Well, good morning, everyone. As numbers are building up, I'd just like to welcome everyone to this presentation of EQT Holdings' full year results to the 30 June 2023. I'm Mick O'Brien, I'm the managing director of the group, and joining me today is Philip Gentry, our Chief Financial Officer and Chief Operating Officer. So let me take you through the agenda for this morning. I'm going to give you an overview of the results, and then I'll talk particularly also about how the AET integration is going.
Then Philip's going to cover the financials in some detail, and I'll come back to reaffirm what our strategy is and give you an outlook for the company, and then we can take questions at the end. So let me first give you an overview of the results.
So just at the headline level, our funds under management, administration, and supervision has increased to AUD 160 billion, so up 7.5%, on the prior year. And there's some big numbers in that, which I'll talk about, shortly. Revenue was up to AUD 141 million, so up 25%, 27%. On an, on underlying basis, it's up 109%, so really strong organic growth. We have a seven-month contribution of revenue from AET in there, so that was AUD 22 million. So, 16% of our total revenue for the time, for the period. Net profit after tax was 18 point... On an underlying basis, net profit after tax, was AUD 29.1 million, up 19.4% on FY 2022.
The dividend is AUD 0.50 for the final dividend, bringing the total year's dividend up to AUD 0.99, so AUD 0.02 up on prior year. So, you know, this set of results is the first time we're reflecting the AET numbers. So we'll go through the detail of how they impact the numbers. We'll also talk about the difference between the statutory net profit and also the underlying net profit because that takes into account the one-off acquisition costs and the integration costs, and also the technology costs that we've been talking about for some time.
The balance sheet remains in a strong and healthy position with low gearing. And let me move on to talk about some of the key highlights. So first, we're starting on the funds under supervision. So this is a key driver of revenue for the business. So in each of the business units, they have a strong correlation to asset values between somewhere between 30% to 60% for different lines of business, and a mix between Australian equities and global equities, and other asset classes for that matter. But I think the key point from this slide is that funds under supervision have grown by 7.5%, up to AUD 160 billion.
And it's a really consistent procedural growth through recent years. AET has contributed AUD 7 billion to that. Not all of those assets will be ongoing, and I'll talk a little bit more about that as we go through these numbers.
Now, this slide is important because this really shows the different experience of each of the businesses. So firstly, just a headline level, you can see that Corporate TrustQuay Services, their funds are down to AUD 99 billion, so down AUD 6 billion. I'll talk about that in a sec. Superannuation, the funds are up AUD 10 billion over the year, so had a really strong year of growth. TrustQuay Wealth Services, their funds are up AUD 7 billion. So there's a mixed result across those lines. Let me just touch on each of them to start with.
So in Corporate TrustQuay Services, we continue to experience a lot of new funds set up and successful when winning new mandates and winning new fund managers. Some of our clients have lost funds, and in fact, lost something...
Four clients lost in the order of about AUD 9 billion of funds, right, from losing institutional mandates. So now, that's a big headline number. It hasn't impacted our revenue to the same sort of extent, and Philip will talk about those numbers shortly. But if you like, behind the result, there's a lot of positive growth in the sort CTS business as well. I'll just comment on the growth in dual registry and listed, unlisted schemes.
So we now have 12 schemes listed on the ASX and the Cboe exchanges. We've got 10 funds in setup, so that growth continues. So if you like, this portfolio is growing a little more on the retail side than the institutional side and expect that to continue.
We are establishing our corporate trust businesses, both in the debt securitization space and the real asset and custody space. And we've had great growth in both of those areas through the course of FY 2023. So, you know, we're really happy with the progress of those businesses. On the superannuation front, you can see there 29% growth, up to just under AUD 45 billion of assets under supervision. So it's clear that our model of independent TrustQuayship is really getting widespread support in the market.
We've also brought on board the AET small APRA funds. They've contributed just under AUD 1 billion to that growth, and we've taken on the TrustQuayship of that business quite smoothly. We've got a good pipeline business.
On the first of July, we took on the TrustQuayship for the Future Super Fund, which is, you know, very innovative, ESG-oriented fund, so we're delighted to take that appointment on. So the assets are already up over AUD 46 billion, and I expect, after we make that announcement, next, early next week, that these assets will be above AUD 50 billion, with the take on of another fund over the course of the weekend. So a really healthy growth in that business, and the pipeline is really strong.
On TrustQuay Wealth Services, so this is where, you know, the bulk of the Australian Executor TrustQuays business has gone. So AUD 6 billion of assets into this business. The organic growth as well has been really solid, you know, with AUD 1 billion of organic growth, some of that in the asset management side and also in the trust side. You can see in the asset management side of the business, we're now managing AUD 4.8 billion of assets. I'd see that set to grow from about that level to about AUD 6 billion in a relatively short period of time.
Really healthy result for TrustQuay Wealth Services. Yeah, I'll just give a quick overview of how we sort of see the business. The company is in very good shape. We're in the middle of a three-year investment in technology, and that is going according to plan. The acquisition of AET happened on the 1 December 2023 and has provided, you know, a really great platform for TrustQuay Wealth Services in different segments of the market and in different states. I'll talk about how the business is coming together with our existing business.
The investment program in technology is focused on firstly, serving clients better, so allowing clients access to information which they haven't had previously, so portals that allow them to facilitate their own transactions, improving productivity for the business, and importantly, providing us with a really sound foundation to continue growing the businesses the way they've been growing. Now, a couple of weeks ago, we announced that we're combining the superannuation and the corporate TrustQuay businesses.
The reason for that was firstly, Russell Beasley, who's been with us for 18 years, announced that he wanted to transition to retirement, so we had an opportunity to make some change. The operating models of Corporate TrustQuay Services business for fund managers and RE services is very similar to the operating model we have for superannuation and superannuation promoters and originators. So we'll be, I guess, over time, it'll take some time, aligning those operating models where it's appropriate to do so and catalyzing on the strengths of both those businesses.
And you can see the path of the superannuation business is following very similar, similarly to the path that we experienced as we built our TrustQuay services business. We also announced last week a decision to exit our U.K. and Ireland investments. So this is a business providing responsible the equivalent of responsible entity services in both of those markets, and we're well advanced on those exit plans, which may be a sale or may be a wind down in one or both of those locations. We'll say more about that to the market when we can, over the course of the next month.
But just, we've been experiencing loss in those businesses, and, once we're out of those, there'll be a significant increase to earnings. I can also say, that as of yesterday, and we'll announce, in a release to the market, to the media, early this morning, that we have reached agreement with SuperConcepts to outsource the administration of our small APRA fund business to them. That'll enable us to continue focusing on TrustQuayship. We'd always planned to do that.
We've also reached agreement to refer clients to them for the AET portfolio management business. That's important. When we acquired Australian Executor TrustQuays, those businesses were making a loss for AET. And now with the way we are reconstructing the business, we'll be making a profit and have them well set up going in the future for the small APRA fund business. And ultimately, we will be out of the AET platforms business.
So I'll talk more about that shortly. So, really happy with that result because it's very important for us achieving the expense synergies of the whole AET integration. And we'll continue fulfilling the purpose of this company, which is caring for people and enriching the broader community.
Obviously, with AET coming on board, we have many thousands more investors, beneficiaries, that and clients that need to be looked after, and we're privileged to be able to do that. I'll just talk very briefly about the technology plan and how it's going, because it's very important for setting up this business to continue its growth. Starting on TrustQuay Wealth Services, we launched a new platform for our active philanthropists called iPhi in December of last year. We now have more than 350 clients on that platform, about to go onto that platform.
Our active philanthropy business now, with AET joined in, is more than AUD 400 million in assets, and we see close on AUD 500 million in assets, sorry, and we see great growth in this area. We'll be continuing to build the marketing that we do for active philanthropy. I think we have the government to some extent behind that as well, wanting to double philanthropic granting through the course of the next five years they've set themselves. So, you know, we're really excited about the prospects for the active philanthropy business.
For the traditional trust business in TrustQuay Wealth Services, we're putting in place a new platform called Nav One. We launched the first phase of that in December last year, putting the AFL Players Association account onto it, as well as our cash management fund. Phase two, we put our continuing or slight testamentary trusts onto that platform, and that's planned for November.
So TrustQuay is a UK company specializing in this type of technology, and we're utilizing Hub24 as our custodian and covering the asset side of the platform for our full TrustQuay Wealth Services TrustQuay business. That's going really well. We will see this whole project completed by the third quarter of the calendar year 2024.
And we're well and truly on track to do the next stage of migration, which happens in November, which is, as I said before, all Equity TrustQuays continuing trust clients, and then we'll move on to the AETs. Moving on to the right side, Corporate TrustQuay Services. We've deployed Salesforce to cover all of our 200 clients in this area.
That's important, you know, for ensuring that we have some productivity improvements and straight-through processing of certain of the transactions we need to undertake in this business, and we'll continue building our sales force through the course of this year. On the superannuation side, the APRA reporting requirements and the requirements to assess member outcomes is becoming all the more onerous over time. We have a complex portfolio of funds with a variable range of investment and other types of options in them.
We currently produce something like 140 member outcome assessments, which is probably, I guess, the largest in the market. We are setting ourselves up from a technology point of view to make that as efficient as possible. So we're happy with the progress through FY 2023 on those technology developments.
Now, people will have always heard us talking about the focus on all of the stakeholders of this company, so our clients, our employees, shareholders, and the community. I'm really pleased with this set of results. On the client side, we've held our Net Promoter Score at 28. The net loyalty score is +36, down a little bit.
These are really outstanding results. I'm really pleased with that in a year where our business was very, if you like, busy in terms of taking on the AET integration and all of the technology development that we're doing, to be able to hold those client service results. That's really important for us, particularly given the needs, the high needs of many of our clients.
Now, technology is one thing, but really, this business is built on its employees, and we need people who are highly skilled, expert in their different areas, and empathetic to our clients' needs. I'm really pleased with the increase we've got on employee engagement and also employee enablement through the course of the year. That result on engagement puts us at the high-performing level, which we've always aspired to. It's been a seven-year journey to get there, and delighted that we have got there.
We'll continue to focus on getting the best people into this company and enabling them to do the job of looking after the clients. Now, the shareholder result, which I'll talk more about, you can see EPS is even there on an underlying basis and not because of the investments that we've put in through the course of the year.
You can see there the dividend increasing from 97% to 99%. You know, I think that dividend sort of shows is based on, I guess, the earnings of FY 2023, but also how we look at the underlying result and where we see it moving forward. On the community front, well, there's many things we do here. We do volunteering, we do employee giving, but we've just got one measure showing here, which is the community granting that we do through our philanthropic trusts. You see it's gone from AUD 92 million up to 122 through the course of the year.
That's really important in terms of the impact that it gets to make on the community. We want, we don't want to waste AUD 1 of that money. We have a great, you know, a really deep philanthropy team, putting those funds out to great use in the community. Of course, it's good commercially for the organization as well, that sort of growth. Just looking at the result for shareholders. So, you can see there, the earnings per share on an underlying basis coming at the same level.
On a statutory basis, it's AUD 0.73. Now, it's important to note there, there's a lot of one-off, acquisition costs leading up to the acquisition of AET, and then, of course, the integration costs of AET, the technology spends that I mentioned before. Now that we have AET on board, we have, the amortization of management rights coming through there. Not a cash item, but amortizing through those numbers.
When we announced exiting the UK and Europe, we wrote off an element of goodwill in relation to that. There's a lot of one-offs in those numbers. Also, of course, the capital raise with us happened seven months ago, but we only had seven months of earnings in these numbers from AET. An underlying result of EPS being flat. I mentioned before, the dividend increasing AUD 0.01 up to AUD 0.50 as the final dividend. I'll just talk about how the AET integration is going. Firstly, first message is we are absolutely on track to what our plan was. Nothing has surprised us, you know, on the downside in this acquisition.
In fact, we've been really pleased by the fact that the quality of the people that have come on board to join, and the alignment of the culture, in terms of putting the clients first. We completed the deal on the 1 December 2023, and at that point, rechanged the pricing on the TrustQuay Wealth Services products, consolidated some licenses in that first stage. The organizational restructure we did in mid-February. After we got through Christmas, we repriced the small APRA funds at that point in time. We've started building on the new applications that are required.
We've merged our two foundations, the AET and the EQT Foundation, which is active, the active philanthropy platform, and we have the IT infrastructure aligned. There is really now two main streams of work to complete.
Firstly, is exiting the platform business, and I mentioned before the agreement we reached yesterday with SuperConcepts to outsource the small APRA fund administration to them, and also to refer our platform and self-managed super fund clients to them. Our plan is then to close the self-managed super fund and platform business by the first quarter of 2024, and be exited by the end of the 2024 year, and for the superannuation small APRA fund business to be set up on a great basis going forward with SuperConcepts as our administrators, so we're delighted with that.
The second stream of work is to build the Nav One platform so that it can house all of the AET clients. We're well advanced on that. November is the next key date to put on the continuing trust clients of the EQT, which will put out a model for the AET clients to go on in February. And then we would hope to have all of the AET clients and EQT clients onto the Nav One platform by the time we get to June of 2024.
But we have got another quarter, if you like, of buffer before we come out of the Insignia systems at that point in time. So that's the two main items of work to go on the AET integration. Moving on to just a couple of other points around the integration.
I'm really pleased to say we've secured and been able to maintain all of the key people in AET, and they've got an absolutely common and trusty mindset, which aligns with the culture of Equity TrustQuays. On the product front, all the products are aligned in terms of prices. Our investment framework that's utilized in Equity TrustQuays is being rolled out progressively into AET, and that's very important for the revenue synergies of this acquisition.
On the premises front, we're co-located in all states. We have new premises in Perth and Brisbane. We're consolidating Adelaide, and we will, through next year, move into a new premises in Adelaide. We've exited the lease we had on the safe custody business, which we also exited earlier on.
The organizational structure is now set with the operational teams combined, not physically combined, but certainly on an organizational sense. And the front-facing businesses in each of the states are combined. License consolidation is progressing. We've achieved that on the advice side and also on estate planning, and the traditional TrustQuay license and custody license will be combined over the course of the next 18 months.
Our framework for risk governance for governance and the risk framework and controls have been overlaid over the business, and client relationships are all being maintained and strengthened. Our distribution partners are all well engaged, websites aligned, and so we're really happy with the progress on that. Let's just touch on asset management. I'll just focus here firstly on performance.
So on the three-year numbers, you can see there, you know, positive alpha across every one of the key investment strategies in this business. So we're delighted with that. The main strategy underpinning most of these trusts is the Australian Equity Strategy, and that's a really solid performance by the team on Australian Equities. We've continued to build the team, so we've gone from 12 to 15. That's important because we've got more investment strategies and there are more funds being managed.
So we're currently sitting at AUD 4.8 billion, but I do expect to see that closer to AUD 6 billion in short time. We've continued getting ratings on the products, and most of the products are rated at a four-star level, and some are 3.75.
With the new strategies that we brought on, Eight Bays Global Equities was brought on, I think probably just on 18 months ago now. And you can see the alpha over the course of the last 12 months there at 2.7. Delighted with that and our partnership with Eight Bays. We acquired the strategic Spectrum Strategic Income Fund through the course of the year.
Not for a consideration, but we brought on the investment manager there and the funds, which we were previously the RE of that particular fund. And that gives us more fixed income credit capability than what we had previously. So that's, you know, builds out the range of products.
Finally, we achieved RIAA accredited certification on our Australian and our global responsible investing strategies, and we'll continue to build that up in the next year. Now, I probably just want to touch on the synergies. Just reminding people, the expense synergy we were looking for was AUD 3.5 million. We expect to come in around the AUD 3.1 million, so we'll be on track on that. That's a full runway for FY 2025. Importantly, on the revenue synergies, we were previously expecting AUD 3.3 million.
We've upgraded that revenue synergy number to AUD 5.5 million. We're already achieving some of that. We expect the AUD 3.3 million in FY 2024 and a full AUD 5.5 million in FY 2025. No change in implementation costs of AUD 22 million and capital release.
Originally, we didn't factor in any capital release, but we're now very confident of a AUD 10 million capital release when we consolidate the traditional custody and custody license. So, so really pleased with this set of results. The business continued to grow strongly. Our, our strategy is being well accepted by the market. The integration of AET is progressing well, and I might hand over to Philip to take you through the financials in more detail.
Many thanks, Mike. Let's start with, firstly, with the P&L and the overall financial performance. Here you can see something of a summary and just sort of working down some of the key points. You can see the strong revenue growth up circa 27%, partly a function of obviously the seven months AET contribution, but also some pretty good revenue, organic revenue growth, and I'll talk a little bit more about that shortly. On the expense side, expenses up some 48%. A whole range of factors there.
Obviously, the inclusion of AET, the one-off acquisition, integration, and technology costs, amortization of management rights, and write-down of goodwill and management rights in the UK as well. Moving down a little further, you can see the underlying EBITDA, net profit before tax, and net profit after tax, all pretty healthy.
Statutory NPAT, of course, is well down, some 22%, reflecting these one-off costs I've just referred to. Underlying EPS is pretty much flat on the prior year, and dividends up a AUD 0.02 to 0.99 for the year. Let's just take a look now at revenue in a bit more detail. Just starting with the revenue bridge and moving from left to right here, you can see the seven months contribution there from AET of some AUD 22.5 million. The slightly adverse impact of markets over the course of the year, the impact of some CTS mandate losses was significant, and again, I'll talk a little bit more about that shortly.
But underlying revenue growth of some 9.2%, which is, you know, pretty encouraging in the circumstances. Now, let's just look a little bit more at expenses. And again, moving left to right across this bridge here, you can see quite a few non-recurring costs there, some AUD 12.2 million associated with the AET acquisition, the integration and technology implementation costs, the non-core costs associated with Europe, which we're exiting, costs associated with the AET uplift, and then the sort of net OpEx increase for the group.
That's around a 12% increase in salaries and related costs, driven by several things: significant reduction in vacancy levels as we've staffed ourselves back to more normal requirements, the higher cost of replacement staff, and some targeted investment in the revenue BU to support growth. Let's now look at some of the broader key financial metrics.
You can see here, revenue, EBITDA, net profit after tax and dividends over the last five years, all heading in a positive direction, particularly on an underlying basis, of course. Let's dive in a little bit more detail now on the BUs. Starting with TrustQuay Wealth Services. Revenue bridge for them, you can see here, strong organic growth of some 9.99%. Nearly double digits for TWS, which is a great outcome.
A modest impact from equity markets, but overall, a pretty strong performance and an encouraging contribution from AET as well. The firm has obviously increased in part function of organic growth, but the principal part of that is from AET. Having a little bit more of a dive into the TWS sub-businesses.
Won't go through each of these, but you can see AET's boosted key product lines and strengthened our position in key states and markets. In estate management, you'll see the year-on-year FUMAS is actually fairly flat. The, as you, as you may recall, the, the estate FUMAS is quite lumpy, and in fact, there has been a reasonable contribution from AET offsetting what's been a reduction this year from the EQT side of those estates.
Just to call out a few more, if you look at, on the right-hand side, the Community and Native Title Trust, and also the Health and, Health and Personal Injury Trust, very significant increases in FUMAS that AET is bringing to the business, which, are all going very well. Now turning to STS. Again, the revenue bridge here, you can see actually double-digit revenue growth in STS.
A very good year. Combination of growth in both new clients and good growth from existing clients, particularly the platform clients. You can see underneath the chart there, some of the new clients there. FUMAS increase, quite significant, nearly up 33%, and a small contribution from AET in relation to small capital funds. Looking forward, Future Super business - Future Super mandate commenced effective from the first of July, so it's given the FY 2024 a good start for the super business, and there's also a strong pipeline beyond that, and we'll talk more to that shortly.
Moving on to CTS. Here, you can see in the revenue bridge, organic growth is more modest, and they've had to deal with the impact of those four large mandate losses. Nonetheless, quite a significant amount of activity, a lot of new funds, and we're also seeing activity levels pretty high at the moment, about 40 funds in various stages of establishment, which all goes well for the year ahead, notwithstanding the beats and mandate losses in FY 2023. Let me just provide a little bit more color around this.
You can see here a breakdown of fund movements and fund manager movements, which reflects the fairly high activity levels. New funds and fund significantly above funds closed. Quite a few funds closed during the year. You can see, likewise, there's quite a few managers exited as well. On the right-hand side, you can see the breakdown of the fund manager location, some 61% domestically, nearly 40% offshore. Then moving on to the custody and DCM business.
This business is still a smaller business for CTS, but it's growing quite rapidly. You can see the 22% CAGR growth in revenue. That's trending nicely. The DCM component of this business had a slower first half, with the interest rates rising, subduing that particular market, but it's bouncing back in the second half and should be in reasonable shape for the year ahead. There's, again, a pretty strong pipeline of transactions for this business in the months ahead as well.
Moving on to UK and Ireland, as Mick mentioned, we've announced our decision to exit this business. Planning is well advanced in terms of the precise mechanism, and we'll keep the market informed of that.
Nonetheless, the business is pretty stable, and it's in reasonable shape, and as I said before, we'll confirm nature and timing of that particular exit in due course. Moving on to the balance sheet. You can see the balance sheet here, summarized as it is, the cash liquid investments have increased over the years. It remains in very good shape. Gearing is low at 9.3%, notwithstanding, there's been a moderate increase in corporate borrowings. The addition of AET has obviously increased the goodwill and the tangibles significantly.
Nonetheless, the balance sheet is strong, and we have surplus borrowing capacity and plenty of flexibility to take advantage of other opportunities should they arise. Moving on to cash. Remains strong. Tax, so you can see the cash flow operations there. Tax on AUD 28 million, payment of dividends and income tax.
We do expect quite a significant income tax refund this year, probably several million AUD, which will also help. Proceeds from borrowings associated for the main with the acquisition and costs associated with that. Overall, leading to an increase in liquidity over the course of the year. Let's just focus on liquidity a little bit more as well. Here you can see the unencumbered liquidity position. Picking this up as you look left to right on this chart, you can see there's AUD 133 million of liquid assets held in various forms.
Some AUD 78 million of regulatory capital we're required to have, less the operational risk financial reserve related to cash, giving us net available liquidity of about AUD 42 million, committed undrawn facilities of AUD 43. So quite a strong surplus liquid asset and committed undrawn facility position. Plenty of flexibility.
So, in summary, strong organic revenue growth, AET performing as expected, and integration on track. Higher expenses in part due to AET and in part due to the one-offs we've talked about. Good cash generation still, but opportunity to improve there further as well. Statutory impacted by the one-offs, but the underlying performance is strong and some capital position. Let me pass back to Mick O'Brien .
Thanks a lot. So I'll quickly talk about the strategy. Firstly, the purpose to help people take care of their future is the reason why everyone turns up to work here each day, and we take it really seriously. 40-year-old company, TrustQuay in financial services. Move on to the strategy. Again, this hasn't changed. Our key objectives. Firstly, consistent in shareholder value returns.
So we expect to get volatility in this business, market movements for much of our revenue, but it's a very consistent business. Market leadership in areas we've been looking to maintain the market leadership in key segments of the market. Of course, AET adds a lot to that. And quickly, our reputation is all important for a TrustQuay, and I guess most of what you...
We do not see Equity TrustQuays in the paper very often. Let me move to talk about market leadership. First on TrustQuay Wealth Services, mentioned that we were already the leader in the philanthropy sector of the market, and AET's just added to that. Of course, AET was the market leader by a long way in the health and personal injury market, and we add a little to their exposure position, a clear market leadership position. Estate management, our businesses has increased in size.
Our estate planning has more than doubled with AET coming on board, and we are probably the number one estate planner in the Australian market at the moment. Continuing trust, we're the leading provider there. Advice, we have a small business there, looking after our client base.
Effectively, that hasn't changed, as a result of the acquisition. Then on our asset management side, the scale of that business is now increasing, quite materially in terms of number of strategies, the team size, and the funds that are being managed. And then geographically, just continuing on, if you like, under TrustQuay Wealth Services, we now have a leadership position that we had, already in Victoria, that we now have in South Australia and West Australia, and much stronger positions in Sydney and in Brisbane.
For Corporate TrustQuay Services, we're clearly the long-term leader for providing responsible entity services to fund managers. That continues. We're building a strong new business for custody and real assets, and also in the debt and securitization market. And you're seeing those results with Superannuation.
We really are the leader in providing independent TrustQuay services in the superannuation market. So that each of these initiatives by 2024, TrustQuay Wealth Services, it's the AET integration continues. Investing of the platform business, as I mentioned before, continuing to build on the technology. So we're delivering on the next phases of the Nav One project, building our capability and capitalizing on the invest funds. The superannuation, it, we've just found the retail segment of the market. That's where we've been most successful and to a lesser extent, on the corporate and industry fund segment of the market.
There will be a focus on operational excellence, particularly as we bring together the superannuation and the corporate TrustQuay services business, capitalizing on the strengths of the businesses and the continuing growth of that business.
As I mentioned, we'd expect by the time we get to today or the end of this month, AUD 50 billion in the superannuation business. On corporate TrustQuay services side, our focus is on continuing to strengthen our proposition in the market, and attracting new managers, particularly global, you know, that have joined, are coming to the Australian market. More industry solutions in the superannuation space, and tailored is customized to large investors.
Also continuing to build ability, I think we said for FundsN et distribution, to continue growth in our new business securitization and custody space. I'll touch on most of the things John, but, we will continue focusing on technology to improve client service and client access to our services, also focusing on productivity on the bottom line there on finance.
We've done plenty of work for finance and for our people function, and that's important given the increased business. I'll just also touch on governance risk and the regulatory framework to our business. We seek to be well-regulated, so we have great relationships and communications with the key regulators and always seek to do that. This culture is essential underpinning to being a TrustQuay, and we continually survey our people around risk culture, and we have really strong results on that front.
And looking forward to AET being brought into that process as well as they progressively come into that process, and feeling very confident about that. Coping with regulatory change is an enormous part of this business. I'm pleased to say we are coping with the long list.
I've got a short list there, but there's a much longer list of regulatory changes that's occurred and will continue to occur in FY 2024. But we're well set for that, and we're looking at different ways to price inevitably for that change, as it continues on. And we're utilizing specialized platforms in our risk, management and compliance management. So in summary, you know, we're firmly of the belief that our strategy is working. Focusing on being a TrustQuay and being the leading TrustQuay in Australia has worked well for us.
We still see a massive runway of future growth in this area. Revenue and funds have continued to rise, and we're investing in the business. The AET acquisition is going according to plan. It's given us great leadership in different market segments and different states.
We expect the overall revenue synergies to exceed what we had originally anticipated. The transformation in terms of technology will continue through FY 2024. I'm confident that we'll have those platforms built and be in a great position by the end of the year. We see ongoing opportunities for the smaller businesses that we're growing. As Philip said, the balance sheet is in really strong condition, and we've got positive momentum moving into FY 2024 and beyond. With that, I think we can take questions.
We've got a fairly long list of questions, so let's start working on them straight away. The first one I think is for you, Philip. Statutory net operating cash flow of AUD 8.9 million looks a little weaker than normal. Can you unpack what's happening there?
Sure. So that 8.9 is a post-tax number. There's about AUD 20 million of tax, as I mentioned earlier. I do expect a significant refund, which makes that cash flow number look quite a bit better. But look, there's also opportunities to improve the working capital management. We're still digesting AET, and I expect the cash flow will continue to improve in the year ahead.
Thank you. I think the next one's for you as well. Can you talk through the additional costs added to the TWS business and what the annualization of that looks like for FY 2024?
Well, there's a couple of components to that. If we think of TWS as including the AET business, I called out some of the uplifts in AET support costs in particular, that were required to be put in place. Because you may recall, when we bought the business, those support functions resided in IFL and didn't come with the acquisition, and we needed to put them in place. The other dimension to this is the operating costs associated with TWS in its normal business.
There have been some, you know, modest increases of particularly frontline relationship staff that were a function of essentially business opportunities being greater than expected, and we needed to make sure we resourced it accordingly to make sure we could capture those and service the clients properly. Overall, a modest increase for the year, partly an annualization effect, as you suggest, but not dramatic.
Thank you, Phil. Next one is: Are you still anticipating divesting for some consideration the portfolio of SAF and self-managed super fund businesses of AET? I'll take that. No, we don't expect to receive any consideration for those businesses, so they were effectively loss-making businesses, the platform business. We'll get some small referral payments that come through, but nothing particularly material, but some small referral payments coming through. In respect of the small APRA fund outsourcing, well, that's not a sale.
That's just simply an outsourcing arrangement, so... But I guess the bottom line is that we've turned something that is a loss-making business, which would have been increasing losses, into now a profitable business, a small APRA fund business for us.
Looking forward then to looking at the growth opportunities for that and partnering with SuperConcepts. The next question is: Have you seen any benefit to margins in TrustQuay Wealth Services associated with the tech investments being made? Perhaps I'll take that one. I think the answer to that is not yet, but we do expect to receive them. So you might have seen on one of those slides, we expect synergies to emerge once the Nav One platform is completely built.
You know, we've got a lot of synergies there, but I would hope that we might be able to do a little better than that once that new platform is bedded down. The next question is: What is the expected benefit to operations in TrustQuay Wealth Services of undertaking administration of assets on Hub24?
Is there applicability of more than the initial, initial AUD 4 billion transition within TrustQuay Wealth Services? Perhaps I'll take that, I think. So, effectively, we'd be utilizing Hub24 as the backing for, in terms of the administration of the assets for almost all of the traditional TrustQuay business within TrustQuay Wealth Services, as well as, the administration of all assets for, if you like, the health and personal injury, book of business over time, and that'll take a little longer to move.
So I can't really comment on what the total of that is, over time, but, effectively, you know, the solution of Nav One for our traditional TrustQuay business- as well as other platforms for non-traditional TrustQuay businesses no set plan, and, you know, most of the assets will move that way.
The next one is, can you talk through the Corporate TrustQuay Services client losses? Why did they leave? What's the impact of the annualization of this into FY 2024? Well, perhaps I'll comment on the losses. So the first thing is, of the four main ones we're talking about there. One of them was a client internalizing an arrangement, and the investor was also the investment manager. So there wasn't, if you like, an RE protection process, if you like, in that arrangement that we had. It was more of a scheme facilitation process.
So they've just internalized that, and it was at a much lower margin. That was some AUD 3.5 billion of the AUD 9 billion. For the remainder three clients, they are still very important large clients of Equity TrustQuays, and they...
It is just simply that they have lost some of their underlying clients. We've analyzed the whole Corporate TrustQuay Services portfolio, and it does have exposure, obviously, to institutional mandates throughout it. But there is nothing like those types of exposures that we continue to have going forward. So really don't see, you know, major change going forward for the outlook for the Corporate TrustQuay Services business. But I might let Philip talk on the annualization that appears there. So there's AUD 1.4 million of reduced revenue as a result of those losses in FY 2023, but, and how we would see it in FY 2024.
Yeah, thanks, Mick. Look, the annualization impact is circa AUD 1 million drag for FY 2024 or of that sort of order.
Thank you. Can you please talk through EQT's exposure, if any, to the Pac Capital business? Sure. So the Pac Capital business is a funds management business out of Sydney, and I think there's been some reports in the press about the investment manager and some of the investments of that. We are the responsibility for a Pac Capital fund as well as two other funds that are managed within that group.
And we've taken actions that a responsibility you'd expect to take if there's any, you know, if you like, elevated redemption requests in those funds or the underlying units within those funds. So there's no exposure to the company at all in respect of Pac Capital.
And really, it's just to some extent, normal responsible entity activity in protecting the investors' interests and ensuring equitable treatment of remaining and leaving investors, basically, where there is illiquid investments involved. Next question is, should we anticipate any further large client losses in Corporate TrustQuay Services? I think, well, of course, there's, you know, something like 400 schemes in Corporate TrustQuay Services, and, you know, 120 fund managers. So there will always be losses, but there's nothing particular that we would call out.
And the ones that have occurred this year, we could see a couple of those coming. I think had flagged that, you know, the market has, as Corporate TrustQuay Services portfolio, did have a couple of very large exposures to underlying clients of our fund manager clients. Yeah.
Perhaps, Mick, it might be worth also adding that there's a reasonable chance we may see some mandates coming to us the other way, of some size in the not-too-distant future as well.
Yeah. Good comment. Thank you, Phil. Do you anticipate being able to divest the corporate TrustQuay services U.K. and Europe business or winding these businesses down? So I might let you have that one.
Sure. Well, there are reasonable prospects of some form of sale, but we're committed to exit one way or the other, and we'll just keep you posted.
Thank you. In the superannuation, margins were up considerably. Can you talk about what benefited the operating margin in this segment? Yes, can. A couple of things. One is, significant growth. And, you know, as a fund grows, it doesn't necessarily mean that we need to grow resources. Of course, as we get more new funds, often more resources are committed, but we can achieve leverage on the back of funds simply growing. And the portfolio now is a little more skewed to funds that are in positive net funds flow territory as opposed to negative net funds flow territory. So that is, that is helping.
One other thing that we were able to do through the course of the year was, if you like, put in a number of fees for some of the regulatory change in client, I guess, client-initiated changes in some of those funds. And that's also helped improve the margin there in the superannuation business. Next question: What was the rough component of non-cash amortization, and when will the AET amortization begin?
Sure. The AET amortization began on the 1 December 2023, so we have seven months of it, and it's about AUD 1.6 million for the seven months.
Thank you. Next question is, you flagged AUD 2 to 2.5 million, a one-off OpEx related to tech. Can you talk to the return on investment on this spend? Right. Good question. I can't give you a number on return on investment. But, the investment is primarily focused on better enabling clients' access to information and to actually transact some things directly. So that will, you know, improve our efficiency and productivity.
It's also aimed at improving our productivity overall. We haven't factored in that we would expect to get, you know, some material number or extent of savings out of that, but more to set the business up for future growth.
So you can see in each of the three businesses, ignoring CTS's performance in FY 2023, each of these businesses is growing materially, and we expect, given our market leading position, for that to continue. So we need to have more efficient models, you know, in each operating models in each of these businesses. So this theme is about ensuring we can get that growth without, you know, putting on a major level of resourcing in each of those areas. Would you add anything to that, Phil?
Look, I think that's fair, mate. We're certainly looking for, this is spread across a range of projects and all three revenue businesses, and we're looking for gains in both the client proposition, the employee proposition, and productivity. We have our own metrics around those, but you know, this is something we'll keep you posted on as we go.
Thank you. Should we think about the AUD 7 million profit before tax in the seven months from AET to the 12 million annualized, being partly offset by about AUD 2 million of additional support costs?
That's correct. Yes.
That's the way to think about it. Thank you. Next question is, superannuation organic funds under supervision growth was 27% and organic revenue growth was 11%. What is the difference due to here? Where were the new funds won on lower fees, or is more timing related? Good question. No, the new funds aren't being won on lower fees.
It's primarily coming from, we set fees, if you like, at a floor level for a fund, and then we have a basis points level for the starting level of the fund, and then as the fund grows, we have reduced fee levels. And some of those funds are getting to the tail end of those reduced fee levels.
So if the growth is, you know, in some of those funds, you know, in some of those areas have been quite significant, and it's coming at our lowest fee levels, basically, on the table. So that's what it is. So we haven't changed our pricing down. In fact, we're in some areas increasing the pricing. Yep. Next question. I'm interested to better appreciate the performance of the underlying business. Can you advise the underlying earnings per share without the benefit of the AET acquisition?
Sure. No, I don't have that at my fingertips, but I'm happy to take it offline.
Yeah. Thank you. Good morning. Is revenue uplift and cost efficiencies from tech upgrades on slide 37 included in the synergy targets for AET integration, or are they in addition to that? Good question.
Yeah, they're in addition. So, you know, the synergy targets don't include the opportunity from those tech projects.
Thank you. Revenue from interest and fund distributions increased from AUD 1 to 5.2 million in aggregate in FY 2023. Interest rates have increased, but how should we think about that moving forward?
Yeah, there will likely be further increases, as these higher interest rates certainly at least annualize, and it depends a little on what the course of those interest rates will be over the year ahead. But, you should still see positive momentum there.
Thanks, Phil. Is it right to expect a large jump up in EPS in FY 2024, given, one, excludes the AUD 6 million UK Ireland losses, and two, full year contribution from AET?
Yeah, look, conceptually, I understand the question. One of the questions that we're not completely clear on yet is it will take time to exit the UK, regardless of the mechanism. For a sale process will require the consent of either the UK and/or the Irish regulator, and that can take time. It could take six months. Might hopefully, it's a lot less than that, but... So it depends on the timing of the UK exit as to the benefit coming through.
There'll also continue to be, you know, some significant one-off costs, a few associated with the UK exit, I expect, but also some associated with the ongoing AET integration and the restructure of the exit of the platform business, over the course of the next six months. So, there'll still be, on a statutory basis, some one-off costs that won't be really till FY 2025, but it's completely clean.
Thank you, Phil. Next one is in regards to the U.K. exit. Did you say you would update over the next month? And if not, what's the likely timeframe, sale versus wind down? How do you progress each end? And is a sale, I assume, financially better outcome?
Yeah, I mentioned in the next month, I think, you know, don't hold us on the month, but it will be in the next month or two that we'll be able to update as to what the likely path is that we're taking. It's not right to assume that a sale versus sale would be better than a wind down because the sale won't really be for consideration, and it'll determine it'll come down to the time frames of each effectively.
So, they're fairly line ball when we consider it. So we've come to the end of all questions. If there's no more that are coming in, we're in to the end of our hour. So hopefully that was insightful for people. Just finishing, you know, we're very happy with this set of results. We're really happy with how we are positioned in the market and what our plans are, and we're really confident going into FY 2024 and looking forward to updating the market more as we move forward. And as always, thank everyone for the support of the company. Thank you. Thank you, Phil.