AUB Group Aktie

Thank you for standing by, and welcome to the AUB Group FY '26 Results Conference Call. [Operator Instructions]

I would now like to hand the conference over to Mr. Mike Emmett, CEO and Managing Director. Please go ahead.

[Audio Gap] through AUB Group's results for the year ended 30 June '26 and our outlook for FY '27. Before I start, I want to recognize our dear friend and colleague, Tim Wedlock, whose sudden and tragic passing has deeply saddened us. Tim was a highly valued member of the Austbrokers family, and we're absolutely heartbroken. Our love and wishes go out to his family and to the AEI team he led with patience, wisdom, and passion over many years.

FY '26 was another strong year for AUB. We delivered double-digit underlying profit growth, expanded margins, completed the acquisition of Prestige, and further strengthened the AUB platform for its next phase of growth. At the same time, FY '26 was unquestionably a year of challenging market conditions. Geopolitical disruption affected trade and business confidence in some markets. And together with policy uncertainty in the United States and foreign exchange movements, these conditions increased the period-to-period variability, particularly of the International division's revenue.

In parallel, lower interest rates created an income headwind across most divisions. Insurance premium rates also remain subdued with rates declining in some classes. While we are pleased that many clients are benefiting from limited or no premium increases, competitive conditions have softened across several classes, and we encourage our insurer partners to maintain sustainable pricing and underwriting discipline, particularly in New Zealand and parts of the United Kingdom.

Against that backdrop, there are 3 messages I would like you to take home today. First, AUB Group comprises a resilient portfolio with a strong earnings track record. Our businesses continue to grow and generate operating leverage across uncertain economic and premium rate environments. We have delivered a 16% compound annual growth rate in underlying EPS since FY '19, and see strong earnings growth continuing. Second, our selective approach to portfolio management and acquisitions is improving both the scale and quality of the group. We continue to assess a range of selective M&A opportunities against clear strategic and financial return hurdles. And third, we have multiple earnings drivers across the group, and we reaffirm our medium-term margin targets.

Slide 2. Before turning to the year's performance, I want to briefly frame what AUB has become. AUB is now a global insurance distribution platform operating across 17 countries with approximately 7,000 insurance professionals in about 640 locations. The group supports more than $11 billion of gross written premium, approximately 1.6 million clients, and 2.5 million policies. The point I'm making is not simply about scale. Our differentiation comes from combining the entrepreneurial leadership and local market expertise of our individual businesses with the capital, capability, insurer relationships, and technology of the broader group. These businesses are led by management teams who are also shareholders. And this owner-driver model remains central to how we create value. We are also increasingly diversified across retail and wholesale broking, agencies and MGAs, insurtech businesses, and claims and loss adjustment services. These make AUB stronger and give our portfolio more ways to serve clients and partners.

Slide 3 shows AUB's transformation from FY '19 to FY '26. The transformation has been deliberate and cumulative. Since FY '19, revenue has grown from approximately $540 million to now almost $1.6 billion, while the underlying net profit after tax has increased from $47 million to approximately $225 million. The model has delivered sustained growth in returns. Underlying net profit after tax has grown at a compound annual growth rate of 25.1%, while the group EBIT margin has expanded by 920 basis points to 36.1%. Importantly, these improvements have also translated into shareholder value with underlying EPS and dividends per share both growing strongly over the same period.

Moving to Slide 4. The margin expansion has been an important contributor to earnings growth, and it reflects the strength of the operating model we have created. Across the group, principal drivers have been organic growth, operating leverage and cost discipline, portfolio optimization, and accretive acquisition. We have benefited particularly from portfolio consolidation and from greater agency scale, which has enabled us to capture more of the insurance value chain as we have expanded our portfolio. The segment chart on the slide demonstrates both the progress already delivered and the remaining potential.

Our focus in FY '27 is, therefore, very specific, to continue the established portfolio playbook, close the segment-level gaps, and use technology, data, and automation to lift productivity. We view the medium-term targets as achievable through execution rather than by relying on a material change in market conditions.

Slide 6. Turning now to the FY '26 performance overview. Underlying net profit after tax increased by 12.2% to $224.6 million, and the group EBIT margin expanded by 140 basis points to 36.1%. This was supported by particularly strong contributions from the International division and BizCover and another resilient year of profit growth in Australian Broking. International underlying profit before tax grew by 19.6% with a 410 basis point improvement in margin. BizCover and Australian Broking delivered profit before tax growth of 19.9% and 10%, respectively. New Zealand underperformed. Market conditions were difficult, and execution was not at the standard we expect. And during the year, we initiated a reset of the business, and business performance has stabilized over the past few months.

We also completed the acquisition of Prestige in March, materially strengthening our U.K. retail position. For FY '27, we are guiding to underlying net profit after tax in the range of $245 million to $265 million, representing growth of 9.1% to 18% over FY '26. We'll discuss the guidance and its assumptions in more detail later.

Slide 7, the FY '26 financial highlights. Revenue grew 6.4% to approximately $1.6 billion. This, together with a 140 basis point increase in EBIT margin, drove a 12.2% increase in underlying net profit after tax. The underlying EPS increased by 7% to $1.8369. The reason EPS growth was lower than the underlying NPAT growth was because of the additional shares issued to fund the Prestige acquisition, which were on issue for the final quarter of the year. The Board has determined a final dividend of $0.71 per share, taking the full year dividend to $0.98, up 7.7% on the prior year, which is consistent with our long-term payout range.

Slide 8. This bridge highlights the quality of the profit growth during FY '26. Organic growth contributed $21.6 million, which is 10.8% on prior year, with acquisitions adding a further $17.3 million or 8.6%. These contributions more than offset a $14.5 million or 7.2% headwind from foreign exchange and from increased funding costs. The existing portfolio continues to deliver strong growth, while selective acquisitions added a further layer of earnings growth.

Turning now to the performance of the operating divisions. Slide 10. The portfolio was broadly strong. Australian Broking, BizCover, Agencies, and International all delivered profit growth, while New Zealand was the exception. As a reminder, this slide presents a 100% view of the portfolio. That is, all businesses, including associates, are shown as though they were 100% owned. At the operating business level, revenue increased by 6.4%, EBIT increased by 10.8%, and profit before tax attributable to AUB shareholders increased by 12.1%. The breadth of this contribution is important. The result was not reliant on a single division or transaction.

This table also shows the margin progression. International improved by 410 basis points, BizCover by 200 basis points, and Australian Broking by 30 basis points. Agencies declined 50 basis points because of the strata revenue challenges, but increased by 80 basis points when strata is excluded. And you will note on the left side of the page that we are showing a graphic aggregation of our retail broking businesses and operations in Australia and New Zealand. And this foreshadows our proposed Australia, New Zealand retail reporting segment for FY '27. This proposed structure better reflects how we manage the business and the changing scale of profit contributions across the AUB portfolio.

Slide 11. Australian Broking delivered revenue of $647.8 million, up 6%, and EBIT of $246.7 million, up 6.8%. Broking commission and fee income grew by 7.8% during the year, while the average commission and fee income per customer grew by 6.5%. The core message is that revenue has continued to grow faster than expenses in Australian Broking. From FY '19 to FY '26, revenue increased at an 8% compound annual growth rate compared with 5.7% for expenses. This operating leverage lifted EBIT margin to 38.1% despite a headwind from lower interest income. We remain confident in the 40% medium-term margin target. The broking portfolio was also actively managed during the year with 3 bolt-ons, 12 equity step-ups, 1 merger, 1 step-down, and restructure. And this is the repeatable work that supports both earnings quality and margin progression, and we have further actions planned for FY '27 and beyond.

I'd like to thank Mark White, who recently retired after more than 10 years representing AUB Group interests on a number of Austbrokers portfolio Boards. I would also like to welcome Eric Harris, who has taken over this role. Eric is very well known in Australian broking circles and has made a seamless transition since joining.

Slide 12. BizCover produced another excellent result. Revenue increased 14%, EBIT grew 19%, and the EBIT margin expanded by 200 basis points to 47.8%. The Australian business remains the primary earnings engine with EBIT increasing 18.5% in FY '26. At the same time, the non-Australian businesses are scaling with margin improving from 8.5% in FY '24 to 20.1% in FY '26. Active clients grew by 13.7% to 308,000, and customer advocacy remains very strong with an NPS of +73. The direct channel gained momentum in the second half, and the new MYOB referral partnership provides another attractive distribution avenue.

BizCover is at the forefront of insurance technology, including the practical deployment of AI. In March, BizCover launched the first business insurance app globally and the first insurance app of any kind in Australia to provide SME insurance quoting functionality within ChatGPT. Since launch, ChatGPT has also begun to emerge as a new source of business inquiries. And while it remains early, the evidence supports 2 initial observations. Firstly, AI appears to be actually expanding the addressable market by prompting some previously uninsured small businesses to recognize their need for cover. And secondly, AI-assisted research is increasing customer confidence in using digital intermediaries such as BizCover, including customers who previously approached insurers directly.

We continue to monitor lead quality, conversion, and channel overlap as volumes develop, noting that we are not observing any cannibalization of AUB's existing broker channels, rather that we are seeing the capture of business from other nontraditional digital search engines or comparison channels. BizCover is also demonstrating practical benefits from AI and automation in other areas. The focus is on faster delivery, consistent code quality, and greater delivery capacity from the existing team. AUB Group is benefiting from BizCover as a hub for insurtech innovation, creating a pipeline of capabilities and solutions that can be leveraged more broadly. This, together with the Covernet team in Belfast, has accelerated AUB's ability to leverage AI tools and thinking.

Slide 13. New Zealand was the one area of underperformance for the group. Local currency share of profit increased by 2.7%, while reported AUD profit before tax declined by 3.9% due to foreign exchange weakening. Revenue was broadly stable, and the EBIT margin reduced by 130 basis points to 33.1%. Broking commission and fee income increased by 2.7%, while the average commission and fee income per client actually reduced by 2.9%, reflecting very competitive market conditions. This result did not meet our expectations, but the reset initiated during FY '26 has stabilized recent performance, and the FY '27 improvement plan is underway.

Our priorities for FY '27 are to restructure the NZ Brokers network with closer alignment to Australia, to better leverage our scale in New Zealand, to improve cost control, and to accelerate portfolio optimization. During the year, we completed 9 bolt-ons and 1 equity step-up, and each of these will provide a base for renewed growth for the business in New Zealand. The 42% medium-term margin target highlights the size of the opportunity, but our immediate focus is on restoring operating momentum and consistent delivery.

Slide 14. Agencies' profit before tax increased by 8.4%, and the EBIT increased by 7.8% to $105.2 million. The EBIT margin was 43.7%, down 50 basis points. However, the margin actually increased by 80 basis points to 46.5% if strata agencies are excluded. Revenue in strata actually reduced during the year. Despite this, because of a very strong year of profit commission income, we were able to offset this reduction in income. The broader Agencies portfolio performed strongly, supported by organic growth and increased ownership positions in 360 and Pacific Indemnity.

I'd like to acknowledge and thank Angie Zissis, who recently retired from AUB after more than 10 years leading our insurer portfolio of agencies and more recently establishing the new AUB Agencies portfolio. Denis Morrissey, founder of 360, has been appointed as CEO to lead the next phase of growth for AUB Agencies. We are now working through a range of changes to simplify and optimize the portfolio.

Slide 15. International delivered the strongest divisional profit growth. Revenue increased by 6.2%, EBIT increased by 24.5%, and the EBIT margin expanded by 410 basis points to 27.6%, benefiting from elevated war rates and momentum from recent acquisitions, partly offset by adverse foreign exchange movements. Recent investments are building momentum. Prestige has materially expanded our U.K. retail footprint, while Renaissance gives us a foothold in the rapidly expanding economy of Turkey and enhances Tysers' access to Lloyd's placement flows. Together with the continued scaling of our start-up businesses, these investments are broadening the group's growth opportunities. The 32% medium-term margin target provides clear further growth potential as we integrate and leverage these businesses.

I'll now hand over to Nick.

Thank you, Mike. Slide 17 sets out our group funding position on the 30th of June 2026. AUB retains a strong and flexible balance sheet with available cash and undrawn debt of $330.5 million and leverage of 2.30x. Leverage reduced from 2.49x at the half, primarily reflecting higher EBITDA following the pro forma inclusion of Prestige, which was largely funded with equity. Compared with FY '25, leverage increased from 1.97x due to higher net debt, mainly from funding the increased ownership in Pacific Indemnity and AUB 360, the residual debt needed to fund the Prestige acquisition and the final Pacific Indemnity earn-out. During the second half, we refinanced our syndicated facility with total commitments of approximately $1.1 billion and maturities reset to 3, 4, and 5 years. The refinancing was well supported, oversubscribed by 1.5x, and delivered a 27 basis point reduction in credit margin. The $200 million facility maturing in 4.7 years is the bilateral agreement with Macquarie, which was committed at the time of the Prestige acquisition.

The right-hand side of the slide shows interest-earning assets and interest-bearing debt on a look-through ownership basis. While the totals are broadly aligned, the key exposure is the currency mismatch. At 30 June 2026, around $210 million of interest-earning assets were in U.S. dollars with no U.S. dollar-denominated debt. These U.S. dollar assets are hedged through to July 2027 via cross-currency swaps that receive BBSW and pay SOFR plus 0.61%.

Slide 18 sets out FX sensitivity on the expected FY '27 currency mix, which includes the full year impact of Prestige, which is predominantly a GBP business. Our key exposure remains the unhedged U.S. dollar brokerage from the international business. GBP is broadly neutral after allowing for our U.S. dollar to GBP hedging program. Post Prestige, this program would typically hedge around USD 50 million to USD 80 million over the next 12 months and USD 25 million to USD 40 million over the following 12 months. FY '27 guidance incorporates our stated foreign exchange outlook assumptions and the current hedge positions shown on this slide. Approximately $75 million of brokerage income remains unhedged with each 1% movement in the AUD to USD exchange rate affecting midpoint UNPAT by approximately 0.3%. As existing hedges mature, the replacement hedges will reflect the prevailing market rates.

Slide 19 shows underlying earnings per share increased 7% in FY '26, while the full year dividend increased 7.7% to $0.98.

I'll now hand back to Mike to cover our FY '27 priorities, AI strategy, and outlook.

Thanks, Nick. Slide 21. Our priorities for FY '27 are focused and practical. The first is to integrate U.K. retail and unlock the benefits of scale, while continuing to expand Tysers' wholesale and specialty capabilities. The second is to improve the portfolio. This means scaling and strengthening the Agencies business across 360, SURA, and Pacific Indemnity and taking decisive action in New Zealand and across the broader Australian portfolio to enhance earnings quality and margins.

The third priority is disciplined capital deployment and continued investment in capability. We will remain selective on M&A, apply clear return hurdles, and continue strengthening our technology, data, and operational capability across the group. These priorities are deliberately consistent with the playbook that has driven AUB's performance over the past 7 years to empower strong local entrepreneurial leaders, actively manage the portfolio, and to use collective scale to improve outcomes.

Slide 22, our AI strategy. We are firmly of the view AUB is an AI beneficiary, and we have now moved well into deployment of multiple initiatives to improve our productivity, efficiency, and value to customers. We have an enterprise AI platform and emerging data foundation, clear governance, and a scalable delivery model built around Covernet and BizCover. We are focused on citizen development and partnering with specialist partners. The adoption is already meaningful, 92% of active Copilot utilization, 43 active AI agents, more than 40 solutions in the pipeline, and 710 hours of capacity released in the last 30 days alone. These are indicators of momentum rather than an end outcome. We are now embedding AI into broking, underwriting, claims, and operational workflows to reduce administration, create more capacity for client-facing work, improve decision-making, and to deliver more consistent client outcomes. Over time, we expect this to support growth, margin improvement, and differentiated insurance capabilities.

Slide 23. For financial year '27, we expect underlying net profit after tax in the range of $245 million to $265 million. The midpoint of $255 million represents growth of 13.5% with the range representing growth of 9.1% to 18%. The bridge on this slide shows the components. Organic growth is expected to contribute between $15.2 million and $33.2 million, with acquisition growth expected to contribute $17.5 million to $19.5 million.

These growth rates are partly offset by approximately $12.3 million of anticipated foreign exchange headwinds and increased funding costs. This guidance includes completed and sufficiently certain acquisitions and excludes any contribution from future unannounced transactions. At the midpoint, the expected first half and second half earnings split is 41% and 59%, broadly in line with our historical seasonality. The underlying EPS guidance is $1.8754 to $2.0285 per share. The difference between underlying NPAT and EPS growth reflects the full year impact of the shares issued for the Prestige acquisition. Excluding this equity funding effect, the EPS range will be $2.0035 to $2.1671 per share.

We have set out the principal currency, interest rate, and cash rate assumptions on the slide. The UNPAT guidance range of $20 million is intended to reflect an appropriate variability in organic growth and market conditions for a group of our scale, while preserving our commitment to consistent execution.

In closing, financial year '26 demonstrated the strength of the AUB model. We delivered strong organic and acquisition growth. We expanded margins, increased shareholder returns, and further strengthened the global platform. We enter FY '27 with clear execution priorities, a strong balance sheet, and meaningful earnings and margin growth potential. Nick and I are now happy to take your questions.

[Operator Instructions] Your first question comes from Tim Lawson with Macquarie.

Just picking up on a couple of last comments you made there in terms of the sort of reset from AI and then the reset of new divisions. Can you just talk about the medium-term margin targets and the potential timing, so the potential to see those upgraded and brought forward?

Thanks, Tim. Well, firstly, I think the -- in terms of the margin targets, so the first point is, we're confident in the margin targets as stated. Second thing is, as part of our new reporting grouping for the Australia and New Zealand retail business, one of the things we'll be doing is working through what our estimate is of that margin target for the aggregated business based on some assumptions around the medium term. As a reminder, we've always said whenever we upgrade or change these, it represents our 3- to 5-year view of what can be achieved in that time frame. They're not terminal margin targets. They are what we think are achievable within that time horizon. So what we'll do possibly at the AGM, but more likely, certainly for the February, half year, will be to revise where we think appropriate the margin targets, but specifically clarify what the margin target will be for the new reporting aggregation.

Just to clarify, with that sort of AI commentary you're making, are you telling us that there's scope that they could be increased, that you're quite positive on that AI benefit in the business?

Yes, absolutely.

The next question comes from Siddharth Parameswaran with JPMorgan.

Maybe a couple. The first one, just on your guidance for UNPAT for FY '27. I was hoping you could just give us some steer as to what you're expecting the contributions to be by -- in Australia versus international. I know you gave us some high-level comments around funding costs and FX headwinds. But just directionally, you can just flag -- previously, you've been explaining that you thought we could still have pretty strong revenue growth in the Australian market, even with the soft cycle. But there's a few things you flagged that were uncertain in your guidance around, I think, just the war and other things. So I was just hoping you could tell us international versus Australian broking versus agency directionally, how you're seeing things in terms of margins and revenues?

So I mean, if we just do a quick trundle through. So the assumption is that BizCover will continue the momentum that has demonstrated for several years. Agencies, actually, we think Agencies have performed really well ex strata. So strata is a market phenomenon, so I'll talk about that separately. So the other 2 agencies, we think, have performed really well, remembering that premium rates impact agencies more than they impact broking businesses. And so those 2 groups of agencies performed really well. We're winning market share. We're winning new business. And our sort of focus on underlying profit for our insurer partners has paid dividends as well.

On the strata side, we foreshadowed this, in fact, in August last year and at the half year. The market is incredibly competitive. Candidly, we don't understand the logic behind why the market is so competitive. Premium rates have been dropping despite the fact that we don't see any underlying reason why premium rates should be dropping. And so our main competitors are able to -- are willing to write business at significantly lower premium rates than we are comfortable to do. And obviously, these are decisions we take in partnership with our insurer partners, and they'll be taking them in partnership with theirs.

So strata has continued the trend that we foreshadowed in February, which is unfortunately, unless we drop rates, which we're not willing to do, our retention rates are dropping because we are losing business to competitors who are competing at much lower premium rates. Structurally, that has to be time boxed, because insurers can't afford. There's nothing in the market that says the cost of repairs and remediation or loss ratios for strata are decreasing, right? They match residential loss ratio. So it doesn't make sense, the rate trend. So ex that, we see agencies as continuing to grow and expand. I referenced, when I spoke about Agencies, that we do see some cost and margin improvement opportunities out of some of the consolidation activities, which we started in Agencies during FY '27, but that we've been very successfully doing in the broader broking business for the last few years.

In terms of Australian broking and New Zealand broking, think I probably gave as much color. I think it's more of the same. So it's more consolidations in the 2 markets. We do see signs that the market is strengthening. The market conditions are strengthening in New Zealand. We have taken the opportunity, over the last 12 months, to invest and expand our broking footprint in New Zealand. And so we believe we'll be strong beneficiaries of that market strengthening. And then in international, it's really on the retail piece, it is about executing on our plans around the consolidation and integration of the U.K. retail piece, while in parallel, on international wholesale, it is about -- I guess part of it is linked to some pieces of the sort of geopolitical uncertainty dialing back slightly, so that trade in some of those affected areas can continue. But broadly, those are the key levers.

Sorry. So just on international, ex the acquisition, am I to read that you're expecting growth? I just wasn't clear exactly whether we're expecting margin expansion or not? Ex the Prestige, I presume low is the margin, but just I wasn't 100% clear on things.

So if you took full year, so we think that there's some artificial inflation in the margin in the international business. We actually believe it's running at about a 25% margin. So we do see revenue growth, and we do see the opportunity for some expansion of margin. The exact timing of that first half versus second half is a bit unclear. So it may still look lumpy. But I think that's more related to the timing of revenue flows in the first half than anything else.

Okay. My second question is just around the strategic priorities. And I think you've got a slide there. I think it's Slide 47. Let me just have a look at it. There was a slide you had there about change in your strategic priorities from -- sorry, it's 45, versus where you were a year ago. And it seems like M&A has reduced in terms of focus and there's much more of a focus on consolidation and specialization. And like a lot of the other areas, it seems like there's been a down-weighting in terms of the expected improvements from commercial arrangements, fees, et cetera. So I was hoping you could just firstly flesh out what you mean by specialization leading to improvement. Is that a long-dated thing? Presumably, that takes a while to come through. Just comments on just the down-weighting on M&A and some of the other levers?

I think, firstly, I'd say the way to read this slide is about a statement of progress, right? So for example, commercial arrangements. So in Tysers, for example, a year ago, we had one commercial arrangement with one insurer partner. Let's imagine that the majority of the business is placed with, pick a number, 20 insurers. Obviously, we had 1 commercial arrangement. We now have 7 with imminently another 3 that will be entered into. And so the opportunity size has reduced simply by virtue of the fact that we now have 10 in the bag rather than 1. So I think that's the first thing you should read it is this is not necessarily a comment on the size of the total price, but more a comment on the progress we've made towards getting to achieving that. So that's the first comment I'd make.

The second comment is your question about M&A. So there are 2 observations I make about M&A. The first one is, we don't buy things just because we're trying to be an aggressive acquirer. I've used the analogy of a jigsaw puzzle before. We intentionally target certain types of assets. Agency is the perfect example. We bought 360 because we wanted to strengthen general commercial. We bought Pacific Indemnity because we wanted to strengthen financial lines. We bought SUU because we wanted to strengthen strata.

In U.K. retail, we bought Prestige because we wanted to strengthen U.K. retail. We bought Movo and Momentum or invested in them because we wanted to have access to replicate our insurance adviser network in Australia, in the U.K., and have access to the appointed representative share of the market. We invested in BizCover because we wanted access to an insurtech with access to the micro SME space in the market. So all of our M&A has not been about trying to spend a certain amount of money or discrete isolated decisions. It's a strategic overlay about what we're trying to complete.

The fact is, we've made fantastic progress in completing that jigsaw puzzle. But obviously, that also needs to be in the context of unlocking all of the value that we can see. And so I almost see this as a series of phased approaches where you unlock the first round is about ensuring that an acquisition is stabilized, you're getting the return you expected from it in isolation. The next step then is unlocking some of the synergy benefits you get from particularly consolidation and creating almost these centers of excellence. The third piece is then iterating how you can further consolidate and strengthening the way in which the business flows go through those businesses across the different parts of our network and our group.

So I think this is more a function of -- actually, we've made -- we've completed a lot of the jigsaw puzzle. That doesn't mean there aren't opportunities for us to still make bolt-on acquisitions, et cetera. But the reality is a lot of the core capabilities that we needed to invest in, we have invested in now, and that's about unlocking more of the value from those. There's also a simple function, which is we are very focused on ensuring that investments we make, we make with an eye on the return we can generate. And so we are cautious about capital capacity and the deployment of that capital and the best ways to generate returns from that. And so we have seen that as we've matured and expanded our portfolio, the better return now is about leveraging those investments to optimize the return for shareholders.

Your next question comes from Blake Dowsett with Jarden Group.

I just got a couple on Prestige, if you don't mind. I'm just curious to get your initial read. I see you got the keys in March. Just your initial read on how that business has run relative to your expectations and maybe a comment on the $10 million or more in synergies that you talked to back in February. Is that implied in your FY '27 guidance?

Not all of it is implied in the FY '27 guidance, Blake. So I think 3 observations that might sound slightly contradictory. So the first observation is, very pleased with the acquisition. Excellent business, excellent growth potential, excellent management team. So very happy with that. Firstly. Secondly, the market environment for sort of SME and sort of the smaller end of broking in the U.K. has been really challenging. Very competitive.

Some of the competitors, and this is not news, because there have been some broker-type reports about some of our big competitors there have been struggling because of capital and funding challenges and have been very, very aggressive at trying to, dare I say, buy business. So it has been a challenging market environment. So we've focused on ensuring that the business strength and capacity and capability is preserved and focused. And we've put in place -- I guess, we've tried to make sure that we integrate the business, but don't negate the benefits of the independence and the entrepreneurial capability that they have.

In terms of unlocking the synergy benefits, I mean, the key first step is about transitioning the historic Tysers retail branches into Prestige. There's an element where we require legal compliance and regulatory changes, including approvals from the regulator. And so there's always a lead time on that. So we're in that phase now. So we have, I think, had a balanced view of how much of the synergy to include in FY '27 versus what flows through to FY '28. So very confident about the synergy quantum on a run rate basis. In terms of timing, and only a portion of that finds its way into our estimate for FY '27.

Got it. I appreciate that. Just a second question on agencies. Just noting historically and back in 1H, for example, you told us margin ex profit commission. Is there any way you can give us that number for FY '26, just helps us understand the underlying business.

Blake, I have to come back to you with that. I think the reality is, strata sort of clouds the view. So we can't give you that. We'll probably defer -- yes, I think we'll have to come back to you with that.

Your next question comes from Andrei Stadnik with RBC.

Can I ask just my first question a little bit around what you've seen in Tysers and the Lloyd's market. We're hearing that marine insurance/reinsurance demand is rather strong at the moment. So what are you seeing in terms of conditions there for Tysers and their marine franchise?

Yes, Andrei. So thank you for the questions. I mean, the reality is there's incredibly strong pent-up demand with a lot of potential in marine. So it's very hard to estimate. And so there's a judgment call. So as a reminder, the way it works is, you'll have insurance on the ship, including both on the hull as well as on the cargo. But if the ship doesn't sail or isn't filled with cargo, then even though you've placed the insurance for it, the actual premium is quite low, but then there's significant premium volatility according to what it's carrying and where it's sailing. And so ironically, you have the premium -- sort of, you are the broker for the ship. And if it's a ship that then carries cargo, let's imagine it's oil at the moment and it's through the Strait of Hormuz and it's able to sail filled with cargo, then there's a massive payday for the insurer and for the broker, right?

Obviously, if the ship doesn't sail, and it's sitting outside the Strait of Hormuz and can't get loaded with oil, then there's very little income for us. So I don't want to overstate the Middle East piece, but the fact is that is where a significant chunk of oil shipment come from, and that's where a significant portion of the world shipping is deployed. So the uncertainty is not, will the income flow to us, the uncertainty is when and how much. And I know that sounds crazy, but it's because you don't know when and how much. And so that's part of the slight uncertainty.

The second piece is, we do a lot of construction and engineering projects in terms of the insurance and placing the insurance. And historically, Dubai has been a center of significant construction activity. At the moment, there's little to no construction activity going on in Dubai. And so again, that's a pent-up demand. Our clients haven't changed. Their needs haven't changed. And in fact, if anything, there's going to be an increased level of activity in Dubai.

The question is when and how much of that will flow, how quickly. So the optimist in me says, if I look out over the next 3 or 4 years, there's a massive pent-up revenue opportunity for us. And it's stronger than just opportunity. But if you said to me how much of that will flow through in the next 3 months, I haven't got a clue. And so I think that's the level of opportunity versus uncertainty that we have at the moment. But you're right, marine war rates are at the highest that I think they've ever been. We are significantly well represented in that area. Our teams are incredibly respected and capable, and it's a significant upside for us, but quantifying that and estimating that is incredibly difficult, in fact, [ nigh ] impossible.

And look, for my second question, there's something closer to home, right? So in broking, it looks like the fee and commission revenue line went up just under 8% year-on-year. But the premium pool went up maybe 5.5% roughly to $3.8 billion. So are we successful in optimizing some of the fee and commission levels? And how do you view that going forward?

Yes. So part of it is about slightly a mix. So actually, interestingly, previously, I've spoken about the bookends, where we've been very successful at winning new large clients, where predominantly it's fee-based income rather than commission. And so the premium would go up disproportionately to the revenue. And we've also won a lot of new clients on the small end, the micro SME, largely through BizCover and ExpressCover. Ironically, in FY '26, we actually lost -- so more of our client losses/the mix shifted where we actually had a net shrinking of business in the large corporate side, which means that proportionately, premium went -- where the premium might have gone down from losing those clients, our revenue proportionately went down. So it's not a fundamental piece where we actually -- I'd love to say we're earning more per dollar of premium. It's a mix shift where we've lost some of our revenue -- sorry, some of our fee-earning clients where they had big premium levels, but not commission rates.

Your next question comes from Shreyas Patel with UBS.

Just a question on some of the below-the-line items. Your stat profit this year, less than half your management profit. So just sort of keen to understand when we can expect that gap to narrow going forward? And in terms of some of the second half impairments, where those came from? And I guess, what revenue impacts there would be off the back of that going forward?

Yes. So I think the first thing I'd do is, I'd say, let's put this in context. So the first is, so since FY '22, you have 2 correlated and therefore, relevant points. Since FY '22, we've had a cumulative sum of $110 million of impairments. This is across roughly 55 cash-generating units that get tested for impairment. In the same period, so it's $110 million of impairment. At the same period, we've had $150 million of write-ups in value, right? So gains on effectively increases in carrying value. And so there's a net $40 million increase rather than a net decrease in carrying values over that period. So that's the first thing.

So in context, every 6 months, all of those CGUs are tested. We test the headroom in terms of the carrying value of those assets, et cetera. So that's the first point. The second point I'd make is that we really have one asset that didn't meet the headroom test, right? And that asset is an Australian broking business, very unimaginatively called Austbrokers Corporate, which is where we house our corporate broking business. And that's what I actually was referencing when I was answering Andrei's question about losing some large corporate clients. So Austbrokers Corporate is sort of the outcome of the merging of 4 entities, 2 we already owned and then 2 we acquired over the last 4 or 5 years.

When you acquire them, I don't -- I'll try to do this briefly. When you acquire a broking business, you estimate the value of the client portfolio, which we call the broking register. And the balance of the purchase price is then the carrying value or the goodwill, right? And I'm leaving out any other tangible assets. So then the test is, when you lose clients that were part of that original portfolio you acquired, you write off the balance of whatever the carrying value is related to the clients that have left. And so that happened in the first half of FY '26. And so we had an impairment in December. And then we foreshadowed in March when we did the cap raise that we thought there might be additional impairment related to those client departures. And that's because you're trying to estimate how much income you'll retain or lose from that portfolio.

Important point is, you never increase the carrying value of that for new clients you might have won. So you might have the irony where you bought a business with 3 clients, they won 3 new clients. But actually, if you lose the 3 clients that were at the time of buying, you write off and impair the asset, but you never write up for the new clients that you've won, right? So you can't directly correlate and say, therefore, the business has lost its original clients, it's worth nothing. The second thing you do is, you then test the carrying value by looking at the -- you basically do a DCF of the future cash flows using a discounting rate.

Now there are a couple of vagaries there. Obviously, what you're doing is you're estimating the future cash flows. So if those have come down, then your carrying value -- your DCF is reduced. And if that's below the carrying value, then you do decrease it. But the second thing is, you do have changes in that discounting rate. So you could have this slight vagary where if discounting rates shift from year-to-year, you could have an impairment purely because of that.

Now I'm not saying that's what happened here. But what I am saying is, this is a technical accounting process that happens every 6 months across the carrying value of all of our cash-generating units. It's a standard practice. It's, for the purposes of assessing value, only a partially representative view of things. But nonetheless, you are correct. The fact is we had a significant set of impairments, but only one cash-generating unit that was sort of, let's call it, a fundamental impairment. So I think in context, the $150 million versus $110 million are the important numbers.

As to your question about when do we see -- when does this stop happening? Well, I think, ironically, this is something that we've tested every year. I think in most years, we've had some form of small impairment. It's actually ironically a function of our oldest assets that we might have bought at 5x or 6x or 7x multiples are the least likely to be impaired. As soon as we buy a majority stake in one of those, we write up the value, and your view on discounting rates and multiples might shift over time. So for example, there is a difference in multiples in the market now versus 18 months ago. So that shift in the market valuations also changes this. So I don't want to pooh-pooh it. I'm an accountant, so sort of I am comfortable with the principle of it, but we shouldn't conflate it with a representation of the quality of our historic M&A.

All right. If I can just ask a second question around M&A, just I guess how you're seeing the pipeline and what changes have you seen in valuation multiples relative to 6 months ago?

So I think the short quick answer is valuation multiples have drifted down. But I think it's less about the valuations, it's more about the rationality of the participants. I think some of the participants who were inflating the multiples and inflating -- so for me, the issue with the valuations was actually more about the normalizations being made to EBIT rather than the multiples themselves. And so we're seeing less of the silliness of normalized EBIT normalizations, and we're seeing more sensible vendors, because some of the, let's dare I say, irrational participants on the buyer side have sort of gone away. But we've been very clear all along about our view on valuations. And so we haven't really been beneficiaries of it. I think we're just seeing less competition.

We definitely are -- we see New Zealand as a market where we have our eye on quality M&A. And that might sound counterintuitive against the backdrop of what I said about the market competitiveness. The reality is we see that as a very attractive market in the medium term. And the best time, frankly, to be investing in that market is now, when the market is under a bit of stress.

Your next question comes from Richard Amland with CLSA.

Just wanted to ask for any commentary on the impairment charges recorded on Slide 36. There's a reasonable uplift year-on-year. And just where is that coming from?

I sort of feel like I just answered that question from Shreyas.

Okay. I was trying to get sort of a bit more granular in terms of which business segment or anything like that?

Yes, I'm pretty sure I answered that quite thoroughly. Yes.

Okay. All right. And just the -- maybe it's exactly the same. The adjustments to fair value of entities, that seems -- these things are intertwined, I guess, more of the same.

Yes. So that's the reference I made to year-over-year change. Yes, $150 million up, $110 million down.

And the last question today will come from Julian Braganza with Goldman Sachs.

Just a follow-up on the previous discussion just around Slide 45. Just want to round out the discussion there just around the reduced focus on fees and commission changes. I think that will be a more important feature in a softer market and should continue. So I just want to understand that piece and also just the cost reduction piece reducing to low for broking.

Well, the commission and fee changes, I mean, I think that implies that these are things that we see as levers we can apply. So this is not about -- so our view is, at the moment, we can put some fees through, and the split in international is a function of retail versus wholesale. But we think we've put through quite a lot in the second half, in particular, of FY '26. And so it's how much more can we do versus this flowing through the business as we progress through FY '27.

Got it. And on the cost reduction piece, for broking?

The cost reduction is actually a function of the -- is that specifically on retail broking that you're asking?

Yes, specifically for retail broking, that's right?

Well, I think it's because actually a lot of the, let's call it, enterprise-wide cost reduction that we could apply across Australia and New Zealand broking, we feel like we've implemented. We think that the margin improvement is going to come from growth without increasing cost rather than cost reduction per se, whereas we do see opportunities to reduce cost in the underwriting agencies and in the international, so both U.K. retail and wholesale. So again, just a function of what we've put through versus what we still see to come.

Okay. Got it. That's fine. And in terms of just Tysers, if my memory serves me correctly, correct me if I'm wrong, there was about $11 million of post-tax costs on the bonus realignment that came through in FY '25. You see about a $6 million pretax unwind coming to the FY '26 numbers. There's still a little bit of a gap between what was booked in FY '25, noting that the $11 million was post tax in FY '25. I just want to understand, are some of those features recurring? Or is there anything held back there? And what do you assume for FY '27 in the outlook there?

No. So there's nothing in FY -- so that is now reversed. So what we can recognize and estimate has reversed. I mean, I think the challenge is, we're trying to compare and clarify things in a moving piece. So for example, if you have fewer people, so you've got natural turnover. So you might get a cost in the provision when someone joins -- or sorry, when someone is there. Then when they leave, you can release that provision. But it's not a -- we don't have provisions by individual, by month, et cetera. So it's trying to make a portfolio-wide estimate into too precise as sort of a spreadsheet piece, Julian.

So I think the reality is, whatever we can recognize as will reverse, has reversed. Some of it may have -- we might have overestimated the negative in FY '25, but some of it would have flowed through potentially inorganic or is sort of still there because people have stayed -- because part of that is an assumption around retention rates, et cetera. So if our retention rates go up, ironically, the reversal goes down, because that becomes almost like a permanent provision that you carry until they leave.

Okay. Got it. And maybe just stepping back in terms of the outlook. Just keen to understand how you're sort of expecting the premium rate environment to pan out just across the different divisions versus what you see today?

Yes. So I mean, it's -- again, it's one of these predict the unpredictable. So our view is that premium rates in New Zealand have softened too far. And so we believe that premium rates have to harden in the New Zealand market. That they are too low. Rate reductions and rate freezes have gone too far and they've been too aggressive. So we think that is unhealthy. And ultimately, we want our clients to be paying fair prices. We don't want them to be exposed to volatility where you have a minus 20% premium rate and then plus 20%. We want just a 4% or 5% rate growth through the -- it should be less volatile. So New Zealand is definitely too soft. Need some remediation, and we're hoping that flows through in the next 6 to 12 months.

The U.K. is behind where New Zealand is, but still it's softened faster than we think is appropriate. So this is particularly on U.K. retail. And so we would see some hardening in New Zealand in the next 12 months. We would see some hardening in the U.K. in the next 18 to 24 months. In Australian broking, I think it's by class. We do think that strata in general is now rationally priced. And so there's a piece there where the strata market logically needs to harden. We're not seeing evidence of that, but we're saying needs to harden. So those are the observations about at a generic level.

I think at a particular specific level, we are observing that insurers are releasing reserves. So they've released reserves now consecutively through a couple of half year reporting cycles. They released reserves bluntly when insurance profits are inadequate and -- my words, not theirs. And so that normally preempts an adjustment in terms of the way in which they price underwriting risks. Now all of these are unfortunately hypotheses, Julian, because we don't know what's going to happen. But that reflects a little bit of what we've seen in the last 2 months, so in June and July, in terms of some pricing behaviors. Certainly, it reflects what some of them are saying, but not necessarily what they're doing. And so unfortunately, that's the best I can project.

Again, I come back to, if I observe what FY '26 to me demonstrates, if we went back 2 or 3 years, the comment I was making all the time was, irrespective of premium rate cycle, we will be able to manage through the cycle to ensure that we deliver fair and reasonable profit growth. And our view is that our sustainable ability to grow profits is low double-digit, right? And so I think what we've evidenced is, through feast and famine, we've been able to do that consecutively for 7 or 8 years at least now. And so for me, that's the key message.

I'll now hand back to Mr. Emmett for closing remarks.

Thank you very much, moderator. So thanks, everybody, for joining us today. Hopefully, you could hear from the presentation and from the answers to the questions, we're quietly pleased and proud of the result. I think an important metric to throw out there is, last year, at this time, we had a guidance range. And as we have this time, we state all of our assumptions in terms of FX rates, interest rates, split in terms of the seasonality, et cetera. And that guidance range a year ago was $215 million to $227 million. If you applied those assumptions around FX rates, for example, to our result, then we estimate that the result would have been $231 million.

So against the $215 million to $227 million a year ago, which a number of you said was a bit conservative, the reality is we don't adjust or restate our guidance every time we see FX headwinds, for example. Our view is we're managing a portfolio of businesses. We're going to try and manage to the guidance range. And so actually, our read of our performance is a beat, because we've delivered effectively against the assumptions we stated a year ago. In a year of, frankly, incredible global craziness, we've delivered an incredibly strong, robust result and the equivalent of a significant beat on our guidance -- our top end last year.

So we are pleased about not only the result, but mostly, we're pleased with the fact that we now have significantly complemented our geographic and our capability sort of footprint. We've got a number of additional revenue and margin growth opportunities. And we have made a very strong progress. And so we're looking forward to a strong FY '27 and stronger FY '28 and '29. So thank you very much. I look forward to catching up with many of you over the next few days.

That does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the AUB Group 1H '26 Results Conference Call. [Operator Instructions]. I would now like to hand the conference over to Mr. Mike Emmett, CEO and Managing Director. Please go ahead.

Good morning, and thank you for joining us. Firstly, I'd like to say how delighted I am that Nick has been formulated as AUB Group CFO, and I'm pleased to welcome him to this, his first results presentation.

Moving now to the presentation. The first half of financial year '26 has been a strong one for AUB, but more importantly, it reinforces the durability of the model we have built over many years. What I hope you take away from today is not just that we delivered another period of strong profit growth, but that the structure of the group, the way it is diversified, the way capital is allocated, and the way we are investing for the future, continues to strengthen and deliver enduring earnings growth.

The key elements of first half '26 performance are listed on Slide 2. Before we move through the detailed results, it's helpful to step back and frame the first half in context. There are 3 key themes in these results. The first is resilience. The underlying net profit after tax increased by 13.9% to $90.4 million with the margin expanding to 33.9%.

This margin expansion is not a function of favorable conditions. Rather, it reflects operating leverage and cost discipline applied across our portfolio. Over the past 4 years, we have delivered first half EPS growth of 17.8% per annum compounded. And this consistent profit delivery across premium rate cycles and interest rate movements is, in our view, one of the defining qualities of AUB.

The second theme is capital discipline. And while we continue to grow organically, we also continue to deploy capital into acquisitions and equity step-ups that are earnings accretive and strategically aligned. The opportunity set remains deep, and we remain selective.

The third theme is about positioning for the future. The Prestige acquisition meaningfully advances our U.K. retail strategy. While our early adoption of AI across the group is strengthening the productivity and capability of our brokers for the future. Each half, year-in and year-out, we are transforming the group for sustained earnings growth.

We delivered pleasing results for the first half '26, and most divisions delivered very strong profit growth, while New Zealand Broking has admittedly struggled. The strong first half '26 performance delivered across most of the divisions, together with acquisitions, most notably Prestige, have enabled an upgrade to our profit guidance. We now expect underlying net profit after tax for financial year '26 to be in the range of $220 million to $230 million, representing growth of 9.9% to 14.9% over financial year '25.

Turning now to Slide 3. As a summary, revenue increased 6.6% for the half. EBIT margins expanded meaningfully and the earnings per share grew in line with underlying net profit after tax, at 13.9% to $0.7754. The board has determined an interim dividend of $0.27 per share, an increase of 8% on PCP, which reflects both our confidence in the earnings profile and the strength of the balance sheet.

Slide 4. Over the past 4 years, we have delivered consistent revenue growth, margin expansion and EPS growth. This performance spans a range of market environments in which premium and interest rates have moved up and down and currency has fluctuated. And through all of this, our portfolio has delivered strong, steady growth. Diversification across retail broking, wholesale broking and underwriting agencies operating in domestic and international markets provides balance, reducing volatility and allowing us to continue to deliver compound profit growth whilst also benefiting from the flywheel benefits of synergies across the group.

Moving now to Slide 5. While profit growth of 13.9% was pleasing, what was more encouraging is that much of this growth was organic, delivered with improving margins, indicating we are not relying on external conditions, we are executing within the business. As I've said previously, the M&A opportunity set is intact and attractive. Acquisitions added a further 6% to profit growth, largely comprising bolt-on and equity step-ups, which are incremental additions enhancing earnings rather than reshaping risk, while FX and funding costs represented manageable headwinds.

On Slide 7, as you look across the divisions, the portfolio effect becomes clear. International, BizCover, Australian Broking and Agencies, all delivered good revenue, margin and profit before tax growth, while New Zealand profits reversed. The advantage of our structure is that we are not dependent on one earning stream. Strength in multiple divisions allows the group to continue progressing even when one geography is challenged.

Slide 8, Australian Broking remains the foundation of the group and has been an excellent performer over a long period. During the first half of '26, average income per client increased by 7.8%. This is an important metric and is notable given the premium rate increases have moderated to be in the low single-digit range over the past year. This result reflects deep client relationships, fee growth and disciplined service delivery. Broking margins continued to expand to 37.7% despite a lower interest income, which is the result in part of continued improvements in underlying operating efficiency. We continue to see opportunities to increase equity stakes in high-performing partners and to consolidate selectively. And this business remains structurally strong and highly cash generative.

As shown on Slide 9, BizCover continues to demonstrate the scalability of a well-built digital platform with a strong and compelling client proposition. Revenues grew 13.3%, EBIT grew 22.1%, and margins expanded meaningfully. In the Blaze technology rollout, is improving onboarding efficiency and product integration and has enhanced BizCover's ability to launch new capacity and new products at speed. BizCover sits in an attractive segment of the market, and the integration of AI capabilities described later will further enhance its competitive advantage and value.

Slide 10. Agencies delivered revenue growth of 10.8% and margin expansion to 42.4%. Specialty lines are performing strongly, and Pacific Indemnity has integrated well. However, strata remains challenging and was a drag on these results. Profit commissions rebounded strongly in 1H '26, following a weaker prior corresponding period. The underwriting capability within agencies strengthens our overall ecosystem, and allows us to capture additional value across the placement chain, ultimately delivering better outcomes for our clients and our brokers.

Slide 11 shows New Zealand profits, which declined in the first half of '26 by 10.9% on a constant currency basis. This reflects both the broader economic and operating challenges in New Zealand, and the cost of the market share push we made, which didn't deliver anticipated results. Impacts were most evident in ICRB-BrokerWeb and NZ Brokers, where remediation initiatives are already underway. We have responded to this performance by reshaping strategy, tightening cost control and accelerating portfolio optimization. While near-term performance is muted, we remain confident in the long-term opportunity.

Slide 12. This shows the strong profit growth in the International division, which was the result of wholesale cost initiatives taking effect, retail startups gaining traction, and recent acquisitions contributing positively. The strong profit growth was achieved despite FX headwinds. International remains an important growth area for the group, especially in U.K. retail over the next few years.

Slide 14. Turning now to Prestige. This acquisition is strategically significant for the group, and it's worth spending a few minutes describing why. The U.K. retail broking market remains one of the largest and most fragmented in the world. Despite consolidation over recent years, there is still substantial opportunity for scale operators who can combine local relationships with centralized capability. Our ambition in the U.K. has always been deliberate. We've not sought to replicate Australia overnight.

Instead, we have been assembling the structural components required to build a sustainable platform, retail broking, appointed rep networks, MGA capabilities and wholesale expertise. Prestige accelerates the strategy meaningfully. It brings national retail presence, strong regional brands established insurer relationships and experienced leadership. It also brings a culture that aligns well with ours, entrepreneurial, but with discipline.

Slide 15 shows how these pieces fit together. In Australia, our strength comes from a coherent ecosystem. Retail broking supported by agency underwriting capability together with a specialty placement into Lloyd's. In parallel, leveraging aligned local insurer partners and disciplined capital management. And what you're seeing here is the development of the same architecture in the U.K. Retail broking provides direct client relationships and recurring income.

AR networks extend this distribution without requiring full capital intensity. While an MGA capability allows us to enhance the client value proposition of our retail brokers, whilst also capturing additional value across the placement chain. Bringing these elements together under a coordinated structure enhances leverage with insurers, improved operating efficiency and strengthens our competitive positioning. Scale in retail broking is not simply about size. It is about influence. It improves access to capacity, enhances pricing insight and strengthens negotiating positions with benefits for clients and the business. Prestige significantly deepens these strengths.

Moving on to Slide 16. With Prestige becoming our primary U.K. retail brand, we now move into a different stage of maturity. The combination of Prestige and Tysers retail creates national coverage with meaningful regional density. This density matters. It allows for operating leverage, shared service efficiency and deeper insurer engagement. One of the advantages we've learned from Australia is that scale also enhances resilience.

It improves diversification across industries and client segments, and it provides the platform for further bolt-on acquisitions. The U.K. market continues to present attractive consolidation opportunities and having a scaled platform in this market, means we can act selectively and from a position of strength.

As described on Slide 17, the MGA component is equally important. Owning an MGA capability enhances margin mix and strategic flexibility. By creating or investing in MGA propositions that directly support our retail broking portfolio, we are able to increase premium flow through aligned underwriting capacity, capturing additional economics across the value chain, while creating more value and differentiation for clients and brokers. In periods where insurer appetite tightens, having underwriting alignment becomes increasingly valuable for sustainability of client risk placement, Prestige strengthens this capability meaningfully. And when you combine retail broking scale with MGA depth, you create a far more defensive position in the market.

Slide 18 describes the synergies we expect to achieve from the Prestige acquisition. Most of these synergies come from areas you would expect in a scaled retail platform, middle and back-office economies of scale, technology rationalization, procurement efficiencies and the removal of duplicated corporate costs. We've taken a deliberately conservative view and excluded revenue synergies from this number. Revenue benefits tend to accrue progressively rather than immediately, but they are strategically significant and very attractive with the Prestige acquisition.

I'll now hand over to Nick.

Thank you, Mike. Slide 20 has our current and pro forma funding position. Our leverage ratio increased from 1.97x to 2.49x at the end of calendar year 2025, reflecting a $239 million increase in total debt. This additional debt-funded acquisitions across the group, most notably the purchase of a further 30% interest in Pacific Indemnity and an additional 6% interest in AUB 360 announced in conjunction with the January institutional equity raise. It also funded the final earn-out payment relating to Pacific indemnity.

In January, we completed a $400 million institutional equity raise and secured an additional AUD 200 million debt facility. These funds will primarily be applied to the $432 million acquisition of Prestige with the surplus directed towards the repayment of existing debt. On a pro forma basis, after allowing for transaction and hedging costs, available cash and undrawn funding increases to $300 million and leverage reduces to 2.41x. This provides us with the financial flexibility to continue to deploy capital in a disciplined manner over time.

As shown in the table in the bottom left of the slide, $500 million of our existing syndicated facility matures in January 2027. We intend to commence refinancing discussions in March, well ahead of maturity.

On the right-hand side of the slide, we present total interest-earning assets and interest-bearing debt on a look-through ownership basis. This period, we've also disclosed the currency composition of both debt and interest earning assets to provide greater transparency around the potential interest rate mix. In aggregate, interest-earning assets are broadly aligned with look-through debt and both are predominantly floating rate. However, 24% of our interest-earning assets are denominated in U.S. dollars, while we currently have no U.S. dollar-denominated debt. In addition, Australian-dollar-denominated debt exceeds Australian dollar interest earning assets by approximately $360 million at December 2025. Accordingly, our principal interest rate exposure arises if the Australian dollar and U.S. dollar base rates move out of alignment.

Turning to foreign currency sensitivity. As outlined on Slide 36, our most material exposure relates to unhedged U.S. dollar brokerage income from our international operations. Among our currency exposures, GBP is largely neutral after allowing for our U.S. dollar to GBP hedging program. While there is some residual exposure to euro and other currencies, these are either relatively immaterial or Australian dollar based. The unhedged component of our U.S. dollar income is our primary currency exposure. As noted in our outlook, approximately $36 million of U.S. dollar brokerage income remains unhedged in the second half of 2026. A 1% movement in the average realized Australian dollar to U.S. dollar exchange rate relative to our outlook assumption would result in approximately a plus or minus 0.3% movement in the midpoint of our second half UNPAT guidance.

Importantly, our outlook guidance incorporates the impact of our U.S. dollar to GBP hedging program with the average GBP to U.S. dollar rate disclosed on Slide 36, under this program, we typically hedge approximately USD 60 million to USD 100 million forward over the next 12 months and $30 million to $50 million forward over the subsequent 12 to 24 months. providing a degree of earnings stability while retaining some participation in currency movements.

I'll now hand back to Mike.

Thanks, Nick. Slide 22. A I'd now like to spend some time discussing artificial intelligence, both what we are doing today and the benefits we see for our insurance broking business more broadly. As I mentioned earlier, AUB has been an early adopter of AI tools. We view AI not as a defensive measure, but as a growth enabler and operational accelerator. Across the group, we have now implemented or are in the process of implementing more than 35 AI solutions and tools. And these span BizCover, retail, agencies and wholesale, and they are designed to improve both the speed and the quality of service delivered to clients.

BizCover is where we have seen some of the earliest and most visible benefits given its digital architecture and predominantly micro SME client base. But AI adoption is not confined to BizCover. It is embedded across underwriting, broking operations, including customer engagement, compliance and claims processes, each solution is designed to enhance broker effectiveness, augmenting rather than replacing expertise. These tools provide timely, relevant insights, industry-specific coverage analysis, product comparisons, identification of wording gaps and benchmarking aligned to a client's specific risk profile and operating environment. In practical terms, AI is reducing administrative friction and improving technical precision. It allows brokers and operational teams to spend more time advising and less time processing.

Slide 23 illustrates one of the more visible examples of this philosophy, the new BizCover ChatGPT app. Through the screenshots, you can see a scenario where a prospective client interacts directly with the application in natural language. And the app has been lodged for review and approval, and we are currently awaiting what we hope will be imminent approval from OpenAI for release. We believe this will be a market-leading application. It enables clients to explore commercial insurance options conversationally, understanding differences between products in their own context, and dynamically comparing quotes.

And if they choose to proceed, they can then bind the policy via a direct link to the BizCover platform. Importantly, this is not about bypassing advice. It's about improving accessibility and engagement within our ecosystem to clients who currently wish to navigate through digital channels and seek products that are less reliant on personal relationships, trust and advice.

Usefully, the functionality shown in these screenshots will also be available through a new AI voice agent to be launched in the coming months, which will significantly extend the capacity and operating hours of the BizCover call center infrastructure. In addition, this capability will be released to brokers as part of the ongoing rollout of our new Australian broking platform, ensuring that our adviser network benefits from the same analytical capability.

Let me briefly address the broader discussion around AI in insurance broking. There's a narrative suggesting AI will automate advice disintermediate brokers and commoditize the industry. I take a different view. Insurance Broking, particularly in SME and commercial segments, is built on judgment, advocacy and trust. These qualities matter most at claim time. They are contextual and relational and they remain human. What AI does is elevate capability. It enables brokers to analyze data faster to identify emerging exposures earlier and benchmark clients more precisely. It automates routine tasks, freeing brokers to focus on program design, negotiation, relationship management. It sharpens technical insight through policy wording analysis and coverage comparison and it strengthens compliance oversight. AI handles the repetitive, brokers handle the consequential.

Now some might ask, if we believe brokers won't be disrupted, why are we launching a ChatGPT powered debt, the answer lies in understanding client segments and points of need. BizCover operates in the micro SME market where many clients prefer digital engagement and transactional simplicity for those customers accessibility and speed matter most. Our app meets that need within our own ecosystem. This is very different from mid-market and commercial clients where complexity increases and advice becomes more valuable and more valued particularly when claims occur, or risks evolve. So they are complementary.

We are using AI to improve digital distribution where it makes sense and to enhance broker capability, where advice is critical. AI doesn't remove the broker, it makes good brokers better. Within AUB, we see AI as a capability multiplier, a super power that amplifies the expertise already in the group. As noted earlier, we have been an early adopter of AI tools and are constantly assessing how we can implement these across our businesses. Our focus now is to ensure our teams continue embedding these tools into daily practice to deliver better outcomes for clients.

Slide 25, depicts a waterfall chart with our upgraded financial year 2016 underlying net profit after tax guidance. We now expect underlying net profit after tax for FY '26 to be in the range of $220 million to $230 million, representing growth on FY '25 of 9.9% to 14.9%. This reflects strong first half performance, equity step-ups and the expected contribution from Prestige. We expect the acquisition of Prestige will settle on or before 1 May and we are actually pleased to confirm that we received FCA clearance for this investment late last week. The assumptions underpinning guidance, particularly FX rates and interest rates are set out on the slide. In summary, we believe the group remains well positioned, operationally strong, strategically aligned and financially sound to continue to deliver compounded earnings over time.

Thank you, and I'll now hand back to the moderator for questions.

[Operator Instructions] Your first question comes from Tim Lawson with Macquarie.

Can I just focus on organic growth, if I could. Your initial guidance as you sort of had a bridge that had like $11-odd to $22 million sort of organic growth. That now if you sort of add what you've done in the first half and the second half, it's sort of like close to $17 million to $25 million, but you're splitting FX out. Can you sort of talk through the sort of moving parts on that organic growth. Obviously, there's a bit of drag in New Zealand and the bolt-ons and obviously better underlying growth elsewhere?

Sure, Tim. I think the first point, and you've highlighted that there is that, when we do -- when we provide guidance or we have an outlook, we can only work with what we know. And so we base it on exchange rates at the point at which we develop the guidance or the outlook. So in effect, a very simple way of thinking about it is that when you look at our first half, in effect, the FX headwind has been a drag on organic growth. And so the outperformance of underlying organic growth is greater than we expected if you're delivering to the same overall profit. Hopefully, I articulated that, okay. So broadly, we have delivered in the first half stronger organic growth than we had anticipated, partially muted by the FX headwinds.

And so calling out the FX piece for the second half is based on what we currently see, now it is plausible that the same phenomenon happens again. So I think that's the first point. So we can only call out FX. So in effect, the guidance in August we didn't call out an FX headwind because we didn't know whether it would be a headwind or a tailwind. Now we know that there was a headwind, and we know that based on the FX rates that have been sort of achieved or delivered so far or experienced so far that, that's what our outlook is.

In terms of the makeup, specifically of the organic growth, Broadly, if I characterize the business, I'd say that all parts ex strata agencies and New Zealand have performed better than we expected in August. And in fact, that better performance was strong enough that it negated New Zealand and strata, which we anticipated weren't going to have a good first half, actually had a worse first half than we anticipated.

So broadly, I guess, I'd say most businesses performed better than we forecast and expected, unfortunately, offset by 2 businesses performing worse than we had forecast or expected. In terms of the second half, very hard to predict specific things. We can just talk to momentum. The reality is, is that large parts of the group are performing well. We just need to make sure that we keep an eye on cost management, et cetera. And so we are very focused and disciplined about cost management and margin expansion. We're also very considered about the fact that we are trying to drive and achieve the margin targets that we've set out previously.

Maybe a follow-on question. In terms of the sort of income per client, which you called out in Australia, about 7%, almost 8% and then close to sort of flat in New Zealand. I mean how far are you away from sort of theoretical fee and commission rate. Sort of what specific outlook for that income per client line?

Yes. Great question, Tim. I think I can only answer that at a macro level, and it's best to use FY '25 numbers because the full year is an easier number to talk to. So in FY '25, our average commission -- our commission and fee income as a percentage of total Australian broking premium was 15.5%, although it varies our calculated weighted estimate of our maximum entitlement in terms of commission and fee across that premium would suggest something in the high 20% level. So somewhere between 25% and 30%.

And so really, what that would suggest to you is that provided a whole bunch of levers are applied, which we possibly would never apply all in the aggregate. But broadly, if we applied all of those levers, we can move the 15.5% to say 26%, 27.5%. For me, the number itself isn't what matters. What's reassuring is we still have a long way to go before we have any form of revenue ceiling, let's call it.

The next question comes from Andrei Stadnik with Morgan Stanley.

Can I ask my first question around the ChatGPT app that you were seeking to launch. It sounds like it's going to be a bit of a marketing extension for what BizCover is already doing. So in some ways, is that actually an opportunity to broaden the reach?

Andrei, it is. I think the first point is, now obviously, when you embark on these pieces, the reality is we know that there's a portfolio of clients out there where they don't understand insurance. They aren't comfortable with insurance and even placing insurance on a well-constructed digital platform, which we generally believe BizCover is the market leader in that unquestionably, they still find that confronting. And -- but they don't feel that they -- frankly, they're too small for them to be particularly well served or targeted by brokers.

And so a number of them are either direct clients of insurers or they're not quite sure what to do and how to do it and how, et cetera. So we do think that there's a segment of micro SME clients that a ChatGPT style of engagement around natural language interaction and inquiry, absolutely would be what helps them become a client of BizCover. And so we do think that there's a market opportunity.

So it's not a marketing thing. It's not like we said, well, everyone's writing about AI, let's build an app, so we can say we've got one, right? We genuinely believe that there's a segment of clients that currently aren't served by our brokers and aren't comfortable or able to place business through the existing digital channels in BizCover that will benefit from using an app.

Secondly, we believe that actually, there's a whole segment of clients that we can improve our servicing of them in BizCover by leveraging AI tools. Most notably, the ChatGPT app and the related AI voice agent that I spoke about. So we think that there's a piece which is about new clients, and then servicing our existing clients and just getting some of the benefits of scale, et cetera. Now clearly, some of the same tools that we're building in the broader business for brokers to use for product comparison, policy comparison, coverage, advice, et cetera, those tools, we can also connect into some of these other digital channel type front-end pieces.

And so again, I've for years avoided using the word ecosystem. But nonetheless, what we anticipate is that there is effectively a technology ecosystem, and AI is a useful and important component of that, not a sole component. It's not something new, different and off on the side. It's something that adds extra power to our existing landscape. And if you like, allows us to accelerate the build-out of our digital landscape. So I think on one hand, it's of great interest, and we believe that it will be particularly useful in the market in terms of improving not only attracting new clients, but actually improving the style of service and speed in which we deal with some existing clients. But equally, I'm not going to say to you that we're going to build a whole new business off the side of it. That's not the intention.

And a partly related questions. So one slide earlier, Slide 22. You're talking about the 35 use cases and some of the benefits around claims lodgements, cancellation requests, so would you say that some of these early AI efficiency wins are helping with a better operating margins that were reported?

No, I think that they're not at the scale yet. I mean it's very hard to point to whether an AI tool delivers a better margin improvement than pure automation or the use of bots, right? So I think we see it as bluntly the AI tools enable us to more rapidly deploy some of these tech solutions. They don't necessarily give us a better outcome at the end but they certainly make -- I mean, it's simpler, it's less tech-heavy to be able to leverage AI, particularly in some of the automation spaces.

And so we're really able to accelerate. But I think you could argue that this will help us achieve our margin targets over a slightly shorter time frame. I don't know if they change what the end margin opportunity is. But it certainly opened up the opportunity to do things in parallel and to automate things in parallel, where previously, we were constrained by tech capacity. That's been unlocked to a large extent.

If I can sneak in the third last question. In the international, I think you grew a commission fee income 8% year-on-year, which looks like it was pretty much the best among any of the any of the divisions, which I think there is some way towards addressing some of the concerns that the market has had in the past around local growth in international. So can you talk a little bit more about that 8% commission fee income growth that international saw?

We'll probably -- I mean, I think drawing too many direct comparisons between the divisions is hard at that piece. I think the combination -- in international, we really have the benefit of some of the acquisitions we've made and the fact that we're subscale in certain areas, et cetera. But again, that top line moves around a fair amount in international as we're reshaping the business. But certainly, if I focus on U.K. retail, that's obviously an area where we anticipate above system for want of better description, growth for the next couple of years because of what we see as our underweight positioning and our accelerated growth opportunities.

[Operator Instructions] Our next question comes from Siddharth Parameswaran.

I might just circle back to the issue of the ChatGPT app and what you're planning to do with AI. Mike, I was just wondering if you could help us understand whether there's any regulatory differences to provide advice via an app like this and how you're dealing with that and whether the regulators are on board with this? And maybe just related to that, if you could just help us understand the capabilities are of what's coming out is any different to what you already provide in BizCover or anywhere else? And also just around that, if underwriters have signed up as well. So whether the same insurers are signing up, yes.

So I think the first point is that the regulator stance is the technology doesn't matter. The accountability is with the license holder, right? So our responsibilities don't change, and we certainly can't delegate our accountability for regulated activities to an app. And so all of it has to be designed and executed in that context. Now that doesn't mean that responding to factual -- so the app doesn't give advice nor do any of our platforms, frankly, it provides fact-based comparators about factual pieces.

So I can't say to you, if you said which quote is better, which insurer is better. It will play back to you facts that -- because it's not giving you advice. So it will play back to you facts about price coverage differences, maybe differences in terms of, I don't know, exclusions, et cetera. It will play back facts that could just as easily be reflected in a digital -- the website platform just represented differently because it's in a natural language sort of set of answers and interaction. So I think that's the first point.

I think we're very conscious. And in fact, it is a very useful point that you've sort of surfaced, which is the complexity, scale and range of compliance and regulation is quite extraordinary, right? And so AI tools and technology give us the ability to manage against all of that complexity to ensure that we don't have any compliance failures. And so that's probably -- I think this is a real asset for us. Probably the single biggest opportunity for us is to get a handle on the scale of compliance activities that we have and the amount of effort that goes into that.

I think in terms of your question around insurers, being on board, et cetera, et cetera. Probably just if I step back, I think one of the challenges for anybody, whether you're a client or whether you're a broker, et cetera, is if you take some really simple product, an average PDS, let's just go and look at the travel insurance, right? If you -- whether you use your credit card travel insurance, you buy travel insurance or whatever it is, go and look at a PDS for travel insurance. It ranges from somewhere between 60 and 110 pages of relatively technical contractual descriptions.

Now anybody who says that they know all the time, the differences between every PDS just for travel insurance is sort of being optimistic. And so the ability to take important but very detailed centric pieces like that and have not only the PDS is stored in a searchable form, but actually leveraging AI so that we have -- so one AI tool could be as simple as, which it is, is enabling our brokers to rapidly compare PDS for different classes of product, et cetera. Now that's an incredibly valuable piece that informs their ability to service and support their clients or helps them themselves to be able to develop thoughts about product opportunities, et cetera.

So what AI does is it gives us the ability -- is giving us the ability to accelerate the way in which we can process search, structure and present for all of our teams, all of this massive amount of data. And it just gives us a different way of doing it that we've been doing for years but it accelerates the way in which you can make it presentable and consumable.

And sorry, just a question asked about if insurers signed up?

So well, when you say insurers are signed up, you possibly have to elaborate. I mean I think insurers are aware of what we're doing. I think the reality is that the things we're talking about are not -- you're not only launching a new product or et cetera. So fundamentally, behind the AI piece, I mean, I think sometimes people think AI tools just sort of develop the insights through osmosis. The fact is, ultimately, there needs to be integration into back-end systems to get to rating tools, et cetera.

And so a lot of the infrastructure that we've spent decades building. It's almost the culmination of that, which we can now present that through these different ways of engaging from the front end, whether it's our brokers or our clients or internal support staff or compliance people, et cetera, et cetera. So the insurers aren't signed up to it in the way that you described because they don't need to -- they signed up to our other core platforms, et cetera. This is just a different way of people consuming and understanding and interrogating the information.

Okay. I might circle back later, but that's fine. I just had a second question just around pricing. Just I think you previously said that in Australia, you've seen price increases of 5% to 7% for the first quarter of the financial year. And I think you made the comment in Australia, you're now seeing low single-digit increases for the half, that would suggest quite a sharp drop.

It doesn't seem to be affecting your guidance, but I was hoping, first, if you could just give us an understanding of what happened in the second quarter, firstly. And then if you could just comment on the other regions. So what's happening with particularly anything affecting the agencies and Tysers of on the rate side?

So I mean, I think broadly, I'd characterize it as New Zealand rates are roughly 0. They would be referred to as rollover rates. And in Australia, it depends on the sub class, but broadly, they are low single digit. Now if you said, Mike, they were sort of 5% to 7% and now you're saying, what are they 2% to 4%. So therefore, the second quarter must have been much worse. The problem is, and that's why I resist and always qualify these numbers, quarters are not equal. So the fact is the first quarter is a completely irrelevant quarter in the insurance Australian Broking world because all of the policy and premium rate movement happens in the fourth quarter of the year.

In New Zealand, it happens in the third quarter of the year, in the second quarter, you do have a bunch of things happening in November, December. So it's much better to look at the half than to look at the quarter. So I guess I begrudgingly gave first quarter view. And that was because we didn't observe the same plummeting premium rates that some other commentators in the market had observed. On a half year basis, looking at our 12-month trailing premium rate moves. And the other thing -- and you guys will be sick of me qualifying this.

But -- so if the insurance rate has gone down by 10%, but property value has gone up by 10%. What does that mean? If property has gone up 20% and insurance rates up 2%. So to measure this number, to even have an opinion on it, we take same client, same insured, same exposure or coverage. That's like such a small proportion of our client, but it's almost a meaningless number.

So that's why I try and talk directionally. So the fact is directionally premium rates have definitely weakened over the last few years. No question about it. Our view is that if you look at the amount of reserve releases going on in the insurers, if you look at the commentators around attritional loss ratios, et cetera, the fact is it feels like rates are more likely to stay flat and increase then go further negative.

But it's like, well, tell me -- that doesn't interest me. What interests me is what are our retention rates, how much new business are we winning? Structurally, are we well positioned for margin expansion? Are we delivering good services to our clients. What's happening to the average income per client? What levers do we have? What arrangements do we have with insurers that we can look at shifting program structures, et cetera. That's how we manage the business.

The rate happens to be a comment that I make every 6 months or every 3 months, depending on how frequently, I get asked. And so I don't want to trivialize it. It's just not a key driver of the way in which we run and manage the business. But unquestionably, rates are low single digits, and it feels that probably for at least another 6 to 12 months that will persist, but it feels like the tension in the system is more for the rates to move up and move down in the medium term.

Okay. And just a final question just on acquisitions. The new ACCC regime, I mean maybe it's a bit early, but it feels like your effort to really switch to offshore and step up. Just wondering, are we likely to see anything testing the new regime? Have you done anything? Any comments on what your experience has been?

Yes, we're not -- so I mean I think, if anything, our view is it simply takes the Australian environment and matches it with the environment we're already working with quite robustly, particularly in the U.K. So we just see it as a sensible step that we need to add to our process. It adds possibly weeks rather than months. It certainly doesn't add huge amounts of cost or complexity. And so we are fine and supportive of the process that's been implemented. And we don't see it as disruptive or a negative for us in terms of M&A in the domestic market.

The next question comes from Andrew Adams with Barrenjoey.

Just can you just give me how have we treated the Tysers bonus realignment from '25 which was obviously an $11 million PAT drag on the '25 base. In the waterfall charts throughout the pack, is that captured in organic growth.

Andrew, so yes, it is. The problem is you can't simply add it. So you might recall that I probably tried to over explain it. So it's a provision based on a question around how many people will be around in 18 months' time? What bonus entitlement will they have? So therefore, it's assumed because they're all on performance bonuses linked to revenue to margin, et cetera, what the mix of performance will be, et cetera.

Now you fast forward 24 months, and the -- because that impact on FY '25 was actually half '24, half '25, the reversal of that, the reason we haven't called it out is simply because we can't categorically map back the one number to the other because we've actually got a different mix of people performing different basis in which their performance has been metric. Some of them will be on bigger bonuses than they would have been, some will be on smaller bonuses, et cetera. So that's why when we put out the guidance last year, I actually said, you can't just add back all of that.

I just don't know how much of it you can add back because it's going to be a chunk of it, but not all of it. And so not because it won't revert -- it's just because you can't -- it's almost like a weird accounting, can't really compare the 2 calculations. So there's absolutely been a benefit, but the benefit hasn't been add back the number and then the difference only is organic and international, for example. It's more complicated than that. And the fact is as the businesses perform better, the bonus part has grown, and therefore, the provision has increased. And therefore, the difference between the previous excess provision and the new larger provision is smaller, right? So I don't know if that answers the question.

I guess we can see in international, I guess you can see those growth numbers. You've made the acquisitions and the costs have gone down. So a chunk of it, I guess, to your words, has come back in the half. I mean, is it -- are we assuming a chunk of it comes back in the second half? And appreciate you're not going to give us the exact numbers, and we can't.

But I guess, obviously, where I'm going is there was a $5 million drag on your second half numbers if that flows through in the second half? Just trying to understand what you're actually guiding to or implying for organic growth, ex Tysers, and I appreciate your explanation. But it was a significant amount, which we called out in FY '25. And even if we only get 75% of it, it's the vast majority of organic growth that you're going to get in '26.

And I think that's -- so firstly, Andrew, it's a reasonable question. I think the second piece is, unfortunately, the businesses aren't sort of a simple correlation of everything is neutral and then you just get this add back. I think there are lots of moving parts to it. So I think it's reasonable to say that perhaps assume 50% of that will be sort of, I'll use the word reversing, if that's the right word. What I'll do is I'll check with Nick and we'll come back to you if we can be a bit more precise.

All right. And then, I guess, on the same, just thinking about the outlook slides, which is 25. Just the $3.2 million funding costs dragged how are we treating the -- obviously the $400 million equity raise, and we're assuming 1 may, so we get 3 months of that benefit. Is that $3.2 million net of the benefit we're getting from holding the $400 million for 3 months? Or does that put somewhere else?

No. So it's net.

That's net. All right. Well, I'll -- I can't reconcile that number then. I might come back to you on that one.

Okay.

There are no further questions at this time. I'll now hand back to Mr. Emmett for closing remarks.

Thank you very much. Clearly, we're quietly pleased with the first half performance. Again, I'll reiterate the 3 points I made at the beginning. The first one is we're very proud of the resilient business that we've built, and we continue to build. We've demonstrated our ability to grow profits through various versions and permutations of economic environments.

The business is well positioned. We've put in place a balanced set of structures, and we're very pleased about the progress we're making, particularly with the U.K. retail. And broadly, inexorably, every year, every 6 months, we are completing the jigsaw puzzle to put in place and ensure that we've got a construct that enables us to deliver strong profit growth pretty much through the cycle on an enduring basis.

So again, I'd like to thank our teams and thank you very much, and I look forward to meeting and seeing many of you over the next week.

That concludes our conference for today. Thank you for participating. You may now disconnect.

Good morning, and thank you for joining us this morning. I'm pleased to announce that AUB Group has agreed to acquire 95.9% of Prestige Insurance in the U.K. for GBP 219 million, AUD 432 million based on an EBITDA multiple of 12.9x before taking into account cost synergies. Prestige is a diversified insurance business comprising a portfolio of broking and underwriting agency businesses as well as an insurtech platform. The business is guided by a highly experienced and respected leadership team, which will continue to drive its success under the direction of CEO, Trevor Shaw.

The acquisition is highly complementary to AUB's strategy and will enable us to accelerate the delivery of growth and margin benefits planned for the U.K. and the International division. In December 2025, we also completed step-ups of our equity stakes in 360 Underwriting and Pacific Indemnity in Australia.

Originally, these step-ups were planned for the second half of '26. However, our equity partners requested we bring them slightly forward to December. Given the requirement to fund the Prestige acquisition, together with the step-up investments in 360 and Pacific Indemnity and to ensure we retain sufficient funding capacity for additional bolt-on and step-up investments likely to arise later in calendar year '26, we have chosen to secure a level of funding that exceeds the amount needed solely for the Prestige investment. To achieve this, we've increased our debt facility by $200 million and today are launching an underwritten $400 million institutional placement at an offer price of $29.40.

A non-underwritten share purchase plan will also be made available to eligible shareholders. On a pro forma basis, post Prestige, these step-up investments, the capital raising and the increase in our debt facility, our leverage will be circa 2.47x, and we will have circa AUD 303 million of cash and undrawn debt available, providing us flexibility to deploy capital in a disciplined manner over time. And while the leverage has increased since our financial year '25 result, we are comfortable with this level in the context of the continued strong performance of the business and this highly strategic opportunity, noting that our business has a strong track record of earnings growth and cash generation, which will lead to a natural deleveraging over time as we have demonstrated strongly in the past.

The investments in Prestige and the step-ups are expected to be EPS neutral pre-synergies and low to mid-single-digit EPS accretive post synergies for calendar year '25 on a pro forma basis. The surplus cash and debt headroom resulting from the equity raise is expected to lead to additional EPS accretion over time as and when the funds are deployed. And while we are still working through the preparation of our audited results for the first half, we expect our first half '26 underlying net profit after tax to be in the range of $90 million to $91 million.

On Slide 11, we have provided an overview of performance in the first half of '26 based on unaudited preliminary results. As mentioned, we anticipate the underlying net profit after tax for the first half to be in the range of $90 million to $91 million, representing growth of 13.4% to 14.7% on the prior calendar period. During the first half of '26, we observed strong performance in most of the group. We are very pleased with the results the team delivered in the first half, which has been achieved in the face of some meaningful FX headwinds.

There are 2 aspects. Firstly, during the first half of '26 on a constant currency basis, using first half '25 FX rates, the underlying net profit after tax would have been $2.2 million higher. Secondly, I'd also highlight that this continued devaluation means that as our hedge contracts mature, they are repricing at lower spot rates such that the benefit of the hedges is diminishing over time. For example, the benefit from FX hedges reduced during the first half of '26 versus the first half of '25 by approximately $1.8 million.

Against this backdrop, the team has delivered strong organic growth, and I'll summarize each division's performance now. Our Australian Broking division continues to deliver solid performance, notwithstanding the reduction in interest income, which has arisen from lower interest rates as well as challenging and highly competitive conditions in the large and corporate segment of the market. The Underwriting Agencies division enjoyed another strong half, although strata agencies struggled in a challenging market with competitors continuing to significantly reduce rates.

The International division performed well and margin improvement initiatives are starting to deliver tangible benefits. We're also beginning to see pleasing momentum from newly seeded businesses in this division. Discover continued its positive trajectory, delivering another half of robust organic top line growth and margin expansion, both locally and in their offshore markets. New Zealand results for the half were disappointing and significantly underperformed expectations. There's been a weakness in the corporate market across New Zealand, and this has impacted the business and our initiatives to grow market share have not delivered satisfactorily. We're working with these businesses to adjust short- and medium-term performance outcomes.

In summary, during the first half, we saw solid to strong performance across much of the business, muted by the disappointing results in New Zealand and the negative impact of currency devaluation. Based on the strong business performance in 1 half '26, we are reaffirming our financial year '26 UNPAT guidance in the range of $215 million to $227 million despite the anticipated continuation of FX headwinds during the second half. This guidance note is before the impact of the Prestige acquisition and the step-up investments.

It's important to note that the step-ups were already planned to occur in financial year '26. They have, however, simply been brought forward slightly into the first half. Additionally, the completion of the Prestige transaction is subject to FCA approval, and we expect this to most likely take place during the fourth quarter of financial year '26. An additional item I want to highlight is that we expect to recognize noncash impairments in the first half of '26 of circa AUD 39 million. AUD 26 million of this relates to a brokerage focused on the corporate segment in Australia and a further $13 million relates to historical Tysers wholesale team departures that took place in early calendar year 2025. These impairments relate to the carrying value of the broker registers as well as to the assessment of the carrying value of goodwill for these respective businesses.

Moving to Slide 13, which provides an overview of Prestige. Prestige was established in 1973 in Belfast and has built a strong portfolio of businesses across the U.K. and Ireland. The group places over GBP 300 million of premium with an EBITDA of GBP 17.5 million in calendar year '25. The business runs at a 30% margin and has a significant and experienced team led by Trevor Shaw, a respected senior industry leader.

On Slide 14, you'll note that Prestige bears a strong resemblance to our Australian operations. They have a portfolio comprised of retail brokerages, underwriting agencies and a highly successful insurtech. In effect, this acquisition, complemented by our equity partnerships with Movo and Momentum, both leading U.K. appointed rep networks, positions us to replicate the model and structure we have in place in Australia and enables us to take advantage of growth and optimization opportunities across the U.K. market.

Our success in achieving the scale and maturity in retail broking in the U.K. is described on Slide 16. Following this investment in Prestige, AUB's U.K. retail broking portfolio, excluding MGAs, will place close to GBP 550 million in premium with teams interacting with our clients across more than 200 locations. Similarly, the underwriting agency portfolio writing GBP 180 million of premium provides a strong platform to grow, not only delivering placement capacity for our brokers and clients, but also the ability to seed or bolt-on new agencies to further scale the portfolio, consistent with the model we have successfully executed in Australia.

Slide 18 illustrates the breadth of the portfolio we've built in the U.K. over the past few years. one that is strongly aligned to the foundational structures that underpin our success in Australia. And this includes strong, well-established and respected authorized rep networks, specialist and/or scaled licensed retail brokerages and both general and specialist underwriting agencies. And in addition, we now have equity stakes in 2 distinctive insurtech players that we can deploy to utilize across our growing portfolio. All of the building blocks for growth are now in place. Prestige is already an excellent business on a stand-alone basis.

There are, however, additional benefits and synergies we expect to unlock, and these are summarized on Slide 19. Please note that for the purposes of estimating synergies, we have only quantified cost-out opportunities, and these are expected to be greater than AUD 10 million by the end of FY '27 on a run rate basis. In addition, we are optimistic that additional upside will be delivered through revenue synergies over time. I've previously spoken about the lack of operational leverage in the existing Tysers retail business and the need to optimize the middle and back-office efficiencies to unlock this potential. And this represents our first synergy area.

With this transaction, we will now be able to leverage Prestige's scale and operational capacity whilst also being able to drive focus and efficiency in Tysers wholesale by focusing the middle and back office support on that area. Secondly, we will streamline and rationalize overlapping functions across Tysers Retail and Prestige.

Thirdly, the leadership of the merged Prestige and Tysers retail operation will enable us to leverage Prestige team's experience and capability. Fourth, the additional scale and breadth we achieve through this merger will increase our ability to enhance commercial arrangements with industry partners.

Fifthly, we see meaningful opportunity to enhance the flow of business between AUB retail broking businesses and our expanded MGA portfolio. And finally, leveraging Tysers wholesale wherever possible to place retail MGA binders and individual risks into Lloyd's. And this follows the model and approach we demonstrated when we acquired Tysers Wholesale and delivered these synergies by placing Australian and New Zealand volumes into Tysers.

In summary, we believe there are significant benefits to be gained from these areas with many that are as yet unquantified. We've previously described our ambition to grow in the U.K. retail market. And on Slide 21, we've summarized the reasons why we have targeted retail in the U.K. and the considered approach we've adopted for our expansion in U.K. retail. So why U.K. retail? Well, frankly, we're good at retail. This is a core strength of AUB. We know how to manage retail broking businesses and MGAs. We have an outstanding platform to leverage in the U.K. through Tysers, and we know that our owner driver equity model is a key differentiator, not only in Australia and New Zealand, but also in the U.K., where our discussions have met with significant engagement and enthusiasm.

The ambition is also supported by the fact that the U.K. broking market is at least twice the size of the market in Australia. We identified 5 areas of focus that we felt would be necessary to position ourselves for success in the U.K. retail. Firstly, to split out Tysers retail from wholesale. This was completed last year, except for the middle and back-office separation, which was deferred until we made an investment like Prestige. This will result in a far more fit-for-purpose middle and back office setup given the differences in market focus between our Tysers wholesale and U.K. retail businesses. Secondly, to invest in at least 1 and ideally 2 highly regarded authorized or appointed rep networks. We have 2 in Australia, and we now obviously have our equity stakes in Momentum and Movo.

Thirdly, to build out a national license brokerage with a national footprint and brand. Post completion, we intend to rebrand our Tysers retail business under the Prestige brand, which will now be our go-to-market in the U.K. and operate as our national licensed brokerage. Fourthly, to grow a portfolio of MGAs that support the retail broking businesses in both general and specialist commercial products. And finally, to build out a selective portfolio of insurtech assets that can be deployed in AUB network businesses. We are pleased with the significant progress achieved to date.

And as you can see, the acquisition of Prestige significantly enhances our ability to deliver on the last 3 building blocks. We are very pleased to have secured an investment in a business of prestigious caliber. It represents an excellent strategic fit with AUB Group, and we are delighted to welcome Trevor and his team into the AUB family. This acquisition positions us incredibly well to accelerate our growth in the U.K. market and to build a set of businesses in the U.K. that, in time, will rival the quality and scale of our Australian portfolio.

The rest of the slides in the pack cover the equity raise in more detail, and I will leave these for you to work through in detail. I'll now hand over to the moderator to take your questions.

[Operator Instructions]

Your first question comes from Tim Lawson with Macquarie.

You've talked about the strategic rationale of the Prestige transaction. Can you just talk about how prepared you are in terms of -- from an inside looking out U.K. retail perspective and how ready they are for this change?

Yes. So well, in fact, I think if we hadn't have made an acquisition like Prestige in the first 6 months of calendar year '26, I think we would then start missing out the opportunities that we're prepared for. So in effect, the last 18 months, we've been separating our Tysers retail. We've been preparing the middle and back office and our technology functions for exactly this type of structure and opportunity.

We just didn't have, if you like, the platform or foundation to move on to. So we've done everything we can with Tysers Retail by having effectively a sort of a platform that we could move it on to. So short answer, Tim, I think the timing is spot on. And in fact, the last 18 months have been pointing to and preparing for this point.

Okay. And then just in terms of the -- if you look back to the original Tysers transaction, you talked a bit about the sort of wholesale opportunities from ANZ Australia, ANZ AUB into the U.K. market and then obviously, commercial terms as well. Can you just -- you haven't talked in as much detail around those sort of commercial term step-ups and wholesale opportunity in this case. Can you sort of contrast the differences as to why that is the situation?

Yes. I think we had -- so we have been preparing and determining the potential value. We set up a business specifically called [ AUS ] placements so that we could anticipate and understand the benefits we get from a wholesale investment. And I suppose in a way, we'd almost geared everything up to estimate those synergies a year before we even embarked on the Tysers investment.

And it was also clearer because MGA binder placements, you can much more tangibly determine. And so I guess there's -- it's not do I believe the benefits are there or not. It's the confidence in being able to estimate them with certainty that we're confident enough to explicitly talk numbers with the market, I think. So it's more about our confidence in estimation than our confidence in the benefits being there.

Okay. And then maybe just a sort of question on the BAU M&A and the step-up M&A, we think about those 2 separately. Just you obviously -- it's obviously been an active period. You called out that the step-ups has sort of maybe fallen in this half rather than the next half. Just anything in particular as to what's behind that timing, why you think there might be a slightly slower period between you sort of called out the end of the calendar year as being maybe the next point of time where there might be some more activity. Just to understand that cycle of timing, please.

Well, I think I said that we agreed with the vendors on selling them Pacific Indemnity 360. I think to be more explicit, we are working through a restructuring of our underwriting agencies portfolio in terms of management and coordination. And we've built a really nice portfolio of agencies we are now looking to how do we consolidate and optimize those. And so in a way, part of the step-up in equity was to facilitate some consolidation activity that we anticipate we can make over the next 6 months. That's the first point.

So that really precipitated part of why we wanted to take these step-ups and then also why we felt it was easier to do it earlier than later. So that piece specifically. I think probably worth emphasizing that when we talk about consolidating businesses, I've spoken for several years about the importance of consolidations in terms of our optimizing of our portfolio and the margin improvement. But very often, the consolidations and the step-ups are linked because in some cases, to facilitate a consolidation, we also take a step-up in equity to enable that consolidation and vice versa.

And so there's a piece which is around if we couldn't take step-ups, we would struggle to action the consolidations. But if we just took step-ups, there'd be less value in the benefit. And so long answer to a short question, we anticipate that there are lots of opportunities for us to continue to consolidate the portfolio to continue to step up our equity stakes. And that's part of what -- why we effectively are looking to raise more equity than is purely needed for the Prestige acquisition. The second piece is that the reason for the timing is actually more about just a broader plan in terms of the way in which we can drive some efficiencies across the business.

[Operator Instructions] Your next question comes from Olivier Coulon with E&P Financial Group.

Congrats on what seems like a pretty sensible deal. Just have a question on the guidance. So you mentioned that it's pre the acceleration of the step-ups, which presumably will increase guidance. But then you don't mention whether it's adjusted for the $400 million capital raising. So is that inclusive of that? Because I suppose depending on what you do with the cash, that will obviously kind of generate some UNPATs.

Well, so there will be -- I mean, it's slightly swings and roundabouts, Olivier. I think probably 4 comments I'd make. The first one is, obviously, the difference to -- in terms of the step-ups is really the net benefit you get between the debt cost versus the profit contribution over a few months being the acceleration. One of those was going to be in June and the other one was going to be in April. And so it's not a full half of benefit.

And obviously, it's the net benefit in terms of -- because we're funding -- you've got to look at the debt cost piece. That's the first point. Second point is purely on a -- if you're talking about the difference in the timing between the raise today and the deployment of the capital for Prestige and pick a date, say, end of March, end of April, then yes, there is some benefit in terms of an interest piece. But we also obviously have slightly offsetting that is facility costs and deployment of the debt component.

But then as I've referenced, there's a hard to quantify FX headwind that we anticipate in the same period. So if you take all of those things in the rounds, our view is based on the -- so the positive is business is performing arguably ahead of expectation. Headwinds, particularly from FX and New Zealand underperformance. In parallel, you've got some swings and roundabouts in terms of funding costs, a bit of uncertainty around the timing of Prestige, et cetera. And so we're confident that guidance range, we're still in play. Business is performing well.

No reason to have -- frankly, no reason to say strong confidence in increasing guidance, no reason to feel nervous about the other situation. But just too early to say given uncertainty around interest rates, FX rates, timing of the Prestige completion. There's a whole bunch of variables in there that we think just sensibly, we stick middle of the road, hit the ball straight, and we just get on with things.

I appreciate that. I mean, particularly given the importance of the fourth quarter. Just maybe have another crack at that revenue synergy because I know that you obviously played a reasonably straight bet. So I mean, it sounds like you're very confident that there will be some. You don't, at this stage, want to kind of go on the record as putting a number out there. I mean, is there a yardstick that we can potentially use as a reference case to the Tysers deal?

No, because it's so different, right? It really is so different. So the reason that I've skirted away from it is precisely because -- so I think it is big enough to be excited about, but too uncertain to try and estimate. And so we are absolutely going to do everything we can to optimize that. But the fact is we're buying a really good quality asset. We're putting in place a strategic sort of set of building blocks in the business that can drive flywheel type benefits. We know that it's interesting enough and exciting enough to focus on, but not tangible or certain enough for us to be able to estimate or commit to.

Yes. Okay. I appreciate that. Maybe just the last one for me. I mean, I don't want to point at a soft spot, but just the write-down of the goodwill relating to that commercial broker. Is that just a function of buying it at the wrong time? Or has something gone wrong from a kind of material or personnel perspective?

So I mean -- and look, Nick, who's on the line listening as our sort of acting CFO will twitch as I say this. So let me be brutal about -- and I'm an accountant, so I'm allowed to be brutal about accounting standards. So here's how it works, right? When you buy a brokerage, so corporate -- this is our corporate broker, very imaginatively called Austbrokers Corporate.

As our corporate broker, it bought a business in 2022. What happens when you buy a broking business, and it had a smallish portfolio, very large clients. When you buy a business, you attribute -- and apologies, I'm teaching you this, you attribute a portion of the purchase price to the value of the client portfolio that's been bought, okay?

Then the accounting approach is we then write off that -- we amortize that broking register over 10 or 12 years depending on the parts of the business and the types of clients. If during that period of 10 to 12 years, any of those clients leave the business, then you write off whatever the carrying value is attributed to that client based on the original acquisition.

Now the reason I'm going into that detail is, so the floor in it is if -- let's say, you bought 10 clients, one of them leaves and 9 of them double in value and revenue over that period. you only have a write-off. You never recognize that actually what you bought was really valuable, right? And so that's the challenge with the broker register amortization. The lion's share of the impairments relate to sort of writing off the carrying value of these clients.

And then there's a consequential goodwill adjustment based on sort of, if you like, a present value of the discounted cash flow view of the income that would have come from that. So I don't want to make it sound -- I don't want to trivialize it, but I do just want to emphasize that these don't talk to any systemic issue with the business. It is a mature seasoned practice. I also want to emphasize that the combination of broking register and goodwill intangibles is at about $2.5 billion on the balance sheet, and this is $39 million of that. So again, I'm trying not to trivialize it, but equally, I want to put it in context. So I want to be very explicit about it so that there were no surprises out of that. And then what I want to do is just make sure that also you understand the context of it.

Yes. No, I appreciate that. So I mean, I guess what you're saying is if there's a step-up in gross churn, you're going to get more write-offs even if net churn hasn't really changed.

Bluntly, in this corporate business, it's one client that we lost. And in Tysers, it's actually with Tysers, obviously lags. So you might recall, and I bored you guys with -- in February and in August, we spoke about property and casualty team to teams that had left or were leaving. And it's the lag effect of on the balance sheet recognizing that adjustment to the carrying value of the clients related to the teams leaving.

[Operator Instructions] Your next question comes from Julian Braganza with Goldman Sachs.

Just the first one. Can you maybe just talk about premium rate increases that you're seeing across the different portfolios at the moment? I think at the first quarter update at the AGM, you had flagged about 5% to 7% rate in the Australian broking portfolio. So I just want to clarify just what you're seeing at the moment in Australian Broking and also just across some of the other portfolios as well.

Sure, Julian. So we're not quite at the point of having -- so I have to talk anecdotally. We're not at the point of being able to do our average income per client explicit pieces. I will talk about that in February, as I always do. So I suppose there's a piece where I don't want to talk explicitly about the numbers and the ranges until we've done -- we do a fairly detailed piece of work about that, which we just haven't done because it's very early. It's quite premature for us in terms of talking about results.

What I would say is that directionally, what we are seeing is premium rates in New Zealand, particularly in the larger end of the market, so sort of mid- to large corporate, et cetera, we're seeing those rates continuing to soften even though rationally, we don't think they should. And in Australia, we're seeing a whole mixed bag according to risk classes. But on balance as a portfolio, the rate -- the premium rates are still in that -- they're certainly not 1% or 2%. They're in the 5%, 6%, 7% range. But I will talk explicitly about that when we do the results presentation in February.

Okay. Got it. That's clear. And then maybe just in terms of some of the organic trends that you're seeing across the U.K. Tysers business, just the wholesale business. Just interested in some of the discussion there just in terms of what are you seeing organically in the Tysers business? And also just for the Prestige business over the last few years, if you can talk to some of the organic growth trends there as well, that would be useful.

Sure. So again, I mean, I think some of this -- I don't want to sort of jump the gun. Some -- probably some of these are better to talk about at our February results, Julian. But I think broadly, what we're seeing in Tysers is good organic growth. Well, let me rather say international and then wholesale because we're now -- we're sort of using a few brands in wholesale. Now we're sort of partitioning out how we go to market, et cetera. So broadly, we're seeing, as I've previously sort of outlined, our strategy is all about reducing certain classes of business and certain types of risk and accelerating others.

And so at a headline level, we're seeing organic growth in the sort of single digit but not low single-digit sort of range. But underneath that, we're seeing very strong organic growth in some of our key focus business areas, obviously muted or offset by some other areas where, in some cases, we're consciously shrinking them. But again, probably more appropriate to talk to -- with some degree of color and detail at the February results.

Okay. Got it. No, that's clear. And then maybe just to provide a little bit of color in terms of the margin differential between U.K. retail and also just the Tysers business. I know it's a consolidated margin target of 32% across the portfolio, and these acquisitions will help in terms of getting there. But just to provide a bit of color on how we're thinking about the Tysers wholesale business from here.

So the 32% margin target, I think I spoke about this in February last year, but maybe in August only. So again, emphasizing the targets obviously fairly broad brush determinations of what is structurally feasible in a 3- to 5-year time horizon. So the 32% target was predicated on 3 assumptions. One, that wholesale -- we should be able to run our portfolio of wholesale businesses at 25% plus margin. Secondly, that U.K. retail businesses -- optimized U.K. retail businesses should run at 35%.

And thirdly, that retail needs to be at least 25% of our portfolio so that the higher margin in retail is significant enough to, on a weighted basis, achieve the 32%. So obviously, as retail grows, it sort of drags the margin up. So structurally, wholesale businesses tend to run at a lower margin than retail businesses.

Structurally, MGAs tend to run at higher margins than pure broking businesses. And so part of achieving that 32% margin target in the International division is about getting scale in retail broking and in MGAs and optimizing margin in all 3 of them. And so that's broadly what our 3- to 5-year horizon was when we spoke about the 32% margin.

Okay. Got it. No, that's clear. And then just a final question for me in terms of just the guidance. I can say that, that's been retained for FY '26. But just in terms of the contribution of the growth, I think previously, you flagged 3% from acquisitions and about 8% from organic. Materially, is that still how you're thinking about the growth from FY '25? Or has that changed more towards an acquisitive SKU?

No. So -- and again, I'll talk in more detail about this more explicitly at the February results. But broadly, if you look at the first half, we've seen -- if you look back at our August sort of broad summary of results, we had organic contribution, contribution from acquisitions and the impact of FX and debt costs. So broadly, on those 3 segments, all 3 of them are higher than I would have sort of anticipated and based on what we thought.

So organic growth has been better than we predicted. Growth from acquisitions has been better than predicted. Unfortunately, the headwinds from FX and debt costs have also been greater. And therefore, on a net basis, we've landed pretty much squarely where we anticipated.

[Operator Instructions] Your next question comes from Andrew Adams with Barrenjoey.

Just the M&A spend of $200 million in first half '26, is that mostly debt funded?

Well, so I suppose there's a hot off the press bit of that, which is the M&A spend, which relates to -- so we completed -- what we did the Pacific and the 360 acquisitions right at the tail end of December. So yes, although it was debt funded anticipating sort of, let's call it, a restructuring. So yes.

Yes. And multiples around, what, 13x on average for that $200 million?

Correct.

And then just on Prestige, who gets the money? Who's the seller? Is it all management? Or is there third-party owners in there or...

So it's a mixed bag. So it's a 50-year-old business. The management team, like the CEO has been in place for 10 years, been in role for 10 years. Management team range from 7 to 15 years of tenure. Originally, it was -- so it's a combination of families that originally founded the business -- and then largely -- it's sort of almost professionalized over time. The family members have retired, moved to different things, et cetera, in some cases, no longer around. And so there was a chunk where unlike our types of transactions, they didn't have a practice of retiring shareholders, exiting the shareholders. So you had a slug of the equity owned by these retired, let's call them, original founders.

How much of the equity goes to people still in the business? Or is most of it going to people no longer in the business?

Yes. So in fact, the current management team owned -- they've sold down half of their equity. So yes. I'm going to round up. So they previously owned 10%, and now will own 5%. And so obviously, they're the ones that we are passionate about. And so that is partly recognizing for a number of them, they're wanting to use it to help pay down personal debt and mortgages and stuff.

And then -- but for them, the 4-point whatever percent that they're retaining remains their sort of key primary asset -- personal asset. The rest were -- now there was actually -- there's also a private equity firm, niche private equity firm that specialized only in owning majority -- small majority or large minority type stakes plus this family chunk. So that combination we bought out. We consciously bought out. There were options around whether...

And that combination is the bulk of it. Is that right? Like the combination...

Yes, correct.

Private equity, how much of that split? 50% of that or...

Yes, it's about -- I don't want to go too much into the detail, but yes.

Yes. Cool. And is there -- I mean, is there any earnout in future years? Or have they got all their money now? Or is there anything that comes later or the...

So no earnout. This is the...

Okay. Cool. And then just on the -- if I can, just on the Prestige numbers, still trying to put together a bit of history here. I mean, can you give us a bit of a sense for the growth in calendar year '25 and what we expect in '26? Because it feels like part of that U.K. market is a bit like what you outlined in New Zealand at the moment. So GWP and revenue growth is a bit tough at this stage. Is that similar to what you saw in Prestige in the second half of '25 or...

No. So I think the key thing with Prestige is they've been -- so they've been growing really well in the commercial segments and the specialty segments that we're really interested in. And in parallel, they've been reducing their exposure and investment in personal lines, so home and motor. And exactly as you described, I think those are some of the areas where it has been very competitive and rates has been playing a big role.

So actually, they've -- in all the areas that we're really interested in, they've seen really good growth. There are actually some segments where we've agreed with them. They had some -- during the process, we've agreed areas that weren't really areas of interest to us that have been carved out and sort of removed, et cetera, et cetera.

So I mean, broadly, I think the -- they've demonstrated an ability to do 3 key things that we really care about. One, they've grown, they know how to grow businesses. They're very well established with the broker market and segment, and they know how to grow top line in the commercial and specialty areas. So that's the first thing Secondly, they've demonstrated them.

On that first thing, so the GBP 59 million of revenue in calendar '25, was that up 10% or so on '24 or any kind of rough numbers you can give there?

Yes. So I think it's high single-digit growth over the medium term. Again, the thing I care about always is profit growth. But yes.

Yes, we'll get to that one. And then the split of commission and fee, which I guess you historically disclosed for Australia and other businesses. Any kind of comments you can make there on that GWP conversion into commission and fee?

No. So again, probably some -- so I think the split in commercial is pretty much exactly what we'd expect and anticipate in the U.K.

Okay. Cool. And sorry, sorry to put it on before. But then I guess maybe on to the margin, as you said, so the 30% margin, how has that tracked over the last couple of years?

Yes. So pretty consistently. So I think one of the things that I really like is that they are they're not only good brokers, they're good business people. And so they know how to run a business. I mean the easiest thing in the world is revenue grows and then profit grows. But it's much better to prove that you can deliver margin improvement irrespective of what the revenue environment looks like. And they're just very sensible, mature experienced.

It makes it a little bit harder for us to pull to expand the margin. If they're so good at doing it, it's probably a bit harder to get margin expansion from here, would it be?

No, no, because I think, frankly, part of the 30% is all about scale, right? And I think bluntly, we specialize in investing in things and then improving margin.

Yes. And then just a comment you made there on the carve-out some businesses. So obviously, we speak to synergies, but I mean, is there any expected leakages. I guess we saw team departures and account losses, et cetera, with Tysers. Is there any more business in this Prestige that you're not happy with that we can expect to go, so we go backwards before we go forwards or?

No, no. Completely different sort of context, et cetera. Yes. So, no, I mean, Prestige is a perfect play for us, products and teams aligned. And structurally, they're just structured completely differently. I think probably just worth emphasizing your question about margin improvement. I think the Tysers U.K. piece plays a key role here because the combination -- effectively, we're doing what we've done in Australia sort of after the fact we're doing at the time of acquiring Prestige.

So actually, the combination of the 2 businesses will lift both businesses' margins. And so firstly, Tysers Retail doesn't operate anywhere close to Prestige margin, but the irony is Tysers retail not only will move to Prestige margin, but actually will help Prestige improve their margin as well. So...

At a '27 exit rate? Or is that a couple of years away?

Hard to predict. I'll tell you in '27.

Your next question comes from Olivier Coulon with E&P Financial Group.

It might have been answered previously, but the step-up, did you say that, that was at around a 13x multiple as well?

Pardon, say that again, Olivier.

The step-ups that you did in Pacific Indemnity and AUB 360, what was the effective multiple on that roughly?

So, effectively, the multiples were -- so again, not talking explicitly because that wouldn't be fair to the businesses, et cetera, given that they step up. But you'd expect the multiples to correlate with the multiples that we had previously transacted at. So you can go and look at the Pacific Indemnity acquisition, et cetera.

So I think the key point is it's not like our bolt-ons or our historic step-ups in smaller businesses where it might be in that 8 or 9x range. These are big mature, high-margin, high-growth businesses. And so you'd expect the multiples to be higher. And we did disclose the types of multiples, for example, when we did the cap raise for Pacific Indemnity, et cetera. So the multiples for those types of businesses are more in that 12 to 13x range.

Yes. Okay. That makes sense. And sorry, does that include the earn-out, which I think you had for Pacific Indemnity? Or is that still to come?

Well, we haven't included the cost of the earn-out in these step-ups because that related to the original acquisition. But yes, we did deploy capital in the first half as part of that earnout.

Right. Sorry. But is that earn-out included in that $200 million number? Or is it exclusive of that?

No, excluded from that.

There are no further questions at this time. I'll now hand back to Mr. Emmett for closing remarks.

Thanks, everybody. So look, in summary, I think we had a good first half. We've managed to secure a great asset, and we're really excited about the strategy and opportunity that we have in U.K. retail. So thank you very much for joining us this morning, for listening, and we look forward to your support on this exciting next stage of our growth journey. Thank you, and have a lovely day.