All right. Well, in the interest of starting on time, it's 4:00 A.M. Sydney time. My name is Brett Kelly, the founder and CEO of Kelly Partners Group Holdings. I'm joined by Kenneth Ko, our Group CFO. We've got a short presentation to share with you today that we shared this morning. I'm looking forward to taking some questions at the end. I'll try my headphones for a little bit better sound. All right. Let's do that. Kenneth, let's do KPG in 10 seconds. We've been publishing this panel for some years now. I think it's an easy way for people to quickly be able to see the performance of the business.
Over the last nearly 17 years, we've focused on growing opportunity for our people because this is a business that, to the degree that it can provide great opportunities for people, will continue to attract, develop, and retain amazing people. 42.2% revenue growth in an industry that's growth is not that, I think a really great effort by the team with a very strong organic component as well. Our margin is compressed. For a moment, if you look down the bottom of the screen, the practice margin's 30%, and we've made heavy additional investments at the services business level, at the group level. Our underlying NPAT A growth is up 7.5% on the prior year, and we're very pleased with that progress.
Our balance sheet, return on equity and net debt to underlying EBITDA. Return on equity, we think, is still very strong at 43.4%, and our balance sheet gearing is still very moderate. Cash flow is up 12%. Cash conversion is up 17%, over 100% in the period. These are highly cash generative businesses that are growing very strongly with, I think, quite unlimited opportunity. On the next page, we love William N. Thorndike, Jr.'s book, The Outsiders. It has a framework for capital allocation that we draw your attention to here. We would improve the earning power of our operating businesses. Our margins still are more than 50% higher than the average in Australia and the U.S. and U.K. We're further increasing our earnings through acquisitions. We're growing very strongly.
We're growing our existing businesses strongly. We're growing our existing complementary businesses, making programmatic acquisitions at an increasing cadence, making occasional large acquisition. None in the last three years, so they will be occasional. We'll repurchase shares from time to time. We're pleased that the number of shares on issue remains constant at 45 million. Three big buckets we're gonna speak about today. I'll talk about growth. Kenneth will talk about financials. We'll talk about the growth plan over the next five years. The business today is a growing business that is very profitable on a daily basis and can continue to fund its own growth indefinitely without raising capital or issuing new shares. Although the opportunity at any point to do those things, if it made sense, would be considered.
Our number of offices has grown strongly. We're growing strongly into Queensland now and Victoria and globally into Hong Kong and the US. There's a strong opportunity to take our playbook and pursue global growth. I'll talk more about that later in the presentation. In terms of our growth in acquisitions, the cadence continues to grow. You can see the number of acquisitions in each 5-year period, six and then eight, now 27. We believe that we can materially accelerate that over time while focusing on a programmatic acquisition approach. Our revenue and EBITDA growth continue to grow. The business has doubled 5x over its lifetime at different periods. On average, I think about every three and a bit years. We expect that that trend can be maintained for a long time, which is exciting.
In terms of revenue growth and EPS growth, you'll see that on the next page. Compounded annual growth rate since 2006 is 30%. Earnings per share annual growth rate since IPO, 13.1%. Strong growth in accounting complementary and acquisitions during the period. Growth in owner earnings, I'll leave for you to refer to. Owner earnings continue to CAGR strongly. Our per share growth is growing strongly. Our return on invested capital, I think you can see on the next page, is you know, very, very strong. I just call out the sort of methodology we're using there. Average 2020-2022 return on invested capital of 26%. We think that's okay. We've traded this business through a global financial crisis in 2008-2009, a pandemic.
Now, you know, I think the first acquisition that we made was funded at 11.1% interest rate. We understand interest rates. An average of ROIC plus organic revenue growth of 31%, we think is not only quite good, but maintainable for the foreseeable future and likely the very long term. Now our people, services and clients, we have again been nominated a great place to work by our 456 team members. Our services are, I think easy to understand. I would call out that, you know, our aim is to be in the top 10 firms in Australia and grow globally. The firms that are larger than us today and some that are smaller, have a much larger proportion of audit and attest type work.
We aim to keep audit under 5% of our revenue. In terms of clients, our Net Promoter Score at 70 is as high as an accounting firm that we're aware of in the world. Our client group numbers continue to grow, which we think is a very powerful, interesting group of people that we've brought together as clients. I'll hand over to you, Kenneth, to talk about the financials.
Thanks, Brett. Hi, everyone. Great to see everyone again and present the financial results for the half year. The first slide here is the highlights of the half year, which, as Brett said, a significant increase in our group revenue, AUD 3.9 million- AUD 44 million, being a 42.2% increase on the prior year, mainly driven by the industry practitioners we completed in the second half of 2022 and in the current half year. Underlying EBITDA for the group has also increased 14.3% compared to the prior half. The percentage increase in revenue has not flown through completely to the bottom line, mainly due to a drag on the margins from our recently acquired businesses, which we'll cover in a later slide.
As Brett mentioned, the additional investments we have made from the parent entity to support our accelerated growth and our expansion globally. Underlying NPAT A for the parent has increased 7.5% to AUD 3.6 million. I'll leave most of the other metrics for you to review at your own time, as most of these will cover off either in later slides in the deck. Most of the metrics are either up on the prior year as a result of the growth of the business or comparable to the prior year. In terms of revenue growth, as we've covered many times now, organic 7.8%, acquired revenue growth of 34.5% with a total revenue growth of 42.2%.
In terms of the income statement, we've covered the revenue and EBITDA margins in the previous highlight slide. A couple of things I wanted to note in this year's number. You'll see that the statutory numbers are mostly down on last year, whereas the underlying numbers are up. The reason for that is because in the last half year, the prior half year, we received government grants in relation to COVID-19, which has inflated the statutory numbers. We exclude those numbers obviously from our underlying analysis. Underlying NPAT A attributable to shareholders increased as a result of our strong revenue growth and acquisition activities, and is offset by the additional investments in the parent entity.
Depreciation and amortization there has increased significantly mainly because of our acquisitions and also increases in the right of use assets from the new offices that we've added into the group. As Brett has covered off previously. We've added nine offices since 31st December 2021, which is a large increase and hence the increase in the depreciation in those right of use assets. Finance cost also has increased considerably, but that is impacted by non-cash accounting entries, again relating to acquisitions and new leases. If we exclude that, the cash finance costs increased by AUD 600,000 mainly because of the debt that we've taken out to fund the acquisitions and a generally high interest rate due to the macroeconomic environment. On to the next slide.
Gross margins, as we've, you know, presented previously, we present this slide to show our gross margins compared to other listed market participants. You'll see that, in this year, our gross margin is at 58%. We'd like that to improve to more than 60% like our previous years, but that's impacted by a higher cost of sales from the recently completed acquisitions, and we continue to integrate and transform those acquired businesses. In terms of profitability, this is a slide that gives you a breakdown by the EBITDA margins into cohorts. As mentioned earlier, the total EBITDA margin of all our operating businesses, excluding the parent, additional investment, is 30% for the half year. Excluding the acquired businesses, which you'll see there generating 20.9% EBITDA margins.
Our EBITDA margins is 31% for the existing businesses. Again, if you look at that breakdown, you'll see growth and subscale businesses which are defined as those with annual revenues less than AUD 2 million and AUD 1 million, to have EBITDA margins of 21.6% and 22.3% respectively. We continue to focus, one, on scaling up those growth and subscale businesses, and two, to transform those acquired businesses to achieve the higher EBITDA margins. As Brett said, we're still comparatively much more profitable than the average accounting business in the industry, as shown in that graph there, with the average accounting business generating EBITDA margins of only 19%.
In terms of the NPAT A reconciliation, as I mentioned earlier, in the prior year, you'll see us deducting that one-off government grant in relation to COVID-19 to arrive at that underlying number, you'll see that that statutory NPAT is higher because of that reason. In this half, we've mainly added back just the acquisition costs in relation to the six acquisitions we've completed this year. Having a look at our core measures of WIP, that is lock up there and cash conversion compared to the prior year, you'll see that our measures are very comparable to the prior year, even though we've made a lot of acquisitions. Our lock up this half is at 56.4 days compared to the prior half at 57.4 days, cash conversion is very high at 106.4%.
Revenue growth much higher than the previous half year because a lot of the acquisitions were completed in the second half of financial year 2022 and in this half. In terms of balance sheet, lock-up days continues to be managed partly as we covered off in the previous slide. Our gearing ratio has increased to 1.93 x underlying EBITDA. Although I think a more meaningful measure is underlying EBITDA of our operating businesses, which excludes the parent additional investment, then that gearing ratio is 1.61x, as you can see in the slide. Our group ROE and parent ROE continues to be very strong, and our assets and borrowings have increased due to the acquisitions.
In terms of debt and liquidity, our net debt increased AUD 5.5 million since third of June, mainly to fund our in-year acquisitions and also partner buy-ins into the business, both existing partners and new partners. We still maintain a significant headroom of AUD 15.1 million in cash and undrawn facility limits. As we've kind of covered off previously, although the debt has increased, we're not concerned at all. We're paying those debts, acquisition debts back at 4- 5 years. You'll see this in the cash flow slide that we'll cover off in the next two slides. Net debt per partner increased marginally to AUD 520K. At third of June, it was slightly above AUD 500K.
That's because even though we've increased the debt acquisitions, debt from acquisitions, we've also grown the number of our partners considerably as well. That the number of equity partners as at thirty-first of December is 72, and we've further added four new partners since then. In terms of the cash flow, our cash from operations increased 12.2%. Our free cash flow, you'll see there, is basically constant, consistent with the prior half year. That is what I spoke about in the, in that debt slide. We're applying all our profits from the acquisitions into debt reduction. The free cash flow there is basically consistent with what it was in the prior year.
Again, it's good to see in that table there, you'll see that we've drawn AUD 7.7 million, but we've also, in the same period, we've repaid AUD 5.3 million, which is the addition of the scheduled debt reductions and the additional debt repayments in that slide. In terms of dividends, in the first half, we've paid final dividends and special dividends relating to FY22. In total, for FY22, we've paid AUD 0.0817 per share, which amounts to dividend payout ratio of 58.4%, and it's in line with our dividend policy. We continue to pay monthly dividends, we've increased our monthly dividends again by 10% this year.
The remaining slides I'll leave for you to read yourselves, as they're basically answers to common questions we get asked around parent NCI, splits, cash reconciliations, first half and second half skews, et cetera. Over to you, Brett.
Thanks, Kenneth. Appreciate that. On to the next slide, if you can, KK. It's worth having a read of a book called The World Is Flat by Thomas Friedman. We believe that professional services, as the work from home trend continues and the use of technology accelerates, will become a global business. You know, my quote here is that it's difficult to justify the investment required to run a world-class organization and deliver a world-class people, client, and community impact that we've become known for, if you don't grow globally. Our clients over the next 25 years are all going to have to earn a return on a global basis and will need their accountants to help them operate in this new global world.
An interesting observation I'll just share on the next two slides, is that while Australia is the 13th largest economy in the world, there is no accounting firm that's a global Australian accounting firm. While the U.S. had Coopers & Lybrand, and the U.K. had Price Waterhouse, China, ShineWing, Japan, Deloitte, Germany, KPMG, India is building or trying to build a global firm. Mazars is a very large global firm from France. MNP, less known out of Canada. It just hasn't been. It's like Australia's a tributary state of the world for accounting services, Australians are a global population. The high net worth business owning and building entrepreneurs in Australia are building businesses around the world, their accountants aren't helping them do that.
We think there's a big, hairy, audacious goal over the next 25 years that we can be that firm. We're calling that out as a differentiated market opportunity, if we've got the team, the get up and go to actually get in and make that happen. We'll start by taking small, sort of asymmetric bets in the U.K. and the U.S., where we've opened an office in California, a group office, where we're looking to open a group office in the U.K. We think we can, you know, reference Mohnish Pabrai's The Dhandho Investor book, take very small bets, You know, massive asymmetric upside. If we can take our playbook for partnering and improving accounting firms into those markets, the U.S. is 15 x the size of Australia, and it looks like the U.K. is certainly some multiple the size of Australia.
We won't say too much more than that other than to indicate that we have a business system. It's not just an accounting firm. While KPG owns a 51% interest in 27 accounting firms, KPG itself is not an accounting firm. It's an expert partner to accounting firms that bring system processes and insight to help them perform better and better reward their partners, their people, and make a more positive impact in their community. That's where we see the real opportunity. We've been supported in that by our major shareholders who've encouraged us to have a good look at that. We've spent a lot of time investigating those markets.
I guess the other insight I would share is that if you psychometrically profile, as we do, the people that we recruit, but you also did that in the U.S., Canada, New Zealand and the U.K., you'd find that the psychometric profile of an accounting professional is virtually exactly the same. In fact, when I've attended conferences in the U.S. that, you know, other than the accent, accountants are expressing and experiencing virtually the same professional experience. We think we can add a huge amount of value in that context. There's a number of people who are shareholders who share that view. What I wanna assure people is that the two major risks that I perceive are, one, that we would over-invest capital where we get no return.
I think over the last seven, eight years, our team has a very strong track record of getting a return on our capital. We'll be very, very careful, and prudent by first bullets and then cannonballs. We'll look to buy small firms and improve them, and then do other things. Programmatic acquisition methodology will continue. Secondly, if we became distracted from the core business of growing Australia at 5% organic, 5% buyer acquisition. You can see again in the prior period of a growth rate well in excess of our long promised five in five. We think we can continue that. We've invested in a strong team and a strong understanding as to how to do this business.
Time will tell, and we'll be prepared to share the results on a very transparent, even-handed basis. I'm here with Ken, and we're pleased to take any questions. I think there's a Q&A box that we can use. Here's a couple of questions coming through. I'll just start answering them as they pop up if you pop them in. Leon, does KPG aspire over time to compete for big four clients at the top end of town? Two-part question here. Definitely not. If I wanted to, you know, I started my career at Pricewaterhouse. I've always said I think the big four are the big four. I'm not sure they are the excellent four for private clients.
We want to maintain a focus on what we call proven successful private business-owning entrepreneurs, or often first and second generation, that are get up early, stay up late, driven types of people that respond to that energy that they get from us. I hope that answers that question. Jack Hayes, with increased number of firms under the KPG umbrella, do you have any concerns about being able to manage these firms, ensure that the quality they provide to their customers remains constant? Two parts there, Jack. We expect that we can continue to run what are called partner-owner-driver model firms. We've been awarded the trademark of that term that we invented and have rigorously applied now to numerous transactions.
Every single one of our partner, partnerships is where we own more than 50%, the partners own the balance of and are the operating partners. We don't run firms. We partner with partners who are owners and drivers. We get under those firms and support them to do their best work. We are completely aligned to the values and behaviors of the people that we bring in. We're very careful about that. We don't think that the number of firms is difficult. In fact, there are numerous and very large global firms that are managing their situations well. It's been done before in our industry. We think we can do a very good job of that over time, emphasizing that, you know, we're not in a rush.
Steven Mabb, thank you for your question. Congrats on the strong revenue growth and especially the organic growth. Revenue grew considerably more than profit for the half. Can you please add some clarity to which significant costs have been increasing more than revenue and which of these you'd expect to drop going forward? Steven, we've invested about AUD 1.5 million, primarily across brand, digital and global workforce. You'll hear much more about that in the coming months and years. If you look back at where we've invested above our 9%, our 6.5% services fee and 2.5% RP fee, about four years ago, we invested a similar number that helped us very materially grow the business.
We don't expect that they are, or we know for certain that they're not recurring expenses. They're largely one-off investments where we think that the, you know, the long-term return is huge. We see ourselves as stewards of the capital of the business. I guess the difference between KPG and ourselves is we've always had a, you know, 25-year view of every dollar that we invest trying to build a 100-year great organization. We're investing to make that happen. We're very confident that that will prove to be money well invested. I'll note that, Steven, I'm very considerably invested in the group, half of that money is my money. I feel very comfortable about the investments that we've made.
Ed Vesely, "What are the drivers behind the half's organic growth rate?" We have built genuinely a powerful brand that is attractive to excellent firms that wanna become part of something bigger than themselves and ideally better than themselves. When people get to a point where they've done everything they can to really develop their business and can see that we can help them take their business to the next level, then we've got really good inbound inquiry continually from stronger and stronger firms. You know, the acquisition pipeline has always been something that we have pursued over nearly 17 years. People come to us directly. I think we've done two deals out of 65 plus through brokers.
Most of the firms that join us don't ever even go on the market through a broker. I'm incredibly pleased with the quality of people that are coming to us. I take up the opportunity there to explain it, but there are three businesses that I find very inspiring. One is Berkshire for obvious reasons, but I think what people often overlook is that Warren Buffett has become the first choice buyer for people with amazing businesses. They feel great to have sold to Berkshire. They even write books about how they sold to Berkshire.
Our humble ambition, if we can submit it in that tone, is that over the next 25 years, we want Kelly Partners Group Holdings to be the organization that people who have spent their lives building amazing businesses, rather than flip them out, you know, to a private equity firm to be bought and sold, will choose to partner in a partner and a driver manner with Kelly Partners Group Holdings, who, you know, we're a listed permanent capital style organization in the, in the sort of heritage of Berkshire. I'm also very inspired by Louis Vuitton Moët Hennessy, where Bernard Arnault has bought into businesses that he knows have multi-hundred year profiles, but he's bought into these heritage brands and re-energized those brands via modern leadership and management.
Most importantly, he's been prepared to out invest his competitors because he can see 25 years out rather than 25 minutes. Finally, Constellation Software, who, you know, share our love of programmatic acquisition, which is, you know, many AUD 2 million-AUD 5 million acquisitions over a long period of time, where we don't do things for employability or size. We do things where we think we can get appropriate economic return and make impact to our, you know, partners, people, clients, and communities. Steven Mabb, it's great to have an aligned founder in the Kelly operating model and expansion plans all sound exciting. My question is, who is your backup? The plan is to expand internationally. Who'll be the leader on the ground domestically if you're off globally or vice versa?
Having firsthand experience of this is very difficult for even a great leader to lead people in execution to different countries or time zones at level you aspire to. How do you ensure you keep that NPS going in different global geographies?" Great question, Steven. Thank you. We have a team of partners, 75+ partners who are owners and drivers of their businesses. We support that team through our services. While it's, you know, very flattering to be called a leader, Steven, your leadership's followed by your you know, is defined by your followship, you know, by who wants to go on the adventure with you, and play in a manner that aligns with your mission, values, and vision. I'm incredibly proud of the partners that we have.
I think often they're overlooked and, you know, people have said to me for many years, "Well, what happens if you're not there?" If I'm moving around a little bit more, as I have for many, many years. I've been outside Australia for 16 weeks a year, every year for a decade, and no one's noticed. I think I was skiing for three months a couple of years ago, and no one noticed it. The company performed incredibly well. You know, we have 75 leaders who own 49% of their businesses. Now we have a services team where we have seven senior professionals across people, IT, finance, risk, legal, et cetera, who are more than capable, and are similarly aligned to deliver in their roles.
I'm incredibly pleased with these people and I'm quietly confident in their ability to manage and execute their roles. Time zones are a little bit of fun. Often as a CEO, you can get dragged into minutia that's best managed by other people. Moving around has always been my way of managing that. NPS, we still have a strong and improving quality review process for our partners. Our people are pleased. I, you know, I couldn't be more proud or pleased with the quality of our people and their, you know, their values and behavior, the difference that they make to the clients. We see it in the NPS surveys live on screens in our offices. It's really, frankly, very inspiring to me.
I can't see any reason why our people won't continue to behave the way they always have. To Janelle, U.S. is only an expansion office today. That's right. Not an accounting office bought yet. We have made some offers on some firms over here. We're pursuing due diligence. We've got a group office up and running. Our first team member will be here on the 27th of February. We've appointed U.S. bank lawyers and M&A advisors. You know, we're well down the track of this 12,500 target firms in California we'd like to buy. We'd like to meet 10% of them, 1,250 of them. We'd like to buy 10% of that, 125. If we do badly, we may do okay.
We'll do that by following our Dhandho mindset of, you know, heads we win, tails we don't lose. We'll continue to just structure the things we do very carefully and very diligently and with a risk-first mindset. Karen, can we expect a DRIP plan to directly reinvest dividends on our behalf? That's a very good question. I'll have to come back to that. I don't have thinking in that direction. We, you know, I've been clear that we will ultimately try and pursue a, you know, a global strategy of growing in the U.K. We are going to move our longest-serving, most senior partner into the London market by the end of March with an office, a group office. We will have our people on the ground, making things happen.
The specifics about dividend reinvestment, I'll come back to. Zach Joyce: Hey, Grant and Clay. Great work, guys. Good to see the focus shine through. Can you add some insight into the investment in the services team we've made? Is this to support U.S. in particular, or keeping up with current growth? Zach, it's mainly in brand, digital, and what we call global workforce. We're pursuing a partnership to open an office in Mumbai with 150 seats imminently. We're well progressed on that so that we can provide workforce to UK, U.S., and Australian firms. As workforce will become a global matter to be solved over the next decade. We're making long-dated investments there. We've invested very significantly digitally, and it's come from our cash flows over the last two years.
We're excited that we've taken what has been our defining client service experience that has been in written form and moved it into a digital format. That's all been funded. It's begun to roll out. We have 44 clients on the platform. The senior team member leading, in services, leading that program, who I'm very confident in, we're gonna try and add hundreds of new clients from our 20% of best clients to that app and digital platform every quarter. We believe that if we have a strong sort of physical presence, a strong digital presence, and a strong community, then we can build something really special. Our clients wanna meet other clients and be part of the powerful relationships that we've built up across the business. This is more than 17,000 client groups.
It's 35,000 people. It's not an insignificant number of people. If you take 20% of them as your leading wholesale clients, it's 3,500 or 7,000 people. You know, there was a guy once who made quite an impact on the world, and I always say he had a few good stories and 12 disciples. We've got some thousands of people that believe in what we're doing, and I think that that will prove to be a huge source of competitive advantage and value over time. Ed Vesely: Time do you envisage before acquired sub-scale businesses achieve that EBITDA margin?
We see it as a portfolio, Ed, we'll work as quickly as we can on each of those businesses in partnership with the owner and owners, operating owners of those businesses. I think we've got a good track record of moving them through that growth profile, we'll always be sticking businesses in that have got lower performance and improving them over time. We can improve them generally within 12 months. If they stay sub-scale, it's a little bit harder. I must say, I do spend, other than Sundays, every waking hour thinking about that, Ed. We're making good traction there, and Kenneth works with me on that very diligently. Are there any updates on a potential U.S. listing?
It's never been a secret of mine to aspire to have a Berkshire Hathaway style structure listed in an appropriate market. We'll continue to, you know, vigorously pursue the right capital structure and listing for the group. That's something that we just continually work on. We'll give you updates as appropriate. Sebastian Campbell: With new offices opening internationally, can you speak to any concerns that this may be occurring too quickly? Put another way, why, if you're starting international expansion now, provide more real benefit to KPG than spending more time hardening your roots in Australia? It's a good question, Sebastian, and I can understand the perhaps the reticence.
I feel that we're on track to be a top 10 firm in Australia, within two years, 24 months, maybe sooner. The number nine firm would have 45, certainly 35% plus audit revenue. It's hard to know. We don't wanna have audit revenue of that size. We believe we can continue to grow strongly. It's a little bit of a, you know, I guess two-part answer. One, we think we can walk and chew gum at the same time, but obviously we'll have to prove that. You know, if I was a betting person, you can't accuse me of not being invested. And second, you know, so I think we can, we can do both. Secondly, I'll give you more of a sort of zen style answer. Within our business, we have amazing senior leaders.
Many of them have been with me for more than a decade. I want to, you know, essentially unleash them on the world, but I wanna unlock for them the full value of their talent and opportunity, so that they can live out their full capacity. This is not about opening an office here or there. This is about taking our best talent and giving them the opportunity to grow themselves and therefore the business in a very best way. We think that international expansion has a role to play in that. John, you know, one of the people that I love and admire, who I've never met, but I am going to meet next week, which is very exciting.
You know, since inception of Kelly+Partners, we've given every employee a copy of Good to Great, Jim Collins, you know, very famous management book. Collins talks about having a big, hairy, audacious goal that's inspiring to your people. We have to be able to say to our best people that there is no other place that can help them better realize their potential than KPG. I'm very passionate about that. I believe in our people. I wanna see them be the best they can. You know, when I looked in the U.S. in considerable detail, in the U.K., you know, our 31% EBITDA margin compares to essentially 8% in the U.S. We think we can add some value here and in the U.K. We'll see.
Trevor Muchedzi, with the global expansion, will KPG also decentralize M&A decision-making to the teams on the ground? This is true, Trevor. You know, I had an incredible session with a senior executive at Constellation Software at the Berkshire Hathaway meeting back last May. He said to me, "Brett, grab your best 10 or 15 senior leaders and invest in training, coaching, and counseling them to be able to get out and grow the business." We're putting a senior leadership council together. We're growing that capability. I'm confident in those people as scouts to go and find deals and our team to document and tidy up and make sure that we're bringing the right people into the business.
I think we can have many of our senior people finding more deals and materially scale up our acquisition cadence in Australia, the U.S., and the U.K. Brendan Harrington. Hello, Brett, Kenneth . Thank you for another great set of results. Brett, can you please elaborate on how you're approaching the management of your time and energy in order to realize a 25-year BHAG? Well, Brendan, I plan my year in advance in color, and then I book out all my holidays and pay for them. I set quarterly goals and put them into a monthly format and manage an ideal day. I try to do 10,000 steps a day. I gave up alcohol 18 months ago, and I surround myself only with positive people.
Not, not Pollyanna-ish types who tell you what you wanna hear, but people that are looking for solutions or can-do people rather than can't-do people. I'm very much, you know, looking to our senior people to deliver in their roles. Business has never been about me. While I do make a contribution, which I think is considerable, you know, the game at this point is to stay in the game every day and to do it across the next two, 25-year plans. I'm 48, 49 in August. I have a plan to age 50 and a plan to age 75 and a plan from 75- 100. I intend that, in order to pursue those, staying healthy is a very high priority. That's not just physically, that's also mentally.
It's very important to, you know, guard your mind and look after what goes in your brain, to stay focused and positive. I have to say the biggest contributor to that are my family and the people I work closely with within our business and our amazing clients. I really cannot emphasize the joy that it is to come to work every day. Some people complain about their work. I'm more invigorated and love what we're doing every day than I ever have been, and we really are making every postal winner. You know, thank you for the question, Brendan. I hope that's a suitable answer. Chinmay Prusty. Thanks for the presentation. Brett, what's your view on penetration of artificial intelligence, machine learning in all areas of life, including accounting?
What do you reckon the major disruptions over the next decade are gonna be? It's a great question, Chinmay. I started at Price Waterhouse when the first IBM computers went in and all the work was going to disappear. I think artificial and intelligence and machine learning will make a contribution, are making a contribution and will continue to be pretty exciting. Frankly, as accountants, I've spent my career, 30 years, having to do work that is really very much below the level of training that chartered accountants have always had. I look forward to a lot of the dross being continually taken out of what we do day to day.
I know that the business that we're building for private business owners that have complex structures, and looking forward that are multi-jurisdictional. These are the get up early, go home late, 24/7 types. We believe they'll always value the quality of advice and insight that an organization like ours, A, can deliver today and can harness technology to even better deliver tomorrow. I would say that if we don't continue to reinvest our 9% and we don't look to the future, if we become what most of the industry are, certainly on an 80/20 basis, most firms are farmers. They haven't invested cents in their business for a decade or more, and they're just taking, you know, they're doing what they did yesterday. They're just taking whatever they can get away with.
I think they'll be severely disrupted, which I'm looking forward to continuing to assist to deliver to them. Anup Kaur, a great, can you comment in terms of funding, terms of funding availability, acquisitions in the U.S. and U.K.? Without giving too much of our secret source away, Anup, we've worked very hard to secure a banking relationship here in the U.S. that we believe will deliver the same or better funding terms than in Australia. We believe that we can do the same in the U.K.. We're involved in discussions to that end. We're confident that there is huge interest in partnering with us to fund what we need to do. Leon Poglioli, there's been a lot of news lately about automation and AI.
I'd refer you to my response to just the earlier question. Kieran Robinson, cheeky question. If I was a retail investor, how do I go about calculating our share price? As I've said before, and I think published you read Robert Hagstrom's book, The Warren Buffett Way. You get the first edition so that you can get the two-stage dividend discount model that he shows you in one of the appendices. You stick that into Excel, and you make a decision about an appropriate discount rate, an appropriate growth rate. We think that so long as we continue to do what we've always done, which is buy into firms that are 0-AUD 15 million in revenue, we believe that those transactions are as close to risk-free an activity that we can undertake.
We don't see them defined as a risk-free activity. When I started the group from day one, I always valued the group on the basis of the USD Treasury bond rate, with a, with a growth rate that, you know, I have a view on. You'll have to make your own assessment of whether I look bored or not, and whether our team look disengaged. But I'm not bored, and I don't think our team's disengaged. I think we'll continue to grow. Essentially, my mindset was that, you know, CEO's first job is chief risk officer. We should not engage in any transaction where we can lose capital. We should never forget that because rule ones don't lose money, rule twos don't lose money, rule threes don't lose money.
If we remember that and we construct a very intelligently and rigorously to ensure that our risk of capital loss is reduced to as close to zero as possible, then we reduce the systematic risk of our business. There might be many other risks, but we'll just control the ones that we can. Anyone who knows me knows that we're extremely aggressive about managing risk. Janelle, congratulate personal development. It's admirable to your resolutions. Thank you, my kind friend. I was asked recently by an investor, "Why do you publish these checklists and these books?" Well, as a team, we have a love of learning.
We believe in its ability to improve people's lives as people, that when they come to work, you know, the only way to make a great professional is to first make a great person. We believe personal development is professional development. You know, I don't think you can as a senior leader say it if you're not prepared to do it. I've, you know, been very committed to trying to improve my life and those of the people around me through, you know, continuous personal development. I'm glad that you can see that. Those checklists, you know, I shared with an investor recently, I publish them to hold myself and our team accountable. It's just the way my brain works.
If we promise to do something, we will spill blood to deliver what we promise. By putting those books out, by putting those checklists out, we're just setting a standard for ourselves that we wanna hold ourselves accountable to. That's that internal scoreboard thing. To my Christian other question, if I may, how do you judge character, and what's your definition of leadership? For us, character is whether somebody's a person who is in the business of making other people better off. What we call a person for others. Number two, whether they keep their promises. We, at Kelly Partners, as we say, whether they do what they say. Number three, whether they're convinced that a team can do more than an individual. They are our three big judges of whether a person should join our team.
You know, to me, fundamentally speak to the character of a person. Leadership's making other people better off as far as I'm concerned. It's mostly about personal self-sacrifice and taking on responsibility for the betterment of others. It's not for everyone. It's certainly, you know, some people have the right constitution, I guess, for doing that. I love Collins' sort of level five leadership idea of, you know, you want a smart person that's humble and very, very determined. So, you know, that's certainly my aspiration while claiming no level of progress or perfection. As to scale consistently, I reckon you'll need to rely on a high-quality leadership team. I am quietly confident in the quality of our leadership team.
We have an unbelievable group of people, and I'll emphasize it again. You know, when people walk through our businesses and meet our people, it's become very easy to get people to join our group. I say, "Hey, call Ken, meet our team. Arrange some meetings, Ken. Let them meet our partners and our people. If those people are excellent, just join our group. If our people are excellent and have the types of values that resonate with you." You know, we're doing incredibly well at getting people at getting people to join. Janelle, a further question. A lot of vacancies open. We're recruiting at least half of the open vacancies of growth. It's probably 70% growth, 30% replacement. People move around. Our retention of our best people is exceptional.
We know that our top 10% of people contribute 90% of the result. That's not to disparage anyone else. We're a people-focused, you know, a right people-focused organization, and I think we're doing really, really well at it. We are growing a lot, and we can produce more opportunity every day than necessarily the people that we can find. We haven't given up finding them. Finally, Karen, with the global expansion plans, do we expect KPG having other share lists in the foreign markets? We will pursue a capital structure that makes the most sense for the shareholders of the group in the long term. I've never walked away from... Frankly, I've copped a fair bit of crap for having heroes in a hero-less world.
I've been pretty clear about who my heroes are. I've normally got a cardboard cutout of him sitting behind me. I get a bit of grief about that. We think we've got the right heroes and that we're keeping the right company, that we've got the right ideas, and that we're delivering the right actions of, you know, developing the right habits and that ultimately, you know, point to a, you know, a really significantly bright future. We'll do what, you know, we'll do what our heroes would encourage us to do, and that is to do the right thing by our shareholders who are partners in our business, to find the best way to create value with everything that exists within KPG today. We have incredible people.
We have incredible intellectual property, incredible know-how, we think that we should, you know, maximize the actual impact, positive impact that that can have on our partners, people, clients and communities anywhere that we operate. If I meet somebody who's got an excellent firm that they've spilled blood most of their life building, and they believe that our group can help them and add value, they share our values, then I'm gonna help them because that's kinda my mindset, and that's what I believe I'm sort of here to do. Graham Strong, as Charlie Munger said, "Show me the incentive, and I'll show you the outcome." Can you give us a bit of information about the incentives that the team talked about earlier? Proceed with acquisitions.
Graham Strong, what we're working on and haven't signed off on or published, you know, I'm getting ahead of what I'm gonna present to that team, but essentially a scout model where they'll get a 10-year override on our 51%. 10% of that 51% is what I've got in mind, where 75% will go into a 10-year share pool for each of them, and 25% will go to them each year in cash. We believe that over a decade, we can build extraordinary value for what I'm calling these senior scouts. People that go out and look for, you know, opportunity for the group and make the world better while continuing to deliver in their role. They'll be long-term aligned. All our partners since day one have signed 10-year agreements. They will...
Those incentives will absolutely reflect the values of our group. Ed Vesely, if there's a U.S. system, would Kelly Partners remain listed in Australia? It's a great question, and too technical for me at this point, Ed. I'm not sure would be the answer. But what we'll continue to do is we will continue to find ways to deliver the maximum impact that we can as a group, to an industry that needs to change. You know, we think we're an organization that is most capable of leading that change. They're lofty ambitions. We don't say much about them. We've tried to keep our presentation, you know, very sober, and moderate and balanced.
If you ask me, you know, am I excited about the opportunities that are ahead for our group, I have never been more invigorated or energized by what we're doing. We have never had better people within our group. We have never had a more aligned group of partners and team and senior people helping the business externally who really want to see us as an organization live up to our full potential. You know, when I was 22, I wrote a book. I would relate later that I met some people, and they were like that breakfast cereal in Australia called Just Right. You tell them your hopes, dreams or aspirations, and they'd say, "You know, you're too young or you're too old. There never seems to be, you know, just the right time.
You know, I have three children with my beautiful and amazingly supportive wife, Rebecca, and who are now 17, 15, and 10. you know, if we look back, there was never just the right time to start the group. There was never just the right time to have a child. If you ask any woman that's delivered a child, I'm not sure if they knew the full glory of that experience, they would volunteer to do that at any particular time.
You know, when people say, "Well, what makes you think that now is just the right time, for, you know, for trying to really unleash the full capacity of our partner group and our people, by growing much more strongly in Australia and globally?" I'm doing what I've always done, which is, you know, sniffing the wind of opportunity and helping people fully maximize their potential, which will fully maximize the potential of the group. We'll do that while we continue to do the right thing by all of the stakeholders in the business, consistent with the values and that I think that most of our people who know us well now are pretty comfortable that have been pretty consistently delivered.
I've had a few people over the last few years tell me, "Oh, I can't buy the share price of $1, $2, $3, $4, $5. It's too expensive." My job is to make it gobsmackingly expensive and make you, if you have sold our shares or don't own our shares, feel sick every day. I'm here working for our people and our shareholders and our clients and the communities that we operate in, and geez, we're having some fun doing that. I notice there are no further questions. I'd love somebody to ask Kenneth a question. I've got him here. He's in Hong Kong. Here we go. Somebody write, "This question's for Ken," and I'll need you, Ken, to answer one.
This one, shouldn't I, amongst your competitors or peers in the accounting space like PwC International , who personal company do you consider as gold standard? I've, I have never hidden the fact that my business heroes are in the area of people, Disney, in the area of processes, Walmart and McDonald's. In the area of clients, Four Seasons and Ritz-Carlton. In the area of finances, Warren Buffett and Bernard Arnault and Mark Leonard. No, I've never looked at accounting firms for inspiration, frankly.
I went to a conference here in October in the U.S. with 75 of the practice leaders of the top 400 accounting firms in the U.S., It was very interesting, but not like sitting down and having lunch with, you know, Warren Buffett or some similarly amazing business leader. Hey, Kenneth, Jack Joyce has a question for you. Kenneth, who are your business heroes, big fella?
Business heroes. I have to say the same as Brett. Like I'm completely aligned with Brett. Warren Buffett really is my business hero as well, as well as Brett. You know? That's what we aspire to live in. The values that he has conducted his business in is really what we aspire to do. That's Warren's definitely my business hero.
Got another one for you, Kenneth. Congrats on being one of the first listed firms to announce in Australia. Guys, we think we're an accounting firm.
Come on.
We wanna do everything we do on a world-class basis. Ken, I think three results in a row, your first and second. What's your secret sauce, KK, to making that happen?
I'd say it's not me, guys. It's my team. It's a team effort. Which we push hard, we prepare early in advance. It's also the consistency in what we do. We've got a focus in what we do. We're focused on accounting firms, which means that we don't have to account for this, that, or the other. To us, it's a very simple business. You know, having done it for 7 years now, Brett, we've kinda refined the processes. With a very concerted team, it's something that we're able to achieve. We're very pleased about that as well.
Awesome. Very cool. All right. Well, if there's no more questions, I am here. I am intending to be quite hard to find over the next six months while we pull together some quite exciting initiatives. Going once, going twice. Well, Kenneth, I think we've bored them all to sleep. It's a funny format that we sort of speak to a screen. We can't see people. We miss that interaction. Look, if at any time anyone's got any questions, we'll take the transcript from today and publish it. We'll work up some more Q&A's. We'll continue to publish our quality shareholders newsletters and make sure that we just communicate on a really transparent basis.
We take very seriously the idea we've got 1,300 shareholders, and that we're in business with you as partners to grow something that really makes a difference to our people and our clients and the communities that we operate in over the long, long term. I just wanna thank everyone for being a shareholder, and tell you how seriously we take that undertaking to you as we do, you know, to everyone else within our business. I've built really great relationships with tremendous people in our share register.
You know, when I'm asked why be listed, I say, "Well, I wouldn't have these 1,300 partners if we weren't." Many of whom give us intel from all over the world, bring us insights and ideas and free consulting and analysis on our business that we know has made the business better. Yes, there's a, you know, there's a small financial cost to be listed, but we think there's a huge value transfer from our partner shareholders in making Kelly Partners Group Holdings a better and better business every day. With no more words from me, I wanna thank everyone for their time, I look forward to chatting you again soon. As I love to say, have a great day. Thanks, Kenneth.
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Thanks, Josie. Well done.