased with where we are with the cash position. I think the response to the buyback was very positive. We may well have excess cash that we may well do a buyback again maybe in the summer, but nothing to announce right now on that. But certainly, the feedback we received on that process was very positive. Back to you, Jo to wrap up. Johanna Cooke: [indiscernible] We said it we can say it again. Jurassic World Evolution has been a big success for us. We're really pleased with that, and it gives us a lot of confidence in our franchise management and our CMS strategy going forward that is delivering. So we are in a good position to achieve sustainable growth. And we've upgraded our financial guidance, revenue of around GBP 100 million and adjusted operating profit of around GBP 11 million. So with that, any questions? Alexander Bevis: Yes. I think let's move to questions. I'm just going to stop sharing the presentation. We can always back into it if we need to. And if you want to ask a question, please put your hand up. And we'll go to [ Andrew Renton ] first, please unmute and turn your camera on if you like. Unknown Analyst: Really good presentation. So a couple of questions from me. First is around the Jurassic World movies and just how much visibility you get around them sort of making new movies and sort of helping keep that franchise going? And do you see any risks around sort of cinema attendance and stuff like that? And then second question is just around sort of trends you're seeing across the different consoles and in particular, what your approach is to the switch to you're seeing there in terms of things you would like to release for that? Johanna Cooke: Okay. Do you want me to take that, Alex? Jurassic World, well, the movies. So we probably get less information early on. So obviously, Universal have movies take a long time to create and they don't always know what they're going to be doing a long time in advance. But we've experienced releasing games before a movie, after a movie, at the same time of the movie, Jurassic World Evolution 3 was after the movie. And there are plenty of opportunities for us to take advantage of that movie tie-in with PDLC. We've got PDLC for rebirth coming up. What we found with JWE3 is actually we kind of transcended the movie in terms of people going to the movie. The franchise is very strong. And we found that a lot of people were actually [indiscernible] in the stake of the game. The franchise is very strong, and it does attract our players, but so does the franchise itself. So it's a very sort of symbiotic relationship, if you like, but it's not necessarily needs to be tied to that movie release at that particular time based on the experience that we've had with the whole franchise so far. Alexander Bevis: Yes. I think just to jump in and add to that, the first game, we really felt needed a big IP event. With the second and the third game, we're selling to a game audience rather than trying to sell to kind of everyone. So it's quite interesting to see how strong it's been launching after movie instead of before the movie. So as Jo said, with the 3 games, we've tried out all the models. The important thing, as Jo keeps saying, is listening to the player, understanding the player, delivering to the player. So I think the timing of movies versus timing of the games is less important. But clearly, having IP events where you've got a big IP is pretty useful. Johanna Cooke: It's great for player speculation as well because there's the whole law around it and then all the things are introduced at every game events and movie events. So that is an interesting conversation to have with our players. To answer your second question, trends against console, well, we really want to reach as many players as we can and go to meet them where they are playing. So I'll be a bit vague about this simply because we will be looking at Switch 2. We look at every platform. The important thing is where are they playing, and that's where we will do our best to meet them. Alexander Bevis: So we've got Will Larwood coming up next. William Larwood: Firstly, just in terms of if you could provide some comments on sort of the market, the competitiveness and sort of pricing, I'm particularly interested as we look to Planet Zoo sequel, whether you thought about your pricing strategy there? Secondly is just in terms of R&D spend going forward, particularly with complex game and also that FY '28 release, do you expect the R&D spend to sort of increase and pick up from these levels? And then finally, Jo, just sort of the areas where you think you can sort of add or look to improve. Obviously, I understand the CMS strategy isn't going to materially change. But where do you think there's sort of the greatest things that you can change or look to change? Johanna Cooke: Alex, do you want to take the first 2? Alexander Bevis: Yes, yes, happy to take the first 2. So competitiveness and pricing, we've always got to have an eye on what other people are doing, particularly if there's a big game sucking oxygen out of the room like a GTA. But what we really like about the CMS strategy is we can never be complacent, but we're sort of protected from above and below. And what I mean by that is the CMS sort of genre is not big enough and interesting enough for the really big companies. But for the small companies, it's hard for them to get in because you do need to invest time and you do need to have that experience. So as I said, we can never be complacent. We've got to live it to the players. But we feel like we can own the CMS space. Now what that means in terms of sort of pricing and competition is we talked about it before, we almost go as high as you dare with the Deluxe price. We want to make sure we capture as much value as we can at the start of a launch around people that are really keen to engage early and having really meaningful interesting Deluxe content is a key element there. The ability for us to tick up sort of base game price over time has come through. If you look at the pricing for Planet Coaster 2 versus Planet Coaster and almost certainly the sequel of Planet Zoo versus the original game, we do have the ability to move price up over time. But we've got to be really careful. Jo is very focused on the player as you keep hearing. So that's #1 priority for us. If we just look at Christmas and the performance there, there's a few stats around saying it was a pretty good performance on Steam. There's quite a lot of people really engaging. And certainly, across the portfolio, we saw really good engagement. But I'd say a lot of that is down to the strategy that we had there, the way that we engage with influencers, the way we engage with players with new content rather than anything sort of sector-wise that's going on. So we always have an eye for the sector, but focus very much is the player. Second question was about R&D spend. So in terms of total R&D spend on a company basis, we're likely to have a pretty similar level, I think, Half 2 to Half 1. We're not looking to grow the R&D at this point. It might be a bit of wage inflation over time. But having gone through the ban a couple of years ago of resetting the cost base, we're going to be very cautious there. And what's encouraging is we feel we're really right now being able to do more with less. We did have to cut the headcount, but we think that the people that we have are really delivering. So we think it's working really, really well. In terms of individual budgets, Jurassic World Evolution 3, actually, the dev budget for that ended up being around about GBP 12 million, and that's because of some of the changes we need to do to the road map to support Universal with the film. If you go back to Andrew's questions earlier about our visibility, the film team within Universal will obviously be pretty secretive about some of those dates and some of that information. So the team has done an amazing job here turning that game around in such a short time and delivering a really great performance. I think overall, for CMS games, in the range of sort of GBP 12 million to GBP 15 million. For complexes games, something around half of that, I think, just in terms of the scale. So give you some idea of what we're looking at in terms of R&D budgets. And then the last one... Johanna Cooke: I will take that one. So well, firstly, I really think we need to play to our strengths. We've got a strategy. We know what we're doing. But I think more robust planning and a slight rearrangement around how we manage our franchises. So that gives us a much longer tail and gives us more confidence in what we can deliver over a longer period of time. We're focused on our strengths that gives us a differentiator. And I think that's really important going back to your competitive question. We need to be really doubling down on what we're good at, so people recognize that, and we need to be able to finesse that over time so that we can repeat it on every franchise that we have. And I'm also really keen to look at wider monetization, which goes back to the earlier question around Switch or around any platform. We want to go and make sure that we can deliver our brilliant game experiences to as many players as possible. And that means looking at other opportunities to develop on different formats. There are a host of things that we can be looking at that will help us expand our IP portfolio beyond just releasing the individual games as we do. Alexander Bevis: Okay. Thanks, Will. Ross, is that next? Unknown Analyst: Just a quick one. Will has taken half of my questions. But let me ask you a slightly different one. Many, many games companies over the last year or so have been talking about rediscovering the relationship with the player. And I'm really interested in your perspective, particularly your background on doing that within the CMS segment. I mean how -- is it easier? Is it harder? Is it different? I'm just interested to get your reflections on that. Johanna Cooke: All right. Well, I'll give you an anecdote then because I think that might help. So when I came back in the summer, Johnny had said to me, a bit worried about what we're doing in Planet Coaster 2. We need to reignite with players. And we've had a few hiccups, but we've got a really good plan going forward. And the industry -- the marketing side of influencer marketing and creator marketing has kind of beared a lot more to paid content. So it's become an acquisition tool. It's actually become a media platform. But that's not engaging with players. That's buying players. So I've just said, what about all the people that we used to speak to. And let's just phone them up. Let's start talking to them, and let's get them into the office. So we reengaged some of them I already knew from when we launched Planet Coaster. Others were new and had great fantastic audiences. We bought them into the studio. We put them in front of the dev team, and we gave them access all areas to what we were doing. We were prepared to listen to the criticism that they had around the game and actually had publicly had around the game. And we have them playing the game and taking their feedback and use them as sort of a micro user research platform. We also let them record some of the sounds in the game, which is really nice because they could then go away and talk about that. But what was really, really useful given the fact that with this particular group of people that influences in -- they're influencing millions of players to understand really what -- how passionate they are about the game and what really bugs them about what we're doing, but also what they would like to see. So having done that, it gave us a little microcosm of what I really feel that we should be doing in a wider scale. I think we should be mapping our customer journey and finding where are all the different areas that we can reengage with players. If players give us their data, if they sign up to an e-mail, we should be talking to them. And we should -- they're investing in us, it's a value exchange. We need to invest in them. So we have various different cohorts. We have those big influencers who are great because they give us fantastic -- hold nothing back in their criticism, and we have to embrace that and not just hide under a rock about it. But also, if we speak to them correctly and we engage with them the right way, they will tell all other more passive engaged players what we're doing, what they think is good, what they think is bad for the games. So it has been working. It's also good from a cost point of view because we're not spending all that. It's better to talk to players you've already got than have to pay so much money to try and acquire players who are not fully engaged. They're just listening to somebody on the YouTube channel. So with that in mind -- and actually, that's exactly what we did, and it's exactly what I did on Elite Dangerous. Elite Dangerous players helped shape the game in the early days. Our current Planet Coaster players are helping us shape the game. Our players on Jurassic World Evolution helped us release the game because we made quite a few changes. And in some cases, we're even showing those players stuck behind closed doors. And before we've even put an update out, they've told us this, this is wrong and we catch something that doesn't seem quite right. I hope that's an answer to your question. Unknown Analyst: Yes. And do you think it's possible to develop a deeper player relationship with the CMS player than it is with... Johanna Cooke: Yes. Yes, I do. Having worked on lots of different games, the fact is they play for many more hours. They're much, much more engaged. They are very creative, and it's so much easier to talk something. Honestly, those stats I talked about with Planet Zoo. You look at those numbers and those players have been playing for 6 years. Alexander Bevis: Thanks. Patrick is up next. Patrick O'Donnell: Yes, a couple of questions. Maybe I'll start on JWE3. If you have a sense of the current split between console and PC? And secondly, around that, kind of any changes in the demographic of the player base globally from JWE2, for instance, like the amount of players that bought JWE2 that are buying JWE3? And then just looking kind of longer term beyond kind of '27, you've talked about a release in '28. It looks like that won't be within the existing IP stack. Admittedly, that is probably organic. Just looking at kind of the CMS category, and the cash balance increasing, would you consider IP opportunities within the category to acquire proven IP? And just the last one, maybe for Jo. You've just talked a lot about CMS, et cetera. How applicable do you think this is for, I guess, roadblocks in terms of future thinking of where the IP goes and sort of any collaborations you might have there in the future? Alexander Bevis: Okay. Why don't I start with the console-PC split for Jurassic World Evolution 3. It's pretty similar to previous games that we've seen. So on digital, it's about a 50-50 split between PC and console. When you add in the physical product, the disks, it sort of makes it maybe 45% PC, 55% console. The split between the consoles is about 2/3 PlayStation, 1/3 Xbox, which is pretty typical of -- I know, Patrick, you do a bunch of work on other companies. So PlayStation is -- tends to be stronger now with game pass having an impact on Xbox. So pretty similar in terms of the console split. In terms of player stats from 2 to 3. Jo, I think you had... Johanna Cooke: Yes. So for JWE 3, 60% of our current players have bought either JWE 1 or 2, 40% of them are new players, which is really encouraging because we've got great retention, but we are acquiring new players as we go through. To go -- IP opportunities, that question? -- if I get the question right, you're saying are we exploring other opportunities? Patrick O'Donnell: Yes, look to acquire really just in terms of -- like obviously, you've got the organic push, would you look to acquire within CMS... Johanna Cooke: I think it would be very much dependent on what's available. We are leading the charge on CMS games. So I think we'd have to think very carefully whether we can achieve the same level of game with a third-party IP. Alexander Bevis: Yes. Obviously, Jurassic is the biggest CMS franchise that we have. So all we've said for FY '28 game is that it's a CMS. We haven't said whether it's own IP or licensed IP. Patrick, you kind of -- you anticipate maybe it's a new IP. If you think of the 3 CMS franchises that we have, you can probably rule out Planet Zoo because why would we do Planet Zoo, a sequel to Planet Zoo and then another sequel to Planet Zoo. Jurassic, it would mean a 2-year tick between Jurassic World Evolution 3 and another Jurassic game. So it kind of leaves you thinking, well, if it's not Planet Coaster 3, it's going to be a new franchise. So nothing to announce at this stage, but you can kind of work out what we might be thinking for FY '28. And clearly, having a new franchise at some point is an important thing for us. We can't just have 3 CMS franchises. I think 3 years for a sequel is too early. So looking to grow franchises over time is a very important part of our strategy. Johanna Cooke: But sorry, I misinterpreted your question, Patrick. Did you mean an existing CMS game that's out there for acquisition? Patrick O'Donnell: Yes, where there might be sequel opportunities basically, yes. Johanna Cooke: Yes. Alexander Bevis: Well, I would say we've started -- we're in development for that game. And we haven't announced that we've sort of bought anything. So I might tell you. Johanna Cooke: And Roblox opportunities. Well, Roblox is really interesting because when you think about particularly CMS games, Roblox, Minecraft, they're very creative platforms. And I see them in many ways as a sandbox in the real sense of the word, a playground for young players to develop their interest in creative games like that before they mature and grow up and then look to a different gaming experience that still sits within that creative environment. So it's definitely conversations that we've had about how can we look to those audiences and bring them up through -- as they mature, bring them and attract them to our games. Patrick O'Donnell: That's clear. Just one last one. On the expansion of the -- that seems like a big number, new players. Like what did you do differently to bring in that new category of players into JWE3? Just curious. Johanna Cooke: Yes. So the people talking about it, one, the game is absolutely excellent. And I think that the peer-to-peer recommendations have made a really big difference. Our player reviews are really high. They're up in the 90s. So there's a lot of interest in people going, I might have a go at that for a change. The other thing that we did, and Johnny gets the credit for this because it was so important, is we improved the onboarding of the game. So the first 1.5 hours is really critical as you're probably well aware of any game to make sure that you're able to get people understanding how to play, but also draw them into a deeper gameplay experience. And we spent quite a bit of time changing that and making sure that the game was so accessible to new players. And that's played out in the numbers. Alexander Bevis: Thanks Patrick. Sean I think you're up next. Unknown Analyst: I've got quite a few, but I'm going to restrict myself so I don't have to subject everyone on the call to [indiscernible] for too long. Alexander Bevis: They're all about tax. Aren't they? Unknown Analyst: Don't worry, Alex. I've got all those questions out of the way now. So first one, I think you've hinted pretty strongly there that the FY '28 game may or may not be a new IP, but certainly over the longer term, you want to expand franchises. I think for me, I think we've discussed previously that you've got some fairly different audiences across the portfolio. Just sort of open question, are there some pockets of potential audiences out there that you think you could build a game to appeal to? Should we think that maybe some of these games will appeal to similar audiences that your existing games already do? Just open question, would love to hear your thoughts. Second game, again, very broadly, and I think you've sort of touched on this with Patrick's question as well. Obviously, you've had enormous success with Jurassic World over a significant period of time, which is obviously a licensed IP without sort of wanting to prejudge and I know you won't say about FY '28. Is that the sort of thing you look to do again? I know, Jo you mentioned your long experience of sort of starting out working with IP games. Do you guys have like a plan to do more of that in the future? Do you think that's sort of maybe in the next 10 years where the business might go? Just really interested to hear any questions on that. And then the final. Alexander Bevis: Let me chip in and answer those ones, and then we'll do the next one. So Sean, you're on a bit of a fishing expedition there. So you checked plenty of bait into the water. I think we don't really want to say too much about FY '28 CMS, we've hinted there that it could well be a new franchise. And as I said earlier, having a sequel every 3 years is probably too short period. So if we want to do a game a year, over time, we probably need to expand and get to 4, maybe 5 franchises, I think, would be ideal. So having a new one does make a lot of sense. I don't really want to answer any questions about what that might be or not be or is it this audience or the other audience because it's far too early for that. So I don't really want to say -- us to say too much more at this stage. Unknown Analyst: Yes. In which case, I've got just one more. Could you remind us -- you've mentioned, I think, that you've got potential -- you're in conversations with all the major platforms about subscriptions. Could you just remind us which of those tend to be most material and therefore, what we should sort of be looking out for when we see it appear or should we see it appear? Alexander Bevis: Sure. So PlayStation have been actually a really, really valuable partner for us on Jurassic World Evolution 3. They gave us a lot of extra promotion and featuring. In terms of the size of the subscription deals, it's the Microsoft deals that tend to be bigger. If you look at just the number of millions of dollars that you receive for PlayStation Plus, on PlayStation versus Game Pass. So we are talking to all the platforms, as you'd expect, those 2 platforms about deals, there are deals around, and we do expect those in the future, but we'd much rather that they were upside rather than being baked into numbers. So I think the guidance we've given, I think, is very sensible to be around GBP 100 million this year, to be growing next year. Clearly, the year after that, depending on what you assume for FY '28, it might be sensible to assume we sort of move backwards before we move forward. But I want deals over those 2 to 3 years to be upside. So we're going to stay quiet until we've got something to say. So I'm not answering any of your questions, Sean, I'm sorry. You got any questions that we can answer. Unknown Analyst: I didn't expect any answers. Don't worry, guys. More just thinking long term on the first 2. But yes, that's pretty it. Alexander Bevis: Who's next? Katie is next. Katie Cousins: Yes, you touched on it earlier in terms of the crossover of players on Jurassic World but more thinking around the Planet Coaster crossover to Planet Coaster 2 and how then that works into your marketing strategy for Planet Zoo Sequel? And are you trying to transfer a lot of those existing players to the new sequel? Or are you focusing on more getting a new layout of players? Johanna Cooke: Okay. I'll go to that one. And actually, it probably gives Sean a little bit of hope that we do look at the players across all our portfolio. And the portfolio management is really important because we want to move people from one game to another. But let me put it in this context. So when I talked earlier about -- to Ross' question around influencers and who's playing the game and how we get them engaged. We have quite a big crossover between Planet Coaster and Zoo on those players who are very vocal about the game. And in fact, when we were talking to those players at that time, we were in the process of doing all our launch planning for JWE3, and we're able to kind of sneak peek them a little bit of content and whatever. And we found that they are willing to jump from one franchise to another. They are willing to go because it's a similar game play. It's the kind of things they like doing. Some may prefer animals more than they like dinosaurs. But the game play mechanics are often similar through those -- through our different games. So we are finding that we're getting players who -- they've tried one game, they're willing to try another one. And I think that really helps as we go through our sales promotions as people own one game and they see it at a price -- another game at a price that makes it an easier decision to make than making that decision. We definitely saw with JWE3, those new players, a lot of them were players that were influenced by our Zoo and Planet Coaster activities. Alexander Bevis: I can see. Ross, have you got your hand up again? Did you have another question? Maybe not. Johanna Cooke: I think Oliver has his question. Unknown Analyst: In terms of the market or labor market, how are you finding? Because obviously, you went crazy during COVID and then it sort of retracted load those people be made redundant. Are you finding it easy to find talent? What's your churn rate looking like? Is everyone very happy with just focusing on CMS? Alexander Bevis: Yes. The churn rate has certainly settled down. I think it's around about sort of 8% to 10%, I think, which is pretty typical. Key thing for us in this environment is making sure that people are happy and that they're here for the right reasons, not just because maybe they can't kind of jump to another company somewhere else as we saw a few years ago during COVID. So I think with Jo stepping up, there's a great opportunity to refresh how we do things internally, in terms of internal comms and engagements. So we are sharing a bit more information internally now with people trying to get people a bit more excited. Clearly, it's not everyone's dream to work on CMS games for their whole career, but we want to make sure that people are as engaged as they can be. And if it's not something that they're really passionate about, then perhaps we're not the company for them. So it's just trying to get all those things right. In terms of wage inflation, during COVID, there were some pretty chunky numbers. We have like a 10% plus pay rise for a couple of years, I think it has settled down at more sustainable levels. But clearly, with things like the National Living Wage and national insurance changes haven't exactly helped on the wage bill for us. But we're managing those things. We don't expect to increase our operating costs very much at all, staying pretty flat. We've still got hands up for Ross and for Patrick. I don't know whether you guys have got a follow-up question or whether... Patrick O'Donnell: Maybe jump in -- just one quick one. On the complex game launch next year, how should we think about that pricing, potential revenue base IP segment? I know you've said it's unannounced, but it's clear they have a strong relationship with Games workshop. So one could assume it could come in that category. Alexander Bevis: Thanks, Patrick. We said back in the, I think, the annual report last year and maybe a couple of times before that, that they're building on their experience and success. So it's not hard to guess what they might be working on. We haven't got anything to formally announce right now. But you will hear more from us in the coming months and looking forward to getting that game out. I think there's a question earlier about budgets. So in terms of the expectation for revenue contribution and the budget that we spend in terms of development is smaller than the CMS game. The first -- the [indiscernible] game that they did for us back under Foundry in its first 12 months did about GBP 10 million. So I think it's sensible to put something maybe similar, but probably a little bit lower into numbers for that. And obviously, it just depend on the timing of the launch as well. That was a full 12-month revenue. But just to add, very happy with that team. They're a great bunch, and we fully expect them to deliver a really good game. Okay. I can't see any more hands up. So I'm just going to -- [indiscernible] jumped in there. Unknown Analyst: Sorry, back with one last one. So I know, obviously, in the past, so [indiscernible] is something very different to what you've done that kind of stemmed out of your Frontier Foundry, I guess, whatever that was gamble. If we're looking at uses for your cash, would you consider buying just an existing studio with a couple of existing titles to diversify your revenue streams a little bit? Is that something you still want to do in the medium term? Because that was the thinking behind releasing different types of games, right, and doing your Frontier Foundry label as well. Alexander Bevis: Yes. I think if anything, the last few years has shown how hard it is to run one studio, let alone multiple studios. And clearly, Embrace had a roll-up model at one point and quite an independent type of model where they just wouldn't try and consolidate, but then you don't get the benefit. So I think we need to really focus on ourselves and what we're doing. That's not to completely rule out M&A, but I think almost certainly, it's going to mean that we just focus on our model, our CMS games, our studio. So in terms of use of cash, as I hinted earlier, I think the buyback went down pretty well. We could have GBP 45 million in the bank by the end of May. So that could be something that's on the cards for us again. Thanks. All right. I'm assuming that no one else is going to sneak in with a question at the end. So just left to me to say thank you very much for joining us this morning. Great to be posting such good results and to have such positive things to say about the future. If you do have any follow-ups, feel free to reach out. We're going to be on the roadshow in the next few days talking to people. But just let us know if you want to reengage and have any questions answered. Thank you very much. Johanna Cooke: Thank you, everyone.
Ben Jenkins: Good morning, everyone, and welcome to our December quarter for 2025 for the quarter 2 of financial year 2026 webinar on our December quarter results. Tim will kick off as usual. And I'll step in on the financial slides, and then we'll go to question as usual. Tim, over to you. Timothy Levy: Right. Thanks. I see there's a few people in the waiting room. They're coming now. Okay, great. All right. Cool. Thanks, Ben. Thanks everyone for joining us. The December quarter isn't the -- typically the highest selling period for us for a lot of our business, particularly northern hemisphere part of our business. It's really about focusing on execution and delivering good, services to customers; getting -- in particular, in the U.S., getting kids back to school and getting their devices protected. But it is a big period, the December half and the December quarter in particular for Australia, New Zealand and our Qustodio business. And you'll see that reflected in the numbers that we're about to show you. Very pleasing results actually. In fact, it was the best sales December quarter we've ever had in our history. And from a guidance perspective, we're really pleased that we've hit all our guidance numbers and are very confident for our guidance for the rest of the year. So look, I'll quickly run through the highlights, then I'll go through the meat of the presentation, then I'll hand over to Ben to talk through the numbers, and then we'll answer questions at the end. So yes, we made some massive milestones, massive milestones actually achieved in the December quarter. We were, of course, buffeted by the FX movements, the Australia, U.S. and euro. But if we forget that, let's make some celebrations. Firstly, we passed USD 100 million of ARR, which is a substantial achievement. And in constant currency terms, that meant AUD 154 million in ARR. We're reporting $149 million of ARR at the end of the calendar year. We also passed through 20% of the students are on our platform in the U.S. That is an amazing number; 20% of our students. Essentially all of those students are organic, and we entered that market in 2018. That is an amazing achievement. We've also passed through 30 million kids are protected by our platform, substantially more kids on our platform than there are Australians on earth. They are achievements that we should celebrate. Now from financial results, we added $5.1 million of net ARR. That is a great result. Over $4 million in the education business was an outstanding result, again, given it's not the key part of the selling part of the season and over $2 million in Qustodio. Qustodio is an absolute flyer, growing now at an annualized rate greater than 34%. So our top line is growing better this time of the year than what we were doing last year. And last year, you'll recall, we hit the ball out of the park for the financial year. Cash receipts $79 million, 20% up on PCP on the same half last year. So a great result on guidance, and we're expecting that to continue comfortably actually for the financial year. Free cash flow positive, up 46% for the half. And then probably also really another big highlight, right? Obviously, key to our financial is the North America K-12 business, and our pipeline is on fire, nearly $40 million in pipe, $14 million on a weighted basis, which is 30% up on the record pipe of last year. So the stage is set for a fantastic end to the financial year. Reiterating guidance, and we think, if anything, there's upside in particular on our ARR. So let's go through some of the numbers. 32,000 schools, that hasn't changed; 30 million kids in the platform, 9 million parents using our tools is up; more than 100 countries accessing our products. As I said, $154 million, I think I said on a constant currency basis, but we ended the half with $140 million -- $149 million of ARR, growing at 20%. Again, that is -- it would have been much higher than 19%, but for the FX. Free cash flow positive for the half. And for the year, we're expecting free cash flow breakeven or better. So again, I'll let Ben talk more to that. And again, a big highlight is that $14 million of weighted pipeline, which sets us up for a fantastic crack in the second half of the financial year. Matter of fact, a big chunk of our team are in the U.K. right now because there's a big sales event which is called the [indiscernible] end of January per year. So all parts of the business are going extremely well. These numbers here are in local currency. U.S. K-12, 30%; Qustodio, on the last 12-month basis, is 27%, but based on the first half this financial year, over 30%. That business is flying. Australia, New Zealand growing at north of 30%. Now the U.K. is still a little bit retarded, let's say, because they haven't got access to all the products, but that's literally happening now. We're launching at that some substantial integration, filter and monitoring by the end of this quarter. The Qoria filtering technology will be valid in the U.K. and more and more stuff to come. I'll talk more about that in coming months, but you'll see the U.K. really a step change in growth in the U.K. in the next 12 months. Very exciting what's happening over there. Things at SaaS, they haven't really changed. I guess, if I could highlight anything, gross margins are over 90%. Again, that excludes acquisition cost, but that compares with most -- whether most SaaS businesses report. So our margin -- our gross margin is incredibly strong. And as we are now maturing and integrating our businesses and our costs are stabilizing, that's what's delivering the operating leverage in the business. And our marketing efficiency, particularly in Qustodio, where we're generating return on investments of anywhere between 300% and 400%. It is expensive to put money into Qustodio because it does drop straight through our P&L, but it is really important because for every dollar we invest in that Qustodio business, we're getting $3 or $4 back in short order is the right place to be investing our money. Okay. So this is a waterfall of the contributors to our growth. K-12, new customers, new logos are still the engine room in our business. We're getting better and better and better at cross-selling, and we delivered $1.5 million of cross-sell. I think cross-sell is now, over the half, it's -- could be -- 30-plus percent of our new ARR is from cross-sell to existing customers. Last year, it was just over 23%. So we're definitely getting -- with more products to sell, we're getting better at [indiscernible] existing customers. Qustodio, as you see there, $2.1 million, so nearly added $5 million of ARR for the financial year together. But of course, a big chunk of hit there with the FX movement. Now of course, there is a cost impact of that as well, which, again, I'll let Ben talk about, but in round numbers, it was around about $3 million of improvement in our costs from the FX movements. Sorry. Bear with me. I just lost my screen. Okay. So K-12, what's the -- I mean, a big net add for the quarter of $3 million, $4.6 million gross. That is -- it's not quite a record for K-12 but it was a little bit surprising how well it came in. This time of the year, it's hard to predict what sales are because it isn't the biggest selling period, but we had some outstanding results again, particularly in the U.K., they're really delivering in that quarter. Average revenue per student continues to go up. Average sales price, as you'd expect, as we're kind of getting into the selling season that's picking up. But the real highlight in the education business is the building of the pipe into the second half of the financial year, nearly $40 million of deals in that pipeline and 30% growth in the way that pipe is remarkable. Qustodio, all indicators in this business are going the right way. So the first half, again, 34% annualized growth. I'll draw your attention to the chart at the bottom, the yellow column being the most recent result of this financial year's results. And you see not only net ARR growth, that's substantial, but you're seeing subscriber growth. For -- prior to this year, for the last 2 years, most of our ARR growth in the Qustodio business has become -- has come through price optimization. But now that we've delivered price increases, feature enhancements and a little bit of investment, we're talking literally $4 million of extra investment over the year in that business. We're now seeing that turning into substantial lifts in ARR subscriber numbers and at really good return on investments. Our average order value and our cost to acquire customers essentially breakeven. And so it's not burning cash to grow that business. But of course, the way the accounting works is to acquire a customer to take that to the P&L immediately and then you take the revenue over the life of that customer. So that is a good business. And we're carefully investing in that business to make sure that we hit our guidance but do not miss the opportunity of the financials. The unit economics of that business are tremendous. So cash flow is up 20% for the half. We're expecting that and more for the second half. We're feeling really comfortable with our inflows. Again, I'll let Ben talk more about that, but you see quite clearly in the charts here, the cycles that our businesses go through, but we're stepping up every quarter, every year. Operating leverage. I guess I can highlight some things that are important. You'll see it through our 4C and you see it on the slide. One, as we've been telling the market for some time now, at the beginning of the financial year, through our budgeting cycle, we make investments. The bets we've made this year is -- the main one we've made this year, 2 of them, sorry, is to put more money into Qustodio marketing, around about $4 million, and to invest in building out the engineering team in Sri Lanka. Those investments were being made now in this first half year to deliver results going forward. And so you've seen a lift in our costs and, of course, pay rises, which you [ deal ] in that October period. So you've seen that lift, but as we have also gone to the market on our ARR and revenue is expected to be at least 20% higher than last year. And so that can be easily accommodated. Those modest increase in costs can be -- and bets that we make going to be easily accommodated in ARR and revenue growth. Now on the bottom chart on the right-hand side, what we've done there for comparison purposes is to show our year-to-date result for net ARR versus cash costs. So essentially, it's a run rate view of our business on a constant currency basis, so using our FX rates at 30 June. As you should see, these investments that we've made in Sri Lanka and Qustodio marketing are comfortably covered by the growth in revenue in our business. So again, leverages in our business is growing. Gross margins are great. We also have flexibility in these bets that we make, particularly around marketing costs. So we can optimize our expenditure to make sure we hit guidance, and at the moment, we're feeling very comfortable with our growth and our guidance, particularly our cash flow and balance sheet, which, again, I'll let Ben talk about later. Now I know there's going to be a lot of questions about balance sheet and finances. But I do think it's important, if I could just steal 5 or so minutes of people's time to talk about AI. There's been a lot of chatter we've seen recently about the impact of AI and what that might mean for SaaS businesses and Software-as-a-Service type of businesses. What I'm going to do now is quickly talk about the investments we're making in our business to take advantage of AI for internal costs, but also deliver value for customers, but also talk about what's the broader implications for businesses like ours with the advent of agentic and generative AI. So firstly, a quick, I think, focus on us. There's really 3 areas of investments in our business with AI. One is enhancing offerings, adding -- essentially adding AI features to our products that customers may enjoy. And we've been talking about this for a while, and it's generating now literally millions of dollars of revenue in our business. We were the first in the kind of mainstream filtering provider space to provide real-time content to web filtering. We can now intercept the kids website, look at the images that they're looking at, look at the videos that they're looking at and blur them if there's inappropriate content. And we can also now look at the text, every single line of text, hidden or otherwise, and make a determination about whether that should be shown to a child because -- or not. And in particular, that stuff is focused on our content, of course, but also kids who are brilliant at finding their ways around filtering technologies using technologies like VPNs and proxies. So we can now scan in real time these pages without the kids noticing and make those determinations. There's a whole host of other things that we're doing behind the scenes with categorization and classification, and there was also some really cool things that we're doing with automations and AI chatbots and let's call it AI agents that can help you with your navigation and your journey of using our products. And we'll talk more about that in the second half of the year, but big investments made -- we're making there and not -- these things are actually delivering real contributions to our business today. Constant work across the business. We're all getting better and better at integrating AI into our day-to-day activities and of course, all of our vendors of various customer relationship management type systems are adding AI features in there. And that's -- so we highlight here about $2 million of reduced support costs, and we've reduced the amount of workload and our human moderators for our monitoring product by that 30% with tons more to go. We -- I won't go into the details, but there's literally millions more dollars of savings that we're expecting out of that customer support and human moderation by the end of this calendar year. And then going to this question that I keep hearing about can people code in their basements and then replicate the sort of features that you offer. Now we're doing that internally. Product development teams globally are now -- are being expected to use wipe coding and AI tools to not only prototype, but to be able to build alpha-ready products that customers can use and then move into the development -- proper development cycle, production cycle, they call it. So we do that today. And it's something like, I think 90% of our -- 88% of our teams are now using generative AI in their day-to-day activity. We've saved 15 FTEs, 15 roles, engineering roles in our business, and these are expensive resources, $120,000 to $200,000 resources, 15 of them have been effectively saved through the use of these tools. And it's not just at the grassroots, even people like myself are using AI to build applications in this business now. So that's now running right in our business. Okay. So what is the impact of AI going to be on SaaS businesses? Unquestionably, the ability to code is accelerating, ability to take an idea from an idea, put something in front of a customer and turn it into a feature that's being used by customers has moved incredibly quickly from taking 9 months to a year to get a feature out the door 3, 4 years ago to 3 or 4 months. We're actually now doing that. We've actually got a feature that shipped a couple of weeks ago that took less than 3 months to deliver. Now does that mean that people can start by coding their way and competing with big companies? Well, what Bain and company say is that with the right playbook, which includes deep AI integration, strong data moats and leadership of standards incumbents can shape and not just survive the next wave of SaaS. Now let me go in a bit more detail what that means. There's a number of references here to third parties that have been investigating this question about what is the impact of AI going to be on dedicated SaaS businesses. The one thing that I draw your attention to is we don't sell really just software. What we're doing is selling mitigation of risk. A customer -- I mean a private school in Australia, they might be spending $20,000 a year with us to make sure that kids are not watching pornography at school or making sure that they're complying with their obligations around safeguarding and privacy. What school is going to entrust that to a backyard provider who may be half the price? They're not going to do it. What's really important to understand in enterprise platforms, particularly in markets which are high trust and heavily regulated like we operate in, there is a transfer of risk inherent in that process, which is really what we're selling plus, of course, the features. Now according to Andreessen Horowitz, durable moats come from restricted proprietary regulatory sensitive dynamic data sets, not the model. So yes, there is a lot of data everywhere, and you can build AI tools that leverage that data. But if you think around a business like ours, we have access to very unique data. We -- in fact, we're the only one really globally that has the ability to see what kids are doing at home and see what they're doing at school and bring all those contexts together. We also, through our acquisition of Octopus last year, we can now see through schools' other systems, attendance systems, academic records, teacher notes. We have more visibility across the data sets and schools than I think anybody in our space. The ability to bring all that together and add value decision-making of schools is a significant moat that is very, very hard to replicate. The third point [ best of ventures ] is that -- and you're seeing this across the Internet is that there is much more now focused on vertical integration. What was previously feature providers, little expense type management systems and project management systems that could apply to everybody, that world is collapsing, and now people are focusing on particular industry segments, which is a vertical integration and approach. We've been talking about this for 3 or 4 years about all those entry points and all those personas that we're trying to support inside the school. So we've been talking about vertical integration for a long time. Outcome-based pricing is where McKinsey sees this world going. So it's less about the subscription per user, subscription per service, but it's, are you delivering value. And again, we've been talking about this for a long time. How do we make sure that customers pay the minimal money, the money they're spending on our services, maybe $7 or $10 per student per year and how do we turn that? How do we prove the value that, that's driven to customers? So our, acquisition of Octopus was, in large part, to make sure we can deliver measurable outcomes in investment for schools, modest investments for schools making our technologies. And then final piece, and I think this isn't talked about enough, accelerating time to value is really important, and that can, of course, be done with great user interfaces, which can be vibe coded, but the complex type systems that we do, it also requires the addition of wrapped professional services, which is something that we do, in particular around professional development for moderation, safety leads and, of course, the online safety education and something that's unique in our business. So we've been thinking about this challenge of protection, building a moat around your business with the -- not just AI, but just the acceleration in software development for a long time. So if I can reiterate, Qoria operates in a high-trust safety, safety-critical environment, very regulated, subject to privacy policies, compliance obligations. And of course, we're dealing with human lives. This isn't an area that's naturally ripe for disruption by backyard coders. Customers are not purchasing software fixed, lowering their purchasing assurance, compliance accountability and professional services. The comment on the right-hand side is the key point I'd like to make. I think the SaaS businesses that are at risk are those single feature and undifferentiated workflow type businesses, those, particularly with low switching costs, and that is not our business model. The winners will be platforms with proprietary data which we have, regulatory drivers which we have, and a customer locking which we have because we are invested across the school stack and we have relationships with parents within these schools. So for businesses like ours, we see that AI is an accelerant and certainly not a threat. Look, that is a very quick overview. Happy to provide some dedicated sessions on this over time, and maybe I'll leave to the broker analysts who are on this call to see if they'd like to do that. That was very quick. Let me quickly hand over to Ben Jenkins. Ben Jenkins: Thanks, Tim. Good morning, again, everyone. Just jump to the next slide, please, Tim. Thank you. So as you can see on the page here, free cash flow for the quarter was just over negative $2 million, broadly in line with what we're expecting across the whole half when you consider the Q1 results and the Q2 together at just under $9 million positive. As we mentioned at the September quarterly, we've collected cash really well in the September quarter, and the collections over the half were in line, almost exactly in line with the guidance we provided at 20.2%, which is really pleasing. Something probably worth calling out here, it is called out on the next slide, but it is mentioned here, so worth talking to the other one-off costs. They are all related to acquisitions that we were looking at. Diligence costs, other bits and pieces. There was 3 different acquisitions across the half that we looked at in a significant amount of detail. And for various reasons, we have walked away from all 3 of those or being outbid on those. So they are genuinely one-off in nature and corporate costs related. Outside of that, I think jump to -- I've got control now. I can jump to the next slide myself. Going into a little bit of detail on the cost line across the board to talk to the investments that we've made in the business over the year. Most of that is done now. So I expect costs to be broadly flat across the half, if not down in some cases, particularly in relation to fixed other costs where you have some seasonality within that. And importantly, on cash collections, I think the most important -- and you can see this in the chart earlier in the deck where we comp the cash collections quarter-on-quarter over the last 3 years. Last year, we're -- receipts in the March quarter were only up 9%, and receipts in the June quarter were actually flat. They weren't up at all year-on-year. And so we're comping a very favorable period. And that's largely due to the runoff in multiyear cash upfront that happened last year. That's washed through. You can see that's washed through in our first half results and cash collections. But in the first half of the year, we're actually still comping at a much tougher period. So we're pretty confident that receipts will be comfortably over 20% for the second half of the year up year-on-year. And I guess the other data point that we can point to is, last year, if you look at the half 1, half 2 split, it was 60% receipts in the first half of the year, 40% in the second half of the year. A lot of people are probably going to that as the baseline. Again, due to the profile of the cash flows last year and the flat nature of it in the second half of the year, that's probably the wrong split to look to. If you look at FY '24, the split was actually 57% half 1, 43% half 2. I don't expect it to be that far to the right this year, but it will be somewhere in between those 2. And if you back through that, that gives you a number of comfortably above 20% in cash receipt growth for the second half of the year. On that basis, net debt is mentioned on the previous slide and all the cash on hand of $21 million. We're comfortable there's enough cash in the bank from now through to 30 June when we start collecting cash really strongly again in the July or the September quarter to see us through. So free cash flow for the full year should be broadly in line with guidance that we've provided before. So we would generate $9 million in the first half, we will see through a bunch of that in the second half and end up the year with a cash balance similar to what we started the year at, probably slightly lower, in line with what we've discussed in the previous quarterly updates. FX exposure, Tim spoke to this earlier. We've updated this slightly, a little bit more in the business related to U.S. dollars. So the sensitivity to the U.S. dollar is a little bit higher than what it has been. The other area where there's a little bit of impact is within the Qustodio business. The majority of their revenue is in U.S. dollars, whereas the majority of the cost is in the euro, and there's been a little bit of a disconnect there. So there's a little bit of cost related to that, that's captured in the sensitivity analysis earlier in the pack. On that basis, we can go to questions. Ben Jenkins: We'll let Laf in. [Operator Instructions]. Unknown Analyst: Thank you for the detail you've given us on the free cash flow. Can I just dive into a little bit more on the cost side? So I can see that you're now more confident on the March and June cycling at least 20% up. Can you talk through the timing of some of the cost savings around AI? And I think from the last couple of quarters, you talked to it being first half heavy. Is that right? And can you just talk about the trajectory of the cost base going into FY '27? Ben Jenkins: Yes. I think the cost savings will really be an FY '27 story. I think FY '26, the cost base is fairly set now. So I'm not expecting any significant increase from here. And then through to FY '27, we're reasonably confident that we'll be able to keep cost flat. So not CPI increase, we should be able to offset any wage increases with savings within the business. So that will further extend that leverage. And if you forecast out the growth that we're expecting in the business in ARR, a lot of that comes through this half of the year, then you can see a path to fairly significant cash generation in FY '27. Unknown Analyst: Yes, sure. And can I just clarify for the second half, I mean I think Tim talked to some of the AI savings you have of $2 million in your presentation in savings. Is some of that coming in the second half? Or is that all really in FY '27? Ben Jenkins: Some of it is cost avoidance. So an example would be the moderation team, the moderation product is growing significantly, 25% to 30% year-on-year, yet we actually haven't grown that too much. So rather than having to put new human moderators on, we're able to deal with that through advancements in AI. Lindsay, you should be able to unmute now and ask your question. Lindsay Bettiol: Okay. Hopefully, that worked. Can you hear me? Ben Jenkins: Yes. Lindsay Bettiol: A couple of questions. First one on the U.K. So it looks like a pretty modest kind of quarter year-over-year, up 6%, something like that. I mean you've talked about that being soft until you can launch new products post-unification. So questions are, like, one, just remind us again where we are in the unification process? And then two, like once you can start cross-selling to the U.K., could you just talk about like where -- firstly, like where the big opportunities are, but then also where the early opportunities are because I think people are going to kind of want to see some runs on the board. So like where are you going to focus first? And then where is the opportunity in the U.K.? Timothy Levy: Yes. Well, the sequence is to take our cloud filtering offering from the U.S. and integrate it with -- into the monitoring product. So you essentially have a cohesive monitor and cloud filter for our cloud-only customers in the U.K., and that's happening right now. The next step is to integrate our cloud filtering offering and monitoring offering with the in-line appliances. So the 4,000 smooth wall appliances, they are in schools and council schools and MATs across the U.K. And then the final piece is to extend that suite of features to the larger MATs, which are what's called a multi-tenant deployment. Essentially think about multiple corporations that are managed by a single MSP. So that's the final stage of the integration road map, which should be around about September kind of worst case end of this calendar year. So to answer your question more directly then, the objective of this year is really that existing customer journey; getting all of our customers acquainted with the future of our platform, the singular platform, new experience is being rebranded as Qoria. It's got brand-new user interfaces, much more modern and user-friendly interfaces, the same that the customers in the U.S. enjoy. So a big part of it this year is about bringing those customers on the journey, making sure that they're happy. It's going to reduce any churn that we have. So our kind of gross retention is going to improve this year in the U.K. and that gross retention, I think, has been 86% to 90% for the last year or 2 there. So that will improve. And it then gives us the opportunity in a cheaper way of selling things like parental controls and classroom management and data analytics and so on. So very much an existing logo story this year, graduating from the less complex to the more complex schools over time. And that's done deliberately for technical reasons, but also those bigger clients will appreciate that this product is tested in the field before they move to it. And then, yes, in '27 for us is then accelerating new logos in the U.K. market, going up a lot of the business that Lightspeed has taken from us in the last 2 or 3 years. Lindsay Bettiol: Okay. Brilliant. And then I'll switch on to Qustodio. Like yes, pretty good quarter, 2.1%, I think is what you called out. I suppose my question would be was a little bit -- my number looks a little bit slower than Q1. I think traditionally, this has been like the strongest quarter for consumer, that kind of Q4 calendar year period. So one, could you just like remind us of the seasonality in the consumer business? And then, two, looks like there was a huge marketing spend in this quarter. It jumped up to like north of $4 million from $2 million something in Q1. Just wanted to confirm that marketing spend is seasonal as well, and we shouldn't expect $4 million a quarter going forward. Ben Jenkins: Do you want to tackle that one first, Tim? Timothy Levy: Go ahead. Yes. Ben Jenkins: Yes, that's right. It's timing effectively and where it landed either side of 30 September. So if you take the spend over the whole half, average it, that's more what you'd expect in the second half of the year, but don't annualize the December quarter. Timothy Levy: Yes, that's right. Yes. So for the half, they added just under $5 million of ARR and spent under $5 million of ARR. That's what we're told Victoria do. Grow within your -- the amount of money that you bill your customers. And if you need more money than that, talk to Ben Jenkins. That's really the message. Lindsay Bettiol: All right. And just -- maybe I'll sneak in like a third question. Just an update on the B2B2C part of the Qustodio business like you've kind of maybe scrapped that from the deck. Timothy Levy: Yes, we've got around 200,000 accounts now connected through U.S. schools to U.S. homes. And that's now a customer base. And we're getting better and better actually. We don't talk much about that, but we probably should. We're getting better at signing on these schools and now proving to schools that there is efficacy, that there is benefits. There was material reductions in toxicity in schools who are bringing on those programs. I should present this to the market actually. It's pretty amazing. So we're now selling out more and more schools and getting better at connecting those accounts. Those schools that follow our marketing plan are typically 20% take up comfortably. We're still getting around 1% of those upgrades to pay product. But just again, to reiterate, we are still not marketing to that group of customers. We're not sending newsletters. We're not sending monthly e-mails or aggressive upgrade-now type, 3-months-off type things. We're not doing any of that. But that program is about to start. And this quarter, we're expecting to do marketing communications to those 200,000 parents. And we're also going to start doing some innovative pricing. So rather than annual plans, which is the only way Qustodio goes, it's all upfront annual plans. We're going to start to do monthly plans. So from low to high value plans, just to A/B test to see what that sort of market will handle. So yes, that's all -- that's the next stage of the journey, Lindsay, as we've now got a big enough customer base to start playing with how do we monetize it. So that's really the '26 story. So we can talk more about that in coming months. Ben Jenkins: Owen, you should be able to unmute and then ask your question. Owen Humphries: Guys, can you hear me okay? Timothy Levy: Yes. Owen Humphries: Well done on the operating performance of the business. Just to kind of understand. ARR growth is 23%, call it, year-on-year. The weighted pipeline is up 29%. I think Qustodio is accelerating to over 30%. Can I just confirm, the guidance is 20%. Given your expectations, are you kind of tracking at this stage above that 20%? Timothy Levy: Yes. Yes. Look, I mean, I'm feeling confident about that. If you spoke to our Head of North American sales, he will say he will kill that. But the risk in our businesses, as you know, is that so much of our North American sales are done in the last 2 weeks of June. So we don't really know for sure. But certainly, the trajectory -- the underlying trajectory of growth in this business is well north of 20%. Absolutely. Owen Humphries: And just to kind of hit the nail on the head here because we're getting a few questions today. So net debt, $33 million; guidance is at or around $37 million, so $4 million for the second half. That includes interest costs, call it, $1 million a quarter. So $2 million for the core. The cost base is running it, if you look at the second and first quarter at around that $35 million per quarter all in. So annualize that for the look over the half year, $70 million for the second half. Looking at the cash receipts of last year around that $44-odd million, talking about around that growing at greater than 20%, that looks like it's about a negative $16 million or $15 million around that number of the $17 million between cash collections and cash outflows in the second half plus interest cost. Can you just kind of give us a bit more clarity? It sounds like the cash collection should be much higher than 20% in the second half to kind of get that. That's kind of where the questions are coming out today. We haven't really talked about that. Ben Jenkins: Yes, that's right. And I think we're comfortable to say that we think it will be comfortably higher than 20%. Again, point you to the half-on-half splits over the last couple of years, and last year is probably not the most appropriate one to use. It's not 60-40. We're comping a very friendly period from a cash collections perspective, as I mentioned earlier. And I think, reiterate the -- I guess, the guidance around in line. We're talking -- it should be there or sort of $2 million to $3 million within that level. So maybe a little bit more burn potentially. But again, going to Tim's point, it depends on North America. There's potential to outperform that. If we get sales through earlier in the period, we can invoice it, collect it, get a good cash receipt result in June. Maybe it spills over into July. But the pipeline is there. The business is coming, and the cash will come, whether it's across June or July. And yes, I think the big point to reiterate that you're touching on is that cash collections piece and having looked at it, I guess, over the last couple of years, not just last year. Timothy Levy: If we run Owen's numbers, we're $21 million at the end of the half. And if we burned $17 million, including interest, we're -- was that what the formulas is? Owen Humphries: Yes, yes. Timothy Levy: Yes, yes. No, we'll be doing better than that. Owen Humphries: And maybe another question is if revenue is running at $145 million constant currency there, what is the cash conversion ratio expected? Ben Jenkins: Yes. I think if you went back 2, 3 years, it was converting at 100% effectively. It won't be that high because of the fact that we've weaned ourselves off those multiyear cash upfront to a degree. If you look at last year, cash collections were about $109 million over opening ARR of $116 million. So I think if you -- our closing ARR is $145 million, it won't be $145 million, but it will be in that sort of, I guess, $5 million, $6 million, $7 million range of that number. Owen Humphries: Good one. And last one, just the U.K., I guess, Lindsay was touching on it running at kind of 6% growth, growth running at 20%. I guess, is that the expectation if you end FY '27 for the U.K. Like if all the work you've been doing is the acceleration you're expecting, just talk us through what growth rate is expected to be sustainable maybe this calendar year and into next? Timothy Levy: Yes. This calendar year, I think, 6-plus, hoping to get to closer to double digits, and then the year after, north of double digits comfortably. Ben Jenkins: There's no further questions, Tim. So if you want to wrap up, we can finish it up there. Timothy Levy: Yes, cool. Well, thanks, everyone. Thanks for your support. Thanks for your attention, a big call. I feel like we have delivered clear guidance to the market about growth, cash flow collections, free cash flow, net debt on the balance sheet. So we're well set up now with the right balance sheet, the right team, the right strategy. Pipeline is good. So feeling very good about delivering all of that. And from 1 July, we never turned back, right. We start paying off debt and we are -- we're away. So feeling very good about our guidance for the year; very well set up; and looking forward to delivering. So we'll see you all next quarter. Thanks a lot. Ben Jenkins: Thanks, everyone.
Operator: Good day, and thank you for standing by. Welcome to Yancoal Fourth Quarter 2025 Production Report. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brendan Fitzpatrick, Investor Relations Manager. Please go ahead. Brendan Fitzpatrick: Thank you, Maggie, and thank you to everyone on the call for joining this briefing on Yancoal's Fourth Quarter Production Report for 2025. We have several members of Yancoal's executive leadership team to recap the quarter and participate in the question-and-answer session. On the call, we have Sharif Burra, Chief Executive Officer; Kevin Su, Chief Financial Officer; Laura Zhang, Company Secretary, Chief Legal, Compliance, Corporate and Affairs Officer; Frank Fulham, Chief Sustainability, Technology, Innovation and Development Officer; David Bennett, EGM Operations; Mark Salem, EGM, Marketing and Logistics; Mike Wells, EGM Finance; and Mark Jacobs, EGM, Environment and External Affairs. The commentary provided today is based on the quarterly production report published to the Australian Securities Exchange and the Stock Exchange of Hong Kong platforms on the 19th of January. There is no presentation pack for this conference call. The Yancoal website holds past presentations for any participants who require additional information on the company. I'll hand over to our CEO, Sharif Burra, to provide the fourth quarter highlights. Sharif Burra: Thanks, Brendan. I also welcome everyone joining us on today's conference call. We had a great quarter. In fact, the 10.4 million tonnes of attributable saleable coal was a company record. The fourth quarter production carried us to the top of our annual production guidance range and the 38.6 million tonnes for 2025 was also a company record. This was a tremendous effort, and I congratulate all of our people for their role in this achievement. All of our mines contributed to total ROM coal production, which increased 20% compared to the third quarter. As usual, we don't include cash operating cost per tonne in the quarterly report. At the half year, our cash operating costs were AUD 93 per tonne, in the middle of our AUD 89 to AUD 97 per tonne guidance range. Consistent with our commentary in October, for the full year, we expect to deliver unit costs around the middle of the guidance range. Previously, we disclosed our expectation for capital expenditure within the guidance range. We now anticipate it will be towards the bottom end of the $750 million to $900 million guidance range. During the fourth quarter of 2025, international coal indices for both the thermal and metallurgical coal markets had mixed performances, yet our average realized prices improved by 6% to AUD 148 per tonne from the prior quarter. This realized price, combined with 10.8 million tonnes of attributable sales and our disciplined approach to costs delivered a $307 million increase to our cash balance over the quarter. We now have over $2 billion on the balance sheet and no debt. This gives us scope to consider dividends and to contemplate potential value-adding growth opportunities. We look forward to carrying our positive operational momentum into 2026. We will provide our 2026 guidance on production, cash operating costs and capital expenditure in our 2025 financial results, which are scheduled to be released on the 25th of February. I'll now hand over to other members of our executive team to share further details from the fourth quarter, starting with David Bennett, our Executive General Manager of Operations. David Bennett: Thanks, Sharif. Our total recordable injury frequency rate reduced throughout 2025, and it was 6.14 at the end of the year. We achieved a downward trend in this statistic and our rate is below the industry weighted average of 7.45. We remain committed to further improving our safety performance. During the quarter, we produced 18.9 million tonnes of ROM coal, 20% more than the third quarter. From our ROM coal, we produced 13.6 million tonnes of saleable coal, 11% more than the third quarter. It takes all our people across all our mines working cohesively to deliver this level of performance. There were some temporary challenges such as hard coal encountered by the Moolarben longwall, some wet weather delays and some equipment reliability issues. However, in each case, the issues were resolved or effective adaptions were applied. Our attributable share of the saleable coal was 10.4 million tonnes. As Sharif mentioned, this was a record performance. In the report, we explained how the 10.4 million tonnes includes the additional 3.75% interest in the Moolarben joint venture, which we secured on the 3rd of October. If this additional interest is excluded, the figure would have been 10.2 million tonnes, which still would have equaled our best ever historical quarter. I will now hand over to Brendan Fitzpatrick, Investor Relations Manager, to provide commentary on the coal markets. Brendan Fitzpatrick: Thanks, David. This is Brendan. We do have Mark Salem, our EGM, Marketing and Logistics online for the Q&A. However, I'll present the initial comments on his behalf regarding the coal market. Our attributable sales volume of 10.8 million tonnes was similar to the third quarter and followed our strategy of optimizing sales volumes and managing stock positions. The sales volume contained a typical mix of thermal and metallurgical coal products. During the quarter, conditions in the international coal markets, both thermal and metallurgical remained somewhat challenging. There were mixed performances across the indices we sell against. The average price on the API5 Index was 12% higher than in the third quarter, while the average price on the GC Newcastle Index was flat. That said, it was the GC Newcastle Index that finished the quarter with positive momentum. There was a similar situation for our metallurgical coal products. The average price on the Platts Low Vol PCI Index was down 2%, but the average price on the Platts Semi-Soft Index was up 10%. In the thermal coal market, Japan is still utilizing coal as a fuel of choice for power generation and its imports increased 16% in 2005. South Korea also increased its imports but prioritized Indonesian and Colombian supply over Australian coal. Elsewhere, demand for thermal coal was less resilient. Despite a restock cycle in China during the fourth quarter, its annual imports fell 18% through the year due to a strong domestic production level in the first half. Taiwan utilized more gas and imported 12% less coal than last year, and India reduced demand for coal imports due to cool weather through summer and increased hydropower generation. Supply from Australia was constrained at times during 2025, but as our performance shows, there is still good export rates being achieved. Indonesia's exports fell 10% and Colombia's exports fell 18% in response to market conditions and due to some infrastructure challenges. But Russian exports continue to reach international markets, and improved rail and port operations in South Africa enabled its production -- sorry, its exports to increase by 5%. A demand uplift may be needed for thermal coal indices to break upward from the trading ranges observed over the past 6 to 12 months. Global demand for metallurgical coal declined as steel production decreased in many countries. The primary driver of this situation was Chinese steel exports displacing production from other steel production nations. In seaborne metallurgical coal markets, global exports were down 7% compared to 2024. A primary component of the global reduction was 9% lower exports from Australia due to a temporary mix -- sorry, due to a mix of temporary and structural reductions, including mine suspensions and some rain delays. Exports from Canada were down 3% due to reduced coal handling capacity following a ship load of fire at an export terminal. Sharif mentioned the 6% increase in our average realized price to AUD 148 per tonne. This combines a 6% increase in our average thermal price to AUD 138 per tonne and a 4% increase in our average metallurgical coal price to AUD 203 per tonne. Having made all these comments, gains in most coal price indices since the end of 2025 is stoking optimism amongst some industry participants. We continue to utilize our scale and blending capabilities to maximize the realized prices we can deliver. I will now hand over to Kevin Su, our CFO, to touch on the financial position. Ning Su: Thanks, Brendan. The key observation is the same one that we made last quarter, Yancoal remains in a strong financial position. We ended the quarter with over $2 billion in the bank and remain free of interest-bearing debt. When we last spoke with you, we discussed the external and temporary cost pressures at the Port of Newcastle. The ship queue at the port has now gone and with it most of those temporary cost pressures. Sharif described how we are still on track to deliver operating costs around the middle of the guidance range. We would see this as a notable achievement in the current industry setting. It reinforces our position as a leading low-cost coal exporter. David and operation teams delivered production records, which allowed Mark and the marketing team to maximize sales and blending opportunities. Adding over $300 million to our balance sheet in just 3 months speaks to the quality of our assets. Our strengthened financial position enables us to consider dividends and to contemplate potential value-adding growth opportunities. We'll be better placed to provide further capital management commentary when we release our 2025 financial results. I'll now hand over back to Brendan to coordinate the Q&A session. Brendan Fitzpatrick: Thanks, Kevin, and also David and Sharif for highlighting the drivers of our record fourth quarter performance. We will now move on to the question-and-answer session, starting with questions from the phone, then moving to questions submitted via the webcast. Maggie, could you please initiate the process for questions via the phone? Operator: [Operator Instructions] Brendan, so far, we don't have any questions on the audio. Brendan Fitzpatrick: Thanks, Maggie. I'll take questions from the webcast, and I'll come back to you shortly. Let's start with some questions about the operational performance. There's a multicomponent question. I'll take it in pieces. Starting with the question, the current Yancoal stockpiles and inventory levels, how are they looking? And is the company back to matching production volumes with sales volumes given the various disruptions at Newcastle through the middle of the year? Sharif Burra: Thanks, Brendan. Yes, look, sales and production are back to normal and are matched. We had a very, very good quarter, a strong production quarter and also a good sales quarter. And moving forward, the intention is for those to be matched. Brendan Fitzpatrick: Thank you. There's an additional component talking about New South Wales production and asking a question about coal royalties, given that the royalties were revised and new royalties were implemented 1.5 years ago. Is there any comment on the current royalty structure and how we view that part of our business? Sharif Burra: Thanks, Brendan. Again, we've had no discussions regarding New South Wales coal royalties and currently unaware of any changes. Brendan Fitzpatrick: And also on the operational side, the Hunter Valley operations, can we comment on the production profile and its uplift in the fourth quarter and how it's running in relation to what we would see as the normalized levels? Sharif Burra: Thanks, Brendan. David, you may want to comment on Hunter Valley operations. But again, just reinforcing, they did have a very strong fourth quarter. David Bennett: Yes, I'll cover that, Sharif. Yes, look, it was a very strong fourth quarter. Hunter Valley operations as well as Mount Thorley Warkworth earlier in the year had quite a bit of wet weather. So at the halfway point of the year, both sites were a little bit behind their production target for 2025. We got more wet weather in August, but we're able to mitigate the effects of that wet weather through the capital investment that we've made in prior years. And we also saw some really good performance from our equipment fleets, our productivities. We set some remarkable records on some of our fleets for their output. And on the back of that, we're able to deliver our budgeted coal production for 2025. So the mines are being operated in steady state. They're productive, and we're getting the most that we can from our people assets, our equipment assets and our geological assets. Thanks, Sharif. Brendan Fitzpatrick: Thank you, David. Let's segue from the production into the coal markets. Mark Salem, I presented comments on your behalf. Could you provide any additional thoughts on the coal market outlook, what we've seen so far this year and what potentially will be driving coal markets over the current calendar year? Mark Salem: Yes, sure. Thanks, Brendan. And thanks for reading my section. As you know, I'm traveling in rural areas, and I was a bit worried about service. So I appreciate you stepping up to read that section, And as long as people can hear me clearly. In terms of the market, we did see some price recovery in Q4 towards the end of the year, and that was on the back of, as you said, China restocking. But we've since seen that price come down a little, not substantially, just a little bit. And this is nothing unusual coming into Chinese New Year and the Chinese buying slowing down a little bit. Coming out of Chinese New Year, I think we are anticipating that the market will again pick up a little bit in that high ash area because there still remains a need in the Southern China for the demand for the coal. From a met coal point of view, we have had a couple of supply disruptions. And if those supply disruptions come through, that could yield a softening in the market, and we really need the steel industry to pick up, which has been in a slightly weakened situation due to the collapse of the property market in China. So in terms of going in from 2025 into 2026, probably a very similar scenario. The current pricing and world demand is really supply driven, and we need just stronger demand to really have a bigger impact into that market. Brendan Fitzpatrick: Thank you, Mark. Maggie, could I please ask you to invite people once more for the online -- sorry, the audio question channel. Operator: [Operator Instructions] Hanyin Yang: Yes. This is Hannah from Morgan Stanley. I just have one quick question on the saleable production. So I noticed the ROM coal production rate high, but the sellable coal production to the ROM coal production, the percentage has declined to 72% in the fourth quarter 2025. And I think the ratio is lower for the Moolarben and Hunter Valley. Can we understand the reasons behind this low ratio for the saleable coal production to ROM coal production? Brendan Fitzpatrick: Okay, I appreciate the question. As I can see, looking at the fourth quarter numbers, our total ROM coal production was about 20% compared to the prior quarter, but the saleable coal production was up 11%, suggesting a slightly lower conversion. So perhaps David Bennett could offer some insights into the relative balance between ROM coal and saleable coal volumes over the fourth quarter. I suspect it's probably to do with more ROM coal being prioritized. But David, over to you. David Bennett: Yes. Thanks, Brendan, and thanks, Hannah, for your question. Brendan's point there is exactly right. There was a lot more ROM coal that came out of the mines in the fourth quarter, and we're unable to process 100% of that coal through the CHPP, our coal handling plants. So the coal that we couldn't process in the fourth quarter, turning it from ROM coal into saleable coal sits on stockpiles just ahead of the CHPPs, and we will process that coal and turn it into saleable product through our warehouses on the first quarter of 2026. Brendan Fitzpatrick: Thank you, Hannah. I'll move back to the webcast questions. There's a few questions all touching on a similar topic. It's the focus on our over $2 billion cash balance reported and interest in understanding what that might mean for dividends and payout ratios heading into the financial results in February. What could we possibly say on this topic ahead of the financial results next month? Sharif Burra: Thanks, Brendan. Look, to start with, we do have a dividend framework in our company constitution. The usual practice being for the Board to review the final position after the end of the year and then determine the capacity for dividend allocation. Kevin, you might have some additional comments you want to make in that regard. Ning Su: Thanks, Sharif. I think the framework Sharif just mentioned is I think has been very clearly communicated with all the investors in the past, which is about a 50% NPAT or 50% free cash flow, whichever is higher and also balancing the debt management growth opportunities. I think companies still follow the same baseline internally. From management perspective, we will definitely balancing all these different priorities and make a decision at Board level in February. Brendan Fitzpatrick: Thank you, Kevin. Thank you, Sharif. There were several questions on that topic. I think we've covered the main focus of those questions through that combined response. Maybe I'll go to you one last time for questions from the phone line. And whilst doing that, let people know that I've exhausted the questions on the webcast. Sorry, excuse me, there were some additional further down the screen that I haven't seen. Let's have a look at these ones. Okay. We're focusing in on the financial performance and the cash balance and cash generation that was reported. When adjusting for the $25 million Moolarben payment, that was the additional 3.75% interest. The free cash flow just to $332 million, which annualizes to $1.3 billion, an implied yield of 18% how should investors be thinking about capital management given the free cash flow generation? So you somewhat covered the capital management component, but perhaps just worth testing that thought process on how the numbers are flowing through, the $307 million increase in the cash balance, the Moolarben payment and the implied annualized free cash flow. Kevin, could I start with you to share some thoughts on what we reported in the fourth quarter in terms of the $307 million increase in the cash balance and recognizing how that might or might not be relevant to an annualized number? Ning Su: Yes. I think from the previous communication, one thing we have to appreciate is the realized price versus the price curve, there's a lagging effects and there is some timing difference we should consider. At the same time, normally, Q4 is a strong -- I mean quite a strong quarter and providing more volume from a shipment perspective as well. They all contributed to a quite a healthy cash flow. But overall, as Sharif just mentioned, the whole objective from management perspective is to be very cost competitive compared with our peers. We are still to be the lowest cost competitive coal producer in the country. For that reason, even in an unfavorable coal price market, I think Yancoal is still generating, generally speaking, very healthy cash flow compared with our peers. And back to the capital management philosophy we just mentioned, we will be assessing the free cash flow on a full year basis, balancing the other priorities and follow the guidance internally and also externally, we've been communicating and decide our dividend management decision by February, the bond year. Brendan Fitzpatrick: Thank you, Kevin. We've got a hypothetical question related to coal markets. So I suspect, Mark Salem, this will be one that we call on your expertise. It relates to the U.S. market and the observation is currently the U.S. exports coal into the global market, but there is speculation with AI-driven power demand levels increasing. Is there a potential for the U.S. to need coal imports to meet power demand is my understanding of the question? Is there a scenario where Australian coal could be imported into the U.S.? And is there any historical precedent for such a market setting? Mark Salem, could you share your thoughts on the coal markets and in particular, swings in U.S. exports and imports? Mark Salem: Sure, sure. Look, I suppose very simply, Australia has not supplied coal into Mainland U.S.A. And I say that because Australia was a supplier into Hawaii, a coal-fired power station to Hawaii many years ago, but Australia is not a supplier. U.S. is the second largest coal producer themselves, and they still have a lot of resources and a lot of surplus. They've always been known in the international seaborne market as the swing supplier. When coal prices are high, you often see U.S. coal coming into the international seaborne market when prices are low, they withdraw and keep their production domestically. So they're not one for importing. So U.S. is not really on our radar as a future coal import market in terms of Mainland U.S.A. We do sell coal into South America and some of the South American markets as well. Just in terms of AI, yes, there is growing demand for electricity consumption in AI in Asian countries, in our more geographically located markets. So that is something we're monitoring very closely and something we do watch in that regard. So yes. Brendan Fitzpatrick: Thank you, Mark. Looking at the questions coming through, we've got another one that's or hypothetical in nature. Given recent media commentary suggesting the potential of a Glencore-Rio merger or acquisition of some sort. The question seeks to clarify our Hunter Valley operations, which are a joint venture with Glencore. Is that joint venture or that operation subject to any change of control clauses or relevant agreements that might be triggered under such a hypothetical scenario? Sharif Burra: Yes. Thanks, Brendan. Look, I won't be commenting on market hypotheticals at this stage. I think we're all reading the press, and it's too early to form any view as to the merit of anything of this nature at this point in time. Brendan Fitzpatrick: Fair enough. Thank you very much, Sharif. We'll come back to the market as and when something concrete requires a comment from us in relation to our specific joint venture operations or joint venture at Hunter Valley Operations. I've now concluded all the questions on the webcast, having scrolled down and found them all in the second setting. Maggie, I'll come back to you one last time for questions via the phone line. During that time, if any questions appear on the webcast, I'll take those. Otherwise, we'll be shortly moving to close out the webcast. Maggie, could you do online questions once more? Operator: [Operator Instructions] Thanks, Brendan. I think I'll pass back to you now. Brendan Fitzpatrick: Thank you, Maggie. Confirming I see no fresh questions on the webcast. I'll pass back to Sharif one last time for the closing comments. Sharif Burra: Thank you, Brendan, and thank you once again to everyone who joined us on the call. I look forward to engaging with you in just over a month when we deliver our 2025 financial results. As we reflect on the production records and the robust financial position we reported, there are 3 things I hope you'll keep front of mind. Firstly, Yancoal delivered the production records because we have world-class assets run by some of the most capable people in the industry. This is something I firmly believe. The level of production we delivered through 2025 required sustained dedication from all of our workforce. Secondly, Yancoal is highly disciplined on cost control. In our view, keeping unit costs flat compared to last year and delivering cash operating costs around the middle of guidance would be a great outcome in the current industry setting. We see our ability to operate with comparably low cash costs as a distinct competitive advantage. And thirdly, Yancoal increased its cash position by more than $300 million in 3 months. This is a distinct reminder that we're not only a low-cost miner, but that our position as the second largest coal producer in Australia provides great leverage to improving coal prices. We look forward to speaking with you all again in February following the release of our 2025 financial results. Have a great day. Brendan Fitzpatrick: Thank you, Sharif. Maggie, would you please conclude the webcast? Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Thank you for waiting, and welcome to the TRX Gold Corporation First Quarter 2026 Results Presentation. [Operator Instructions] The meeting is being recorded. [Operator Instructions] At this time, I would like to turn the meeting over to Stephen Mullowney, CEO. Please go ahead, sir. Stephen Mullowney: Yes. Thank you, and thanks, everybody, for joining this morning. I believe it's Martin Luther King Day in the United States. And thus, you have a holiday. I think we got a little bit mixed up in that, but that's -- it's good to see a number of participants here today as well as we had really good participation on Friday on our virtual NDR with Renmark as well. So it's an exciting time here at TRX. We're going to go over our Q1 2026 results, which were really good. The results continue to improve the company's financial profile, working capital continues to improve. And Richard and team on site, Richard is joining us from Buckreef today, have been progressing very well on the expansion plans. As I mentioned and as the team has mentioned before, really, our business plan is quite straightforward. We have a robust asset in Tanzania, 1.5 million ounces, 2.5 grams a tonne. The business plan is to expand the plant in the next 18 to 24 months, increase production, which then helps fund the underground. And then we have an 18-year mine life between an open pit operation and an underground mine operation, all on the Buckreef main zone that's funded [Technical Difficulty]. Thereafter -- we have someone [Technical Difficulty] probably -- there we go. Thank you, operator. And then also, we have some very prospective areas of the property, particularly Stamford Bridge, Anfield. Richard will also get into what we're finding on the geophysics side, and we're quite excited for the exploration side as well. And Khalaf will give a brief summary of our government relations side. So I'm going to try not to speak as much today. I have a very strong team. I have Mike Leonard, our CFO, here today. Mike, there we go. Richard, as I mentioned, is joining us from site, our COO. Raise your hand, Richard. I think everybody can tell who Richard is. He's got the orange shirt on. And then Khalaf is joining us from Dar es Salaam this morning. Good morning, Khalaf. So without further ado. So TRX at a glance, I gave a high-level overview. We operate the Buckreef Gold project in Tanzania. We are in production, producing between 25,000 ounces and 30,000 ounces in fiscal 2026. That cash flow will enable our expansion of the plant, which will then be online with PEA for an 18-year mine life and the last 15 years are underground roughly. Richard will get into that today. We may be a little bit early on some of those items, but we won't overpromise as well. And we have 1.5 million ounces in the resource category M&I, about 2.5 grams a tonne. So I really want to focus on what we did in the first quarter and financial-wise. And I'm going to hand it over to Mike to go through Slide #5 with regards to what Q1 looked like, and he will be supplemented by Richard on some of the operational aspects. Go ahead, guys. Michael Leonard: Terrific. Thank you, Stephen, and good morning, everybody. Thank you for joining us, particularly those in the U.S. on a holiday. As you would have seen, we did release our Q1 2026 results late last week on Thursday, we press released the numbers, and they were record results across the board. Yet again, starting right at the top on production. It was a record quarterly production quarter for us. We produced just under 6,600 ounces. That was a significant increase over the prior comparative period as well as even our Q4 results. We had indicated that over the first half of 2025, we undertook a Stage 1 strip campaign. And the idea was to remove overburden to access higher-grade ore blocks towards the back end of last year. What you would have seen is that we put through about 1.9 grams a tonne through the mill at higher throughput levels compared to the prior year. So higher throughput, higher grade and higher recovery, in fact, we recovered around 60 -- excuse me, 75% recovery for Q1 meant record production for the quarter. And in terms of guidance, we'd indicated full year production guidance of between 25,000 ounces and 30,000 ounces. Q1 was expected to be amongst the lowest quarters of the year. We do continue to access higher-grade ore blocks and remain on track for that production guidance of again, between 25,000 ounces and 30,000 ounces at a cash cost of between $1,400 and $1,600 an ounce. And in Q1, we came in at around $1,500 an ounce, right in the middle of that. You couple that record production with the record gold price environment that we're seeing. In Q1, we realized $3,860 an ounce, which was a record at that time. And of course, a few weeks later, here we are at over $4,600 an ounce. So gold continues to be very, very strong. We continue to demonstrate leverage to that gold price. And you couple a record gold price with record production and inevitably, you've got record quarterly revenue in our case of over $25 million for Q1 as well as things like adjusted EBITDA of over $13 million. So we're demonstrating strong, strong cash flow, strong margins. And what we've been able to do, we've talked about this for a couple of quarters now, is basically take that free cash that we're generating, and we've overturned what was a negative working capital ratio early last year as we were in the middle of that strip campaign and have effectively recapitalized our balance sheet. So even relative to our year-ended August 31, where we had a working capital ratio of about 1.3x, we're up to 1.7x or about $15 million positive working capital at Q1, and that continues to improve. And amongst other things, we've been able to show an increase in our cash position to over $9 million, which is an increase relative to Q4, but we also continue to invest in the business. So we have significantly grown our ROM pad stockpile, which Richard can talk a little bit about in his remarks. But we've got over 22,000 ounces sat on that ROM pad stockpile, which is about 1.2, 1.3 gram a tonne roughly on average currently and a split between oxide and sulfide rock, which allows us basically to optimize what goes through the mill and also serves as a very, very good insurance policy for us to make sure that, that mill feed is consistent and strong. And material coming out of the pit is sort of prioritized relative to what's on the stockpile to make sure the highest-grade material is going through the mill. I guess the last maybe comment I'll make on the quarter. We do continue to invest in what Stephen talked about, the plant upgrade followed by the expansion, which once complete, will pay for effectively the underground development. During Q1, we used a lot of that free cash to put down payments on things like thickeners and elution plants and gold rooms and increased oxygenation, all of which is meant to help improve things like throughput and recovery, which will lead to higher production over time. So a very, very strong quarter, record across the board and certainly expect that to continue into Q2 and beyond. Next slide, please. So this is effectively a summary of some of the key stats, I think we've already talked about. We've talked about the revenue. We've talked about EBITDA. Gross profit is an important one to touch on. We have been able to demonstrate it's a high-margin, low-cost operation with, again, leverage to gold price. Gross profits are over 50% right now. So we're generating lots and lots and lots of free cash and sitting in that -- what we would characterize as the lowest quartile of the cash cost curve at roughly $1,500 an ounce. And again, the model is to use that free cash flow to execute against in the PEA to both upgrade our existing mill and expand it and then use that cash flow to fund the underground development that Stephen touched on. We've also been able to invest in things like exploration. The first stage of our exploration program was effectively this geophysics study, which I think we'll talk a little bit about later, but continue to advance in that regard and hope to be able to put some assay and drill results out later this year as that continues to develop as well as finalizing metallurgical test work that, again, I think Richard will touch on when he gets to it, but effectively demonstrates that we can achieve high, high recoveries with some of the mill enhancements that we're making, which will help drive future production. And the last bit, I think I've touched on, but we do continue to expect our production to be between 25,000 ounces and 30,000 ounces at between $1,400 and $1,600 an ounce. Capital, we had guided at between $15 million and $20 million. We continue at this stage to expect to spend at that level. But of course, at these gold price levels, if we generate additional free cash, we may move some of those capital expenditures around the plant expansion forward into the back end of this year, but we'll certainly update the market as and when we make that determination. And finally, we're spending on exploration. We expect to spend between $3 million and $5 million. We have procured a couple of drill rigs in RC and a diamond drill rig, which we'll talk about, which we expect will help our drill program over the course of this year. So that was it, I think, as far as results in terms of what I wanted to touch on, Stephen, back to you, please. Stephen Mullowney: Yes. No, thank you, Mike. And we're going to switch into what I'll call operational growth here. And I'm going to hand it over to Richard to give a brief overview, Richard, of where we are in our expansion plans and what investors can expect in the next 12 to 24 months around our expansion and where we're going to get through to on throughput. Obviously, we're online with what was in the PEA, and our goal is to exceed what was in that PEA given that we do plan to have a higher throughput than what was in the PEA. But where exactly are we on all our items? I know a lot of exciting things around Aachen reactors, ADR plants, looking at confirming and finalizing metallurgy and then getting into the SAGD (sic) [ SAG ] ball mill as well as flotation cells and thickeners, all kinds of things going on. So a lot on your plate. You are on mute, Richard. Here you go. Richard Boffey: Hopefully, -- how is that? You can hear me clearly? Stephen Mullowney: We can hear you just fine. The reception is good [indiscernible] today. Possibly any thunderstorm. Richard Boffey: No, we're in the middle of one right now, which is why I asked. Anyway, in terms of the work we're doing at the moment, we are still heavily focused on upgrades to our 2,000 tonne per day plant. So right now, we're in the midst of doing a major upgrade and improvement to our crushing circuit. We've got more work lined up straight after that to move on to our mills and the power draw for the mills as well as the CIL circuits. We're installing a super oxidation system that will hopefully give us another couple of percent recovery. We've also made some major improvements this last quarter in the recovery areas, which Mike alluded to, and that's going well and is progressing again through this quarter. In terms of work towards the expansion, we have more or less finalized all of our metallurgical test work. We've done a full modeling in spec of the SAG circuit. And for those people who may have read the PEA, we had planned to combine our existing 600-kilowatt ball mill with a SAG mill. And our modeling shows we're probably better to just invest in a larger SAG mill and make it a simpler circuit. So we're going out on price inquiry at the moment and full tender very shortly. And indications are that the lead time on that equipment is probably of the order of 7 to 9 months. The float plant and fine grind aspects of the expansion and the change in the process flow sheet have gone well. The met testwork was really focused on that, generally getting some excellent results in the lab and pilot plant with recoveries and mass pull, both better than expected. And our fine grind looks like we're going to optimize at about 20 microns instead of 15 microns, which again is a big improvement in energy expenditure and capital expenditure. So those aspects are going well. On the water at the moment, we've got oxygen plants coming to site. So we've got ADR plant orders just finalized and under construction. So they'll be in towards the end of this financial -- they'll be in by the end of the financial year. I won't say we'll see much benefit from some of those aspects until financial year 2027. So generally, things are working pretty well. And as I discussed, this change to a straight SAG circuit for our new expanded plant allows us to effectively fully utilize the existing plant we've got, which is why we're confident that we can probably improve on PEA metrics in terms of throughput and ultimate gold production. Coupled with that, we're doing a re-optimization of our pits with this higher gold environment, and we're pretty confident we're going to see some added reserves in our known reserves coming out with a reduced cutoff grade. So all in all, things are looking pretty positive for us. Stephen Mullowney: Yes. Thank you, Richard, for that. A lot of information intake there, and it gives investors a sense of the direction and some of the news that will come out as we finalize plans. As Richard indicated, we may not utilize 1,000 tonne per day ball mill now in the SAGD (sic) [ SAG ] circuit. So per the prior press release, we said we wouldn't utilize the 3 smaller ball mills. So that means the existing circuit will remain intact as well as the new SAGD (sic) [ SAG ] circuit. So that's essentially higher throughput than we announced before, but we got to finalize that. The -- also with regards to operating cost, recovery rates are up. And the reason why they're -- one of the reasons why they're up is oxygenation and we've been using hydrogen peroxide currently and Aachen reactor will come in. And Richard, I assume we're going to get the oxygen rates even up higher than what we currently have with hydrogen peroxide. So that should, as you mentioned, lower cost as well as increased recovery rates going forward as well as the upgrades to the crushing circuit, I believe the apron feeders we put in today, which is critical for that. So that enables us to continue to operate our 2,000 tonne per day plant efficiently, both before and after the expansion. So I think that things are extremely positive, and we should see higher throughput rates this year than we've seen as well as the grade profile is going to increase. We'll get into that in a second than it was last year, given where we are in the pit. And as Richard mentioned, in any study and in any resource profile, you pick a gold price to figure out your optimal pit design and underground mining plan design. In our PEA, I believe we utilized $1,900 an ounce, Richard, is what it was in order to do that work. And so that then drives a cutoff grade. So Richard and team now are going to relook at that given we're at $4,600 an ounce now. So we'll choose a higher price there. And really, the goal is what you'll start to see is as you do that mine plan, you'll have a bottleneck in your plant and your stockpile will continually increase as you take the lower grade material and just put it on the stockpile for the end of mine life. And typically, that's what you'll see from a mine planning perspective. But certainly, the reserves and resources will go up as a result of that. So all in all, very, very positive aspects are going on, on the throughput side of things. So with regards to that, when you're looking at numbers coming through in financial numbers, we haven't utilized a $4,000 gold price in our budgets. We use a lower gold price than that. So given we are confident on our throughputs, on our recovery rates and on our gold production metrics, obviously, that should flow through to the financial metrics, and we are very hopeful that we'll be higher than we were certainly for fiscal 2025. If you look at our run rate right now, it's certainly higher, significantly higher than what was achieved in fiscal 2025, and we're doing fairly well. The first quarter had an increase in EBITDA of around $10 million versus first quarter of last year from a net basis. So all in all, doing very well. And obviously, working capital continues to increase. Our judgment is companies that have performed extremely well, have a working capital ratio anywhere between 1.75 and above 2. That certainly we'll get there fairly soon and are well capitalized to execute our plans. Anything to add to that point, Mike? Michael Leonard: No, I think that was well said, Stephen. We're well on our way, as mentioned, at $15 million positive for Q1 with an improving profile will fit deeply into that working capital metric that you just described. Stephen Mullowney: Yes, exactly. So our mine planning, a lot of people have come back to me on this particular slide and like it because the saying a picture says a thousand words, it certainly does on this particular slide and explains why we had to go through the stripping campaign last year and now we're into the pinks and the reds, the nice colors. We still got some blue colors to go through, but you can't avoid blue colors. You got to strip in order to open up the nice colors. And Richard, do you want to give just a quick overview of our mine plan for this year, what can we expect from a mining perspective as grade profile comes through. And obviously, the thickener is a big thing because we no longer will have to mix oxides in our plant, and that will increase the head grade, which increases production as well. So just give us a quick overview of what people are seeing here. Obviously, Buckreef gets nicer colors as we get deeper. Richard Boffey: Sure. Look, Generally, our focus towards the second half of financial year '25 was in that southern area to the left on that slide, where there were better grades, and that was in response to some delays to get there. This year, we've got a far more steady descent of the project of the main pit, and we'll be taking a pretty -- probably about a 30-meter overall vertical lift right across the site -- right across the pit. And that allows us a fairly even grade profile, especially for the first 3 quarters. And then we actually hit some very sweet stuff in the fourth quarter, which we'll see a bit of a boost in grade through the mine. The reason I'm stressing an even profile of about 2.1 grams, 2.2 grams is that... Stephen Mullowney: Richard, we're losing you a little bit. Yeah, mute again. Oh, we lost you. [indiscernible] So we lost you at the reason why I'm stressing an even profile of 2.1 grams. Richard Boffey: Fine. So it's helping the plant enormously having a nice steady grade profile. As Stephen mentioned, in about 2.5 months, 3 months, certainly by sometime in April, we'll have our pre-leach thickener installed, and that will enable us to probably see about a 5% lift in the mill head grade. So we'll start to see some improvements in production related to that as well. The other thing we're doing in the third quarter of this year is we're starting a new pit, the strip for the new pit, which is called Eastern Porphyry. And by the end of our financial year, we'll have faced off to have all faces in the ore blocks available to us. So we'll be, I guess, derisking our production profile in that respect as well. Stephen Mullowney: That's great. So we've gone through on the production side of things, what solidifies the pay for things. And I'm going to jump around our presentation a little bit here. And let's just go straight into what our exploration programs are envisioned to be. I do know we do have one drill rig, RC rig on site, and that's currently doing, I believe, Richard, some condemnation drilling for some of the expansion plans. But we do plan to do some exploration holes with that fairly soon and describe our diamond drill rig is -- should be on the water pretty soon and be at site, and we'll probably use some subcontract drilling as well in 2026. Obviously, everything we've described on the production side is in the Buckreef main zone. We've had a good geophysics study being completed, and we'll come to the market with that shortly. But give an overview of what our plans are around exploration. Richard Boffey: Sure. So as you mentioned, Stephen, we've got -- we've completed our first geophysical study, and it's basically highlighting interesting structures, and it's done in quite a high level of detail that hasn't been done before on this project area. So that's highlighted some really interesting targets for us. And we are -- we will hit some of those immediately with our drills. And others, we're planning to do what's called an induced polarization or electrode resistivity survey on those other ones to see if we can try and identify some deeper pyritic anomalies and therefore, we'll put drills on those as well. So across the course of the year, we're planning to probably drill of the order of about 40,000 meters of drilling in total, maybe even 50,000 to 60,000 if we get a good run at it. Stephen Mullowney: Yes. And so obviously, Stamford Bridge will be in there. Anfield will be in there. And as other people just heard, there's other areas that are looking extremely good from the geophysics survey that's being done on the site, which are not Anfield or Stamford Bridge. Is that correct? Richard Boffey: Yes, that's absolutely correct. We've got some other very interesting little structural features that we've identified that we want to follow up on. Stephen Mullowney: Correct. Excellent. So in summary, we are online our PEA. As people understand, the production profile gets quite good under the PEA. We're hopeful to exceed that. And given current gold prices, profitability looks pretty good as well. The next thing, part of our whole business plan, obviously, we've been open with this. We are in negotiations with the government. Obviously, that's a little bit slower than everybody would like, but that is the nature of dealing internationally. Things have to go through their political process. So Khalaf, why don't you just give a high-level overview of where we are in that? Come off mute. Khalaf Rashid: Yes. Thank you, Stephen, and good morning to everybody. Good evening, Richard, at the site in Tanzania with me. Yes, okay. So I mean, we all know that Tanzania has been through a difficult period. We're coming out of that difficult period, election period. So it does feel like things are normalizing. Business is getting back to how it should be. Obviously, there's some aftermath that the politicians are dealing with trying to reconcile differences and so forth. They've had -- Tanzania has been hit a little bit with international development funding. For us, it's probably a positive thing because it prioritizes mining, right? So there's a focus trying to get projects to -- new projects off the ground, existing projects ourselves to scale up as soon as possible. So obviously, that government gets more income. We've -- as we've mentioned in the previous meetings we've had; we've been busy negotiating with the government. There is -- as we all know, state participation regulations, the amendment was introduced in 2022, right, essentially framework agreements and participation of the state. We have an existing joint venture agreement since 2011. So what we're looking forward to is getting to a point where we can agree with the government better agreements, all parties, right, much more transparent, easier to operate in Tanzania, and I guess, avoiding dispute and reducing risks for investment in the country. So we're looking forward to that. Negotiations are ongoing. As Stephen says, albeit a bit slow. But in Tanzania, apparently, we're going fast. But anyway, so we do expect that I think 2026 is going to be the year that I hope things will accelerate. At least the groundwork has been done, right? The groundwork and initial discussions have been done. So we should move quite quickly. I think the last month; we've already met twice. We met in December, late December. We met last week again with our partners. So we're moving. And the expectation, like I said, possibly by the end of this year, we should have new agreements and better and more investable agreements. So -- yes, basically, in summary, that's what it is, Stephen. Do you like me to add anything else to that? Stephen Mullowney: No, no. I think, look, it's progressing. And obviously, pace and politics are different in other parts of the world versus what we would be used to in the United States and Canada. But that is part of operating internationally. I have a lot of experience around this, and it has to go through its political departments and get to the right spot where decisions could be made. And I think we're at that spot, and we will hopefully be able to progress it with a little bit more pace than we've had before. Our agreements are a little different than what you see in other companies there. Other companies are looking to put properties in production, so they go straight to the framework agreement. We are dealing with an existing joint venture to switch to framework agreement terms. And in that, obviously, we're looking to basically put the agreements into better agreements than what we currently have for both sides, both for us and for the government, and that has been well communicated. So I think we'll come out the other side for us and for the government in a much better win-win situation. Khalaf Rashid: Yes. No, absolutely. Perhaps I should add also that we are engaging with our embassies here locally. And they're weighing in and they're obviously quite involved as well in this process, working with the government to try and get all these things over the line as soon as possible. So... Stephen Mullowney: Yes. And that's both the American and Canadian... Khalaf Rashid: Canadian, yes. Stephen Mullowney: Yes, both American and the Canadian embassies. And when I was in Tanzania in December, I visited with both of them. And it -- both are pro-investment; pro-stability is what I would say. All right. So with regards to us, I'm going to open up the floor now in the second and last part as I'm going to go through valuation. Obviously, we are starting to move up our chart somewhat as we continue to produce good financial results, recapitalize the business internally and the market gets a sense of where we're going with our business plan and expansion plan. So I fully expect, hopefully, as we continue to execute and execute successfully, we continue to move up that chart. We have looked at a lot of metrics of what the market is looking for and have orientated our business plan towards that -- towards those metrics. I do think we have a huge chunk of warrants coming off on February 11, $0.80 warrants and then a year later, it's the $0.44 warrants. I think we will get into a spot where the overhang of those warrants and capital structure on the equity side becomes a lot cleaner. I think that will be a positive for the stock as well. So all in all, things are going fairly well. TRX is in a good position. We are generating good cash flow, particularly at $4,600 gold, reinvesting that cash flow into the business. We did our last capital raise over 4 years ago and raised net $20 million, and we're probably going to get to a mining property that could produce 80,000 ounces to 100,000 ounces plus of that $20 million, which is I don't think it has been done anywhere. And right now, the gross investment into the asset has been around $70 million off of that $20 million. So that ratio is well over 3x now and continues to grow. We're looking confident. you're hearing the confidence in our voice. I think there's a lot of upside in the exploration side as well. And there's even upside in revising our mine plan. So we're a self-funding growth operation, both on the production side, cash flow side and resource side. So looking -- yes, we're fairly confident. So I'll hand it back to the moderator for questions. Operator: [Operator Instructions] And today's first voice question comes from Heiko Ihle with H.C. Wainwright. Heiko Ihle: The larger processing facility, can you walk me through potential bottlenecks during like when it actually ramps up? And also the impacts on the labor force, how many extra staff do you think you'll need? I assume once this is up and running, it's a limited number. And then maybe if I could just throw in one more, the guess for the -- your best expectations for what you'll pay for labor this year. Stephen Mullowney: I'll hand that back over to Richard. I assume the -- I'll answer the last part of the question. I assume that you're looking at labor as inflationary pressures. That your real question? Heiko Ihle: Correct. Well, also I mean, it's presumably going to be more people. But yes, that's the idea. Stephen Mullowney: Yes. So I think Richard will answer that question more around what we expect processing cost per ton to be versus labor rates. We haven't seen a lot of inflationary pressure on labor rates in Tanzania. But certainly, versus what you've seen elsewhere, there is some, but it's not to the same extent. So Richard, do you want to answer the first part of the question? I think you're on mute again. There we go. We're having some difficulty hearing you, Richard, today. You're on mute. Richard Boffey: How about now? Did you hear now? Stephen Mullowney: Yes. Richard Boffey: Fantastic. Okay. Very quickly on labor. Labor is not particularly increasing significantly. It's more exchange rate affected than anything else at the moment. We've had a pretty stable sort of 36 months here. As we upskill our people, obviously, we remunerate them a bit better, but that will result in slightly reduced workforces. The expansion will increase total workforce but reduce unit costs and overall labor increments relative to what we're seeing at the moment. The underground aspect of the project is not that labor-intensive compared to what we're seeing in the open pit at the moment. We're looking to have quite an efficient contractor-run underground mine, probably only employing a maximum of 300 operators and maybe another 50 staff. So it's not going to be a huge increment, not like some of the other African mines where you're seeing thousands of people employed. I don't see labor being a big driver of [indiscernible]. Stephen Mullowney: Okay. Thank you, Richard. Does that answer your question, Heiko? Heiko Ihle: Yes. Thank you. Thank you, Richard and team. And then also figure 8 on Page 7 of the press release, I mean, if you just sort of look at it like from a 20,000-foot view, there's a lot of high-grade material center, right? Given -- and it seems to be getting even better as you go deeper. Just conceptually, when should we expect that to get mined? And is it going to be blended in a way that, that impact will be muted? Or will there be, call it, a quarter or 2 with substantially above mine fine grades? Stephen Mullowney: Yes. So Richard answered that question earlier in the presentation that head grade will go up as we get into -- put in place the thickener. So the thickener enables us not to have to mix lower-grade oxides with the higher-grade sulfide material. And as the pit goes down deeper and we get into the underground portions, you'll see the head grade change in our PEA, and there are peaks in there, obviously, as a result of the increase in head grade. Operator: [Operator Instructions] As we wait for any other verbal questions to come through, I can turn it over to you, Steve, there are some text questions that came through. Stephen Mullowney: Yes. So there's some text questions, so I'll get into those. The first one is, could you explain what brought the plant utilization rate from 88% to 90% in hopes that I have a related question, are there any plans to place a lower strip ratio from 5.8. Thanks for taking my 2 questions. Great results this quarter. So on the first one, the utilization has gone up a little bit. Look, there's been a large focus on preventative maintenance and also bringing in a lot more spares on a working capital perspective. Both of those have had a positive impact on plant utilization. Richard, anything else to add to that? Richard Boffey: Look, only that we're getting this process plant a little bit better organized. We've brought some expatriate expertise for consulting and management to improve our reliability-based maintenance planning. Stephen Mullowney: And then with regards to the strip ratio, the strip ratio is really determined by the mine plan. And the mine plan has the figures in it I just mentioned. One is gold price, one is recovery rates, one is mining operating cost. And what then the mine model is doing is you want to maximize net present value and cash flow. And so with regards to the strip ratio is down, strip ratio will go up and down depending on how much ore blocks you're getting versus strip blocks in that or waste in your mine plan. So given that we're now getting -- when you see stockpiles increasing, that means your strip ratio is generally going to be lower. When you're drawing on your stockpile, generally your strip rate is higher. So what we generally look at as miners is a life of mine strip ratio. So life of mine strip ratio is going to be higher than 5x because that's the nature of the deposit, particularly at $4,600 gold, you'd want to in order to maximize cash flow to have a higher strip ratio in this deposit than that. When you have what I'll call a crossover point, and that's when you go underground because it's more costly to strip than it is to have underground development. And so the strip ratio is consistently changing. With regards to the second question, the TSF3 is listed as taking 1 quarter to build later in fiscal 2026. What are the risks of completing this on schedule given? So Richard, take people through TSF3. Obviously, you and I were discussing this earlier on this morning. We are doing a lift to TSF2 and then doing TSF3. And TSF3 then removes almost all tailings risk because it will be predominantly for the life of the mine. So just take people through the process on this. Richard Boffey: Sure. So we're -- we're in the full swing of design and assessment of our major TSF3, our life of mine facility that's based upon holding all of the PEA material that we're planning to mine. We're -- in terms of risk, we've made the decision to put in a third and final lift on our current TSF2.2. That will buy us another quarter or 1.5 quarters. And that really gives us till probably the first or possibly the second quarter of FY '27, which should give us plenty of time to build this full facility. So we're basically committing to the expenditure of a full life of mine tailings project in one construction effort. And basically, we're doing that for the economy of scale in the area of basically everything that we dig out, we put into walls, and it's a very even match. So we're not importing a lot of material. And that will probably take us about 5 months to complete construction, and we've probably got another month of permitting and final design to go. Stephen Mullowney: Excellent. Thank you. So it's well in hand is the answer to the question. The next one is, Stephen, can you provide a view on 2026 initiatives to further promote TRX and its stock? We'd like to see more high and ultra-high-net-worth investors understanding the value and investing in the company, particularly given the strong operational performance. Please advise. So with regards to marketing, we do have a couple of marketing firms that have been hired on our behalf, out in the market, approaching a lot of what I'll call retail brokers, high-net-worth individuals as well as institutional investors. And that has brought in a lot of meetings. Also with regards to the performance of the company, that has gotten the eyes of a lot of investment banks who have also brought forward a lot of institutional investors. The challenge, I would say that we predominantly have is most people in the mining industry are used to getting discounts through private placements. And we're not offering that. We're offering if you want exposure to our stock and our growth story, you can purchase in the market. And so a lot of the institutional investors have the option of going in -- there's a lot of capital raises happening, going into other stocks on the capital raise or purchasing ours in the market without a discount. And we're going to hold the line on that because we want to hold the line on and believe that not increasing the share count by our choice is more beneficial over the medium to long term. So you may not see the shareholder base change as quickly as you would like as a result of that philosophy, but we're going to hold the line on that. With regards to marketing as well, we do quite a bit of marketing in what I'll call small to mid-cap conferences now in the United States, as well as a couple of mining conferences. So in the small to mid-cap conferences, dovetailing that with the 2 marketing firms that we have -- actually, we have 3 marketing firms on board. We do find a lot of shareholders that fit what you're describing around high-net-worth individuals. And that's been a successful avenue for us to find new shareholders. So those are the initiatives. It is certainly a top-of-mind initiative. Anything to add to what I just described, Mike? Michael Leonard: No, I think you said it well, Stephen. I mean as you mentioned, we are heading into conference season here and I have 3 conferences in the next 4 weeks, and our calendars are already full with a fairly large slate of high-net-worth and institutional investors that have -- to help answer the question, take an interest in the results that we're starting to generate. So there is active interest in the market. And over the next few weeks, expect to get in front of some prospective shareholders. So stay tuned. Stephen Mullowney: Stay tuned, yes. I think that's it for the questions, operator. Operator: Yes, that is correct. There are no further voice questions at this time. Stephen Mullowney: Thank you. Well, thanks, everyone, for joining the Q2 -- sorry, Q1 conference call. Results are good. They continue to grow. We are on side our business plans for expansion, utilizing free cash flow. Exploration results will come further on later in the year. As Richard mentioned, we're looking to do well over around 40,000 meters of drill holes. We have also more prospective targets than just Anfield and Stamford Bridge to go after. And we're all excited for what the future lies at Buckreef in Tanzania. Thank you. Asante sana. Operator: This brings to a close today's meeting. You may now disconnect. Thank you for participating and have a pleasant day. Stephen Mullowney: Yes. Thanks, Richard, and Khalaf for joining from Tanzania.
Ben Jenkins: Good morning, everyone, and welcome to our December quarter for 2025 for the quarter 2 of financial year 2026 webinar on our December quarter results. Tim will kick off as usual. And I'll step in on the financial slides, and then we'll go to question as usual. Tim, over to you. Timothy Levy: Right. Thanks. I see there's a few people in the waiting room. They're coming now. Okay, great. All right. Cool. Thanks, Ben. Thanks everyone for joining us. The December quarter isn't the -- typically the highest selling period for us for a lot of our business, particularly northern hemisphere part of our business. It's really about focusing on execution and delivering good, services to customers; getting -- in particular, in the U.S., getting kids back to school and getting their devices protected. But it is a big period, the December half and the December quarter in particular for Australia, New Zealand and our Qustodio business. And you'll see that reflected in the numbers that we're about to show you. Very pleasing results actually. In fact, it was the best sales December quarter we've ever had in our history. And from a guidance perspective, we're really pleased that we've hit all our guidance numbers and are very confident for our guidance for the rest of the year. So look, I'll quickly run through the highlights, then I'll go through the meat of the presentation, then I'll hand over to Ben to talk through the numbers, and then we'll answer questions at the end. So yes, we made some massive milestones, massive milestones actually achieved in the December quarter. We were, of course, buffeted by the FX movements, the Australia, U.S. and euro. But if we forget that, let's make some celebrations. Firstly, we passed USD 100 million of ARR, which is a substantial achievement. And in constant currency terms, that meant AUD 154 million in ARR. We're reporting $149 million of ARR at the end of the calendar year. We also passed through 20% of the students are on our platform in the U.S. That is an amazing number; 20% of our students. Essentially all of those students are organic, and we entered that market in 2018. That is an amazing achievement. We've also passed through 30 million kids are protected by our platform, substantially more kids on our platform than there are Australians on earth. They are achievements that we should celebrate. Now from financial results, we added $5.1 million of net ARR. That is a great result. Over $4 million in the education business was an outstanding result, again, given it's not the key part of the selling part of the season and over $2 million in Qustodio. Qustodio is an absolute flyer, growing now at an annualized rate greater than 34%. So our top line is growing better this time of the year than what we were doing last year. And last year, you'll recall, we hit the ball out of the park for the financial year. Cash receipts $79 million, 20% up on PCP on the same half last year. So a great result on guidance, and we're expecting that to continue comfortably actually for the financial year. Free cash flow positive, up 46% for the half. And then probably also really another big highlight, right? Obviously, key to our financial is the North America K-12 business, and our pipeline is on fire, nearly $40 million in pipe, $14 million on a weighted basis, which is 30% up on the record pipe of last year. So the stage is set for a fantastic end to the financial year. Reiterating guidance, and we think, if anything, there's upside in particular on our ARR. So let's go through some of the numbers. 32,000 schools, that hasn't changed; 30 million kids in the platform, 9 million parents using our tools is up; more than 100 countries accessing our products. As I said, $154 million, I think I said on a constant currency basis, but we ended the half with $140 million -- $149 million of ARR, growing at 20%. Again, that is -- it would have been much higher than 19%, but for the FX. Free cash flow positive for the half. And for the year, we're expecting free cash flow breakeven or better. So again, I'll let Ben talk more to that. And again, a big highlight is that $14 million of weighted pipeline, which sets us up for a fantastic crack in the second half of the financial year. Matter of fact, a big chunk of our team are in the U.K. right now because there's a big sales event which is called the [indiscernible] end of January per year. So all parts of the business are going extremely well. These numbers here are in local currency. U.S. K-12, 30%; Qustodio, on the last 12-month basis, is 27%, but based on the first half this financial year, over 30%. That business is flying. Australia, New Zealand growing at north of 30%. Now the U.K. is still a little bit retarded, let's say, because they haven't got access to all the products, but that's literally happening now. We're launching at that some substantial integration, filter and monitoring by the end of this quarter. The Qoria filtering technology will be valid in the U.K. and more and more stuff to come. I'll talk more about that in coming months, but you'll see the U.K. really a step change in growth in the U.K. in the next 12 months. Very exciting what's happening over there. Things at SaaS, they haven't really changed. I guess, if I could highlight anything, gross margins are over 90%. Again, that excludes acquisition cost, but that compares with most -- whether most SaaS businesses report. So our margin -- our gross margin is incredibly strong. And as we are now maturing and integrating our businesses and our costs are stabilizing, that's what's delivering the operating leverage in the business. And our marketing efficiency, particularly in Qustodio, where we're generating return on investments of anywhere between 300% and 400%. It is expensive to put money into Qustodio because it does drop straight through our P&L, but it is really important because for every dollar we invest in that Qustodio business, we're getting $3 or $4 back in short order is the right place to be investing our money. Okay. So this is a waterfall of the contributors to our growth. K-12, new customers, new logos are still the engine room in our business. We're getting better and better and better at cross-selling, and we delivered $1.5 million of cross-sell. I think cross-sell is now, over the half, it's -- could be -- 30-plus percent of our new ARR is from cross-sell to existing customers. Last year, it was just over 23%. So we're definitely getting -- with more products to sell, we're getting better at [indiscernible] existing customers. Qustodio, as you see there, $2.1 million, so nearly added $5 million of ARR for the financial year together. But of course, a big chunk of hit there with the FX movement. Now of course, there is a cost impact of that as well, which, again, I'll let Ben talk about, but in round numbers, it was around about $3 million of improvement in our costs from the FX movements. Sorry. Bear with me. I just lost my screen. Okay. So K-12, what's the -- I mean, a big net add for the quarter of $3 million, $4.6 million gross. That is -- it's not quite a record for K-12 but it was a little bit surprising how well it came in. This time of the year, it's hard to predict what sales are because it isn't the biggest selling period, but we had some outstanding results again, particularly in the U.K., they're really delivering in that quarter. Average revenue per student continues to go up. Average sales price, as you'd expect, as we're kind of getting into the selling season that's picking up. But the real highlight in the education business is the building of the pipe into the second half of the financial year, nearly $40 million of deals in that pipeline and 30% growth in the way that pipe is remarkable. Qustodio, all indicators in this business are going the right way. So the first half, again, 34% annualized growth. I'll draw your attention to the chart at the bottom, the yellow column being the most recent result of this financial year's results. And you see not only net ARR growth, that's substantial, but you're seeing subscriber growth. For -- prior to this year, for the last 2 years, most of our ARR growth in the Qustodio business has become -- has come through price optimization. But now that we've delivered price increases, feature enhancements and a little bit of investment, we're talking literally $4 million of extra investment over the year in that business. We're now seeing that turning into substantial lifts in ARR subscriber numbers and at really good return on investments. Our average order value and our cost to acquire customers essentially breakeven. And so it's not burning cash to grow that business. But of course, the way the accounting works is to acquire a customer to take that to the P&L immediately and then you take the revenue over the life of that customer. So that is a good business. And we're carefully investing in that business to make sure that we hit our guidance but do not miss the opportunity of the financials. The unit economics of that business are tremendous. So cash flow is up 20% for the half. We're expecting that and more for the second half. We're feeling really comfortable with our inflows. Again, I'll let Ben talk more about that, but you see quite clearly in the charts here, the cycles that our businesses go through, but we're stepping up every quarter, every year. Operating leverage. I guess I can highlight some things that are important. You'll see it through our 4C and you see it on the slide. One, as we've been telling the market for some time now, at the beginning of the financial year, through our budgeting cycle, we make investments. The bets we've made this year is -- the main one we've made this year, 2 of them, sorry, is to put more money into Qustodio marketing, around about $4 million, and to invest in building out the engineering team in Sri Lanka. Those investments were being made now in this first half year to deliver results going forward. And so you've seen a lift in our costs and, of course, pay rises, which you [ deal ] in that October period. So you've seen that lift, but as we have also gone to the market on our ARR and revenue is expected to be at least 20% higher than last year. And so that can be easily accommodated. Those modest increase in costs can be -- and bets that we make going to be easily accommodated in ARR and revenue growth. Now on the bottom chart on the right-hand side, what we've done there for comparison purposes is to show our year-to-date result for net ARR versus cash costs. So essentially, it's a run rate view of our business on a constant currency basis, so using our FX rates at 30 June. As you should see, these investments that we've made in Sri Lanka and Qustodio marketing are comfortably covered by the growth in revenue in our business. So again, leverages in our business is growing. Gross margins are great. We also have flexibility in these bets that we make, particularly around marketing costs. So we can optimize our expenditure to make sure we hit guidance, and at the moment, we're feeling very comfortable with our growth and our guidance, particularly our cash flow and balance sheet, which, again, I'll let Ben talk about later. Now I know there's going to be a lot of questions about balance sheet and finances. But I do think it's important, if I could just steal 5 or so minutes of people's time to talk about AI. There's been a lot of chatter we've seen recently about the impact of AI and what that might mean for SaaS businesses and Software-as-a-Service type of businesses. What I'm going to do now is quickly talk about the investments we're making in our business to take advantage of AI for internal costs, but also deliver value for customers, but also talk about what's the broader implications for businesses like ours with the advent of agentic and generative AI. So firstly, a quick, I think, focus on us. There's really 3 areas of investments in our business with AI. One is enhancing offerings, adding -- essentially adding AI features to our products that customers may enjoy. And we've been talking about this for a while, and it's generating now literally millions of dollars of revenue in our business. We were the first in the kind of mainstream filtering provider space to provide real-time content to web filtering. We can now intercept the kids website, look at the images that they're looking at, look at the videos that they're looking at and blur them if there's inappropriate content. And we can also now look at the text, every single line of text, hidden or otherwise, and make a determination about whether that should be shown to a child because -- or not. And in particular, that stuff is focused on our content, of course, but also kids who are brilliant at finding their ways around filtering technologies using technologies like VPNs and proxies. So we can now scan in real time these pages without the kids noticing and make those determinations. There's a whole host of other things that we're doing behind the scenes with categorization and classification, and there was also some really cool things that we're doing with automations and AI chatbots and let's call it AI agents that can help you with your navigation and your journey of using our products. And we'll talk more about that in the second half of the year, but big investments made -- we're making there and not -- these things are actually delivering real contributions to our business today. Constant work across the business. We're all getting better and better at integrating AI into our day-to-day activities and of course, all of our vendors of various customer relationship management type systems are adding AI features in there. And that's -- so we highlight here about $2 million of reduced support costs, and we've reduced the amount of workload and our human moderators for our monitoring product by that 30% with tons more to go. We -- I won't go into the details, but there's literally millions more dollars of savings that we're expecting out of that customer support and human moderation by the end of this calendar year. And then going to this question that I keep hearing about can people code in their basements and then replicate the sort of features that you offer. Now we're doing that internally. Product development teams globally are now -- are being expected to use wipe coding and AI tools to not only prototype, but to be able to build alpha-ready products that customers can use and then move into the development -- proper development cycle, production cycle, they call it. So we do that today. And it's something like, I think 90% of our -- 88% of our teams are now using generative AI in their day-to-day activity. We've saved 15 FTEs, 15 roles, engineering roles in our business, and these are expensive resources, $120,000 to $200,000 resources, 15 of them have been effectively saved through the use of these tools. And it's not just at the grassroots, even people like myself are using AI to build applications in this business now. So that's now running right in our business. Okay. So what is the impact of AI going to be on SaaS businesses? Unquestionably, the ability to code is accelerating, ability to take an idea from an idea, put something in front of a customer and turn it into a feature that's being used by customers has moved incredibly quickly from taking 9 months to a year to get a feature out the door 3, 4 years ago to 3 or 4 months. We're actually now doing that. We've actually got a feature that shipped a couple of weeks ago that took less than 3 months to deliver. Now does that mean that people can start by coding their way and competing with big companies? Well, what Bain and company say is that with the right playbook, which includes deep AI integration, strong data moats and leadership of standards incumbents can shape and not just survive the next wave of SaaS. Now let me go in a bit more detail what that means. There's a number of references here to third parties that have been investigating this question about what is the impact of AI going to be on dedicated SaaS businesses. The one thing that I draw your attention to is we don't sell really just software. What we're doing is selling mitigation of risk. A customer -- I mean a private school in Australia, they might be spending $20,000 a year with us to make sure that kids are not watching pornography at school or making sure that they're complying with their obligations around safeguarding and privacy. What school is going to entrust that to a backyard provider who may be half the price? They're not going to do it. What's really important to understand in enterprise platforms, particularly in markets which are high trust and heavily regulated like we operate in, there is a transfer of risk inherent in that process, which is really what we're selling plus, of course, the features. Now according to Andreessen Horowitz, durable moats come from restricted proprietary regulatory sensitive dynamic data sets, not the model. So yes, there is a lot of data everywhere, and you can build AI tools that leverage that data. But if you think around a business like ours, we have access to very unique data. We -- in fact, we're the only one really globally that has the ability to see what kids are doing at home and see what they're doing at school and bring all those contexts together. We also, through our acquisition of Octopus last year, we can now see through schools' other systems, attendance systems, academic records, teacher notes. We have more visibility across the data sets and schools than I think anybody in our space. The ability to bring all that together and add value decision-making of schools is a significant moat that is very, very hard to replicate. The third point [ best of ventures ] is that -- and you're seeing this across the Internet is that there is much more now focused on vertical integration. What was previously feature providers, little expense type management systems and project management systems that could apply to everybody, that world is collapsing, and now people are focusing on particular industry segments, which is a vertical integration and approach. We've been talking about this for 3 or 4 years about all those entry points and all those personas that we're trying to support inside the school. So we've been talking about vertical integration for a long time. Outcome-based pricing is where McKinsey sees this world going. So it's less about the subscription per user, subscription per service, but it's, are you delivering value. And again, we've been talking about this for a long time. How do we make sure that customers pay the minimal money, the money they're spending on our services, maybe $7 or $10 per student per year and how do we turn that? How do we prove the value that, that's driven to customers? So our, acquisition of Octopus was, in large part, to make sure we can deliver measurable outcomes in investment for schools, modest investments for schools making our technologies. And then final piece, and I think this isn't talked about enough, accelerating time to value is really important, and that can, of course, be done with great user interfaces, which can be vibe coded, but the complex type systems that we do, it also requires the addition of wrapped professional services, which is something that we do, in particular around professional development for moderation, safety leads and, of course, the online safety education and something that's unique in our business. So we've been thinking about this challenge of protection, building a moat around your business with the -- not just AI, but just the acceleration in software development for a long time. So if I can reiterate, Qoria operates in a high-trust safety, safety-critical environment, very regulated, subject to privacy policies, compliance obligations. And of course, we're dealing with human lives. This isn't an area that's naturally ripe for disruption by backyard coders. Customers are not purchasing software fixed, lowering their purchasing assurance, compliance accountability and professional services. The comment on the right-hand side is the key point I'd like to make. I think the SaaS businesses that are at risk are those single feature and undifferentiated workflow type businesses, those, particularly with low switching costs, and that is not our business model. The winners will be platforms with proprietary data which we have, regulatory drivers which we have, and a customer locking which we have because we are invested across the school stack and we have relationships with parents within these schools. So for businesses like ours, we see that AI is an accelerant and certainly not a threat. Look, that is a very quick overview. Happy to provide some dedicated sessions on this over time, and maybe I'll leave to the broker analysts who are on this call to see if they'd like to do that. That was very quick. Let me quickly hand over to Ben Jenkins. Ben Jenkins: Thanks, Tim. Good morning, again, everyone. Just jump to the next slide, please, Tim. Thank you. So as you can see on the page here, free cash flow for the quarter was just over negative $2 million, broadly in line with what we're expecting across the whole half when you consider the Q1 results and the Q2 together at just under $9 million positive. As we mentioned at the September quarterly, we've collected cash really well in the September quarter, and the collections over the half were in line, almost exactly in line with the guidance we provided at 20.2%, which is really pleasing. Something probably worth calling out here, it is called out on the next slide, but it is mentioned here, so worth talking to the other one-off costs. They are all related to acquisitions that we were looking at. Diligence costs, other bits and pieces. There was 3 different acquisitions across the half that we looked at in a significant amount of detail. And for various reasons, we have walked away from all 3 of those or being outbid on those. So they are genuinely one-off in nature and corporate costs related. Outside of that, I think jump to -- I've got control now. I can jump to the next slide myself. Going into a little bit of detail on the cost line across the board to talk to the investments that we've made in the business over the year. Most of that is done now. So I expect costs to be broadly flat across the half, if not down in some cases, particularly in relation to fixed other costs where you have some seasonality within that. And importantly, on cash collections, I think the most important -- and you can see this in the chart earlier in the deck where we comp the cash collections quarter-on-quarter over the last 3 years. Last year, we're -- receipts in the March quarter were only up 9%, and receipts in the June quarter were actually flat. They weren't up at all year-on-year. And so we're comping a very favorable period. And that's largely due to the runoff in multiyear cash upfront that happened last year. That's washed through. You can see that's washed through in our first half results and cash collections. But in the first half of the year, we're actually still comping at a much tougher period. So we're pretty confident that receipts will be comfortably over 20% for the second half of the year up year-on-year. And I guess the other data point that we can point to is, last year, if you look at the half 1, half 2 split, it was 60% receipts in the first half of the year, 40% in the second half of the year. A lot of people are probably going to that as the baseline. Again, due to the profile of the cash flows last year and the flat nature of it in the second half of the year, that's probably the wrong split to look to. If you look at FY '24, the split was actually 57% half 1, 43% half 2. I don't expect it to be that far to the right this year, but it will be somewhere in between those 2. And if you back through that, that gives you a number of comfortably above 20% in cash receipt growth for the second half of the year. On that basis, net debt is mentioned on the previous slide and all the cash on hand of $21 million. We're comfortable there's enough cash in the bank from now through to 30 June when we start collecting cash really strongly again in the July or the September quarter to see us through. So free cash flow for the full year should be broadly in line with guidance that we've provided before. So we would generate $9 million in the first half, we will see through a bunch of that in the second half and end up the year with a cash balance similar to what we started the year at, probably slightly lower, in line with what we've discussed in the previous quarterly updates. FX exposure, Tim spoke to this earlier. We've updated this slightly, a little bit more in the business related to U.S. dollars. So the sensitivity to the U.S. dollar is a little bit higher than what it has been. The other area where there's a little bit of impact is within the Qustodio business. The majority of their revenue is in U.S. dollars, whereas the majority of the cost is in the euro, and there's been a little bit of a disconnect there. So there's a little bit of cost related to that, that's captured in the sensitivity analysis earlier in the pack. On that basis, we can go to questions. Ben Jenkins: We'll let Laf in. [Operator Instructions]. Unknown Analyst: Thank you for the detail you've given us on the free cash flow. Can I just dive into a little bit more on the cost side? So I can see that you're now more confident on the March and June cycling at least 20% up. Can you talk through the timing of some of the cost savings around AI? And I think from the last couple of quarters, you talked to it being first half heavy. Is that right? And can you just talk about the trajectory of the cost base going into FY '27? Ben Jenkins: Yes. I think the cost savings will really be an FY '27 story. I think FY '26, the cost base is fairly set now. So I'm not expecting any significant increase from here. And then through to FY '27, we're reasonably confident that we'll be able to keep cost flat. So not CPI increase, we should be able to offset any wage increases with savings within the business. So that will further extend that leverage. And if you forecast out the growth that we're expecting in the business in ARR, a lot of that comes through this half of the year, then you can see a path to fairly significant cash generation in FY '27. Unknown Analyst: Yes, sure. And can I just clarify for the second half, I mean I think Tim talked to some of the AI savings you have of $2 million in your presentation in savings. Is some of that coming in the second half? Or is that all really in FY '27? Ben Jenkins: Some of it is cost avoidance. So an example would be the moderation team, the moderation product is growing significantly, 25% to 30% year-on-year, yet we actually haven't grown that too much. So rather than having to put new human moderators on, we're able to deal with that through advancements in AI. Lindsay, you should be able to unmute now and ask your question. Lindsay Bettiol: Okay. Hopefully, that worked. Can you hear me? Ben Jenkins: Yes. Lindsay Bettiol: A couple of questions. First one on the U.K. So it looks like a pretty modest kind of quarter year-over-year, up 6%, something like that. I mean you've talked about that being soft until you can launch new products post-unification. So questions are, like, one, just remind us again where we are in the unification process? And then two, like once you can start cross-selling to the U.K., could you just talk about like where -- firstly, like where the big opportunities are, but then also where the early opportunities are because I think people are going to kind of want to see some runs on the board. So like where are you going to focus first? And then where is the opportunity in the U.K.? Timothy Levy: Yes. Well, the sequence is to take our cloud filtering offering from the U.S. and integrate it with -- into the monitoring product. So you essentially have a cohesive monitor and cloud filter for our cloud-only customers in the U.K., and that's happening right now. The next step is to integrate our cloud filtering offering and monitoring offering with the in-line appliances. So the 4,000 smooth wall appliances, they are in schools and council schools and MATs across the U.K. And then the final piece is to extend that suite of features to the larger MATs, which are what's called a multi-tenant deployment. Essentially think about multiple corporations that are managed by a single MSP. So that's the final stage of the integration road map, which should be around about September kind of worst case end of this calendar year. So to answer your question more directly then, the objective of this year is really that existing customer journey; getting all of our customers acquainted with the future of our platform, the singular platform, new experience is being rebranded as Qoria. It's got brand-new user interfaces, much more modern and user-friendly interfaces, the same that the customers in the U.S. enjoy. So a big part of it this year is about bringing those customers on the journey, making sure that they're happy. It's going to reduce any churn that we have. So our kind of gross retention is going to improve this year in the U.K. and that gross retention, I think, has been 86% to 90% for the last year or 2 there. So that will improve. And it then gives us the opportunity in a cheaper way of selling things like parental controls and classroom management and data analytics and so on. So very much an existing logo story this year, graduating from the less complex to the more complex schools over time. And that's done deliberately for technical reasons, but also those bigger clients will appreciate that this product is tested in the field before they move to it. And then, yes, in '27 for us is then accelerating new logos in the U.K. market, going up a lot of the business that Lightspeed has taken from us in the last 2 or 3 years. Lindsay Bettiol: Okay. Brilliant. And then I'll switch on to Qustodio. Like yes, pretty good quarter, 2.1%, I think is what you called out. I suppose my question would be was a little bit -- my number looks a little bit slower than Q1. I think traditionally, this has been like the strongest quarter for consumer, that kind of Q4 calendar year period. So one, could you just like remind us of the seasonality in the consumer business? And then, two, looks like there was a huge marketing spend in this quarter. It jumped up to like north of $4 million from $2 million something in Q1. Just wanted to confirm that marketing spend is seasonal as well, and we shouldn't expect $4 million a quarter going forward. Ben Jenkins: Do you want to tackle that one first, Tim? Timothy Levy: Go ahead. Yes. Ben Jenkins: Yes, that's right. It's timing effectively and where it landed either side of 30 September. So if you take the spend over the whole half, average it, that's more what you'd expect in the second half of the year, but don't annualize the December quarter. Timothy Levy: Yes, that's right. Yes. So for the half, they added just under $5 million of ARR and spent under $5 million of ARR. That's what we're told Victoria do. Grow within your -- the amount of money that you bill your customers. And if you need more money than that, talk to Ben Jenkins. That's really the message. Lindsay Bettiol: All right. And just -- maybe I'll sneak in like a third question. Just an update on the B2B2C part of the Qustodio business like you've kind of maybe scrapped that from the deck. Timothy Levy: Yes, we've got around 200,000 accounts now connected through U.S. schools to U.S. homes. And that's now a customer base. And we're getting better and better actually. We don't talk much about that, but we probably should. We're getting better at signing on these schools and now proving to schools that there is efficacy, that there is benefits. There was material reductions in toxicity in schools who are bringing on those programs. I should present this to the market actually. It's pretty amazing. So we're now selling out more and more schools and getting better at connecting those accounts. Those schools that follow our marketing plan are typically 20% take up comfortably. We're still getting around 1% of those upgrades to pay product. But just again, to reiterate, we are still not marketing to that group of customers. We're not sending newsletters. We're not sending monthly e-mails or aggressive upgrade-now type, 3-months-off type things. We're not doing any of that. But that program is about to start. And this quarter, we're expecting to do marketing communications to those 200,000 parents. And we're also going to start doing some innovative pricing. So rather than annual plans, which is the only way Qustodio goes, it's all upfront annual plans. We're going to start to do monthly plans. So from low to high value plans, just to A/B test to see what that sort of market will handle. So yes, that's all -- that's the next stage of the journey, Lindsay, as we've now got a big enough customer base to start playing with how do we monetize it. So that's really the '26 story. So we can talk more about that in coming months. Ben Jenkins: Owen, you should be able to unmute and then ask your question. Owen Humphries: Guys, can you hear me okay? Timothy Levy: Yes. Owen Humphries: Well done on the operating performance of the business. Just to kind of understand. ARR growth is 23%, call it, year-on-year. The weighted pipeline is up 29%. I think Qustodio is accelerating to over 30%. Can I just confirm, the guidance is 20%. Given your expectations, are you kind of tracking at this stage above that 20%? Timothy Levy: Yes. Yes. Look, I mean, I'm feeling confident about that. If you spoke to our Head of North American sales, he will say he will kill that. But the risk in our businesses, as you know, is that so much of our North American sales are done in the last 2 weeks of June. So we don't really know for sure. But certainly, the trajectory -- the underlying trajectory of growth in this business is well north of 20%. Absolutely. Owen Humphries: And just to kind of hit the nail on the head here because we're getting a few questions today. So net debt, $33 million; guidance is at or around $37 million, so $4 million for the second half. That includes interest costs, call it, $1 million a quarter. So $2 million for the core. The cost base is running it, if you look at the second and first quarter at around that $35 million per quarter all in. So annualize that for the look over the half year, $70 million for the second half. Looking at the cash receipts of last year around that $44-odd million, talking about around that growing at greater than 20%, that looks like it's about a negative $16 million or $15 million around that number of the $17 million between cash collections and cash outflows in the second half plus interest cost. Can you just kind of give us a bit more clarity? It sounds like the cash collection should be much higher than 20% in the second half to kind of get that. That's kind of where the questions are coming out today. We haven't really talked about that. Ben Jenkins: Yes, that's right. And I think we're comfortable to say that we think it will be comfortably higher than 20%. Again, point you to the half-on-half splits over the last couple of years, and last year is probably not the most appropriate one to use. It's not 60-40. We're comping a very friendly period from a cash collections perspective, as I mentioned earlier. And I think, reiterate the -- I guess, the guidance around in line. We're talking -- it should be there or sort of $2 million to $3 million within that level. So maybe a little bit more burn potentially. But again, going to Tim's point, it depends on North America. There's potential to outperform that. If we get sales through earlier in the period, we can invoice it, collect it, get a good cash receipt result in June. Maybe it spills over into July. But the pipeline is there. The business is coming, and the cash will come, whether it's across June or July. And yes, I think the big point to reiterate that you're touching on is that cash collections piece and having looked at it, I guess, over the last couple of years, not just last year. Timothy Levy: If we run Owen's numbers, we're $21 million at the end of the half. And if we burned $17 million, including interest, we're -- was that what the formulas is? Owen Humphries: Yes, yes. Timothy Levy: Yes, yes. No, we'll be doing better than that. Owen Humphries: And maybe another question is if revenue is running at $145 million constant currency there, what is the cash conversion ratio expected? Ben Jenkins: Yes. I think if you went back 2, 3 years, it was converting at 100% effectively. It won't be that high because of the fact that we've weaned ourselves off those multiyear cash upfront to a degree. If you look at last year, cash collections were about $109 million over opening ARR of $116 million. So I think if you -- our closing ARR is $145 million, it won't be $145 million, but it will be in that sort of, I guess, $5 million, $6 million, $7 million range of that number. Owen Humphries: Good one. And last one, just the U.K., I guess, Lindsay was touching on it running at kind of 6% growth, growth running at 20%. I guess, is that the expectation if you end FY '27 for the U.K. Like if all the work you've been doing is the acceleration you're expecting, just talk us through what growth rate is expected to be sustainable maybe this calendar year and into next? Timothy Levy: Yes. This calendar year, I think, 6-plus, hoping to get to closer to double digits, and then the year after, north of double digits comfortably. Ben Jenkins: There's no further questions, Tim. So if you want to wrap up, we can finish it up there. Timothy Levy: Yes, cool. Well, thanks, everyone. Thanks for your support. Thanks for your attention, a big call. I feel like we have delivered clear guidance to the market about growth, cash flow collections, free cash flow, net debt on the balance sheet. So we're well set up now with the right balance sheet, the right team, the right strategy. Pipeline is good. So feeling very good about delivering all of that. And from 1 July, we never turned back, right. We start paying off debt and we are -- we're away. So feeling very good about our guidance for the year; very well set up; and looking forward to delivering. So we'll see you all next quarter. Thanks a lot. Ben Jenkins: Thanks, everyone.
Operator: Good day, and thank you for standing by. Welcome to Yancoal Fourth Quarter 2025 Production Report. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Brendan Fitzpatrick, Investor Relations Manager. Please go ahead. Brendan Fitzpatrick: Thank you, Maggie, and thank you to everyone on the call for joining this briefing on Yancoal's Fourth Quarter Production Report for 2025. We have several members of Yancoal's executive leadership team to recap the quarter and participate in the question-and-answer session. On the call, we have Sharif Burra, Chief Executive Officer; Kevin Su, Chief Financial Officer; Laura Zhang, Company Secretary, Chief Legal, Compliance, Corporate and Affairs Officer; Frank Fulham, Chief Sustainability, Technology, Innovation and Development Officer; David Bennett, EGM Operations; Mark Salem, EGM, Marketing and Logistics; Mike Wells, EGM Finance; and Mark Jacobs, EGM, Environment and External Affairs. The commentary provided today is based on the quarterly production report published to the Australian Securities Exchange and the Stock Exchange of Hong Kong platforms on the 19th of January. There is no presentation pack for this conference call. The Yancoal website holds past presentations for any participants who require additional information on the company. I'll hand over to our CEO, Sharif Burra, to provide the fourth quarter highlights. Sharif Burra: Thanks, Brendan. I also welcome everyone joining us on today's conference call. We had a great quarter. In fact, the 10.4 million tonnes of attributable saleable coal was a company record. The fourth quarter production carried us to the top of our annual production guidance range and the 38.6 million tonnes for 2025 was also a company record. This was a tremendous effort, and I congratulate all of our people for their role in this achievement. All of our mines contributed to total ROM coal production, which increased 20% compared to the third quarter. As usual, we don't include cash operating cost per tonne in the quarterly report. At the half year, our cash operating costs were AUD 93 per tonne, in the middle of our AUD 89 to AUD 97 per tonne guidance range. Consistent with our commentary in October, for the full year, we expect to deliver unit costs around the middle of the guidance range. Previously, we disclosed our expectation for capital expenditure within the guidance range. We now anticipate it will be towards the bottom end of the $750 million to $900 million guidance range. During the fourth quarter of 2025, international coal indices for both the thermal and metallurgical coal markets had mixed performances, yet our average realized prices improved by 6% to AUD 148 per tonne from the prior quarter. This realized price, combined with 10.8 million tonnes of attributable sales and our disciplined approach to costs delivered a $307 million increase to our cash balance over the quarter. We now have over $2 billion on the balance sheet and no debt. This gives us scope to consider dividends and to contemplate potential value-adding growth opportunities. We look forward to carrying our positive operational momentum into 2026. We will provide our 2026 guidance on production, cash operating costs and capital expenditure in our 2025 financial results, which are scheduled to be released on the 25th of February. I'll now hand over to other members of our executive team to share further details from the fourth quarter, starting with David Bennett, our Executive General Manager of Operations. David Bennett: Thanks, Sharif. Our total recordable injury frequency rate reduced throughout 2025, and it was 6.14 at the end of the year. We achieved a downward trend in this statistic and our rate is below the industry weighted average of 7.45. We remain committed to further improving our safety performance. During the quarter, we produced 18.9 million tonnes of ROM coal, 20% more than the third quarter. From our ROM coal, we produced 13.6 million tonnes of saleable coal, 11% more than the third quarter. It takes all our people across all our mines working cohesively to deliver this level of performance. There were some temporary challenges such as hard coal encountered by the Moolarben longwall, some wet weather delays and some equipment reliability issues. However, in each case, the issues were resolved or effective adaptions were applied. Our attributable share of the saleable coal was 10.4 million tonnes. As Sharif mentioned, this was a record performance. In the report, we explained how the 10.4 million tonnes includes the additional 3.75% interest in the Moolarben joint venture, which we secured on the 3rd of October. If this additional interest is excluded, the figure would have been 10.2 million tonnes, which still would have equaled our best ever historical quarter. I will now hand over to Brendan Fitzpatrick, Investor Relations Manager, to provide commentary on the coal markets. Brendan Fitzpatrick: Thanks, David. This is Brendan. We do have Mark Salem, our EGM, Marketing and Logistics online for the Q&A. However, I'll present the initial comments on his behalf regarding the coal market. Our attributable sales volume of 10.8 million tonnes was similar to the third quarter and followed our strategy of optimizing sales volumes and managing stock positions. The sales volume contained a typical mix of thermal and metallurgical coal products. During the quarter, conditions in the international coal markets, both thermal and metallurgical remained somewhat challenging. There were mixed performances across the indices we sell against. The average price on the API5 Index was 12% higher than in the third quarter, while the average price on the GC Newcastle Index was flat. That said, it was the GC Newcastle Index that finished the quarter with positive momentum. There was a similar situation for our metallurgical coal products. The average price on the Platts Low Vol PCI Index was down 2%, but the average price on the Platts Semi-Soft Index was up 10%. In the thermal coal market, Japan is still utilizing coal as a fuel of choice for power generation and its imports increased 16% in 2005. South Korea also increased its imports but prioritized Indonesian and Colombian supply over Australian coal. Elsewhere, demand for thermal coal was less resilient. Despite a restock cycle in China during the fourth quarter, its annual imports fell 18% through the year due to a strong domestic production level in the first half. Taiwan utilized more gas and imported 12% less coal than last year, and India reduced demand for coal imports due to cool weather through summer and increased hydropower generation. Supply from Australia was constrained at times during 2025, but as our performance shows, there is still good export rates being achieved. Indonesia's exports fell 10% and Colombia's exports fell 18% in response to market conditions and due to some infrastructure challenges. But Russian exports continue to reach international markets, and improved rail and port operations in South Africa enabled its production -- sorry, its exports to increase by 5%. A demand uplift may be needed for thermal coal indices to break upward from the trading ranges observed over the past 6 to 12 months. Global demand for metallurgical coal declined as steel production decreased in many countries. The primary driver of this situation was Chinese steel exports displacing production from other steel production nations. In seaborne metallurgical coal markets, global exports were down 7% compared to 2024. A primary component of the global reduction was 9% lower exports from Australia due to a temporary mix -- sorry, due to a mix of temporary and structural reductions, including mine suspensions and some rain delays. Exports from Canada were down 3% due to reduced coal handling capacity following a ship load of fire at an export terminal. Sharif mentioned the 6% increase in our average realized price to AUD 148 per tonne. This combines a 6% increase in our average thermal price to AUD 138 per tonne and a 4% increase in our average metallurgical coal price to AUD 203 per tonne. Having made all these comments, gains in most coal price indices since the end of 2025 is stoking optimism amongst some industry participants. We continue to utilize our scale and blending capabilities to maximize the realized prices we can deliver. I will now hand over to Kevin Su, our CFO, to touch on the financial position. Ning Su: Thanks, Brendan. The key observation is the same one that we made last quarter, Yancoal remains in a strong financial position. We ended the quarter with over $2 billion in the bank and remain free of interest-bearing debt. When we last spoke with you, we discussed the external and temporary cost pressures at the Port of Newcastle. The ship queue at the port has now gone and with it most of those temporary cost pressures. Sharif described how we are still on track to deliver operating costs around the middle of the guidance range. We would see this as a notable achievement in the current industry setting. It reinforces our position as a leading low-cost coal exporter. David and operation teams delivered production records, which allowed Mark and the marketing team to maximize sales and blending opportunities. Adding over $300 million to our balance sheet in just 3 months speaks to the quality of our assets. Our strengthened financial position enables us to consider dividends and to contemplate potential value-adding growth opportunities. We'll be better placed to provide further capital management commentary when we release our 2025 financial results. I'll now hand over back to Brendan to coordinate the Q&A session. Brendan Fitzpatrick: Thanks, Kevin, and also David and Sharif for highlighting the drivers of our record fourth quarter performance. We will now move on to the question-and-answer session, starting with questions from the phone, then moving to questions submitted via the webcast. Maggie, could you please initiate the process for questions via the phone? Operator: [Operator Instructions] Brendan, so far, we don't have any questions on the audio. Brendan Fitzpatrick: Thanks, Maggie. I'll take questions from the webcast, and I'll come back to you shortly. Let's start with some questions about the operational performance. There's a multicomponent question. I'll take it in pieces. Starting with the question, the current Yancoal stockpiles and inventory levels, how are they looking? And is the company back to matching production volumes with sales volumes given the various disruptions at Newcastle through the middle of the year? Sharif Burra: Thanks, Brendan. Yes, look, sales and production are back to normal and are matched. We had a very, very good quarter, a strong production quarter and also a good sales quarter. And moving forward, the intention is for those to be matched. Brendan Fitzpatrick: Thank you. There's an additional component talking about New South Wales production and asking a question about coal royalties, given that the royalties were revised and new royalties were implemented 1.5 years ago. Is there any comment on the current royalty structure and how we view that part of our business? Sharif Burra: Thanks, Brendan. Again, we've had no discussions regarding New South Wales coal royalties and currently unaware of any changes. Brendan Fitzpatrick: And also on the operational side, the Hunter Valley operations, can we comment on the production profile and its uplift in the fourth quarter and how it's running in relation to what we would see as the normalized levels? Sharif Burra: Thanks, Brendan. David, you may want to comment on Hunter Valley operations. But again, just reinforcing, they did have a very strong fourth quarter. David Bennett: Yes, I'll cover that, Sharif. Yes, look, it was a very strong fourth quarter. Hunter Valley operations as well as Mount Thorley Warkworth earlier in the year had quite a bit of wet weather. So at the halfway point of the year, both sites were a little bit behind their production target for 2025. We got more wet weather in August, but we're able to mitigate the effects of that wet weather through the capital investment that we've made in prior years. And we also saw some really good performance from our equipment fleets, our productivities. We set some remarkable records on some of our fleets for their output. And on the back of that, we're able to deliver our budgeted coal production for 2025. So the mines are being operated in steady state. They're productive, and we're getting the most that we can from our people assets, our equipment assets and our geological assets. Thanks, Sharif. Brendan Fitzpatrick: Thank you, David. Let's segue from the production into the coal markets. Mark Salem, I presented comments on your behalf. Could you provide any additional thoughts on the coal market outlook, what we've seen so far this year and what potentially will be driving coal markets over the current calendar year? Mark Salem: Yes, sure. Thanks, Brendan. And thanks for reading my section. As you know, I'm traveling in rural areas, and I was a bit worried about service. So I appreciate you stepping up to read that section, And as long as people can hear me clearly. In terms of the market, we did see some price recovery in Q4 towards the end of the year, and that was on the back of, as you said, China restocking. But we've since seen that price come down a little, not substantially, just a little bit. And this is nothing unusual coming into Chinese New Year and the Chinese buying slowing down a little bit. Coming out of Chinese New Year, I think we are anticipating that the market will again pick up a little bit in that high ash area because there still remains a need in the Southern China for the demand for the coal. From a met coal point of view, we have had a couple of supply disruptions. And if those supply disruptions come through, that could yield a softening in the market, and we really need the steel industry to pick up, which has been in a slightly weakened situation due to the collapse of the property market in China. So in terms of going in from 2025 into 2026, probably a very similar scenario. The current pricing and world demand is really supply driven, and we need just stronger demand to really have a bigger impact into that market. Brendan Fitzpatrick: Thank you, Mark. Maggie, could I please ask you to invite people once more for the online -- sorry, the audio question channel. Operator: [Operator Instructions] Hanyin Yang: Yes. This is Hannah from Morgan Stanley. I just have one quick question on the saleable production. So I noticed the ROM coal production rate high, but the sellable coal production to the ROM coal production, the percentage has declined to 72% in the fourth quarter 2025. And I think the ratio is lower for the Moolarben and Hunter Valley. Can we understand the reasons behind this low ratio for the saleable coal production to ROM coal production? Brendan Fitzpatrick: Okay, I appreciate the question. As I can see, looking at the fourth quarter numbers, our total ROM coal production was about 20% compared to the prior quarter, but the saleable coal production was up 11%, suggesting a slightly lower conversion. So perhaps David Bennett could offer some insights into the relative balance between ROM coal and saleable coal volumes over the fourth quarter. I suspect it's probably to do with more ROM coal being prioritized. But David, over to you. David Bennett: Yes. Thanks, Brendan, and thanks, Hannah, for your question. Brendan's point there is exactly right. There was a lot more ROM coal that came out of the mines in the fourth quarter, and we're unable to process 100% of that coal through the CHPP, our coal handling plants. So the coal that we couldn't process in the fourth quarter, turning it from ROM coal into saleable coal sits on stockpiles just ahead of the CHPPs, and we will process that coal and turn it into saleable product through our warehouses on the first quarter of 2026. Brendan Fitzpatrick: Thank you, Hannah. I'll move back to the webcast questions. There's a few questions all touching on a similar topic. It's the focus on our over $2 billion cash balance reported and interest in understanding what that might mean for dividends and payout ratios heading into the financial results in February. What could we possibly say on this topic ahead of the financial results next month? Sharif Burra: Thanks, Brendan. Look, to start with, we do have a dividend framework in our company constitution. The usual practice being for the Board to review the final position after the end of the year and then determine the capacity for dividend allocation. Kevin, you might have some additional comments you want to make in that regard. Ning Su: Thanks, Sharif. I think the framework Sharif just mentioned is I think has been very clearly communicated with all the investors in the past, which is about a 50% NPAT or 50% free cash flow, whichever is higher and also balancing the debt management growth opportunities. I think companies still follow the same baseline internally. From management perspective, we will definitely balancing all these different priorities and make a decision at Board level in February. Brendan Fitzpatrick: Thank you, Kevin. Thank you, Sharif. There were several questions on that topic. I think we've covered the main focus of those questions through that combined response. Maybe I'll go to you one last time for questions from the phone line. And whilst doing that, let people know that I've exhausted the questions on the webcast. Sorry, excuse me, there were some additional further down the screen that I haven't seen. Let's have a look at these ones. Okay. We're focusing in on the financial performance and the cash balance and cash generation that was reported. When adjusting for the $25 million Moolarben payment, that was the additional 3.75% interest. The free cash flow just to $332 million, which annualizes to $1.3 billion, an implied yield of 18% how should investors be thinking about capital management given the free cash flow generation? So you somewhat covered the capital management component, but perhaps just worth testing that thought process on how the numbers are flowing through, the $307 million increase in the cash balance, the Moolarben payment and the implied annualized free cash flow. Kevin, could I start with you to share some thoughts on what we reported in the fourth quarter in terms of the $307 million increase in the cash balance and recognizing how that might or might not be relevant to an annualized number? Ning Su: Yes. I think from the previous communication, one thing we have to appreciate is the realized price versus the price curve, there's a lagging effects and there is some timing difference we should consider. At the same time, normally, Q4 is a strong -- I mean quite a strong quarter and providing more volume from a shipment perspective as well. They all contributed to a quite a healthy cash flow. But overall, as Sharif just mentioned, the whole objective from management perspective is to be very cost competitive compared with our peers. We are still to be the lowest cost competitive coal producer in the country. For that reason, even in an unfavorable coal price market, I think Yancoal is still generating, generally speaking, very healthy cash flow compared with our peers. And back to the capital management philosophy we just mentioned, we will be assessing the free cash flow on a full year basis, balancing the other priorities and follow the guidance internally and also externally, we've been communicating and decide our dividend management decision by February, the bond year. Brendan Fitzpatrick: Thank you, Kevin. We've got a hypothetical question related to coal markets. So I suspect, Mark Salem, this will be one that we call on your expertise. It relates to the U.S. market and the observation is currently the U.S. exports coal into the global market, but there is speculation with AI-driven power demand levels increasing. Is there a potential for the U.S. to need coal imports to meet power demand is my understanding of the question? Is there a scenario where Australian coal could be imported into the U.S.? And is there any historical precedent for such a market setting? Mark Salem, could you share your thoughts on the coal markets and in particular, swings in U.S. exports and imports? Mark Salem: Sure, sure. Look, I suppose very simply, Australia has not supplied coal into Mainland U.S.A. And I say that because Australia was a supplier into Hawaii, a coal-fired power station to Hawaii many years ago, but Australia is not a supplier. U.S. is the second largest coal producer themselves, and they still have a lot of resources and a lot of surplus. They've always been known in the international seaborne market as the swing supplier. When coal prices are high, you often see U.S. coal coming into the international seaborne market when prices are low, they withdraw and keep their production domestically. So they're not one for importing. So U.S. is not really on our radar as a future coal import market in terms of Mainland U.S.A. We do sell coal into South America and some of the South American markets as well. Just in terms of AI, yes, there is growing demand for electricity consumption in AI in Asian countries, in our more geographically located markets. So that is something we're monitoring very closely and something we do watch in that regard. So yes. Brendan Fitzpatrick: Thank you, Mark. Looking at the questions coming through, we've got another one that's or hypothetical in nature. Given recent media commentary suggesting the potential of a Glencore-Rio merger or acquisition of some sort. The question seeks to clarify our Hunter Valley operations, which are a joint venture with Glencore. Is that joint venture or that operation subject to any change of control clauses or relevant agreements that might be triggered under such a hypothetical scenario? Sharif Burra: Yes. Thanks, Brendan. Look, I won't be commenting on market hypotheticals at this stage. I think we're all reading the press, and it's too early to form any view as to the merit of anything of this nature at this point in time. Brendan Fitzpatrick: Fair enough. Thank you very much, Sharif. We'll come back to the market as and when something concrete requires a comment from us in relation to our specific joint venture operations or joint venture at Hunter Valley Operations. I've now concluded all the questions on the webcast, having scrolled down and found them all in the second setting. Maggie, I'll come back to you one last time for questions via the phone line. During that time, if any questions appear on the webcast, I'll take those. Otherwise, we'll be shortly moving to close out the webcast. Maggie, could you do online questions once more? Operator: [Operator Instructions] Thanks, Brendan. I think I'll pass back to you now. Brendan Fitzpatrick: Thank you, Maggie. Confirming I see no fresh questions on the webcast. I'll pass back to Sharif one last time for the closing comments. Sharif Burra: Thank you, Brendan, and thank you once again to everyone who joined us on the call. I look forward to engaging with you in just over a month when we deliver our 2025 financial results. As we reflect on the production records and the robust financial position we reported, there are 3 things I hope you'll keep front of mind. Firstly, Yancoal delivered the production records because we have world-class assets run by some of the most capable people in the industry. This is something I firmly believe. The level of production we delivered through 2025 required sustained dedication from all of our workforce. Secondly, Yancoal is highly disciplined on cost control. In our view, keeping unit costs flat compared to last year and delivering cash operating costs around the middle of guidance would be a great outcome in the current industry setting. We see our ability to operate with comparably low cash costs as a distinct competitive advantage. And thirdly, Yancoal increased its cash position by more than $300 million in 3 months. This is a distinct reminder that we're not only a low-cost miner, but that our position as the second largest coal producer in Australia provides great leverage to improving coal prices. We look forward to speaking with you all again in February following the release of our 2025 financial results. Have a great day. Brendan Fitzpatrick: Thank you, Sharif. Maggie, would you please conclude the webcast? Operator: Thank you. This concludes today's conference call. Thank you for participating. You may now disconnect.
Operator: Thank you for waiting, and welcome to the TRX Gold Corporation First Quarter 2026 Results Presentation. [Operator Instructions] The meeting is being recorded. [Operator Instructions] At this time, I would like to turn the meeting over to Stephen Mullowney, CEO. Please go ahead, sir. Stephen Mullowney: Yes. Thank you, and thanks, everybody, for joining this morning. I believe it's Martin Luther King Day in the United States. And thus, you have a holiday. I think we got a little bit mixed up in that, but that's -- it's good to see a number of participants here today as well as we had really good participation on Friday on our virtual NDR with Renmark as well. So it's an exciting time here at TRX. We're going to go over our Q1 2026 results, which were really good. The results continue to improve the company's financial profile, working capital continues to improve. And Richard and team on site, Richard is joining us from Buckreef today, have been progressing very well on the expansion plans. As I mentioned and as the team has mentioned before, really, our business plan is quite straightforward. We have a robust asset in Tanzania, 1.5 million ounces, 2.5 grams a tonne. The business plan is to expand the plant in the next 18 to 24 months, increase production, which then helps fund the underground. And then we have an 18-year mine life between an open pit operation and an underground mine operation, all on the Buckreef main zone that's funded [Technical Difficulty]. Thereafter -- we have someone [Technical Difficulty] probably -- there we go. Thank you, operator. And then also, we have some very prospective areas of the property, particularly Stamford Bridge, Anfield. Richard will also get into what we're finding on the geophysics side, and we're quite excited for the exploration side as well. And Khalaf will give a brief summary of our government relations side. So I'm going to try not to speak as much today. I have a very strong team. I have Mike Leonard, our CFO, here today. Mike, there we go. Richard, as I mentioned, is joining us from site, our COO. Raise your hand, Richard. I think everybody can tell who Richard is. He's got the orange shirt on. And then Khalaf is joining us from Dar es Salaam this morning. Good morning, Khalaf. So without further ado. So TRX at a glance, I gave a high-level overview. We operate the Buckreef Gold project in Tanzania. We are in production, producing between 25,000 ounces and 30,000 ounces in fiscal 2026. That cash flow will enable our expansion of the plant, which will then be online with PEA for an 18-year mine life and the last 15 years are underground roughly. Richard will get into that today. We may be a little bit early on some of those items, but we won't overpromise as well. And we have 1.5 million ounces in the resource category M&I, about 2.5 grams a tonne. So I really want to focus on what we did in the first quarter and financial-wise. And I'm going to hand it over to Mike to go through Slide #5 with regards to what Q1 looked like, and he will be supplemented by Richard on some of the operational aspects. Go ahead, guys. Michael Leonard: Terrific. Thank you, Stephen, and good morning, everybody. Thank you for joining us, particularly those in the U.S. on a holiday. As you would have seen, we did release our Q1 2026 results late last week on Thursday, we press released the numbers, and they were record results across the board. Yet again, starting right at the top on production. It was a record quarterly production quarter for us. We produced just under 6,600 ounces. That was a significant increase over the prior comparative period as well as even our Q4 results. We had indicated that over the first half of 2025, we undertook a Stage 1 strip campaign. And the idea was to remove overburden to access higher-grade ore blocks towards the back end of last year. What you would have seen is that we put through about 1.9 grams a tonne through the mill at higher throughput levels compared to the prior year. So higher throughput, higher grade and higher recovery, in fact, we recovered around 60 -- excuse me, 75% recovery for Q1 meant record production for the quarter. And in terms of guidance, we'd indicated full year production guidance of between 25,000 ounces and 30,000 ounces. Q1 was expected to be amongst the lowest quarters of the year. We do continue to access higher-grade ore blocks and remain on track for that production guidance of again, between 25,000 ounces and 30,000 ounces at a cash cost of between $1,400 and $1,600 an ounce. And in Q1, we came in at around $1,500 an ounce, right in the middle of that. You couple that record production with the record gold price environment that we're seeing. In Q1, we realized $3,860 an ounce, which was a record at that time. And of course, a few weeks later, here we are at over $4,600 an ounce. So gold continues to be very, very strong. We continue to demonstrate leverage to that gold price. And you couple a record gold price with record production and inevitably, you've got record quarterly revenue in our case of over $25 million for Q1 as well as things like adjusted EBITDA of over $13 million. So we're demonstrating strong, strong cash flow, strong margins. And what we've been able to do, we've talked about this for a couple of quarters now, is basically take that free cash that we're generating, and we've overturned what was a negative working capital ratio early last year as we were in the middle of that strip campaign and have effectively recapitalized our balance sheet. So even relative to our year-ended August 31, where we had a working capital ratio of about 1.3x, we're up to 1.7x or about $15 million positive working capital at Q1, and that continues to improve. And amongst other things, we've been able to show an increase in our cash position to over $9 million, which is an increase relative to Q4, but we also continue to invest in the business. So we have significantly grown our ROM pad stockpile, which Richard can talk a little bit about in his remarks. But we've got over 22,000 ounces sat on that ROM pad stockpile, which is about 1.2, 1.3 gram a tonne roughly on average currently and a split between oxide and sulfide rock, which allows us basically to optimize what goes through the mill and also serves as a very, very good insurance policy for us to make sure that, that mill feed is consistent and strong. And material coming out of the pit is sort of prioritized relative to what's on the stockpile to make sure the highest-grade material is going through the mill. I guess the last maybe comment I'll make on the quarter. We do continue to invest in what Stephen talked about, the plant upgrade followed by the expansion, which once complete, will pay for effectively the underground development. During Q1, we used a lot of that free cash to put down payments on things like thickeners and elution plants and gold rooms and increased oxygenation, all of which is meant to help improve things like throughput and recovery, which will lead to higher production over time. So a very, very strong quarter, record across the board and certainly expect that to continue into Q2 and beyond. Next slide, please. So this is effectively a summary of some of the key stats, I think we've already talked about. We've talked about the revenue. We've talked about EBITDA. Gross profit is an important one to touch on. We have been able to demonstrate it's a high-margin, low-cost operation with, again, leverage to gold price. Gross profits are over 50% right now. So we're generating lots and lots and lots of free cash and sitting in that -- what we would characterize as the lowest quartile of the cash cost curve at roughly $1,500 an ounce. And again, the model is to use that free cash flow to execute against in the PEA to both upgrade our existing mill and expand it and then use that cash flow to fund the underground development that Stephen touched on. We've also been able to invest in things like exploration. The first stage of our exploration program was effectively this geophysics study, which I think we'll talk a little bit about later, but continue to advance in that regard and hope to be able to put some assay and drill results out later this year as that continues to develop as well as finalizing metallurgical test work that, again, I think Richard will touch on when he gets to it, but effectively demonstrates that we can achieve high, high recoveries with some of the mill enhancements that we're making, which will help drive future production. And the last bit, I think I've touched on, but we do continue to expect our production to be between 25,000 ounces and 30,000 ounces at between $1,400 and $1,600 an ounce. Capital, we had guided at between $15 million and $20 million. We continue at this stage to expect to spend at that level. But of course, at these gold price levels, if we generate additional free cash, we may move some of those capital expenditures around the plant expansion forward into the back end of this year, but we'll certainly update the market as and when we make that determination. And finally, we're spending on exploration. We expect to spend between $3 million and $5 million. We have procured a couple of drill rigs in RC and a diamond drill rig, which we'll talk about, which we expect will help our drill program over the course of this year. So that was it, I think, as far as results in terms of what I wanted to touch on, Stephen, back to you, please. Stephen Mullowney: Yes. No, thank you, Mike. And we're going to switch into what I'll call operational growth here. And I'm going to hand it over to Richard to give a brief overview, Richard, of where we are in our expansion plans and what investors can expect in the next 12 to 24 months around our expansion and where we're going to get through to on throughput. Obviously, we're online with what was in the PEA, and our goal is to exceed what was in that PEA given that we do plan to have a higher throughput than what was in the PEA. But where exactly are we on all our items? I know a lot of exciting things around Aachen reactors, ADR plants, looking at confirming and finalizing metallurgy and then getting into the SAGD (sic) [ SAG ] ball mill as well as flotation cells and thickeners, all kinds of things going on. So a lot on your plate. You are on mute, Richard. Here you go. Richard Boffey: Hopefully, -- how is that? You can hear me clearly? Stephen Mullowney: We can hear you just fine. The reception is good [indiscernible] today. Possibly any thunderstorm. Richard Boffey: No, we're in the middle of one right now, which is why I asked. Anyway, in terms of the work we're doing at the moment, we are still heavily focused on upgrades to our 2,000 tonne per day plant. So right now, we're in the midst of doing a major upgrade and improvement to our crushing circuit. We've got more work lined up straight after that to move on to our mills and the power draw for the mills as well as the CIL circuits. We're installing a super oxidation system that will hopefully give us another couple of percent recovery. We've also made some major improvements this last quarter in the recovery areas, which Mike alluded to, and that's going well and is progressing again through this quarter. In terms of work towards the expansion, we have more or less finalized all of our metallurgical test work. We've done a full modeling in spec of the SAG circuit. And for those people who may have read the PEA, we had planned to combine our existing 600-kilowatt ball mill with a SAG mill. And our modeling shows we're probably better to just invest in a larger SAG mill and make it a simpler circuit. So we're going out on price inquiry at the moment and full tender very shortly. And indications are that the lead time on that equipment is probably of the order of 7 to 9 months. The float plant and fine grind aspects of the expansion and the change in the process flow sheet have gone well. The met testwork was really focused on that, generally getting some excellent results in the lab and pilot plant with recoveries and mass pull, both better than expected. And our fine grind looks like we're going to optimize at about 20 microns instead of 15 microns, which again is a big improvement in energy expenditure and capital expenditure. So those aspects are going well. On the water at the moment, we've got oxygen plants coming to site. So we've got ADR plant orders just finalized and under construction. So they'll be in towards the end of this financial -- they'll be in by the end of the financial year. I won't say we'll see much benefit from some of those aspects until financial year 2027. So generally, things are working pretty well. And as I discussed, this change to a straight SAG circuit for our new expanded plant allows us to effectively fully utilize the existing plant we've got, which is why we're confident that we can probably improve on PEA metrics in terms of throughput and ultimate gold production. Coupled with that, we're doing a re-optimization of our pits with this higher gold environment, and we're pretty confident we're going to see some added reserves in our known reserves coming out with a reduced cutoff grade. So all in all, things are looking pretty positive for us. Stephen Mullowney: Yes. Thank you, Richard, for that. A lot of information intake there, and it gives investors a sense of the direction and some of the news that will come out as we finalize plans. As Richard indicated, we may not utilize 1,000 tonne per day ball mill now in the SAGD (sic) [ SAG ] circuit. So per the prior press release, we said we wouldn't utilize the 3 smaller ball mills. So that means the existing circuit will remain intact as well as the new SAGD (sic) [ SAG ] circuit. So that's essentially higher throughput than we announced before, but we got to finalize that. The -- also with regards to operating cost, recovery rates are up. And the reason why they're -- one of the reasons why they're up is oxygenation and we've been using hydrogen peroxide currently and Aachen reactor will come in. And Richard, I assume we're going to get the oxygen rates even up higher than what we currently have with hydrogen peroxide. So that should, as you mentioned, lower cost as well as increased recovery rates going forward as well as the upgrades to the crushing circuit, I believe the apron feeders we put in today, which is critical for that. So that enables us to continue to operate our 2,000 tonne per day plant efficiently, both before and after the expansion. So I think that things are extremely positive, and we should see higher throughput rates this year than we've seen as well as the grade profile is going to increase. We'll get into that in a second than it was last year, given where we are in the pit. And as Richard mentioned, in any study and in any resource profile, you pick a gold price to figure out your optimal pit design and underground mining plan design. In our PEA, I believe we utilized $1,900 an ounce, Richard, is what it was in order to do that work. And so that then drives a cutoff grade. So Richard and team now are going to relook at that given we're at $4,600 an ounce now. So we'll choose a higher price there. And really, the goal is what you'll start to see is as you do that mine plan, you'll have a bottleneck in your plant and your stockpile will continually increase as you take the lower grade material and just put it on the stockpile for the end of mine life. And typically, that's what you'll see from a mine planning perspective. But certainly, the reserves and resources will go up as a result of that. So all in all, very, very positive aspects are going on, on the throughput side of things. So with regards to that, when you're looking at numbers coming through in financial numbers, we haven't utilized a $4,000 gold price in our budgets. We use a lower gold price than that. So given we are confident on our throughputs, on our recovery rates and on our gold production metrics, obviously, that should flow through to the financial metrics, and we are very hopeful that we'll be higher than we were certainly for fiscal 2025. If you look at our run rate right now, it's certainly higher, significantly higher than what was achieved in fiscal 2025, and we're doing fairly well. The first quarter had an increase in EBITDA of around $10 million versus first quarter of last year from a net basis. So all in all, doing very well. And obviously, working capital continues to increase. Our judgment is companies that have performed extremely well, have a working capital ratio anywhere between 1.75 and above 2. That certainly we'll get there fairly soon and are well capitalized to execute our plans. Anything to add to that point, Mike? Michael Leonard: No, I think that was well said, Stephen. We're well on our way, as mentioned, at $15 million positive for Q1 with an improving profile will fit deeply into that working capital metric that you just described. Stephen Mullowney: Yes, exactly. So our mine planning, a lot of people have come back to me on this particular slide and like it because the saying a picture says a thousand words, it certainly does on this particular slide and explains why we had to go through the stripping campaign last year and now we're into the pinks and the reds, the nice colors. We still got some blue colors to go through, but you can't avoid blue colors. You got to strip in order to open up the nice colors. And Richard, do you want to give just a quick overview of our mine plan for this year, what can we expect from a mining perspective as grade profile comes through. And obviously, the thickener is a big thing because we no longer will have to mix oxides in our plant, and that will increase the head grade, which increases production as well. So just give us a quick overview of what people are seeing here. Obviously, Buckreef gets nicer colors as we get deeper. Richard Boffey: Sure. Look, Generally, our focus towards the second half of financial year '25 was in that southern area to the left on that slide, where there were better grades, and that was in response to some delays to get there. This year, we've got a far more steady descent of the project of the main pit, and we'll be taking a pretty -- probably about a 30-meter overall vertical lift right across the site -- right across the pit. And that allows us a fairly even grade profile, especially for the first 3 quarters. And then we actually hit some very sweet stuff in the fourth quarter, which we'll see a bit of a boost in grade through the mine. The reason I'm stressing an even profile of about 2.1 grams, 2.2 grams is that... Stephen Mullowney: Richard, we're losing you a little bit. Yeah, mute again. Oh, we lost you. [indiscernible] So we lost you at the reason why I'm stressing an even profile of 2.1 grams. Richard Boffey: Fine. So it's helping the plant enormously having a nice steady grade profile. As Stephen mentioned, in about 2.5 months, 3 months, certainly by sometime in April, we'll have our pre-leach thickener installed, and that will enable us to probably see about a 5% lift in the mill head grade. So we'll start to see some improvements in production related to that as well. The other thing we're doing in the third quarter of this year is we're starting a new pit, the strip for the new pit, which is called Eastern Porphyry. And by the end of our financial year, we'll have faced off to have all faces in the ore blocks available to us. So we'll be, I guess, derisking our production profile in that respect as well. Stephen Mullowney: That's great. So we've gone through on the production side of things, what solidifies the pay for things. And I'm going to jump around our presentation a little bit here. And let's just go straight into what our exploration programs are envisioned to be. I do know we do have one drill rig, RC rig on site, and that's currently doing, I believe, Richard, some condemnation drilling for some of the expansion plans. But we do plan to do some exploration holes with that fairly soon and describe our diamond drill rig is -- should be on the water pretty soon and be at site, and we'll probably use some subcontract drilling as well in 2026. Obviously, everything we've described on the production side is in the Buckreef main zone. We've had a good geophysics study being completed, and we'll come to the market with that shortly. But give an overview of what our plans are around exploration. Richard Boffey: Sure. So as you mentioned, Stephen, we've got -- we've completed our first geophysical study, and it's basically highlighting interesting structures, and it's done in quite a high level of detail that hasn't been done before on this project area. So that's highlighted some really interesting targets for us. And we are -- we will hit some of those immediately with our drills. And others, we're planning to do what's called an induced polarization or electrode resistivity survey on those other ones to see if we can try and identify some deeper pyritic anomalies and therefore, we'll put drills on those as well. So across the course of the year, we're planning to probably drill of the order of about 40,000 meters of drilling in total, maybe even 50,000 to 60,000 if we get a good run at it. Stephen Mullowney: Yes. And so obviously, Stamford Bridge will be in there. Anfield will be in there. And as other people just heard, there's other areas that are looking extremely good from the geophysics survey that's being done on the site, which are not Anfield or Stamford Bridge. Is that correct? Richard Boffey: Yes, that's absolutely correct. We've got some other very interesting little structural features that we've identified that we want to follow up on. Stephen Mullowney: Correct. Excellent. So in summary, we are online our PEA. As people understand, the production profile gets quite good under the PEA. We're hopeful to exceed that. And given current gold prices, profitability looks pretty good as well. The next thing, part of our whole business plan, obviously, we've been open with this. We are in negotiations with the government. Obviously, that's a little bit slower than everybody would like, but that is the nature of dealing internationally. Things have to go through their political process. So Khalaf, why don't you just give a high-level overview of where we are in that? Come off mute. Khalaf Rashid: Yes. Thank you, Stephen, and good morning to everybody. Good evening, Richard, at the site in Tanzania with me. Yes, okay. So I mean, we all know that Tanzania has been through a difficult period. We're coming out of that difficult period, election period. So it does feel like things are normalizing. Business is getting back to how it should be. Obviously, there's some aftermath that the politicians are dealing with trying to reconcile differences and so forth. They've had -- Tanzania has been hit a little bit with international development funding. For us, it's probably a positive thing because it prioritizes mining, right? So there's a focus trying to get projects to -- new projects off the ground, existing projects ourselves to scale up as soon as possible. So obviously, that government gets more income. We've -- as we've mentioned in the previous meetings we've had; we've been busy negotiating with the government. There is -- as we all know, state participation regulations, the amendment was introduced in 2022, right, essentially framework agreements and participation of the state. We have an existing joint venture agreement since 2011. So what we're looking forward to is getting to a point where we can agree with the government better agreements, all parties, right, much more transparent, easier to operate in Tanzania, and I guess, avoiding dispute and reducing risks for investment in the country. So we're looking forward to that. Negotiations are ongoing. As Stephen says, albeit a bit slow. But in Tanzania, apparently, we're going fast. But anyway, so we do expect that I think 2026 is going to be the year that I hope things will accelerate. At least the groundwork has been done, right? The groundwork and initial discussions have been done. So we should move quite quickly. I think the last month; we've already met twice. We met in December, late December. We met last week again with our partners. So we're moving. And the expectation, like I said, possibly by the end of this year, we should have new agreements and better and more investable agreements. So -- yes, basically, in summary, that's what it is, Stephen. Do you like me to add anything else to that? Stephen Mullowney: No, no. I think, look, it's progressing. And obviously, pace and politics are different in other parts of the world versus what we would be used to in the United States and Canada. But that is part of operating internationally. I have a lot of experience around this, and it has to go through its political departments and get to the right spot where decisions could be made. And I think we're at that spot, and we will hopefully be able to progress it with a little bit more pace than we've had before. Our agreements are a little different than what you see in other companies there. Other companies are looking to put properties in production, so they go straight to the framework agreement. We are dealing with an existing joint venture to switch to framework agreement terms. And in that, obviously, we're looking to basically put the agreements into better agreements than what we currently have for both sides, both for us and for the government, and that has been well communicated. So I think we'll come out the other side for us and for the government in a much better win-win situation. Khalaf Rashid: Yes. No, absolutely. Perhaps I should add also that we are engaging with our embassies here locally. And they're weighing in and they're obviously quite involved as well in this process, working with the government to try and get all these things over the line as soon as possible. So... Stephen Mullowney: Yes. And that's both the American and Canadian... Khalaf Rashid: Canadian, yes. Stephen Mullowney: Yes, both American and the Canadian embassies. And when I was in Tanzania in December, I visited with both of them. And it -- both are pro-investment; pro-stability is what I would say. All right. So with regards to us, I'm going to open up the floor now in the second and last part as I'm going to go through valuation. Obviously, we are starting to move up our chart somewhat as we continue to produce good financial results, recapitalize the business internally and the market gets a sense of where we're going with our business plan and expansion plan. So I fully expect, hopefully, as we continue to execute and execute successfully, we continue to move up that chart. We have looked at a lot of metrics of what the market is looking for and have orientated our business plan towards that -- towards those metrics. I do think we have a huge chunk of warrants coming off on February 11, $0.80 warrants and then a year later, it's the $0.44 warrants. I think we will get into a spot where the overhang of those warrants and capital structure on the equity side becomes a lot cleaner. I think that will be a positive for the stock as well. So all in all, things are going fairly well. TRX is in a good position. We are generating good cash flow, particularly at $4,600 gold, reinvesting that cash flow into the business. We did our last capital raise over 4 years ago and raised net $20 million, and we're probably going to get to a mining property that could produce 80,000 ounces to 100,000 ounces plus of that $20 million, which is I don't think it has been done anywhere. And right now, the gross investment into the asset has been around $70 million off of that $20 million. So that ratio is well over 3x now and continues to grow. We're looking confident. you're hearing the confidence in our voice. I think there's a lot of upside in the exploration side as well. And there's even upside in revising our mine plan. So we're a self-funding growth operation, both on the production side, cash flow side and resource side. So looking -- yes, we're fairly confident. So I'll hand it back to the moderator for questions. Operator: [Operator Instructions] And today's first voice question comes from Heiko Ihle with H.C. Wainwright. Heiko Ihle: The larger processing facility, can you walk me through potential bottlenecks during like when it actually ramps up? And also the impacts on the labor force, how many extra staff do you think you'll need? I assume once this is up and running, it's a limited number. And then maybe if I could just throw in one more, the guess for the -- your best expectations for what you'll pay for labor this year. Stephen Mullowney: I'll hand that back over to Richard. I assume the -- I'll answer the last part of the question. I assume that you're looking at labor as inflationary pressures. That your real question? Heiko Ihle: Correct. Well, also I mean, it's presumably going to be more people. But yes, that's the idea. Stephen Mullowney: Yes. So I think Richard will answer that question more around what we expect processing cost per ton to be versus labor rates. We haven't seen a lot of inflationary pressure on labor rates in Tanzania. But certainly, versus what you've seen elsewhere, there is some, but it's not to the same extent. So Richard, do you want to answer the first part of the question? I think you're on mute again. There we go. We're having some difficulty hearing you, Richard, today. You're on mute. Richard Boffey: How about now? Did you hear now? Stephen Mullowney: Yes. Richard Boffey: Fantastic. Okay. Very quickly on labor. Labor is not particularly increasing significantly. It's more exchange rate affected than anything else at the moment. We've had a pretty stable sort of 36 months here. As we upskill our people, obviously, we remunerate them a bit better, but that will result in slightly reduced workforces. The expansion will increase total workforce but reduce unit costs and overall labor increments relative to what we're seeing at the moment. The underground aspect of the project is not that labor-intensive compared to what we're seeing in the open pit at the moment. We're looking to have quite an efficient contractor-run underground mine, probably only employing a maximum of 300 operators and maybe another 50 staff. So it's not going to be a huge increment, not like some of the other African mines where you're seeing thousands of people employed. I don't see labor being a big driver of [indiscernible]. Stephen Mullowney: Okay. Thank you, Richard. Does that answer your question, Heiko? Heiko Ihle: Yes. Thank you. Thank you, Richard and team. And then also figure 8 on Page 7 of the press release, I mean, if you just sort of look at it like from a 20,000-foot view, there's a lot of high-grade material center, right? Given -- and it seems to be getting even better as you go deeper. Just conceptually, when should we expect that to get mined? And is it going to be blended in a way that, that impact will be muted? Or will there be, call it, a quarter or 2 with substantially above mine fine grades? Stephen Mullowney: Yes. So Richard answered that question earlier in the presentation that head grade will go up as we get into -- put in place the thickener. So the thickener enables us not to have to mix lower-grade oxides with the higher-grade sulfide material. And as the pit goes down deeper and we get into the underground portions, you'll see the head grade change in our PEA, and there are peaks in there, obviously, as a result of the increase in head grade. Operator: [Operator Instructions] As we wait for any other verbal questions to come through, I can turn it over to you, Steve, there are some text questions that came through. Stephen Mullowney: Yes. So there's some text questions, so I'll get into those. The first one is, could you explain what brought the plant utilization rate from 88% to 90% in hopes that I have a related question, are there any plans to place a lower strip ratio from 5.8. Thanks for taking my 2 questions. Great results this quarter. So on the first one, the utilization has gone up a little bit. Look, there's been a large focus on preventative maintenance and also bringing in a lot more spares on a working capital perspective. Both of those have had a positive impact on plant utilization. Richard, anything else to add to that? Richard Boffey: Look, only that we're getting this process plant a little bit better organized. We've brought some expatriate expertise for consulting and management to improve our reliability-based maintenance planning. Stephen Mullowney: And then with regards to the strip ratio, the strip ratio is really determined by the mine plan. And the mine plan has the figures in it I just mentioned. One is gold price, one is recovery rates, one is mining operating cost. And what then the mine model is doing is you want to maximize net present value and cash flow. And so with regards to the strip ratio is down, strip ratio will go up and down depending on how much ore blocks you're getting versus strip blocks in that or waste in your mine plan. So given that we're now getting -- when you see stockpiles increasing, that means your strip ratio is generally going to be lower. When you're drawing on your stockpile, generally your strip rate is higher. So what we generally look at as miners is a life of mine strip ratio. So life of mine strip ratio is going to be higher than 5x because that's the nature of the deposit, particularly at $4,600 gold, you'd want to in order to maximize cash flow to have a higher strip ratio in this deposit than that. When you have what I'll call a crossover point, and that's when you go underground because it's more costly to strip than it is to have underground development. And so the strip ratio is consistently changing. With regards to the second question, the TSF3 is listed as taking 1 quarter to build later in fiscal 2026. What are the risks of completing this on schedule given? So Richard, take people through TSF3. Obviously, you and I were discussing this earlier on this morning. We are doing a lift to TSF2 and then doing TSF3. And TSF3 then removes almost all tailings risk because it will be predominantly for the life of the mine. So just take people through the process on this. Richard Boffey: Sure. So we're -- we're in the full swing of design and assessment of our major TSF3, our life of mine facility that's based upon holding all of the PEA material that we're planning to mine. We're -- in terms of risk, we've made the decision to put in a third and final lift on our current TSF2.2. That will buy us another quarter or 1.5 quarters. And that really gives us till probably the first or possibly the second quarter of FY '27, which should give us plenty of time to build this full facility. So we're basically committing to the expenditure of a full life of mine tailings project in one construction effort. And basically, we're doing that for the economy of scale in the area of basically everything that we dig out, we put into walls, and it's a very even match. So we're not importing a lot of material. And that will probably take us about 5 months to complete construction, and we've probably got another month of permitting and final design to go. Stephen Mullowney: Excellent. Thank you. So it's well in hand is the answer to the question. The next one is, Stephen, can you provide a view on 2026 initiatives to further promote TRX and its stock? We'd like to see more high and ultra-high-net-worth investors understanding the value and investing in the company, particularly given the strong operational performance. Please advise. So with regards to marketing, we do have a couple of marketing firms that have been hired on our behalf, out in the market, approaching a lot of what I'll call retail brokers, high-net-worth individuals as well as institutional investors. And that has brought in a lot of meetings. Also with regards to the performance of the company, that has gotten the eyes of a lot of investment banks who have also brought forward a lot of institutional investors. The challenge, I would say that we predominantly have is most people in the mining industry are used to getting discounts through private placements. And we're not offering that. We're offering if you want exposure to our stock and our growth story, you can purchase in the market. And so a lot of the institutional investors have the option of going in -- there's a lot of capital raises happening, going into other stocks on the capital raise or purchasing ours in the market without a discount. And we're going to hold the line on that because we want to hold the line on and believe that not increasing the share count by our choice is more beneficial over the medium to long term. So you may not see the shareholder base change as quickly as you would like as a result of that philosophy, but we're going to hold the line on that. With regards to marketing as well, we do quite a bit of marketing in what I'll call small to mid-cap conferences now in the United States, as well as a couple of mining conferences. So in the small to mid-cap conferences, dovetailing that with the 2 marketing firms that we have -- actually, we have 3 marketing firms on board. We do find a lot of shareholders that fit what you're describing around high-net-worth individuals. And that's been a successful avenue for us to find new shareholders. So those are the initiatives. It is certainly a top-of-mind initiative. Anything to add to what I just described, Mike? Michael Leonard: No, I think you said it well, Stephen. I mean as you mentioned, we are heading into conference season here and I have 3 conferences in the next 4 weeks, and our calendars are already full with a fairly large slate of high-net-worth and institutional investors that have -- to help answer the question, take an interest in the results that we're starting to generate. So there is active interest in the market. And over the next few weeks, expect to get in front of some prospective shareholders. So stay tuned. Stephen Mullowney: Stay tuned, yes. I think that's it for the questions, operator. Operator: Yes, that is correct. There are no further voice questions at this time. Stephen Mullowney: Thank you. Well, thanks, everyone, for joining the Q2 -- sorry, Q1 conference call. Results are good. They continue to grow. We are on side our business plans for expansion, utilizing free cash flow. Exploration results will come further on later in the year. As Richard mentioned, we're looking to do well over around 40,000 meters of drill holes. We have also more prospective targets than just Anfield and Stamford Bridge to go after. And we're all excited for what the future lies at Buckreef in Tanzania. Thank you. Asante sana. Operator: This brings to a close today's meeting. You may now disconnect. Thank you for participating and have a pleasant day. Stephen Mullowney: Yes. Thanks, Richard, and Khalaf for joining from Tanzania.