Introducing the new Servcorp app, power in your palm. Skip the wait. When entering any global Servcorp location, scan the QR code from the Servcorp app for seamless and secure check-in. When your day moves fast, Servcorp keeps you ahead. Need a workspace? Use the Servcorp app to book a world-class office or meeting room in moments. No calls, no delays, just premium workspaces ready whenever you are. Access your intelligent Servcorp assistant, powered by AI. Book rooms, get support, and navigate your workspace, all in one place. Stay connected with enterprise-grade, high-speed, and secure Wi-Fi access without compromising security of your business. Everything you need, right where you need it. The Servcorp app has a clean, intuitive dashboard designed for the way you work. The Servcorp app: Your workspace elevated, your business empowered.
So the Servcorp app is pretty well ready to roll out, and we don't need to do the presentation today, guys, because if you haven't read the presentation, you shouldn't be here. And the presentation was pretty good, but what happened yesterday doesn't count. It's really what happens next year and the year after, and whether you build a sustainable business, and I'll talk a little bit about that. But Elena had to put that bloody horse in there, because this is the Year of the Horse, and Happy New Year. So Ility which is Marcus' company, built the Servcorp app, which sits on a thing we call the Wombat, which I talked about at the last meeting.
But it was developed by Ryoma, who's worked around Servcorp for about more than 30 years, and he wrote the old data system, and it was produced in Japan. But we got it... Just New Zealand was the only one I wanted to put up because it doesn't count. And that allows us to see, in real time, sales, revenue. The reason I put New Zealand up is that doesn't give anybody any idea what we do in any country, of course. I guess I'm allowed to say New Zealand doesn't count. But if you have a look at it, it's got lousy occupancy, it's made one sale, it's revenue, and it updates every 15 minutes across all of our countries, every location, and it updates the sales, and it updates the... Just go up a bit.
The packages, so they've sold eight. They've done, sorry, they've gained eight so far this year. They got 940. Sales this month, 34. They've lost this month, 1,950. Well, Servcorp is not the same as everybody else in shared space, and finally, our clients are realizing it, and the market, to a degree, is realizing it. We haven't made the inroads we'd like to make, but if you look at Servcorp, we've spent over AUD 100 million over the years putting everything in the cloud so that nobody else in this business has everything in one place. We've got 200,000 extensions. Let's have a look at a speed test. Same thing, we can actually do a Servcorp speed test in real time. This is on the Servcorp system.
We watch it, we maintain it 24 hours a day, and this is it. Actually, I don't know which... We're in Sydney, I don't know which location, but nevertheless, it doesn't make any difference because if you then have a look at your Wi-Fi speed in a Servcorp location compared to... Let's have a look at the competition. Keep that up. Like, 12 x the speed. Twelve, not, not one or two, 12 x the speed, and it's not just in one country. It's in every single country, in every global location. There is a massive difference, which is why we don't use aggregators, because aggregators are only interested in a price per square foot. But that's not a serviced office. That's not real co-working, where a guy has the same power that you get from a major corporation.
That is just making an arbitrage on space, and there is a massive difference. We've got 60,000 clients globally, and all you have to do is charge your clients a small margin for what they get. A guy using a hot desk can walk into a Servcorp location. He's paying AUD 250 a month. He walks past the receptionist that you're paying AUD 5,000 or AUD 6,000 a month. He gets out of a plane in New York, he can go to level 85 in the World Trade Center or any other place, and he can take his Sydney phone with him because we've got everything in the cloud, and we can put it on his one phone. I mean, on his, on his, whatever those pretty things are you carry in your hand all day, mobile phones.
Hey, it's okay. I'm old, and so you've got to get used to it, that I could just topple off the perch, but I'm not going to at this moment. So as I stopped to look at Servcorp, and I looked at last year and thought, "Well, everybody thinks we did a pretty good job. But it started 47 or 8 years ago, I can't remember when. 1978 till now, two years off 50. 48 years ago! And there've been a lot of people that have worked to develop the system, and so finally now we actually understand the business we were in. When we first started, nobody was in it.
If anybody had shared space, they hadn't organized it, they didn't have a system, they didn't have a training session, they didn't have an IT department, and we've slowly but surely put all of that together so you've got a sustainable business where you can confidently predict the future. And so, I think the future, as we all know, is going to be driven by AI. And because I think that every job, every day, every single thing we do is going to be AI-assisted. The problem with everybody else is that whatever they want to do, they've got to do location at a time. With our... The way we built Servcorp, with our IT team and every client in one place in the cloud, we can use AI effectively.
Our AI concierge can be developed and put within our Cisco system, and we're working on it right now. That should be able to answer questions and do a lot of the work. The app we just showed you, everybody forgets that we're a sort of big coffee shop in some ways. Like, we sell AUD 1.3 million a month's worth of coffee, just by the way, because you got 50,000-60,000 clients, they drink coffee. They'll be able to order that from the Servcorp app, same way they'll be able to order all other things that they want to buy, whether they want to print to a printer or whatever they want, book a space in another location, and all of that's finished. The other reason that we're better is that we spend money building the centers.
It looks as if they just pop up out of the ground because we build them, and our cash pile continues to grow a little. But we spend, because, mainly because of the infrastructure, we spend about AUD 4 million on a center, whereas Regus spends about AUD 1 million on a center. And some of the centers look great, but they don't have the underlying infrastructure that allows you to run and drive them. Once again, they're booked to make, to look good and make an arb on the space, whereas I think that the... more and more people in the real world are going to need a team to delegate to, and, and Servcorp, the most expensive part of our operation, and the most important part, are our teams. And we run 10 people per 100 office, offices.
The industry average is below two per 100, which means, sure, you might try and implement a training scheme, but you've got nobody to train. I walked into one of our competitors in Japan the other day, and I'm at reception, and some guy came out of his office. I said, "Where the hell is the receptionist?" Jesus, it was Servcorp by closing. And he said, "She's gone to lunch." They had one person on three floors. It was 120 offices, and they had one person working there. Servcorp on that would have between 12 and 14, and in fact, in Australia, we run over 12 people per hundred offices. So we spend the money building them, and we put the infrastructure in. We've got 200,000 extensions in the cloud.
Our IT team is about 100 strong, and Regus's got 4,000 centers, makes less than us, and they've got less than two people per 100 offices, but they've got less IT guys than we've got, and we've got 100 and heading for 140 centers. So now we've got a system, we've got a training school, you've got a discipliner. And I'm a bit of a prick, I think, sometimes because everybody looks at me as if they want me dead. But we have a discipline that says you come to work because if you're providing services to 60,000 people, across the globe, the teams that are operating the shared space have got to come to work. They've just got to be there.
And so we operate a training scheme, we've got a library, we've got all of our videos that train our people. We're now starting on our AI training courses, which will go across the globe, and they should be completed and embraced by July. So I guess I could run around the world. London made a profit last month, just. But okay, I'm going to London. Well, I'm going everywhere, actually. I started to look at my travel schedule for the next six months, a bit like a novel. But I intend to open some more centers if I can find the space I like in London. I hate the landlords, but London's a critical city to Servcorp. So it's probable. Paris just sort of washes its face. You've got to put up with the bureaucracy.
I might add, the bureaucracy in Australia doesn't help. That, that Ility, which is Marcus, my son, right? So we spent AUD 300,000, and all that I've got is an ASIC or [audio distortion]. I'm not allowed to swear. People who are investigating related party transactions. God! I didn't think I'd continue to use them, but I probably will. Greg protects me because he does it so that it's totally kosher, if that's a word we're allowed to use. So France, well, that's Brussels makes money. U.S., probable. It's got so many losses, we pay no tax there, so that's something, unless there's somebody will work out a way to tax you, even if you're just making up the losses. But they haven't yet, have they? No, they don't. Japan, runs totally the system.
It's got 2,000 competitors now, between Tokyo and Osaka. We've got 32 centers. I don't think any of them lose money. We just opened a new one in Osaka. We opened three, closed three, and then in the second half of the financial year, we'll open six, and I don't think we'll close any. I think we opened Osaka, which is profitable. We closed Chengdu, which was a bit... Anyway, France, the U.S., Japan, China still loses money. Not as much as last year, but, and I can't see too much light at the end of the tunnel. Asia, well, David's still working on that, and the Middle East, right across the Middle East, I think where it's a bit like Japan, we're profitable in every location, and we'll open probably four new ones in the Middle East. We might even add seven.
I did write them down. We'll open two in Japan, three in Saudi, and one in Australia in the next six months, and I think we've closed pretty well everything we need to close. Our EPS this year will be between AUD 0.80 and AUD 0.85, which is not bad, and over the last five years, it seems to have gone up 25% per annum compounding, which is faster than the share price. Cash is up. Oh, we did all that, 25%, and the cash went up AUD 40 million. I t's better than robbing banks, I tell you. Anybody got any questions?
Alf, let's talk a bit more about the Middle East. What are the underlying factors that are driving such strength for you in that region?
Well, basically, it's all the Middle East, but, and while you look at the, your profits in the Middle East, we've got. A lot of it comes back to management and how you train them, so that we've been in the UAE for 25 years. We've been in Japan for 30 years. This seems to take a while to get, and we've been in Saudi for 15 years. And so everybody says, "Hey, you're pretty smart. You're investing in Saudi." Well, we invested in Saudi and Iran at the same time, so it's six and one half dozen the other, I guess. So we're not geniuses.
We just got a system that works, and when they targeted Khashoggi, a lot of people that were international operators moved out in a lot of places, and a lot of businesses moved out and banks. I just had a view that every government kills somebody sometimes, so we stayed there and continued to expand. I think that if you... The ruler is great. MBS, he's great, and he has his people at heart, and in particular, the women, they can vote. No, they can't vote. It's a kingdom. Damn! Like, if there was a vote, they'd give them the vote. They can wear jeans and T-shirts, whereas before they had to be fully dressed. They can drive. They can travel without the eldest male member of the family's permission. They can bank and carry credit cards.
So you give women a driver's license and a credit card, and it creates a boom on top of the oil boom because the Saudis are now spending all their money improving their own country. And so PIF is really spending the majority of its cash in Saudi, whereas it didn't used to, and gee, that's made a difference to the economy. And I think that there is quite a substantial boom there. I think it's got between five and 10 years to run.
Do you expect that boom to attract any competition?
There's already competition there. There's a lot of competition. Look, competition comes wherever there's margins, so we should have competition in Japan and in the UAE, where the UAE is just as competitive as anywhere else in the world. They don't get it yet. I mean, a lot of the competition that we see is building owners, and then you've got your Regus, who's the major with 4,000. They've got to go back and put the infrastructure in. They've got to put everything in the cloud. They can't. It's almost impossible for them to develop the answer that Servcorp had for a long time. But it's just taken a while to get the critical mass and to be able to discipline them. If you ask me about the competition, I don't see anybody yet.
For somebody, if you put an enterprise value on Servcorp and said, if somebody decided to open in competition to us, just in the cities we're in, I would—the enterprise value would be between $1.5 billion and $2 billion, and I don't think they could do it for that. Then they'd have to make it work. But look, that makes it all sound too easy. It's not easy. You've got the currencies, you've got the competition, you've got the people that just want to shop on price. I just think that we happen, right now, to be ahead of the curve, and I think that that will probably be maintained, and we'll continue to grow at a, I don't know, about 25%, but we'll continue to grow at 5%-15% a year on a compounding basis, I think.
Just on the U.S. market, given that you're profitable over there now, are you going to go harder on expanding in the U.S. going forward?
Yes. The only reason that we closed the U.S. is we didn't manage it properly.
That's all been fixed. It's fixed now?
Well, ask me when we've opened a few more. But I intend to expand in the U.S. at a time, and we're continuing to expand in Japan and the U.K. And also, I mentioned before that we're looking at some real estate purchases because we've got the cash flow, we've got the money. And I've done the feasibilities, and I'm not going to go into the absolute detail, but it stacks up on our business model so long as we've got at least 30 centers so that we've got the marketing capacity to pay for buildings. You don't have to do too much if you buy a building to get it to work. If you use just Servcorp, so you spend $2 million.
That's me saying it's beer time. You... everybody, they have another problem. I mean, we spend AUD 2 million a month on marketing, and we're okay on the internet, and we've got a trip to sale that's pretty well set, and a web page, a landing page that seems to work. I might add that that's taken millions of AUD and lots of years to get to a point where it sort of operates. This isn't something you just do in a day. I mean, if you look at where Servcorp has come from in the last five years, you got to a critical mass, and it's just, we've just leveraged it and leveraged it up.
Anything that isn't making money, if I don't think it's value, if I think it's the market, then it's dead. If it's value, then we'll put up with it for a while, and we'll work it out. I mean, there's some things that we've still got to do. Tom, that's enough questions. You've had your three questions. Yeah, okay.
Online question from Stella Wang. "Congrats on the great results. Two questions from me. One was a U.S. question, which you've already answered. The main question is, there has been strong EBIT margin expansion in the last couple of years, particularly in Europe and Middle East. The mature floor revenue % for the group do not seem to move much in the meantime. So what's the driving margin expansion?
We closed c enters.
Was it partly due to increasing service and communication revenue?
We closed the centers.
Thank you.
Well, I guess that's a technical explanation. Now, you're not allowed to ask any more questions. Where's Susie? Where's who? Susie. I can't understand his great accent. Where did this guy come from? Well, he never made it. Do you speak Arabic? Try again. Susie. Yeah, yeah. Susie? Yeah. Oh, she's dead. So what happened to Susie was, well, that doesn't mean that we've got the concierge out in beta form. One, she had access to the LLMs so that she could answer any questions. So this chick was all things to all people, and so I've been excited about it for a while. And then, the company that produces her went over. Oh, you guys understand the technical, bankrupt.
So Susie, Susie fell out of the sky, and we wrote off against our profits about AUD 300,000-AUD 400,000, but there are lots of other avatars, and we've done a lot of work that we are using. The thing that I guess our shareholders don't realize is that we don't do anything unless we can own the source codes because we want to be the masters of our own destiny. So that using Ility, which is Marcus's company, so that's a related party transaction, we get the source code, whereas a lot of other guys are never going to give it to you, and so that if you do it, they're going to sell it to somebody else anyway.
So we get the source codes, and if you look at the Wombat, which we just looked at, we own the source codes, and we're we own them, and that development team's biggest customer in Japan. The avatar will reappear when we can get it so that a client or a person would rather ask questions verbally, whereas now it's faster to do it in text. But we're a long way down the track. I mean, you can make bookings and things, but I guess I could touch on one of the new things we're working on, which is the within the...
We've got one standard telephone system globally, and we are the only operator that has, which is all part of this thing in the cloud, and so that the IT team, it's under David Cooper, who's sitting over here, can work on any problems. The concierge, which will be generative and interactive, will be installed over time within the voicemail system so that you will be able to ask it questions, make bookings. It will run to an LLM. All of this is taking time and a lot of money, and I might add that we're expensing. We'd be capitalizing very little of it, 50. Well, we should be capitalizing some. We're probably making too much money. I won't even get into that. Once upon a time, we used to capitalize a lot of that stuff.
Now, we don't capitalize it, so if something like Susie falls out of the heavens, it's already expensed. But we're working on it, and we're expensing most of this stuff as we go, so that when we do come up with a winner, and we've got a fair few winners already, it's ours. We own it, we don't need to depreciate it, and is that right? Yeah. Look at that, I even know what I'm talking about. Maybe. Come on, three more questions.
So out of the, so you've got 47 NPBIT first half, you've only given guidance for 80-84, 47 x 2 is 90-
That's me. That, you guys—I mean—
What's-
you guys, if you guys can't multiply by two, then I give up. That's your problem.
What are the negatives likely or why, you know, I know you're very conservative, but the currency, is currency a concern?
Well-
What are the negative things?
The currency's got to be a little bit of concern, not a great concern. I mean. I don't know where Greg takes this, but I think that even though we've upgraded, we'll be to the upper end, I think. But I'd rather just roll along in my own comfort zone, building a business, rather than trying to please you guys and producing a profit next year.
I mean, Servcorp , I think it's sustainable now, but I want to build a sustainable business that continues to grow at its own pace, and we put a bit of real estate under it, so that because that just makes it a massive difference if you pick pieces of real estate conservatively, and that doesn't mean that I intend to drop the dividend. I don't. Last question. Nope. Going, going, thank you, guys.