Good morning, everyone. I'm Mick O'Brien. I'm the Managing Director of EQT Holdings Limited. I'm here this morning with Philip Gentry, our CFO and Chief Operating Officer. Welcome to this call, where we're going to talk about the full year results for Equity Trustees to 30th June 2021.
The agenda for today, I'm going to go through an overview of the results and then hand over to Philip, who will take you through the detailed financials. Then I'll come back and talk about the strategy update and the outlook for the company. We'll be very happy to take questions at the end.
Before starting, I'd like to acknowledge, the Aboriginal and Torres Strait Islander people as the first Australians and respect their long and enduring connection to the land on which we're on, and pay our respects to their elders, past, present, and emerging. I also want to acknowledge Australians are all doing it tough at the moment in lockdown in our two biggest states and elsewhere in the country.
That may apply to some people doing it tough who are sitting on this call today, and I wish everyone all the best at this difficult time. Let me give you an overview of the results. It's been a year of really strong growth for the company. Our funds under management, administration, and supervision grew by 43% to AUD 144 billion. It really has been really strong growth of the funds under supervision.
Revenue was AUD 101 million. The first time in the company's history has exceeded AUD 100 million, so that was a great result. A 5.9% increase on FY20. Underlying net profit after tax was AUD 22.4 million, and that was up 5.5% on the previous year. The board decided to increase the final dividend to AUD 0.47 for the final dividend, up from AUD 0.44 the interim dividend, giving a total for the year of AUD 0.91.
That's a 1% increase on the financial year for last year. I'll just give some highlights of how the company's performed through the course of the year. We've had a lot of new wins, and the momentum of new business, particularly in superannuation and Corporate Trustee Services, has been really strong.
We actually had to invest ahead of the curve to achieve some of that growth that I showed on the previous page. It's not possible to take on that amount of business that quickly without investing to do it, and we've been doing that. There's no doubt the industry is now fully understanding the importance of the trustee role and great governance, the importance of that.
That's really provided some tailwinds to our business and providing a lot of opportunity and people to talk to for us. We've kept investing in our people and technology, and really it's our people that sets us apart. We need expertise, we need judgment, and we need people with the culture that fits with this business. I'm pleased that we've been able to secure the right people to enable us to achieve that growth.
Finally, this company seeks to fulfill our purpose of trust, which means putting our clients first and contributing as much as we can to the broader community, and we've again done that through FY21. I'll now just look at the funds under management, administration, and supervision and how it's grown through the course of the year. This is really the key driver of revenue.
Philip will talk about how the revenue is correlated to funds growth. It does vary by business unit based on a range of factors, but it is really a key driver of revenue. Funds increased from AUD 101 billion at the start of the year to AUD 144 billion. A lot of that, about half of that increase came in the superannuation business, which has had really strong growth.
That's on the back of a couple of major appointments to the AMP Life superannuation business, which is now in the Resolution Life and the HUB24 Platform Business. In the Corporate Trustee Services area, we saw continued growth throughout the course of the year with a lot of new funds being established and new clients coming on board. Of course, the positive equity markets have contributed to that.
Just if you look at our whole portfolio, we're about 50% invested in equities across the whole of that AUD 144 billion. Markets were obviously strong through the course of the year. There is a lot of organic growth in that result there. If I look at the result by each business, the first thing I'll just point out is for the first time, we're reporting the business in three lines.
We've separated our superannuation trustee services business to show it separately from our private client trustee wealth services business. The reason for that is because of its greater scale and significance, and also they're very different lines of business in terms of the way fees are charged. This, I think, will be much more transparent for the market and for investors to see.
If I start on the left-hand side there in Corporate Trustee Services, where we've continued to see new responsible entity appointments to fund managers, both Australian and global managers, quite a lot of global managers. The diversity of asset classes, I think, has changed a lot through the last year or maybe two years or so. Really our business is well set up to provide those types of fund structures.
We expanded the offerings that we put to the market with our first dual registry quoted funds being put to the market. We now I think have six listed vehicles in the market, and this is an increasing trend that we'll see for funds managers to access the retail market. We've continued to build the corporate trust business, both in the debt loan and securitization side, but also in the real asset and custody side of that business.
A really solid result for Corporate Trustee Services, increasing from AUD 81 billion up to AUD 101 billion for the year. Superannuation has tripled its assets through the course of the year from AUD 11 billion to AUD 33 billion. It really is, I guess, no other word other than to say that's quite extraordinary growth.
We've taken on trusteeship for four new funds through the course of the year. A bit of a mix of funds, an AMP Life book that has transferred to Resolution Life. HUB24, a very contemporary platform. Centric, a brand-new platform. Aracon, kind of an existing fund that's been in place for some time.
I think it's in this part of the market where the company is really benefiting from the demand for the independent trustee model. Finally, on the right-hand side, looking at Trustee & Wealth Services. Again, achieved really solid growth. A lot of that has been in the philanthropy side of the business and also the health and personal injury side of the business. We've talked about our focus of this business, looking at all stakeholders.
We use this sort of framework to internally drive our behavior and the decisions in maintaining balance between each of the stakeholders. I'll start on employee engagement. You see our engagement result is up 2 points to 70%. That's 2 points above the industry norm. We're really delighted with that result, and really proud that we've been able to keep our employees safe through this time period,
But they increased their engagement despite being in lockdown, and most of our staff are in Melbourne, and they were in lockdown for more than six months of this year. That really is an outstanding result. On enablement, we're down 2 points. We're still equal to the industry average. That's, I guess, understandable. People working remotely not being quite as enabled in some areas.
On client satisfaction, our results, our Net Promoter Score was 12, our Net Loyalty Score was 13. They're both positive scores. They're down on the previous year. I think that reflects lower distributions from any of our trust clients. We've tried to build that into our communication efforts, and I think that's showing some promise.
Shareholder value, I'll talk in more detail about the earnings per share, but you can see the statutory EPS was up AUD 0.10- 103.04, and underlying EPS was up AUD 0.045- 107.2. I mentioned before the dividend up to AUD 0.91 for the full year. Finally, community impact. We're really pleased that we were able to pivot a lot of our philanthropic granting through the year to the areas of most need as COVID hit hard.
Our granting increased by AUD 5 million for the course of the year, up to AUD 96 million. That was a great result given dividends were lower in the Australian equity market, which is a major driver of that number. Volunteer days were 22. We'll obviously be looking to get a much bigger number next year and hopefully as we return to some normal ability to get out into the market.
I'll just now turn to the earnings per share. You can see the top line there, our underlying earnings per share up to AUD 1.072. That's growth of 4.4%, and the statutory earnings per share of AUD 1.03 is 10.9% up on FY 2020. The dividend there you can see at full year AUD 0.91 versus last year of AUD 0.90.
I'll just make the point that we have managed to increase dividends in five of the last six years, and we maintained it in the COVID impact year of FY 2020. I really think that's a fairly unique result in the market for financial services companies. I just want to touch a few areas. I mentioned the people side before. That's really important to this business.
We kept our employees safe and increased engagement through the lockdowns. I'm really delighted with that result. We've made some successful changes to the board, with Carol Schwartz taking on the chair from Jeff Kennett at the last AGM, and Kelly O'Dwyer being appointed to the board, after Alice Williams' retirement and also Judy Minto's retirement. I think it's been a really smooth succession for our chair and the whole board configuration.
We've transitioned new leadership into Corporate Trustee Services, appointing Russell Beasley to head up that business. Russell's been with us for 15 years. He's a veteran of funds management service and funds management governance, and I'm delighted that he's taken on that role for us. We've been able to manage to secure a lot of new superannuation talent into our business, which has been really important to have that expertise to achieve that growth.
On the marketing front, we changed a lot of our marketing to digital, increased communication through this whole period. I think that's been well received. On the technology front, we continue to invest in very specific targeted technology. Camms is a new platform for risk and compliance, and that's so important to us because governance is our business. We rolled out another platform, Zeidler, for our service provider oversight. Again, critical for our business.
We operate an open architecture in the service providers we use, and we're probably more networked than any financial services player in the market to custodians, insurers, administrators, and the like. It's really important our oversight activity is there. We've continued evolving Salesforce in all parts of the business and investing in cyber resilience. Finally, I just want to call out asset management.
We put in place a new team a couple of years ago under Darren Thompson and Chris Haynes. Our flagship Australian equity fund delivered over 200 basis points of alpha for the financial year, and the team have delivered over 200 basis points of alpha since they've come on board. A really great result for our clients to be able to do that. We undertook a major consolidation of our funds, reducing 24 funds down to 13.
It's somewhat a hangover of the ANZ Trustees acquisition some years back. It's really streamlined our operating model for asset management. We launched a new global equities fund, rounding out the range of products from Australian equities fixed income, cash, and mortgages to have now global equities.
In summary, the funds under management growth has been really strong through the course of the year, both organic and through the equity markets. Solid EPS growth, both on an underlying and a statutory basis. We increased the dividend, as I mentioned before, continuing to invest in the business, and we really have a solid foundation going forward. As always, with this company, continuing to deepen our community impact and attempting to deliver for all of the stakeholders of the company.
I'll stop there and I'll now hand it over to Philip to talk you through the financials in some detail.
Thanks, Mick. Let me firstly take you through some of the higher level comparisons. On this slide, you can see we've had pretty consistent performance across a range of financial dimensions over the last five years. Revenue, you can see steadily increasing. EBITDA and NPAT, likewise, and dividends also very consistent over that period and increasing, as Mick said, in FY over the last six years.
Let's now have a closer look at the profit and loss. On this slide, just sort of coming down from the top of the page, some of the key points. You can see revenue year-on-year up 5.9%, quite strong. Half-on-half it's even better, up 9.1%, in part reflecting the stronger markets, but also quite healthy organic growth. Underlying expense growth is actually in line with the revenue growth. I'll explain what underlying is in just a moment.
You can also see that there's pretty robust EBITDA margins of 38.5%. Underlying just removes two elements. One is the M&A expenses that didn't proceed in due course during the year, and also a normalizing for the tax provision write-back that occurred in relation to the RGFI matter. That's essentially what gets us to the underlying.
On an NPAT basis, statutory, we're up 12.1% and underlying basis up 5.5%. A pretty healthy improvement in profit over the year. Let's now unpack the revenue line in a little more detail. This revenue bridge just moving from left to right, you can see some of the key points there. We have a very large single estate impact on the FY 2020 year of TWS that didn't proceed forward into the subsequent year, so we've adjusted for that.
There's some competitive repricing of fees on advice. A quite significant interest rate impact on the cash funds as a result of interest rates being much lower, and also, as Mick O'Brien alluded to, an impact on our dividend distribution revenue as a result of low dividends more broadly across the market.
That was offset to a significant extent by the positive equity markets impact on FUMAS. Overall, you can see the organic growth was very strong. Revenue up 5.9% and on an adjusted basis up 7.3%, mainly driven by the particularly strong organic growth in superannuation and corporate. Overall, though, you can see that the net impact of markets, if we don't want to include the interest rate markets as well, is relatively negligible.
Now turning to look at some of the BU performances, and as Mick said, we're now providing this information across three business units, corporate, superannuation, and TWS. Starting first with the TWS bridge.
Here you can see there's a range of impacts and a number of headwinds for TWS. I've touched on some of these in my previous slide. The single estate impact, the interest rate impact, and the dividend distribution impact offset by equity markets and some organic growth, which is good to see.
Quite strong increase in FUMAS on the right, in part a function of the organic growth, in part a function of strong equity markets, and also the alpha that's been generated across our equity portfolios by our asset management team, which Mick touched on before. Let's have a look at some of the components of the TWS business in a bit more detail.
Here you can see some of the major components. Pretty good momentum across most of the BUs. Again, a function of reasonable organic growth momentum in these businesses, positive equity markets, and a particularly strong performance across compensation trusts on the right-hand side there. You can see 26 new trusts in the financial year. Now having a closer look at superannuation.
Here you can see on the left-hand side some pretty extraordinary organic revenue growth. Pretty limited equity market impact. The linkage to equity markets for the superannuation business is only about 20%. There's a lot of fixed rate arrangements in place. It's not as pronounced as you might see in CTS and TWS, which is closer to 50% linkage to markets. On the right-hand side, we can see the dramatic increase in members.
Mick's already touched on the tripling of funds under supervision and driven by the organic growth, and particularly the appointments of AMP Life and HUB24. Let's have a look at the corporate trustee services business. Pretty strong performance. Equity markets have certainly helped, and they're leveraged more to the MSCI, which has been particularly strong. You can still see pretty strong organic growth there.
Currently over 40 new funds under establishment in various stages of development, more as well for the FY22 financial year. Looking at just a little bit more detail of this business. Here you can see the number of funds has increased from 289 to 310, up 21, and 8 new fund managers. I might add that these numbers are net, of course, and every year there are some fund terminations and closures.
We've actually grown the numbers of funds and fund managers quite a bit stronger than this, but nonetheless, the net numbers are what counts. The fund manager locations, very much a global fund manager base. The fund types, we just about service every different type of fund you can imagine. Turning to the Corporate Trust business.
This is still a small business, but as you can see, it's got good momentum and growing quite quickly. Got a number of tier one clients on board now, and you can see we had retail note transactions which we assisted Macquarie and Challenger with during the year. We're continuing to invest in this business and deploy additional resources to support its growth and momentum. It has good momentum, which we should see further pronounced in the FY 2022 year.
Let me turn to our overseas businesses in the U.K. and Ireland. Here you can see progress is continuing. The numbers of clients, the numbers of funds, and the total assets under management continue to grow. It's been a little slower than we would've liked, obviously affected by the pandemic, and that's made it more difficult to establish funds as quickly as we would've liked, and it's also slowed the distribution efforts of fund managers.
Nonetheless, you can see some pretty reasonable progress. Ireland is particularly strong, and we see very good prospects there. The U.K. is a little more subdued. Regulatory intensity is increasing, particularly in the U.K. Competition is also more marked than it is in Australia, as you might expect. Nonetheless, the opportunities are also very significant in terms of the size of the markets as well.
We continue to have a good pipeline, but the break-even is probably going to take a little bit longer, rather than next year, but at least the following year before we'd expect to see break-even.
Moving on to the balance sheet. Here you can see it continues to be very strong. We've got high levels of cash, a significant portion of which is required for regulatory purposes, low gearing, plenty of headroom in our covenants, and lots of flexibility to take advantage of future opportunities should it be required.
I'll also just call out the IOOF facilities. These are the facilities that are used to support superannuation fund activity, and the borrowings are matched by cash on the other side of the balance sheet. The net interest is effectively neutral to us. Ultimately, the recourse does not sit with EQT. Moving on to the cash flow.
Again, we're a consistent high-quality cash generator. You can see from this waterfall that the cash is principally used for payment of dividends, income tax, and in this case, in the payment of corporate facilities. We have very negligible bad debts. The strong and reliable cash flow generation enables the reliable payment of dividends, which we've evidenced over the last five years. Turning to liquidity, just to paint a bit of a picture here for you.
High levels of liquidity. A lot of cash used to support our RE business in particular. I've touched on the IOOF-related cash, which is matched by borrowings on the other side of the balance sheet. We've got surplus cash of around AUD 15 million and committed undrawn facilities of around AUD 30. About AUD 45 million of surplus cash and committed undrawn facilities. Plenty of flexibility should it be required for any purpose.
In summary, strong organic revenue growth supported by growth in equity markets. Underlying cost growth is pretty much in line with revenue growth. Continue to make particularly healthy margins, 38.5% on an underlying EBITDA basis, with a strong capital position with the flexibility to fund future growth. I'll pass over to Mick, who'll take you through the strategy and outlook.
Fabulous. Thanks to you very much, Philip. Now let me quickly summarize our strategy for you. It really hasn't changed. As our name suggests, this is a company founded on trust, and what we do is we help people take care of their future.
Safeguard their wealth, protect the interests of members and investors in schemes and trusts and the like. We're independent in the way we go about doing that and also looking to empower clients and the community in that process. Our values haven't changed.
They're clear, trusted, accountable, and empowering. If I look at our current position, we are a leader in providing trustee services in the market. Trustee & Wealth Services on the left-hand side there, the original part of the business, 130 years old.
We have more than AUD 2 billion in philanthropy funds that we look after and making AUD 96 million of grants a year in that space, really lead in a number of different areas of traditional trustee private client services. The superannuation side, clearly we're the number one provider of independent outsourced superannuation trustee services. To some extent, that has really helped drive the growth that we've seen in FY21, the 200% growth.
In Corporate Trustee Services, we're the number one provider of responsible entity services in Australia, the number three provider of corporate trust arrangements in Australia, we're continuing to build that business, both in the real asset side and also in the debt and loan side of the market. We've got a building presence in the U.K. and Europe that Philip touched on.
I won't go through all the products and services on this slide, but I will point out a couple of things that we've been continuing to build the list of services that we can provide. We only provide trusteeship, it's very important that we're in every line of business that we have the capability to be in and where there is demand.
We've been building, if I start at the top of the pie there, the debt capital markets area, the securitization area. I keep winding around the circle. Custody, investment management, and the investment we made in putting the team in place there a couple of years ago. Indigenous trust is a building area for us, and also compensatory trust. That circle has been built out quite a lot over the last four years, and we're starting to see the benefit of that.
Winding through the rest of the circle are the services we've been in for some time. If I just touch on the industry. Trust has never been in more demand than what it is at the moment, and in fact, dominates a lot of the industry and a lot of the regulatory push from both APRA and ASIC. It's been clear in recent years that conflicts of interest have not been managed well.
There's increase in regulatory oversight from both the main regulators in trying to deal with that issue, and the regulatory landscape is changing. For us, that's a two-edged sword. In one respect, there's more work for us to do, but in another respect, it makes our services and our offer more valuable to those who've got other core capabilities that they really want to bring to market.
The expectations are obviously heightened for trustees, and we feel we're very well equipped to live to those standards. The ownership changes that have been going on in the financial services market have really provided some opportunities for Equity Trustees over the last couple of years, and we see those trends that are on this slide continuing for some time to come.
If I just talk about our strategy at a very high level. We're looking to deliver what I'd say consistent growth in shareholder value and returns. This is a company that has a core of its business that is very stable, and we're looking to, from that base, deliver really consistent returns. We want to lead in the parts of the market in which we operate. We're not there just making up numbers.
Where we compete and provide services, we want to focus on being the best. Of course, as a trustee, it's so important to us our reputation and the enduring nature of the arrangements that we enter into, and that this corporation would be a trusted corporation. The strategy really sort of comes down to four areas. Continuing to grow the business. Our aspirations and ambitions are high, and we can see many opportunities for growth.
Focus on client service. I think we've got more work to do in continuing to improve the client service experience and enable the team with more technology. Capability is critical. Getting the right people is absolutely critical to this business. It's a people business, and it's all about judgment and expertise. Finally, we're serious about the impact that we can make on the community.
We have the privilege of granting such a significant amount of money to the for-purpose sector each year, and we take it really seriously in making the most of every dollar that we contribute in that area. If I move on, and just talk a little bit more detail about our investment in technology. I mentioned before what we put in place through the course of the last year.
Our focus is on information security and cybersecurity. You can see with a footprint of AUD 144 billion, we cover a lot of the financial services market, and that's really important. Digital solutions for client self-service is a focus, and also for our service providers that we operate with. Data analytics is becoming increasingly important to us, particularly in the superannuation space.
Our focus for the next 12 months in Corporate Trustee Services is around re-engineering some of our processes to handle the increased scale as the number of schemes and funds continues to increase.
For superannuation, it's around data analytics, and that's aimed at improving member outcomes, a very key responsibility for our trustees there. In Trustee & Wealth Services, it's about improving the client experience, and we'll be putting a big focus in that more in the second half of this year.
A major investment in technology for FY 2022. If I talk about each of the strategies of each of the business units. In Trustee & Wealth Services, we see opportunities in expanding our presence in other states and in more lines of business. As I mentioned, enhancing the client experience.
Building on our philanthropy business and what we do in the for-purpose market, and continuing to increase our expertise in the intergenerational wealth transition part of the market.
We're never going to be an enormous player in that market, but we do aim to be a very specialized player in targeted areas of wealth transition. For Superannuation Trustee Services, it's about capitalizing on the industry ownership changes that are going on and APRA's push for higher governance standards.
That works in our favor. Increasing our focus on member outcomes and continuing to look for opportunities to build more scale in that business. For Corporate Trustee Services, continue to capitalize on the leadership position we have in providing responsible entity services to the Australian funds management market. It's a great industry. It's innovative, it's growing, we lead it in terms of providing governance structures.
Accelerate the growth in our corporate trust business. We've put more people into that business of late, and we see great opportunity there. We've got to continue to achieve greater scale and improve the profitability of our U.K. and Irish business, so that'll be a focus going forward to try and do that. I'll just touch on 2 points in each of these areas, on each of these slides, and then open it up to questions.
For Trustee & Wealth Services, I'll just touch on the last 3 points here, and that is increasing investment in technology so we have a better client service experience across all parts of our trusts and other clients that we have in the business. We'll increasingly segment our client base, so we're providing greater levels of service to our high net worth clients.
We are re-engineering our operational processes, and that's to reduce risk but also improve operational leverage. If I move on to indigenous communities, you can see there the growth that we've had in the last couple of years in this area. It's been an area that we are very proud to be working in. It's a small area for us, but we now have a presence across four of the states and territories, having won new clients through the course of the year, so we're delighted with that.
It's important to us because we believe the communities need our services and our expertise, and they will achieve better results with the governance that we can provide in working in collaboration with indigenous communities. Move on to superannuation trustee services. I've probably mentioned most of the points on this slide, but I'll just focus on the last point there.
That's continuing to build capability by investing in our people and our technology. We're deep in the middle of a data project at the moment, and I think that'll give us great insights to looking after members in a more streamlined way than what we've been able to do in the past. Obviously, there's a lot of complexity in dealing with a portfolio of 15 superannuation funds of all varieties.
Hence it's really important that we have the capability in our people, and I'm delighted that the team have been able to manage the growth through the course of the year, together with all the other regulatory change that has hit the superannuation area, and I think we're really well positioned going forward. If I move on to Corporate Trustee Services, I'm just going to touch on a couple of things here.
The market for fund vehicles is changing. Superannuation funds and their investment programs are changing. We're increasingly using our expertise to provide better solutions for super funds. We're using our expertise to build listed vehicles, I mentioned that before, and that's expanding the distribution capability of our fund managers. I think that'll be something that we'll continue to see both, on the ASX on APRA-listed offers, to ASX-listed offers, and the like.
Just the last point I'd make on this point, we've had a small corporate trust business that we established about four years ago. That has been building over time, as Philip showed you in those numbers. We continue to expand the types of services and products that we can offer in this area and, really comfortable with how the team is now positioned to continue to build that business in FY22 and beyond.
Just in finishing, I'll give you an outlook. The momentum in the business is strong. You can see that in the growth in funds that we're overseeing. The trend to outsourcing fiduciary services continues to transform the industry, both in superannuation and in the investment markets of the industry, and that's a benefit to Equity Trustees. Obviously, equity markets have continued to be strong, and that benefits our revenue.
We've seen really good growth in our debt and securitization of corporate trust area, and we see further opportunities there. We'll keep investing in our people and our capability and the technology to support them. Philip took you through the balance sheet. It's in a really strong position, and that's important in these volatile times, and we've got the flexibility to fund our growth. We've got a positive outlook for FY22 and beyond.
I'll stop there, and we're happy to take any questions. People can use the question and answer session on their screen. Looking forward to any questions that they have. As we're waiting for questions to come through, I guess one question that would have occurred to me if I was sitting on the other side of the table would be, well, you've had quite extraordinary growth in superannuation in FY22.
Do you forecast the same will happen Sorry, FY21, the same will happen in FY22? Look, I think it has been a very big year in FY21. We've got a good pipeline of conversations that we are having with other superannuation providers. These deals are inevitably complex, and they take a long time to put in place.
We'll continue to have those conversations and that I wouldn't expect the same type of year in FY 2022 as to what was achieved in FY 2021. Could be delightful if it happened, but that is a little unlikely. We're having a number of positive conversations in that area. I've got another question here. Is the overseas operations profitable? What return on investment is EQT targeting? I might hand that over to Philip to answer.
Sure. Thanks, Mick. The overseas operations are not yet profitable. The loss is around 3 million markets. They're a little reduced from last year. We'd like to obviously get that profitable as quickly as we can.
It'll probably take at least another year or two. In terms of return on investment, we're certainly targeting a return on investment that's double digits and higher than EQT's current return on investment.
Fabulous. Thanks, Philip. Thank you. Another question here is: What are the biggest challenges that you have for FY22? Perhaps I'll take that question. Well, one of the biggest challenges we have is the increasing regulatory load.
Both APRA and ASIC are introducing new lines of legislation almost on a continual basis. I should say we're well set up to manage that. Our clients really benefit from us taking on that workload. I won't go through the long list of what we're working on and what's to come, but it is extensive.
Just managing that requires great planning and organization. I have another question here. "Can you please provide any commentary on M&A and what you are seeing in the market?" Perhaps I'll take that. Look, we're always active looking in the market at M&A opportunities. I would say we're very focused on our specialist areas of trusteeship.
Whilst it's not an enormous universe of opportunities in that area, there is quite a number. It's fair to say we're active in looking at all of those opportunities continually. You've seen in the past the types of acquisitions that we've made. The OneVue responsible entity business, Sandhurst Trustees estates and trusts business, the ANZ Trustees business, the superannuation business, and they've all been in our core spaces.
The next question is, "Can you please give a bit more detail on your expectations around cost efficiency benefits from the IT investment and process reengineering? Thanks, and hope all is well." I might hand that one over to Philip.
Sure. Thanks, Mick. In answer to this question, there are investments and projects underway in all three of our revenue business units to improve productivity, improve the client experience, and also the employee experience. Of particular note are the projects that are underway in CTS. Mick talked earlier about the greater than 40 funds being established. We've got over 300 funds now.
There's a real opportunity to get some scale efficiencies there with some improved automation and business process reengineering. We're quite optimistic we'll see some material benefits from that particular project. There's also projects in the superannuation business where it's been growing very quickly, as you know.
We think there's some scale benefit opportunities for appropriate systems investment there. Likewise, in TWS, although that's probably longer dated in terms of getting their systems upgraded in the fullness of time.
Not yet in the position to give you any sort of quantification of that. It's certainly going to help us in the months and years ahead.
Thank you, Philip. The next question is, "Clearly, superannuation trustee service is a lower margin business, but will profitability from that fund's growth flow through more in 2022 than in 2021?" Perhaps I'll take that. Yeah, it is a lower margin business, but of course, our margins have been increasing as we've increased the scale of the business. I think we've got a great foundation going into FY 2022, so you'll see the profitability come through from that higher foundation.
Some of the clients in this area are growing. Some are declining, mind you, some of the funds as well. On balance, we've got a growing portfolio there. There will be some increase in profitability coming through, we expect. The next question is, "Is the underlying expense growth of 5%- 6% what we should expect for FY 2022?
Will the expense growth be lower because you've hired ahead of the curve for the new super clients that you've won? I might hand that over to Philip. Philip.
Thanks, Mick. Look, there will be, I think, slightly elevated expense growth compared with the average sort of prior history. It could be of that sort of magnitude, partly a function of the technology investment that we're making and also some additional resourcing, particularly in Corporate Trust and superannuation.
It shouldn't be too marked. We're also very mindful that we continue to pace the expense growth so that it's appropriately in proportion to the revenue growth. There is some flexibility around how quickly we spend that money, and we're going to be cautious about how we do that.
Thanks, Philip. Another one for you, Philip, which, "Can you discuss the costs incurred in FY21 for M&A of AUD 1.8 million?
All I can really say is that there was obviously a very significant project that was underway that didn't complete. We got down to the very near midnight with that particular opportunity, new information came to light at a very late stage that caused the risk profile we thought to be not something we could accept. It didn't proceed, and hence we called out those costs accordingly.
Thanks, Philip. I'll take the next one. The next one is, "Can you provide more details on the IT investment? Is it a major change to your providers or just adding a few more staff to improve the experience for clients?" Well, in FY21, there was two new platforms that were introduced into the business, as I mentioned, around compliance and also outsourced provider oversight.
In FY22, one of the big focuses will be the platforms that we use going forward to look after our private clients. That will potentially be changes to the platforms that we're currently using. It may not be, but potentially it may be. It will definitely be focused on providing a better client experience. We've got really the resources in place to be able to handle that.
The next question is, "Can I get an update on what % of revenue is linked to equity market indices given the change in funds composition?" Over to you, Philip, on that one.
Sure. Just to explain this in terms of the 3 business lines rather than the two previously. From a TWS perspective, if I start there, it's about 20% linked to average ASX 200. PWS is about 50% linked to the average daily ASX 200, and the Corporate Trustee Services business is around 50% linked to the global MSCI.
Fabulous. Thank you, Philip. I think this is the last question, and it is: how much more investment in IT and people is required, and are we to expect margin expansion in the outer years? I might hand that up to you, Philip, as well.
Thanks, Mick O'Brien. This year, as you'll have seen in the presentation, we've called out an additional AUD 2 million to AUD 2.5 million of technology investment. That being a combination of OpEx and CapEx, at least 50% will be OpEx, possibly slightly higher.
There's still a few accounting questions to answer around some of the amortization of the new interpretation around software as a service. It's at that point. In terms of margin expansion, it's possible, but I think frankly, we'd be very happy to hold onto the 38.5% EBITDA margins we've got coming.
Thank you, Philip. I said that was the last question, but we've got 1 last that's come through which could be answered pretty quickly. I think the answer to that question is yes. We're delighted really with the smooth succession and change over the last 18 months. I think we're really well-positioned now with the board. With that, we'll call an end to the session.
Thank you all for joining and listening to that. We'll be talking to many of you individually over the coming days, which we really look forward to. I do hope that everyone stays safe and well out there. Thank you very much.