Earnings Call: H1 2020

Feb 12, 2020

Thank you, and good morning, everyone. Welcome to IDP's Half Year Financial Results. This morning, I'm joined by Murray Walton, our CFO and Craig Mackie, our Head of Investor Relations. We'll be going through the presentation pack this morning. And then at the end of that pack, we'll open the call up to Q and A. So let me begin by starting on Page four of the pack. Clearly, you can see we've delivered a very strong operating and financial performance in the half. The strength of our digital strategy and IDP's diverse global business was again reinforced in this period. Revenue at $379,000,000 was up 25%, EBIT at $86,900,000 up 49% NPATA at 59,500,000.0 up 42% and NPATA at 57,700,000.0 up 42%. We declared an interim dividend of 16.5%, and that was up 37% on the same period last year. In terms of student placement, a very strong result through the first half. And I'm very pleased to say that our APS were up 30% in the half to $33,800 Underpinning that was some very strong performances, in particular from India, up 57%. China was up 13% as source markets to all our destination countries. In terms of our Australia, Australia was up 10%. UK as a destination market was up 61% and Canada up 49%. So overall, a very strong result and again, a reflection of us taking market share from each of the markets that we're sourcing students from and destination markets we're sourcing into. In terms of English language testing, IELTS tests were up 11% to seven and thirty six thousand, very strong performance again from India, Canada, Vietnam and Nigeria. And again, across the board, we're taking market share in that testing space. In English Language Teaching, our courses were up 15% to 52,900, and that really was on the back of a very strong performance from our Cambodian operation. If I move over to Page five and the business highlights and just point to some of the highlights and milestones, I think as you're all aware, we're really in the process of bedding down a significant digital transformation alongside our analog business. And as you'll see in the presentation, we're starting to see some strong results from that. I was very pleased in the first half to open up our new digital canvas. It really is the engine room for innovation for IDP. We now have four fifty individuals in Chennai who are digital marketing technology experts helping us innovate our product and service lines. And obviously, that will bring much advantage to IDP in the coming periods. In student placement, our global platform is exceeding our expectations in terms of pipeline growth and conversion, and IDP was named Agency of the Year by a very reputable PIE and the Year Awards, which are globally recognized. In English language testing, a record half one volumes. Computer delivered IELTS is now available in 47 countries across our network. And we're now, as you'll see, applying our marketing and our technology expertise to really transform the test taker experience through the second half. In digital marketing events, we've had record web traffic and attendance across our global network and strong growth in digital marketing product orders, in particular from our international clients, those clients who are seeking a larger intake of international students. If I move to Page six, as I mentioned, we really are in the process of not just bedding down the investment that we've made in the platform, but now reaping some of those early rewards from that investment. We now have the world's best course search across 40 connected sites. That's matched with our leading office network. And I think I continue to make a point, the hybrid model, the ability to leverage that diverse physical footprint overlaid and enabled by technology is proving to be quite a powerful strategy. Our global contact center is stood up in 15 countries with three additional scheduled for the second half. We've had an enormous turnout at our events across all countries with an increase in 59% in terms of students showing up to our physical events. Now a lot of that is really being driven by our incremental marketing expertise that we've invested in and the leveraging of the technology that we have to engage those students. Strong growth of our virtual agency in India, up 74% in terms of leads. A strong CRM and content management system now supporting our 2,500 counselors and frontline destination and office management people engaging directly with our customers. Our student essentials revenues are up 200% versus the previous comparable period, and we continue to pilot our career support program. I think what's not to be missed on this page is again our shift to ensuring that in the long term we're leveraging this incredibly rich data that we're creating. And as of today, we have over 3,000,000 unique customers in our connected platform data set that we're able to engage with and move through our pipeline ultimately through to fulfillment. If I move to Page seven, you can see here we're focusing deeply on the experience of our customers. We've made an investment in the first half in a sophisticated Net Promoter Score system to give us insights into our customer satisfaction at various steps through their experience and through their journey. That's now established in 15 markets and will become a key KPI for the business as we move into the next financial year. But at this time, we're seeing very strong support from our students with 87% of student placement customers likely or highly likely to recommend IDP. If we move to the funnel, and this is really a representative if you like of how that connected platform that we've implemented is starting to accelerate our ability to expand our addressable opportunity and compete more effectively against the many disparate small competitors that we have. We've seen our SEO expertise and content expertise drive organic traffic up 35%. In the background, of course, that reduces our cost per lead because we're leveraging our skills in digital marketing to bring students and engage with them in our funnel. I mentioned our digital event format attracted a 59% increase in attendance at our events through the first half. Our marketing automation and contact centers are moving students through the funnel with qualified leads now up 45% over the previous comparable period. I think what's most exciting is we're seeing the conversion numbers lift with a 41% increase in students applied in the half. Moving on to Page eight and IELTS. As I mentioned, record test volumes. We've made market share gains across our markets, in particular against our major competitor BC with market share up 2.2. We now have computer delivered IELTS in 167 centers in 47 countries. When we combine that distribution with BC centers, we have 70 over 70 countries now covered with computer delivered IELTS. In terms of the volumes delivered by computer delivered IELTS in the half, about 22% of our volume is coming through computer delivered IELTS and it is growing. We really are now as we move forward leveraging that digital capability that we've brought in our marketing expertise to improve our customer experience to compete more effectively against all competitors in this space through redesigning the booking experience, providing more targeted and relevant preparation support for our customers and investing in the technology to leverage the data and the data set that we're generating from that opportunity. I'm going to now hand over to Murray, who will begin by presenting through the detailed financial results beginning Page 10. Murray, over to you. Thanks, Andrew. So revenue was $379,000,000 with growth of 20% on a constant currency basis. We had good growth across all of our product categories, but the standouts were multi destination student placement and English language testing. English language testing revenue was $215,000,000 and growth was 15% on a constant currency basis, with India, Nigeria and Canada making strong contributions to that growth. Student placement revenue was GBP 123,000,000, and growth was 34 on a constant currency basis with India and China, the major contributors to the growth. Digital Marketing and Events and English Language Teaching both performed well with revenue of $22,000,000 and $16,000,000 respectively. Gross profit was $222,000,000 and underlying growth was 24%, with margin improving to 58.6%, a result of price increases and operational efficiencies in aisles and a greater contribution from student placement. Overhead costs grew 6% on a constant currency basis, although the impact of the new accounting standard for leases has materially impacted occupancy costs and, as a result, EBITDA. Although we did not open up any new student placement offices in the first half, we completed the digital campus in Chennai and new regional offices in Singapore, Melbourne and New Delhi. EBITDA at $106,000,000 had growth of 53% on a constant currency basis, but the new leasing lease accounting standard has inflated this. Depreciation and amortization increased by 146% to $17,000,000 but $10,000,000 of that relates to the new lease accounting standard. EBIT is $87,000,000 and on a constant currency basis grew at 43%. And net profit after tax is $58,000,000 with growth of 35% on a constant currency basis. I'm going to go to Page 11 now. And we've provided a summary on this page of the first half income statement to show the impact of the new lease accounting standard. So we've included the FY 'twenty first half, both pre and post AASB '16, so that comparison to last year on a like for like basis is possible. The differences are in direct costs, where computer delivered test centers rent was booked and occupancy where the remainder of IDP offices rent was booked. Depreciation and amortization under AASB 16 is $10,100,000 and the notional interest cost is 2,200,000.0 The impact on EBIT is not material, but there is a $2,300,000 negative impact on net profit with pre AASB 16 net profit after tax at $60,000,000 versus post AASB 16 net profit at $57,700,000 If we look at total overheads on a pre AASB 16 basis, they increased by 14% on a constant currency basis versus PCP. And with GP increasing by 24%, the growth in EBITDA and EBIT margin is understandable. I'm going to move on to the key operating metrics now on Page 12. So the key operating metrics highlight the volume growth across all products. IELTS volumes were 732011% above last year. There were strong performances from India, Nigeria, Canada and Vietnam. Student placement volumes were 33830% above last year, with the Australian destination growing 11% and multi destination growing 52%. Multi destination volume growth was primarily from The UK at 69% and Canada at 49%. Moving on to the average fee performance. The average test fee for IELTS was $294 a 9% increase. On a constant currency basis, the average increased 3%, with price increases in India and Australia offsetting price reductions in some computer delivered testing markets to ensure that we remain competitive. The average student placement application processing fee has increased to $3,629 a 3% increase on the same period last year on a constant currency basis. The Australian average fee increased 1%, but a carryover credit provision booked in the first half and lower student pays revenue from China as we launched freemium to postgrad students offset a favorable study sector mix and increases in commissions from clients. If we remove the impact of the credit note carryover and the student pays freemium, the underlying price increase for Australia is 5.6%. The multi destination average fee increased 6% on a constant currency basis, with growth in U. K. Average price of 11%, but the Canadian average price was flat. I'll move on to Page 13 now, product category summary. And testing revenue of $215,000,000 growing at 21% was due to volume growth of 11%, underlying three percent price increase and a favorable FX impact of 6%. Student placement revenue of $123,000,000 is 35% above last year, volume growth of 30% and average price increase of 3% and FX of 1%. We move on to gross profit. IELTS GP increase of 28% on last year included margin improvement as operational efficiencies continue to flow on a much larger volume and with price increases in India and Australia, major contributors. There was a 2.1% margin improvement from operations and a zero five percent improvement from the change in the lease accounting standard AASB 16. Student placement gross profit is 31 is up 31%, is lower than the student placement revenue growth as margin was down versus PCP to 81.4%, but was up versus the second half of FY twenty nineteen. The old CRM license saving was $500,000 in the first half, but the increase in the cost of ongoing licensing support and development of the digital platform and an increase in sub agent commissions for China are higher than the PCP. We move across to Page 14 on the cash flow. So gross operating cash flow was $81,700,000 up 60% on a like for like basis. Cash conversion was stronger at 77% versus the BCP of 67%. If we look at IDP's cash conversion calculation, it is sensitive to the timing of student placement receipts from institutions. At the FY 2019 full year result, we had approximately $10,000,000 of university receivables that were due but not collected, and that alone would have increased our cash conversion from 91 to 98%. These receivables were collected in July and August and have helped in increasing our cash conversion at the half from 67% last year to 77% this year. As we renegotiated improved commission rates from universities, we've had to trade off IDP's preferential payment terms and have moved to census date invoicing, which means collections are concentrated around the end of financial periods. And if a couple of large clients delay payment, it can have an impact on the cash conversion calculation. So I'm going to hand back to Andrew now. Thanks, Murray. Let me move to Page 16 just to summarize the first half performance. I mean, obviously, very strong performance and really reflects, again, as I said at the beginning, the diverse nature of our global business and the benefits we're starting to receive from the investment we've made in marketing, digital and technology skill sets. Revenue up strongly at 25%, strong margin and cash flow performance, EBIT up 49%, multi destination revenue growth at 63%, definitely a highlight of the result. And again, as I said and pointed out, strong contributions from India, certainly as a source market and Canada and United Kingdom as destination markets for us. The digital transformation is driving accelerated growth in our pipeline and very pleasingly also driving improvement in conversion, which is a good forward leading indicator for us as a business. Now having our ability to innovate product much further from a much faster from a technology perspective and bringing further innovation to the table, I believe, again further puts IDP well out ahead of its competitors in the marketplace. Of course, a key KPI is customer satisfaction and to go through a period where we're growing as quickly as we are and transforming the business. It's important that we keep a very close eye on our ability to support our customers. So an NPS score of 87% as it relates to customers likely to recommend IDP is a very strong result for us. I think before we begin questions, let me just comment on the coronavirus situation. The disruption being caused by the coronavirus is being managed by IDP such that it is not currently having a material impact on the financial performance of the company. The situation, of course, is however constantly evolving and the ultimate impact is somewhat uncertain. I think for IDP, clearly, the longer term structural drivers remain regardless of any timing related impact from the novel coronavirus. With that, operator, I'd like to now open up the call to Q and A, please. Certainly. Thank you very much. Your first question comes from the line of Philip Pepe from Blue Ocean Equities. Firstly, well done on a very, very strong result. Good to see the or everything rebound even though pre the accounting changes. Just just on the coronavirus impact, obviously, very fluid and highlights the importance of computer based testing as opposed to physical. But have have IELTS in China resumed yet? Are they still suspended? Are we thinking March before things get back to normal? Can we get an update on what's basically happening on the ground, please? Yes. Phil, thanks for the question. In terms of as it relates to IELTS testing in China, I mean, for the benefit of others on the call, I mean, may be aware we receive quite a small royalty from BC on the tests that are done in China. So from that perspective in itself, it's not a major contributor to EBIT. As relates to the current situation, the Chinese government had put in place an edict for all high stakes English language tests and entrance exams to be canceled for the month of February. And to date, that's the that is the public information. In terms of our assessment, and as you can imagine, I'm running we're running a daily situation call. As we've looked at the impact, we've made our own assumptions in terms of assessing it. And we've taken a more conservative position. And our expectation is potentially could be canceled for March, but we've brought that into our analysis and our review of the impact on IDP and therefore, the impact being manageable in that we're working with Cambridge and BC and NEO, the Chinese testing organization, to be able to deliver on what will be a backlog of demand, which will come into market. So we're working on incremental test dates As soon as that if February is all it is, then we'll have additional test dates to go through the following months, which gives us some confidence we can make up for a lot of that pent up demand, which will be there. Excellent. And second question, if I can, quickly. Good improvement in the operating cash flow, and thanks for the extra slide. Normally, the second half is stronger. So do we assume for the full year roughly 98%, which is what you said you did underlying last year? Is that the new norm within your accounting standards? I at this stage, yes, that's the view we take, that we should get close to 100%. Excellent. Thank you, and well done again. Appreciate it. Thanks, Tim. Your next question comes from the line of Tim Plum from UBS. Your line is open. Please go ahead. Hi, guys. Just a couple of questions from me. Firstly, great result. Where do you guys think that you are in terms of that conversion story from the digital transformation strategy? Are we kind of 20% through the potential opportunity? Have you guys started to get a fair bit of that conversion through? I think we're probably only a third of the way through the ultimate story. And I say that because we still have a little bit of work to do on the embedding into the platform, in particular as it relates to getting more sophisticated between the connection of contact center and our marketing automation system. We believe, in particular, those markets where we have very, very large volumes of opportunity now entering our pipeline, we've still got some work to do to drive more sophistication in the automation between marketing programs and campaigns and our contact centers. So the ability therefore to nurture leads much more effectively than we are today. So I think, yes, we're probably only about 30% into that journey. Equally, we're spending a fair bit of time now focusing on starting to focus on the data that we've got in the platform to become more sophisticated about how we prioritize the nurturing of our leads. We've just hired a CDO. They don't come on board until Chief Data Officer until March. But we'll be building out once they come into the business a strong team around automation and AI, which will again deliver benefits for us both in how the system helps us convert and nurture leads, but equally how we gain greater productivity from our counselor network. Got it. And then just as we roll that digital opportunity across IELTS, how do you guys think about the scale of the opportunity there relative to the opportunity within the student placement business? Yes. I mean, obviously, dynamics in terms of the two businesses, in particular as it relates to the customer experience and the customer outcome sort. So a focus of the investment that we're putting in to IELTS is around the test taker experience. The objectives that we're driving to there are primarily around improving our market share position by presenting a better experience and more relevant coaching and preparation for those students delivered in a more sophisticated way. So there, the real returns are stay aligned to the system growth, which you can see is around that 11%, 12%. But within that, accelerate our ability to lift that by taking market share from our competitors leveraging that digital hub, those new marketing capabilities and the ability to effectively engage with those test takers in a much more sophisticated way. Got it. And just last question from me, if possible. The Australian visa data is showing quite a material slowdown in terms of Indian student applications. I understand it shouldn't impact your tier one universities, you guys are heavily skewed towards that. But could you maybe talk a little bit towards that trend that you're seeing? And can you give us any sense in terms of how we should think about the Australian student placement business in terms of exposure to Tier two, Tier three universities, please? Yes. I think certainly as it relates to India to Australia, the overall visa data reflects a decline to Australia. But for us, as we look in the first half, we were up to Australia by 15%. And in that context, our position in India is extremely strong. So we dominate the market share position from any Indian students coming to Australia. From the events that we've run through the first half, we've had very strong turnout from India. And again, don't doubt our ability to continue to show growth from India to Australia because of our market position for the full higher ed sector. Your next question comes from the line of Aaron Yeo from Goldman Sachs. Please ask your question. Good morning, Andrew. Congrats on the great results. First question for me, just with regards to the IELTS business and the rollout of computer based testing. I think you mentioned that globally, 22% of volume is now computer based testing. I'm just wondering what that number is in Australia and and what the sort of progress is to sort of fully sort of change over to computer based testing. And then just to lead up into the next question, just how should we think about, I guess, the gross margin profile within the IELTS business as you transition over? Because clearly, it looks like there are some benefits coming through. Yes. Thanks, Darren. Yes, in terms of the global view, we've been quite aggressive with our rollout of computer delivery centers. And that's been, I think, an important strategy just to ensure that we've got defensive markers in against competition around the world with the ability now to present that alternative offering to all our markets around the world. I mean, it's interesting in some markets and yes, I mentioned that 22% are taking computer delivered tests. I mean, to give you an example, in India, only 14% are And a huge number of Indian students still from all the analysis that we're doing prefer paper based tests. So again, we're having to be mindful of ensuring that we fulfill on the customer choice and not take that choice away from them. As it relates to Australia, the penetration of CD is at about 52% now. And again, that reflects certain cohort, if you like, of test taker who prefers to do a paper based test. I'm sure over time that will continue to increase. But again, we're not in a rush to remove paper where there's a preference for the customer to do that. Now I think as we get into your comments around marginal, I'll pass to Murray, but just a couple of points I want to make. We are, as I've mentioned before, well into the program of work to replatform the IELTS test. And this will give us the opportunity, should we choose to take it, to do some really neat things like instead of distributing paper as we do, to simply in a secure way print a unique test within a test center. So in the context of improving our model and still being able to provide choice, the aim is using new technology and our investment in this new IOS platform to be able to deliver up on the customer experience in a more cost effective way and a secure way, whether they want paper or they want computer delivered. Murray, did you want to add some commentary around margin improvement? So there's a couple of so yes, we have a bit of slightly better margin on the computer delivered than the paper test. But we have actually taken a couple of actions. We've taken some cost out of the delivery of the paper test in India, large volumes. And that has improved margins. And we've also taken a price increase in both Australia and India that has improved the margin of the ILS paper test. So margins on the Ops business grew 1.8% versus PCP, and that was the major contributors to the increase in margins on paper tests during that half. Great. And just my next question is, could you make some, I guess, comments on how you're seeing things in The U. K, particularly with regards to student placement? Obviously, there's been some positive regulatory sort of changes in that environment, and we've seen some strong Visa data. Do you think that overall, you should expect to see things continue to improve there? And I guess as a business, how are you positioning yourselves with regards to the opportunities in The UK? Yeah. No. Thanks, Aaron. I think The UK is proving to be a significant opportunity for us as we've continued to expand our multi destination strategy, in particular, our capability to counsel into The UK. Our client list is gold star now in The UK. Our market share position now from markets like India, we would be clearly the market share leader into the higher education sector for The U. K. Market. I mean, just to give you a quick couple of statistics. I mean, even from China to The U. K. In the half, we grew 23%. And then from markets like India, we grew 169% in the half. And that reflects maybe a smaller base, but that reflects again the size of the network and our ability to using both analog and digital capabilities take advantage of that opportunity. I think IDP is very well positioned to remain a very strong market leader in student placement business into The U. K. And certainly, from everything we can see at the moment, in particular reflected in some of the events that we've run and are running now in markets. I think The U. K. Will be a strong market again into the next major intake, which will be in the fall of this year. Great. And then just one last question for me. I guess how are you guys thinking about potential M and A at the moment or inorganic growth opportunities? Yes. I think we're again, we're open to It's difficult to find things that really plug in to accelerate our strategy. For us, it's more likely to be technology accretive and accelerative in terms of data and data around international students for the markets we're in. And then, yes, we continue to work on the testing side to see whether we can find options there to extend out our diversity and our reach. But nothing in the short term to point to. Okay, great. Thanks very much. Your next question comes from the line of Matt Johnston from Macquarie. Please ask your question. Good morning, Andrew. Good morning, Murray. Just first one for me, just around going back to margins. Obviously, quite a strong uplift in the basis points, PCP. Just trying to think if you sort of strip out the uncertainty of corona, if you think about the drivers of that uplift, would you assume sort of a similar result in the uplift going into the second half? We're expecting that the second half is going to be slightly lower versus the PCP. The reason being now, first half mix is heavily weighted to student placement. So that if you look at the benefit of student placement in our GP total, it really is that's the key driver of the improvement in the first half, higher mix of student placement, and that's going to be less in the second half. Okay, understood. And then just obviously, sort of guiding to expecting stronger cash conversion in the second half. Again, if coronavirus impact is immaterial, do you still expect that to be strong? Yes. The receivables book was already quite strong with The UK particularly The UK clients will collect a significant proportion of UK and Canada before the end of the financial year. And I expect that the next intake for Australia, which we'll see on our books in May, June, we will collect some of that before the end of the financial year. So I'm expecting that it won't have a significant effect. Okay. Great. And then just one for me, just more high level around, obviously, comments around managing an evolving situation with corona. Can you sort of comment about what some of the universities are doing in Australia? Yes. Thanks, Matt. I mean, certainly, as you can imagine, we have a 05:00 call every day, a global call to just assess any changes from an in market perspective, from a client perspective, from a product and services perspective, from a financial perspective and from an industry and communications point of view. And the Australian clients, of course, are many taking actions to extend the timeframe for their semester one intake. And you can see a majority of the GOAs have pushed out their intake into March, some as late as the March to ensure that those students that aren't here yet can get into the market. We know from the government visa data in total 50% about 50% of the students are already here. So 50% are offshore, those will be students who are coming back to study or students who are coming here for the first time who are waiting for the opportunity to get back into Australia. I think the universities are responding extremely well in terms of supporting the students, assisting them if they're unable to come in. And I do believe on the ground having spoken to our teams in China that the students are still hopeful they will be able to get in, whether that be in March, which is a delayed to these delayed starts. But nevertheless, at this juncture, and of course, we have the ability to ship them to The U. K. Potentially for the fall intake if that was required. But the teams on the ground are suggesting that they will hold off on in a large number. And if they can't get in, in March, they'll likely to come into the next intake, which is in that June time frame. Okay. Thanks, Matt. Your next question comes from the line of Kenny Wong from Morgan Stanley. Please ask your question. Hi, guys. It's James here. Can you hear me? Yes. Hi, James. Firstly, I'd like to just understand in a scenario where there is a prolonged impact from corona, what's your attitude to the cost base? Would you do you have much flexibility there? And do you have a willingness to sort of scale back and manage earnings in the near term? Or would you just keep going hard at reinvestment? Yes. I think we're working on dealing with the facts as they are presented. And in terms of answering that question, I mean, to give you a view of how we're approaching what we think could be more potential challenges is we're actually leveraging and putting in place new technologies and new operating or ways of working to enable our people to remain productive. For example, this week, we're piloting in China a new virtual events platform whereby we already have a number of clients signed up and students signed up to run events, if you like, in that form. So we're leaning into leveraging technology and still chasing the opportunity that's in front of us. We know those students are there. We know the test takers are there. And there's plenty of opportunity, right, with Canada, with its stores open, The U. K. With its stores open. And you recognize anything that shifts from this period becomes fundamentally a backlog to execute on in the next period. So at least continue to lean into the opportunity at this point. And then if we sort of look at that opportunity and how it's evolving, especially in relation to the student placement funnel, The durability of growth there looks pretty strong at this stage with traffic up 35% cycling 40% last year. How do you expect that to evolve over time as that base gets bigger much faster? Yeah. I think we come back to we're obviously in and ourselves turning our eye away from total traffic and moving to hot and warm leads as being a good measure. And as I put in this presentation, organic leads because they are generally of much higher quality than sort of higher quality traffic than just paid traffic. So in that context, it's all about sophistication. It's not simply about growing a pipeline based on pure numbers. It's about building quality in that pipeline. So for me, it's going to be more around the hot and warm leads. It's going to be around the sophistication. We've got 3,000,000 unique students in our marketing automation system. Now many of those students we know are not necessarily going into the next one or two intakes. They're now going into intakes that may be eighteen months away. So six months ago, we had no opportunity really to nurture those, to stay with them through that journey. So it's more now around the sophistication on hot and warm leads and managing a larger landscape across multiple intakes of students through our pipeline, and it is simply chasing the top end numbers. And then finally on student essentials, that seems to have reaccelerated. What have you got right there, and where have you expanded to? What's the state of play? Yes. So I think to be quite frank through the half, a lot of the Student Essentials work was not focused on expanding our revenue growth. It was focused on how we take our existing relationships and start to deploy the Student Essentials in a way that enables people to adopt those services off our websites more effectively. So to start thinking and acting in a way that takes load off the counselors as it relates to Student Census Essentials. So what you're seeing there primarily in the first half in terms of growth is almost the organic growth of slowly rolling that out and having our counselors understand and ask the right questions with the students. The team's effort has primarily been around how we can improve adoption using technology. And the benefits of that will come probably more in the second half and first half of next year. Thanks, James. Your next question comes from the line of Julien Mocay from Evans and Partners. Please ask your question. Hi, another question on just with the coronavirus and to sort of understand the scenarios. Can you just sort run through the accounting treatment of of when you would typically book revenue and then then the actual invoicing of the universities? And then what happens if students start in June or to actually start into the next half year? What's the sort of impact? Sure. Firstly, just let me make a quick comment. It's important to know that IDP is running a very comprehensive and significant global network of students moving from 33 source countries to six destination countries. And you can see the growth across that network has been significant for many markets. And therefore, again, just in the context of materiality, that's really reflects why the current student intake from China that's impacted is not causing us really much pain. We know clearly that over a third of the IDP students are already onshore. In terms of the revenue treatment, we have already booked the revenue for those students. The universities are working hard to extend their start dates. I mean, as I said, many through to the March to ensure that they can take the take those students in. In that context, there's no revenue impact on us at all. I think even if those students were not to get here in March, from what we know from talking to them, their primary objective will be to come into the next intake. So in that context, there may be a credit and re invoicing, but that would happen within the half as they would come into the intake in the June time frame. So net net, no revenue intake. Sorry, no revenue impact. The cash collection with the invoice, would that slip into the following year? Yes, it would be. Because the invoices wouldn't be triggered until Census Day, even though the revenue will be recognized in May, Your next question comes from the line of Will McDiomed from Ord Minette. Hi, Andrew and Murray. Again, a terrific result. Just in terms of the fee increases, in IELTS first, are you likely to see similar increases across other markets going forward? And given your position in the Indian market, do you see this being something that you can sort of drive annually? So our target is 3% across the the portfolio of countries, and we expect that that'll continue. Okay. So per annum. Okay. No problem. And then in terms of the the the fee increases in multi destination placements, I think you mentioned that The UK underlying was up to 11%. Can you just talk around the dynamics of that? Is that partly a function of Indian students increasingly studying postgrad? Or is there anything else in that? So for UK, we've had a significant uplift in postgrad students. So the mix has gone from 52% to 64% postgrad in The UK. So that's just a big driver of increasing average price for that margin. And presumably, you expect that sort of that shift to continue? Or where do you think that probably gets to long It's it's a factor of Indian students have a tendency to go courses. So I expect that it'll be at a similar level. I don't see that it'll continue to grow at that sort of rate. Okay. Great. And then just finally, are are you seeing any any bleeding of the coronavirus impacts into other markets from the perspective of of IELTS volumes? In in other words, students delaying taking the test just until they see what happens? No, not in any other markets. I mean we took some action in ourselves in Hong Kong just to delay testing through to the end of Feb to align it with China. But no, we haven't seen any impact in the other markets. We have time for one final question, and it is from the line of James Barker from Morgan. Congrats on the great results. Just interested in I think it was asked before, but just your expectations around the SKU for FY 'twenty. Should we expect a similar sort of fifty-fifty revenue and sixty-forty EBITDA? Or is there any other factors that we should be aware of? I think clearly, we've had an exceptional first half. And that's continued to be driven by our acceleration of growth to markets like The U. K. And Canada for major source markets in our network. So I think probably revenue wise around fifty-fifty, but I think you need to take into account that in the first half, we've clearly shot the lights out. So maybe a bit more weighted to the first half. Okay. Just in terms of IELTS and your market share gains there, could you just talk about the key drivers versus your competitors? And maybe which regions you see, I guess, additional market share benefits in? Yes. Well, I guess we've seen some significant market share benefits in a couple of our really key markets, India. India being one, and you would recall the issue we had some year ago in the Punjab. So we've been able to recover our share very, very well there. And of course, on a PCP basis, with a little bit of impact we had from that issue in kind of November, December. That's enabled us to reflect some strong share gain. And equally, in Vietnam, some strong share gains there, which is another big market. But it really comes down to partly the investment that we've made in marketing capabilities originally and primarily to drive student placement. We're now taking the opportunity to use some of those technologies and techniques around promotion to just improve our ability to get test takers to take or book tests on our sites. And I think our continued sophistication there will put us in a strong position to drive further market share gains into the future. Okay, great. And maybe just a final one for me. Just in terms of the outlook for operating expenses, I think you'd mentioned that you didn't roll out any offices. I think you'd flagged at the full year result that you were looking to roll out four major centers in India this year. Could we just maybe just how operating expense growth should be in the second half? Yes. I think just generally, still are on track to roll out four more offices in India in the second half and three mini offices as well. So we're looking at a new model, a really neat combination of physical and digital to start to create a footprint in some of those smaller cities where we see opportunity. That will be in the second half. And then we're obviously in process right now of assessing Nigeria as being a market that we should the business case stack up, we'd probably look to open. I'm not sure we get that in the second half. It just depends on where we get with that process. But Murray, I mean, do you have a comment? We've obviously still adding headcount. So in the first half, we had another 400 people. So the full year impact of that is it's certainly the second half impact of that in terms of additional staff costs. Thanks, Murray. Okay, James? That's great. Thanks. Good. Alright. I think at this juncture, we'll we'll finish up the call. Thank you everybody for joining and participating in the call, and look forward to having discussions with many of you over the coming days. Thank you very