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S&P 500: Best Case Scenario? Another Failed Rally (Technical Analysis)
Operator: Welcome to the Imdex Limited First Half '26 Results Presentation. [Operator Instructions]. Press the Documents icon to see copies of today's announcement and presentation. Select document to open it, you can still listen to the meeting while you read. [Operator Instructions] I will now hand over to IMDEX Managing Director and CEO, Paul House. Paul House: Welcome, everyone, to IMDEX's results for the first half of FY '26. Today, I am joined by Linda Lim, our Chief Financial Officer; Shaun Southwell, our Chief of Exploration and Production; and Michelle Carey, our Chief of Digital Earth Knowledge. The first half has been a record for IMDEX and has featured some outstanding results across all facets of the business, and I'm delighted to be able to share with you the detail that has delivered this result. Throughout this call, we will be referring to the 2026 half year results presentation released on the ASX this morning. At the conclusion of our presentation, along with Linda and myself, both Shaun and Michelle will also be available for questions. Our agenda on Slide 3 outlines the focus areas for today. We will walk you through our record first half performance. We'll provide an operating outlook for our major regions around the world, and we will recap our corporate strategy and the key focus areas as we look ahead. Bringing your attention to Slide 5. At IMDEX, our purpose is to efficiently and sustainably unlock the earth's value by enabling customers to find, define and optimize the subsurface environment with confidence and speed. We achieve this through the development and deployment of technology that drives smarter, faster decision-making for our customers. While our heritage is in mining, our technologies are increasingly being applied across the broader earth science end markets. Critically, our technologies first originate subsurface data and then enrich it by delivering that data to our customers wherever they are in the world through software solutions that allow them to make that next decision. The MINEPORTAL visualization on the slide in front of you demonstrates how we bring our purpose to life, turning complex subsurface data into real-time insights that drive better decisions. So let's turn to Slide 6, where we can speak to the strong financial highlights for the half. Our 1H '26 financial performance was the strongest first half in IMDEX history. We delivered record revenue, record EBITDA normalized and [Technical Difficulty] NPATA normalized $247 million was up 16% on 1H '25. Importantly, this growth has been led by strong market share gains and supported by an increase in exploration activity on established projects across all regions. Later in the presentation, we'll expand upon where our strategy and our technologies continue to create further opportunities for growth, both within mining and the adjacent earth science markets. Normalized EBITDA increased 22% to $78 million, with margins expanding 32%, a clear demonstration of the operating leverage [Technical Difficulty] that is in line with 1H '25 at $74 million, noting that the 1H '25 result included a one-off gain of $9 million. These results reflect positive demand for all products in all regions. They are particularly strong and pleasing results having regard to the ongoing industry challenges. That includes both geopolitical uncertainty and the rising cost environment I referred to earlier. Turning now to Slide 7. Cash discipline remains an ongoing strength of our business. Normalized cash conversion was strong at 86%, evidence of our disciplined working capital management while delivering on the growing demand for our next-generation sensors. Net debt increased to $27 million following the completion of the Earth Science Analytics acquisition in August. Our leverage ratio at period end was just 0.2x. We clearly have ample capacity and have used that capacity to fund the Datarock, ALT and MSI completions post the half year end date. And finally, the Board has declared an interim fully franked dividend of $0.0169 per share, consistent with our approach to capital management being a 30% payout of NPAT normalized. This is a record interim dividend for IMDEX shareholders. Turning now to Slide 8 and the strategic highlights for the half. Starting with Drill Site Technologies. IMDEX continued to strengthen its position as a global leader in drilling optimization and downhole intelligence [Technical Difficulty] per $100 of exploration spend, up from $2.10 in 1H '25 and $2.20 for FY '25, reflecting the continued adoption of IMDEX's integrated solutions. Our Integrated Field Services, which is a combination of Directional Core Drilling and IMDEX Managed Solutions, saw its revenue increase by 28% on pcp. Notably, our operating footprint grew by 12% globally as new customers adopt the Integrated Field Services model. Our HUB-IQ connected revenue, which highlights the strong connection between our hardware sensors and our software solutions to form that integrated system grew by a very pleasing 22%. Our Mining Production segment continued to scale with IMDEX Mining Technologies revenue up 47%. This was led by faster growth in underground applications and extending IMDEX's presence further downstream into that mining life cycle. Within Digital Earth Knowledge, our Datarock business grew 90% on pcp, reflecting strong demand for AI-enabled geological interpretation. Completion of the Earth Science Analytics acquisition strengthens our overall AI-driven geoscience offering with the EarthNET platform being highly complementary to our HUB-IQ and Datarock applications. I'll now hand over to Linda, who will take us through the key financial metrics and performance drivers for the half. Linda Lim: Thanks, Paul. Turning to Slide 10. I'll focus on the quality and sustainability of the first half financial performance. In 1H '26, we normalized our results for nonrecurring integration and transaction costs associated with the acquisitions of Earth Science Analytics, Datarock and Krux. Before stepping into the detail in the following slides, I'm pleased to highlight 3 outcomes that reflect the strength of our operating model. First, a record normalized operating cash flow of $67 million; second, a record interim fully franked dividend of $0.0169 per share; and third, a low leverage ratio of 0.2x following the ESA acquisition. Importantly, had we not acquired ESA, the group would have ended the half in a net debt cash position, having fully repaid the debt used to fund the Devico acquisition in under 3 years. Turning to Slide 11. As Paul outlined, half year revenue of $247 million represents a 16% increase on pcp, continuing IMDEX's track record of outperforming underlying exploration markets. Sensors, services and software is up 20%, representing 68% of group revenue. This continues the fast growth of our higher-value, higher-margin solutions. Sale of goods grew 9% with strong growth in fluids, which is tracking above market growth. Over the past 5 years, IMDEX has delivered a revenue CAGR of 15%, nearly double the growth rate of global exploration budgets, underscoring the resilience, scalability and structural strength of the IMDEX business model through the cycle. Turning to Slide 12. Our record first half revenue was driven by growth across all regions. Americas are up 20%, driven by strong U.S. activity and expanding operations across South America and Canada. Canada saw the biggest drop during the downturn, and activity there is still around 20% below its prior peak. Funding conditions have improved and the full benefit of increased activity is still ahead of us. APAC is up 9%, underpinned by strong sensor demand in Western Australia and signs of recovery across Asia. Europe, Middle East and Africa is up 17%, supported by technology-led growth and increasing adoption of Integrated Field Services. Importantly, the Americas and Europe, Middle East and Africa both delivered record first half revenue. Turning to Slide 13. Normalized EBITDA increased 22% to $78 million with margins expanding to 32%, a clear demonstration of the operating leverage that is a feature of our business model and disciplined cost management. Our discipline around cost management -- sorry, is in 2 key areas: First, reorganizing our operational spend to make existing operations more efficient and scalable; and second, continuing to invest in the areas that support growth and responding to expanding customer demand. Turning to Slide 14. There are 3 key messages I'd like to highlight on R&D. Firstly, we have continued to invest consistently in R&D through the cycle, and that sustained investment is clearly reflected in the performance delivered this half. Second, our R&D program is strongly customer-led. Projects are prioritized based on customer needs, and we retain the flexibility to adjust investment as those needs evolve. And third, our focus in 1H '26 has been on HORIZON 1 initiatives, continuing to build out our sensor and digital ecosystem with machine learning solutions increasingly embedded directly into customer workflows. Our disciplined approach to R&D investment and capitalization remains unchanged. We ensure clear pathways from innovation to commercial outcomes. Moving to Slide 15. We are sharing the capital expenditure by half year for the first time. Our intention is to highlight 2 key things. First, forecast and deliver into customer demand for current and next-generation sensors that will deliver revenue in the near term. We can clearly see this in the slide with the increase in CapEx for 2H '25 and the resulting step-up in revenue realized in 1H '26. Second is to show the blend between our capital investment in sensors and capital investment in software, again, in response to customer demand. This is increasingly important as customers take system. Turning to Slide 16, where we delivered operating cash flow of $65 million, resulting in a strong normalized cash conversion of 86%. This outcome reflects disciplined working capital management while supporting double-digit revenue growth and increased deployment of next-generation technologies. We closed the period with healthy liquidity and a $49 million cash balance, providing the flexibility to continue investing for growth, fund innovation and acquisitions and maintain our balance sheet strength. Importantly, this level of cash generation underpins our ability to execute the strategy while preserving capital discipline through the cycle. Turning to Slide 17. Our balance sheet remains strong. Returns have continued to improve with higher ROE and ROCE. However, I do note that 2H '26 will reflect an increase in acquired intangible assets. This balance sheet strength provides the flexibility to fund growth initiatives, including the completion of the Datarock, ALT, MSI and Krux acquisitions in 2026. Turning to Slide 18. Our capital management is underpinned by strong operating cash flow, disciplined investment through the cycle and a consistent 30% payout of normalized NPAT. This provides flexibility to reduce debt and reinvest in R&D, capital expenditure and selective M&A whilst balancing growth and shareholder returns. I will now hand back to Paul. Paul House: Thank you, Linda. Turning to Slide 20. I'd like to spend some time sharing the current outlook in the major regions around the world. The Americas remain IMDEX's strongest engine of growth, delivering record first half revenue. In North America, activity continues to be supported by extended drilling programs, particularly in the U.S. market, where near mine and brownfields work remains resilient. The FAST-41 program is improving project visibility and demand for integrated solutions that improve drilling productivity, which continues to grow. As Linda mentioned, activity in Canada is improving, yet remains well below its prior peak. However, the improvement in junior funding conditions over recent months is encouraging. Exploration programs are therefore increasingly well-funded, and we expect this to translate into higher drilling activity as the year progresses, most likely in the back half of calendar year '26. South America continues to operate at elevated levels, driven primarily by copper. Chile, Argentina and Peru remain very active, supported by long-term energy transition fundamentals and gold activity is on the rise, although cost pressures are leading to the demand for productivity-enhancing technologies, which is favorable to IMDEX. Overall, the Americas remains the most attractive market for growth as we look forward, driven by a combination of critical metals, government policy and that demand for improved productivity. Moving to Slide 21. In Europe, activity is supported by brownfields exploration and policy-led investment, covering defense, resources and infrastructure and therefore, a demand for metals. While Scandinavia remains slightly softer, this is being offset by growth in the Balkan region, where demand for drilling optimization is leading the majority of conversations with customers. In Africa, near-mine work for major miners, predominantly gold and copper, is driving the growth. While parts of West Africa remain challenging, this continues to be offset by emerging opportunities across Zambia, Eastern Africa and Saudi Arabia. Moving to Slide 22. Western Australia continues to show strong gold drilling activity, partially offsetting softer conditions in Queensland and New South Wales. The adoption of IMDEX mining technologies remains strong, and the pipeline for Integrated Field Services continues to build in this market and has significant headroom ahead of it. Importantly, the focus for Australian customers is a combination of productivity and real-time decision-making. This, in turn, is driving adoption of our next-generation sensors and our integrated HUB-IQ solutions. Outside of Australia, activity in the rest of Asia has been low for a long period of time. Increasingly, the outlook is positive, and this presents significant headroom for growth in this part of APAC. Turning now to our strategic outlook on Slide 24. Industry signals have continued to improve since our October AGM with key macro indicators strengthening. The supply/demand imbalance that sets the scene for exploration demand remains firmly in place as does the overall decline in proven reserves. That in turn is forcing exploration deeper and into more complex ore bodies, structurally increasing the need for advanced subsurface intelligence, most evident in commodities like copper, where supply is tightening despite the strong demand. M&A activity, including consolidation in the gold sector, is reinforcing industry momentum, and this is expected to act as a catalyst for future exploration activity. That said, overall exploration budgets remain well below prior cycle peaks. However, visibility is increasingly improving. We expect exploration budgets to increase by double digits in the calendar year 2026. Capital raisings have increased significantly across junior intermediate explorers. And remembering there is a typical 6- to 9-month lag between funds being raised and drilling activity commencing. We, therefore, expect a step-up in exploration activity through the back half of calendar year '26, subject, of course, to geopolitical and regulatory constraints. For IMDEX, these signals all point towards a continued strengthening in global exploration activity. We would regard 1H '26 as the swing period where we have moved from 3 years of decline in exploration towards a net growth in drilling activity. We are already seeing this uptake on established drilling programs. And at IMDEX, our sensors on hire are increasing across all regions. In summary, industry signals continue to align in support of higher market growth ahead. This higher growth in the exploration drilling market from Slide 24 connects to the right-hand side of the image on Slide 25. IMDEX's ability to deliver growth regardless of market conditions has been a strategic priority and a highlight of our progress in recent years. We have achieved that through strong progress in the 3 levers that we control outside of general exploration market activity. First, our growth in the share of exploration spend. By expanding our offering through targeted R&D, complementary M&A, and embedding AI across our physical and digital portfolio, we have been able to increase our share of exploration spend. Second, our market share. Driven by having technical leadership in each product family, which is reflected in the uptake of our next-generation of sensor technologies, and our ability to deliver fully integrated hardware-software solutions. Third, market expansion. Both geographically and into the Mining Production market segment and further afield into adjacent earth science markets. We continue to expand geographically with our global network presence continuing to grow to support customers where they operate in the world. These 3 pillars work to drive growth regardless of market conditions. As we look forward, our recent acquisitions complement all 3 of these growth pillars. Finally on Slide 26, I would like to draw together the key elements that position IMDEX to deliver sustainable returns. First, we have a market-leading, integrated physical & digital system, with technologies that work together to meet customer needs and embed IMDEX deeply into workflows. Second, we deliver high quality earnings supported by a technology led, capital light model, delivering structurally higher margins, exhibiting strong operating leverage and consistently high cash conversion. Third, our disciplined investment through the cycle has been a long-standing feature of our business and has again delivered value in the most recent period, while positioning us to benefit from a multi-year exploration upcycle that is ahead of us. Together, these strengths underpin IMDEX's leadership position and support the continued growth of a high quality, scalable earnings base. That concludes our presentation today and will hand back to the moderator for Q&A. Operator: [Operator Instructions] Our first question comes from Nicholas Rawlinson from Morgans. Nicholas Rawlinson: Congrats on the results. Sensors and software revenue was up 15% in the first quarter, and it's now up 20% for the half. So that implies around 25% in 2H. Is that a good way to think about the exit rate in tools? And just for fluids, now that we're lapping comps where those large contracts, which finished are out of the picture, is that also a useful proxy for fluids growth going forward? Or are there sort of different dynamics to call out in the fluids business? Paul House: Yes. I might -- thanks, Nick. I might start with your second question first. We've always said that we thought fluids was more directly responsive to changes in actual drilling activity. And so I think you're right now that those -- we have lapped those comps where we had a couple of significant contracts come off. I think looking forward, the drilling outlook or the drilling optimization outlook looks pretty solid. Of course, beyond fluids, we think of drilling optimization is including the DCD side of our business, which is obviously exhibiting much stronger growth in the half. The sensors revenue, I think, is a combination of the growth in activity, but also the next-generation technologies coming through. And so that pace can be not quite so linear. It can have to do with how quickly the size of projects that are taking on new technologies, but we still expect it to be pretty strong as we look forward. So double digits is pretty safe. So somewhere in between that 15% and 25% that you called out. Operator: The next question is from Evan Karatzas from UBS. Evan Karatzas: Can I just ask one around the headcount, please? Pretty impressive keeping that up to just like 2% first back in June, just given the revenue growth you're delivering. Just keen to talk through how you're thinking about headcount now for the second half, including obviously the acquisitions that are coming through, just the core IMDEX business, that outlook for headcount? Paul House: Yes. Okay. So I think we mentioned at the FY '25 result that we had been continuing to be trimming the business, including a slight reorganization to set up for Drill Site Technologies and Digital Earth Knowledge as we finished FY '25. And so that headcount discipline is partly a reflection of the work taken at the back end of FY '25. There -- we do add heads, of course, as we bring in the recently acquired companies. And I think the previous announcements show what that margin profile looks like. We can provide a bit more guidance later on around the FTEs that are being added from those acquisitions. Within the core business, however, we will continue to add people in customer-facing roles, sales roles, service roles in response to the market demand. But obviously, we get good leverage in that business model being predominantly a dry hire business. So without giving you a specific on the number of heads, we think about it in terms of what is the incremental headcount we need in the core business, what is the additional headcount that comes from M&A, but the rest of the business should have good leverage. Evan Karatzas: Yes. Okay. That was what I was trying to get to, right? You should expect some decent growth [Technical Difficulty] in the second half. Paul House: Yes, that's right, Nick. Evan Karatzas: Okay. And then just around the juniors, you obviously made some interesting comments regarding the raisings, but it's also yet to be seen on the ground. Do you want to just run through how you're thinking about the juniors coming into the market over the next 6 to 12 months and how IMDEX is preparing for that given it's been a pretty benign environment. You sort of shifted the business a fair bit away to the majors. Just how you're thinking about their contribution in the next 6 to 12 months? Paul House: Yes. I might answer that first, and we have Shaun Southwell on the call, and I'll get him to add a further comment at the end if I've missed anything. But certainly, we've seen the initial uptake being on established projects where there are clear targets, there's established permitting and adding extra drill rigs onto established projects is slightly easier. The junior capital raisings have set records month-on-month for a period of time coming through that sort of July, August, September period. Historically, it takes 6 to 9 months for that to go into the ground. And so we haven't really seen a significant uptake in that area yet, a little bit in WA, a little bit in Canada, but really not reflective of the amount of capital raisings. So I think that upside is all ahead of us. Canada today is circa 20% below its prior peak still. And if that gives you some indication of the headroom ahead of it. I think the only caution we have around that 6- to 9-month lag is simply around a lot of boardrooms are just a little cautious around deploying capital with geopolitical uncertainty. So if they can deploy it closer to home, that's fine. And although there's been a lot of talk about removing or improving regulations and environmental restrictions, we're not seeing a lot of that play through very quickly. We think the intent is real, but we just think that this -- it's still a bit near term, and there's still a little bit of risk that, that holds up deploying some of the capital. Other than that, I think it's just that 6- to 9-month lag coming off Q1, Q2 raisings will play through later this year. I probably should have handed over to Shaun then in case there was actually another comment you wanted to add. Shaun? Shaun Southwell: Yes. Probably the only other one would be a lot of the junior activity, particularly in Canada, is in BC. When the raisings came through, they're still waiting for their season. So their seasonal start as they come into the Canadian summer where this time of year, they don't do a lot of activity in the BC region. So we are seeing those delays and then you've still got to take into consideration the seasonal timing as well. Paul House: Yes, good point. Thanks Shaun. Operator: Our next question is from Mitchell Sonogan from Macquarie. Mitchell Sonogan: Apologies, I've just been jumping between a few, so I missed a few of your comments earlier. Just in terms of the EBITDA margin at 32% there, can you maybe just give us a thought of how you're thinking about that in the next 6 or 18 months or so? Clearly, you're expecting to see a stronger uptick in industry activity. But I guess you've previously talked about maintaining it around these levels here. So yes, just keen to understand how you're thinking about that in terms of up cycle versus ongoing growth in the business. Linda Lim: Thanks, Mitch. So the way -- when we came out of the FY '25, we did say that FY '26 is really a transitional year for us, especially with the cycle turning. So we always say about 30% EBITDA normalized margin is our guide for FY '26. We have realized operational leverage uplift for the first half, and we'll continue to obviously look at our OpEx cost base and making sure we're making good inroads in terms of keeping that disciplined approach and scaling our business. However, we are really conscious that we do -- the growth is happening and especially in our Integrated Field Services area. So we will need to invest, as we had alluded to at the end of the last financial year into our labor resources for that revenue. And also with the acquisitions coming in, there is a bit of margin pressure just purely due to the nature of those businesses. Mitchell Sonogan: Yes. And probably a pretty similar question really just for the Americas revenue up 20%. EBITDA margins were broadly flat. Any color you can give to the outlook in that region in terms of the revenue growth versus ongoing costs you might have to put into it to support that growth? Linda Lim: So the cost initiatives and cost discipline occurs across all of our regions, Mitch. And so we are looking to that scalability globally. And with Americas growing, obviously, we will be looking for making sure we've got the right resources and the right infrastructure to make sure we can deliver into that high revenue opportunity. And so yes, but there will be scalability opportunities across the whole globe. So we would be -- I'd be reluctant to guide anything different at this stage. Paul House: I think as I said -- I did make a comment on the call, Mitch, that we did see the Americas and, in particular, the U.S. still presents probably one of the most attractive growth markets for us looking forward. Operator: Our next question is a written question from William Park from Citi. Could we get some sense around competitive dynamics across your footprint and businesses as exploration levels continue to trend upward? Paul House: Yes. Thank you. Thanks, Will. Look, the broad statement I would make is probably 3 things. We don't think the overall competitive landscape has shifted too significantly. Importantly, we do continue to win market share, and we have some very good internal numbers that support that. But as we look forward, we expect that competitive intensity to remain. I think we are heading into, hopefully, a pretty attractive environment. And certainly, the industry's demands for -- or the cost pressures that it faces is going to see a focus on things like productivity. So I expect it will be -- the customer-led side will be seeking technologies that somehow speak to improved productivity, and that opens up the market for both IMDEX, but also its competitors wherever that can be demonstrated. That's not a bad thing. That's a good thing. Operator: A second question from William Park from Citi. How are you thinking about earnings trajectory with the strengthening AUD for the remainder of FY '26? Linda Lim: Yes. So there's -- yes, thank you, Will. There's definitely headwinds when it comes to FX. So with the strengthening Australian dollar, as we've spoken to before, our FX exposure on the revenue side is 50% U.S. dollar or U.S. dollar-linked revenue. So that will create quite a headwind for us. We -- our usual FX management structure remains in place, and we'll continue to monitor it. I think for the second half, the rough exposure for us on AUD/USD revenue exposure is about $1.5 million for 1% movement in the FX rate. Operator: The next question is from Gavin Allen from Euroz Hartleys. Gavin Allen: Congratulations on the numbers. Look, apologies if you've discussed this, I have been hopping around a little bit as well this morning. But you didn't -- you mentioned growth and in particular, in front of market growth in established projects. I'm just wondering if you could provide some flavor on the opportunity or the headroom available to you outside of established projects and what you -- how we think about the go-to-market plan on that front? Paul House: Yes. I think to be very clear, we have a footprint anywhere in the world where our customers might want to go, whether it's greenfield, brownfield, et cetera. So our network is well positioned to meet the demand wherever it comes from. The distinction between established projects is really to say that the ease of increasing rig activity on projects that are already drilling targets and you're just adding -- already have permitting, already compliant with whatever the regulations are, adding rigs on those projects -- established projects is a little faster. And so both juniors and [Technical Difficulty] intermediates and major projects or continuing to increase established projects. And so it really comes down to what the exploration budget focus looks like for intermediates and majors, which we expect S&P to publish some commentary on in the first week in March. And it all comes down to how quickly juniors do deploy what has been a period of record capital raisings. That's the headroom, I think, if that answers your question. Operator: The next question is from Josh Kannourakis from Barrenjoey. Josh Kannourakis: First one, just with regard to the split in terms of customers. Can you talk a little bit more, especially in North America about some of the success you've had with regard to going direct with the resource companies? How much that's had to play with some of the growth in that region in terms of taking a broader solution and whether you think that model is replicatable to that extent in other regions of the world over time? Paul House: Yes, I might answer that initially, and then I'll hand over to Shaun Southwell again. I think, very important, we recognize the drilling customer group as a distinct group and the resource customer group as a distinct group. Our portfolio of solutions can add value to each. Historically, what we have felt we've missed is where we had resource company-specific solutions to unlock value, we have been underweight in that area historically. But all of those integrated solutions that we've been talking about, the IMS portfolio, requires a collaboration between IMDEX and the driller and the resource company. And that is how we've been looking to advance that market. That started in the U.S., as you pointed out. Shaun and his team have already expanded that to other regions around the world. I think I'll ask Shaun to speak to what we've seen out of that 16% top line revenue growth. I think Shaun has some guidance on how much of it was that Integrated Managed Solutions offering. But Shaun, can I throw to you? Shaun Southwell: Yes. Thanks, Paul. Yes, we see activity pretty much in all of our regions around IMS. It's very dependent on the drilling conditions the customer is experiencing, which is why in the Americas, both in North and South, it is a strong business model because of the difficulty in drilling conditions there compared to places like in Australia or in Africa, where the complexity of the geology is far less. We've seen a double-digit growth in our field services, I think more than that actually, probably closer to 25% growth in our field services, and we expect that to continue. That's a combined of our IMS and DCD, which is actually when we completely supply all projects with all the technologies. Paul House: Yes. Thanks, Shaun. I think it was -- 28% was the Integrated Field Services uplift. Josh Kannourakis: That's great. Appreciate it. And second question, just with regard to CapEx. Obviously, there's a few moving parts given the additional new businesses in there. But Linda, would you be able to give us some context of how we should be thinking about maybe the core IMDEX business CapEx profile that you're thinking about into the second half and into '27? Linda Lim: Yes. Sure, Josh. So the CapEx guidance we gave remains whole. So we expect to see the second half to be consistent with the first half in terms of that CapEx. Josh Kannourakis: Got it. And just in terms of underlying that, like you mentioned the new products. I guess I'm just trying to understand a little bit more in terms of where you're spending the dollar and how we should be thinking about what's going in terms of new higher-margin products versus maybe some of the existing core and how much is available, I guess, within the existing fleet that you've got that isn't utilized at the current point in time? Linda Lim: Sure. So the way we think about CapEx at the moment in terms of the spread is we usually have about 20% is general CapEx. Then we say there's about 40%, which is growth CapEx and the rest is sustaining CapEx on the existing tool fleet. Operator: The next question is from Jakob Cakarnis from Jarden. Jakob Cakarnis: Just 2 for me, please. Could you just talk to the earnings skew that you're expecting for FY '26, just noting typically, you'd had a first half weighting at least over the last 2 years. But if I go back to the prior cycle, you've actually had stronger second half than your first. Could you just make some commentaries around that? Obviously, M&A will come in for a full contribution in the second half, too, please? Paul House: Yes, I'll start, and I'll hand over to Linda. You're quite right. So during the 3 years of exploration down cycle, H1 was stronger than H2 being reflective, I guess, of that down cycle. And you're right, in an up cycle, H2 is normally stronger than H1. And so as we go through -- we do think that the H1 '26 is a little bit of a swing period as we come out of that 3 years of decline. So I think we are sitting here despite some of the -- there's still some uncertainties as you go through that swing phase, but we would expect us to resume a period where H2 is stronger than H1. Could you add to that Linda? Linda Lim: I would -- no -- consistent. I mean, we still are expecting seasonality, though as well. We would normally expect to see Q3 to be consistent with Q2 and then Q4 to see that step up as we run into FY '27. So our seasonality guidance still holds. Paul House: And I think in terms of the acquired businesses, our focus is always -- and we're very consistent about this. Our focus is always in year 1 to not put too many demands on top line revenue growth. The value unlock comes from a very deliberate focused integration of the teams and the products and the networks, and that sets the tone then for growth in years 2 and 3 onwards. And I think there's only -- can you -- do you want to refresh on the number of months, where... Linda Lim: Yes. So we provided -- when we announced ESA and also ALT and MSI, we provided guidance as to FY '26 revenue contribution. And so also as Datarock and Krux are fully owned, and so we'll see their results actually instead of being in the share of associates line, it will be throughout the P&L. And so you'll see Datarock will bring 5 months of contribution and Krux bringing in 3 months of contribution going forward. Jakob Cakarnis: And just while you've got the mic, just on the working capital swing, I know you [Technical Difficulty] on cash conversion. Does that working capital unwind through the second half? And do we get back to kind of levels that you guys see historically, please? Linda Lim: Sorry, Jakob, I missed the first part of that question. Could you please repeat? Jakob Cakarnis: Okay. My headphones just decided that they pick up the Bluetooth again. I was just talking about the cash conversion in the first half, a little bit less than probably what you thought there was an uptick in working capital. Do we just assume that, that unwinds through the second half and you get back to where you have been historically on cash conversion, please? Linda Lim: So our -- so our guidance is 70% cash conversion, and that still stays. I mean, we have disciplined working capital movement to support double-digit revenue growth. So we are still very happy with the way we're managing working capital. We've made a lot of inroads to make sure that's as efficient and effective as it can be. And I think that's reflected in the 86% cash conversion. Paul House: Yes. I think in a growth phase, that 70% rule has been our historical practice. It is better than that in this half in spite of that top line growth. So I think that's a really good feature. A little bit of that will have to do with the shifting portfolio mix of sensors versus fluids, Jakob. Operator: The next question is from Lindsay Bettiol from Goldman Sachs. Lindsay Bettiol: Apologies if this question has been asked. I think a lot of mine have, but I was kind of cutting in and out. Just Krux and Datarock, like if I look at maybe the last update you gave us for FY '25, Krux' growth was circa 90%, Datarock was 60-ish. And the update today, it looks like Krux is like 80% growth and Datarock is kind of reaccelerating to 90%. So it just feels like the growth rates in both those businesses have taken very different parts in the past 6 months. Like firstly, can you just confirm if that's the right read? And if it is, like maybe just talk about the kind of differing trajectories of Krux and Datarock, please? Paul House: Yes. I mean happy to answer that, Lindsay. They're 2 very different digital businesses and being start-up businesses, their revenue trajectory can be a little bit lumpy. I think the difference being, Krux is a much more infield operations-focused business that goes through probably slightly harder sales cycles to get embedded and Datarock probably spends more of its time at the front end building the platform before it rolls out. And that's what you're seeing that shift in revenue growth. So I would expect -- and Michelle Carey is with me, but I would expect the Datarock business probably continues to compound at a higher rate in the periods ahead. And we think that the growth trajectory for Krux starts to benefit from being integrated into the Drill Site Technologies business under Shaun, which will happen post completion. So we still see significant headroom in growth for both of them, but they're just very different products. And as they go through that start-up phase, it just -- it's a little bit lumpy. But nothing has fundamentally changed in terms of overall expectations of either of those technologies. I might ask Michelle Carey if she wanted to add anything else to the Datarock. Michelle Carey: No. Maybe just the last comment to support what Paul said is, obviously, we were also aware from the start that Datarock were a little bit further -- not quite as far along in their journey as Krux and both of them are growing from a relatively low basis. So you can see a little bit of that as the growth rates evolve as well. Operator: I will now hand back to Paul as there are no further questions. Paul House: Wonderful. Thanks, Michelle. In closing, 1H '26 has obviously been an important period for IMDEX, particularly as we turn the corner on 3 years of very tough exploration conditions. The result has reinforced the strength of our strategy and the quality of the IMDEX operating model. Delivering record above-market growth, strong cash generation and the discipline that we've shown through the cycle has been a pleasing feature of the half. Our global network and our global team, both are unrivaled in the marketplace. And so we're very well positioned to benefit from a multiyear exploration cycle ahead and continuing to deliver long-term value to our shareholders. I'd like to extend my thanks to our team, our Board and our shareholders all, and I look forward to speaking with many of you in the week ahead. Thanks very much for your time today. Linda Lim: Thank you.
Operator: Thank you for standing by, and welcome to Navigator Global Investments Limited HY '26 Interim Results. [Operator Instructions] I would now like to hand the conference over to Mr. Stephen Darke, CEO. Please go ahead. Stephen Darke: Thank you, operator, and welcome to everyone joining the call this morning to discuss Navigator's half year results for the 2026 financial year. I'm Stephen Darke, Navigator's CEO. I'm joined today, as per usual, by my colleagues, Ross Zachary, Navigator's CIO and Head of NGI Strategic Investments; and Amber Stoney, Navigator's Group CFO. Turning to Slide 4, the company snapshot. Navigator is the only ASX-listed company focused exclusively on partnering with leading alternative asset managers. We provide growth capital and strategic engagement to a diverse portfolio of 11 managers. As of 31 December, at the Partner Firm level, Navigator's affiliates manage over USD 84 billion, up 6% over the past 12 months. This AUM is managed across 42 investment strategies and invested via 197 products. These strategies typically have low correlation to global equity and fixed income markets and to one another. Turning to a summary of Navigator's first half 2026 financial results on Slide 5. I'm pleased to report that NGI continued to see strong top line growth and earnings momentum. Our ownership adjusted AUM increased 5% during the period to $29 billion. Higher management fees with higher fee rates and continued strong risk-adjusted investment performance, leading to higher performance fees drove Navigator's first half revenue to USD 108.3 million, up 17% during the period. The group's adjusted EBITDA was USD 48.2 million, a 17% increase from first half '25, leading to a 7% increase in adjusted EPS. On Slide 6, you can see Navigator's ownership-adjusted AUM over the last 12 months and since 2021. The consistent AUM growth over the past 5 years continues. Over the past 12 months, we saw a 7% increase in ownership-adjusted AUM, meaning an additional USD 1.9 billion of AUM. During 2025, we saw marginal net inflows across NGI, with the growth in AUM driven by continued investment performance from both business segments, but particularly across the range of Lighthouse strategies, which have performed strongly in volatile markets. Given the 2025 investment performance, recent and prospective new product launches across NGI's portfolio, more positive sentiment from capital allocators and a generally improving fundraising environment across the industry, we expect to see higher net inflows across NGI's Partner Firms in 2026. Turning to Slide 7. Alternative asset managers who aim to generate positive absolute returns for their investors across all market cycles have a strong alignment of interest in the economic performance of their strategies and the returns they generate for their investors. For Navigator's portfolio of managers, this is typically reflected in higher and more sustainable fee yields, which Navigator and our shareholders are a direct beneficiary of. Here, we show Navigator's underlying revenue composition, taking Navigator's share of the revenues of our Partner Firms, including Lighthouse on a calendar year basis. It's these underlying revenues that ultimately drive earnings for our Partner Firms and result in higher distributions to Navigator, but predominantly -- the latter predominantly occurring in the second half of every financial year. 2025 adds yet another year of strong underlying revenue performance to this chart, further illustrating the power and predictability of Navigator's resilient and growing model over the short, medium and longer term. After a very strong year in CY '24, total underlying revenues were up again in calendar year '25, with a higher relative contribution from base management fees and a lower contribution from performance fees. The average total fee yield, the light blue dotted line, over 5 years increased by 5 basis points to 1.14%, driven by higher management fees and relatively stable performance fees. NGI's Partner Firms have shown consistent growth in recurring management fee revenues, the dark blue bars, in line with higher AUM. The average management fee yield is 74 basis points within the range of 72 basis points to 75 basis points over that 5-year period, reflecting a marginally higher average fee yield than the prior corresponding period. Our Partner Firms have a consistent track record of producing strong risk-adjusted investment performance and hence, performance fees across market cycles and over multiple years. As a result of that, Navigator generates resilient underlying performance fee revenues annually as evidenced by the light blue bars. The performance fee yield, as shown by the gold line at the bottom of the chart, has averaged 39 basis points and in a relatively narrow range of 26 basis points to 47 basis points over that period, reflecting the relative stability and expected recurring nature of that revenue stream, especially through challenging investment cycles. The performance fee yield for calendar year '25 was 41 basis points, slightly higher than the long-term average, but lower than the prior year of 47 basis points. Unlike performance fees from strategies that are benchmarked to a market index, the absolute return nature of the strategies managed by our Partner Firms and the structure of their performance fee mechanics as we outlined at our November Investor Day, drive these outcomes and have now done so for longer than 5 years. Moving forward and based on the long-term track record you can see here, we think it is reasonable to expect performance fee revenues within this range, providing a resilient source of recurring income for Navigator. In the appendix, we present the latest numbers on the lack of correlation across the NGI Strategic Partner Firms. On Slide 8, we show the segment revenue composition for NGI Strategic and Lighthouse across management fees and performance fees. In line with growth since calendar year '21 and prior, Navigator has exhibited consistent continued underlying management fee growth across both NGI Strategic and Lighthouse, with an aggregate USD 216 million revenues generated for calendar year '25, up 9% on the prior year and slightly ahead of the 3-year growth rate of 8%. As you can see on the right-hand side chart, the rolling 3-year average performance fee revenue across the business segments has continued to increase and now sits at USD 101 million from USD 94 million in the prior corresponding period. After a historically strong calendar year '24, overall performance fee revenues decreased by 7%, with NGI Strategic generating performance fee revenues more in line with its 5-year average. It was pleasing to see Lighthouse performance fees increase again, up 23% by prior corresponding period and a 16% across the calendar year -- increase across the year -- calendar year. This result reflects an increasing trend towards the growth of Lighthouse's direct hedge fund business, which incorporates a performance fee model for investor alignment rather than a management fee-only model. As investors saw from our Q2 AUM and performance update released last month, rather than the reliance on an outperformance of any one strategy, Lighthouse is exhibiting strong risk-adjusted returns across almost all of its strategies, exceeding their respective 3- and 5-year averages in 2025. The broader diversification of the Lighthouse performance fee revenue stream is encouraging as we enter 2026. With additional new products and a continued supportive environment for delivering strong investment returns, we remain confident in the ongoing success and growth of the Lighthouse platform. Importantly, Navigator continues to see no fee pressure in either base management fee rates or performance fee rates across our Partner Firms. And in fact, we're observing increases across some strategies and new products as investors are prepared to pay managers who can truly generate non-market-linked investment returns across cycles. Amber will address the updated fee rates across our business segments during the presentation of our latest key metrics. Turning to Slide 9. You can see the earnings power of the diversified portfolio. In the first half '26, we saw strong adjusted EBITDA across both business segments. NGI Strategic increased its earnings contributions by 32% to $19.3 million due to higher cash distributions received during the 6 months. Lighthouse generated a record $28.9 million EBITDA during first half, an increase of 9% from prior corresponding period, driven by the higher management and higher performance fees across the platform, with the operating margin in line with PCP. As noted last May, while Navigator continues to benefit from a resilient and diversified earnings base, subject to market conditions and the timing of revenue receipts, Navigator expects full-year adjusted EBITDA to be lower than FY '25. This reflects comparatively lower investment performance in the NGI Strategic segment relative to the prior strong year, which may result in lower profit distributions in the second half compared with yet again a very strong H2 FY '25. We are very pleased with the ongoing consistent investment performance, management and earnings generations by our Partner Firms, which continue to prove to be some of the leading alternative asset managers globally in their respective area of specialty. There has been and there will continue to be material long-term value accruing to Navigator shareholders from the ongoing organic growth of our Partner Firms who continue to generate that performance and launch new strategies and also a focus on reinvesting our operating cash into new Partner Firms that we source the diligence and execute to further diversify and grow the NGI portfolio and increase the scale of our earnings. Ross will talk more about this, but we remain focused on continuing inorganic growth in 2026. Finally, it's particularly important in this investment environment of heightened volatility to recognize the value of diversification that is generated by a portfolio approach like that, that Navigator adopts. This ensures that overall resilience and consistency of earnings should be able to be maintained across market cycles. And secondly, with stable or indeed increasing fee rates and a resilient investment performance from strategies that are benchmark unaware, Navigator's business model can produce growing revenues, higher fee yields and the resulting increased cash earnings over the medium and longer term. Now, I'll hand over to Ross to provide the NGI business update for the half. Ross Zachary: Thank you, Stephen. I'm thrilled to have the opportunity to review more about our business and highlight how Navigator's scale and diversification continue to drive value. On Slide 11, what is clear here is that Navigator operates and partners with large established firms who are leaders across a diverse range of unique alternative investment strategies. These businesses deploy well over $100 billion in time-tested strategies across global markets designed and refined over decades to generate strong risk-adjusted returns. Dispersion within and across asset classes, market volatility, interest rate changes, economic cycles and geopolitical uncertainty, all present opportunities to provide their clients strong risk-adjusted returns. These are scaled but growing firms with an average of over $8 billion of firm-level AUM. In today's industry, it's the scale and the related resources that are more critical than ever to attract and retain talent and generate strong results. Lighthouse and our Partner Firms, all benefit from these attributes. In addition, NGI and our Partner Firms have a clear competitive advantage through our partnership with Blue Owl's GP Strategic Capital division. Their 55-plus person business services platform continues to benefit us across various verticals such as capital introductions, operational and technology best practices as well as very targeted human capital advisory engagement. If you flip to Slide 12, we have a snapshot of the business composition today. Across the NGI Strategic and Lighthouse segments, our earnings are generated from over 40 alternative investment strategies delivered through almost 200 products globally. Not only is the business diversified across liquid alternatives, public and private credit, specialized private equity, real estate capital solutions and a variety of commodity strategies, but it also generates revenues through a wide variety of fee terms and structures. Today, an estimated 33% of ownership-adjusted AUM in the NGI Strategic segment or 13% across the entire Navigator business is in long-duration products with highly visible sticky revenues. We expect this contribution from this high-quality and stable earnings stream to continue over time as we add Partner Firms and the existing Partner Firms further evolve their product set. We cannot emphasize enough that the diversification available to us by partnering with independent firms has and will continue to benefit the company and our shareholders as we execute our growth initiatives. Please flip to Slide 13. We'll provide a few select highlights of activity during the period. Our Partner Firms continue to be at the forefront of their respective strategies and prove out why they are leaders in the alternative investment industry globally. During the period, we have seen our partners at 1315 Capital continue to deploy capital into innovative, growing health care companies as well as realize existing portfolio companies in a difficult environment. Another private markets Partner Firm, Marble Capital continues to illustrate their leadership position in a large, highly fragmented asset class with their unique strategy as they specialize in providing capital solutions to high-quality real estate sponsors in regions of America that are experiencing strong, resilient economic growth, coupled with an undersupply of housing. They recently announced that they deployed over $350 million in new investments in 2025 across over 8,300 units, illustrating their impressive ability to execute a focused and differentiated strategy at scale. Similarly, Invictus Capital Partners' highly differentiated approach to residential real estate credit continues to attract the most sophisticated long-term oriented institutional clients in the world. This is evidenced by a recently publicly announced mandate for Moore Capital. CFM, one of the Partner Firms acquired in the NGI Strategic portfolio, has continued to demonstrate their clear leadership position in the global hedge fund industry. With over $20 billion of firm-level AUM today, their investment results have remained exceptionally strong, which, as you can see here, continues to result in winning several industry awards in this past year. Please flip to Slide 14, and we can review the overall growth of the business this year. On Slide 14, you will see that excluding the sale of Bardin Hill, which closed in October, both the NGI Strategic and the Lighthouse segments generated positive organic growth in the period. We are very pleased to report this 5% increase in ownership-adjusted AUM or 7% when adjusting for the Bardin Hill sale in a challenging backdrop for the industry. Our private market Partner Firms are in the process of raising capital for their flagship funds, and we expect to see additional contribution from these efforts in the second half of our fiscal year. Lighthouse continues to demonstrate their long-term proven track record of innovation by creating and offering new hedge fund products, which leverage the breadth and sophistication of their platform to meet both existing and new client demand. It is important to remember that the underlying returns of Lighthouse, our Partner Firms and the public markets show very little correlation to one another. And therefore, we continue to see investment performance across the group as a key driver of AUM and revenue growth. Please turn to Slide 15 to review a cross-section of recent investment performance. This slide summarizes certain indicative performance across both segments. The NGI Strategic composite is comprised of flagship strategies in the NGI Strategic portfolio. And although it generated lower performance in calendar year '25 as compared to recent history, you'll see the 3- and 5-year performance not only illustrates the strength of the track record across this business, but also how well positioned they are for continued growth and performance. At Lighthouse, performance was particularly strong in 2025, with hedge fund products delivering attractive risk-adjusted returns and a broad contribution across their teams and sectors. From what we see, the environment to generate strong returns remains in 2026. This performance data clearly illustrates the power of our model and how Partner Firms that show low correlation to one another can generate the continued durable results for NGI shareholders over time. If you go next to Slide 16, we can touch briefly on our growth strategy and our focus on continued growth through acquisition. The criteria you see on Slide 16 are informed by our deep experience in partnering with, investing in and operating alternative investment management firms for over 20 years. We continue to build and work through a very active pipeline of established and growth-oriented firms who are acutely focused on positioning themselves for sustainable long-term growth. Today, this pipeline is broad and includes both firms that specialize in areas of private market alternatives that we believe our partnership may add value to, as well as certain liquid alternative firms that we think may provide diversification benefit and present the potential to enhance the growth profile of our business. Although we increasingly recognize a trend of larger alternative asset managers capturing investor market share, we are focused on a wide universe of specialized proven businesses that will capture share and add tangible value to their clients over time. When identifying new potential Partner Firms, our goal is to continue to increase the stability, durability and growth profile of NGI's earnings, which in turn strengthens our competitive position to make further acquisitions over time. Thank you. Amber, I'll turn it over to you for the financial results. Amber Stoney: Thanks, Ross. As Stephen and Ross have covered, we've seen continued momentum across the business, and I'll now take you through the financial results for the first half of FY '26. I'll focus on 3 things: earnings outcomes, what drove them and the strength of the balance sheet supporting our strategy. As outlined on Slide 18, adjusted EBITDA increased 17% on the prior comparative period to $48.2 million, driven by a combination of very strong Lighthouse performance fees, solid management fee growth and higher distributions received from our NGI Strategic Partner Firms. Lighthouse performance fees were $39 million for the half, up from $31.7 million in the prior period, reflecting strong investment performance across the Lighthouse platform. Lighthouse management fees also grew by 8% on prior comparative period, consistent with its higher AUM. From NGI Strategic, we have received $22.3 million of distributions compared to $16.6 million last period. The majority of the increase came from our private market Partner Firms. These revenue increases were partially offset by higher costs. Employee expenses increased by $6 million, largely reflecting the higher bonus accruals tied to lighthouse performance fees. Other operating expenses increased by $4.4 million, driven by higher IT spend, third-party distribution costs and professional fees. In terms of the balance sheet, net assets were $795 million as at 31 December 2025, which is materially the same as it was at 30 June. On Slide 19, we look at both statutory and non-IFRS performance results. Statutory results show a net loss of $4.3 million compared to a significant profit in the prior period. This outcome is primarily due to movements in fair value of investments recognized through the P&L. Such variation in fair value from period to period is indicative of the significant growth in our balance sheet, with NGI currently holding $670 million in investments in our Partner Firms. Importantly, when we adjust for this significant non-cash item as well as other non-recurring items, adjusted EBITDA increased 17% to $48.2 million, highlighting the underlying strength of the operating performance across both the Lighthouse and NGI Strategic businesses. Adjusted NPAT for the half was up 7% to $29.8 million. While this also reflects improved operating earnings, it is impacted by higher interest costs and tax outcomes relative to the prior period. The adjusted EBITDA and NPAT measures are intended to reflect the underlying operating performance of the business for the half, while the statutory outcome includes items that can introduce significant volatility period-to-period given the size of the assets that we hold. Turning to Slide 20. We take a closer look at segment performance. This table summarizing 3 comparative periods shows how diversification across the NGI Strategic and Lighthouse businesses contributed to group earnings, with both improving on the prior period. Lighthouse delivered improved results from operations, supported by higher management and performance fees, with a small reduction in margin compared to the prior half due to increased operating expenses. NGI Strategic was the key driver of group profitability in half 1, with distribution income increasing 34% on prior comparative period and reflecting resilient receipt of earnings distributions from our Partner Firms, particularly in private markets. Looking ahead to the full year, with NGI Strategic expected to contribute a larger share of earnings in the second half, we expect the group's full-year adjusted EBITDA margin to trend closer to the FY '25 margin of 56% due to the expected lower weighting of Lighthouse in the second half results. Slide 21 focuses on the momentum in revenue growth across our key revenue streams. For NGI Strategic, we've seen strong and improving distribution outcomes over recent years, reflecting the quality and diversity of our Partner Firms and increasing exposure to private market strategies that generate meaningful cash earnings over time. This multi-year growth trend continued into the first half of FY '26, with distributions again increasing compared to the prior comparative period. That said, distributions can vary materially period-to-period depending on Partner Firm performance and operating outcomes, the strategy mix and product-specific fee realization. Total distribution income in FY '25 was particularly strong. And while we saw a further uplift in half 1, we note that distributions received in half 2 may be lower than in the prior comparative period. As Ross noted earlier, calendar year '25 composite performance for the NGI Strategic portfolio is lower than for the prior calendar year, and that is likely to have some impact on distributions received in the second half of our financial year. Given the inherent variability of underlying Partner Firm performance and their distributions, as always, forecasting NGI Strategic income for the remainder of FY '26 is difficult. I've previously noted that once again, Lighthouse has delivered strong performance fee revenues in the first half. We are pleased to see the 8% growth of management fees for Lighthouse. A change in AUM mix has improved the average management fee rate this half from 54 basis points to 56 basis points. And combined with continued AUM growth, this has underpinned this increase in fee revenue. The next slide, Slide 22, summarizes the key financial metrics underpinning profitability across both businesses. Starting with NGI Strategic, ownership-adjusted AUM was $11.7 billion at period end. The average management fee rate is approximately 1.2% per annum, which is up 2 basis points from 30 June. The average performance fee rate and AUM that can earn performance fees have held steady at 17% and 80%, respectively, and the 33% to 43% indicative margin range is slightly down on the prior year. Overall, the metrics for the NGI Strategic business remains strong, with investment performance and AUM growth through net flows being 2 of the key variables to impact future distribution outcomes. For Lighthouse, AUM was $17.3 billion, with an improved average management fee rate of 56 basis points per annum. Approximately 23% of AUM is eligible to earn performance fees as at 31 December, with almost all of that AUM at or above high watermarks. Combined with positive investment performance across key Lighthouse products for the 2025 calendar year, this has led to $39 million of performance fees recognized for Lighthouse in this first half. Across both segments, these metrics reinforce the scalability of the platform and the strong conversion of AUM into earnings and cash flow over time. And I'll finish with the balance sheet on Slide 23. We continue to operate with a strong balance sheet, supporting both organic growth and new partnership opportunities. Net debt to adjusted EBITDA was 0.6x at 31 December, well within our target leverage range of up to 1.5x. The group has access to a $100 million credit facility with a 2029 maturity, providing flexibility to fund growth initiatives as they arise. As announced in November, the Board has suspended dividend payments, with the last dividend payment paid in September 2025. This decision reflects our view that the best use of capital at this point in the cycle is to reinvest in growth opportunities and compound long-term shareholder value. To wrap up my section, we've delivered a solid first half with strong underlying earnings and a balance sheet that keeps us well positioned for the opportunities ahead. And with that, I'll hand over to Stephen to take you through the outlook and closing remarks. Stephen Darke: Thank you, Amber. So as summarized on Slide 25, in the first half of FY '26, we saw consistent and continued financial outperformance driven by a step-up in the Lighthouse business and higher cash distributions received in NGI Strategic during the first half. We saw continued robust investment performance generated across our diversified portfolio of Partner Firms, especially across the Lighthouse strategies. NGI is operating in an environment that continues to benefit leading managers globally with higher volatility and dispersion driving an increased performance by leading alternative asset classes and a greater investor appetite for these strategies. NGI saw an increase in the average management fee rates across our business segments and the maintenance of our flexible balance sheet, the payment of the remaining deferred considerations on the 2022 transactions and the ongoing generation of significant cash flow from our portfolio. NGI is a scaled and diversified platform, which continues to exhibit organic growth across our portfolio of Partner Firms and is positioned for further acquisitive growth. Turning to Slide 26, which you have seen before, it shows how Navigator and its portfolio of Partner Firms have opportunities to drive growth and to compound earnings at a high rate of return. As we do so, the scale, diversification and resilience of our business increases. Navigator's growth will be driven by a number of key factors: one, growth in the broader alternatives industry in which we specialize, increasing demand for our absolute return-focused Partner Firm strategies. The 2026 investor allocation plans by asset class are set out in the appendix at Slide 33, with broad positive net interest in increasing allocations across alternatives, in particular, hedge funds and private equity. There are tailwinds supporting this increased interest and the ability for our leading alternative managers to maintain or increase fee rates, and they include growing investor appetite from wealth management investors and insurance firms globally and our Partner Firms operating in sectors, benefiting from rich trading opportunities and increased volatility, driven by elevated uncertainties in relation to the impact of artificial intelligence, geopolitics and the implementation of fiscal and monetary policies globally. Secondly, continued organic growth and increased scale of our Partner Firms, and that can be generated by strong performance, net inflows, new product launches and increasing their operating margins. Thirdly, such growth could be supplemented opportunistically, and it is by value creation from Navigator and/or Blue Owl's business services platform, which aims to accelerate partner firm trajectory. And not just some of the services that Ross mentioned earlier like capital introduction, there's also a dedicated AI advisory and data science group providing cutting-edge advice to all of our Partner Firms and all of their Partner Firms around how to address artificial intelligence in the new world we all find ourselves in. Finally, there's an addition of new Partner Firms can drive growth to expand the portfolio or indeed, if the opportunity arises to invest additional capital in our existing Partner Firms to support their growth. During 2025, we partnered with 13 Capital, and we have a high-quality pipeline of opportunities, but remain prudently focused on investments that satisfy our criteria. In terms of the outlook for Navigator for FY '26 on Slide 27, we expect our portfolio of firms to continue to perform across market cycles as they have done historically at both the management company level and an investment strategy level. Lighthouse continues to focus on its core mission of generating attractive returns primarily through idiosyncratic risk for its clients, providing relevant and innovative solutions for its clients across array of strategies and aligning as long-term partners for their clients' portfolio managers and other joint ventures. We believe this emphasis will allow Lighthouse to potentially add meaningful scale and diversification to the business in the future. Unlike other listed asset managers in Australia that may benefit from a sustained risk-on period for equity and/or bond markets, NGI's public markets' focused firms show resilience in more difficult time periods, which can provide diversification. In terms of execution of growth strategy, we are focused on acquisitive growth in '26 and to look to add new differentiated Partner Firms that meet our investment criteria and further diversified our earnings. The addition of new firms and the expansion of our portfolio will further Navigator's ambition to be the leading alternatives manager listed on the ASX and a leading partner to asset managers globally. In terms of funding growth opportunities, we're generating strong operating cash flow. As Amber says, we have a flexible credit facility only drawn around 30% currently and all deferred consideration paid during the year on our acquisitions with only an earn-out left in relation to 1315. In terms of our financial outlook, while Navigator continues to benefit from a diversified and resilient earnings base, subject to market conditions and the timing of receipts, we expect FY '26 adjusted EBITDA to be lower than FY '25, and it reflects the comparatively lower investment performance in the NGI Strategic relative to the prior year, which may result in lower profit distributions compared with a strong H2 FY '25. Importantly, though, we remain highly confident in the outlook for Navigator and its Partner Firms to deliver strong returns across the cycle, including during periods of market volatility. Before I conclude and open to questions, I want to revisit on Slide 28, why we think Navigator is a unique and compelling investment proposition as the only pure-play alternatives firm on the ASX. Navigator and our portfolio of global Partner Firms have deep expertise across diverse sectors of the alternative industry and established track records of generating returns. Management continues to focus on acquisitive growth, but on the right terms and with the right Partner Firms. Along with the consistent organic growth across the business segments, we continue our progress towards achieving our 2030 target of over USD 45 billion of high fee-paying AUM. Our portfolio is very well positioned to benefit from the significant structural tailwinds driving alternative asset management and over the medium and longer term to deliver superior performance for its shareholders. In particular, in this world of rapidly changing technology and the advancement of artificial intelligence, Navigator should be expected to benefit both in terms of investment performance, particularly with our underlying quantitative strategies and improved processes and efficiencies that are implemented and will be implemented at our Partner Firms. When advised by leading AI advisory and data science groups by the BSP, these factors have the potential to improve the growth trajectory and operating margins of our Partner Firms and Navigator over the longer term. Thank you for your time, everyone. I would now like to open the call to questions. Operator? Operator: [Operator Instructions] The first question comes from the line of Nick McGarrigle with Barrenjoey. Nicholas McGarrigle: Maybe just a question around, just to clarify the relationship with Blue Owl and so much is there involved with private credit investments. My understanding is that's a completely separate segment to the Dyal business effectively that you're exposed to. I have been getting a few investor questions about that. So, it was worth just getting you guys to clarify the current position that they're in on the private credit side and how that relates to your business? Stephen Darke: Yes. Thank you, Nick. I, obviously, been following a lot of that press. I think everyone understands this. But Blue Owl hold their stake in Navigator by their first GP staking fund owned by institutional investors rather than the Owl balance sheet. That fund does not have an end date. Owl are working with their portfolio companies, including NGI to help maximize value for their own investors like any asset management business. Their manager sourcing and the BSP are all part of that GP staking business. It operates independently and not part of the private credit business. Just stepping back, though, and so really, very little, if any, impact on Navigator. I don't really want to comment on the specific private BDC capital return that's in the press right now as I'm not an employee or a spokesperson or an investor in that vehicle. But I would urge people to review very carefully what has happened. There's a lot of conflicting reports about the facts and the outcomes. But very, very clearly aware of all the noise and it has no impact on Navigator and the way that we work with Blue Owl as frankly, on that GP staking side, without a doubt, the global leader and strategic partner. Just more broadly, though, while we're on that topic, Nick, it's worth talking about Navigator and private credit. And I'll hand over to Ross. But even though, on Slide 12, we referred to sort of the asset class AUM as including public and private credit at sort of 31% of the portfolio, everyone should realize that most of that is really publicly traded fixed income as part of the hedge fund portfolios and maybe we should break it out going further. Marble and Invictus are not private credit. They're specialized real estate credit firms and both performing well in their sector. I think out of all of our managers, Waterfall, who I have an affinity for all the way back to 2005, given their focus on structured credit and ABS, they do have private credit strategies. They represent $13 billion of our $84 billion at a partner firm level. It's been challenging, but they've seen these difficult environments before, and they have a long track record of investing well for their investors. And I know that they're focused on ensuring their assets and portfolios are performing. So Navigator, not a large exposure to that space. And even within it, not every private credit strategy is the same, not every manager is the same. And there are opportunities, frankly, right now in some sectors and challenges in others. So, I just thought it was important to highlight that, Nick. I would say that what's happening, I think, globally around here is just, frankly, evidence of a liquidity mismatch between various GPs putting assets that are illiquid into strategies that are more liquid. There's always going to -- we saw this in the GFC. There's always going to be tension around that structure. Anyway, apologies for the long answer, but I think it's worth dealing with both U.S. private credit as well as Blue Owl in the same breath. Nicholas McGarrigle: That's helpful. And then you've given, I think, the performance fee number for the strategic portfolio in the first half. and then we've guided -- you guided to potentially lower distributions in the second half as a flow-through of that and group EBITDA being down year-on-year. looks to me like the delta on the performance fee is only $15 million, which on a look-through basis doesn't imply that big of a step down for distributions in the second half. can you just talk through the building blocks to the assumption around the second half Strategic profit? Because I guess that has to come down quite a bit given you've had such a strong first half in Lighthouse. Stephen Darke: Yes, there's a lot in there, Nick. Maybe I'll start and then Amber can perhaps address more on the building block side. I think there's a couple of slides in the deck that just -- that indicate. One of them is the composite return slide where you see across the Navigator Strategic portfolio numbers in more of the 6% to 7% net return range, which are, as Ross pointed out, lower than the 3- to 5-year strong averages. We have to remember a couple of things. That's only around $20 billion of the overall AUM that, that represents. Like, for example, the private market firms that we all hold are not represented in that composite return, and they're performing well. Ross can talk about that. The second thing I would say, if you have a look at those indexes at the bottom of the page, the indices there, the 6% is well in ahead because you have to remember, there's very little volatility, mostly alpha ahead of those hedge fund indices and also really ahead of Lighthouse's long-term averages. So, still a great result out of the portfolio. As a result of that, though, given the performance fee mechanics, you do see an impact on expected performance fee revenues that then translates through to earnings. But to your point about quantum, and I will pass over to Amber, out of those performance fee revenues, obviously, then bonuses are paid. And the great thing about the business models is that we have a variable cost base that's linked to revenue. So to the extent you do see top line revenues, performance revenues come down, we will see compensation relevant to those revenues also comes down, which helps buffer the margins and the operating -- the profitability at each of our Partner Firms and then ultimately, also at Navigator level. But Amber, do you want to talk maybe about the building blocks and how we're thinking about the second half? Amber Stoney: Yes. I guess to probably zero in on Nick's point, looking at Slide 8, just the difference between the Strategic going from $87 million to $72 million, with that $15 million delta you referred to, the thing that we don't have the clarity on right now is how that revenue translates into profit distributions to the point. So, comp decisions are still to be made and depending on which managers are contributing to that and how they actually comp their staff in relation to those fees can have a different impact on distributions versus just pure change in revenue. So, we're still waiting to see some of those come through, and we'll have a clearer idea sort of as we normally do come April, May. And as you know, our usual practice is to give an update at that time when we've got more clarity on how that flows through to earnings. Stephen Darke: I'll just supplement on that topic actually, while the operator gets to the next question. Back in May of last year, the investors may remember that during the earnings upgrade that we gave to the market then in relation to FY '25 that we called out that there was particularly strong distributions during that year, not something that can't be repeatable, but we did think there might be a little bit lower distributions in the year and we now find ourselves in a situation where that's the case. But none of it is concerning. And the market consensus, as you know, Nick, is around the $103 million to $106 million. We feel very good about that level. We just have to realize that unlike a lot of the long-only managers where performance fee revenues can go from 100 to 0 extraordinarily quickly, we can see a little bit of variability. And I do love Slide 7 because it shows that sort of range of performance fee yield, and you'll see that we're 41 basis points this year versus 47 last year. So, you've got a 6-point move. To Amber's point, it's got to play out to earnings, which will cut the delta. It won't be 15. It will be way less than that. But regardless, you can't imagine it. You can't expect it to go from the bottom left to the top right every single period. So yes, we feel good about this year in the portfolio, but we have to call out a slightly lower second half distribution versus, we believe, the prior corresponding period. Ross, we've crossed over into a lot to do with NGI Strategic in the second half. Is there anything you want to add to a very important question from Nick? Ross Zachary: No, not too much to add. I think you guys covered it pretty well. My main point would just be to echo what you said, Stephen, which is despite a lower year on a relative basis, still a very strong year across the portfolio as a segment as well as the Lighthouse business, which again just shows the potential as well as this year's model playing out. So, happy to answer further questions though. Operator: Next question comes from the line of Tim Lawson with Macquarie. Tim Lawson: Can you just help us understand -- obviously, at 17% EBITDA -- adjusted EBITDA increase versus the only 7% at the adjusted EPS line, can you just talk about the moving parts across the 2 halves to make that impact? Amber Stoney: Yes. So, below the line from an EBITDA perspective, obviously, the key impacts on that is depreciation, amortization, interest and tax. So, our interest expense is a little higher this period compared to the prior half. We've been more drawn on the loan facility comparatively speaking. So, we've ended up with a higher interest expense, which has contributed to that slight difference. I think our depreciation is also slightly higher. So as we continue to build like, particularly Lighthouse continues to build out its offices around the globe, we spend money on fit-outs and various equipment, and we'll depreciate that over time. So, we have seen a marginal increase in depreciation. And also, our tax outcomes can be a little variable, just the nature of the U.S. income that we get. We basically invest through partnerships that provide underlying information on tax, and that can get trued up from period to period. So, we've just had a bigger impact from a tax expense perspective this year as we've gotten updated underlying information through. So, each of those 3 are slightly higher compared to the prior year, which has created a 7% versus a 17% growth. Tim Lawson: That's great. And just maybe some color on the fact that the facility was drawn more this half. Amber Stoney: Yes. So, I mean, we basically paid out the remainder of the Invictus, which was almost half of what the original investment was in August. So, given our cash flow is always lower in the first half of the year and significantly higher in the second half of the year, we've drawn on the facility just and that's the beauty of the flexibility around that. So, we're continuing to pay it off. We've already paid down some of it. And as and when we get more distributions through, that will be paid down. Tim Lawson: Okay. And then the second question just on the deals pipeline. Can you maybe, Stephen, talk a little bit about how you're seeing opportunities out there and Ross? Stephen Darke: Yes. I'll hand that to Ross actually. Ross Zachary: Tim, thanks so much for the question. I would start off just to say that there's really been no slowdown despite a little bit of choppiness as you guys covered in kind of private credit landscape headlines as well as continued, I would say, both optimism, but uncertainty in kind of private markets and private equity in general. The pipeline is full as ever, with the key theme of diversification. It is concentrated in private market alternatives. So, specialized private equity continues to be an area that we really find attractive to add, but we're also spending time in real assets and some areas in private credit. But as Stephen alluded to in the answer about Blue Owl, areas of private credit that, number one, are very specialized in nature, given our focus. But also we are really not looking at Partner Firms who are targeting the retail alternatives trend or kind of either in the BDCs in the U.S. or other vehicles you're familiar with in Australia to deliver that. These are mostly private credit firms that are both specialized and partnering with institutional firms -- institutional clients such as insurance companies and sovereigns and things like that. So it's attractive. And what I would say is, as Stephen said in the outlook, we think 2026 will be a year where we hope to continue to allocate capital in a similar fashion that's been working as you've seen with the private market alternative firms and the NGI Strategic portfolio. So, remain hard at work at a pretty exciting time right now. Operator: Next question comes from the line of Fraser Noye with UBS. Fraser Noye: Just a couple of questions from me. Stephen, just on the outlook for lower adjusted EBITDA in FY '26, it's consistent with your prior messaging. Can you just give us some color on the Partner Firms or the asset classes which are driving this? I know you've previously spoken about weaker commodities being a factor. Is that still the case? Stephen Darke: Fraser, thanks for the question. As you know, challenging to speak specifically about managers, but I would say, yes, in certain sectors, and you just named one of them, overall, it's just been challenging. Let's just take commodities. Challenging to trade energy, to trade precious metals, to actually make money. I think it's not just one manager, it's a lot of managers across the industry globally. So, I would say that's the case. But like as you can tell by the sort of amount of AUM at Lighthouse that's above high watermark and also Ross can talk about the other strategies. And he also called out that really only one of our Partner Firms has a mainline strategy that's negative. All the others are positive. And I think that really is a good reflection on diversification and resilience. And our M&A, to Ross's point, is going to extend that and to increase that. But yes, there is a little bit of weakness in areas like that, Fraser. Ross, is there anything you want to add on that? Ross Zachary: Yes. I mean, again, I also won't speak to any individual Partner Firms' performance, but mostly not because we can't, but also because it really is a portfolio approach. And we will see in any kind of 3-, 5-year period, a potential year where certain strategies would naturally just have a lower absolute return. Still, as Stephen said, doing their job, generating strong risk-adjusted returns in their particular specialty. But given the diversification across this, that will happen. And then in a year like this year, it just depends on the overall contribution. But just to reiterate, the momentum across these businesses is really strong. The performance outlook from an investment and financial receipts is really strong given the market environment. And we haven't touched on it a lot yet, but the investor appetite and outlook for allocating new capital into the strategies, including the one you guys have mentioned, is also really strong because the opportunity sets there. So it really is just about communicating clearly with yourselves and our other shareholders rather than anything indicative to the future outlook of the company. Amber Stoney: Yes. I was probably also going to say, listening to ourselves, we might be coming across overly cautious, and that's not really meant to be the case. I think we're really just trying to reiterate the previous guidance that you pointed out, where we just want to make sure that we've had a really strong half and that it's a balanced look at the remainder of the year. So... Fraser Noye: Understood. And just secondly, just keen to unpack the fair value adjustment to financial assets and liabilities. I appreciate this can be volatile period-on-period and is non-cash. But can you just give us some color on the assumptions that's driving this over the first half? Amber Stoney: Yes. So, we have a process that every half, we use an external valuer to value the investments for us. They give us a valuation range, and we take a pretty disciplined approach about choosing midpoint unless there's something to indicate otherwise within that range. And one of the key inputs to that is underlying cash flow forecasts. And you can see that from the composite performance, that's one of the key investment performance that feeds into those forecasts. So the fact that we have a slightly lower calendar year '25 composite return versus FY '24 really feeds into how some of those models actually work. So, it's not that it's a long-term expectation of a decrease in value. It's really sort of a bit more of a mathematical function of the inputs that feed into that model from that perspective. And we take a pretty conservative approach. We use pretty discount rates that incorporate a fair bit of risk in them. So, we want to be quite conservative with our valuations from that perspective. And so it just does change period-to-period as some of those inputs change, including other inputs like market multiples, cost of capital, all of those sorts of things vary from half to half. Stephen Darke: And just to add to that. And I'm by no means an accountant, but it's interesting in the Navigator's sort of financial accounts, you've got a number of managers who changes in unrealized valuation go through the P&L. Then you've got some other managers and actually, those managers go through other comprehensive income. Those managers were marked up on our private market side. So, our net assets were flat period-on-period. We want the market to look at this as a portfolio. Adjusted EBITDA -- sorry, statutory EBITDA last year was such a high -- I never quoted the number. I think it was $160 million, but we never used that number. We like to -- you look at a cash flow proxy and look for adjusted EBITDA and adjusted NPAT as a better way to look at the business. So yes, it's just a situation where I think that the reaction to the NPAT situation is not really reflective of the overall performance of the business. But we're very cognizant of the statutory result. Operator: Next question comes from the line of Laf Sotiriou with MST Financial. Lafitani Sotiriou: Just wanted to follow up, Ross, on some of the NGI Strategic portfolio potential acquisitions you're looking at. Could you give us a bit more color? Are there 2 or 3 live transactions that you're possibly looking at? Are any of them towards the latter end of BD, and what's the market environment like? Is it -- is there a shortage of opportunities coming being presented? Or is it price that's the issue? If you could just give us a bit of color about the market environment and just specifics around the number of transactions you're looking at? Ross Zachary: Yes, no, absolutely. And Laf, thanks so much for the question. Maybe I'll start with the second, if that's okay, on market environment. From what we see, not only for ourselves, but across other groups we kind of speak with on a kind of collegial basis in the industry, 2026, there is actually a pickup in activity. I think across real estate firms and areas of real assets, firms are increasingly confident in their existing portfolios and outlook and therefore, seeking partners. Likewise, in specialized private equity, there's been both sector as well as asset class kind of pressure on them. And I think a lot of -- that's always been a big part of our pipeline, but I think we're seeing very strong firms coming out of that looking for a partner and ready to transact in 2026. So, that's quite active as well. And the overall outlook, just given all the uncertainties both I and Stephen mentioned on the call in the general markets have these firms on the front foot. They're speaking with institutional investors and other groups all the time, and they have a lot of demand, and therefore, they want to prepare their business with either balance sheet capital and/or a strategic partner to capitalize on that. So, it remains a really active industry overall in terms of finding strategic partnerships. In terms of our pipeline, like we said, it's probably -- I'm going to use rough numbers. Hopefully, it's helpful to illustrate it. Probably 70-30 private markets versus liquid alternatives, which is a bit of a pickup in liquid alternatives, quite frankly, again, because we're seeing firms in demand and growing and therefore, looking for a partner. And there are some areas such as some more specific sector long/short, some areas of quant that we're not in, some areas of credit, such as areas of credit relative value and also just areas of private/hybrid credit that we don't have represented that are really interesting. So, those are there. We continue to like areas of the private markets that are just specialized. So, that could mean more sector specialists like 1315 Capital in health care. but maybe areas of other broad sectors such as either technology, business services, defense, things like that. Those are the types of sector-specific private equity firms in the pipeline. And then we also like kind of growth and even secondaries when we can access them. So, there's a couple of those. I would say just being fully transparent, there's 2 to 3 opportunities that are developed, but maybe hedging, but also just being completely open and candid with you, Laf. There's always about 2 to 3 that are developed just given we're pursuing things. So, there's really no way for us to know that those will transact, but we're feeling really optimistic for this year that we can add to the portfolio. I hope that helps. Lafitani Sotiriou: No, that does. And can I just follow up on Lighthouse, Stephen, just more so? There's a comment in there that active current pipeline focused on new products and institutional mandates. Does that still extend to possible joint ventures? If you could give us an update on that, please? Stephen Darke: Yes, no, happy to do that, and I'll address the sort of the Fortress joint venture shortly. But yes, we're seeing elevated interest -- or Sean and team are seeing elevated interest at the Lighthouse level and are in advanced pipeline discussions in relation to North Rock's beta 1 product, which is sort of the combination of sort of select beta and alpha for institutional investors, seeing a pipeline of investors interested in investing in that product. Also interestingly, and it's the first time I've sort of heard this, but accelerated interest in some of the offshore hedge fund strategies. So certainly, according to Sean and the team, for those hedge fund platforms that had non-U.S. exposure, non-U.S. strategies, there was actually more alpha to be generated and higher returns for investors in either global strategies. So, for example, Penglai Peak, the Japanese multi-PM strategy that sits within Lighthouse, has seen some pipeline activity and interested investors in that product, which is fantastic. Also, despite the timetable being longer than expected, as you point out, there is continued progress on investor engagement on the Fortress Lighthouse multi-strat product. I think still -- I think it's been a little frustrating. And it's not really in the Lighthouse side, but really important to get that product structured to be able to scale quickly out of the gate. And I know there are cornerstone investors meetings happening, frankly, as we speak. I'd also, I think, you call out some of the customized mandates, a couple of pipeline mandates, large ones. Lighthouse may not win them, but large managed accounts, they're in active RFP process because to be honest, we're seeing, as you saw from that slide in the appendix, hedge funds are now the most sought after sort of allocation for 2026 by institutional investors according to Bank of America. So, I think in that situation, Lighthouse is very well placed to win some of those larger mandates. They're at a slightly lower fee level. They're pretty close to the average fee for Lighthouse, but we should see some of those execute during the course of '26. So on the sort of net inflows, new product side, Laf, that's a couple of touch points. Also, given how well the macro manager, which is quoted on Slide 15, has performed without 13, net, and that's in the normal strategy, the dynamic asset class of that product is actually up closer to 23% that is seeing interest that it hasn't seen for some time. The macro strategies are doing exactly what they should be doing in this climate. So it'd be disappointing not to see investor flow into that strategy. So, that's what really gave credence to the, I guess, more positive outlook during my first session. Next question comes from the line of Nick McGarrigle with Barrenjoey. Nicholas McGarrigle: Just one follow-up. The newer investments, the private market firms, can you just give us an update, Ross, on progress there? Looks like the result there for the half was really strong. Was there a performance fee in that? Or is that now kind of a typical recurring type level of profitability from those firms? And I guess, the intentions or the plans for them to continue growing into '26 in terms of flows? Ross Zachary: Yes, no, I'd be happy to. So if we think about those as Marble, Invictus and 1315 Capital, our newest partnership in aggregate, frankly, not how we designed it, but they all are raising capital right now. So it is hard to comment. They've also seen significant flows in this period. So, that contributed to the positive flow in the NGIC segment, but we do expect it to continue. And so if you think about between now and June 30, we would expect to see all 3 of those firms raise more capital. The distribution increase this year that Amber highlighted was a mix of increased FRE or management fee driven as well as some GP side, but nothing chunky to -- that would be any out of the ordinary. So, we haven't seen kind of a lumpy GP side overinflate that. So, we think the -- you could think of it as kind of a trend upwards as those have now scaled and continue to scale. Operator: Next question comes from the line of Tim Lawson with Macquarie. Tim Lawson: You just talked a little bit in the Directors' Report around the private market Partner Firms' distribution. It's obviously up very strongly for specific at 10.5% versus 5.5%. Can you just expand on the mix of that from crystallization versus distributions? And also any sort of color you can give on the NGI Strategic part, which you get in the annual report, but I don't think we get in the half year. Stephen Darke: Ross, do you want to take that or would you like Amber to? Ross Zachary: Amber, do you want to start and I can elaborate? Amber Stoney: Yes. I mean, it's really consistent with what Ross just said, actually. So it's probably a combination of both, pretty similar on -- in terms of what's coming from, to your point, the distributions from management fee side as well as what's coming from the carry and GP realization. So, that increase is sort of roughly probably about 50-50 on both sides. Stephen Darke: Tim, I was going to just as a follow-up there. I mean, we have received cash distributions after the end of the reporting period up until now of around about $12 million across the portfolio. But given the variability, that doesn't necessarily indicate anything in relation to the second half, but just updating everyone on cash distributions received post end of reporting period. I would also say that in relation, at least to Lighthouse, certainly, the second half of the year or the calendar year of 2026 has kicked off very well across all the strategies. We are seeing performance continue really from last year into this year. And as -- and I'm talking to Sean last week, until we get to midterms or discussions around midterms and the U.S. political seeing sort of second half of this year, the environment is pretty constructive for continued growth in those strategies that take advantage of dispersion and volatility. So, just a little bit of color for everyone in terms of how we're feeling about the environment, obviously, all subject to market conditions. Operator: Thank you. That does conclude our conference for today. Thank you for participating. You may now disconnect. Stephen Darke: Thank you, everyone.
Operator: Welcome to the Imdex Limited First Half '26 Results Presentation. [Operator Instructions]. Press the Documents icon to see copies of today's announcement and presentation. Select document to open it, you can still listen to the meeting while you read. [Operator Instructions] I will now hand over to IMDEX Managing Director and CEO, Paul House. Paul House: Welcome, everyone, to IMDEX's results for the first half of FY '26. Today, I am joined by Linda Lim, our Chief Financial Officer; Shaun Southwell, our Chief of Exploration and Production; and Michelle Carey, our Chief of Digital Earth Knowledge. The first half has been a record for IMDEX and has featured some outstanding results across all facets of the business, and I'm delighted to be able to share with you the detail that has delivered this result. Throughout this call, we will be referring to the 2026 half year results presentation released on the ASX this morning. At the conclusion of our presentation, along with Linda and myself, both Shaun and Michelle will also be available for questions. Our agenda on Slide 3 outlines the focus areas for today. We will walk you through our record first half performance. We'll provide an operating outlook for our major regions around the world, and we will recap our corporate strategy and the key focus areas as we look ahead. Bringing your attention to Slide 5. At IMDEX, our purpose is to efficiently and sustainably unlock the earth's value by enabling customers to find, define and optimize the subsurface environment with confidence and speed. We achieve this through the development and deployment of technology that drives smarter, faster decision-making for our customers. While our heritage is in mining, our technologies are increasingly being applied across the broader earth science end markets. Critically, our technologies first originate subsurface data and then enrich it by delivering that data to our customers wherever they are in the world through software solutions that allow them to make that next decision. The MINEPORTAL visualization on the slide in front of you demonstrates how we bring our purpose to life, turning complex subsurface data into real-time insights that drive better decisions. So let's turn to Slide 6, where we can speak to the strong financial highlights for the half. Our 1H '26 financial performance was the strongest first half in IMDEX history. We delivered record revenue, record EBITDA normalized and [Technical Difficulty] NPATA normalized $247 million was up 16% on 1H '25. Importantly, this growth has been led by strong market share gains and supported by an increase in exploration activity on established projects across all regions. Later in the presentation, we'll expand upon where our strategy and our technologies continue to create further opportunities for growth, both within mining and the adjacent earth science markets. Normalized EBITDA increased 22% to $78 million, with margins expanding 32%, a clear demonstration of the operating leverage [Technical Difficulty] that is in line with 1H '25 at $74 million, noting that the 1H '25 result included a one-off gain of $9 million. These results reflect positive demand for all products in all regions. They are particularly strong and pleasing results having regard to the ongoing industry challenges. That includes both geopolitical uncertainty and the rising cost environment I referred to earlier. Turning now to Slide 7. Cash discipline remains an ongoing strength of our business. Normalized cash conversion was strong at 86%, evidence of our disciplined working capital management while delivering on the growing demand for our next-generation sensors. Net debt increased to $27 million following the completion of the Earth Science Analytics acquisition in August. Our leverage ratio at period end was just 0.2x. We clearly have ample capacity and have used that capacity to fund the Datarock, ALT and MSI completions post the half year end date. And finally, the Board has declared an interim fully franked dividend of $0.0169 per share, consistent with our approach to capital management being a 30% payout of NPAT normalized. This is a record interim dividend for IMDEX shareholders. Turning now to Slide 8 and the strategic highlights for the half. Starting with Drill Site Technologies. IMDEX continued to strengthen its position as a global leader in drilling optimization and downhole intelligence [Technical Difficulty] per $100 of exploration spend, up from $2.10 in 1H '25 and $2.20 for FY '25, reflecting the continued adoption of IMDEX's integrated solutions. Our Integrated Field Services, which is a combination of Directional Core Drilling and IMDEX Managed Solutions, saw its revenue increase by 28% on pcp. Notably, our operating footprint grew by 12% globally as new customers adopt the Integrated Field Services model. Our HUB-IQ connected revenue, which highlights the strong connection between our hardware sensors and our software solutions to form that integrated system grew by a very pleasing 22%. Our Mining Production segment continued to scale with IMDEX Mining Technologies revenue up 47%. This was led by faster growth in underground applications and extending IMDEX's presence further downstream into that mining life cycle. Within Digital Earth Knowledge, our Datarock business grew 90% on pcp, reflecting strong demand for AI-enabled geological interpretation. Completion of the Earth Science Analytics acquisition strengthens our overall AI-driven geoscience offering with the EarthNET platform being highly complementary to our HUB-IQ and Datarock applications. I'll now hand over to Linda, who will take us through the key financial metrics and performance drivers for the half. Linda Lim: Thanks, Paul. Turning to Slide 10. I'll focus on the quality and sustainability of the first half financial performance. In 1H '26, we normalized our results for nonrecurring integration and transaction costs associated with the acquisitions of Earth Science Analytics, Datarock and Krux. Before stepping into the detail in the following slides, I'm pleased to highlight 3 outcomes that reflect the strength of our operating model. First, a record normalized operating cash flow of $67 million; second, a record interim fully franked dividend of $0.0169 per share; and third, a low leverage ratio of 0.2x following the ESA acquisition. Importantly, had we not acquired ESA, the group would have ended the half in a net debt cash position, having fully repaid the debt used to fund the Devico acquisition in under 3 years. Turning to Slide 11. As Paul outlined, half year revenue of $247 million represents a 16% increase on pcp, continuing IMDEX's track record of outperforming underlying exploration markets. Sensors, services and software is up 20%, representing 68% of group revenue. This continues the fast growth of our higher-value, higher-margin solutions. Sale of goods grew 9% with strong growth in fluids, which is tracking above market growth. Over the past 5 years, IMDEX has delivered a revenue CAGR of 15%, nearly double the growth rate of global exploration budgets, underscoring the resilience, scalability and structural strength of the IMDEX business model through the cycle. Turning to Slide 12. Our record first half revenue was driven by growth across all regions. Americas are up 20%, driven by strong U.S. activity and expanding operations across South America and Canada. Canada saw the biggest drop during the downturn, and activity there is still around 20% below its prior peak. Funding conditions have improved and the full benefit of increased activity is still ahead of us. APAC is up 9%, underpinned by strong sensor demand in Western Australia and signs of recovery across Asia. Europe, Middle East and Africa is up 17%, supported by technology-led growth and increasing adoption of Integrated Field Services. Importantly, the Americas and Europe, Middle East and Africa both delivered record first half revenue. Turning to Slide 13. Normalized EBITDA increased 22% to $78 million with margins expanding to 32%, a clear demonstration of the operating leverage that is a feature of our business model and disciplined cost management. Our discipline around cost management -- sorry, is in 2 key areas: First, reorganizing our operational spend to make existing operations more efficient and scalable; and second, continuing to invest in the areas that support growth and responding to expanding customer demand. Turning to Slide 14. There are 3 key messages I'd like to highlight on R&D. Firstly, we have continued to invest consistently in R&D through the cycle, and that sustained investment is clearly reflected in the performance delivered this half. Second, our R&D program is strongly customer-led. Projects are prioritized based on customer needs, and we retain the flexibility to adjust investment as those needs evolve. And third, our focus in 1H '26 has been on HORIZON 1 initiatives, continuing to build out our sensor and digital ecosystem with machine learning solutions increasingly embedded directly into customer workflows. Our disciplined approach to R&D investment and capitalization remains unchanged. We ensure clear pathways from innovation to commercial outcomes. Moving to Slide 15. We are sharing the capital expenditure by half year for the first time. Our intention is to highlight 2 key things. First, forecast and deliver into customer demand for current and next-generation sensors that will deliver revenue in the near term. We can clearly see this in the slide with the increase in CapEx for 2H '25 and the resulting step-up in revenue realized in 1H '26. Second is to show the blend between our capital investment in sensors and capital investment in software, again, in response to customer demand. This is increasingly important as customers take system. Turning to Slide 16, where we delivered operating cash flow of $65 million, resulting in a strong normalized cash conversion of 86%. This outcome reflects disciplined working capital management while supporting double-digit revenue growth and increased deployment of next-generation technologies. We closed the period with healthy liquidity and a $49 million cash balance, providing the flexibility to continue investing for growth, fund innovation and acquisitions and maintain our balance sheet strength. Importantly, this level of cash generation underpins our ability to execute the strategy while preserving capital discipline through the cycle. Turning to Slide 17. Our balance sheet remains strong. Returns have continued to improve with higher ROE and ROCE. However, I do note that 2H '26 will reflect an increase in acquired intangible assets. This balance sheet strength provides the flexibility to fund growth initiatives, including the completion of the Datarock, ALT, MSI and Krux acquisitions in 2026. Turning to Slide 18. Our capital management is underpinned by strong operating cash flow, disciplined investment through the cycle and a consistent 30% payout of normalized NPAT. This provides flexibility to reduce debt and reinvest in R&D, capital expenditure and selective M&A whilst balancing growth and shareholder returns. I will now hand back to Paul. Paul House: Thank you, Linda. Turning to Slide 20. I'd like to spend some time sharing the current outlook in the major regions around the world. The Americas remain IMDEX's strongest engine of growth, delivering record first half revenue. In North America, activity continues to be supported by extended drilling programs, particularly in the U.S. market, where near mine and brownfields work remains resilient. The FAST-41 program is improving project visibility and demand for integrated solutions that improve drilling productivity, which continues to grow. As Linda mentioned, activity in Canada is improving, yet remains well below its prior peak. However, the improvement in junior funding conditions over recent months is encouraging. Exploration programs are therefore increasingly well-funded, and we expect this to translate into higher drilling activity as the year progresses, most likely in the back half of calendar year '26. South America continues to operate at elevated levels, driven primarily by copper. Chile, Argentina and Peru remain very active, supported by long-term energy transition fundamentals and gold activity is on the rise, although cost pressures are leading to the demand for productivity-enhancing technologies, which is favorable to IMDEX. Overall, the Americas remains the most attractive market for growth as we look forward, driven by a combination of critical metals, government policy and that demand for improved productivity. Moving to Slide 21. In Europe, activity is supported by brownfields exploration and policy-led investment, covering defense, resources and infrastructure and therefore, a demand for metals. While Scandinavia remains slightly softer, this is being offset by growth in the Balkan region, where demand for drilling optimization is leading the majority of conversations with customers. In Africa, near-mine work for major miners, predominantly gold and copper, is driving the growth. While parts of West Africa remain challenging, this continues to be offset by emerging opportunities across Zambia, Eastern Africa and Saudi Arabia. Moving to Slide 22. Western Australia continues to show strong gold drilling activity, partially offsetting softer conditions in Queensland and New South Wales. The adoption of IMDEX mining technologies remains strong, and the pipeline for Integrated Field Services continues to build in this market and has significant headroom ahead of it. Importantly, the focus for Australian customers is a combination of productivity and real-time decision-making. This, in turn, is driving adoption of our next-generation sensors and our integrated HUB-IQ solutions. Outside of Australia, activity in the rest of Asia has been low for a long period of time. Increasingly, the outlook is positive, and this presents significant headroom for growth in this part of APAC. Turning now to our strategic outlook on Slide 24. Industry signals have continued to improve since our October AGM with key macro indicators strengthening. The supply/demand imbalance that sets the scene for exploration demand remains firmly in place as does the overall decline in proven reserves. That in turn is forcing exploration deeper and into more complex ore bodies, structurally increasing the need for advanced subsurface intelligence, most evident in commodities like copper, where supply is tightening despite the strong demand. M&A activity, including consolidation in the gold sector, is reinforcing industry momentum, and this is expected to act as a catalyst for future exploration activity. That said, overall exploration budgets remain well below prior cycle peaks. However, visibility is increasingly improving. We expect exploration budgets to increase by double digits in the calendar year 2026. Capital raisings have increased significantly across junior intermediate explorers. And remembering there is a typical 6- to 9-month lag between funds being raised and drilling activity commencing. We, therefore, expect a step-up in exploration activity through the back half of calendar year '26, subject, of course, to geopolitical and regulatory constraints. For IMDEX, these signals all point towards a continued strengthening in global exploration activity. We would regard 1H '26 as the swing period where we have moved from 3 years of decline in exploration towards a net growth in drilling activity. We are already seeing this uptake on established drilling programs. And at IMDEX, our sensors on hire are increasing across all regions. In summary, industry signals continue to align in support of higher market growth ahead. This higher growth in the exploration drilling market from Slide 24 connects to the right-hand side of the image on Slide 25. IMDEX's ability to deliver growth regardless of market conditions has been a strategic priority and a highlight of our progress in recent years. We have achieved that through strong progress in the 3 levers that we control outside of general exploration market activity. First, our growth in the share of exploration spend. By expanding our offering through targeted R&D, complementary M&A, and embedding AI across our physical and digital portfolio, we have been able to increase our share of exploration spend. Second, our market share. Driven by having technical leadership in each product family, which is reflected in the uptake of our next-generation of sensor technologies, and our ability to deliver fully integrated hardware-software solutions. Third, market expansion. Both geographically and into the Mining Production market segment and further afield into adjacent earth science markets. We continue to expand geographically with our global network presence continuing to grow to support customers where they operate in the world. These 3 pillars work to drive growth regardless of market conditions. As we look forward, our recent acquisitions complement all 3 of these growth pillars. Finally on Slide 26, I would like to draw together the key elements that position IMDEX to deliver sustainable returns. First, we have a market-leading, integrated physical & digital system, with technologies that work together to meet customer needs and embed IMDEX deeply into workflows. Second, we deliver high quality earnings supported by a technology led, capital light model, delivering structurally higher margins, exhibiting strong operating leverage and consistently high cash conversion. Third, our disciplined investment through the cycle has been a long-standing feature of our business and has again delivered value in the most recent period, while positioning us to benefit from a multi-year exploration upcycle that is ahead of us. Together, these strengths underpin IMDEX's leadership position and support the continued growth of a high quality, scalable earnings base. That concludes our presentation today and will hand back to the moderator for Q&A. Operator: [Operator Instructions] Our first question comes from Nicholas Rawlinson from Morgans. Nicholas Rawlinson: Congrats on the results. Sensors and software revenue was up 15% in the first quarter, and it's now up 20% for the half. So that implies around 25% in 2H. Is that a good way to think about the exit rate in tools? And just for fluids, now that we're lapping comps where those large contracts, which finished are out of the picture, is that also a useful proxy for fluids growth going forward? Or are there sort of different dynamics to call out in the fluids business? Paul House: Yes. I might -- thanks, Nick. I might start with your second question first. We've always said that we thought fluids was more directly responsive to changes in actual drilling activity. And so I think you're right now that those -- we have lapped those comps where we had a couple of significant contracts come off. I think looking forward, the drilling outlook or the drilling optimization outlook looks pretty solid. Of course, beyond fluids, we think of drilling optimization is including the DCD side of our business, which is obviously exhibiting much stronger growth in the half. The sensors revenue, I think, is a combination of the growth in activity, but also the next-generation technologies coming through. And so that pace can be not quite so linear. It can have to do with how quickly the size of projects that are taking on new technologies, but we still expect it to be pretty strong as we look forward. So double digits is pretty safe. So somewhere in between that 15% and 25% that you called out. Operator: The next question is from Evan Karatzas from UBS. Evan Karatzas: Can I just ask one around the headcount, please? Pretty impressive keeping that up to just like 2% first back in June, just given the revenue growth you're delivering. Just keen to talk through how you're thinking about headcount now for the second half, including obviously the acquisitions that are coming through, just the core IMDEX business, that outlook for headcount? Paul House: Yes. Okay. So I think we mentioned at the FY '25 result that we had been continuing to be trimming the business, including a slight reorganization to set up for Drill Site Technologies and Digital Earth Knowledge as we finished FY '25. And so that headcount discipline is partly a reflection of the work taken at the back end of FY '25. There -- we do add heads, of course, as we bring in the recently acquired companies. And I think the previous announcements show what that margin profile looks like. We can provide a bit more guidance later on around the FTEs that are being added from those acquisitions. Within the core business, however, we will continue to add people in customer-facing roles, sales roles, service roles in response to the market demand. But obviously, we get good leverage in that business model being predominantly a dry hire business. So without giving you a specific on the number of heads, we think about it in terms of what is the incremental headcount we need in the core business, what is the additional headcount that comes from M&A, but the rest of the business should have good leverage. Evan Karatzas: Yes. Okay. That was what I was trying to get to, right? You should expect some decent growth [Technical Difficulty] in the second half. Paul House: Yes, that's right, Nick. Evan Karatzas: Okay. And then just around the juniors, you obviously made some interesting comments regarding the raisings, but it's also yet to be seen on the ground. Do you want to just run through how you're thinking about the juniors coming into the market over the next 6 to 12 months and how IMDEX is preparing for that given it's been a pretty benign environment. You sort of shifted the business a fair bit away to the majors. Just how you're thinking about their contribution in the next 6 to 12 months? Paul House: Yes. I might answer that first, and we have Shaun Southwell on the call, and I'll get him to add a further comment at the end if I've missed anything. But certainly, we've seen the initial uptake being on established projects where there are clear targets, there's established permitting and adding extra drill rigs onto established projects is slightly easier. The junior capital raisings have set records month-on-month for a period of time coming through that sort of July, August, September period. Historically, it takes 6 to 9 months for that to go into the ground. And so we haven't really seen a significant uptake in that area yet, a little bit in WA, a little bit in Canada, but really not reflective of the amount of capital raisings. So I think that upside is all ahead of us. Canada today is circa 20% below its prior peak still. And if that gives you some indication of the headroom ahead of it. I think the only caution we have around that 6- to 9-month lag is simply around a lot of boardrooms are just a little cautious around deploying capital with geopolitical uncertainty. So if they can deploy it closer to home, that's fine. And although there's been a lot of talk about removing or improving regulations and environmental restrictions, we're not seeing a lot of that play through very quickly. We think the intent is real, but we just think that this -- it's still a bit near term, and there's still a little bit of risk that, that holds up deploying some of the capital. Other than that, I think it's just that 6- to 9-month lag coming off Q1, Q2 raisings will play through later this year. I probably should have handed over to Shaun then in case there was actually another comment you wanted to add. Shaun? Shaun Southwell: Yes. Probably the only other one would be a lot of the junior activity, particularly in Canada, is in BC. When the raisings came through, they're still waiting for their season. So their seasonal start as they come into the Canadian summer where this time of year, they don't do a lot of activity in the BC region. So we are seeing those delays and then you've still got to take into consideration the seasonal timing as well. Paul House: Yes, good point. Thanks Shaun. Operator: Our next question is from Mitchell Sonogan from Macquarie. Mitchell Sonogan: Apologies, I've just been jumping between a few, so I missed a few of your comments earlier. Just in terms of the EBITDA margin at 32% there, can you maybe just give us a thought of how you're thinking about that in the next 6 or 18 months or so? Clearly, you're expecting to see a stronger uptick in industry activity. But I guess you've previously talked about maintaining it around these levels here. So yes, just keen to understand how you're thinking about that in terms of up cycle versus ongoing growth in the business. Linda Lim: Thanks, Mitch. So the way -- when we came out of the FY '25, we did say that FY '26 is really a transitional year for us, especially with the cycle turning. So we always say about 30% EBITDA normalized margin is our guide for FY '26. We have realized operational leverage uplift for the first half, and we'll continue to obviously look at our OpEx cost base and making sure we're making good inroads in terms of keeping that disciplined approach and scaling our business. However, we are really conscious that we do -- the growth is happening and especially in our Integrated Field Services area. So we will need to invest, as we had alluded to at the end of the last financial year into our labor resources for that revenue. And also with the acquisitions coming in, there is a bit of margin pressure just purely due to the nature of those businesses. Mitchell Sonogan: Yes. And probably a pretty similar question really just for the Americas revenue up 20%. EBITDA margins were broadly flat. Any color you can give to the outlook in that region in terms of the revenue growth versus ongoing costs you might have to put into it to support that growth? Linda Lim: So the cost initiatives and cost discipline occurs across all of our regions, Mitch. And so we are looking to that scalability globally. And with Americas growing, obviously, we will be looking for making sure we've got the right resources and the right infrastructure to make sure we can deliver into that high revenue opportunity. And so yes, but there will be scalability opportunities across the whole globe. So we would be -- I'd be reluctant to guide anything different at this stage. Paul House: I think as I said -- I did make a comment on the call, Mitch, that we did see the Americas and, in particular, the U.S. still presents probably one of the most attractive growth markets for us looking forward. Operator: Our next question is a written question from William Park from Citi. Could we get some sense around competitive dynamics across your footprint and businesses as exploration levels continue to trend upward? Paul House: Yes. Thank you. Thanks, Will. Look, the broad statement I would make is probably 3 things. We don't think the overall competitive landscape has shifted too significantly. Importantly, we do continue to win market share, and we have some very good internal numbers that support that. But as we look forward, we expect that competitive intensity to remain. I think we are heading into, hopefully, a pretty attractive environment. And certainly, the industry's demands for -- or the cost pressures that it faces is going to see a focus on things like productivity. So I expect it will be -- the customer-led side will be seeking technologies that somehow speak to improved productivity, and that opens up the market for both IMDEX, but also its competitors wherever that can be demonstrated. That's not a bad thing. That's a good thing. Operator: A second question from William Park from Citi. How are you thinking about earnings trajectory with the strengthening AUD for the remainder of FY '26? Linda Lim: Yes. So there's -- yes, thank you, Will. There's definitely headwinds when it comes to FX. So with the strengthening Australian dollar, as we've spoken to before, our FX exposure on the revenue side is 50% U.S. dollar or U.S. dollar-linked revenue. So that will create quite a headwind for us. We -- our usual FX management structure remains in place, and we'll continue to monitor it. I think for the second half, the rough exposure for us on AUD/USD revenue exposure is about $1.5 million for 1% movement in the FX rate. Operator: The next question is from Gavin Allen from Euroz Hartleys. Gavin Allen: Congratulations on the numbers. Look, apologies if you've discussed this, I have been hopping around a little bit as well this morning. But you didn't -- you mentioned growth and in particular, in front of market growth in established projects. I'm just wondering if you could provide some flavor on the opportunity or the headroom available to you outside of established projects and what you -- how we think about the go-to-market plan on that front? Paul House: Yes. I think to be very clear, we have a footprint anywhere in the world where our customers might want to go, whether it's greenfield, brownfield, et cetera. So our network is well positioned to meet the demand wherever it comes from. The distinction between established projects is really to say that the ease of increasing rig activity on projects that are already drilling targets and you're just adding -- already have permitting, already compliant with whatever the regulations are, adding rigs on those projects -- established projects is a little faster. And so both juniors and [Technical Difficulty] intermediates and major projects or continuing to increase established projects. And so it really comes down to what the exploration budget focus looks like for intermediates and majors, which we expect S&P to publish some commentary on in the first week in March. And it all comes down to how quickly juniors do deploy what has been a period of record capital raisings. That's the headroom, I think, if that answers your question. Operator: The next question is from Josh Kannourakis from Barrenjoey. Josh Kannourakis: First one, just with regard to the split in terms of customers. Can you talk a little bit more, especially in North America about some of the success you've had with regard to going direct with the resource companies? How much that's had to play with some of the growth in that region in terms of taking a broader solution and whether you think that model is replicatable to that extent in other regions of the world over time? Paul House: Yes, I might answer that initially, and then I'll hand over to Shaun Southwell again. I think, very important, we recognize the drilling customer group as a distinct group and the resource customer group as a distinct group. Our portfolio of solutions can add value to each. Historically, what we have felt we've missed is where we had resource company-specific solutions to unlock value, we have been underweight in that area historically. But all of those integrated solutions that we've been talking about, the IMS portfolio, requires a collaboration between IMDEX and the driller and the resource company. And that is how we've been looking to advance that market. That started in the U.S., as you pointed out. Shaun and his team have already expanded that to other regions around the world. I think I'll ask Shaun to speak to what we've seen out of that 16% top line revenue growth. I think Shaun has some guidance on how much of it was that Integrated Managed Solutions offering. But Shaun, can I throw to you? Shaun Southwell: Yes. Thanks, Paul. Yes, we see activity pretty much in all of our regions around IMS. It's very dependent on the drilling conditions the customer is experiencing, which is why in the Americas, both in North and South, it is a strong business model because of the difficulty in drilling conditions there compared to places like in Australia or in Africa, where the complexity of the geology is far less. We've seen a double-digit growth in our field services, I think more than that actually, probably closer to 25% growth in our field services, and we expect that to continue. That's a combined of our IMS and DCD, which is actually when we completely supply all projects with all the technologies. Paul House: Yes. Thanks, Shaun. I think it was -- 28% was the Integrated Field Services uplift. Josh Kannourakis: That's great. Appreciate it. And second question, just with regard to CapEx. Obviously, there's a few moving parts given the additional new businesses in there. But Linda, would you be able to give us some context of how we should be thinking about maybe the core IMDEX business CapEx profile that you're thinking about into the second half and into '27? Linda Lim: Yes. Sure, Josh. So the CapEx guidance we gave remains whole. So we expect to see the second half to be consistent with the first half in terms of that CapEx. Josh Kannourakis: Got it. And just in terms of underlying that, like you mentioned the new products. I guess I'm just trying to understand a little bit more in terms of where you're spending the dollar and how we should be thinking about what's going in terms of new higher-margin products versus maybe some of the existing core and how much is available, I guess, within the existing fleet that you've got that isn't utilized at the current point in time? Linda Lim: Sure. So the way we think about CapEx at the moment in terms of the spread is we usually have about 20% is general CapEx. Then we say there's about 40%, which is growth CapEx and the rest is sustaining CapEx on the existing tool fleet. Operator: The next question is from Jakob Cakarnis from Jarden. Jakob Cakarnis: Just 2 for me, please. Could you just talk to the earnings skew that you're expecting for FY '26, just noting typically, you'd had a first half weighting at least over the last 2 years. But if I go back to the prior cycle, you've actually had stronger second half than your first. Could you just make some commentaries around that? Obviously, M&A will come in for a full contribution in the second half, too, please? Paul House: Yes, I'll start, and I'll hand over to Linda. You're quite right. So during the 3 years of exploration down cycle, H1 was stronger than H2 being reflective, I guess, of that down cycle. And you're right, in an up cycle, H2 is normally stronger than H1. And so as we go through -- we do think that the H1 '26 is a little bit of a swing period as we come out of that 3 years of decline. So I think we are sitting here despite some of the -- there's still some uncertainties as you go through that swing phase, but we would expect us to resume a period where H2 is stronger than H1. Could you add to that Linda? Linda Lim: I would -- no -- consistent. I mean, we still are expecting seasonality, though as well. We would normally expect to see Q3 to be consistent with Q2 and then Q4 to see that step up as we run into FY '27. So our seasonality guidance still holds. Paul House: And I think in terms of the acquired businesses, our focus is always -- and we're very consistent about this. Our focus is always in year 1 to not put too many demands on top line revenue growth. The value unlock comes from a very deliberate focused integration of the teams and the products and the networks, and that sets the tone then for growth in years 2 and 3 onwards. And I think there's only -- can you -- do you want to refresh on the number of months, where... Linda Lim: Yes. So we provided -- when we announced ESA and also ALT and MSI, we provided guidance as to FY '26 revenue contribution. And so also as Datarock and Krux are fully owned, and so we'll see their results actually instead of being in the share of associates line, it will be throughout the P&L. And so you'll see Datarock will bring 5 months of contribution and Krux bringing in 3 months of contribution going forward. Jakob Cakarnis: And just while you've got the mic, just on the working capital swing, I know you [Technical Difficulty] on cash conversion. Does that working capital unwind through the second half? And do we get back to kind of levels that you guys see historically, please? Linda Lim: Sorry, Jakob, I missed the first part of that question. Could you please repeat? Jakob Cakarnis: Okay. My headphones just decided that they pick up the Bluetooth again. I was just talking about the cash conversion in the first half, a little bit less than probably what you thought there was an uptick in working capital. Do we just assume that, that unwinds through the second half and you get back to where you have been historically on cash conversion, please? Linda Lim: So our -- so our guidance is 70% cash conversion, and that still stays. I mean, we have disciplined working capital movement to support double-digit revenue growth. So we are still very happy with the way we're managing working capital. We've made a lot of inroads to make sure that's as efficient and effective as it can be. And I think that's reflected in the 86% cash conversion. Paul House: Yes. I think in a growth phase, that 70% rule has been our historical practice. It is better than that in this half in spite of that top line growth. So I think that's a really good feature. A little bit of that will have to do with the shifting portfolio mix of sensors versus fluids, Jakob. Operator: The next question is from Lindsay Bettiol from Goldman Sachs. Lindsay Bettiol: Apologies if this question has been asked. I think a lot of mine have, but I was kind of cutting in and out. Just Krux and Datarock, like if I look at maybe the last update you gave us for FY '25, Krux' growth was circa 90%, Datarock was 60-ish. And the update today, it looks like Krux is like 80% growth and Datarock is kind of reaccelerating to 90%. So it just feels like the growth rates in both those businesses have taken very different parts in the past 6 months. Like firstly, can you just confirm if that's the right read? And if it is, like maybe just talk about the kind of differing trajectories of Krux and Datarock, please? Paul House: Yes. I mean happy to answer that, Lindsay. They're 2 very different digital businesses and being start-up businesses, their revenue trajectory can be a little bit lumpy. I think the difference being, Krux is a much more infield operations-focused business that goes through probably slightly harder sales cycles to get embedded and Datarock probably spends more of its time at the front end building the platform before it rolls out. And that's what you're seeing that shift in revenue growth. So I would expect -- and Michelle Carey is with me, but I would expect the Datarock business probably continues to compound at a higher rate in the periods ahead. And we think that the growth trajectory for Krux starts to benefit from being integrated into the Drill Site Technologies business under Shaun, which will happen post completion. So we still see significant headroom in growth for both of them, but they're just very different products. And as they go through that start-up phase, it just -- it's a little bit lumpy. But nothing has fundamentally changed in terms of overall expectations of either of those technologies. I might ask Michelle Carey if she wanted to add anything else to the Datarock. Michelle Carey: No. Maybe just the last comment to support what Paul said is, obviously, we were also aware from the start that Datarock were a little bit further -- not quite as far along in their journey as Krux and both of them are growing from a relatively low basis. So you can see a little bit of that as the growth rates evolve as well. Operator: I will now hand back to Paul as there are no further questions. Paul House: Wonderful. Thanks, Michelle. In closing, 1H '26 has obviously been an important period for IMDEX, particularly as we turn the corner on 3 years of very tough exploration conditions. The result has reinforced the strength of our strategy and the quality of the IMDEX operating model. Delivering record above-market growth, strong cash generation and the discipline that we've shown through the cycle has been a pleasing feature of the half. Our global network and our global team, both are unrivaled in the marketplace. And so we're very well positioned to benefit from a multiyear exploration cycle ahead and continuing to deliver long-term value to our shareholders. I'd like to extend my thanks to our team, our Board and our shareholders all, and I look forward to speaking with many of you in the week ahead. Thanks very much for your time today. Linda Lim: Thank you.
Operator: Thank you for standing by, and welcome to the Electro Optic Systems 2025 Full Year Results. [Operator Instructions] I would now like to hand the conference over to Dr. Andreas Schwer, Group CEO. Please go ahead. Andreas Schwer: Good morning, ladies and gentlemen. Welcome to our annual results presentation. I will go through the slide deck, which has been published on ASX this morning. Starting with Page #4 with the agenda. So we will go through the 2025 summary by highlighting the most important aspects of last year. I will give you some aspects in terms of market conditions. I will further explain our growth and expansion strategy. We will focus on the order book and the forthcoming sales pipeline before I will hand over to our CFO, Clive Cuthell, who will give you a detailed overview about our financial performance and the cash flow situation. At the end, I will take over again to lead you through our strategy and to highlight some further growth and strategic market opportunities. Let's switch to Page #5, please. The EOS leadership team is stable, the same as last year with one exception. We have added Lee Kormany. Lee is heading our Defense Systems Australia team. The other people you probably know from last year's presentation. So 2025 summary, Page #7. The markets are not only remaining strong, they are getting stronger and stronger month by month. Thanks to global tensions and some advancements on the technological side, we expect to benefit largely from those kind of superb market conditions. Our strategic focus is absolutely on 2 domains. One is the counter-drone business. We are aiming to become one of the globally leading anti-drone companies. And also, we want to become one of the world-leading space control or space warfare companies. EOS has enhanced its sales capability. We have added significant number of people, in particular, in Europe in order to increase our sales capability and the order book 2025 is a good testimony of that. We have also expanded in terms of geography. We have added new offices and operations in Europe, in France, in U.K., in the Netherlands and Germany to be followed soon. In terms of commercialization, we have succeeded in the high-energy laser weapon domain by EOS, becoming the first company worldwide to sign a 100-kilowatt high-energy laser weapon export contract. That is a breakthrough for EOS, and it's a breakthrough in the laser weapon world. And we are very optimistic to sign further contracts over the next years to come. We also have executed, in a very disciplined way, our M&A strategy. We have divested what is noncore to our business. So you might remember it was SpaceLink in 2022 and 2023. And now we have divested also EM Solutions because it didn't fit or it doesn't fit our long-term strategy. Instead, we have reinvested into something which is absolutely core to our business, into a C2 command and control company, MARSS, which also brings with it AI technology, AI algorithms, which you can easily put into our remote weapon systems and the laser weapons to further increase and improve the performance in terms of drone detection and classification. So all those things, we can tick the box and which makes us very optimistic in terms of future outlook. We move to Page #8. Let's have a look to the highlights of 2025. So the revenue was $128.5 million. It's down compared to '24 because of 2 aspects, obviously, because of the divestment of EM Solutions. and second, some of the major order intakes happened later than we wished to be in 2025. And that had obviously also an impact on the revenue in 2025. We expect in return all that to happen in 2026. The gross margin went up to 63%, which is very positive and very pleasing. The underlying EBITDA with minus $24 million is a result of our revenue, which went down. And you might remember our CFO saying that our breakeven is around AUD 200 million. So obviously, we expect this year to see a change there. If you look to the order book, I think that is the most important aspect here. We have signed last year 18 contracts totaling up to AUD 420 million order intake, which is a significant high number compared to the year before, where we only had $70 million, 6 orders in order intake. This is resulting in an unconditional order book of AUD 459 million, and this unconditional order book does not include the conditional order, which we have signed with a Korean client. Our cash position is very positive with more than $106 million plus the restrained cash sitting for bank guarantees and other activities, and that comes on top of $106 million. In terms of investments, we have opened quite recently our new high-energy laser weapon factory in Singapore, and I will come back at a later point in time on that particular subject. We've announced the acquisition of the C2 command and control company, MARSS, end of last year, beginning of this year. We have opened up facilities in the Netherlands, France, U.K. and Germany will happen also this year. Our total number of employees went up to 436 people. We remain extremely sensitive in terms of adding indirect costs to our organization to keep overall indirect cost and overhead low and to stay very competitive in terms of our pricing structure. Page #9. If you look backwards into 2025, the year was filled up with many positive events, obviously a little bit back-end loaded. I just want to highlight, again, in August, the landmark contract with the Dutch government for the first 100-kilowatt laser weapon, EUR 71 million. We have been successful in bidding with LAND 156, which by the dollar value now is not so large, but it has more than AUD 1 billion order intake perspective as we are now selected with our partners to be the solution provider for the anti-drone systems for Australia. We also signed the LAND 400 Phase 3 contract with more than $100 million in October and towards the end of the year, very important contracts with General Dynamics, one of our key clients, and one of them is opening up the big market towards the U.S. Army as we became the key supplier for the future Abrams main battle tank. I will also come back to that in a minute. So the market conditions are superb. The markets are growing as the budgets are growing. And as long as geopolitical tension continues to be high, we can benefit from that one. This statement is not new. But again, if you see how much budgets are growing over the last few months and how many governments have formally stated to go even higher, this is very promising for Electro Optic Systems. And again, that's the key reason why we want to expand into those markets, in particular, into the European market as in Europe, this super-cycle is extremely dominant. On this chart, again, you can see on the right side, the number of drone attacks, which is extremely growing. The number of missile strikes on Ukraine is rather going down. That has more or less a kind of price or cost structure rationale behind. The anti-drone business, as a consequence of that, will become predominant. The entire warfare situation in Ukraine has changed dramatically. The Ukraine war in the beginning was pretty much a kind of war on the ground between artillery forces on the left and right side. That has changed now drastically. It's now a drone and an anti-drone warfare where the front line is dominated by loitering ammunition falling down and destroying tanks which are high-value target destroyed by drones for a few thousand dollars only in terms of production cost. So this is the key reason why we believe that this drone or anti-drone warfare will be dominant not only in Ukraine, but will also play a dominant role in all the future conflicts to come. And that's the reason why we invest heavily into this kind of technology base and why EOS is well positioned to become a global leader in this particular type of business. Page #12, you can see the different types of effectors being able to defeat drones. You obviously need to have a layered response to tackle the different types of drones attacking your high-value assets. EOS is concentrating on the so-called hard kill. We're concentrating on hard kill as soft kill becomes less and less effective in military context as drones are more and more hardened. In the area of hard kill, EOS has by far the broadest product portfolio globally. Our product portfolio includes remote weapon systems. Here, we are one of the world market leaders. Nobody is as accurate as we are in terms of anti-drone performance on long range. We have added to our portfolio, end of last year, interceptor drones, drones which fly up, which kill the attacking drones by flying into them. That is a new type of effector which we are happily adding to our portfolio and which is predominantly of advantage in commercial or homeland security applications where you cannot use missiles, rockets or canon-based air defense systems. We have added now high-energy laser weapon and our actual architecture allows us to scale those weapons between 50 and 150 kilowatts. And I just want to remind everybody that there's only one other competitor to EOS in the global market. And so the overall competitive situation is very, very favorable to EOS. We have also added rocket systems and various types of missile systems on our multi-carrier platform, so we can offer the full range to be able to defeat any kind of incoming drone threat. And with the acquisition of MARSS and its NiDAR Command & Control system, we are now in a position to offer fully integrated solution. The command and control system is the brain behind any anti-drone system as it identifies the threat as it allocates the various effectors to the threat, and it's the key to make sure that you can defeat large quantities of drones or drone swarms. So now we are in a position as one of the very, very few bidders on the market to offer turnkey solution to any client in the military, in the homeland security and in the civil/commercial context, including operators of airports, for example. Let's move on to Page #13, please. Number 13 is not an exhaustive list of partners and clients. All those companies mentioned here are also clients of Electro Optic Systems. You can see very prominent names, big OEMs worldwide, OEMs which trust EOS, which trust our performance, our quality, our high-end products, and all of them have acquired our products. I just want to highlight one aspect. You can see on the right upper side, a prototype of the M1E3 Abrams main battle tank. This is the breakthrough landmark contract, which we have achieved by end of last year. Even if the dollar value is not so impressive, it is only the very first slice of something which will become very, very big. So after many years of absence from the U.S. Army market, we have succeeded now -- we have been selected by the U.S. government and by General Dynamics to become their sole partner to put our R400 Slinger weapon station in a very autonomous version on top of the Abrams tank, allowing this very important American platform to survive the threats of the modern battlefield. As the U.S. Army is operating thousands of those tanks and as many export clients around the world are operating Abrams tanks, we believe that the total market potential just for this type of integration installation will add up over the next 15 years to up to USD 3 billion. So that's the reason why this contract now, even if it's only the very first slice, is extremely important for Electro Optic Systems. We expect further slices to come in the course of the next years, and this will add up to those large numbers then. Let's move on. Slide #14 is a selection of some partnership agreements which we have signed in the course of the last year, very important ones. So Calidus is a very strategic partner in the Middle East for EOS, not only for remote weapon systems, we aim also partnership in the other product domains with Calidus to open and to secure, for example, the very important UAE market. We've signed, under recommendation by the British government, a partnership agreement with MSI, which opens for us the U.K. market and associated exports market. So MSI will produce our weapon systems under license. We've also entered into a teaming agreement with a world-leading KNDS company, which is this German-French multinational company. KNDS is also highly interested in the partnership with us. We can add up there or we can add and integrate their canons on our weapon stations. And KNDS in return is interested in producing our weapon systems, our remote weapon systems in France for the French market, for example. So very important to penetrate those European markets. And we most recently also signed a strategic partnership agreement with a Turkish company, Roketsan. Roketsan is also a very strong, very large company active in the missile domain today, which has decided to enter into the high-energy laser weapon domain. And with Roketsan, we are in a very comfortable position and very optimistic to conquer also the Turkish and associated export market with high-energy laser weapons. Page #15. So the high-energy laser weapon domain is, for us, the first strategic pillar of growth over and above a remote weapon system market, which is growing by itself. Again, irrespective of whether or not the Ukrainian conflict would come to an end, the remote weapon system market will continue to grow and the laser energy market -- the high-energy laser weapon market will be the first layer above that. As there's only very limited competition in our 100-kilowatt power domain, we expect that we can acquire a large chunk of the non-U.S. international market. In order to be able to serve those huge markets, we've opened up our first, and I think it's the worldwide first serial high-energy laser weapon production facility. It was opened on February 6, so quite recently. It is a 20,000 square feet capability, a factory which allows us to produce 20 laser weapons per year, and we have expansion potential to go up to 40 laser weapons per year there. But even if we can produce 40 laser weapons per year there, we expect that most of our clients will ask us to localize production in their home country. And here, our unique feature comes into play as EOS is the only company worldwide in the laser weapon domain, which owns all the IP relevant to do this kind of development and production. We can offer turnkey solutions, and we can localize the production in each client country, which none of our competitors is able to do so. That's the reason why we strongly believe into this kind of strategic growth area. To give you some update on where we are with the Netherlands contract, so the initial design approval, the first milestones, have been successfully passed. We have passed the so-called PDR on the system. We have passed the CDR on the laser itself, which is a very successful process and progress which we have achieved. The client is extremely happy. We are negotiating now with the clients to increase the scope of the contract and to accelerate the delivery time frame. The client is highly interested in signing further orders with EOS and to make EOS a strong partner -- a strong strategic partner of the Netherlands government. So this is very promising, and it's a world-class testimony of our quality and performance. If you look to the opportunities, our go-to-market strategy depends on the type of client, depends on the region. If you look to the NATO market, and in particular here, the Western European market, it's, in most of the cases, either a direct sale to a government or we go through partners and through teaming arrangements with the respective national champions. If you look to the Middle East, it's either direct sale or it's a partnering model with local producers. In many cases, it's governmentally owned companies. And if you look to other markets like the Korean markets, there are a range of other channels, depending on the specific local market conditions. So we have continued discussions and ongoing negotiations with many countries and many governments related to future high-energy laser weapon sales opportunities. Among those ones are Germany, France, Italy, Turkey, Saudi Arabia, the UAE, India, Korea, Australia and the United States. This list is not exhaustive, but it should give you a little bit of a perspective of how much this kind of weapon system is in demand and how much the market will grow in the future. And again, we are in the pole position because we have been the only company so far being able to sign a 100-kilowatt laser weapon contract to an export client. The conditions of the USD 80 million Korean laser weapon contract we have mentioned before, it's a highly conditional contract. It's not included in our internal planning. We have not spent any money on that one so far, but we expect that the conditions will be concluded in the course of the first quarter this year. But again, no guarantee is coming with that one. Page #16, space warfare, whereas we call our product line for high-energy laser weapons in the anti-drone business domain, Apollo, we have given our product family for space warfare, the name Atlas. Atlas comes in different configuration in fixed installations, like you can see here on the right side of this slide, or it comes in a mobile configuration. It comes in containers, which are coming on the backside of trucks. So the Atlas product range is designed in order to fulfill 3 dedicated missions. The first mission is to blind and dazzle satellite sensors to stop satellites from taking pictures and intelligence from the ground. That's very important in any kind of military context. The second mission is to disable or to defeat satellites. This kind of destruction capability comes by increasing the laser power. So if we include now our high-energy laser weapon capability, the 100-kilowatt effectors, into the kind of optical chain of our telescopes, it will allow us to do those kind of missions. And the third mission is obviously to move satellites and to move space debris. We can even cause atmospheric re-entry if we illuminate those satellites and space debris with our laser weapons. So this is giving our operators, our clients, a huge portfolio of more decisive capabilities. I want to highlight that there's not any other company outside EOS being able to offer this kind of competency and capability to any client. That's the reason why this will become a huge growth opportunity for EOS. And I'm very happy to announce also that we welcome frequently commanders from Tier 1 governments, commanders of space forces coming to Canberra, coming to our Mount Stromlo installation to visit and to witness what we can do in this kind of domain. Page #17. You might remember this slide from the last year. We always had 3 ticks. The tick on markets was there. The tick on product was there as we have launched many new products. We are highly innovative. And we can also tick now the right side of this slide, we can tick sales and marketing, and we can tick the order book as we have increased our order book from $136 million end of 2024 to more than $459 million by end of December 2025. Again, this does not include the USD 80 million order from this Korean client. So this is an extreme success last year. And again, we expect this year to be extremely positive in terms of order intake. We will continue putting focus on order book growth as this will be the baseline for any revenue growth in the future. Page #18. I don't want to go into all the details here. I mentioned some of them before. Important is really that our European footprint is creating now much more value, much more order intake. And if you really look to the development of the unconditional order book, this underlines our statements. It is very strong with $459 million, and we aim to realize about half of this order book value by revenue in 2026, plus all revenue coming in by new orders taking on board over the next few months to come. Page #19. This is an updated pipeline. This pipeline is extremely conservative. So if you go through that one, you will notice that we have not included here order intake for laser weapons in 2026, but we're obviously aiming for achieving order intake for laser weapons in 2026. But even if it would not come hypothetically, the pipeline is very strong and the foundation for a very strong year in terms of revenue is extremely high. So it's -- this contains order intake opportunities from all around the world. It is extremely diversified. It includes lots of opportunities from the Middle East, but also from North America and from Europe. And it should give everybody lots of confidence that the growth strategy of the company is intact, and we are in a very, very healthy and extremely positive outlook position. Page #20, a summary of the MARSS acquisition. MARSS is one of the very few companies in the market, which is offering a highly customized integrated anti-drone solution. It is a company which has fielded more than 60 systems around the globe, a company which is well established, a company which is world-leading in terms of user intuitive C2 systems, a company with which we have collaborated in the past for a long time. And our team always came back and said that the MARSS integration is the most easiest to be done. The MARSS user interface is the best one from a customer perspective. And with MARSS being part of our EOS portfolio once we have completed the deal in a few months or weeks from now, we are in a position to offer turnkey solutions to the client. And again, with this kind of capability, we have also the advantage of including all those AI algorithms into our weapon stations and into our laser weapons to make those weapon systems even more competitive and leading edge by being able to even better discriminate drones and to detect drones. So the transaction summary, we announced that on January 12, there's an upfront cash payment of USD 36 million, plus an earn-out in shares and cash. The earn-out will happen as the order intake is happening and as all those products and all those orders are extremely profitable, we expect that we can pay those kind of earn-outs by the order intake cash flow to come. So I would like to hand over now to Clive to go through the details of the financial results 2025. Clive? Clive Cuthell: Thank you, Andreas. So for those that joined late, my name is Clive, and I'm the CFO and COO. I joined EOS 3 years ago in mid-'22, going on for 4 years. Revenue -- as this slide shows, revenue came in at just over $128 million. That is in line with what we said at the end of January, which was slightly above the guidance range that we issued at the end of the year last year. The lower revenue compared to last year really reflects the end of old contracts and the start of some new ones and a little bit of a gap in between. And obviously, there's been, as Andreas said, a big focus on growing the order book this year to underpin a position next year that hopefully will be more favorable. The gross margin was 63%. This includes 2 main things. One was the benefit of a contract that was finalized in the Middle East. That was already reported back in June, so that's not new news. The second thing that's perhaps more significant is there has been a continued improvement in the base gross margin in our business. We do not expect to achieve 63% gross margin going forward, but we do expect a continuation of the multiyear improvement in gross margin that we have seen consistently between '23, '24 and '25. So we are aiming for continued improvement in '26 on the historical levels, perhaps over 50%. The underlying EBITDA was a loss of $24 million, mainly driven by the lower revenue during the year. The gross margin benefit was offsetting some increase in operating expense as well. The EBIT was impacted by a number of items, including higher depreciation and amortization, a big chunk of which is customer-funded CapEx. We also had 2 nonrecurring items totaling $9 million. These are nontrading, 2/3 of this relates to the ASIC matter penalty in Australia, and the other 1/3 relates to some acquisition costs with MARSS that were expensed during the year. And there are some details in the back of the slide deck on these nonrecurring nontrading items. Finance costs improved. All debt was repaid in January 2025, and EOS today has no borrowings. The expense for finance costs includes the make-whole expense relating to the debt repayment that took place in January 2025. And the total net profit after tax includes the continuing operations, but it also includes the $91 million gain on sale that was recorded in January 2025 following the sale of EM Solutions that Andreas mentioned earlier. Maybe the other thing to note and highlight on this slide is that we have done an awful lot of work, as Andreas said, on revenue diversity. And the graph at the bottom right of the slide shows the split of revenue by geography, and as we said, an increasing emphasis on Europe, not just in the orders secured that Andreas mentioned earlier, but also flowing into revenue this year. So that work going to market in different ways in different parts of the world is going to continue as we -- and we expect the quality and the diversity of the revenue base to continue improving in future years. The next, Page 23, has the segment results for defense and space. The outcomes at segment level here are largely a result of lower defense revenue because of the gap in contract activity during the year. In the space business, pleasingly, that business continued to grow during the year. As Andreas said, this is really developing -- designing, developing and starting to commercialize new products, particularly in the space control area. And it's pleasing to see that Atlas system work includes customer-funded activity, which flows through the revenue line. As we said, a big focus on growing the order book during 2025. And we have said the order book of $459 million, our outlook for this year -- we've not issued revenue guidance, but we have said that between 40% and 50% of that order book of $459 million is what we're aiming to realize in 2026. And that should give you a little bit of a thumbnail sketch as to where revenue could end up. The next page has cash flow on it. Now the cash flow information was largely announced at the end of January already. So some of this is not new news. But as you can see, the operating cash flow was a net $24 million out the door. That's despite the lower revenue during the year. We did have some big receipts from the finalization of the contract in the Middle East. And also in the cash flow, we had the impact of interest in the operating cash flow -- the impact of the make-whole interest that I mentioned earlier. Investing cash flows, which was $130 million coming in, included the disposal proceeds on the sale of EM Solutions as well as some other items. Notably, the level of security deposits on bank guarantees also reduced during the year. which is a positive. Financing cash outflows included the repayment of debt of $48 million that occurred in January with the sale -- January 2025 with the sale of EM Solutions. Maybe just a couple of other things. Cash flow discipline is quite important to us at EOS. At the end of December, we achieved the highest yet, the highest ever position of cash received in advance from customers. So upfront payments from customers at the end of December were $42 million, which is up $18 million on the prior year. And that's because of a consistent focus on this item as we deal with customer contract negotiations at the signing stage. We continue to manage cash carefully. We do make targeted investments in inventory where we can get a source of competitive advantage from reducing long lead times as some of our competitors are not able to supply quickly. And if we make limited investments, we can really improve there. On the balance sheet, as we've announced previously, cash at bank $107 million at the end of December. And we have a committed term loan facility for $100 million with docs being finalized at the moment to help cash flow liquidity protection over the next 12 and 24 months, and particularly as we get into the MARSS acquisition and aim to realize a lot of the growth that we've been mentioning earlier. That's it on cash flow, and I'm going to hand back to Andreas now, who's going to talk a little bit more strategically. Andreas Schwer: Thanks, Clive. Page #26, key strategic achievements. EOS will position itself as the leading counter-drone company worldwide, being able to serve any kind of client, whether it's military or nonmilitary. And in order to do so, we have also increased our portfolio in counter-drone effectors. So beside our R400 Slinger, we are at the last stage now to also include the R800 in anti-drone configuration to the field. And all those systems will be, in the future, equipped with AI-enabled C2 system coming from us, which allows us to be even more effective. I just want to mention one further contract, which we have not announced so far in the -- which we have not outlined here in the paper. It's the German UTF tender. It's probably one of the largest RWS tenders over the next 10 years to come. The German government wants to procure more than 3,000 systems and among -- and we've been among 13 bidders to bid for this first phase of the contract. The German government has down selected 3 bidders to go into the last round of selection, and we are proud to say that our partner Diehl and EOS, we are among those 3 last bidders in a very promising position. So we are very optimistic to make that happen in the course of this year and to announce an order intake on that one, not this year, but the final decision is probably to be made by the German government in 2027. So this is -- this will become then also the next landmark order intake. Again, it's more than 3,000 weapon stations. So that's underlining our growth strategy in remote weapon systems. And as we have now partnership agreements in place with local champions in Germany, in France, in U.K., those markets are widely open for us in the future. The high-energy laser weapon market is just starting now. And again, we are one of the very, very few contenders in this market, only one other company active in the 100-kilowatt domain. This is promising very healthy contracts, very profitable contracts in the future. And with our new laser innovation center, the worldwide first serial production laser center, we should be well positioned there. Space control, to be more commercialized, we have to complete our development on the mobile solution, the mobile Atlas solution, which will put us into a market which is just about to come. It will position us as the unique source outside U.S., and we will be very well positioned to let the company grow in space control then over the next 3 to 10 years. So Page # -- what is that, 27, our growth strategy. Again, we will have a very robust organic growth by RWS by enabling our weapon stations with the AI algorithms and with bringing further counter-drone variants to the market. This will be substantial for our further growth. And then, with the laser weapon and with the MARSS-enabled C2 systems, we'll be in a position to bump our revenues up significantly over the next few years. Before then, space control will kick in with very substantial revenues to become the world market leader in space warfare. So we will continue commercializing our IP assets, our huge inventory of IP and innovation. We will further put effort in developing software. We will continue investing into new features such as mesh network technologies to give our clients a leading edge over anybody else in the market, whilst obviously maintaining our strict capital discipline. So Page #28. The markets will remain very supportive. We are benefiting from a super-cycle. We are perfectly positioned with our counter-drone and space control business segments within those markets. And as our growth strategy and our go-to-market strategy in Europe is already proving that we are highly effective and highly successful, we are very well positioned. And again, with the inclusion of MARSS in our portfolio and our widened product range, we should be able to offer and to reach out to all the homeland security and commercial clients in the future as we expect that most of the airports, most of the civil and commercial infrastructure needs to be protected against drone attacks in the future. EOS wants to be in the middle of this kind of market to become the world-leading anti-drone company. Thank you, ladies and gentlemen, for your interest. We are ready now to answer your questions. Operator: Your first phone question is from Baxter Kirk with Bell Potter. Baxter Kirk: Andreas and Clive, can you hear me? Andreas Schwer: Yes. Baxter Kirk: You've mentioned commercialization of the stationary Atlas product from 2026 onwards. What would the initial contracts look like? Should we expect multiyear development contracts like the laser contracts and then followed by JVs? So how would that work? Andreas Schwer: So the product in terms of stationary fixed asset product is available. We can duplicate our installation on Mount Stromlo. It's a fixed asset, which we are starting now to offer to the market, to clients. So a copy of this kind of system comes in for a price of around about USD 100 million. That is an asset which we can sell instantaneously. There is no further development needed. Development is still continuing for the mobile solution where we expect to be able to have a prototype ready by end '27, 2028. Baxter Kirk: Okay. Great. And since the events that happened last year regarding the drone incursions across Europe, are you seeing an acceleration in procurement cycles, particularly for your counter-drone products? Andreas Schwer: Yes, we can see a growing demand, but obviously, military procurement cycles are long lasting. It goes through a very complex capability definition process on the client side, followed by low quantity orders, and that is what we are seeing today. And as soon as low quantities are delivered, as soon as they have done the incorporation into their overall multilayered ConOps process, we can expect that large quantity orders will follow by that. It's the normal kind of cycle when you introduce a new weapon system to the market. Baxter Kirk: Okay. So there's no sort of -- they're not skipping steps or anything, given the urgency of drone protection. It's just following normal procurement cycles. Andreas Schwer: In most of the cases. Obviously, if there's an emergency demand like to support Ukraine, we can expect quick delivery and quick turnovers, same in the Middle East. So that is still the case. But predominantly the market of the future, the growth market will come through normal type of procurement cycles. Operator: There are no further questions on the phone line at this time. I'll now hand back to address any webcast questions. David Bert: Thanks. We have a number of webcast questions, and we'll try to get to as many of them as we can. There are some related questions, which I'll present relating to the 40% to 50% realization of the $459 million backlog. Could you talk a bit more about what sort of swing factors would affect that range and any weighting that you can provide as well? Clive Cuthell: Thanks, David. So the order book is -- as we said, we're pleased. It's grown a lot to $459 million at the end of December. We -- obviously, we track the tenor or the rollout of that order book quite carefully for our internal management purposes. And today, we have guided that we are aiming for 40% or 50% of that order book to roll into calendar 2026. So that represents something like AUD 180 million to AUD 230 million. Now that's obviously the revenue that we're aiming for that could come from the existing order book. And obviously, on top of that, as Andreas mentioned, would be new orders received, particularly in the first half of the year that are capable of delivery before the end of the year. We do -- what are the factors that impact where we land in that range? Obviously, it depends on -- a little bit on order intake and whether we get short notice orders, but also it depends particularly on delivery. A large amount of delivery is within our control, but some of it involves very close cooperation with customers, but we've been working quite hard for several months now to lock in as much of that 2026 revenue as we can. So it does depend on -- more largely on delivery than on new orders being won. We have not issued revenue guidance. This guidance that we're issuing today in order book rollout is as far as we're going at this stage. But we can say that the revenue is as normal, is more likely to be weighted towards the second half than the first half of the year. And if that changes, we can -- we will be looking to keep the market informed. There is quite a wide range in analyst consensus out there that we are aware of. Some of the analyst numbers assume an exceptionally high level of order intake and I'm not -- being turned into revenue in 2026. I'm not sure that's quite right, but that's as far as we're prepared to go at this stage. So thanks for that question, David. Hopefully, that deals with the 2 or 3 questions that have been asked on this area. David Bert: We have a couple of related questions on the Korean high-energy laser contract. Can you confirm if the deposit has been received yet? And if not, is there a deadline on when this contract would be terminated? Clive Cuthell: Thanks, David. So we've been quite clear in our announcements that the deposit has not yet been received. That was a condition in the contract. And the second condition is for a letter of credit to be finalized, and we've also been clear in our announcements that, that has not occurred yet either. And I'll pass to Andreas for the second part of the question, which is how do we look at this? David Bert: Yes. So is the South Korean contract exclusive? And if so, does the cash deposit have to be provided before -- between the 2 parties? Andreas Schwer: So the South Korean contract, which is signed with a private party is not exclusive. We are in parallel also in discussions with the Korean government and end users. And yes, at any point in time, we can enter into contracts with the government in parallel. David Bert: Another question relating to the high-energy laser facility. You mentioned that you can build up to 20 lasers per year. Why does the current order take up to 2 years to build? Andreas Schwer: It takes more than 2 years to build because of the supply chain. Key components which we have to buy from the market have a long lead time. And that is the key reason as with any other weapon system you sell to the market that simply the delivery time line is usually between 2, 3, 4 years. We try to optimize this time line, and we are in negotiations with the client to bring the delivery forward. If everything works well, it could be as early as end of 2027, which is compared to the procurement of any other weapon system, quite a record time. David Bert: Great. There are a number of questions about the German opportunity with Diehl. Could you just talk a bit more detail on -- and what sort of price points for the products? Andreas Schwer: So the German UTF tender, which is about 3,000 systems, it's related to our R150 weapon station, which we do, and which we produce together with the German partner Diehl. It has a total market potential of more than EUR 1 billion. David Bert: What are the next steps for the M1 Abrams tank integration opportunity? Andreas Schwer: So the contract which we have signed end of last year was about to finalize the integration of the R400 Slinger and a very specific version on the Abrams tank. We expect that to happen in the course of 2026. We expect to get the next slice of orders in the course of this year, 2026, before then, large quantity orders will come in by 2027 onwards. David Bert: Great. An analyst has asked, what are the expectations for capital expenditure in 2026? Clive Cuthell: Yes. Thanks, David. So CapEx -- we don't provide guidance on CapEx, but historically, it has been -- typically it has been less than $20 million. I would emphasize that, within the amounts that we've had historically, very significant portions of our CapEx have been funded by customers under customer contracts with no net cash going out from the business. So we would expect to see that activity continue. We do make selective investments in opportunities where we see near -- modest amounts of development spending being required. But we are very judicious in terms of the level of investment risk we take around technical developments and the amount of money we put at stake, and that is going to continue. So that's -- I'd probably leave it at that, David. David Bert: There's a question here on what kind of opportunities are in front of MARSS in terms of timing, value, type of end products and customers? Clive Cuthell: Thanks, David. So we think the opportunities in front of MARSS over the next 2 to 3 years are exceptional because they provide a route to market in the counter-drone area. MARSS has a pipeline and it has an order book, and as one of the slides said earlier that our pipeline slide and our order book slide do not include any information in relation to the pipeline and order book of the MARSS business. They consistently look at a number of markets and different opportunities. And at the moment, they're looking at opportunities that include anything from EUR 20 million and EUR 30 million per bid to, in a few cases, bids that are much larger, stretching upwards, including EUR 50 million and EUR 100 million per bid. Now the lead time on sales in the MARSS business is -- which sells into defense and homeland security, a bit like us, the lead time is just as elongated in that business as it is in ours. But we are hoping that the business could achieve significant orders in '26 and '27 that could make a potentially very material difference to the EOS order book over the next 12 and 24 months. We are not expecting the MARSS order book to be dilutive to EOS margins in any way. And naturally, we are looking for the right cash flow profile on these orders. I think it's a bit too early to be more specific on the size of the order opportunities, but I'm just going to ask Andreas to make a couple of other comments about how we see the market overall for the MARSS products and the cross-selling opportunities. Andreas Schwer: So the market opportunities are tremendous. Their home market was the Middle East or is the Middle East. And as you can see by the geopolitical tensions and the actual political threat scenario between Iran and the other GCC countries, we expect further push coming from that end. So we hope to be able to sign contracts over the next 12 months in a significant value to protect critical military and governmental infrastructure in countries like the UAE or Saudi Arabia. That is imminent. And again, politics is playing currently in our favor there. We also expect that we will be able to sign contracts in non-Middle Eastern markets, in European markets. But obviously, as we need to reach out now to NATO clients for the MARSS portfolio, which was not done before to a large extent, this will take a little bit more time. But yes, all the protection requirements for critical infrastructure in Eastern and Western Europe, MARSS is made for that. And we believe that, that market on the long run will be extremely substantial for EOS. David Bert: Great. There's a question here about the recent news articles around the German government pausing of the Rheinmetall high-energy laser weapon contract. Can you comment further on this? Andreas Schwer: Yes, sure. So we have to look a little bit backwards in history. So the German government has supported Rheinmetall and MBDA over the last 15 years with more than EUR 150 million subsidized R&D work to develop laser weapon technology. Today, Rheinmetall has reached a level of 20 kilowatts, and they have offered and agreed with the German MoD to get into a development contract to develop a 50-kilowatt solution in the course of the next 5 years for a total budget of EUR 500 million. That is a very tremendous amount of money. And when the German parliament -- so the German government became aware of the Dutch contract, which we have signed for a fraction of the price, and when they have asked us, would you be ready to deliver also to us, to Germany, we obviously said, yes, you can get twice the power for less than half the price in half the time. And with that, the kind of statement and obviously, by then consecutive interactions with leading stakeholders on the German government side, the parliament and the government has decided to stop the further procurement in a sole-source mode with Rheinmetall, but to have a detailed look instead on the EOS capability. And that is happening right now. David Bert: A few questions have come through about what's the future product development pathway for our laser weapon project. Andreas Schwer: So our current technology is scalable between 50 and 150 kilowatts. So we don't need to spend any more money to make that happen. But we are in negotiation with 2 governments and with one of them, we will hopefully sign this year, a contract to develop a 300-kilowatt laser weapon family. which is also scalable. This will enable us to offer to the market something which is not the best solution to kill drones, but which is also very capable to act as a so-called C-RAM type of effector. C-RAM means it can go against any kind of missile rocket and artillery shell. That is opening up an additional market for EOS. And we can also use those 300-kilowatt lasers to extend our space warfare capability to engage not only against satellites flying in low earth orbit, the low earth orbit is up to 1,000, 1,500 kilometers and it includes all the constellations such as Starlink, but the 300-kilowatt will also allow us to engage against higher flying objects such as [ GPS ] or GLONASS navigation satellites or even geostationary satellites, whether it's communication, intelligent satellites or what else. So that will give us the full portfolio. David Bert: Great. I think that's all the questions that we have time for at this time. Thanks, operator. Operator: Thank you. And that does conclude our conference for today. Thank you for participating. You may now disconnect.
Operator: Thank you for standing by, and welcome to the Austal Limited FY '26 Half Year Results Call. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded. I'd now like to welcome Paddy Gregg, Chief Executive Officer, to begin the conference. Paddy, over to you. Patrick Gregg: Good morning, everybody, and welcome to our 2026 half year results call. I'm Paddy Gregg, the CEO, and I'm joined by our CFO, Christian Johnstone. We will be presenting in the same format as usual with me giving business overview and context, while Christian focuses on the financial details. And as always, we plan to present for no more than 30 minutes to allow time for questions. I think it's been a very exciting half for the company. We've seen the strategic shipbuilding agreement provide the backbone for significant contract awards in Australia with the signing of the Landing Craft Medium contract before Christmas and then last week, the signing of the Landing Craft Heavy contract. These 2 contracts total about $5 billion and take the order book to a record $17.7 billion. That translates to about 76 ships in build or scheduled in our shipyards, providing certainty of jobs and revenue for a decade. And you'll see revenue and employee numbers are growing in line with the order book as programs come online, and that's translating into earnings, too. We announced a revision to guidance a couple of weeks ago that was caused by a forecasting error, very disappointing, but we are still delivering a very strong financial performance this year despite this. The outlook is fantastic, both in the United States and in Australasia. So I'll talk through where the business is today. Christian will take you through the detail of the financials, and I'll finish by updating you on where I see the strategic outlook for the company. So for those of you that are following along in the pack, Austal at a glance, a couple of slides that cover the key facts. For anyone who doesn't know Austal, so we're operating 5 shipyards in 4 countries with 8 service centers in 4 countries, 76 ships under construction or scheduled, 64 vessels under sustainment contracts. And importantly, we've continued to add to the order book, and it stands at a record high. We've received orders for some 22 ships this year and delivered 2. Employee headcount globally is over 4,600 and growing daily and recruiting people to deliver that record order book. And the vast majority of our work is in the defense sector these days, and defense will continue to grow relative to the commercial sector. But interestingly, we'll start to see more balance between the U.S. and the Australian operations. So if I talk about the financial highlights, and as I said, Christian will go into the details. So jumping straight in, we're building sustainable growth, seen through the order book, that was predominantly in the U.S. and now followed in Australia with the signing of those Landing Craft Medium and Heavy contracts. We also signed 2 more Evolved Cape-class vessels before Christmas. And while that used to be big news, I think that was lost due to the size and scale of the Landing Craft announcement. And for me, this is all about us creating long-term value for shareholders. When I look at the results, I see lots of greens across the key financial measures, demonstrating strong business performance with year-on-year improvement and foundation laid for growth. Encouraging EBIT, slightly skewed to the first half, revenue growing in line with forecast as new programs move from design phases into construction with a big increase compared to the previous corresponding period. It's really encouraging as the legacy programs start to tail off. And of course, we saw the delivery of the last LCS last year. And the order book at $17.7 billion, secures revenue for years. It's grown in Australia following the strategic shipbuilding agreement and the Landing Craft Medium and Heavy. There's growth in submarine module production. The commercial yards have got a really sound order book and future potential for growth, particularly in the low emission space. And indeed, in Australia, we expect to start general purpose frigate contract discussions this financial year with the Commonwealth of Australia. Both the submarine module manufacturing facility, MMF3 and the final assembly sheds for the large steel ships, FA2, as we call them, are fully funded and in construction and ready to support future growth. I've put a slide in the pack where you can see the progress on MMF3 and Stage 1 opening is due this financial year, bringing that project online. Of course, cash was projected to be lower than full year due to the capital investment in facilities and an increase in capacity and capability. It was a little bit lower than we expected due to a couple of late milestone payments in December. As announced, we settled the request for equitable adjustment on tax. And for me, that really demonstrates the strength of relationship we have with the customer in the U.S. Interestingly, we're becoming victims of our own success, and we have become the lead yard for that program, and we're in discussions with the customer about the implications of that. And Christian will talk about that a bit more in the financial section. And so looking at the order book slides, we include programs and revenues for those of you who still like to try and build your own financial model. It doesn't include the commercial vessels, but with relatively fewer of these and our ASX announcements, I'm sure you have the information you need to factor those into your forecasting models. For me, it's really pleasing to see those commercial orders have returned following the challenges we saw during COVID and really excited about seeing the Philippines yard ramping up and testing those low-emission technologies ready to be deployed in the defense world as and when necessary. So I'll hand over to Christian now, and he'll talk you through some of the financial highlights. Christian Andrew Johnstone: Thank you, Paddy. Turning to Slide 8. It's my pleasure to present Austal's FY '26 first year first half performance. Before I get into the details, the key message is that we've had double-digit growth across all key financial performance metrics: Revenue, earnings, and NPAT, which represents the results from the focused efforts of our employees across the group to construct and deliver ships, submarine modules, sustainment services, and additive manufacturing to our growing customer base. The balance sheet is stable, and we have a robust cash balance to support the significant capital investment we have underway as we complete 2 key infrastructure growth projects in the U.S.A., which have a combined spend of more than $1 billion. The order book is at all-time high of $17.7 billion, which underpins continued growth over many years. Group revenue increased by 34.4%, which was a solid growth across the group. And pleasingly, all segments experienced growth, which is an exceptional outcome. U.S.A. shipbuilding increased 29% based on increased revenue from the OPC, T-ATS, and submarine contracts, which more than offset the completion of the LCS and EPF programs. It should be noted that the company's auditors had a qualification in their opinion relating specifically to the judgment on the T-ATS and AFDM programs. Whilst the company is in ongoing discussions with its sole customer in the U.S. and is seeking some contractual relief, the company's auditors, Deloitte, included a qualification in their review opinion to reflect the position that whilst the company considers it has sufficient evidence to support the judgments made in respect of the contractual relief for these programs, the auditors have concluded that they need additional evidence above what has been provided and so have qualified on this particular judgment on these particular programs. Further details appear in the notes for the half year report. U.S.A. support revenue increased by 11%, primarily due to additional contribution from the growing additive manufacturing business, which is performing strongly. It was particularly pleasing that Australasia shipbuilding continued its growth with an increase of 83%, which has 2 key drivers being the appointment of Austal as the Commonwealth of Australia's sovereign shipbuilder and the work performed on the first 2 key contracts under this umbrella being the Landing Craft Medium and Landing Craft Heavy contracts with the Australian Army. In addition, the work completed from our Asian shipyards was a strong contributor to this performance. The Australasia support business improved by 27% due to the increase in servicing work driven by an expansion of the fleet requiring sustainment services. It is pleasing to see ships built by Austal continue to be serviced by Austal across our regional service centers. Moving to EBIT. Earnings growth of 41% across the group was extremely pleasing with EBIT of $60 million for the half year. And whilst there are mixed results across key segments, the geographical diversification of the group provides an ability to manage these variances. The standout earnings growth was Australasia shipbuilding at over 600%, which benefited from the work performed on the 2 Landing Craft programs and the commercial shipbuilding activities progressed by our Philippines and Vietnamese yards. Australia support business had an additional throughput from work from patrol boats and sustainment contracts and posting earnings growth over 400%. There was a contraction in earnings from U.S. shipbuilding, primarily driven by the margin compression as a result of the wind down of the LCS and EMS programs, the earlier stages of the windup of the OPC and T-AGOS programs and from 2 onerous contracts that continue to dampen margins. The U.S. support business results were steady in the 6 months. We continue to see strong contributions from the Advanced Manufacturing Center of Excellence facility in Danville. Turning to the segment breakdown. We are now at 96% defense weighted across the group and with the growth in Australasia business, with the geographical contributions are nearing a 70-30 split between U.S.A. and Australasia. On a segment basis, the Shipbuilding segment continues to report tight margins as a result of 2 onerous contracts we have in the U.S. However, it should be noted that this segment is profitable, albeit at a level below our expectations. The Support segment is a key earnings contributor at an EBIT margin of 17.9% across the group, contributing the majority of earnings of $41.1 million for the half. The group's balance sheet was stable with net assets at over $1.3 billion. The group has a significant cash balance of $371.6 million at the close of 2025. And whilst it reduced in the half, this reflects a significant capital investment underway in the U.S. on growth infrastructure. The trade receivable balance was higher by 43% at $211 million, reflecting the growth in production in the 6-months period. Overall cash position decreased by $212 million with $131 million of this comprising the capital expenditure on the ongoing MMF3 and FA2 projects. The cash flow from operations was negative $63 million, which reflected the 2 onerous contracts we have in the U.S. and the late receipt of customer payments. As I highlighted earlier, the trade receivables is $211 million across the group, and the collection of this could have significantly impacted this position. This will be a key focus for management in the second half. I'll now hand back to Paddy. Patrick Gregg: Thanks, Christian. And so focus on strategic outlook. In summary, our key growth pillars are increasing defense expenditure, and this is going to continue to drive positive momentum in the medium-term. We have revenue and earnings growth with the underlying business performing well. And as Christian pointed out, it is especially pleasing to see the Australia business contributing so significantly on the back of the strategic shipbuilding agreement and the associating contracts and all of that work starting to come online. And then also the commercial business as well. No drag from that business and some very exciting projects that we're building there. The order book of $17.7 billion has grown significantly to the record high that we have today. And as I said earlier, that gives us certainty of work for the next decade, a position we've just never been in before as a company. And the greater diversity in the contracts will lower the overall risk profile of the business. We're making significant CapEx investments, and those projects are performing very well. That will enable further growth for the company and increase our capacity and capability. We've got additional opportunities to grow on top of what we're talking about today. The AUKUS agreement, the submarine modules, the technology business, and generally, the world becoming a less safe place is a good time to be in defense shipbuilding. We're capitalizing on those defense spend trends, both in the United States and in Australia. And I think that trend will continue. So overall, the business is performing well and executing the strategy we set out 5 years ago. So with that, thank you, and we're happy to open up for questions. Operator: [Operator Instructions] And your first question comes from the line of Pia Donovan of Argonaut. Pia Donovan: Hello, Paddy and Christian. I just have one question regarding the margin. So obviously, the margins are slightly lower on a half-on-half basis. Just wondering, do you expect the current margins to be going forward into the second half? Or will there be an improvement back to those margins levels of last half? Patrick Gregg: Yes. Good question. I think the -- it was the U.S. shipbuilding business that was slightly lower than we wanted to be for reasons that we've talked about. But as those programs come online, we get stability in that business, yes, I absolutely see that returning. The U.S. has been a massive contributor to our earnings for the last few years, and they will absolutely get back into their stride. And it's been fantastic to see how well the Australian business has done. And the new contracts coming online, I think, are what's very exciting about earnings growth going forward. Pia Donovan: Okay. Yes. Great. So yes, you said about the Australian business growing. Do you expect that trend to continue and the U.S. to also continue or remain relatively flat there? Patrick Gregg: No, I expect them to continue. As the programs really come online and the U.S. gets back into the strides, we'll be up into the 7% to 10% sort of EBIT range that we've often talked about, that is pretty common in defense shipbuilding. Operator: And your next question comes from the line of Sam Teeger of Citi. Sam Teeger: Hello, Paddy, hello, Christian. Well done in securing the Heavy Landing Craft. The pipeline now looks very good. I want to ask about cash. So you called out $105 million of milestone payments that didn't come through in the first half. Have they come through now? Christian Andrew Johnstone: Yes, they've come through now. But it wasn't -- obviously, the balance -- well, that's why there's a bit of spike in trade receivables. So that would have had a different earnings profile from the operating segments that they have come through. So yes, they've come through. Sam Teeger: Okay. And in that cash flow number for the first half, is there tax [ REA ] money in there? Or does that come in the second half? Christian Andrew Johnstone: Tax REA is across the program. So there will be tax REA cash in the first half as well because it's earned through the progress of the whole 3 ships under that program. Sam Teeger: Okay. And then what are you budgeting for cash at the end of the financial year? And maybe just as part of that, is MMF3 and FA2, are those construction projects? Like how they're proceeding versus budget? Christian Andrew Johnstone: So first question, we don't provide cash flow guidance. Second question, they're both in line with budget. Actually, MMF3 is ahead of schedule. So we had always said that that would open at the beginning of next financial year. Phase 1 is targeted to be open in the fourth quarter of this financial year. So look, if that comes to fruition, what we expect, then that's a phenomenal effort by the team in the U.S. to get that large growth infrastructure up and running. If we can then drive some earnings through that for the fourth quarter, that's going to have a boost to the business. So that's really pleasing. But both are on schedule, on time, and then both are in cash flow and their budget cash flow around the cost of them. So we have significant cash. And you can see through our untapped debt lines, we've got a huge amount of debt capacity if we were to meet that for those programs going forward. Operator: [Operator Instructions] And your next question comes from the line of Mitchell Sonogan of Macquarie. Mitchell Sonogan: And sorry, Paddy, I might have missed some of the detail, been jumping around a few different calls this morning. Just on the Landing Craft programs, do you mind just giving a little bit more color just in terms of timing and how that might ramp, particularly in the heavy, I guess, with the visibility you have now, over what time frame would you expect that to get to more of a, I guess, a steadier mature run rate in production? Patrick Gregg: Yes. Good question. So coincidentally, both the Landing Craft Medium and Heavy programs will cut metal towards the back end of this calendar year. So last quarter of this year. We are working through the Landing Craft Medium design and the Landing Craft Heavy design came slightly more mature as it's an existing vessel that is currently in build down and have built one of those before. Yes, so both of them should come online back end of this year and ramp up to steady-state production over about 18 months. And then as we delivered the Guardian Class program and the Cape Class program, we really want to establish a drumbeat and build those programs as efficiently as possible. Mitchell Sonogan: Yes. Thank you. And I know you just made a comment before about the 7% to 9% sort of target shipbuilding margin range over there in the U.S. Just in terms of the Landing Craft programs, I know you've had some high-level details you put out with the announcements about the strategic shipbuilding agreement, et cetera. But yes, is there anything at this point in time, high level you can provide us just in terms of how we should be thinking about margins on these contracts over time? Is it in that typical range that you target? Patrick Gregg: Yes, absolutely. Same sort of range and really driven by government procurement rules and what they find acceptable based on the risk we take in the contracts. So yes, both the U.S. and Australia are targeting to get into that 7%, 8%, 9% range. Mitchell Sonogan: Yes. And just one quick one for Christian. Obviously, you had the earnings guidance update back on the 12th of Feb, just with that incentive payment. And I'm not sure if you covered this during the general presentations before, Christian. But yes, do you mind just giving us a little bit more color, I guess, on how that came about and have they been checked to make sure there's no other particular issues like that on other programs? Christian Andrew Johnstone: Yes. Thanks, Mitch. That was an error. We're going through that, the half year close process with our auditors. And in the U.S. with one particular program, that is an onerous contract position. So it's a bit -- firstly, it's a little bit different from the run-of-the-mill programs that we have. And it was just going through that closing period and a review of the auditors that they had inadvertently double counted because of the requirements to then -- to book the revenue for -- the end revenue to the 6 months to December, but also the forecasted revenue over the program because it's onerous, we have to consider the revenue for the balance of the full program. And it was just an inadvertent error. We are putting in additional internal control checks, program checks, and revenue across each of those programs in the U.S. to ensure that this doesn't happen again. Operator: And you have a follow-up question from Sam Teeger at Citi. Sam Teeger: Just on the $6.7 million of sub-module revenue, what EBIT margin would this be flowing through at? And whatever it is, would that be a good guide as to what we should expect from this going forward? Christian Andrew Johnstone: So it's a bit nuance what the answer is. That $6.7 million is related to the MMF3 program that we have. So it's a bit unusual. We have a contract to build a building. And so our delivery mechanism is the construction of that building. We previously put out a lot of guidance around what we expect the earnings and revenue profile for that. So look, in totality, that's a USD 450 million contract that will flow through the income statement. There's 0 cost related to it. So anything that's revenue recognized through that particular contract will then drop directly to earnings. What's separate to that, though, and is not -- we don't separately disclose is the earnings that we have through construction of submarine modules in the U.S. That sits in as part of the segment around U.S. shipbuilding. So we don't split program by program out, but that's a very profitable part of the business right now and somewhat offset some of the margin compression we have on the onerous contracts that we have in the U.S. Operator: And this does conclude our Q&A session for today, and I'd like to turn the call back over to Paddy for closing remarks. Patrick Gregg: Thanks, everybody, for joining us this morning and asking the questions. As always, we are transparent and happy to answer any questions you've got. So thanks for those of you that were able to get on the call today. Operator: This does conclude today's conference call. Thank you all for joining us. You may now disconnect.