Kelly Partners Group Holdings Limited (KPG) Earnings Call Transcript

[Audio Gap] our Chief Financial Officer, Kenneth Ko. We've had a tremendous enrollment of people for this call today, which we're very grateful for. And to those who are here on time, we'll just get moving now I can see more people coming in. But I want to start by acknowledging the quality of our teams. We have tremendous people in the business led by very, very capable leaders who have made long-term commitments to the business. And it is really that leadership that makes so much difference within the system. And so I want to start by acknowledging those more than 100 partners as leaders really leading from the bottom up, our incredible people to deliver our 20th year of results that I think can only be described over that period as extraordinary. We started in June 2006 with AUD 200,000 of billings. And this year, you can see that our revenue is AUD 159 million as a group, which is 800x the revenue that we started with. And while when we started, we did have an intention to make an impact to improve the quality of opportunities available for people within accounting firms and in the accounting industry. And we were ambitious on day 1 to take that number to -- I remember us hoping that by year 10, our plan was we'd have $50 million of revenue. We are continually grateful for the quality of the people, clients and communities that are part of the ecosystem of our business. And every day, the business becomes, frankly, more fun and the difference it's making to people is more obvious after this period of time, and that's very, very gratifying. So as we like to say in one page, you can see across the top there, the team has got over 700 people. Average revenue per person remains very high by industry standards anywhere over AUD 220,000 per person in billings, it's 105 partners, 43 businesses in 6 countries, $159 million of revenue. Current run rate is about $164 million. The shares on issue, 45.2 million are still below the 45.5 million shares that were on issue at IPO. And that revenue today, revenue at IPO was forecast to be about AUD 30 million, and we haven't increased the share count since IPO, which I think shows the discipline of the model and the team. Free cash flow per share is $0.221 and is up 17.5%. Our return on invested capital at 23.2% remains very high. Organic growth, 2.9%, we're pleased with and our ROIC plus organic growth is 26.1%. And so from a numbers perspective, they're a good set of numbers. On Page 3, Kenny, if we can whip through this, 20 years of growth. The business has doubled 6 times in a row, and we've tried to lay that out here for new and long-term investors. But the point here is that Kelly Partners Group Holdings operates a business system and that system is in the habit of doubling itself consistently. When I moved here with my family of 5 in January 2023, our trailing revenue was AUD 64.9 million. And this year, that revenue is AUD 160 million. You see in that period, again, the business has doubled. As it's now done, that's the sixth time, which is great. On Page 4, the book value of the business has compounded at 34.3% CAGR for 20 years and particularly pleased with that, and that was a goal of mine from day dot to compound that book value of 30% or more annually and it was a quiet goal, and I'm very pleased to be able to sign off on that. 20-year track record that I regard as a really interesting investment track record. Because when we started, accounting firms were not regarded as even businesses let alone as investable businesses and the industry itself was just not considered investable, which is very interesting. On Page 5, Ken has done a huge amount of work. We are consistently asked questions by people confused by our structure and the accounting conventions that standards mandate. And we've tried to be very clear here, and I want to thank Ken, our CFO, for the effort that he's made to again try and make this clearer. Our Partner-Owner-Driver model means that the HoldCo owns typically a 50.01% or more interest in a local accounting firm. And often, I get some people on Twitter who are confused by the accounting. And I don't think they're confused. I think they've just spoken before they've taken the time to look carefully at the accounts. I think as a group, we've done the best now we can to make our business as understandable to a quality shareholder with some insight who can sit down and have a good look at the business. So that's laid out there, and I'll get Ken in the financial section come back and take you through that carefully. Page 6, and this -- all of this presentation was published this morning on the ASX. You've got statutory versus underlying NPATA and EPS. And you can see the consistent growth in the business over a long period of time. Page 7, some financial highlights for you. Underlying EBITDA is $17.9 million. Underlying NPATA, $10.8 million, up 18%. NPATA, $8.4 million, up 18%. Balance sheet remains very, very strong with a very high cash conversion and owners earnings of $10 million. And our returns 35.7% on equity, up from 31.9% last year. I think those numbers -- the value -- the business is trading at an EV to EBITDA multiple of 12.6x, which doesn't appear to be excessive and earnings per share on an underlying NPATA basis are up 18%. On Page 8, some common misperceptions. We've published this. We get asked many, many questions every day, and we try not to do one-on-ones with investors. We really try to hold to these types of meetings twice a year so that nobody really has an information advantage. And if anyone asked these questions, we'll often publish them in a quality shareholders' letter or to Twitter or in an ASX announcement as is appropriate. But these are some of the questions that we get asked. And often, I do think they're by people that haven't understood our model because they haven't perhaps taken enough time to really look at the materials. Now often, I get the other criticism that we provide too much information about the company. We're now at a point where there's more than 20 quality shareholders' newsletters, 9 years as a public company accounts published and results presentations. I must have done 30 podcasts or so and plenty of interviews. And our team have done a great job on our website of publishing an AI engine that will allow you to search much of that information. And so we are getting to a point where saying much more than we've said about our model and how we generate the returns we do. We don't really believe at a point is in the interest of the business. I'm not that interested in sharing any of our trade secrets as interest in this sector continues to grow. And so you'll see a posture from us of less sharing of the operational and other insights of the business because we do think we've done our best to, at this point, make clear what the business is, how it operates and to some degree, how it generates the returns it does. On Page 9, one of the very, very exciting things about the business today is that the business now never sleeps. It's trading 24 hours a day, 7 days a week, which gives us this opportunity to take a flywheel and not -- even 5 years ago, our flywheel was certainly in operation, but it was really only in operation 10, maybe 12 hours a day, let's say, certainly for a good 8-hour workday, Ken is in Hong Kong and has been for 10 years. So we've extended it a little bit. And Ken works a lot as, does his team. So yes, it was a little bit more than 8 hours a day. But today, genuinely, I'm very pleased that our business is a global business, and it is operating 24 hours a day, most days a week, hopefully not on some days and is compounding and that flywheel is being established and is starting to turn. Now I don't know that I've got a good photo, Ken, but you might find it and pop it up at the end of our presentation when we take some questions. But -- our signage officially went up today on the new office in Dublin, in Ireland. And so our partners in Wexford have opened the office in Dublin. And that's a 20-year vision for Stefan and his father who built that firm over 55 years in Wexford. And I'm very, very excited about the opportunity that will come from that, which is just another fantastic thing that's going on. So you'll see us talk a little bit today about the next stage for the business. And I'm confident that today, our revenues outside Australia are at or above what they were at the time that we IPO-ed the business in 2017. And while they're not as profitable as we would like them to be in the U.S., we're certainly beyond benchmark in Ireland. And there's really no reason that we won't close the gap on those earnings over time and very dramatically grow this business, which is particularly exciting. So on Page 11, many years ago, for people that are new to the group, I used to sit with investors who weren't that interested in the sector, let alone Kelly Partners and they'd say, "Can you just give me the story in 10 seconds." So this is KPG in 10 seconds. This is where this slide comes from. Lots of green dials, basically, revenue up 18%, margins are very strong. Parent NPATA, very pleased with. Returns on equity at 40%. I don't think anyone can be too upset about that, 38.8% on the underlying group NPATA. Gearing at 1.52x net debt to EBITDA, I think, is very moderate. I saw a large competitor backed -- PE-backed competitor recently here in the U.S., 6.5x net debt to EBITDA seems to be very common, which is not Kelly Partners. And to emphasize, we can fund in the manner that we have the type of growth that we have for decades at these levels of gearing at 2.5x or less. Cash flow is up 20% to $32.4 million and our cash conversion is -- I think our teams are doing an exceptional job there. Our people remain very, very effective, as you'll see with revenue per FTE and our group operating cash flow at 47.9% is a slight tougher number we're happy to see. So tons of graphs on Page 12 and 13, which I'll leave for you to admire and not me that these are our teams just epic efforts and on a consistent 20-year basis. And I really want to emphasize that, Ken and I have the pleasure of presenting these results, but this is 100 partners, 700 people who every day turn up for their teams and their clients and make a difference in their local communities, and I could not be more proud of them. On Page 14, this is a slide you've seen before, but Stage 5 of what we're doing is really this is what we've built in Australia. Can we now take this business global over these next 5 years. And the answer, I think, is yes. But we'll be doing that with our partners as we always have. So it's not a sort of HoldCo operation. It's a 51-49 with our partners. And at $134.6 million in '25, we're on our way to try and double that again because 7 is a lucky number and 7 doubles would be excellent. And so that's what we're on about. The revenue CAGR remains very, very strong. I might leave the rest of these slides for you to review in your own time, but I think much of it you've heard from me before and then really hand over to you, Ken, on the financials and then take some questions.

Okay. Awesome. Thanks, Brett. And great to see everyone again and have the opportunity to present the financial results for 2026. This slide, we publish every year for the group, and it has the consolidated metrics as well as the attributed metrics for the parent. As Brett alluded to earlier, we've had investors ask us about just focusing on the attributed measures. And that's why we presented the Slide 5 in the presentation that is a one pager on just the parent attributable economics and metrics. So going forward, if you're after group and parent measures, look at this old slide. If you're just after -- all you want to see is parent attributable economics, then look at that new slide that we published. I won't go through this slide in much detail because a lot of the metrics and measures are covered in the later slides. So on the P&L, revenue of $159.2 million, an increase of 18.2% on the prior year, driven both by organic revenue growth of 2.9% and acquired growth of 15.3%. I just want to highlight here that if we exclude the effects of consolidating offices that we did during the year and exiting unprofitable clients, our organic growth was 4.5%. On the right there, operating EBITDA margins of our operating businesses was 28.4%. Our Australian businesses achieved 31.9%, which is a very strong result. And on the right here, you'll see that revenue has grown 18.2%. Our operating expenses have increased in line with that. Our underlying EBITDA has increased in line with that. And I'll leave the rest for you to look at. At the very bottom of that table, underlying NPATA to shareholders of $10.8 million, up 18.9% on prior year. In terms of the balance sheet, 1.52x is our leverage ratio as at 30th of June 2026. The group return on equity of $40.8 million (sic) [ 40.8% ], parent return on equity of 35.7%. If we look on the right there, lockup days, which is something we like to measure regularly because it gives an indication on how well we are managing our working capital is very strong at 52.8 days, which comprises of 8 WIP days and 45 debtor days. On the summary of the balance sheet there at the bottom, you'll see our total assets of $229.9 million, having increased because essentially of the acquisitions that we completed during the year. On the next slide, in terms of our debt and liquidity, we had as of 30th of June, $89.4 million of facility limits, of which we drew $74.7 million of drawn debt and $70.7 million of net debt, leaving us with $18.6 million of cash and headroom, representing 25% of the gross debt drawn. I just want to highlight there on the right because we have had, again, some investors and shareholders misunderstand, they think that the consolidated debt is all debt relating to parent, and that's not the case. This table, which we publish every period shows that where the debt actually sits. So in terms of the $74.7 million of total debt in the group, $28.5 million sits in the parent's balance sheet and $46.3 million of the debt sits in operating businesses balance sheet. So I just want to make that clear to everyone to see that. And as we said before, the group gearing increased to 1.52x EBITDA from 1.42x in the prior year due to the debt that's been taken out to complete the 6 acquisitions during the year. This is a new slide that we have put in this year. Again, we have had feedback from shareholders. We used to publish and we still do in the appendix a slide called net debt per partner. We think that this is obviously a much better way to look at the debt situation or the leverage of the group. And here, I've presented since IPO, all of our debt-to-EBITDA metrics for the last 8 years. And you'll see that I've put different calculations, net debt to underlying EBITDA, net debt to underlying EBITDA after you take out rent expense, net debt to statutory EBITDA, if you reduce rent expense and you don't add back the nonrecurring items, what would it look like? And if you look at the history of the business, we have never exceeded 2x EBITDA in the last 8 years, which demonstrates the disciplined approach in us repaying the debt. And as Brett said just now, we come across examples in our competitors, that has much higher leverage than what we have. So we think this is very moderate. I also note here at the bottom left of this slide, we often also get asked why we don't include contingent consideration as debt. So contingent consideration is the deferred component of the purchase price when we make acquisitions, and that's because we pay this through saved operating cash flow. We actually don't borrow again to pay for this. We set aside cash flows in our businesses to pay for those contingent consideration. And that's why we don't count it in the leverage ratio. In terms of the cash flow, very strong. As you can see there, $32.4 million of cash from operations, up 30.1% from the prior year. If you take out the scheduled debt reductions of $13.1 million, you get to a free cash flow to the consolidated group of $18.4 million, which has grown 50.5% on the prior year. You will see that during the year, we drew debt of $23.1 million, and we used that primarily to complete the 6 acquisitions during the year of $20.5 million, and we also did fit-outs on 3 of our offices of $3.5 million. Again, $13.1 million of scheduled debt reductions. We think that is a very disciplined approach in repaying down the debt, and we're very pleased about that. And then the parent NCI waterfall, which we have presented since the previous year showing how we get from the 51% to 49% share of the net profit before tax to the statutory split, which is affected by parent taxes, interest on parent debt, depreciation, additional investments and nonrecurring expenses. I might just go quickly before I hand back to Brett, just to those -- to the parent attributable slide on Slide 5 and just explain quickly what I've done here. As I said, this is a one page that shows all the economics of the parent. Previously, all of these metrics are available in the slides just in different sections, but we've put it now together in one slide for everyone to refer to. You will see there on the top how the consolidated revenue and EBITDA per the statutory accounts and how we then kind of do a waterfall to show how that then the parent gets a share of the operating business underlying EBITDA. It spends the additional investments, it spends on interest, depreciation, income tax to arrive at the underlying NPATA. And on the right there, you'll see some parent specific measures, balance sheet return and valuation metrics that I think will be helpful to everyone. So with that, I would like to hand back to Brett. Thank you. Brett? You're on mute, Brett, sorry.

Thanks, Kenny. Just for everyone that's attending today, we have a Q&A service where you can put in a question, and we can do our best to try and answer that question. And so we'll give you a moment to do that. General comments are that the business is in a really tremendous place. We have a settled business model, and we are in a market where there's probably never been more acceptance of what we're doing as a good place to invest. There are -- we have had a strange year of people being worried by AI, but I do believe that there's a more sophisticated and nuanced understanding of the potential of that technology for our business coming through. We believe that we've got a very strongly differentiated understanding and deployment in that space that will create tremendous value for the business to such a degree that we won't say much about what we're doing or how we intend to use that technology to make our shareholders better off, but we feel very comfortable that that's just a massive, massive opportunity. And I think I've said enough in various presentations over the last 12 months to give people some comfort that we're aware that AI is a thing, and we might have some ideas as to how to create some value from it. I have written a shareholders' letter for our quality shareholders today that I hope you find helpful. And I want to acknowledge that the last 12 months, share price performance has been very distressing for many people, including myself that owns shares and quite a few of them in the business, although we do take a decades-long view of the business. And so we -- while I do find the gyrations of the share price annoying, I accept that, that's the mood of the market. And to some degree, that's just one of the things that you accept when you run a public company. Other than that, the business is very much in posture to aggressively grow from here. We've mentioned in our presentation that there are 3 things that we're working on, and we're working -- we've been working on them for a couple of years. We've really invested a fair bit of capital and certainly a huge amount of time to really move the business now onto a global footing. And those things are to continue to investigate and at some point, execute a listing on an international exchange to secure long-dated debt funding in the style of Constellation's 15-year debentures. And to implement a dual class structure for long-term governance of the business. So those 3 things we think will add huge capability to the businesses opportunities to grow. And that growth is really about taking our unique Partner-Owner-Driver model into markets where there is real demand, not least a few in the U.S. We think that our model very much sits between private equity buy 100% and grow you into a big monster and try to swim by yourself at an increasingly older range against a market that really is on the move. Our model is tremendously unique and differentiated with a 2-decade track record that I think is without peer, frankly, in the industry globally. And I think that's probably become quite well known. So there's good acquisition pipeline, and there's real deep opportunity for the business. Now Kenny, I can't see any questions there, whether they're published. Here we go.

They are in the comment section, Brett.

Focusing on SME clients, do we see the risk that your customer gets acquired and losing that customer? It's true that from time to time, clients companies do get acquired. I'm pleased to say that we often keep them as clients, but it's very marginal at best as a risk to the business, and it's been that way for a couple of decades. Number two, you are still working on the new structure and the financing of the company and mentioned that it takes a long time. Could you be more specific? For the deal we look to close in Cyprus, we were pleased that we were able to attract from the Bank of Greece funding that duplicated what we've done in Australia. We've duplicated the arrangements that we have in Australia in Ireland, and we're confident we could do that in those places. We are working with Westpac on how we structure long-term for global growth, and we think that a 15-year debenture at HeadCo would do the best job of that, but executing that is not without its challenges. So we continue to work on that together and Westpac have been a long and excellent partner of the business. And then there's a third question, the partnership in Cyprus that we look to buy in that deal didn't go through as the company suddenly asked for more money. That's true. Did we have to pay any fee for walking away? No. We didn't have a break fee because we had a binding term sheet. And when the vendor asked for a lot more money at the end, we just said no. Deals that don't start well, seldom end well. And so we're very careful at this point. We've got a huge amount of internal opportunity, and we've got a lot of incoming partnership opportunity. And we're really continually trying to raise our standards as to the quality of the people and partnerships would bring into the business because when deals get difficult, they do absorb a lot of time and they don't create additional value for that time. So they're the answers to those 3 questions. I've got a bunch of people with us. Have we got any questions?

Brett, there's more in the review section in the Q&A.

Sorry. Had them in the published bit, great. Group investment went to 3.1% of revenue, the highest level for 5 years. Where do you think the right level is for the business? And what are some of the investments being made and expected benefits returns for the business? It's true that our additional revenue at the group level is the highest it has been in 5 years, but a careful look at what the pattern of that is over the last 20 years is frankly more relevant. We are duplicating all of the capabilities to a great degree that we've got in Australia and on a global basis. And so that has been seconding team members in here, investing in infrastructure, technology and teams. And I think short of 1 or 2 people, we've probably got full capacity now that Australia has in the U.S. across Hong Kong and into the U.K. So we feel pretty good about that. If we've been public the first 10 years of Kelly Partners, it would have looked like this. In fact, that's -- that number would have been about 4%, could have been up to 5%. I think when we started services, it was between 12% and 14% of revenue. And post IPO, we committed to the partners, we would keep it at 9%, and we would pay the difference at the HoldCo level. So I feel really comfortable in that. It's a capital allocation decision. It's taking internal profits and essentially directing them to internal growth. And any serious study the book "The Outsiders," will -- an analysis of our business would show that our best returns are from additional partnerships, and next best returns are from internal investments of these very, very high ROICs. Brett, I appreciate if you can talk about the recent dilution in your shareholding down to 31%. Chinmoy, I really took the position in a situation where there was a massive fire in L.A. and I said this to our shareholders at Berkshire catch-up in Omaha and again in London recently. There was a big fire in the middle of L.A. We're living in Malibu, and I needed to relocate our family to the other side of that fire. My wife has a serious heart condition. And Beck had said to me for years that the stress of the gyrating share price does affect her much more than it does me. And I committed over time that, as I had said publicly in 4 versions of the owner's manual that I would look to have a Warren Buffett style 35% shareholding. So I took on some margin loans because when I needed to buy a new house, I couldn't get a term loan. I couldn't sell a bunch of stock. I approached Morgans who've been our bank for the IPO and they were going to sell some stock for me, but it came up short a few days later after being quite confident that they can sell the stock. And so in an emergency, I entered into facilities that I thought confident it was unlikely to see a 50% decline in our share price in the period given the results you've just seen, the market has moved in a different direction to our business. It was simply a bet I took as a shareholder in a business that was founded by my wife and I, on the bet that I could take the $200,000 of personal billings I had and turn it into something. So most of our bets have gone okay. This one has gone strongly against me. I thought that our shareholder base was less likely than the market to react to broad AI fears. And I would say to our long-standing quality shareholders, many of whom have smaller holdings that we did have a couple of larger shareholders in February sell down pretty aggressively, one in particular across all of their portfolio. And that seem to have spooked the market. So I've paid a real price for that, but we have diversified our family's financial position, which is good for my wife and kids, and we've been able to move homes in an emergency. It's not the way I would have liked to achieve that outcome, but it was the only option available after very exhaustive inquiries by me over a period of time. I've held a significant shareholding in the business for 20 years. At IPO, I had 65 personal guarantees and Westpac released their charge on my family's trust in about January, February this year, which held our entire stake in the group. And so I think my wife and I have taken on a fair amount of responsibility for a long time. And I don't think in that period, I've been overpaid either. So it's generated a lot of commentary. I think a lot of the commentary is what it is. I won't say much more than that, but I feel very confident as the largest shareholder in the group to continue to be the largest shareholder in the group. There's a fair amount of commentary around funding sources, given the low debt to EBITDA doesn't seem like it's limiting your near-term growth. That's true. What's the thinking behind the long-term debt funding? Long-term debt funding at the HoldCo would allow us to grow very dramatically outside Australia. It's difficult to get an individual banking situation in each country to do what might be, at least in the first instance, smaller 1, 2, 3, 4, 5 deals. So Constellation software is the best example. They're in over 100 countries. They can move very quickly and give certainty to people about joining their group. We bought a 51% interest in Kudos Network, and it has got 60 firms in 48 countries. Many of those are smaller firms, smaller countries would be harder to finance. And certainly, Westpac couldn't do them under our current arrangements. And they've been a tremendous partner in helping us grow this initial global foundational footprint. So that's the thinking. But again, we're thinking decades out, trying to get the structure right and the funding structure right now so that we can do as we've done in the current business, just continue to get that flywheel moving and keep it moving on the same basis. Can you please give any updates on acquisitions or partnerships and what you're seeing on the ground? We're seeing a huge amount of activity as always. We feel unanxious about doing much. I think we did 6 or 7 deals in the first 6 months of the year, Ken, up to the end of January. The share price fell 70%, Ken. So maybe if we do less, share price will get closer to intrinsic value. Who knows? There is -- we'll just continue to do what we've always done, and that's not be desperate to do a deal that doesn't make sense. But there's a huge amount of activity in the market, and we'll always get out there this year. We're pretty confident. Any update on listing in U.S., Canada markets? I can't say much more because there are real laws about that commentary. But we are -- I have visited and shared openly online that I've been to the London Stock Exchange twice. I've been to Toronto Stock Exchange. We've been to New York Stock Exchange and NASDAQ. You can see disclosures in the accounts for the last more than 2 years of some millions of dollars spent on that effort to investigate the right venue long-term for the business and spent some money with lawyers to work on structure and other good things. So we are on the move there. Shed some light on the number of acquisitions slowed down. That's not my position. Just look back 20 years, there's a really clear graph of when we've been able to find good partnerships to join the business. And it's got to be the right people, right values and the right terms, right price, et cetera. And a lot has to come together to do to do the right type of a partnership deal. So feel pretty relaxed about that. At what company performance would you reinstate dividends? Great question. Probably none, Lynn. If we ran out of places to earn the sorts of ROICs that we're generating, then we might sell the company as opposed to pay dividends, Ken. But while ever our returns are miles beyond our weighted average cost of capital, then there's no plan to pay dividends at any point. Should there be a change of listing venue, it's quite likely that we would fund out the very large franking credit balance that we have -- and if we were to do that, that would go out as a special dividend. But that's the only thought I've had of line of dividends. I don't mind the idea of having a base level dividend like Constellation has had, but the opportunities to grow have been so substantial over the last 5 years that we have thought that internally funding that was better for all shareholders than paying dividends. You made a comment in the presentation earlier, U.S. is not as profitable as you would like. Is that because the inherent economics are lower or it's taking longer to get to maturity than compared to Aussie? I think that profitability probably looks a lot like Australia did in the early years. We need a consistent effort into those businesses. And it just takes time to build a relationship and we've just completed a new office in Woodland Hills, which is amazing, and that will change everything about that business. We're building a new office for our large Florida firm that will be finished by 1 January. Again, that will dramatically impact that business. And it's just a step-by-step process that you can do in 6 weeks, but often when you don't have the relationships that we would in Australia, it might take 18 months to 2 years. Again, we feel unanxious about that because we can see clearly in the P&L where the opportunity is. And we actually think that that's an understanding that isn't in this market generally. So we actually see a very, very big opportunity in this market as a result of sorts of margins that we're seeing in firms that we look to bring into the group. That's actually quite an interesting opportunity. And that might be the last question that's in that list. How do you intend to scale the acquisition engine in the event that you're able to raise some debt? It's a great question, Patrick. It would be a matter of scaling the teams in various markets. And so we really like businesses like McDonald's who have sort of 5 global markets. I can see us having teams in each of those markets. So North America, U.K., Australia, Pacific, potentially into Asia and Africa and Middle East, so Middle East and Africa and Asia. And this is a 20-year view rather than a 20-minute view, but there's no question we could scale teams into those places and grow those businesses dramatically. We're getting a lot of inbound from private equity groups who have bought into groups and now have had 10 firms and are like what do we do with this thing. There's not an obvious public market exit and a lot of these groups are not obvious targets for the very, very large consolidators. So when I started, I was excellent and became excellent at getting an individual client or person that own an excellent business to come across to the business. And then I saw the opportunity in just bringing an entire firm into the group, which was just more efficient. Frankly, it took the same amount of time. What I see today is this whole groups that have been consolidated, multi-location businesses that are like, well, where do we go? We don't really want to go to a big private equity group and we're sort of too big to be small, but too small to be massive. And so where can we go? And what I'm trying to set us up for is to be the consolidator of those consolidators. There's a global posture, the listed HoldCo that can bring many of those groups into the business. I don't want to say too much more than that. It's a different thing to a degree to what we've been doing. But I think we'll see that come to shape over the next 5 years and I think in quite an exciting way. If you could share your thoughts about long-term debenture. If we could bring that together, we can do that as a rights issue to existing shareholders if there's appetite, and that would be the best way to give a shareholder a dividend-like return. So Mark Leonard at Constellation designed a 15-year debenture with inflation plus 6.5% and the total return was basically designed to mimic the 30-year historical return of equities on the Toronto Stock Exchange. So we are contemplating and have designed an instrument that would allow shareholders to get a dividend-like return, income like return from a business that they understand that would also strengthen our ability to grow the equity value of their equity investment. And for anyone deeply curious about that, study what Constellation have done and how they've done it and imagine what KPG would look like if we can make that happen. I'm also curious about your thoughts on any buyback. there isn't the capital in the business today to do a meaningful buyback. And should we go to the market as we have, as you can imagine, over the last number of months, looking for that alternative capital, typically debt to fund a very large buyback. Those debt providers then typically start to try and encourage us to take the entire business private. And we keep the conversation that, no, give us a very large debt facility at the right prices, so we can buy a meaningful amount of stock back. It doesn't really move the dial if we buy $5 million worth of stock back. But if we had the capital, we would buy a very, very large chunk of this business back and cancel those shares. And we have a very strong preference to be a public company. So we intend to scale the acquisition engine in the event that you're able to raise. So there's a question as to has the acquisition engine been unable to scale so far? No, I wouldn't suggest that. I think a 2-decade 30% revenue CAGR performance is without essentially issuing additional shares is probably okay. And if you throw that performance on for another 20 years, as a shareholder and you hang around long enough, you might be pretty happy with what happens. Is AI giving any noticeable benefits? What I'll say to that is very strongly, yes. But what I won't do is tell you how or why or anything else. I'll let the other accountants try and work that out. And what we're not going to do from this point is run the sort of education service for other firms in our industry and other consolidators. How is the acquisition price in the U.S.A. affected by competition from private equity? I must say there really isn't any impact on the part of the market that we are looking at. There's a real sort of bifurcation private equity into very large firms. And there are some sort of now popping up sort of AI-led HoldCo consolidator style dot-com favored things that might want to buy small things. It's not affecting us. We have very much a proprietary deal flow line of 20 years where people know who we are. They know what we stand for, the difference that we can make, and we've got a proven track record and dozens and dozens of people that have partnered with us who can stand behind what we say that we will do with you in your business. So I think we're in a very, very unique place. This is permanent capital relationship-based with decade-long view versus flighted PE capital with a transactional emphasis with a 3- to 5-minute attention span, in and out in 3 to 5 years. So I feel very, very confident that we're in an extremely strong position at this point. And I can't -- I must say I haven't been involved in the business at a time when the business was stronger. And so that I'm very, very excited about where we are. Has the equity raise made through partners $11 and change led to any morale problems with the partners who bought at that price and subsequently saw the price drop $0.60? Frankly, that's -- it's been a good education for our partners. I think I owned our equity for many years. And during COVID, we saw 60%, 70% price drops. During COVID, our share price dropped to $0.60. We issued at $1. There was never going to be a situation where any government contemplated not collecting tax even for a second. And so I'm very confident that the intrinsic value of the business is the focus of our partners. They've all made typically 10-year commitments to the business. And when they bought into the business, I explained to them buying into the business with a 20-year view, and I think you'll do okay. So I'm not concerned about that at all. If you're a short-term person, our firm and our stock is not a place for you. What are your thoughts on recent acquisition of CBIZ by Grant Thornton at current depressed price? Do you see KPG as a potential acquisition target? I think that CBIZ acquisition is instructive. I think it leaves a hole for our type of business to be listed on a U.S. exchange or a Toronto Exchange or a London Exchange. There's billions of dollars worth of invested capital in that business is going to be looking for a home and our returns have always been 3x on any major metric -- 3x better on any major metric than CBIZ's. So I think it's great that CBIZ has been or will go private with Grant Thornton. And I think that that frankly just presents an enormous opportunity for our business. I think our business today is by far the best performing publicly traded accounting group in the world. If you look at 10 years, what do you think is the biggest constraint on KPG becoming a much larger business available acquisition target partner group capital? If we can get the structure right, Warren Buffett, I think, wrote the best one page letter ever in the history of business when he wrote about Charlie Munger on his death and said Munger's contribution to Berkshire was the architecture of Berkshire. If we can duplicate that architecture to set us up to be able to compound for many decades from here, then I think I feel very, very excited about the future of the business. So structure kind of is everything. We've got a very settled strategy. And after structure, it's availability of flexible capital on the right terms, that's very long dated. Do you need to change the stock market listing venue in order to raise the debenture debt? We thought we did. We're getting some feedback that that might not be the case. And we are working with Stifel in Canada on that matter, and we can publicly share that. So we'll tell you more when we've got more news. From Brendan Harrington. Brendan, great to see you. Brett and Ken, I hope you are both very well. Congratulations on 20 years, a phenomenal personal achievement. Phenomenal achievement in and of itself. So to do in a patient, principled and platform-building way of KPG, is something you should be especially proud of. Can you please speak more of the rationale and performance to date of the WrkPod acquisition? Yes. The WrkPod acquisition is sort of sleeper business based in the Philippines, more than 1,000 seats that we are now -- we are using I'll say a little bit more. It's a very, very good question, Brendan. So we did a shareholders meeting in London. We had 35 investors there, including -- and I won't mention who it was, but a gentleman came up to me and said, "Look, I run the family office of this family. We have more than GBP 20 million investable capital in our HoldCo. I saw you speak in Sweden at the Serial Acquirers Conference earlier in the year, and I wanted to ask you one question." And he wanted to do that privately, so we did it before the meeting. He said, "Will you take your Partner-Owner-Driver model over time and apply it to other verticals?" And I said, "Well, look, Warren Buffett and Bill Gates when asked what's the #1 thing you can do in business, answered simultaneously focus. So we will stay focused on the accounting sector." But at the same time, when WrkPod came along that can provide team members to our firms and to our 25,000 clients, the alignment and the fact that it was -- that has been built from scratch by one of our clients. So the values alignment and the business alignment was so strong. I saw this as an opportunity to apply our Partner-Owner-Driver model in this niche. Now what we're doing under that effectively WrkPod, HoldCo is identifying niches where we can build these types of virtual teams that gym operators need, health care operators need, and I won't spend any more than that. But there's a dozen niches that we've identified that really need excellent people. And what WrkPod does is it doesn't just find random people. It actually finds great people and then train them, documents the systems of the business looking to work with them and then it trains those people. So Brendan, what the opportunity there is, is to take that from 1,000 seats to 10,000 seats. And based on today's market cap, that business would be more valuable than KPG if we can execute that plan and by a significant number. Now I believe KPG will continue to grow. I think today's market cap just doesn't matter. It doesn't reflect the intrinsic value of the business. But I want everyone to be aware that we believe that the #1 asset of KPG is our Partner-Owner-Driver model that we invented, designed and refined over nearly 100 partnerships and transactions all apart. And so as we find partners that want to take that model and really apply it with our expertise in coaching and guidance, I'm very, very keen to scale the use of that intellectual property across those vehicles. Now longer-term shareholders will know that we attempted to do that in Texas here in the United States as a startup in the accounting industry, and we didn't have a partner that was able to execute and it wasn't all his fault, it wasn't all our fault and all of that. But one of the insights was that if we had somebody who had an established decent sized business and was more closely aligned in various ways, then we thought that might actually work very, very well. So I'd just say that WrkPod is performing very well, and I believe we'll continue to outperformance sector and be a very, very valuable contributor to our business, contributor to our clients' business and our set of the group. Another question, Jim, what are your observations post partnership with Hello AI on AI adoption and embedment by KPG? We are doing well with the initiatives that we are running in the AI space. I would point you and everyone to Jim Collins' amazing book "Good to Great." He has a 6-part framework, and it talks about great leadership, great people, great thinking and then great execution, discipline. And the last step is technology as an enabler. What -- whether it's a dot-com boom or now in AI, it's very easy to turn that framework, and I'm seeing it in our industry to rather than start here to start here and say, AI will save me, AI will make me better. AI is going to be awesome, which it is awesome. But it's a technology and in a change program that Collins described and the flywheel that results from it, it has to happen in the right place at the right time. And the way to think about it, in my view, is if we go and get the latest and greatest machine gun and we give it to 6-year-olds who aren't trained or even 36-year-olds that aren't disciplined, then the return on that machine is going to be very low, you've got to have great leaders of excellent soldiers with the right thinking, right strategy, right structure. And then that disciplined force needs to take that technology, whatever it is into the theater of war, if you like. So that's the way we think. And if you get that right, you get this flywheel. The reason I'm so confident about our business' ability to extract enormous value from any technology and in particular, from AI is that we all operate on a consistent technology network, which is very, very unusual across accounting firms anywhere in the world. We have at least 80% commonality in our software stack which again is very, very unusual across any accounting groups that you'll see anywhere near our size. And that's because we have a 51-49 ownership situation where the HoldCo has control of certain things. And one of those things is that the IT network and the software stack, and it's always been like that. And we've always done the work to do that change program to do that actual hard yards of operational efforts. And it is very, very hard work. It's much easier to buy something than to fix it. And then because of the alignment created by our Partner-Owner-Driver model, we've got leaders and soldiers who are more like the SAS or SEAL teams than general armies. Most firms our size have huge audit practices. Our audit practice is less than 5% of revenue. So they have masses of people, and they don't have a 51-49 structure where there's any agreement on real governance, let alone who's responsible for what. And so our ability to move and move fast and implement technology, whatever that technology is, is miles in advance in the average group. Now when private equity come in and think that they have power because they bought 100%, in professional services, just because you own 100%, it doesn't mean you have 100% of the hearts and minds. We have more than 100 partners who, on average, have signed agreements that say they're committed to the group for at least 10 years. That's 1,000 years of people commitment to our business. That's unheard of. And it's that commitment when s*** gets hard, which change, in particular around technology adoption is very hard. When it gets hard, it's that commitment from the leadership and the fantastic people in the group that drives change through the business. So we are not a top-down organization. We have services from the bottom up with unusual alignment and partners who are driving this change who are saying, Brett, how can we go faster? How do we do this? We want to use that. Our services team serves those people. And the dynamic and frankly, the high-performance culture that that has built in the team is unbelievably exciting. So I get most excited by the quality of our people, their alignment, their commitment to what we're doing, and that's a commitment to their people and our clients and communities. And so it's that area that I'm excited about. Now I'm holding myself back giving you anything specific that we're doing. But I've said enough, if you go and you look at our -- my presentation in Sweden in March, which is the most I'm ever going to say about it, and you use your AI to look at everything I've ever said on any podcast or anywhere else and ask me the questions, you'll have a very good conversation with me based on what we've already shared. And I hope that makes some sense. What you will see is our continual strength of billings per person and revenue growth, which tells you a little bit. Ken, did I leave anything out, my friend? If you've got anything you'd like to share? And certainly, to answer any other questions, we're right here. I've got time. I'm in Los Angeles today at 6:04 p.m. So I have nowhere to, sort of, rush off to a particular, other than dinner at 7:00. So I do have a bit of time for people.

There's a few more questions, Brett, in the review.