PointsBet Holdings Limited (ASX: PBH) has reported a notable increase in half-year revenue and a positive EBITDA in Australia for the first time, according to its FY '24 Half Year earnings call. The company is on track with the sale of its U.S. business to Fanatics, expecting completion in Q4 FY '24.
In Australia, PointsBet achieved a record half-year revenue of $101.7 million, up 6.8% from the previous period. The company's Canadian operations are moving towards a break-even EBITDA by FY '25, with a strategic partnership with Strive Gaming aimed at enhancing its online casino offering in Ontario.
PointsBet maintains its financial guidance for FY '24, anticipating a total net win increase of 10% to 20% over FY '23 and a group EBITDA loss between $9 million and $14 million.
Key Takeaways
- PointsBet achieved a record half-year revenue of $101.7 million in Australia, a 6.8% increase year-over-year.
- The company reported its first positive H1 EBITDA in Australia and is progressing towards break-even EBITDA in Canada by FY '25.
- A strategic partnership with Strive Gaming is expected to enhance PointsBet's online casino offering in Ontario.
- PointsBet is expecting strong revenue growth from Canada in the upcoming years.
- The company has appointed a new CTO, Dan Lucas, to improve technology for sports products.
- Financial guidance for FY '24 includes a total net win increase of 10% to 20% over FY '23 and a group EBITDA loss between $9 million and $14 million.
Company Outlook
- PointsBet is focused on growth in the Australian and Canadian markets, with a strong emphasis on responsible gambling and sustainability.
- The company aims for a gross profit margin of around 50% and a reduction in total marketing expenses by 15% to 20% compared to FY '23.
- PointsBet expects to deliver strong growth and a positive EBITDA from FY '25 onwards.
Bearish Highlights
- The Australian market experienced negative variance in the first half but is expected to rebound soon.
- PointsBet anticipates a group EBITDA loss between $9 million and $14 million for FY '24.
Bullish Highlights
- PointsBet's strategic moves, such as the partnership with Strive Gaming, are set to attract more casino-first players in Canada.
- The iGaming segment in Canada has shown strong performance in the first seven weeks of the year.
Misses
- There are no specific misses mentioned in the provided context.
Q&A Highlights
- The company discussed the impact of the shift from racing to sports betting on gross and net margins.
- PointsBet is improving promotion efficiency and aims to maintain a gross to net ratio below 30%.
- Innovations like multi-bets and same-game multi-bets are expected to drive higher yields and align with consumer trends.
PointsBet's earnings call outlined a robust strategy for growth, with a focus on enhancing its offerings and improving technology to meet consumer demand. The company's commitment to responsible gambling and sustainability, along with its positive financial trajectory in Australia and strategic initiatives in Canada, positions it to capitalize on the growing online betting market.
With the upcoming completion of its U.S. business sale and the appointment of a new CTO, PointsBet is poised to continue its momentum into the next fiscal year.
Full transcript - PointsBet Holding Ltd (PBH) Q2 2024:
Samuel Swanell: Good morning. Thank you for joining us today for PointsBet's FY '24 Half Year Results. I'm Sam Swanell, and joining me on the call today is Alister Lui, who from today takes over the role of Group CFO from Andrew Mellor. I would like to thank Andrew for all he has done for the business over the past 5 years and wish him all the best in future in his future endeavors. Please note the safe harbor statement. All the numbers referred to are unaudited and in Australian dollars, unless otherwise stated. I will give a brief overview of the half, and we'll then open to questions from analysts. First and most importantly, as highlighted in the Q1 and Q2 investor conference calls, during the half, we continued our global commitment to responsible gambling. This is an important issue for the long-term sustainability of the industry, and we take our obligations in this area very seriously. PointsBet endorses the principle of informed choice, which is aimed at empowering customers to make informed decisions and exercise choice regarding their wagering expenditure. Further details of our approach to responsible gambling can be found in our FY '23 sustainability report released in October, which also highlights the ways in which we operate to produce social, economic and environmental benefits for the communities we serve in both Australia and Canada. Turning to Slides 4 and 5. Before I turn to the H1 results, I would like to provide a brief update on the sale of the U.S. business. Initial completion was on the 31st of August with Fanatics paying the USD 175 million first installment. We've completed the first capital return of $1 per share on the 22nd of September 2023, delivering $315.4 million back to shareholders. Ownership of 13 out of the 14 U.S. states have now transferred to Fanatics Betting and Gaming. Subsequent sale completion, receipt of the balance of consideration and second capital distribution is on track for completion in early to mid Q4 FY '24. PointsBet continues to support Fanatics from an operations perspective as part of the transition in each state. Turning now to Australia and Canada, where our ever-improving back-end capability and front-end product is delivering our efficiency strategy with record H1 results. Looking at Slide 5, we can see that at a group level, total net win was up 14% on the PCP at $128.1 million. Gross profit was even stronger, up 21% versus the PCP at $58.5 million. Finally, normalized EBITDA improved 71% with a loss of $13.3 million for the half. We reiterate our full year normalized EBITDA loss guidance of between $9 million and $14 million, which provides transparency that we expect H2 to deliver a result of between a loss of $700,000 and a profit of $4.3 million. These results show our strategy, backed by outstanding technology and an outstanding team, is building a platform for near-term profitability and strong ongoing growth. Turning to Slide 7 for a review of the Australian business performance. In Australia, we achieved a record half of revenue being $101.7 million, up 6.8% compared to the PCP. Gross profit was also a record being $50.1 million with growth outperforming net win at 11.7% compared to PCP. Gross profit margins were 49% compared to 47% in the PCP. Total marketing expense was $28.4 million, down 37% on the PCP. Despite lower spend, our brand consideration increased from 34% to 37% year-on-year. Importantly, statutory segment EBITDA for the half was positive $0.9 million, a material improvement compared to the loss of $20.2 million in the PCP and represented the first Australian positive H1 EBITDA in the company's history. We have delivered positive full year EBITDA in Australia for the past 4 financial years, but have always incurred a material loss in H1. Our positive H1 this year sets Australia up for a strong full year result as previously flagged. During the half, our gross win margin of 10.9% was slightly lower than our long-term average of 12% to 13%. We can attribute this to our relative share of turnover shifting towards sport and lower-than-expected yield in the high-staking client cohort late in H1. Net win margins at 7.6% are approaching our target rate of 8.9%. Our continued focus on promotions efficiency led to the rate of promotions as a percentage of gross win improving to 29.7% versus 36.8% in the PCP. Net win contribution from racing was in line with the PCP with the net win contribution from sport growing strongly versus the PCP. We continue to see strong activity across our core international sports offering of NBA, NFL and soccer. All sports we operate from our market-leading OddsFactory capability whilst in-play continues to perform strongly with our Darwin-based home betting team taking record bet placement volumes. With all major operators having reported their H1 results, it has confirmed that the overall market experienced negative H1 revenue growth, and our positive H1 revenue growth of 7% makes it clear we strongly outperformed the market and grew our market share. Turning to Slide 10 and a review of the Canadian business performance. In Canada, we continued on our path to break-even -- or close to break-even EBITDA in FY '25 with H1 statutory segment EBITDA loss reducing to $12 million compared to a loss of $19.4 million in the PCP. We currently expect the Canadian H2 EBITDA loss to be lower than the H1. Sportsbook net win was $6.3 million, up 153% versus the PCP. This growth was driven by both improved trading margin on a higher overall mix of multi-bets and continued gains in customer generosity efficiency, demonstrating the strength of our product offering. Our multi-, same-game multi and live same-game multis are powered by our proprietary OddsFactory technology, and along with our live in-play betting capability, form the cornerstone of our Sportsbook product-led strategy in Canada. Pleasingly, Sportsbook in-play handle grew to 66% of total handle, highlighting the strength of PointsBet's live betting product offering. On the iGaming side, our online casino segment performed very well, delivering net win of $9.5 million. Combining both segments, we achieved a total net win in Canada of $15.8 million, up 135% versus the PCP. Gross profit was up 149% versus the PCP with improved gross profit margins from efficiency in cost of sales as the Canadian business continues to scale. Gross profit margin of 52.8% already exceeds our Australian business gross profit margins. This record half of net win was delivered whilst also delivering a 10% reduction in marketing spend compared to the PCP. In the latter part of the half, we announced our strategic partnership with Strive Gaming, which will transform our iGaming offering and accelerate our growth in this critical vertical. In summary, we remain on track to achieve break-even or close to break-even EBITDA in FY '25 in Canada. We are seeing continued growth of the customer base and continued growth in revenue. In parallel, we are expanding gross profit margins and executing more efficient marketing. Turning to Slide 11. As just mentioned, we recently announced our strategic partnership with Strive Gaming. Through partnering with Strive, we will be able to bring our customers a broader selection of games and enhanced overall experience. We have launched the Strive functionality and are progressively rolling this new capability in the Ontario market. We expect this new offering will accelerate the growth of our online casino business, helping drive a more favorable game mix over time with higher gross margins along with enhanced retention and customer lifetime values. Importantly, with an improved online casino product, we will now be in a position to target with our marketing casino-only players rather than Sportsbook players who are cross-sold into online casino. Turning to Slide 12. The regulated Ontario market is estimated at $2 billion in terms of net win today, and we predict it will grow to between $2.5 billion and $3 billion over the next 5 years. This attractive total addressable market is expected to be complemented by other provinces creating regulated markets in the coming years, thus providing a natural expansion of the Canadian regulated market. With our market-leading Sportsbook product and ever-improving online casino product, PointsBet will deliver very strong revenue growth from Canada for many years to come. I will now hand over to Alister Lui to discuss the H1 group results.
Alister Lui: Thank you, Sam. Turning to Slide 14, talking to normalized results first. For the reporting period, PointsBet reported revenue of $117.6 million, a growth of 15.4% compared to the PCP. Gross profit of $58.5 million represented growth of 21.4% over the PCP. Gross profit margin for the reporting period was 49.7%, up from 47.3% in the PCP. This was driven by improved global efficiency and increasing contribution from Canada, which has more favorable unit economics than in Australia. Group sales and marketing expense was $42.4 million for the reporting period with Australia accounting for $28.4 million, down 37% on the PCP; and Canada accounted for $14.0 million being CAD 12.3 million, down 10% on the PCP. Product and technology expense decreased 47% due to reduction of cloud hosting and support costs as a result of the sale of the U.S. business. Certain costs will normalize higher post final completion. As per Slide 15, which details our statutory segment results, our Technology segment is now fully funded by our trading businesses, reporting a statutory segment EBITDA of $1.5 million. Corporate costs per statutory segment results were $4.1 million for the half. Corporate costs will continue to reduce versus the PCP in H2 and reduce further in FY '25. The normalized EBITDA loss was $13.3 million for the reporting period, a material decrease from the PCP loss of $45.9 million. As previously referenced, the company expects a normalized group EBITDA loss for the full FY '20 year of between $9 million and $14 million. Turning to Slide 16, the balance sheet. At 31 December 2023, the company had $46.6 million in corporate cash with adjusted corporate cash of $74.3 million and net assets of $150.6 million. The reduction in net assets compared to the PCP was driven primarily by the company making the first capital return of $315.4 million and payment of U.S. business sale-related transaction and restructuring costs as well as the USD 21 million funding commitment. Turning to Slide 17, cash flows. We provided a detailed cash flow explanation in our Q1 and Q2 4C quarterly reports. Reiterating the company held adjusted corporate cash of $74.3 million as at 31 December 2023 and had no corporate debt. We also expect that cash flow from operating activities, excluding movement in client cash to be positive in H2. I will now hand back to Sam to speak to our FY '24 financial guidance and make some concluding comments.
Samuel Swanell: Thanks, Al. Turning to Slide 19. As said over on this slide, the company reiterates its expectations for the 12 months to 30 June 2024 being FY '24 as follows: total net win to be 10% to 20% higher than in FY '23. H1 has delivered 14% growth, and I'm happy to report that H2 has started well with group H2 net win to February 24 up 34% versus the PCP. Gross profit margin to be circa 50%. Total marketing expense to be between 15% and 20% lower than FY '23. Normalized operating expenses, excluding marketing, to be between $60 million and $70 million. And group EBITDA loss will be between $9 million and $14 million. On Slide 20, we have provided an illustrative example to bridge H1 normalized group EBITDA to our FY '24 group EBITDA guidance. In summary, today's results clearly show that our strategy is working. Revenue growth is up and costs are going down, resulting in a significant reduction in normalized EBITDA losses versus the PCP with record H1 results across all trading and financial metrics. With the final closure of the sale of the U.S. business imminent, we are obviously at an important stage in PointsBet's journey. The combined Australian and Canadian businesses have grown revenue from $26 million in FY '19 to an estimated $230 million to $250 million in FY '24 as per our guidance that we have reiterated today. Our ability to deliver strong growth is evidenced by our trading year-to-date, and upon the completion of the sale of the U.S. business, we will be delivering this top line growth and matching it with positive EBITDA and EBITDA growth from FY '25. Sports betting and iGaming remains a fast-growing global market, and companies like PointsBet with the experience, technical capabilities and ability to work in highly regulated markets are rare and valuable in this industry. This means we can leverage what we have built to deliver shareholder value now, and importantly, increasingly into the future. I will now take questions.
Operator: [Operator Instructions] Your first question comes from Rohan Gallagher from Jarden.
Rohan Gallagher: Sam, thank you, firstly, for the increased disclosure. May I ask, as under the PointsBet 2.0, how do you find the balance between profitability and growth? You're clearly demonstrating good efficiencies around your promotions generosities. But how do you find that balance in taking share given your existing brand technology and so on?
Samuel Swanell: I think the first thing is as it relates to our marketing investment and our wider cost base, that is an investment level that we're comfortable with is not us trying to prune things back. That's the investment level that we expect to continue to deliver the growth that we are delivering. The amount of marketing that we're spending in Australia, while less than last year, it's still a growth amount. We're spending, I suppose, an amount greater than represented by our current market share, so we're spending to grow. And similarly, in Canada, we're investing at a level to grow our market share. And in both markets, we're clearly outgrowing the market. So we are doing so. We're just executing better. We've found efficiencies. And when you have a better product, both on the front end and from a back-end tooling perspective as it relates to promotions and the way we execute that, we just get more bang for the buck. So it's sort of a natural evolution that as our product gets better and gets stickier, we can get more share of wallet from those clients that we have on the books versus them perhaps spending some money elsewhere and we execute more efficiently. So the investment that we're making from a marketing and promotions perspective is just more efficient. But yes, there's no doubt in our minds that we're a growth company and we want to keep growing, and I suppose that's where Canada is really important. The Australian market is in good shape. We're growing, I think it's going to return to some growth shortly. But that Canadian market really provides the hyper-growth opportunity and that's what we -- that's why we're there.
Rohan Gallagher: It's a great segue, Sam. Just on Canada, again, to be in TAM, I do note that you've got high gross profit margins than, say, in America or Australia probably because of iGaming and partner fees, et cetera. But can you just talk about how the profitability and market shares and the opportunities be, given that it's a very highly contested market?
Samuel Swanell: Yes, it's a competitive market, but it has some -- as we've spoken about before, it has some differences to the U.S., so you can clearly see that in our gross profit margins. That's why we're keen to disclose those without having to pay those partner fees, paying a reasonable tax rate, having iGaming sitting next to sports betting for the entire market, it does definitely help that path to profitability. And as we've sort of said today, we expect by the end of our third year of operations there that we'll be hitting that profitability in Canada. So we're on track for that, and it's clearly an aim. But again, an aim within delivering strong growth out of that market. As you said, it's a $2 billion net today Ontario. We can see a part of that clearly getting to $3 billion pretty quickly given the rate at which the market is growing at. And then you have the opportunity for other provinces, Alberta, British Columbia, seem to be probably at the head of the list to legalize in the next couple of years and provide a natural expansion to that TAM. So yes, pretty attractive market. We're growing our market share. Our primary right to win still is around our sports betting product, in our OddsFactory capability, so around live betting. But you can also see how important iGaming is across the whole market, and that's represented in our numbers as well. And so the partnership that we've announced with Strive, it will deliver further upside on those iGaming numbers. So good gross profit margins, effective marketing now on the back of a really strong product on sports and iGaming, there's a clear path to profitability, but also a clear path to good ongoing growth, which is what we're after.
Rohan Gallagher: And a final question, if I may, to Alister with -- as you move towards a stand-alone entity, can you help us in terms of understanding what are sustainable costs at Corporate and Technology levels for this business post the sale of the U.S., please?
Alister Lui: Yes. Thanks for your question, Rohan. So look, obviously, we spoke to the fact that the Technology segment for the half was positive, which means that the Australian trading business and the Canadian business are funding that Technology organization. We've also guided to the fact that there will be some cost that would normalize higher in H2 as we kind of roll out of the sale of the U.S. business. So we do expect that the Technology cost base will normalize a bit higher in H2 and then into FY '25. As it relates to the Corporate cost base, you can see there's already been significant -- a pretty material decrease versus the PCP. In H2, we do expect that to reduce further versus PCP and then normalize out to a full year [indiscernible] in FY '25, which we can obviously provide some more guidance to closer to when we finish our FY '25 budget and whatnot.
Operator: Your next question comes from Rohan Sundram from MST.
Rohan Sundram: Just a couple for me. Firstly, Sam, are you able to just talk us through the drivers of that very strong start you're seeing at the moment in the second half between just attributing it between Australia and Canada?
Samuel Swanell: Yes. I think as we stated, the result that we delivered for Australia in the H1, that was probably a little bit unlucky. We probably left a little bit of net win on the table there that would have meant that our H1 result was actually a little bit stronger than the 14% that we delivered. We're really happy with the group growing 14% in the half, but we probably left 1% or 2% on the table there. And that we -- the momentum that we've had has clearly continued into H2. Both Australia and Canada are performing well. I would say that as we guided to, we expected our margins to sort of normalize a little bit higher from a sports betting perspective back into that 12% to 13% gross range and a little bit higher on the net range, and that's what we're seeing in the half. It's hard for us to talk to the Australian macro a little bit because, yes, we are seeing strong growth, in particular, strong growth on the back of our sports products. We know that now that Tabcorp and Sportsbet have reported -- they make up the majority of the market. Sportsbet was down 5% for the half. Tabcorp digital was down 4% for the half. We grew, so we've clearly grown our market share. So look, it would seem that the macro cost of living is weighing a little bit on the Aussie market. There's probably been the impact of the increases in point of consumption taxes that have sort of come one after the other up until now no doubt has a little bit of an impact because we all get more efficient with our bonus-ing. And there's a compliance piece, I suppose, to the Australian market as well. I think all the large operators, including ourselves, compliance is at an all-time high and even things like proactively contacting clients to ensure that they can afford the wagering that they're undertaking, almost source of funds-type calls, that's probably had an impact over the last year or 2 as we've really taken that to the high level. Unfortunately, a lot of that then flows down to the long tail of operators that probably don't have the ability to invest in compliance like we do. But overall, I think those factors have resulted to in the Aussie market being a little bit down. We're growing strongly. We expect the Aussie market to sort of come back to being positive in the near term and we've spoken extensively about the opportunity that Canada presents. So to get back to the original question, Rohan, better margins, Australia sort of has probably even accelerated its growth from H1. But as I said, H1 in Australia was a little bit negatively impacted by that negative variance late in the half, otherwise, it would have been slightly stronger itself.
Rohan Sundram: And last one for me is just around the new CTO hire. Can that impact the tech strategy in any way?
Samuel Swanell: No. Yes, so great to be able to announce that Dan Lucas is coming onboard as the new CTO. Dan is effectively Head of Trading Technology at the Flutter group across Fanduel, Sportsbet, Paddypower, et cetera. Obviously, we speak a lot about OddsFactory and how important it is to our strategy globally. We want to win on sports products, we want to win on live betting, we want to win on multis. All of that is very dependent on the technology that we've built. Just to remind everyone, while we're selling the U.S. business to Fanatics and the technology was a key part of why they were keen to buy our U.S. business, we split the technology. They get the technology, we get the technology and we continue on with it. But no, the strategy won't change. There will be -- to continue to invest in those areas. And obviously, Dan's background is A1 for that investment.
Operator: Your next question comes from Phil Chippindale from Ord Minnett.
Phillip Chippindale: Sam, just wanted to touch on the Canadian iGaming business. Just in terms of your strategy to target casino-only customers, obviously, as a newer segment for your business, I'm just curious as to how you're going to target those types of customers rather than leveraging those sports wagering platform as you typically have thus far? And I guess I'm really just trying to unpack the partnership with Strive.
Samuel Swanell: Yes, yes. I mean, I think, our strategy in Ontario has clearly been around acquiring clients on the back of our outstanding sports betting client and then cross-selling a portion of them across to iGaming. And you can see that despite being a sports betting-led operator, we even generated more iGaming or online casino revenue than we did sport. But you can think of that as still being generated by sports-first bettors. But then people enjoy playing some blackjack or some roulette. There's a lot of correlation between sports punters and table games, blackjack, roulette, et cetera. Less correlation between sports punters, and say, slots, online slots. So we do believe that the partnership with Strive delivers functionality around bonus-ing and promotions and around content that will allow us to target casino-first players, and those are players that generally prefer slots and slots comes with higher margins than table games. So it's a segment that we haven't really put any marketing dollars behind because we never felt that our casino product was strong enough for those specialist casino players. I think it was -- our casino product was ranked sort of middle of the tier as it relates to competitors. Good enough for a sports punter who wants to come across and plays casino because it's not their #1 preference, but not necessarily good enough for a hardened casino punter who that's their primary interest of coming to you and through Strive. We really accelerate our capability. It will continue to roll out a little -- more games will roll out every month. The promotion functionality will get better every month. So it's not a big bang where you just see a step change overnight. It will be gradual, but it's certainly a segment of the market that we haven't targeted before. So if you think about performance marketing, we can go and do digital marketing to a segment of client that perhaps wasn't necessarily core to us as it relates to sports betting and increase our target audience.
Phillip Chippindale: Okay. And just in relation to that pretty strong performance in the first sort of 7-or-so weeks of the year. Could you just maybe comment on the iGaming segment there in Canada? Presumably, that's performed pretty well. And given you said the Australian business is probably up a bit on the first half growth level, presumably Canada is likewise. But I just -- I'd love a comment on how that iGaming product has performed so far?
Samuel Swanell: Yes. What I would say really is that what we're seeing for the first 7 weeks is pretty much what we've seen in Australia and Canada for H1. the only exception really been that we got hit, as I said, by a bit of negative variance late in the half for Australia. So the momentum's improved, obviously, up 34% for the first 7 weeks, as you said, is a bit above. I sort of made comment to Rohan earlier that margins are back up from a sports betting perspective in Australia. But yes, continued momentum as we've seen with Canada as per the first half, iGaming making up the majority of the contribution still being driven by sports-led strategy and Australia getting back to the yields that we expect for the long term.
Operator: [Operator Instructions] Your next question comes from Simon Thackray from Jefferies.
Simon Thackray: Maybe just come at this a slightly different way. The margin differential between Sportsbook and online casino in Canada, can you give us a bit of a hand in understanding that sort of spread, if there is one, between those two? And just on that, just an excuse my ignorance, which I no doubt it is. But does iGaming in Canada need to be licensed at sort of the head level with an existing land-based casino? Or can this be done independently in Canada unlike the U.S.?
Samuel Swanell: Answering the second part first, Simon. So no, we don't need any connection to any land-based operator like we did in the U.S. So in the U.S., we're paying fees to a casino or a race track in most states. So that's one of the advantages from a gross profit perspective in kind of that no, the license is ours. We have the direct relationship with the regulator and no extra cost there. So iGaming is a committed product, online casino, sitting side-by-side with sports betting. In terms of the first part of the question, look, so far, the margins are pretty similar as it relates to gross profit. So casinos -- different casino products don't necessarily yield at what sports betting yields at, at a gross level, 8%, 10%, et cetera. Yields might generally be lower than that. But from -- if we look at it from a gross profit perspective, pretty similar from sports to iGaming. But what we would say is that, as I just touched on, table games have been the majority of our casino play so far because, again, a sports-led punter prefers those table games and they are lower yielding than slots. So as we can target this new segment of players who are casino-first type players, we would expect our, I suppose, our net win to be earned a little bit more efficiently and that may be able to help us a little bit on gross profit margins, but they're pretty interchangeable from our perspective. And I wouldn't expect to see a massive change in our Canadian gross profit margins.
Simon Thackray: That's super helpful, Sam. And then just the -- for Australia, I think you said the target net win rate of 8.9% versus the 7.6% delivered. And notwithstanding, I took your comments about was a bit of a weaker end to the half. But what does that infer for us for the implied mix of racing versus Sportsbook revenue given the net win differential between the two? What does it look like?
Samuel Swanell: So what we've spoken about is gross margins on sport in Australia -- or on sport and racing in Australia to be between 12% and 13%. That's where we see ourselves sitting, again H1 a bit below that. We've got that haircut a little bit later in the quarter -- late in the half that didn't help. And then net margins, we expect to be between 8% and 9% ongoing in Australia. But you picked up a very relevant point, which is historically as turnover moves from racing to sport, that would put pressure on your gross margin because sport is generally lower yielding than racing. And we made a comment, obviously, that our sport is growing really strongly and that our racing has been largely flat PCP. So all other things being equal, you would have expected our gross margins and potentially net margins to sort of come under pressure because of that transfer from racing to sport. But on the flip side, I think the propensity for bettors to take multi-bets and same-game multi-bets, which are high-yielding sports products and player pots and other innovations in sports betting means that the gap is closing from sports yields to racing yields. But sport is still a little bit lower. If racing was performing stronger, then we might be looking at gross win yields above 13% instead of 12% to 13%, as an example. And then from the gross line to the net line, it really comes down to that promotion efficiency that we've spoken about and we'd expect that efficiency in time to get better. I think we were below 30% for the first time in Australia from gross to net and we won't go back above 30%.
Simon Thackray: Yes. That makes sense. And then on the multi-bet side as well, that's just the -- I think you've made reference to it a couple of times now, just the tailoring, the personalization of the offer to the bettor and encouraging, I guess, that improved mix, which if we can call it mix with more multi-bets. I'm just interested in what are you doing specifically or from a technology point of view, how is that working? How is that offer being tailored far more efficiently for us to understand that sort of a little bit more clearly?
Samuel Swanell: Yes. Yes, so there's a few things there. I mean, first of all, the depth of bet types that can be included in a multi have grown enormously over the last couple of years. So the things that we now bet on, for example, on NBA and NFL, which are really, really popular here in Australia, the U.S. sports, that depth has increased. There's more things in terms of players that clients can bet on. So we -- depth and breadth product is one thing. Then you've got, I suppose, making it easily findable on the app. People need to be able to navigate around, build their multi-bet, make that as user-friendly as possible, the bet placement process is user-friendly as possible. Obviously, as it relates to promotions or tokens, we can direct them towards certain bet types as well. I think the other point to note here is that it is what consumers want. It's just -- it's where the market has been going, that people love their sport and being able to put on a $10 bet that can win you $200 or $500 or $1,000 through a multi has proven very, very popular with bettors these days. But yes, there's lots of things that we've done from a product perspective that have enhanced that product and made it all the more easy for clients to take them. I mean, same-game multi is an absolute game changer because at any one time there could be 3 or 4 NBA games going on and if someone wants to take the same-game multi into another same-game multi, we can do that now. And these are all things you couldn't do a little while ago.
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