Q4 2026 Kelly Partners Group Holdings Ltd Earnings Call

August 12, 2026

Speaker #1: As grip holdings, financial year 2026 results call. My name is Brett Kelly, the founder and CEO, and I'm joined by our Chief Financial Officer, Kenneth Ko.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: We've 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.

Speaker #1: We started in June 2006 with 200,000 Australian dollars of billings, and this year you can see that our revenue is 159 million Australian dollars as a group, which is 800 times the revenue that we started with.

Speaker #1: 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, you know, we're continually grateful for the quality of the people, clients, and communities that are part of the ecosystem of our business.

Speaker #1: 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.

Speaker #1: So as we like to say in one page, you can see across the top there the team's got over 700 people, average revenue per person remains very high by industry standards, anywhere over 220,000 Australian dollars per person in billings.

Speaker #1: It's 105 partners, 43 businesses in 6 countries, 159 million dollars of revenue, current run rate's about 164 million. The shares on issue, 45.2 million.

Speaker #1: I 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 30 million Australian dollars, and we have an increase in share count since IPO, which I think shows the discipline of the model and the team.

Speaker #1: Free cash flow per share is 22.1 cents, 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%.

Speaker #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.

Speaker #1: 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.

Speaker #1: When I moved here with my family of 5 in January 2023, our trailing revenue was 64.9 million Australian dollars, and this year that revenue's 160 million.

Speaker #1: You see in that period again the business has doubled. As it's now done, you know, that's the 6th time. Which is great. On page 4, the book value of the business is compound at 34.3%, CAGR for 20 years, and particularly pleased with that.

Speaker #1: And that was a goal of mine from day dawn, and to compound that book value at 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.

Speaker #1: 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.

Speaker #1: On page 5, Ken's done a huge amount of work. We are consistently asked questions by people confused by our structure and the accounting conventions that standards mandate.

Speaker #1: 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.

Speaker #1: Our partner owner-driver model means that the whole co-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.

Speaker #1: I think they're just the 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.

Speaker #1: So that's laid out there, and I'll get Ken and the financial section to come back and take you through that carefully. Page 6, and all of this presentation was published this morning in the ASX.

Speaker #1: You've got statutory versus underlying MPATA, an EPS, and you can see the consistent growth in the business over a long period of time. Page 7, some financial highlights for you.

Speaker #1: Underlying EBITDA is 17.9 million dollars. Underlying MPATA, 10.8 million up 18%. MPATA 8.4 million up 18%. Balance sheet remains very, very strong with a very high cash conversion.

Speaker #1: Nanona earnings at 10 million, and our returns 35.7% on equity up from 31.9 last year. I think those numbers, you know, the value of the business is trading at an EV/EBITDA multiple of 12.6 times.

Speaker #1: Which doesn't appear to be excessive, and earnings per share on an underlying MPATA basis are up 18%. On page 8, you know, 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.

Speaker #1: We're really trying to hold to these types of meetings twice a year so that nobody really has any information advantage, and if anyone asks these questions, we'll often publish them in a quality shareholder's letter or to Twitter or in an ASX announcement as is appropriate.

Speaker #1: 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.

Speaker #1: 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's presentations.

Speaker #1: 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 in the AI engine that'll allow you to search much of that information.

Speaker #1: And so we are getting to the 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 interests of the business.

Speaker #1: I'm not that interested in sharing any of our trade secrets. As interested 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.

Brett Kelly: On an underlying NPAT basis are up 18%. On page 8, some common misperceptions. We have 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. If anyone asks these questions, we will often publish them in a quality shareholders letter or to X or in an ASX announcement as is appropriate. These are some of the questions that we get asked, and often I do think they are by people that have not understood our model because, they have not perhaps taken enough time to really look at the materials. Often I get the other criticism that we provide too much information about the company.

Speaker #1: And then I'd log in on a per day basis, or 18%. On page 8, you know, 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.

Speaker #1: We really try to hold to these types of meetings twice a year so that nobody really has any information advantage and, if anyone asks these questions, we'll often publish them in a quality shareholders letter or to Twitter or, or in an ASX announcement, as is appropriate.

Speaker #1: 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 the flywheel and not, you know, even 5 years ago, our flywheel was certainly in operation, but it was really only in operation 10, maybe 12 hours a day.

Speaker #1: Now, often I get the other criticism that we provide too much information about the company. We're now at a point where there are more than 20 Quality Shareholders newsletters, nine years as a public company's accounts published, and results presentations.

Speaker #1: Let's say certainly for a good 8-hour workday, Ken is in Hong Kong and has been for 10 years, so with that extended it a little bit, and Ken works a lot, as does his team, so yeah, 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.

Brett Kelly: We are now at a point where there is more than 20 quality shareholders newsletters, nine years of public companies 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. We are getting to the point where saying much more than we have said about our model and how we generate the returns we do, we do not really believe at a point is in the interest of the business. I am not that interested in sharing any of our trade secrets as interest in this sector continues to grow.

Speaker #1: 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'll allow you to search much of that information.

Speaker #1: And so we are getting to the 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 this point is in the interests of the business.

Speaker #1: 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, you know, 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, you know, another fantastic thing that's going on.

Speaker #1: I'm not that interested in sharing any of our trade secrets. As interest in this sector continues to grow, 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.

Brett Kelly: You will see a posture from us, of less sharing of the operational and other insights of the business because we do think we have 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 is trading 24 hours a day, seven days a week, which gives us this opportunity to take the flywheel and not. Even five years ago, our flywheel was certainly in operation, but it was really only in operation 10, maybe 12 hours a day. Let us say certainly for a good eight-hour workday. Ken is in Hong Kong and has been for 10 years, so we have extended it a little bit.

Speaker #1: 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'd the business in 2017.

Speaker #1: 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 the flywheel and not— you know, even five years ago our flywheel was certainly in operation, but it was really only in operation 10, maybe 12 hours a day.

Speaker #1: And while they're not as profitable as we would like them to be in the US, we're certainly beyond benchmark in Ireland, and there's really no reason that we won't close a gap on those earnings over time, and very dramatically grow this business.

Speaker #1: Which is particularly exciting. So on page 11, you know, 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.

Speaker #1: Let's say, certainly, for a good 8-hour workday. Kenny's in Hong Kong and has been for 10 years, so we extended it a little bit, and Ken works a lot, as does his team, so it was a little bit more than 8 hours a day.

Brett Kelly: Ken works a lot, as does his team. So it was a little bit more than eight hours a day. Today, genuinely, I am very pleased that our business is a global business and it is operating 24 hours a day, most days a week, hopefully not on Sundays, and is compounding. That flywheel is being established and is starting to turn. I do not know that I have 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. Our signage officially went up today on the new office in Dublin, in Ireland.

Speaker #1: This is where this slide comes from. Lots of green dials, basically revenue up 18%, margins are very strong, current MPATA very pleased with, you know, returns on equity at 40%.

Speaker #1: But today, genuinely, I'm very pleased that our business is a global business and is operating 24 hours a day, most days of the week—hopefully not on some days.

Speaker #1: I don't think anyone can be too upset about that. 38.8 on the underlying group MPATA. Gearing at 1.52 times net debt to EBITDA, I think, is very moderate.

Speaker #1: And it's 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.

Speaker #1: I saw a large competitor-backed or PE-backed competitor recently here in the US, 6.5 times net debt to EBITDA seems to be very common, which is, you know, not Kelly Partners.

Speaker #1: 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, you know, a 20-year vision for Stefan and his father, who built that firm over 55 years in Wexford.

Brett Kelly: Our partners in Wexford have opened the office in Dublin. That is a 20-year vision for Stefan and his father, who built that firm over 55 years in Wexford. I am very excited about the opportunity that will come from that, which is just another fantastic thing that is going on. You will see us talk a little today about the next stage for the business. I am confident that today our revenues outside Australia are at or above what they were at the time that we IPO'd the business in 2017. While they are not as profitable as we would like them to be in the US, we are certainly beyond benchmark in Ireland. There is really no reason that we will not close the gap on those earnings over time and very dramatically grow this business, which is particularly exciting.

Speaker #1: 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 2.5 times or less.

Speaker #1: And I'm very, very excited about the opportunity that will come from that, which is just, you know, 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'd the business in 2017.

Speaker #1: Cash flows up 20% to 32.4 million and our cash conversion is, you know, I think our team's doing an exceptional job there. Our people remain very effective.

Speaker #1: As you'll see with revenue per FTE and our group operating cash flow at 47.9%, it's like the type of number we're happy to see.

Speaker #1: And while they're not as profitable as we would like them to be in the US, 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.

Speaker #1: So tons of graphs on page 12 and 13, which I'll leave for you to admire. And not me, these are our team's just epic efforts and on a consistent 20-year basis.

Speaker #1: Which is particularly exciting. So, on page 11—you know, many years ago, for people who 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.

Brett Kelly: On page 11, many years ago, for people that are new to the group, I used to sit with investors who were not that interested in the sector, let alone Kelly Partners. They would say, "Can you just give me the story in 10 seconds?" 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. Current NPATA, very pleased with returns on equity at 40%. I do not 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, PE-backed competitor recently here in the US, 6.5x net debt to EBITDA seems to be very common, which is not Kelly Partners.

Speaker #1: And I really want to emphasize that, you know, 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.

Speaker #1: This is where this slide comes from. Lots of green dials—basically, revenue up 18%, margins are very strong, current NPS per day, very pleased with, you know, returns on equity at 40%.

Speaker #1: 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, Australia can we now take this business global over these next, you know, 5 years?

Speaker #1: I don't think anyone can be too upset about that. Thirty-eight point eight on the underlying group EBIT per day. Gearing at 1.52 times net debt to EBITDA, I think, is very moderate.

Speaker #1: I saw a large, competitor-backed, PE-backed competitor recently here in the US. Six and a half times net debt to EBITDA seems to be very common, which is, you know, not Kelly Partners.

Speaker #1: 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 whole co-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 sevens are lucky number and seven doubles would be excellent, and so that's what we're on about.

Speaker #1: 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 2.5 times or less.

Brett Kelly: 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 flows are up 20% to AUD 32.4 million. Our cash conversion is, I think our teams are doing an exceptional job there. Our people remain very effective, as you will see with revenue per FTE and our group operating cash flow at 47.9%. It is the type of number we are happy to see. Tons of graphs on page 12 and 13, which I will leave for you to admire, and not me. These are our team's just epic efforts and on a consistent 20-year basis. I really want to emphasize that.

Speaker #1: Cash flows are up 20% to $32.4 million, and our cash conversion is—you know, I think our team's doing an exceptional job there. Our people remain very effective.

Speaker #1: 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.

Speaker #1: As you'll see with revenue per FTE and our group operating cash flow at 47.9%, it's the type of number we're happy to see.

Speaker #1: So, tons of graphs on pages 12 and 13—which I'll leave for you to admire. And not me; these are our team's just epic efforts, and on a consistent 20-year basis.

Speaker #2: Okay, awesome. Thanks, Brad. And great to see everyone again and have the opportunity to present the financial results for 2026. This slide we publish every year.

Speaker #2: 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, you know, just focusing on the attributed measures, and that's why we presented the slide 5 in the presentation.

Speaker #1: And I really want to emphasize that, you know, Ken and I have the pleasure of presenting these results, but this is 100% part of 700 people who, every day, turn up for their teams and their clients.

Brett Kelly: 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. I could not be more proud of them. On page 14, this is a slide you have seen before, but stage 5 of what we are doing is really, this is what we have built in Australia. Can we now take this business global over these next five years? The answer, I think, is yes. But we will be doing that with our partners, as we always have. It is not a sort of whole co-operation. It is a 51/49 with our partners. At AUD 134.6 million in 2025, we are on our way to try and double that again, because seven is our lucky number, and seven doubles would be excellent. That is what we are on about.

Speaker #1: 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. Australia.

Speaker #2: 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.

Speaker #1: Can we now take this business global over these next, you know, five years? And the answer, I think, is yes. But we'll be doing that with our partners, as we always have.

Speaker #2: If you're just after or 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.

Speaker #1: So it's not a sort of whole co-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.

Speaker #2: So on the P&L, revenue of 159.2 million increase of 18.2% on the prior year, driven both by organic revenue growth of 2.9% and acquired growth of 15.3%.

Speaker #1: Because seven's a lucky number, and seven doubles would be excellent. And so that's what we're on about. The revenue CAGR remains very, very strong.

Speaker #2: I just want to highlight here that if we exclude the effects of consolidating offices that we did during the year and exiting, I'm profitable clients, our organic growth was 4.5%.

Brett Kelly: 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 have heard from me before. I will then really hand over to you, Ken, on the financials and then take some questions.

Speaker #1: 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.

Speaker #2: 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%.

Speaker #1: And then I'll really hand over to you, Ken, on the financials, and then we'll take some questions.

Speaker #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 MPATA to shareholders of 10.8 million up 18.9% on prior year.

Speaker #2: Okay, awesome. Thanks, Brett. It's great to see everyone again and have the opportunity to present the financial results for 2026. This slide, we publish every year.

Ken Ko: Okay, awesome. Thanks, Brett. 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 have had investors ask us about just focusing on the attributed measures, and that is why we presented the slide 5 in the presentation that is a one-pager on just the parent attributable economics and metrics. Going forward, if you are after group and parent measures, look at this old slide. If you are just after all you want to see is parent attributable economics, then look at that new slide that we published. I will not go through this slide in much detail because a lot of the metrics and measures are covered in the later slides.

Speaker #2: For the group, 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 slide 5 in the presentation.

Speaker #2: In terms of the balance sheet, 1.52 times is our leverage ratio as at 30th of of June 2026. The group return on equity of 40.8 million.

Speaker #2: Parent return on equity of 35.7%. If we look on the right there, lock-up 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 eight WIP days and 45 debtor days.

Speaker #2: 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.

Speaker #2: If you're just after or 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.

Speaker #2: 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.

Speaker #2: So, on the P&L, our revenue of $159.2 million is an increase of 18.2% on the prior year, driven both by organic revenue growth of 2.9% and acquired growth of 15.3%.

Ken Ko: On the P&L, our revenue of AUD 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. On the right here, you will 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. I will leave the rest for you to look at. At the very bottom of that table, underlying NPATA to shareholders of AUD 10.8 million, up 18.9% on prior year.

Speaker #2: On the next slide, in terms of our debt and liquidity, we had, as at 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.

Speaker #2: 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%.

Speaker #2: On the right there, operating EBITDA margins of our operating businesses were 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%.

Speaker #2: 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 the parent and that's not the case.

Speaker #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 NPAT to shareholders of $10.8 million, up 18.9% on prior year.

Speaker #2: 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 parents' balance sheet, and 46.3 million of the debt sits in the operating businesses' balance sheets.

Speaker #2: In terms of the balance sheet, 1.52 times is our leverage ratio as at 30th of June 2026. The group return on equity was $40.8 million.

Ken Ko: In terms of the balance sheet, 1.52 times is our leverage ratio as at 30 June 2026. The group return on equity of AUD 40.8 million, parent return on equity of AUD 35.7%. If we look on the right there, lock-up 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 will see our total assets of AUD 229.9 million having increased because essentially of the acquisitions that we completed during the year.

Speaker #2: So I just want to make that clear to everyone, to see that. And as we said before, the group gearing increased to 1.52 times EBITDA from 1.42 times in the prior year due to the debt that's been taken out to complete the six acquisitions during the year.

Speaker #2: Parent return on equity of 35.7%. If we look on the right there, lock-up days—which is something we like to measure regularly because it gives an indication of how well we are managing our working capital—is very strong at 52.8 days, which comprises 8 WIP days and 45 debtor days.

Speaker #2: This is a new slide that we've put in this year. Again, we've had feedback from shareholders we used to publish and we still do in the appendix a slide called net debt per partner.

Speaker #2: 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.

Speaker #2: 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 RPO all of our debt to EBITDA metrics for the last eight years.

Speaker #2: On the next slide, in terms of our debt and liquidity, we had, as at 30th of June, $89.4 million of facility limits, of which we drew.

Ken Ko: On the next slide, in terms of our debt and liquidity, we had, as at 3 June, AUD 89.4 million of facility limits, of which we drew AUD 74.7 million of drawn debt and AUD 17.7 million of net debt, leaving us with AUD 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 the parent, and that's not the case. This table, which we publish every period, shows where the debt actually sits. In terms of the AUD 74.7 million of total debt in the group, AUD 28.5 million sits in the parent's balance sheet and AUD 46.3 million of the debt sits in the operating businesses' balance sheets.

Speaker #2: 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 non-recurring items, what would it look like?

Speaker #2: $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.

Speaker #2: And if you look at the history of the business, you know, we've never exceeded two times EBITDA in the last eight years, which demonstrates the discipline approach and us repaying the debt.

Speaker #2: 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 the parent, and that's not the case.

Speaker #2: And as Brett said just now, you know, we come across examples in our competitors. That has much higher leverage than what we have. So we think this is very moderate.

Speaker #2: This table, which we publish every period, shows where the debt actually sits. So, in terms of the $74.7 million of total debt in the group, $28.5 million sits on the parent's balance sheet.

Speaker #2: 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.

Speaker #2: And $46.3 million of the debt sits on the operating business's balance sheets. So I just want to make that clear to everyone, to see that.

Ken Ko: I just want to make that clear to everyone to see that. 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 six acquisitions during the year. This is a new slide that we've put in this year. Again, we've had feedback from shareholders. We used to publish, and we still do in the appendix, a slide called Net Debt to a Partner. We think that this is obviously a much better way to look at the debt situation or the leverage of the group. Here I've presented, since IPO, all of our debt to EBITDA metrics, for the last eight years.

Speaker #2: 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.

Speaker #2: And as we said before, the group gearing increased to 1.52 times EBITDA from 1.42 times in the prior year, due to the debt that's been taken out to complete the six acquisitions during the year.

Speaker #2: 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.

Speaker #2: This is a new slide that we've put in this year. Again, we've had feedback from shareholders. We used to publish—and we still do, in the appendix—a slide called "Net Debt per Partner."

Speaker #2: 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.

Speaker #2: 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 RPO, all of our debt to EBITDA metrics for the last eight years.

Speaker #2: You'll see that during the year we drew debt of 23.1 million, and we used that primarily to complete the six acquisitions during the year of 20.5 million.

Speaker #2: And we also did fit outs on three of our offices of 3.5 million. Again, 13.1 million of scheduled debt reductions. We think that is, you know, a very disciplined approach in repaying down the debt, and we're very pleased about that.

Speaker #2: 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 non-recurring items, what would it look like?

Ken Ko: 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 non-recurring items, what would it look like? If you look at the history of the business, we've never exceeded 2x EBITDA in the last eight years, which demonstrates the disciplined approach and us repaying the debt. 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.

Speaker #2: 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 net profit before tax, to the statutory split which is affected by parent taxes, interest on parent debt, depreciation, additional investments, and non-recurring expenses.

Speaker #2: And if you look at the history of the business, you know, we've never exceeded 2 times EBITDA in the last 8 years, which demonstrates the disciplined approach and us repaying the debt.

Speaker #2: And as Brett said just now, you know, we come across examples in our competitors that have much higher leverage than what we have. So we think this is very moderate.

Speaker #2: I might just go quickly before I hand back to Brett just to those to the parent attributable slide. On slide five, and just explain quickly what I've done here.

Speaker #2: 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.

Ken Ko: 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 considerations, and that's why we don't count it in the leverage ratio. In terms of cash flow, very strong. As you can see there, AUD 32.4 million of cash from operations, up 30.1% from the prior year. If you take out the scheduled debt reductions of AUD 13.1 million, you get to a free cash flow to the consolidated group of AUD 18.4 million, which has grown 50.5% on the prior year.

Speaker #2: As I said, this is a one-page that shows all the economics of the parent. Previously, all of these metrics are available in a slide, just in different sections.

Speaker #2: But we've put it now together in one slide for everyone to refer to. You'll 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 NPAT-A.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: 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.

Speaker #2: You'll see that during the year, we drew debt of $23.1 million, and we used that primarily to complete the six acquisitions during the year, totaling $20.5 million.

Ken Ko: You will see that during the year, we drew debt of AUD 23.1 million, and we used that primarily, to complete the six acquisitions during the year of AUD 20.5 million. We also did fit-outs on three of our offices of AUD 3.5 million. Again, AUD 13.1 million of scheduled debt reductions. We think that is a very disciplined approach in repaying down the debt, and we are very pleased about that. Then the parent NCI waterfall, which we have presented since the previous year, showing how we get from the 51% to 49% share of net profit before tax to the statutory split, which is affected by parent taxes, interest on parent debt, depreciation, additional investments, and non-recurring expenses.

Speaker #2: Thank you. Brett. You're on mute, Brett. Sorry.

Speaker #2: And we also did fit-outs on three of our offices for $3.5 million. Again, $13.1 million of scheduled debt reductions. We think that is, you know, a very disciplined approach in repaying down the debt, and we're very pleased about that.

Speaker #1: Thanks, Kenneth. 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.

Speaker #2: 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 net profit before tax to the statutory split, which is affected by parent taxes, interest on parent debt, depreciation, additional investments, and non-recurring expenses.

Speaker #1: 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.

Speaker #2: 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.

Ken Ko: I might just go quickly before I hand back to Brett, just to the parent attributable slide, on slide 5, and just explain quickly what I have 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. We have 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 do a waterfall to show how the parent gets 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. On the right there, you will see some parent-specific measures, balance sheet return and valuation metrics, that I think will be helpful to everyone.

Speaker #2: As I said, this is a one-pager that shows all the economics of the parent. Previously, all of these metrics were available in the slides, just in different sections.

Speaker #1: 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.

Speaker #2: But we've put it now together in one slide for everyone to refer to. You'll 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 NPAT-A.

Speaker #1: 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.

Speaker #2: 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.

Speaker #1: 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.

Ken Ko: With that, I would like to hand back to Brett. Thank you. Brett? You are on mute, Brett. Sorry.

Speaker #2: Thank you. Brett, you're on mute. Sorry.

Speaker #1: Thanks, Kelly. 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.

Brett Kelly: Thanks, Keith. Just for everyone that is 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. We will 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 is probably never been more acceptance of what we are doing as a good place to invest. We have had a strange year of people being worried by AI, but I do believe that there is a more sophisticated and nuanced understanding of the potential of that technology for our business coming through.

Speaker #1: I have written a shareholders letter for our quality shareholders today that I hope you find helpful. And I wouldn't acknowledge that the last 12 months share price performance has been very distressing for many people, including myself, that owns shares.

Speaker #1: 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, you know, I accept that that's the moods of the market and to some degree that's just one of the things that you accept when you run a public company.

Speaker #1: This year, we have had a strange period 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.

Brett Kelly: We believe that we have 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 will not say much about what we are doing or how we intend to use that technology to make our shareholders better off. But we feel very comfortable that that is just a massive opportunity. I think I have said enough in various presentations over the last 12 months to give people some comfort that we are aware that AI is a thing, and we might have some ideas as to how to create some value from it.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: I have written a shareholder letter for our quality shareholders today that I hope you find helpful. And I want to acknowledge that the last twelve months' share price performance has been very distressing for many people, including myself, who owns shares.

Brett Kelly: I have written a shareholders' letter for our quality shareholders today that I hope you find helpful. I want to acknowledge that the last 12 months, share price performance has been very distressing for many people, including myself, that own shares, and quite a few of them in the business. Although we do take a decades long view of the business, and so while I do find the gyrations of the share price annoying, I accept that is the moods of the market. To some degree, that is just one of the things that you accept when you run a public company. Other than that, the business is very much in a posture to aggressively grow from here. We have mentioned in our presentation that there are three things that we are working on, and we have been working on them for a couple of years.

Speaker #1: So those three things we think will add huge capability to the business's opportunities to grow. And that growth is really about taking our unique partner and a driver model, into markets where there is real demand, not least of here in the US.

Speaker #1: And quite a few of them in the business. Although we do take a decades-long view of the business, and so while I do find the gyrations of the share price annoying, I accept that that's the moods of the market, and to some degree, that's just one of the things that you accept when you run a public company.

Speaker #1: We think that our model very much sits between private equity buy 100% and royal into a big monster. And try to swim by yourself.

Speaker #1: At an increasingly older age, against a market that really is on the move. Our model is tremendously unique and differentiated with a two-decade track record that I think is without peer, frankly, in the industry globally.

Speaker #1: 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.

Speaker #1: Other than that, the business is very much in a posture to aggressively grow from here. We've mentioned in our presentation that there are three things that we're working on, and 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.

Speaker #1: They're published. Here we go. 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.

Brett Kelly: We have really invested a fair bit of capital and certainly a huge amount of time to really move the business now onto a global footing. 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 three things we think will add huge capability to the business' opportunities to grow. That growth is really about taking our unique Partner-Owner-Driver model into markets where there is real demand, not least of here in the US. We think that our model very much sits between private equity, buy 100% and roll 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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?

Speaker #1: 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.

Speaker #1: So, those three things we think will add huge capability to the business's opportunities to grow, and that growth is really about taking our unique partner-and-driver model into markets where there is real demand, not least of here in the US.

Speaker #1: We've duplicated the arrangements that we have in Australia in Ireland, and we're confident we could do that in most places. We are working with Westpac on how we structure long-term for global growth, and we think that a 15-year debenture at the headco would do the best job of that.

Speaker #1: We think that our model very much sits between private equity—buy 100%—and rolling into a big monster, and trying to swim by yourself.

Speaker #1: But executing that is not without its challenges. So we continue to work on that together. And Westpac have been a long-term and excellent partner of the business.

Speaker #1: At an increasingly older age, against a market that really is on the move. Our model is tremendously unique and differentiated, with a two-decade track record that I think is without peer, frankly, in the industry globally.

Speaker #1: And then there's a third question, the partnership that in Cyprus that we look to buy in, that deal didn't go through as the company suddenly asked for more money.

Brett Kelly: Our model is tremendously unique and differentiated with a two-decade track record that I think is without peer, frankly, in the industry globally. I think that is probably become quite well-known. So there is good acquisition pipeline and there is real, deep opportunity for the business. Kenny, I cannot see any questions there, were they published?

Speaker #1: 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.

Speaker #1: And I think that's probably become quite well known. So there's a good acquisition pipeline, and there's real deep opportunity for the business. Now, Kelly, I can't see any questions there.

Speaker #1: And when the vendor asked for a lot more money at the end, we just said no. You know, deals that don't start well sell them in well.

Speaker #1: They're published. Here we go. Focusing on SME clients, do we see the risk that your customer gets acquired and you lose that customer? It's true that from time to time, clients—companies—do get acquired.

Speaker #1: 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.

Ken Ko: Yeah, in the comments section.

Brett Kelly: Focusing on SME clients, do we see the risk that your customer gets acquired and losing that customer? It is true that from time to time, clients, companies do get acquired. I am pleased to say that we often keep them as clients. It is very marginal at best as a risk to the business. It has 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 looked to close in Cyprus, we were pleased that we were able to attract from the Bank of Greece funding that duplicated what we have done in Australia. We have duplicated the arrangements that we have in Australia, in Ireland, and we are confident we could do that in most places.

Speaker #1: And we're really continually trying to raise our standards as to the quality of the people and partnerships we bring into the business. Because when deals get difficult, they do absorb a lot of time.

Speaker #1: 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.

Speaker #1: And they don't. Create additional value for. Time. So yeah, the answers to those. Those three questions. Now, I've got a bunch of people with us.

Speaker #1: 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?

Speaker #1: Have we got any questions?

Speaker #2: Brett, there's more in review section in the Q&A.

Speaker #1: 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.

Speaker #1: Sorry. Adam, in the published bit, great. Group investment went to 3.1% of revenue, the highest level for five years. Where do you think the right level is for the business?

Speaker #1: We've duplicated the arrangements that we have in Australia in Ireland, and we're confident we could do that in most places. We are working with Westpac on how we structure long term for global growth, and we think that a 15-year debenture at the headco would do the best job of that.

Speaker #1: And what are some of the investments being made and expected benefits, returns for the business? It's true that our additional revenue at group level is the highest.

Brett Kelly: We are working with Westpac on how we structure long-term for global growth, and we think that a 15-year debenture at head code would do the best job of that, but executing that is not without its challenges. We continue to work on that together, and Westpac have been a long-term and excellent partner of the business. There is a third question. The partnership in Cyprus that we looked to buy in, that deal did not go through as the company suddenly asked for more money. That is true. Did we have to pay any fee for walking away? No. We did not 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 do not start well seldom end well. We are very careful at this point.

Speaker #1: It has been in five years. But a careful look at what the pattern of that is over the last 20 years is frankly more relevant.

Speaker #1: But executing that is not without its challenges, so we continue to work on that together. Westpac has been a long-term and excellent partner of the business.

Speaker #1: 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.

Speaker #1: And then there's a third question. The partnership in Cyprus that we looked to buy into, that deal didn't go through as the company suddenly asked for more money.

Speaker #1: That's true. Did we have to pay any fee for walking away? No. We did 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.

Speaker #1: And you know, I think short of one or two people, we've probably got full capacity now that Australia has in the US across Hong Kong and into the UK.

Speaker #1: So we feel pretty good about that. If we'd 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%.

Speaker #1: You know, 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.

Brett Kelly: We have got a huge amount of internal opportunity, and we have got a lot of incoming partnership opportunity, and we are continually trying to raise our standards as to the quality of the people and partnerships we bring into the business. Because when deals get difficult, they do absorb a lot of time, and they do not create additional value for that time. They are the answers to those three questions. Now, I have got a bunch of people with us. Have we got any questions?

Speaker #1: We've got a lot of incoming partnership opportunities, and we're continually trying to raise our standards regarding the quality of the people and partnerships we bring into the business.

Speaker #1: 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 at a 9, and we would pay the difference at the whole co level.

Speaker #1: Because when deals get difficult, they do absorb a lot of time, and they don't create additional value for that time. So yeah, the answers to those—those three questions.

Speaker #1: 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 in the book be outsiders will, you know, an analysis of our business would show that our best returns are from additional partnerships.

Speaker #1: Now, I've got a bunch of people with us, so have we got any questions?

Speaker #2: Right, there's more in the in-review section in the Q&A.

Ken Ko: Brett, there is more in the in review section in the Q&A.

Speaker #1: Sorry, Adam. In the published bit—great. Group investment went to 3.1% of revenue, the highest level for five years. Where do you think the right level is for the business?

Brett Kelly: Adam, 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 is true that our additional revenue at the group level is the highest it has been in 5 years. 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 have got in Australia, and on a global basis.

Speaker #1: Our next best returns are from internal investments of these very, very high ROICs. Hi, Brett, appreciate if you can talk about the recent dilution in your shareholding down to 31%.

Speaker #1: And what are some of the investments being made, and the expected benefits or returns for the business? It's true that our additional revenue at group level is the highest it has been in five years.

Speaker #1: Chin moi, I really took a position in a situation where there was a massive buyer in LA and I said this to our shareholders at the Berkshire catch-up in Omaha and again in London recently.

Speaker #1: 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.

Speaker #1: There was a big fire in the middle of LA we're living in Malibu and I needed to relocate our family to the other side of that fire.

Speaker #1: And on a global basis, that has meant seconding team members in here, investing in infrastructure, technology, and teams. And, you know, I think, short of one or two people, we've probably got full capacity now that Australia has in the US, across Hong Kong and into the UK.

Speaker #1: 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.

Brett Kelly: That has been seconding team members in here, investing in infrastructure, technology, and team. I think short of one or two people, we have probably got full capacity now that Australia has in the US, across Hong Kong, and into the UK. So we feel pretty good about that. If we had been public the first 10 years of Kelly Partners, it would have looked like this. In fact, 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 is a capital allocation decision. It is taking internal profits and essentially directing them to internal growth.

Speaker #1: And I'd committed over time that as I'd said publicly in four versions of the owner's manual, that I would look to have a Warren Buffett style 35% shareholding.

Speaker #1: So, we feel pretty good about that. If we'd been public the first 10 years of Kelly Partners, it would have looked like this. In fact, that number would have been about 4%, could have been up to 5%.

Speaker #1: 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.

Speaker #1: 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 whole co level.

Speaker #1: I approached Morgan's. s. They'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 could sell the stock.

Speaker #1: 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.

Speaker #1: 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 of the book "The Outsiders" will—an analysis of our business would show that our best returns are from additional partnerships. Our next best returns are from internal investments with these very, very high ROICs.

Speaker #1: And the period, given the results, you've just seen the market has moved in a different direction to our business. There was simply a bet I took.

Brett Kelly: Any serious study of the book, The Outsiders, an analysis of our business would show that our best returns are from additional partnerships. Our next best returns are from internal investments of these very, very high ROCs. Hi, Grant. Appreciate if you can talk about the recent dilution in your shareholding down to 31%. Chinmoy, I really took a position in a situation where there was a massive fire in LA, and I said this to our shareholders at the Berkshire catch-up in Omaha and again in London recently. There was a big fire in the middle of LA. We are living in Malibu, and I needed to relocate our family to the other side of that fire.

Speaker #1: You know, the 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.

Speaker #1: I'd appreciate it if you could talk about the recent dilution in your shareholding, down to 31%. Chin Moi, I really took a position in a situation where there was a massive fire in LA, and I said this to our shareholders at the Berkeley catch-up in Omaha and again in London recently.

Speaker #1: So most of our bets have gone okay. This one's gone strongly against me. I thought that our shareholder base was less likely than the market to react to broad AI fears.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: And that seemed to have spooked the market. So you know, 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.

Speaker #1: My wife has a serious heart condition, and Beck has said to me for years that the stress of the gyrating share price affects her much more than it does me.

Brett Kelly: 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. I had committed over time that, as I had said publicly in four versions of the owner's manual, that I would look to have a Warren Buffett style, 35% shareholding. 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 Morgan, who had been our bank for the IPO, and they were going to sell some stock for me, but came up short a few days later after being quite confident they could sell the stock.

Speaker #1: And I'd committed over time that, as I'd said publicly in four versions of the owner's manual, I would look to have a Warren Buffett-style 35% shareholding.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: I approached Morgan's, who had 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 could sell the stock.

Speaker #1: 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.

Brett Kelly: 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 have just seen, the market has moved in a different direction to our business. It was simply a bet I took. You are the shareholder in a business that was founded by my wife and I on the bet that I could take the AUD 200,000 of personal billings I had and turn it into something. 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.

Speaker #1: 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.

Speaker #1: And 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.

Speaker #1: And I don't think in that period I've been able to pay it either. So you know, it's generated a lot of commentary. I think a lot of the commentary is what it is.

Speaker #1: You know, I'm the shareholder in a business that was founded by my wife and me, on the bet that I could take the $200,000 of personal billings I had and turn it into something.

Speaker #1: I won't say much more than that. But I feel very confident as a larger shareholder in the group to continue to be the larger shareholder in the group.

Speaker #1: So most of our bets have gone okay. This one’s gone strongly against me. The market has reacted 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.

Speaker #1: There's a fair amount of commentary around funding sources, giving the low debt to EBITDA. It doesn't seem like it's limiting your new term growth.

Speaker #1: That's true. What's the thinking behind the long-term debt funding? Long-term debt funding at the whole co would allow us to grow very dramatically outside Australia.

Brett Kelly: I would say to our longstanding quality shareholders, many of them 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. That seemed to have spooked the market. I have paid a real price for that. But we have diversified our family's financial position, which is good for my wife and kids. We have been able to move homes in an emergency. It is not the way I would have liked to achieve that outcome. But it was the only option available after the very exhaustive inquiries by me over a period of time. I have held a significant shareholding in the business for 20 years.

Speaker #1: 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.

Speaker #1: And that seemed to have spooked the market. So, you know, 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.

Speaker #1: So Constellation Software is the best example. They're in over 100 countries. They can move very quickly and give certain people about joining their group.

Speaker #1: 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 exhausted inquiries.

Speaker #1: We bought a 51% interest in QDOS network and it's got 60 firms in 48 countries. Many of those are smaller firms, smaller countries, would be harder to finance.

Speaker #1: 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.

Speaker #1: 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.

Brett Kelly: 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. I think my wife and I have taken on a fair amount of responsibility for a long time. I do not think in that period I have been overpaid either. It has generated a lot of commentary. I think a lot of the commentary is what it is. I will not 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 is a fair amount of commentary around funding sources, giving the low debt to EBITDA. It does not seem like it is limiting your near-term growth. That is true. What is the thinking behind the long-term debt funding?

Speaker #1: 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.

Speaker #1: 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.

Speaker #1: And I don't think in that period I've been able to pay it either. So, you know, it's generated a lot of commentary. I think a lot of the commentary is what it is.

Speaker #1: 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.

Speaker #1: I won't say much more than that, but I feel very confident, as a larger shareholder in the group, to continue to be the larger shareholder in the group.

Speaker #1: We feel unanxious about doing much. I think we did six or seven deals in the first six months of the year, came up to the end of January in the share price.

Speaker #1: You know, the share price fell 70%. Ken, so maybe if we do less, share price will get closer to intrinsic value. Who knows? There is, you know, 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.

Speaker #1: There's a fair amount of commentary around funding sources, given the low debt to EBITDA. It doesn't seem like it's limiting your near-term growth.

Speaker #1: That's true. What's the thinking behind long-term debt funding? Long-term debt funding at the whole co would allow us to grow very dramatically outside Australia.

Brett Kelly: Long-term debt funding at the whole co would allow us to grow very dramatically outside Australia. It is difficult to get an individual banking situation in each country, to do what might be, at least in the first instance, smaller, one, two, three, four, five deals. Constellation Software is the best example. They are in over 100 countries. They can move very quickly and give certain people about joining their group. We bought a 51% interest in Kudos Network, and it has 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. They have been a tremendous partner in helping us grow this initial global foundational footprint. That is the thinking.

Speaker #1: But there's a huge amount of activity in the market and we'll always get our fair share. We're pretty confident. Any update on listing in U.S., Canada markets?

Speaker #1: It's difficult to get an individual banking situation in each country to do what might be, at least in the first instance, smaller deals—1, 2, 3, 4, 5 deals.

Speaker #1: 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.

Speaker #1: So Constellation Software is the best example. They're in over 100 countries. They can move very quickly and give certain people an opportunity to join their group.

Speaker #1: I've been to Toronto Stock Exchange. We've been to New York Stock Exchange and NASDAQ. You can see disclosures in the accounts that last more than two years of some millions of dollars spent on that effort to investigate the right venue long-term for the business.

Speaker #1: We bought a 51% interest in the QDOS network, and it's got 60 firms in 48 countries. Many of those are smaller firms in smaller countries, which would be harder to finance.

Speaker #1: And spend 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.

Speaker #1: And certainly, Westpac couldn't do them under our current arrangements. They've been a tremendous partner in helping us grow this initial global foundational footprint.

Speaker #1: That's not my position. You know, just look back 20 years as a really clear graph of when we've been able to find good partnerships to join the business.

Speaker #1: 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.

Brett Kelly: Again, we are thinking decades out trying to get the structure right and the funding structure right now so that we can do as we have 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 are seeing on the ground?" We are seeing a huge amount of activity. As always, we feel unanxious about doing much. I think we did six or seven deals in the first six months of the year, Ken, up to the end of January. The share price fell 70%, Ken. Maybe if we do less, share price will get closer to intrinsic value. Who knows? We will just continue to do what we have always done, and that is not be desperate to do a deal that doesn't make sense.

Speaker #1: And you know, 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 the right type of partnership deal.

Speaker #1: 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.

Speaker #1: So feel pretty relaxed about that. At what company performance would you reinstate dividends? Great. Probably none. Lynn, you know, if we ran out of places to earn.

Speaker #1: We feel unanxious about doing much. I think we did six or seven deals in the first six months of the year, came up to the end of January, and the share price, you know, the share price fell 70%.

Speaker #1: Sorts of ROICs. That we're generating, then you know, we might sell the company as opposed to pay dividends. Ken, but while ever our returns of miles beyond our weighted average cost of capital then there's no plan to pay dividends at any point.

Speaker #1: Ken, so maybe if we do less, the share price will get closer to intrinsic value. Who knows? 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.

Speaker #1: But there's a huge amount of activity in the market, and we'll always get our fair share. We're pretty confident. Any update on listing in US or Canada markets?

Brett Kelly: There is a huge amount of activity in the market, and we will always get our fair share. We are pretty confident. "Any update on listing in US, Canada markets?" I cannot say much more because there are real laws about that commentary, but I have visited and shared openly online that I have been to the London Stock Exchange twice. I have been to Toronto Stock Exchange. We have been to New York Stock Exchange and Nasdaq. You can see disclosures in the accounts for the last more than two years of some millions of AUD spent on that effort to investigate the right venue long-term for the business and spend some money with lawyers to work on structure and other good things. We are on the move there. "Shed some light on the number of acquisitions slow down." That is not my position.

Speaker #1: You know, 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.

Speaker #1: 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.

Speaker #1: And you know, if we were to do that, that'd go out as a special dividend. But that's the only thought I've had of late of dividends.

Speaker #1: I've been to the Toronto Stock Exchange. We've been to the New York Stock Exchange and NASDAQ. You can see disclosures in the accounts that last more than two years of some millions of dollars spent on that effort to investigate the right venue, long-term, for the business.

Speaker #1: 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 five years that we have thought that internally funding that was better for all shareholders than paying dividends.

Speaker #1: And spend some money with lawyers to work on structure and other good things. So we are on the move there. Shed some light on how the number of acquisitions has slowed down.

Speaker #1: You made a comment in the presentation earlier at US 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 us?

Speaker #1: That's not my position. You know, 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.

Speaker #1: I think they're profitability probably looks a lot like Australia did in the early years. We need, you know, consistent effort into those businesses. And it just takes time to build a relationship.

Brett Kelly: Just look back 20 years as a really clear graph of when we have been able to find good partnerships to join the business. It has got to be the right people, right values, and the right terms, right price, et cetera. A lot has to come together 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 are 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 is no plan to pay dividends at any point.

Speaker #1: And, you know, it's got to be the right people, right values, and the right terms, right price, et cetera. A lot has to come together to do the right type of partnership deal.

Speaker #1: And we've just completed a new office in Woodland Hills. Which is amazing. And that'll change everything about that business. We're building a new office for our large flora firm.

Speaker #1: So, feel pretty relaxed about that. At what company performance would you reinstate dividends? Great question. Probably none. Lynn, you know, if we ran out of places to earn the sorts of ROICs that we're generating, then, you know, we might sell the company as opposed to pay dividends.

Speaker #1: That'll be finished by 1 January. Again, that will dramatically impact that business. And you know, it's just a step-by-step process. You know, you can do it in six weeks, but often when you don't have the relationships that we would in Australia, you know, it might take eight, eight months to two years to.

Speaker #1: Again, we feel unanxious about that because we can see clearly in the penal where the opportunity is. And we've actually think that that's an understanding that isn't in this market generally.

Speaker #1: Ken, but while our returns are miles beyond our weighted average cost of capital, there's no plan to pay dividends at any point.

Speaker #1: 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.

Speaker #1: You know, 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.

Brett Kelly: Should there be a change of listing venue, it is quite likely that we would fund out the very large franking credit balance that we have. If we were to do that would go out as a special dividend, but that is the only thought I have had of late of dividends. I do not mind the idea of having a base-level dividend like Constellation has had. The opportunities to grow have been so substantial over the last five years that we have thought that internally funding that was better for shareholders than paying dividends. "You made a comment in the presentation earlier that US is not as profitable as you would like. Is that because the inherent economics are lower or it is taking longer to get to maturity than compared to Aus?" I think their profitability probably looks a lot like Australia did in the early years.

Speaker #1: It's actually quite an interesting opportunity. That might be the last question. In that list. How do you intend to scale the acquisition engine in the event that you're able to raise a debt?

Speaker #1: And you know, if we were to do that, that would go out as a special dividend. But that's the only thought I've had of late on dividends.

Speaker #1: 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 five years that we have thought that internally funding that was better for all shareholders than paying dividends.

Speaker #1: 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 five global markets.

Speaker #1: You made a comment in the presentation earlier: the US is not as profitable as you would like. Is that because the inherent economics are lower?

Speaker #1: I can see us having teams in each of those markets. So North America, UK, Australia, Pacific, potentially into Asia. And Africa. And Middle East.

Speaker #1: Or it's taking longer to get to maturity than compared to us? I think their profitability probably looks a lot like Australia did in the early years.

Speaker #1: We need, you know, 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.

Speaker #1: 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.

Brett Kelly: We need consistent effort into those businesses, and it just takes time to build a relationship. We have just completed a new office in Woodland Hills, which is amazing, and that will change everything about that business. We are building a new office for our large Florida firm that will be finished by 1 January. Again, that will dramatically impact that business. It is just a step-by-step process that you can do in six weeks, but often when you do not have the relationships that we would in Australia, it might take eight months to two years. Again, we feel unanxious about that because we can see clearly in the clear now where the opportunity is. We actually think that that is an understanding that is not in this market generally.

Speaker #1: Which is amazing, and that'll change everything about that business. We're building a new office for our large Florida firm, and that'll be finished by January 1.

Speaker #1: And grow those businesses dramatically. We're getting a lot of inbound from private equity groups who have bought into groups. And now have 10 thing?

Speaker #1: Again, that will dramatically impact that business. And you know, it's just a step-by-step process. You know, you can do it in six weeks, but often, when you don't have the relationships that we would in Australia, you know, it might take eight months to two years.

Speaker #1: 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 owned an excellent business to come across to the business.

Speaker #1: Again, we feel unemotional 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 present in this market generally.

Speaker #1: And then I saw the opportunity in just bringing an entire firm into the group. Which was just more efficient. Frankly. Same amount of time.

Speaker #1: So, we actually see a very, very big opportunity in this market as a result of the sorts of margins that we're seeing in firms that we look to bring into the group.

Brett Kelly: We actually see a very big opportunity in this market as a result of sorts of margins that we are seeing in firms that we look to bring into the group. That is actually quite an interesting opportunity. That might be the last question that is in that list. "How do you intend to scale the acquisition engine in the event that you are able to raise it debt?" It is a great question, Patrick. It would be a matter of scaling the teams in various markets. We really like businesses like McDonald's who have five global markets. I can see us having teams in each of those markets, so North America, UK, Australia, Pacific, potentially into Asia and Africa, and Middle East. So Middle East and Africa and Asia.

Speaker #1: 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.

Speaker #1: It's actually quite an interesting opportunity. And that might be the last question in that list. How do you intend to scale the acquisition engine in the event that you're able to raise debt?

Speaker #1: 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.

Speaker #1: 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, which have sort of five global markets.

Speaker #1: As a, you know, a global posture, the listed whole co that can bring many of those groups into the business. I don't want to say too much more than that.

Speaker #1: It is, you know, it's a different thing to a degree to what we've been doing. But I think you'll see that come to shape over the next five years.

Speaker #1: I can see us having teams in each of those markets—so, North America, the UK, Australia, the Pacific, potentially into Asia, and Africa, and the Middle East.

Speaker #1: And I think in quite an exciting way. If you could share your thoughts about long-term to venture. You know, if we could bring that together we can do that as a rights issue to existing shareholders.

Speaker #1: So, the Middle East, 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.

Brett Kelly: This is a 20-year view rather than a 20-minute view, but there is no question we could scale teams into those places and grow those businesses dramatically. We are getting a lot of inbound from private equity groups who have bought into groups and now have 10 firms and are like, "What do we do with this thing?" There is not an obvious public market exit, and a lot of these groups are not obvious targets for the very large consolidators. When I started, I was excellent and became excellent at getting an individual client or person that owned an excellent business to come across to the business. 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.

Speaker #1: If there's appetite. And that would be the best way to give. A shareholder like return. So Mark Leonard at Constellation designed a 15-year to venture with inflation plus 6.5% and a total return was basically designed to mimic the 30-year historical return of equities on the 30-day stock exchange.

Speaker #1: And grow those businesses dramatically. We're getting a lot of inbound from private equity groups who have bought into groups and now have 10 firms and are like, what do we do with this thing?

Speaker #1: 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 owned an excellent business to come across to the business.

Speaker #1: 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.

Speaker #1: And for anyone deeply curious about that study, you know, what Constellation has done and how they've done it and imagine what KPG would look like if we can make that happen.

Speaker #1: 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.

Speaker #1: 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?

Speaker #1: What I see today is these 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."

Brett Kelly: 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. Where can we go?" 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. I think, we'll see that come to shape over the next five years and I think in quite an exciting way. If you could share your thoughts about long-term debenture.

Speaker #1: And we're sort of too big to be small, but too small to be massive. And so, where can we go? What I'm trying to set us up for is to be the consolidator of those consolidators, as a global posture.

Speaker #1: 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.

Speaker #1: The listed Hold Co that can bring many of those groups into the business—I don't want to say too much more than that. It is, you know, it's a different thing, to a degree, to what we've been doing.

Speaker #1: And we keep the conversations at, no, give us a very large debt facility at the right prices so we can buy a meaningful amount of stock back.

Speaker #1: But I think you'll see that come to shape over the next five years, and I think in quite an exciting way. If you could share your thoughts about long-term venture.

Speaker #1: It doesn't really move the dial if we buy a 5 million bucks 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.

Speaker #1: And we have a very strong preference to be a public company. So you intend to scale the acquisition engine in the event that you are able to raise a venture.

Speaker #1: You know, 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.

Brett Kelly: 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. 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. 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. For anyone deeply curious about that study, what Constellation has done and how they've done it, imagine what KPG would look like if we can make that happen. I'm also curious about your thoughts on any buyback.

Speaker #1: 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 two-decade, 30% revenue CAGR performance is without essentially issuing additional shares is probably okay.

Speaker #1: So Mark Leonard at Constellation designed a 15-year venture 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.

Speaker #1: So we are contemplating and have designed an instrument that would allow shareholders to get a dividend-like return, an income-like return from a business that they understand, that would also strengthen our ability to grow the equity value of their equity investment.

Speaker #1: And if you throw that performance on. Another 20 years as a shareholder and you hang around long enough you might be pretty happy with what happens.

Speaker #1: And for anyone deeply curious about that study, you know, what Constellation has done and how they've done it, and imagine what KPG would look like if we can make that happen.

Speaker #1: Is AI giving any notice or 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.

Speaker #1: 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?

Speaker #1: I'll let the other accountants try and work that out. And what we're not going to do from this point is run a sort of education service for other firms.

Brett Kelly: There isn't the capital in the business today to do a meaningful buyback. 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. We keep the conversation, say, "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 AUD 5 million worth of stock back. If we had the capital, we would buy a very, very large chunk of this business back and cancel those shares. We have a very strong preference to be a public company.

Speaker #1: You know, industry and other consolidators. How is the acquisition price in the USA affected by competition from private equity? I'd say there really isn't any impact on the part of the market that we are looking at.

Speaker #1: 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.

Speaker #1: There's a real sort of bifurcation. Private equity are into very large firms. And there are some sort of now popping up sort of AI-led old co-consolidator style, you know, dot-com flavored things.

Speaker #1: And we keep the conversations at, no, give us a very large debt facility at the right prices so we can buy a meaningful amount of stock back.

Speaker #1: It doesn't really move the dial if we buy $5 million as a stock buyback. But if we had the capital, we would buy a very, very large chunk of this business back and cancel those shares.

Speaker #1: That might want to buy a small things. It's not affecting us. We have very much a proprietary deal flow line over 20 years where people know who we are.

Speaker #1: And we have a very strong preference to be a public company. So, you intend to scale the acquisition engine in the event that you're able to raise a venture?

Speaker #1: 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 aren't with us.

Speaker #1: Who can stand behind what we say that we will do with you and your business. So I think we're at a very, very unique place.

Brett Kelly: In terms of scale, the acquisition engine, in event you're able to raise value at it. 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 two-decade, 30% revenue CAGR performance is, without essentially issuing additional shares is probably out of cake. 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. What I won't do is just tell you how or why or anything else. I'll let the other accountants try and work that out.

Speaker #1: So there's a question as to, has the acquisition engine been enabled to scale so far? No, I wouldn't suggest that. I think a two-decade, 30% revenue KDI performance, without essentially issuing additional shares, is probably okay.

Speaker #1: You know, this is permanent capital relationship based with decade-long view. Versus flat EPE capital with a transactional emphasis. With a three-minute attempt, you know, three to five-minute attention span only, three to five-minute, you know, three to five years.

Speaker #1: And if you throw that performance on for another 20 years, as a shareholder, you hang around long enough, you might be pretty happy with what happens.

Speaker #1: So I feel very, very confident that we're in a extremely strong position. At this point. And I can't, you know, I must say I haven't been involved in the business at a time when the business was stronger.

Speaker #1: 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.

Speaker #1: And so that, you know, 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 60 cents?

Speaker #1: I'll let the other accountants try and work that out. What we're not going to do from this point is run a sort of education service for other firms, industry, and other consolidators.

Brett Kelly: What we are not going to do from this point is run a sort of education service for other firms in our industry and other consolidators. How is the acquisition price in the USA affected by competition from private equity? I must say there really is not any impact on the part of the market that we are looking at. There is a real sort of bifurcation. Private equity are into very large firms, and there are some sort of now popping up, sort of AI-led, whole consolidator style, dotcom flavored things that might want to buy small things. It is not affecting us.

Speaker #1: 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.

Speaker #1: How is the acquisition price in the USA 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.

Speaker #1: During. COVID, our share price dropped to 60 cents. We issued at a dollar. There was never going to be a situation where any government contemplated not collecting tax even for a second.

Speaker #1: There's a real sort of bifurcation, private equity are into very large firms. And there are some sort of now popping up sort of AI-led hold co consolidator style, you know, dot-com flavored things.

Speaker #1: 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.

Speaker #1: Those that might want to buy small things—it's not affecting us. We have very much a proprietary deal flow line over 20 years, where people know who we are.

Speaker #1: And, you know, when they bought into the business, I explained to them, buy into the business with a 20-year view and I think you'll do okay.

Brett Kelly: We have a very much a proprietary deal flow line over 20 years where people know who we are, they know what we stand for, the difference that we can make, and we have 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 and your business. I think we are in a very, very unique place. This is permanent capital, relationship-based with decade-long view versus a flighty PE capital with a transactional emphasis, with a three to five-minute attention span. I need three to five years. I feel very confident that we are in an extremely strong position at this point. I must say, I have not been involved in the business at a time when the business was stronger. I am very excited about where we are.

Speaker #1: They know what we stand for, the difference that we can make, and we've got a proven track record, with dozens and dozens of people who have partnered with us.

Speaker #1: So I, you know, I'm not concerned about that at all. If you're a short-term person, our firm and our stock's not a place for you.

Speaker #1: Who can stand behind what we say that we will do with you and your business? So I think we're at a very, very unique place.

Speaker #1: What are your thoughts on recent acquisition of Seabis by Grant Thornton and current suppressed price? Do you see KPG as a potential acquisition target?

Speaker #1: You know, this is permanent capital relationship-based with decade-long view. Versus flighty PE capital with a transactional emphasis. With a 3-minute attempt, you know, 3 to 5-minute attention span only, 3 to 5-minute, you know, 3 to 5 years.

Speaker #1: I think that Seabis acquisition is instructive. I think it leaves a hole for. Our type of business to be listed on a US exchange or a Toronto exchange or a London exchange.

Speaker #1: So I feel very, very confident that we're in an extremely strong position at this point. And I must say, I haven't been involved in the business at a time when the business was stronger.

Speaker #1: There's billions of dollars worth of investor capital in that business. It's going to be looking for a home and our returns have always been.

Speaker #1: Major metric than Seabis is. So I think it's great that Seabis has been, you know, or will go private. With Grant Thornton. And I think that that frankly just presents an enormous opportunity for our business.

Speaker #1: And so, you know, I'm very, very excited about where we are. Has the equity raise made through partners at $11 and change led to any morale problems with the partners who bought at that price and subsequently saw the price drop $0.60?

Brett Kelly: Has the equity raise made through partners at AUD 11 and change led to any morale problems with the partners who bought at that price and subsequently saw the price drop AUD 0.60? Frankly, it has 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 AUD 0.60. We issued at AUD 1. There was never going to be a situation where any government contemplated not collecting tax even for a second. I am very confident that the intrinsic value of the business is the focus of our partners.

Speaker #1: I think our business today is by far the best performing publicly traded accounting group in the world. If you look out 10 years, what do you think is the biggest constraint on KPG becoming a much larger business?

Speaker #1: Frankly, 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.

Speaker #1: Availability of 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, you know, Munger's contribution to Berkshire was the architecture of Berkshire.

Speaker #1: During COVID, our share price dropped to 60 cents. We issued at a dollar. There was never going to be a situation where any government contemplated not collecting tax, even for a second.

Speaker #1: 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.

Speaker #1: 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.

Brett Kelly: They have all made typically 10-year commitments to the business, and when they bought into the business, I explained to them, "Buy the business with a 20-year view, and I think you will do okay." I am not concerned about that at all. If you are a short-term person, our firm and our stock is not a place for you. What are your thoughts on recent acquisition of cBusiness by Grant Thornton at current press price? Do you see KPG as a potential acquisition target? I think that cBusiness acquisition is instructive. I think it leaves a hole for our type of business to be listed on a US exchange or a Toronto exchange or a London Stock Exchange.

Speaker #1: And, you know, when they bought into the business, I explained to them: buy into the business with a 20-year view, and I think you'll do okay.

Speaker #1: 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. It's very long-dated.

Speaker #1: So I, you know, I'm not concerned about that at all. If you're a short-term person, our firm and our stock are not the place for you.

Speaker #1: Do you need to change your 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.

Speaker #1: What are your thoughts on the recent acquisition of Seabis by Grant Thornton at the current press price? Do you see KPG as a potential acquisition target?

Speaker #1: I think that the Seabis acquisition is instructive. I think it leaves a hole for our type of business to be listed on a US exchange, or a Toronto exchange, or a London exchange.

Speaker #1: And we are working with Stifel in Canada on that matter. We can publicly share that. So you know, we'll tell you more when we've got more news.

Speaker #1: There's billions of dollars worth of investor capital in that business. It's going to be looking for a home. And our returns have always been 3 times on any major metric, 3 times better on any major metric than Seabis's.

Brett Kelly: There is billions of AUD worth of invested capital in that business that is going to be looking for a home, and our returns have always been three times on any major metric, three times better on any major metric than Andersen. I think it is great that Andersen 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 out 10 years, what do you think is the biggest constraint on KPG becoming a much larger business? Available acquisition target, partner firm capital.

Speaker #1: From Brendan Harrington. Hey Brendan, great to see your note. Hello Brendan. Ken, I hope you are both very well. Congratulations on 20 years. A phenomenal personal achievement.

Speaker #1: So, I think it's great that Seabis has been, you know, or will go private with Grant Thornton. And I think that that, frankly, just presents an enormous opportunity for our business.

Speaker #1: Not phenomenal achievement, in and of itself. To doing the patient principled on platform building way of KPG. Something should be especially proud of. Can you please speak more of the rationale and performance today of the workload acquisition?

Speaker #1: I think our business today is by far the best performing publicly traded accounting group in the world. If you look at our last 10 years, what do you think is the biggest constraint on KPG becoming a much larger business?

Speaker #1: Yeah, the workload acquisition's just 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.

Speaker #1: Availability of 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. He said, you know, Munger's contribution to Berkshire was the architecture of Berkshire.

Speaker #1: 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.

Brett Kelly: 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 feel very excited about the future of the business. Structure is everything. We have got a very settled strategy, and after structure, it is availability of flexible capital on the right terms. It is very long-dated. Do you need to change the stock market listing venue in order to raise a debenture debt? We thought we did. We are getting some feedback that that might not be the case. We are working with Stifel in Canada on that matter, when we can publicly share that.

Speaker #1: We have more than 20 million pounds investable capital in our whole co. I saw you speak in Sweden. There's a serial acquirers conference earlier in the year.

Speaker #1: 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.

Speaker #1: And I wanted to ask you one question. And he wanted to do that privately. So he did it before the meeting. He said, will you take your partner and a driver model over time and apply it to other verticals?

Speaker #1: So, structure, kind of, is everything. We've got a very settled strategy. And after structure, it's the availability of flexible capital on the right terms. It's very long-dated.

Speaker #1: And I said, well look, you know, Warren Buffett and Bill Gates went asked, what's the number one thing you can do in business? Answered simultaneously, focus.

Speaker #1: 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.

Speaker #1: So we will stay focused on the accounting sector. But at the same time, when workload 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 it's been built from scratch by one of our clients to the values alignment and the business alignment were so strong.

Speaker #1: And we are working with Stifel in Canada on that matter. We can publicly share that. So, you know, we'll tell you more when we've got more news.

Brett Kelly: We will tell you more when we have got more news. From Brendan Harrington. Hey, Brendan. Great to see your note. Hello, Brendan Ken. Hope you are both very well. Congratulations on 20 years. A phenomenal personal achievement, a phenomenal achievement in and of itself. To do in a patient, principled, and platform-building way of KPG, something you should be especially proud of. Can you please speak more of the rationale and performance to date of the Workpod acquisition? Yeah, the Workpod acquisition is a sleeper business based in the Philippines, more than 1,000 seats, that we are now using. I will say a little bit more. It is a very good question, Brendan. We did a shareholders' meeting in London. We had 35 investors there, including, and I will not mention who it was, but a gentleman came up to me and said, Look, I run the family office of this family.

Speaker #1: I saw this as an opportunity to apply our partner and a driver model in this niche. Now what we're doing under that effectively work whole code is identifying niches where we can build these types of virtual team set gym operators need healthcare operators need.

Speaker #1: From Brendan Harrington: Hey, Brendan, great to see you. Hello, Brendan. Ken, I hope you are both very well. Congratulations on 20 years—a phenomenal personal achievement.

Speaker #1: Not a phenomenal achievement in and of itself, but to do it in a patient, principled, and platform-building way like KPG, is something to be especially proud of. Can you please speak more about the rationale and performance today of the workload acquisition?

Speaker #1: And I won't stay any more than that. But there's a dozen niches that we've identified that really need excellent people. And what workload does is it doesn't just find random people.

Speaker #1: Yeah, the workload acquisitions is sort of a sleeper business. Based in the Philippines, more than 1,000 seats that we are now—well, we are using, I'll say, a little bit more.

Speaker #1: It actually finds great people and then trains them, documents the systems of the business looking to work with them and then it trains those people.

Speaker #1: 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.'

Speaker #1: So Brendan, what are the opportunities there 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 at KPG if we can execute that plan and buy a significant number.

Speaker #1: We have more than £20 million of investable capital across our whole company. I saw you speak in Sweden. There was a serial acquirers' conference earlier in the year.

Speaker #1: Now I believe KPG will continue to grow. I think today's market cap doesn't matter. That doesn't reflect the intrinsic value of the business. But I want everyone to be aware that we believe that the number one asset of KPG is our partner and a driver model that we invented, designed and refined over nearly 100 partnerships and transactions hold apart.

Brett Kelly: We have more than GBP 20 million investable capital in our holdco. I saw you speak in Sweden at the Redeye Serial Acquirers Conference earlier in the year, and I wanted to ask you one question. He wanted to do that privately, so he did it before the meeting. He said, Will you take your Partner-Owner-Driver model over time and apply it to other verticals? I said, Well, look, Warren Buffett and Bill Gates, when asked what is the number one thing you can do in business, answered simultaneously, Focus. We will stay focused on the accounting sector. At the same time, when Workpod came along, that can provide team members to our firms and to our 25,000 clients. The alignment and the fact that it has been built from scratch by one of our clients, so the values alignment and the business alignment was so strong.

Speaker #1: And I wanted to ask you one question, and he wanted to do that privately. So he did it before the meeting. He said, "Will you take your partner-and-driver model over time and apply it to other verticals?"

Speaker #1: And I said, well, look, you know, Warren Buffett and Bill Gates, when asked, "What's the number one thing you can do in business?" answered simultaneously: focus.

Speaker #1: 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 verticals.

Speaker #1: So, we will stay focused on the accounting sector. But at the same time, when Workload came along—that can provide team members to our firms and to our 25,000 clients—the alignment, and the fact that it has been built from scratch by one of our clients, meant the values alignment and the business alignment was so strong.

Speaker #1: 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.

Speaker #1: I saw this as an opportunity to apply our partner and a driver model in this niche. Now, what we're doing under that effectively work whole code is identifying niches where we can build these types of virtual team set gym operators need, healthcare operators need.

Brett Kelly: I saw this as an opportunity to apply our Partner-Owner-Driver model in this niche. What we are doing under that, effectively, Workpod holdco, is identifying niches where we can build these types of virtual teams that gym operators need, healthcare operators need. I will not say any more than that. There are a dozen niches that we have identified that really need excellent people. What Workpod does is it does not just find random people. It actually finds great people and then trains them, documents the systems of the business looking to work with them, and then it trains those people. Brendan, the opportunity there is to take that from 1,000 seats to 10,000 seats. 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.

Speaker #1: 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.

Speaker #1: And I won't say any more than that. But there's a dozen niches that we've identified that really need excellent people. And what Workload does is it doesn't just find random people.

Speaker #1: So I just say that work pod is performing very well. And I believe we'll continue to outperform that sector and be a very, very valuable contributor to our business, contributor to our clients' business.

Speaker #1: It actually finds great people and then trains them in the documents and systems of the business looking to work with them. And then it trains those people.

Speaker #1: And our set of the group. Another question. Jim, what are your observations post partnership with Hello AI adoption and embedment by KPG? We are doing well with the initiatives that we are running in the AI.

Speaker #1: 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 at KPG if we can execute that plan and buy a significant number.

Speaker #1: 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 the number one asset of KPG is our partner and driver model, which we invented, designed, and refined over nearly 100 partnerships and transactions to date.

Speaker #1: Space. I would point you and everyone to Jim Collins' amazing book, Good to Great. He has a six-part framework and it talks about great leadership, great people, great thinking.

Brett Kelly: I believe KPG will continue to grow, and I think today's market cap just does not matter. It does not reflect the intrinsic value of the business. I want everyone to be aware that we believe that the number one asset of KPG is our Partner-Owner-Driver model, that we invented, designed, and refined over nearly 100 partnerships and transactions worldwide. As we find partners that want to take that model and apply it with our expertise in coaching and guidance, I am very keen to scale the use of that intellectual property across those verticals. 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 did not have a partner that was able to execute. It was not all his fault, it was not all our fault, and all of that.

Speaker #1: And then great execution. So discipline and the last step is technology as an enabler. What, you know, whether it's a dotcom firm or now in AI, it's very easy to turn that framework.

Speaker #1: 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 verticals.

Speaker #1: I'm seeing it in our industry. So rather than start here to start here and say, AI will save me, AI will make me better, you know, AI is going to be awesome, which it is awesome.

Speaker #1: 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, 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.

Speaker #1: But it's a technology and in a change program that Collins describes in the flywheel that results from it, it has to happen in the right place at the right time.

Speaker #1: 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.

Speaker #1: 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 six-year-olds who aren't trained or even 36-year-olds that aren't disciplined, then the return on that machine gun is going to be very low.

Brett Kelly: 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 well. I just say that Workpod is performing very well, and I believe will continue to outperform that sector and be a very valuable contributor to our business, contributor to our clients' business and asset of the group. Another question, Jim, "What are your observations post-partnership with Hella AI adoption and embed, and embedment by KPMG?" 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 six-part framework, and it talks about great leadership, great people, great thinking, and then great execution. It is a discipline.

Speaker #1: So, I'd just say that WorkPod is performing very well, and I believe we'll continue to outperform that sector and be a very, very valuable contributor to our business and to our clients' business.

Speaker #1: You've got to have great leaders of excellent sources with the right thinking, right strategy, right structure. And then that discipline force needs to take that technology, whatever it is, into the theater of war, if you like.

Speaker #1: And that set of the group. Another question, Jim. What are your observations post-partnership with Hello AI adoption and embedment by KPG? We are doing well with the initiatives that we are running in the AI space.

Speaker #1: 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 businesses' 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.

Speaker #1: I would point you and everyone to Jim Collins' amazing book, Good to Great. He has a six-part framework, and it talks about great leadership, great people, and great thinking.

Speaker #1: We have at least 80% commonality in our software stock. Software stack, which again is very, very unusual across any accounting groups that you'll see anywhere near our size.

Speaker #1: And then great execution. So, discipline. And the last step is technology as an enabler. Whether it's the dot-com boom or now in AI, it's very easy to turn that framework.

Speaker #1: And that's because we have a 51-49 ownership situation where the whole code has control of certain things. And one of those things is that the IT network and the software stack.

Brett Kelly: The last step is technology as an enabler. Whether it is a dotcom boom or now in AI, it is very easy to turn that framework, I am 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 is a technology and a change program that Collins describes in the flywheel that results from it. It has to happen in the right place at the right time. 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 six-year-olds who are not trained, or even 36-year-olds that are not disciplined, then the return on that machine gun is going to be very low.

Speaker #1: And I'm seeing it in our industry, too. Rather than start here, they start here and say, "AI will save me, AI will make me better, you know, AI is going to be awesome," which it is—awesome.

Speaker #1: And it's always been like that. And we've always done the work to do that, to do that change program, to do that actual hard yards of operational effort.

Speaker #1: 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 and a driver model, we've got leaders and soldiers who are more like the SAS or SEAL teams than general armies.

Speaker #1: But it's a technology, and in a change program, Collins describes in the flywheel, it results from it. It has to happen in the right place, at the right time.

Speaker #1: 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 six-year-olds who aren't trained—or even 36-year-olds who aren't disciplined—then the return on that machine gun is going to be very low.

Speaker #1: 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.

Speaker #1: You've got to have great leaders of excellent soldiers with the right thinking, the right strategy, the right structure, and then that disciplined force needs to take that technology—whatever it is—into the theater of war, if you like.

Brett Kelly: You've got to have great leaders and excellent soldiers with the right thinking, right strategy, right structure. That disciplined force needs to take that technology, whatever it is, into the theater of war, if you like. That's the way we think. If you get that right, you get this flywheel. The reason I'm so confident about our business's 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 unusual across accounting firms anywhere in the world. We have at least 80% commonality in our software stack, which again, is very unusual across any accounting groups that you'll see anywhere near our size. That's because we have a 51/49 ownership situation where the holdco has control of certain things.

Speaker #1: And so our ability to move and move fast and implement technology, whatever that technology is, is miles in advance than 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% doesn't mean you have 100% of the hearts and minds.

Speaker #1: 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's 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.

Speaker #1: 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 a thousand years of people commitment to our business.

Speaker #1: That's unheard of. And it's that commitment when shit gets hard. Which change in particular around technology adoption is very hard when it gets hard.

Speaker #1: 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 sites.

Speaker #1: 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.

Speaker #1: And that's because we have a 51/49 ownership situation where the whole code has control of certain things. And one of those things is the IT network and the software stack.

Speaker #1: We're services from the bottom up with unusual alignment and partners who are driving this change. We're saying, Brett, how can we go faster? How do we do this?

Brett Kelly: One of those things is that the IT network and the software stack, and it's always been like that. We've always done the work to do that change program, to do that actual hard yards of operational effort. It is very hard work. It's much easier to buy something than to fix it. 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. They don't have a 51/49 structure where there's any agreement on real governance, let alone who's responsible for what.

Speaker #1: And it's always been like that. And we've always done the work to do that, to do that change program, to do the actual hard yards of operational effort.

Speaker #1: We want to use that. Now our services team serves those people. And the dynamic and frankly the high performance culture that that is built in the team is unbelievably exciting.

Speaker #1: 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-and-driver model, we've got leaders and soldiers who are more like the SAS or SEAL teams than general armies.

Speaker #1: 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 in that clients and communities.

Speaker #1: And so if 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.

Speaker #1: 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.

Speaker #1: If you go and you look at our presentation in Sweden in March, which was 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.

Speaker #1: And so, our ability to move—and move fast—and implement technology, whatever that technology is, is miles in advance of the average group. Now, when private equity comes in and thinks that they have power because they bought 100%, in professional services, just because you own 100% doesn't mean you have 100% of the hearts and minds.

Brett Kelly: Our ability to move and move fast and implement technology, whatever that technology is miles in advance from 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% 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. It's that commitment when shit 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.

Speaker #1: 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.

Speaker #1: 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 our business.

Speaker #1: Kenny, did I leave anything out? My friend, have you got anything you'd like to share? And certainly if anyone's got any other questions, we're right here.

Speaker #1: That's unheard of. And it's that commitment when things get hard—particularly when it comes to changes around technology adoption, which is very challenging. When it gets tough, it's that commitment from the leadership and the fantastic people in the group.

Speaker #1: I've got time. I'm in Los Angeles today. It's 6:04 PM. So I have nowhere to rush off to a particular Canada dinner or something.

Speaker #1: So I do have a bit of time for people. There's a few more questions, Brett, in the review. Okay. Recent news of Big Four accounting firms, recently KPMG undergoing an erosion of corporate trusts.

Speaker #1: That drives change through the business. So, we are not a top-down organization. We're serviced from the bottom up, with unusual alignment and partners who are driving this change.

Brett Kelly: We're services from the bottom up with unusual alignment and partners who are driving this change, who are saying, "Brett, how can we go faster?" or "How do we do this? We want to use that." Our services team serves those people. 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. 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.

Speaker #1: We're saying, "Brett, how can we go faster? How do we do this? We want to use that." Now, our services team serves those people.

Speaker #1: And the dynamic, and frankly, the high-performance culture that is 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 in that.

Speaker #1: Do you think it creates an opportunity for KPMG? I have had the view and started the group in. 2006 because I thought that there was an opportunity if you look at the bane book founders mentality to create a scaled insertion.

Speaker #1: Big Four are here. I've often said, I think the cancer written given their values. And that their future looks like this. Their structure is not right today, et cetera.

Speaker #1: Clients are communities. So if there's an area that I'm excited about—now, I'm holding myself back from giving you anything specific that we're doing—but I've said enough.

Speaker #1: I would like tomorrow. I think those businesses have got a bit of a drift. I think there's an opportunity for us to scale. This is the industry.

Speaker #1: If you go and you look at our, you know, at my presentation in Sweden in March—which was the most I'm ever going to say about it.

Speaker #1: This is us. The second tier will pick up some of that work. I think we are the best place firm globally to be a specialist provider of very, very high quality what we call a first choice accountant.

Brett Kelly: If you go and you look at our presentation in Sweden in March, which was 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. 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. Kenny, did I leave anything out, my friend? Have you got anything you'd like to share? Certainly to anyone's got any other questions, we're right here. I've got time. I'm in Los Angeles today. It's 6:04 PM, so I have nowhere to rush off to in particular. I can have a dinner at 7:00.

Speaker #1: 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.

Speaker #1: It's a private business owning families going somewhere. I think we do own that space today and can own that space globally. And I don't fear the Big Four or anyone else.

Speaker #1: 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.

Speaker #1: With respect to that, we are bogus. So there's no big audit group. We're not doing public companies. We're not getting distracted with consulting businesses or ad businesses or whatever.

Speaker #1: Kenny, did I leave anything out? My friend, have you got anything you'd like to share? And certainly, if anyone's got any other questions, we're right here.

Speaker #1: So feel pretty good about that. My takeaway is do you have other firms that recently listed globally? Anderson in the US and MHA in the UK.

Speaker #1: I've got time. I'm in Los Angeles today. It's 6:04 p.m., so I have nowhere to rush off to, in particular. I can attend dinner at 7:00.

Speaker #1: So just very brief, it's a very good question. Tristan, very brief comments. Anderson structure is incredibly complicated. And that business is, you know, history is interesting.

Speaker #1: So, I do have a bit of time for people.

Brett Kelly: I do have a bit of time for people.

Speaker #1: So you know, it's done well. It's a good business and we'll see. MHA in the UK, for example, both of these have had successful listings and KPG was mentioned in both of their investor packs, et cetera.

Speaker #2: There's a few more questions, Brett, in the queue.

Ken Ko: There's a few more questions, Brett, in the

Speaker #1: In review. Oh.

Speaker #2: Yeah.

Speaker #1: Okay. Recent news of Big Four accounting firms, recently KPMG undergoing erosion of corporate trust. Do you think it's a credit opportunity for KPMG? I have had the view and started the group in 2006 because I thought there was an opportunity if you look at the Bain book, Founders Mentality, to create a scaled insertion.

Brett Kelly: In review. Oh.

Ken Ko: Yeah.

Brett Kelly: Okay. Recent news of Big Four accounting firms, recently Kelly Partners, undergoing erosion of corporate trust. Do you think it creates an opportunity for Kelly Partners? I have had the view and started the group in 2006 because I thought there was an opportunity. If you look at the Bain book, The Founder's Mentality, to create a scale insurgent. Big Four are here. I have often said I think they are cancer-ridden, given their values, and that their future looks like this, that their structure is not right today, et cetera. They lack tomorrow. I think those businesses have got a bit of a drift. I think there is an opportunity for us to scale. This is the industry. This is us. The second tier will pick up some of that work.

Speaker #1: So MHA in the UK has for example a, I think a four-year partner commitment and just jump in, ask your favorite AI tool to compare the three of us and throw CBs in there in the mix and I think KPG looks pretty good.

Speaker #1: Big Four are here. I've often said I think they're cancer-ridden, given their values, and that their future looks like this—that their structure is not right today, et cetera.

Speaker #1: Patrick's asked a question, non-recurring expenses, have a habit of becoming recurring. Can you shed some light on the non-recurring expenses of parent level? Patrick, I think there's, I'd probably spent half my life telling people that if we keep running an acquisition-led strategy, we'll continue to incur these non-recurring expenses.

Speaker #1: I always learn tomorrow. I think those businesses have got a bit of a drift. I think there's an opportunity for us. This is us.

Speaker #1: The second tier will pick up some of that work. I think we are the best place firm globally to be a specialist provider of very, very high-quality—what we call a first-choice accountant.

Brett Kelly: I think we are the best-placed firm globally to be a specialist provider of very, very high quality, what we call a first choice accountant, to private business-owning families going somewhere. I think we do own that space today and can own that space globally, and I do not fear the Big Four or anyone else with respect to that. We are focused. There is no big audit group. We are not doing public companies. We are not getting distracted with consulting businesses or ad businesses or whatever. So feel pretty good about that. What takeaways do you have other firms that recently listed globally, Andersen in the US and MHA in the UK? Just very brief. It is a very good question, Tristan. Very brief comments. Andersen structure is incredibly complicated, and that business' history is interesting. So, it is doing well. It is a good business, and we will see.

Speaker #1: And I don't think we could do a better job at stepping them out. Very, very clearly for any investor. But the best way for us to prove that non-recurring would be to do no deals for a year and you wouldn't see any, but it's probably better if we do.

Speaker #1: To private business-owning families going somewhere, I think we do own that space today and can own that space globally. And I don't fear the Big Four or anyone else.

Speaker #1: With respect to that, we are focused. So there's no big audit group. We're not doing public companies. We're not getting distracted with consulting businesses or ad businesses, or whatever.

Speaker #1: Any book recommendations, please. So favorite books at the moment, Barry Diller, his book is exceptionally good. And John Malone, his book, read back to back, it's very good.

Speaker #1: So, I feel pretty good about that. My takeaways: do you have other firms that recently listed globally? Anderson in the US and MHA in the UK.

Speaker #1: I think both of them are just very, very good. Very, very interesting. Gentlemen, their books are I think have a number of lessons for sort of everyone.

Speaker #1: So just very briefly—it's a very good question, Tristan. Very brief comments. Anderson's structure is incredibly complicated, and that business's history is interesting.

Speaker #1: Which is really cool. Any other questions? Tristan, just one comment on Anderson and MHA. When we went to list KPG, investors pretty much stayed in our face.

Speaker #1: So it's done well. It's a good business, and we'll see. MHA in the UK, for example—both of these have had successful listings. And KPG was mentioned in both of their investor packs, et cetera.

Brett Kelly: MHA in the UK, for example, both of these have had successful listings, and Kelly Partners was mentioned in both of their investor packs, et cetera. So MHA in the UK has, for example, I think, a four-year partner commitment, and just jump in, ask your favorite AI to compare the three of us and throw CB's in there in the mix, and I think Kelly Partners looks pretty good. Patrick has asked a question: Non-recurring expenses have a habit of becoming recurring. Can you shed some light on the non-recurring expenses at current level? Patrick, I think I have probably spent half my life telling people that if we keep running an acquisition-led strategy, we will continue to incur these non-recurring expenses, and I do not think we could do a better job at stepping them out very clearly for any investor.

Speaker #1: The whole idea of a listed accounting firm was sort of anathema to people. I think that you can see in the showers that I published today, a list of the private equity investment into the group, more than 10 billion US in a very short period of time.

Speaker #1: So MHA in the UK has, for example, I think a four-year partner commitment. And just jump in, ask your favorite AI tool to compare the three of us and throw CBs in there in the mix.

Speaker #1: And these two listings and I expect there'll be more to come. So I think our investment thesis is validated. I think our operational track record is good or better than anything that I've seen private or public.

Speaker #1: And I think, in KPMG, looks pretty good. Patrick's asked a question: non-recurring expenses have a habit of becoming recurring. Can you shed some light on the non-recurring expenses at the current level?

Speaker #1: And really from here, it's a question of getting the structure right and the capital to the point much, much, much more capital at high rates of return.

Speaker #1: Patrick, I think I've probably spent half my life telling people that if we keep running an acquisition-led strategy, we'll continue to incur these non-recurring expenses.

Speaker #1: You know, a very excellent mentor to me who's built one of the world's best compounders said to me, Brett, look, if you could deploy some billions at 25% compounding, it'd be better than deploying some millions and that's an obvious observation.

Speaker #1: And I don't think we could do a better job at stepping them out very, very clearly for any investor. But the best way for us to prove that it's non-recurring would be to do no deals for a year.

Brett Kelly: The best way for us to prove that non-recurring would be to do no deals for a year, and you would not see any, but it is probably better if we do. Any book recommendations, please? So favorite books at the moment, Barry Diller. His book is exceptionally good. John Malone, his book read back-to-back is very good. I think both of them are just very interesting gentlemen. Their books, I think, have a number of lessons for everyone, which is really cool. Any other questions? Tristan, just one comment on Andersen and MHA. When we went to list Kelly Partners, investors pretty much spat in our faces, and the whole idea of a listed accounting firm was anathema to people.

Speaker #1: And you wouldn't see any, but it's probably better if we do. Any book recommendations, please? So, favorite books at the moment: Barry Diller—his book is exceptionally good.

Speaker #1: But it was very adamant, get your structure right, get the right access to the right capital. It's scale and get on with deploying this model globally.

Speaker #1: So I'm excited by the more acceptance of what we're doing. I think our model is very proven and we're expected and I think the opportunity for the group is frankly gigantic.

Speaker #1: And John Malone, his book—read back to back—it's very good. I think both of them are just very, very good. Very, very interesting.

Speaker #1: Gentlemen, their books are, I think, have a number of lessons for sort of everyone, which is really cool. Any other questions? Tristan, just one comment on Anderson and MHA.

Speaker #2: Brett, I just want to chime in on Patrick's questions on the non-recurring expenses. In that, if you look at the reconciliation table, there are actually two components there.

Speaker #2: That's in actual fact, they're just non-cash accounting entries. That don't really mean anything. So the first one being we are required by the accounting standard to record the present value, i.e., a discounted value of the contingent consideration.

Speaker #1: When we went to list KPG, investors pretty much sat in our face, with the whole idea of a listed accountant for them was sort of an anathema to people.

Speaker #1: I think that you can see in the slides that are published today, a list of the private equity investments into the group, more than $10 billion US.

Speaker #2: And every year there's this unwinding of this interest into the books to get it to the current value. So that's one of the non-cash adjustment, which sorry to be technical, but that's what it is.

Brett Kelly: I think that you can see in the shells that are published today, a list of the private equity investment into the group, more than AUD 10 million in a very short period of time with these two listings, and I expect there will be more to come. I think our investment thesis is validated. I think our operational track record is good or better than anything that I have seen, private or public. Really from here, it is a question of getting the structure right and the capital to deploy much, much, much more capital at high rates of return. A very excellent mentor to me who has built one of the world's best compounders said to me, "Brett, look, if you could deploy some billions at a 25% compound, it would be better than deploying some millions." That is an obvious observation, but he was very adamant.

Speaker #1: In a very short period of time. And these two listings—and I expect there'll be more to come—so I think our investment thesis is validated.

Speaker #2: The second one is very important.

Speaker #1: I think our operational track record is good, or better than anything that I've seen, private or public. And really, from here, it's a question of getting the structure right and having the capital to deploy much, much, much more capital at high rates of return.

Speaker #1: Like can that's very, very important. Like guys, that's a huge number. There's no question that it's not real. It's just something we're required to do.

Speaker #1: And there's no question that we're not losing clients at any we near that number. So you know, we don't, I'd like to think that's not particularly controversial.

Speaker #1: A very excellent mentor to me, who’s built one of the world’s best compounders, said to me, "Brett, look, if you could deploy some billions at 25% compounding, it’d be better than deploying some millions," and that’s an obvious observation.

Speaker #2: No, it isn't. No, it isn't. And then Patrick, the second one is this impact of this accounting standard that came in many years ago where the rent is actually capitalized therefore it creates a non-cash difference between kind of the depreciation of the right of use asset and the repayment of the lease liability.

Speaker #1: But it was very adamant: get your structure right, get the right access to the right capital, make sure it's scalable, and get on with deploying this model globally.

Brett Kelly: Get your structure right, get the right access to the right capital at scale, and get on with deploying this model globally. I am excited by more acceptance of what we are doing. I think our model is very proven and well-respected. I think the opportunity for the group is frankly gigantic.

Speaker #1: So, I'm excited by the greater acceptance of what we're doing. I think our model is very proven and well respected, and I think the opportunity for the group is, frankly, gigantic.

Speaker #2: Again, this is so technical, but it's again all non-cash that's been added back. So those two components there that's part of the non-recurring expenses.

Speaker #2: That's always going to be there because that's a simply an accounting non-cash adjustment that doesn't really make a lot of sense. And that's why that's been added back.

Speaker #2: Brett, I just want to chime in on Patrick's questions about the non-recurring expenses. If you look at the reconciliation table, there are actually two components there.

Speaker #2: And the others, as Brett's alluded to, it's the costs of the one-off costs of us completing the acquisitions.

Ken Ko: Brett, I just want to chime in on Patrick's questions on the non-recurring expenses. In that, if you look at the reconciliation table, there are actually two components there. That is in actual fact, they are just non-cash accounting entries that don't really mean anything. The first one being, we are required by the accounting standard to record the present value, i.e., a discounted value of the contingent consideration. Every year, there is this unwinding of this interest into the books to get it to the current value. That is one of the non-cash adjustment, which sorry to be technical, but that is what it is. The second one is-

Speaker #1: And various other things that happen from time to time. But it's a good one. Like today, you know, with the use of AI, you can take our half-year, year-end accounts since IPO throw them in there, ask it to give you good explanation and see if it lines up with what makes sense for you.

Speaker #2: In actual fact, they're just non-cash accounting entries that don't really mean anything. So, the first one being, we are required by the accounting standard to record the present value, i.e., a discounted value, of the contingent consideration.

Speaker #2: And every year there's this unwinding of this interest into the books to get it to the current value. So that's one of the non-cash adjustments, which—sorry to be technical—but that's what it is.

Speaker #1: And I'm very, very confident that that'll look okay for you. Thank you, KK. See any more questions here, Ken? All right. Well, going once, going twice, appreciate all the answers.

Speaker #2: The second one is very important.

Speaker #1: Like Ken, that's very, very important. Like, guys, that's a huge number. There's no question that it's not real—it's just something we're required to do.

Brett Kelly: It is very important. Ken, that is very, very important. Guys, that is a huge number. There is no question that it is not real. It is just something we are required to do. There is no question that we are not losing clients at anything near that number. I would like to think that is not particularly controversial.

Speaker #1: Thanks to you both. Thank you, Patrick. I appreciate everyone's attendance today. We always aim to give you clear information that is very, very transparent and hopefully helpful to you.

Speaker #1: And there's no question that we're not losing clients at anywhere near that number. So I'd like to think that's not particularly controversial.

Speaker #1: If you've got any questions, please at any stage drop Ken and I an email and we'll always do our best to give you a swift and clear answer.

Speaker #2: No, it isn't. No, it isn't. And then, Patrick, the second one is this impact of this accounting standard that came in many years ago, where the rent is actually capitalized.

Ken Ko: No, it isn't. Patrick, the second one is this impact of this accounting standard that came in many years ago where the rent is actually capitalized. Therefore, it creates a non-cash difference between kind of the depreciation of the Right-of-Use Asset and the repayment of the lease liability. Again, this is so technical, but it's again, all non-cash that's been added back. So those two components there, that's part of the non-recurring expenses. That's always going to be there because that's simply an accounting non-cash adjustment that doesn't really make a lot of sense. That's why that's been added back. The others, as Brett alluded to, is the one-off costs of us completing acquisitions.

Speaker #1: Even if it's just a reference to where we might have answered that before. And as I love to say, thank you Kenny and to our entire team for what's been a huge year.

Speaker #2: Therefore, it creates a non-cash difference between kind of the depreciation of the right of use asset and the repayment of the lease liability. Again, this is so technical, but it's again all non-cash that's been added back.

Speaker #1: Again, and to Joyce for setting up today's meeting and for all of those people quietly doing incredible things within our businesses and within our group.

Speaker #2: So those two components there, that's part of the non-recurring expenses. That's always going to be there because that's simply an accounting non-cash adjustment that doesn't really make a lot of sense.

Speaker #2: And that's why that's been added back. And the others, as Brett's alluded to, it's the one-off costs of us completing acquisitions.

Speaker #1: And various other things that happen from time to time. But it's a good one. Like today, with the use of AI, you can take our half-year and year-end accounts since IPO, throw them in there, ask it to give you a good explanation, and see if it lines up with what makes sense for you.

Brett Kelly: And various other things that happen from time to time. But it's a good one. Like today, with the use of AI, you can take our H1, year-end accounts since IPO, throw them in there, ask it to give you a good explanation and see if it lines up with what makes sense for you. I'm very, very confident that that'll look okay for you. Thank you, KK. See any more questions there, Kenny?

Speaker #1: And I'm very, very confident that that'll look okay for you. Thank you, KK. See any more questions here, Ken?

Speaker #2: I know.

Speaker #1: All right. Well, going once, going twice. I appreciate all the answers. Thanks to you both. Thank you, Patrick. I appreciate everyone's attendance today. We always aim to give you clear information that is very, very transparent and hopefully helpful to you.

Ken Ko: No.

Brett Kelly: Well, going once, going twice. I appreciate all the answers. Thank you both. Thank you, Patrick. I appreciate everyone's attendance today. We always aim to give you clear information that is very, very transparent and hopefully helpful to you. If you've got any questions, please, at any stage, drop Ken or I an email, and we'll always do our best to give you a swift and clear answer, even if it's just a reference to where we might have answered that before. As I love to say, thank you, Kenny, and to our entire team, for what's been a huge year again. And to Joyce for setting up today's meeting and for all of those people quietly doing incredible things within our businesses and within our group. It's always a great day to be an accountant. So have a great day. Thanks so much.

Speaker #1: If you've got any questions, please, at any stage, drop Ken and me an email, and we'll always do our best to give you a swift and clear answer, even if it's just a reference to where we might have answered that before.

Speaker #1: And as I love to say, thank you, Kenny, and to our entire team for what's been a huge year—again. And to Joyce, for setting up today's meeting, and for all of those people quietly doing incredible things within our businesses and within our group.

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Q4 2026 Kelly Partners Group Holdings Ltd Earnings Call

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