Yeah. Right. Through the script, Jason. Next slide. First half performance, pretty good, I think, given the context of the pandemic we're in. Underlying free cash down 14%, AUD 30 million, which again, pretty strong given the environment. Revenue and other income down 22%. Like-for-like revenue down 14%. We've seen definitely some FX headwinds. On a constant currency basis, like-for-like revenue is down 11%. Underlying net profit down 10%. I think supporting the strong cash flow generation, we're still paying dividends of AUD 0.09 for the interim. Strong balance sheet still, AUD 90 million at the half, 31 December. Over AUD 100 million in cash currently. I think that's again reflective of our tight cost control, which we've been very proactive since the start of COVID in March, April last year. Underlying free cash, 155% of underlying net profit.
That's going to support maintenance capital programs, which was quite small, I think, in the first half. I think we only spent about AUD 1,800 in maintenance capital. Dividends providing everything stays the same. Next slide, please. There's the underlying results. The areas have moved out a little bit. We have stripped out of underlying, well excluded from revenue the JobKeeper. I think that's all set out there. I don't know if there are any questions on that. That's the only real standout. Next slide. There's the balance sheet. Again, strong cash flow with the underlying free cash rec, AUD 29.4. Next slide. There's the cash flow bridge. Not too much orange there. Next slide. Our capacity. I'm sure Alf can talk to this, we closed quite a few floors in the last financial year. This financial year, we've only got two floors that have opened.
Well, we eventually managed to open the floor in Manila. We had quite some serious lockdowns there. We opened that floor last month. We expect to open a new floor in Parramatta. It's really a switch-over floor. The net there is zero. We closed a floor in New York and one in Al Khobar in Saudi. Next slide. A global overview. The standouts, definitely North Asia, and to a lesser degree, but pretty reasonable result, is the Middle East. U.S.A., certainly on a cash earnings basis, we broke even. I think that's the first time we've done that in a while. I think that's a reasonable result. Certainly demonstrating the decision to close some of those floors at the end of last financial year. A disappointing result, though, from ANZ, Southeast Asia. It is still cash positive. On a profit basis, dismal. Next slide.
I'll leave you to the segments. I won't go through each one. I'll leave that for Alf. Next slide. Again. The dividend again. I guess our outlook. Still focusing on the controls and measures, so certainly cost control, maintaining strong liquidity, making our clients feel safe, and our teams preparing for a recovery in some of the markets. We've perhaps seen some slow recoveries, I think it really depends on the uncertainty of the timing of when the vaccines roll out and how that timeline will end up looking. Certainly looking for opportunities for growth in markets where we have proven management. I think there's real opportunity on the other side of this for us. Flexible workstation industry is certainly not dead. I think it's going to come back and in bounds once this COVID, to a certain degree, normalizes, I think. Next slide.
I think all things being equal, we certainly still expect to produce cash and be profitable, but I think we do envisage that the rest of this calendar year will be quite challenging. Alf?
Well, that's the past. I haven't. I'll just talk on the past. If I can find my own Lost my notebook. Found it. It's been a pretty interesting six months. I had a look at what I said last time, and it sort of rings a little true in that there's no hurry. Then it's got a pretty long tail, and I don't think that anybody's felt the real commercial and financial impact. In fact, from a P&L and a performance perspective, the places that have got the higher amount of assistance from government seem to be the worst performers as I look at the world. Seeing I can't talk on the future, I thought I'd talk on the past. Just a little dream that this chief executive has as he sort of reflects on what happened.
The time's coming when we are going to expand, but if I look at the past, or even look at today, we've got a market cap of AUD 300 million. We've got AUD 100 million in cash. We've got a market cap, in effect, of AUD 200 million. We produced AUD 25 million in free cash in the first half, so in real terms. I reckon you get pretty close to that next half, so you get close to AUD 50 million on AUD 200 million. That's 25%. That's four times free cash is what our market cap is. At the same time, I sort of reflected on Regus. They sort of roll along losing about GBP 1 million a day, and they've got a market cap of GBP 3.5 billion, and they've got GBP 7 billion borrowed, and they're probably our main competitor.
We pay a dividend of 6%, which is about the yield, at AUD 0.09. We have 120 floors, which if you tried to replace them, would cost in excess of $500 million, would be my estimate, before they start to fill them. We're running at 70% occupied. I'd reckon that each one of those 120 floors would have to lose AUD 2 million before it got full. That's another AUD 240 million, which is why everybody seems to raise AUD 1 billion to go into this business. We paid dividends in 21 years. Today, for those of you who don't know, the lady that started the business was a lady called Joan Salter, and she died 21 years ago at 4:00 P.M. on this day. This is the anniversary, which normally I don't have it on the 24th.
She spent a lot of time working on Servcorp, and we really only had a bit of cash because I'd had a reasonably small real estate business. It was organic growth in real terms. Anyway, we've raised AUD 140 million. We've paid AUD 310 million in dividends. If you take that over the 21 years to this day, it's been about a 7% per annum return to our investors, which is one of the reasons I'm a pretty happy shareholder. Everybody says, Man, you continue to buy shares. It's not a bad return, 7%, 21 years, and we've still got AUD 100 million of the AUD 140 million that we invested, that we raised in cash in the bank. Plus, we've got the business, which is paying 6%.
I sort of look at it and think, "Well, that's not too bad." I went one step further as I looked back, because as I said, it's impossible to look forward, and our balance sheet's got AUD 200 million in net assets. Of that AUD 200 million, AUD 100 million is in cash. We're going to produce cash of no less than AUD 50 million, my guess is. Guess, chief executive's dream. I'm not going to do any projections. We're going to have 50% free cash on the amount of our balance sheet net assets that we've got equity on the side, that we've got invested, which is not bad, actually. Particularly, we're in the middle of a pandemic, guys. Nobody seems to have noticed because they're all in Australia.
I look at it and I get all the questions, and we get first strike against us because we paid some of our international executives bonuses. As a matter of interest, guys, we made no dough in Australia. Very little. 90% of our money is made offshore and 60% of our tax is paid in Australia. Why would you stay here? You got ASIC, DFAT, ACCC. They're all like tits on a bull. They are bodies that inhibit our ability to grow and compete globally, yet we do grow and compete globally. They attack the people that have their head offices in Australia, and DFAT's no help overseas. That's another story. I think that in the past, we haven't run Australia, New Zealand, the U.S., or Southeast Asia the way it should run.
For us to be producing the profits and free cash that we're producing with half the business working the way I would expect it to, is I think, quite admirable. A lot of the team members worked pretty hard. We've dropped a lot. We've cut costs. It's been a pretty tough year. The competitors we're competing actively with have raised close to AUD 40 billion. My current view, I don't know, Regus' numbers come out, I think, normally about March 3rd or 4th, is that we are about the only ones that are producing free cash. That means that at the end of this pandemic, we should be in pretty good shape. We've got 50% of our net equity balance sheet money in cash to start to expand. My view is the incentives will be around 30%-50% across the globe.
We've got systems that work. We just need to train a bit of our management, and we should be able to go close to doubling our size. We do have a lot of trouble in traveling because, in Australia, we are one country where five states that we work in, you can't travel in and out of them with confidence because they can close their borders at any time. There's no international travel. We can't travel to manage our team members and our people. We're finding that the culture is being eroded now at quite a rapid rate. First six months, it wasn't too bad, but now you can feel it. You can see it. I've been overseas three times this year, but it's very difficult to go anywhere past Japan.
You've got to isolate in Japan for two weeks, isolate in Australia when you come back for two weeks. Even if you're an old guy and you make an application to have a vaccine so that you can travel and support your business so that you can keep Aussies employed and keep your head office here, it falls on deaf ears. I'm not that wrapped in Australia at the moment. Competitive landscape. Man. Argyll in the U.K. have 36 centers in London, and they were insolvent, had just been rescued by a fund. They're a pretty good operator. Knotel had 100 in New York. They've gone bankrupt, owing $2.6 billion. Victory, well, my view is that they're only surviving on JobKeeper, and their revenue is between AUD 20 million and AUD 30 million.
Their revenue, pardon me, per location, is well under half Servcorp's revenue per location, even if they're the same size, simply because they don't have the occupancy. Everybody thinks there's no barrier to entry, but they don't have the IT solutions that enable the phone system to be set up, et cetera. I look at all of this and think it should be a time of great opportunity because we will survive and we will stay liquid and we will stay profitable. It is uncertain, but the only certainty that I can see out there is that the competitive landscape will weaken and the opportunity to sign new deals will work in our favor.
Because we have paid all of our rent to 90% of our landlords on time, we'll have a reputation and a covenant that building owners will value because it has been shown that having people that run shared accommodation, taking large swathes of space in your building lowers the cap rate so that it means that the value of the building, if they ever want to sell it, drops. Our covenant is so good that if we become a client, it doesn't lower, it increases it. People across the world that are in this business are, they call it rationalizing. That just means they're closing centers that don't work. The only place we really had to close centers that didn't work was the U.S. We still haven't worked out how to make it work, but we should. I did touch on Australia and Southeast Asia.
That's just management. They will come good. It's just a matter of how we run them. That's it. Anybody got any questions? Goodbye. Anybody wants to sell their shares at AUD 3, I'm available. I'm serious. I'm still a buyer. I'm not allowed to buy yet. It's got to wait a day.
Alf, can't let you go without any questions. Obviously, massive change in the way people are working. That's going to have a big impact on shared workspace, flexible workspace, offices, all that sort of stuff. What do you see, apart from the better environment for leasing and so on, what do you see as the opportunities coming out of this? Is there perhaps opportunities to have some centers in more suburban locations? You have a bit more of a mix of centers in different cities. What are your thoughts on the?
Well, I think is that the center of the cities should still be a vibrant place to work. I do believe that people that have an office, so whether it be a serviced office or But mainly a serviced office. What was our bread and butter when we first started this business? Will want to have remote workers. To do that, you're going to need to have the IT solutions that allow you to do that. We're the only guys where you can have 10 remote workers to one office. We're releasing this product now, it's just going up on our global platform. What happens is if you have one lead telephone number, each one of your workers can take his business number on his mobile phone, work from home or work from anywhere, commute three hours a day in the co-working space within the environment.
That the guy that's running a serviced office can have up to 10 remote workers per office. The suburbs. I know it sounds great that you can just ride your bike to the office. Well, my bike's sitting there. I'm not sure when you think that we're not geographically tied, that I would go to the suburbs. Rather than being in Cammeray, I'd rather be in Riyadh, because it's a major city and we can run a business hub and remote workers out of that location, and we're already the biggest in Saudi. I look at that. I look at where we've got management. I look at the City of London, and I think the city is going to remain the city. We'll probably be city dwellers more than suburban dwellers. Massive impediment.
Having your head office in Australia is becoming a greater impediment as time goes on. I don't know how. We are talking to government, but whether we make any headway, I don't know. I believe that with the vaccine, things will almost get back to normal. Once we can travel our executives again, it'd be great. Right now, I'm putting more infrastructure in Japan and in the Middle East than I'm increasing it in Australia. I'm dropping the amount of people we run in Australia and increasing it in those diverse locations. Because if you look at, well, take Singapore. They're giving the jab to their bankers and business people that need to travel, whereas we're not even on the list. Except I'm old, it sort of helps. What a stupid excuse to be able to get the bloody vaccine.
The old guys are going to fall off the perch anyway. It's going to be. When I look at where we're going to expand, it will be where we've got the management that can handle the expansion because they've got a management team around them. At the moment, I would think Milan, Tokyo, Riyadh. The young lady that runs, Fabia, who runs Qatar. I'm just trying to work out how to put some strength around her because she's pretty close to Europe and she can travel and help us, and she's a great general manager, too. Determining the results in each location.
Yeah.
What we're seeing over the years is that good locations stay good.
Yes.
Bad locations so far have stayed bad. Not without much effort, I'm sure. Because I'm quick to work with. Funnily enough, I said to one of my senior guys today, You've either got to be doing this because it's fun or it's profitable. If it's not profitable in Servcorp, it's not fun because you've got to live with me. I think that in some cases, in the U.S. that's true. In Australia, that's not true. At the time of the global financial crisis, Australia was making AUD 1.3 million a month and Japan was making AUD 500,000 or AUD 600,000. There was a real difference. Australia was the powerhouse that pulled the whole thing. Southeast Asia built the whole of the North Asia operation out of its profit. It was highly profitable. It is management.
Because the business we run is very similar. The management that comes in has got to learn the Servcorp system and the way we make our margins, and that's based upon quality, IT, and all the subscription income that we have the ability to earn with all the products that we have. It's a training problem, and it's a chief executive problem in many ways because the chief executive doesn't have that much patience with the training regime. At least he recognizes it, and so we're slowly getting a team together. I think in the Middle East, we're showing that you can train your management team to create profits, and the profits there are just moving pretty rapidly.
The interesting thing is that if you're in Dubai, and Saudi's saying that if you want to deal with Saudi, you've got to have an office in Saudi, which is helping us. If you're in Dubai and you're in business, you need to travel for business, you're number one on the jab list. All my bloody executives have all had the vaccine, but I can't get it in Australia. I mean, you're going to use avoided bloody political favors to try and get a vaccine? That's ridiculous.
It seems to be rather inconvenient, not to tell. My serious question is, following on competition and in terms of the different types of serviced offices, so the coworking versus the physical offices. Been reading that WeWork is now finally chasing shares and so forth. Have you noticed any competitive changes in their behavior and are they pulling back on their traditional fee office?
I meant to say that WeWork can't make a profit unless they change the way they do it, and it's almost impossible. Unless you can make some subscription income, which means you've got to have IT solutions, you've got to have phone systems, you've got to have receptions, you've got to have all those things that give you that underlying infrastructure. If I looked at WeWork, just to put the base comms systems in would cost them between AUD 300,000 and AUD 400,000 without cabling, that's going to cost them another AUD 100,000 for that. Say AUD half a million a center. They've got whatever they've got. Call it 2,000. At AUD half a million, there's another AUD 1 billion. They've got a pretty big problem.
Then they've got to sell their clients on it, and then they've got to put in all the accounting systems to make it work. I think that Regus, because they copied Servcorp almost to the letter, has got a reasonable underlying business model, as has Executive Centre. I don't think the rest of them have got it. I mean, they just decided that if they cut space up, they could let it at twice the price they were paying the landlord, and so they were just making an arbitrage on the space rather than giving a service that would assist a small business to grow big. I mean, all big business starts small. All these guys are going for enterprise. Enterprise businesses, when they've got to come in, they'll bring their own switchboards, their own team.
I think there'll be a lot of room for guys and markets who work with us is out there in that business that can provide the underlying infrastructure for businesses that want to outsource the control of their space and their communications. They will have a security problem, too. I don't see WeWork as a major worry because I don't think that WeWork ever looked at it as anything other than an arbitrage play. I think they've got a problem. Regus won't. I hear, whether it's fact or fiction, you'll know on the 3rd of March, I think that's when their figures come out, around about then anyway. 9th of March. If what I hear is correct, they're losing GBP 1 million a day. I think that they can correct it. One, they've got the depth, and two, they have a lot of systems.
One of the problems they have is that they put up different systems into different locations, it's very difficult to get a centralized system, it's impossible to run the one office, 10 remote workers. Which we don't know whether it works yet. One of the problems with running remote workers is they have to work on a mobile. Well, we've got a thing that we call Onefone. Forget what it's called. It means that you can take your business telephone number, it can be answered by the receptionist here put through to the relevant team member, when the team member leaves you, he doesn't take all your clients because they've all got your mobile number. They've only got the business phone number.
To me, once again, that's a way to get subscription income that relies on your IT solutions rather than on the way people want to work, the way they have to do it. All you do is provide them with a bit of spare space. I think we've got no crowd, no questions. How good? You got it written on a tissue?
We do have a question from online. The question is: Can I ask regarding the pricing pressure, please? Are the landlords supportive in negotiating better rent so that Servcorp can maintain margin as a value-add service provider?
Well, I was just talking about the chief executive's dream. That's another one of my dreams. I'd love the landlords to be cooperative. I think that Some of our landlords have been cooperative. Not a lot, but some. Normally what they want you to do is lengthen your lease term, or they just want to give you a period of time where you don't have to pay the rent. We know the guys that like us and there is always a quid pro quo. I think that at the end of our lease terms, and the one thing that people have never really looked at Servcorp and said, Well, real value is actually when the lease expires, if you're coming into a market like this, where you get a 30%, 40% incentive to go ahead.
In the next three years, more than 30% of our leases come up. In five years, it's more than 50%. We're talking 50. That's 10 a year. Interest makes you smoother, but I only care about cash. The fact is that it's another part of that opportunity, is that we've got the clients, and if we get the space and we get the incentive or a lower rent, then of course the margin will go up. None of that is certain. There are very few people that have that advantage. Am I worried about Servcorp? No. Am I pissed off with Servcorp because the way we run it? Yes. Can we do it better? Yes. Is it tough? I don't think I've ever seen it this tough. I mean, this is real.
You've got all these guys going broke, so they're slashing their prices and everybody's scared. The team's under pressure. Nobody gets salary increases. When you look at the business that we're in, you would think that we are just in the wrong business. It's like being in a bloody airline business. I didn't complain. Some of you Aussies will know Luke Mangan. I said to Luke, It's bloody tough out there. He said, Yeah, well, you wouldn't be in a restaurant, pal, so shut up. I shut up. Just had another drink. That's it. Oh, thank you for being shareholders.