Earnings Call: H2 2019

Aug 22, 2019

Thank you, operator, and good morning, everybody. Welcome to the FY twenty nineteen Full Year Results Presentation for IDP Education. Today, I'm joined in this meeting by Murray Walton, our Chief Financial Officer and Craig Mackie, Head of Investor Relations and Corporate Development. My plan on moving through the pack, and I'll update you on the page numbers as we go. I think FY twenty nineteen represents another very strong year for IDP. IDP's growth continues to be aligned to strong international education and global migration and work trends. FY 2019 was a successful and transformative year for IDP as we delivered on our digital platform and digital capabilities through our Delight program. We have now laid down the strategic foundation for continuous improvement and service innovation and market leadership into the future. If we move to Page three and look at the financial highlights, Revenue at $598,000,000 is up 23% EBITDA at $115,000,000 up 29% NPAT A at $68,600,000 up 24% NPAT $66,300,000 up 29%. So a very strong top level and bottom financial result. In terms of the dividend, the half year dividend will be $0.75 per share. That makes a full year dividend of $0.01 $95 and that's a 30% growth over the prior year. Student placement, a particularly strong result in FY 2019 with almost 50,000 students placed by IDP around the world. Our APS up in the year by 25% over FY 2018. And very strong performance across the board. Australia up 10%, The UK up 41%, Canada up 22%. And when we look at our major sorry, 72%. When we look at our major markets, China in total, a 14% increase and India, a 63% in total. As we move to English language testing, again, another record year for IDP and indeed for IELTS globally. IELTS testing volume up just over 12%, some very strong performances from our major markets, India up 18%, Canada up 19%, Vietnam up 31%. In our English Language Teaching business, our course numbers were up 13%, in particular, a strong effort again in Cambodia with a new campus coming online and getting the full year impact from that investment in the FY 2018 period. Moving to Page four now just to touch briefly on the performance highlights. Student placement, as you'll see as we go through the presentation, the investment that we've made in standing up the platform is clearly beginning to deliver very strong results for us top line, and those equally are now beginning to flow into our placement volume. We expanded our physical office network further in the year, in particular, opening up in a very strategic market for us as we look into the future being Pakistan in June with three offices there. But equally, we opened up in Nepal a number of new offices in Canada, and we opened up onshore office in Canada to support our students there. Our Student Essentials service line was expanded, and we'll talk to the success of that. And we've seen market share gains across all destinations relative to competitors in student placement. As we move to English language testing, strong volume performance, as I said, in some of our key offshore markets. A real focus for FY 'nineteen was accelerating the rollout of our computer delivered IELTS test. That was a top priority for us. We opened up 124 computer delivered test centers in the year in 44 countries, which was well ahead of our beginning of the year target of aiming for '21 countries. And we've also seen market share gains in the year against our primary competitor, British Council. In digital marketing events, we fulfilled on the integration of hot courses, in particular with our own client teams creating a new B2B division branded IDP Connect. They are really focused on transforming the data based and digital services that we will bring to our university institution partners, delivering on global insights, content services and data driven student engagement products. And in English language teaching, as I said, very strong performance by our operations in Cambodia. Moving to Page five. A key part of our digital transformation strategy has been to put in a sophisticated platform to enable us to connect and to grow at scale around the world. Well, the foundations for that growth have been completed in FY 2019. We now have the world's best course search across 28 IDP new search sites now integrated in with the 12 Hot Courses international sites. So they are now plugged into our marketing automation and our data repositories in CRM, so we can drive engagement and marketing automation and lead nurturing across and from those platforms. As I mentioned, we opened up our new office network. So we now have nine new offices, 127 offices for student placement across more than 33 countries. We completed our rollout of our global contact center with 18 countries now live with our contact center capabilities. We've digitized our student expos with new technology. We've had over 115,000 students attend our events in FY 2019. In terms of virtual agency, strong performance from our virtual agency in China and in India, and we continue to look to the innovation we can drive and learnings we can obtain from those initiatives to apply more broadly to our strategy. We've rolled out the leading content management and CRM systems. So we now have 2,500 of our counselors and their office staff now using that one platform, engaging with our customers consistently around the world. And with our new Student Essentials program, we've had more than 20,000 services sold in FY 2019. And as we ended the year, we began our first internship pilot program, which, of course, for many of you would remember, is a key part of our strategy to remain relevant on our customer journey through Study to Career. When we look at under the covers in terms of some of the other things we've done, it's one thing to put the technology in place. I think it's another thing to actually build the capability and the competency to really drive the returns from that investment. So whilst we've been very successful in putting in an integrated platform, We've equally been working on bringing new capabilities and competencies into the business, in particular, as they relate to digital technology and digital marketing. So from a global perspective, under our Chief Digital Marketing Officer, where we lead a lot of this transformative strategy, we've built a global team ensuring that we have the best capability and the best ideas being rolled out on a consistent global basis. From a regional perspective, we've hired more than 40 new digital marketing and digital technology specialists, and we've replicated a consistent structure and operating model and cadence in each one of our regions around the world. And within each region, we brought 16 new roles into place to ensure, again, we're getting the return and the high levels of engagement we expect from the platform with our students. And you'll see some of the benefits of that on the following slide. Our innovation hub in Chennai is quickly coming together. We are bringing the teams, which were the hot courses teams we acquired and our own technology teams together in Chennai. We've expanded that team dramatically. And this is where we do our products and software design, development, testing and customer support. It's now been named our new digital campus based in Chennai. We have almost 400 people there now, which will ensure the innovation that we're bringing on the table is not a one off. It puts us in a position now to constantly lead the market with innovation in student and ultimately also IELTS technology innovation. So if I move to Page seven and have a look at some of the results we're getting from the platform or received from the platform through FY 2019. As I mentioned, we now have 40 connected international websites. We've had a 30% increase in IDP web traffic. Our hot and warm lead numbers continue to grow, now at 37% growth in that funnel. We've had a 27% increase in event attendance. And again, much of this comes from using marketing automation and new campaigns and programs to bring people to our physical locations to have an event experience with IDP. 36% increase in contact center leads moving from unqualified to qualified. So we are now starting to see the impacts as these leads now move through the funnel into following stages, an 11% decrease in cost per lead and a 30% increase in applied volumes. And it's the first time we've shared that data point, but we're now seeing the impact of the platform at the very top of the funnel now moving through into significant increases into applied. As it relates to IELTS, moving on to Page eight, some highlights for us there. Of course, IELTS continues to hold its position and expand its position in the world's most trusted English language test. We had record volumes in FY 2019, and we expanded our network further through the year into Poland, Peru, Chile and Ireland, with computer delivered IELTS, 124 new centers, as I mentioned, and 44 countries with computer delivered IELTS now up and running. On Page nine, talking to really where we're going with IELTS from an innovation perspective, We're now in a position to start leveraging the investment we made in our digital platform and digital capabilities. And in the coming year, we'll start to focus that resource and capability on really reimagining IELTS, in particular, as it relates to the customer journey and our digital customer engagement. I just wanted to touch on a couple of things that we're doing there. In terms of investment in the customer experience, of course, the rollout of computer delivered was the primary objective that we wanted to achieve. And now our aim is in the year ahead is to drive adoption. We've seen great adoption in some of the technology mature markets. Singapore is now at 80% of tests done on computer delivered, and Australia is now at just over 60% on computer delivered. We're rapidly innovating the product. The product in the year ahead is being replatformed. Cambridge, IDP and British Council have, for the first time, jointly created a new product group to drive innovation, reporting into all three parties that will be properly funded to ensure that, that innovation continues to hold IOPs as the leading product in the world. And the three partners have embarked on the production of a new AI based IELTS prep product, which will be launched into the China market in the October time frame. From a digital innovation perspective, as I said, leveraging our investment in the digital platform to do simple things like nurturing our leads and connecting the leads and our engagements from IOS with our student placement business will also be a priority for the year ahead. So let's now jump into some more of the detail on the results for FY 2019. And Murray, I'll pass over to you to present the financial results. Thanks, Andrew. I'm on Page 11 of the pack. Revenue was $598,000,000 for the year with growth of 26% on a constant currency basis. We had good growth across all of our product categories, but the standouts were student placement, both Australian and multi destination and English language testing. English language testing revenue was $360,000,000 and growth was 15% on a constant currency basis, with India making a strong contribution to that growth. Student placement revenue was $170,000,000 and growth was 36% on a constant currency basis, with very strong growth from India and strong growth from China. Digital marketing events and English language teaching both performed well with revenue of £37,000,000 and £28,000,000 respectively, and growth of 1215%, respectively, on a constant currency basis. Gross profit at $334,000,000 had growth of 21%, with margin improving to 55.9%, a result of operational efficiencies in IELTS and a greater contribution from student placement. Overheads grew 19% on a constant currency basis and included investment in nine new student placement offices. We continue to add digital marketing capability and contact centers moving forward in our digital transformation. Excluding the expansion costs into the new offices, overheads grew at an underlying rate of 17%. EBITDA at $115,000,000 had growth of 26% on a constant currency basis. EBITDA margin was 19.3%, an increase on last year's 18.3%. Depreciation and amortization increased by 81% to $15,000,000 with growth related to student placement digital platform and the network office expansion. And net profit after tax, dollars 66,000,000 with growth of 23% on a constant currency basis. I'm going to move on to Page 12, the key operating metrics. And the key operating metrics highlight the strong volume growth across all products. IELTS volumes were 1283012% above last year. There were strong performances from India, Canada, Nigeria and Vietnam. Student placement volumes were 49625% above last year, with the Australian destination growing 10% and multi destination growing 51%. Multi destination growth of 51% saw strong growth from Canada of 72%, while The UK performed strongly for IDP with growth of 41%. Moving on to the average fee performance. The average test fee for IELTS was $280 a 4% increase. On a constant currency basis, the test fee increased 2%, with a strong growth in India had a negative mix impact as the price is lower than our global average. The average student placement application processing fee has increased to $3,435 a 9% increase on the same period last year on a constant currency basis. The Australian average fee increased 17% with favorable study sector mix, increase in commissions from clients, client incentives and student essentials all contributing to the strong price increase. The multi destination average fee decreased 2% on a constant currency basis, with a higher mix of Canada bound students and a lower than average price, lower student pays revenue as the change in revenue recognition deferred this revenue, and these offset the favorable study sector mix and increase in client commissions. I'll hand back to Andrew now. Yes. Thanks, Murray. If we move to Page 13, which provides really a global picture of our network. On the left, reflecting the source countries where we're sourcing international students on the right, the destination markets where we're placing them. And again, as I said, a very strong year for student placement volume growth, up 25%. I think here, you can see, of course, the contribution of the two major markets, India and China. And I think year on year, India has become a larger portion of our international student source country base simply because of the significant growth with India up 63%, now becoming 37% of the total market as we've sourced our students. China, 25%, grew strongly at 14%. I think when you're double clicking to China, and we've all probably heard that Australia itself has had a few challenges with international students of late. In terms of our aggregate numbers from China, we were down minus 6% from a source country. But in that 14% growth, it was offset significantly by very strong UK growth, with UK up 68% from China over the previous year. If we look at India, with its growth of 63%, Australia destination growth from India was at 52%, U. K. Destination growth from India was at 54, and Canada destination growth was 83%. So really across the board firing on all cylinders. And I think that's reflected again when we have a look at the destination growth rates in themselves from our source markets: Australia, up 10% UK, up 41% Canada, up 72% USA, up 51%. So we're getting the benefits of our expanded office network, our new operating systems and processes and the platform starting to come to the fore and have an impact, as I said, taking market share in all markets that we operate in. If I move to Page 14 in terms of a global view of IELTS, our English language testing product. And this, in aggregate, in terms of volumes reflects IDP and BC total volumes. Performance this year at just over 12%, again, above the last ten year CAGR of 11%, so still reflecting very strong growth and a record result for IELTS around the world. And for us, some small market share gains within the year against BC with, I guess, the volumes as they are so significant has a real impact on our EBIT for every market share point we take from BC. So with that said, Murray, I'm going to hand back to you and take everyone through the segmental earnings. Thanks, Anger. On Page 15, we had strong revenue growth in Asia and the rest of the world with Australasia declining. Asia revenue grew 29 to $392,000,000 with India growth of 39% a major contributor, supported by strong performances from China, Vietnam and Cambodia. The rest of the world grew 26% to $143,000,000 with Canada, Nigeria and The Middle contributions to the growth. Australasia revenue of $63,000,000 was 8% lower than last year. Good growth in onshore student placement revenue could not offset the decline in Australian and New Zealand IELTS volumes. EBIT in Asia was $114,000,000 with very strong growth of 38% that has underpinned the strong FY 'nineteen group EBIT performance. The rest of the world EBIT was $13,000,000 and had strong growth at 21%. Australasia EBIT declined 25%, a result of lower IELTS revenues and the onshore student placement business investing in digital marketing and contact center resources in support of the student placement digital platform. Corporate costs increased by 23% due to increases in depreciation, staff and IT costs. Overall, the total EBIT growth of 28% is a result of the strong student placement and IELTS revenue growth and the geographic spread of the business across the world. I'm going to hand back to Andrew now. Yes. So I think thanks, Murray. In summary on Page 12, again, a record financial performance, strong financial performance by IDP in FY 'nineteen. Very strong growth across all product lines continue. And I think certainly, as we look ahead, I think the macro trends remain very favorable for IDP into the future, in particular with also the extent of that the network and the strength that that network gives us around the world. We've successfully transitioned the business from primarily an analog products and services company to one very much now integrated into a digital way of working with digital technology and digital skills and capabilities. And this really provides us with a strong foundation for growth and a foundation to more aggressively scale the business as we move forward. Equally, the investment now that we've made, in particular to support the transformation of our student placement business, now gives us the skills and technology to turn to other products and services. And as I said, through the year ahead, we'll be taking that investment and those capabilities and applying them to our IELTS customer journey and our IELTS product innovation. So with that said, that ends the formal part of this presentation. I'd now like operator to open up the call for Q and A. Thank you. Your first question comes from the line of Philip Pepe from Blue Ocean Equities. Ask your question. Hi, guys. Thanks for taking the question and well done on another strong result. Just a question on the cash flow, though. EBITDA was up strongly, but operating cash flow was flat. It looks like the main part of this contract assets. Just wondering, what's the rationale for booking revenue ahead of billing? Is that normal practice? So the new accounting standard, AASB 15, required us to change our revenue recognition policy. So there's UK student placement revenue and some Australian student placement revenue that is now required to be recognized effectively when control of that student passes to the institution. So there's $24,000,000 of contract assets on our balance sheet. So that increase of $27,000,000 is that one off? Or is that recurring? Sorry, that will be ongoing, but there's a one off step up as we obviously have changed the policy. So there will always be contract assets as our business grows to The UK and Australia. Got you. Okay. Thank you. If you take out that contract net, so the cash conversion is actually 112%. Yes, that's correct. Thank you. Next question comes from the line of William McJarmid from Ardninet. Please ask your question. Hi, everyone. A few questions from me. Just on IL volume growth, the growth of 12% implies that you possibly lost market share in the second half. Can you just talk a little bit around that and perhaps potentially also talk a little bit to British Council's activities with respect to their own computer based testing rollout? Yes. No, thanks, William. I mean, overall, obviously, a solid performance. And there were a couple of one off challenges in the second half in India. So whilst India showed significant growth for us at 18%, We did have an impact there with the general election in the second half, which muted IELTS growth for us and for BC in that context as well. And that was very similar to what we saw when we did a little bit of research on the twenty fourteen general election, and it relates specifically to colleges and schools not releasing their marks in a timely manner, which pushes out the IELTS volume. So we've seen that IELTS volume that was dampened through that period now come back in later periods, in particular, through the last couple of months. And then as it relates to market share, we had a small issue in the Punjab, probably middle of the second half, where there was some misinformation going or being spread in the Punjab, in particular, around the acceptance of an IDP IELTS test compared to a BC IELTS test for Canadian college acceptance. Now the Punjab is a highly emotionally charged area, and it literally took us probably about two months to get a to squash that misinformation that was being pushed around that. Again, that's behind us now. And our volumes in the Punjab and our market share in the Punjab is back to where it was. And by the way, we had a majority market share in the Punjab. But that impacted us for a couple of months, probably about I mean, we estimate probably about 65,000 tests in those couple of months that we had to address. Okay. Can you also just talk a little bit around potential for deregulation of high stakes English language testing for immigration in the Canadian and UK markets? I think there continues to be speculation that, that will be opened up at some point. What your opinion on that is and What your exposure Thanks, William. I mean, in my view, and I've said this before to our investors and to the analysts, I believe, ultimately, other markets will open up, and that's driving our investment in IELTS with the partners and our own innovation agenda. But again, I think it's worth recognizing that the markets are open as it relates to university admissions. So pretty much every university around the world accepts almost every test for admission. It only comes down to where there is migration tests aligned to a visa result. The U. K, I mean, my estimates are they'll probably open up sometime through the course of the next six months. I don't think that's a material impact on us based on the assessments that we've done because it relates specifically to a test design for the U. K. Government called UKVI, which is of limited volumes around the world. And Canada, far as we understand, and we've been in direct consultation with the Canadian immigration authorities and interest there, there is no timetable to change their positions that we understand. And clearly, in Canada, we already compete in that market with another organization called Paragon with a test called CELPIP, which is a computer delivered test owned by the British UBC, University of British Columbia, and a very well regarded and respected test in Canada. So it's not necessarily a compelling reason for them to add more tests. Okay, great. Thanks. I'll let someone else ask the question, please. Thanks, Glyn. Your next question comes from the line of Erroneo from Goldman Sachs. Please ask your question. Good morning, guys. Thanks very much for taking my questions this morning. First one, could you just make, I guess, a broad comment on your expectations for sort of the macro or volume environment in your key sort of destination markets heading into 2020? It seems like overall Canadian volumes potentially might have slowed. Do you think this will be a headwind into next year? Or do you expect volumes from other markets such as The UK to sort of pick off some of the flak? Yes. No. Thanks, Aaron. We, at this juncture, have pretty good visibility. As you know, our major Northern Hemisphere intakes are coming up in the fall. And I feel quite confident that we'll still see strong growth. Now as it relates to Canada, you're right. Canada the Canada growth in aggregate looks like it has slowed. However, IDP's penetration of Canada in terms of opening up new clients has met our expansionary objectives. We actually have a team in Canada right now who are confirming additional places. So really, becomes a market share play for us, and we're extremely well positioned for that relative to other competitors. So I'm confident even with a slowing top line market growth for Canada because of our network now and the strength of our sourcing of Canadian stunes that we will still take growth as we have been in other markets like The UK through market share gains. And again, quite confident with what we can see coming into the fall intakes. The UK in itself is proving at this moment to be very popular with the Chinese students. And part of that has been the Trump effect. Possibly part of it has been, in recent times, a question about employability from Australian universities. So whilst I think the number to Australia will continue to be significant, and there we'll focus on market share gains again, we are getting, and you can see it in certainly the numbers we presented here on FY 'nineteen, a strong uptick and Chinese students looking now at The UK as a priority, in particular, The U. S, which is a net benefit to us because in China, we don't actually place students to The U. S, but we do have an operation that places into The UK. Great. Just a second question for me. I'm interested in, I guess, your outlook sort of commentary around your priorities in FY 'twenty and particularly the comment around improving the IELTS customer experience. I was just interested in, I guess, the last couple of years has been around the digital platform strategy. What's really been driving, I guess, the decision as a business to sort of refocus on a new sort of priority area in terms of where Yes. That No, I mean, very much on the strategy map that we put together and really is our guide and it's been in place for three years, at the very top, it is building a global platform and connected community to assist our customers on their journey through study to employment. So that actually enables us to encapsulate also the digital transformation of IELTS. Certainly, because student placement was within our own realms and we can get our arms around it, and that investment can be focused specifically on IDP getting a return, the right place to put that effort was in student placement first to bring in the capabilities, skill sets and the technologies to support that. Of course, we've been working very closely in parallel with an IELTS transformation objective. And in the last twelve months, we've made significant progress with Cambridge and with BC on aligning a vision and a strategy for really the digitization and the further development of additional IELTS products and services. So it just makes sense that now that we've got the platform in place to support student placement and the capabilities, in the year ahead, we're going to very much focus on driving the returns from that investment and building that definitive data set through the year, bringing in skills around data, analytics and AI to enable us to move from platform to marketplace on student placement. But with IELTS, yes, this year is about the transformation of that product from a technology and from a customer experience level. And I mean, for example, if you're an IELTS test taker today, you would come on to a website. If you had difficulty booking and you dropped off, we would have no way of retargeting you and then nurturing you or understanding why you were doing IELTS. So we're going to take the technology that we've invested in for student placement, which enables those capabilities and now underpin IELTS with that. And so whilst we're transforming the product with BC and Cambridge, we are transforming the experience as it relates to the distribution and the customer journey across our markets, which we believe gives us an advantage not only against the likes of PTE, who are a competitor in this market, but more importantly, it's a place where we can go and gain market share against BC with our level of investment and sophistication now. Okay, great. And just with regard to, I guess, the plans that you have in place to the IELTS business, I mean, how much sort of additional investment does that require? And I guess given the fact that it's tripartite agreement with yourselves in BC and CA. I was just wondering like would it be easier, for instance, to potentially take on BC's stake to then roll this across your sort of key geographies? Yes. I think I mean there's two components investment as we're looking at it now. One will be the investment we put into leveraging our own technology to build out things like new online registration systems, marketing automation, lead nurturing, ensuring a unique customer experience for each test taker depending on their objective. And we're probably looking in aggregate, I think, of around $12,000,000 in CapEx spend in the year ahead that will go into a combination of that as well as included in that will be a proportion of that CapEx will go into the newly created unified product innovation group that we've set up in The UK. We have a new leader for that. We have new marketing capability now hired into that. And that will be an entity where we jointly put equally in capital to innovate the product and the family of IELTS products together. Great. Thanks very much. Okay. Thank you. Sorry, operator, go ahead. There is a follow-up question in the line. Great. Thank you. Let me still take this. Okay. So the follow-up question is from the line of William McJarman from Ardneman. Please ask your question. Hello, William. Your line is now open. You can ask your question. Hi, guys. Sorry, I just thought in the absence of other questions, I might just jump in again. You mentioned you've spoken a little bit about that innovation around IELTS. Can you talk a little bit around the shared costs, how those costs should be shared amongst each other? You also mentioned that there's you've been looking at sort of developing more work around test prep. Would that be launched into China? Will you share an economic benefit of that? Or what's the outlook for that product in particular? Yes. So the investment in transforming, in particular, the front end of the customer experience, leveraging our technologies and capabilities that we've built and have been deployed around student placement, those will be our costs because fundamentally there, we're aiming to compete against BC. And I mean I think everybody understands BC is still by far and away our most significant competitor. So those will be cost borne by us. And then there'll be a proportion of other CapEx, which will go into the product innovation group based in The UK, which is a new entity that reports into the three partners. And the investment into that will go in equally. And that's fundamentally transforming the core IELTS IDP and ultimately IELTS core IP in the family of IELTS products. The example that I gave you, Rhyee, are products and it's a big step for the partnership. We engaged a consultancy in China. We had a very deep analysis of the preparation market. We identified a Chinese based, quite sophisticated AI partner, very well experienced and very well known. And they're working on behalf of all three partners, so Cambridge, IDP and DC, to create a new product, in particular, at Prep and Prep for IELTS' success from an early stage, from a junior education stage. And that product will be launched most likely in October, and all three parties will equally share the benefits financially from that product in China. Okay. Great. And then just finally, USA was up reasonably across the full year. Can you talk a little bit around the outlook for that market and if you see that as an opportunity for you guys, I guess, across the next question? Yes. The U. A, for us, it's an important market for India. But outside of I mean even for India, it's small volumes. But outside of India, we really on The USA. And we don't plan on or I certainly don't plan on putting a specific focus on expanding our U. S. Capability within our network. For the year ahead, we will remain focused on Australia, Canada, The UKIreland, where we're expanding our client footprint. And all of those markets represent, I think, the best opportunity for us to continue to grow strongly. We'll leave The U. S. As something that we'll come back to in following years. There is another follow-up question from the line of Aaron Yeo from Goldman Sachs. Andrew, just a follow-up for me. Just wondering if you could comment on, I guess, your plans to open up new student placement offices next year? Well, we will continue to open up new student placement offices. We in particular, we're looking at and it hasn't hasn't been finalized yet, but we're assessing a strategy in India to execute what we're calling a micro office model to give us access into potentially another 15 or 20 cities, not all in the same year, but over the course of the next couple of years. We will open up four new offices in India that are already as part of our approved as part of our CapEx investment next year. So outside of the micro offices, four new large offices in India. And we are in the process of assessing some other markets, in particular, in Africa at the moment. So Nigeria is a market that we have a desire to go into and potentially Kenya, the great markets for The U. K. In particular. But I think I'd say, as I said before, Aaron, part of my job is just to ensure that we execute well with the opportunity we have at hand. So opening up new offices isn't at the top of my list to ensure that we expand on our student placement growth objectives. It's more the expansion we should get through now the digital implementation of technology and the improved counselor productivity we'll get in the existing office network. Okay. Great. And then just sorry, one last question. Just with regards to the 30% increase in IDP web traffic called out on Slide seven of your presentation pack, Did this compare to 40% in the first half? 40% in the first half, yes, it does compare. But again, as we've rolled out the new sites, we've probably captured in the first half a fair bit of low hanging fruit as it relates to just having a much, much further expanded web presence. So it's probably normalizing a little bit around 30%. And the other thing that's important to note, and I don't think it's actually reflected in the numbers here, the organic traffic is the one that I've really got my eye on because it's very easy to drive web traffic through paid, etcetera. But our organically growth is up 60%, and that's a metric which is much more important. And I think equally a more important metric is now how we drive hot and warm leads. Because it's easy one thing that we've learned is it's easy to get web traffic. So I can put out a specific buy some keywords for things like internships or scholarships. And you can drive a lot of web traffic to that, but it's very low conversion web traffic. So I think for us, as we go forward, it's hot and warm leads will become more important. And then watching the applied number because that's where we're seeing the hot and warm leads actually turn into applications, which is giving us a first view of how we can drive conversion out of the pipeline. Great. And then I guess sorry, just following from that. Given the positive stats you're seeing around the increase in leads and the sort of cost per sort of lead, shouldn't we why shouldn't we expect, I guess, some sort of margin expansion within this business to start really coming through? Ultimately, it will. And this year, we're we have in our own objectives and KPIs for the first time put in a measure around driving counselor productivity, as I'm just giving you an example, because we should now see through the system, the automation enabling us and the contact centers enabling us to take a large pipeline, distill that down to qualified and relevant leads for specific intakes and get those leads to counselors in a more efficient way and therefore, drive growth through having greater productivity at the counselor level. So ultimately, yes, we should see some margin expansion coming through. So in terms of that, just a follow on. How should we think about, I guess, the profile around the timing of margin expansion driven by the increased scale? Is that something is this year still a bit of a build on that in terms of building up scale? And then it's more sort of next year or the year after where you really start to see that come through? So Aaron, we you saw our EBIT margin improve from 18.3% to 19.3 this year while we were still making investments. And still making investments in our network. Yes, we'll see some margin improvement, but I'm not I don't expect to see a significant step up in one year. It will be gradual and over a number of years. There's no more question at this time. I would now like to hand the conference back to today's presenters. Please continue. Okay. Thank you very much. What I suggest we do now is wrap up the call, and I look forward to, as does Murray and Craig, speaking with many of you over the next coming days. Thank you very much for joining the call.