Kelsian Group Stock

Good morning, ladies and gentlemen. My name is Fiona Hele, and I'm the Chair of Kelsian Group Limited. On behalf of the Board of Directors, I thank you for joining us here today at the U-City Function Centre, and I welcome those listening online. I'm also pleased to welcome those shareholders here today who are also previous Board members. The Company Secretary has confirmed a quorum for the meeting, and so I declare the meeting open.

I'd like to acknowledge that today, we meet on the traditional country of the Kaurna people of the Adelaide Plains and pay respect to elders, past and present. We recognize and respect their cultural heritage, beliefs and relationship with the land. In person today in Adelaide, I've got the following directors to the left of myself from far left: Jackie McArthur, Terry Sinclair, Diane Grady, Caroline Elliott and Terry Dodd.

I've got Graeme Legh, our Group Chief Executive Officer; and Kelsian Joint Company Secretaries, Michelle Evans and Andrew Muir are also present. We've also got, thank you, Nigel Stevenson from Ernst & Young, our external auditor, who will be here to answer questions as required in the meeting.

On behalf of the Board, I thank you for joining us and for your continued interest and support of Kelsian.

This morning, I'll reflect on the considerable progress made during FY '26 and the strong position in which Kelsian has entered this coming -- this financial year. FY '26 was an important year for Kelsian. We delivered another record financial result, strengthened our balance sheet and took a significant step in reshaping our portfolio.

The strength of the result was evident in our cash generation. Net operating cash flow reached $220.1 million, while leverage reduced to 2.46x at 30 June within our target range. The Board declared a fully franked dividend of $0.10 per share, bringing the full year dividend to $0.18 per share.

Importantly, our results demonstrated the resilient nature of Kelsian's earnings, particularly in the second half of the year when we delivered a strong financial performance despite businesses globally experiencing continued inflationary pressures and significant fuel price volatility. These results reflect the essential nature of the services we provide, the indexation mechanisms protecting a large portion of our fuel and wage costs, the strength of our contracted operations and above all, the commitment and professionalism of our people.

While we are pleased with this progress, we recognize that strong financial performance alone is not enough. Our focus remains on translating our operational strengths into improved returns on capital and sustainable long-term value for our shareholders. The completion of the sale of our Tourism Portfolio to Journey Beyond on 30 September was an important milestone in this journey. The divestment positions Kelsian as a more global commuter and contracted transport business with lower capital intensity, less exposure to discretionary consumer spending and a greater proportion of earnings supported by long-term government and corporate contracts.

This divestment has brought considerable change for our people. On behalf of the Board, I sincerely thank our Marine & Tourism teams for their contribution to Kelsian and for the patience and professionalism they demonstrated throughout this transition. Their work has been an important part of Kelsian's development, and we are extremely grateful for it. This transaction has strengthened our balance sheet and provides us with greater flexibility. However, it does not change the discipline with which we deploy capital.

Our capital management and allocation framework provides a clear basis for decision-making on leverage, dividends, investment returns and the deployment of surplus capital. We will continue to assess opportunities against their strategic merit, risk profile and potential to generate attractive returns.

Turning now to Kangaroo Island. I acknowledge that the delays have been frustrating for the KI residents, and I'm thankful for their patience and understanding they have shown us. I'm delighted to share that Wanggami commenced services this morning, I think, at 5:30 a.m. this morning, and it was very smooth, I hear, and alongside SeaLion 2000. And her sister vessel Ruwi is on her way to Australia as we speak. And Terry Dodd has just advised me that it's currently -- and he showed me on the map, it's north of the Lombok Strait just northwest of Bali. So it's well and truly on her way.

Safety remains our highest priority and underpins every aspect of our operations. During FY '26, we achieved significant improvements in both our lost time injury frequency rate and our total recordable injury frequency rate. The Board remains focused on safety, leadership and effective controls to manage critical risks and accountability throughout the business. Kelsian operates in inherently high-risk transport and marine environments. Every day, our people carry significant responsibility for the safety of our passengers, employees and other users of public roads and waterways.

Serious transport incidents remain our most significant health and safety risk. Tragically, a passenger died in June 2026 following an incident involving our Australian bus operations. Our thoughts remain with the passenger's family and all those affected. An independent review is underway, and we will carefully consider its findings. Safety remains a key priority, and we continue to focus on enhancing our controls, systems and practices. The Board has withheld the safety component of short-term incentive awards pending the outcome of this independent review.

Turning to remuneration. We have listened carefully to feedback and made changes to strengthen the alignment between executive rewards and long-term shareholder outcomes. Our financial measures focus executives on earnings growth and capital allocation decisions that deliver strong risk-adjusted returns. Half of any final short-term incentive award is deferred into equity. Return on invested capital now sits along earnings growth and relative shareholder returns in the long-term incentive plan. Minimum shareholder requirements also apply to directors and executives.

We continue to review and benchmark our remuneration approach to ensure it supports our strategy, reflects shareholder interests and enables us to attract and retain talent. During FY '26, the Board undertook extensive benchmarking against comparable organizations. We will continue to review our approach to ensure it remains appropriate, competitive and aligned with our strategy and shareholder interests. And alignment with shareholders also matters around the Board table, and all Kelsian directors do own shares in the company.

Good governance ensures the Board continues to focus on the company's changing needs while maintaining the right mix of corporate history, experience and skills. I'm delighted today to be announcing that Graeme has been appointed to the Kelsian Board in addition to his ongoing role as Group Chief Executive Officer. During the past 19 months, Graeme has led Kelsian through the delivery of record FY '26 results and the Tourism portfolio divestment. His depth of experience and knowledge of the business will be valued to the Board, and I'm confident he will make a significant contribution.

Neil Smith resigned from the Board in February 2026. Neil was a founder of Transit Systems, which Kelsian acquired in 2020, and he played an instrumental role in building the international bus and marine operator that Kelsian is today. I welcome Neil, who's in the room today. And on behalf of the Board, I sincerely thank him for his significant contribution over the past 16 years, and we wish him all the best in his retirement.

We regularly review the Board's mix of skills and succession plan to reflect the needs of a more focused international company. Last year, Terry Dodd announced that he would not seek another term beyond this year, and a search for a new director is well advanced, and we will update shareholders at the appropriate time. Alongside Board renewal, our oversight throughout FY '26 continued to cover strategic and operational matters, including operational risk, cyber resilience, implementation of the new global finance platform and the opportunities and risks associated with climate change. These matters are important in protecting the business today, whilst ensuring we are equipped to address the challenges and capitalize on the many opportunities ahead of us.

As Australia's largest multimodal transport provider, Kelsian plays an important role in supporting the transition to lower emissions transport and encouraging greater use of public and shared transport. During FY '26, we continued to work closely with our government customers and industry partners to expand our zero-emission bus fleet. We also supported depot electrification projects in New South Wales, South Australia, Western Australia and Victoria, providing the infrastructure needed to deploy and operate these buses.

These initiatives are particularly important at a time when households are increasingly focused on transport affordability. Governments are responding by investing in more frequent, reliable and accessible public transport to help ease cost of living pressures, reduce congestion and support sustainability goals. Importantly, this shift towards public transport supports Kelsian's long-term growth outlook. Government investment can create a reinforcing cycle; better services attract more passengers, supporting further investment in transport networks. Through our partnerships with government and industry, Kelsian is well positioned to contribute to and support this transition.

Despite delivering record financial results, our share price has been disappointing. I understand and I share this frustration. The Board recognizes that our success must be measured not just by our operational achievements and financial results, but by the value we create for those who invest in Kelsian. Our engagement with investors following the results was constructive, and it was encouraging to receive the positive feedback on our operating performance, improved cash generation and strengthened balance sheet. Our responsibility is to turn these achievements into stronger shareholding returns and build lasting value for our shareholders.

The Board and management remain focused on delivering against our commitments, improving returns on invested capital and pursuing growth with discipline. We recognize that confidence must be earned through consistent performance and clear communication, and we remain committed to delivering on this.

In closing, I would like to thank Graeme and his leadership team for their hard work and commitment in a demanding yet transformative year. And thank you to my fellow directors for their contribution, diligence and support. Most importantly, I thank Kelsian's people. Across our global operations, you continue to deliver safe, reliable transport solutions to passengers, customers and communities every day. You have continued to do so through a period of considerable change and your contribution has been fundamental to our success.

To our shareholders, thank you for your continued support and interest in Kelsian. After a year of change, we have taken an important step towards a more focused commuter and contracted transport business. Kelsian enters FY '27 with strong operational momentum, a strengthened balance sheet and a substantial pipeline of organic growth and acquisition opportunities.

I'll now hand over to Graeme, who will discuss this in more detail.

Thank you, Fiona, and good morning, everyone. I would like to start by reflecting on the significant progress Kelsian has made over the past 2 years and why that progress gives me confidence in our future. When we announced the portfolio review in October 2024, we set out to improve the performance of our core operations, strengthen our balance sheet and establish a disciplined framework for sustained future growth. Today, I'm pleased to report back on the significant progress delivered against each of these priorities.

We undertook the review of our portfolio to ensure our operating businesses were aligned to our strategy and delivered appropriate returns. The review led to the Tourism Portfolio divestment, which we completed at the end of September. Kelsian is now a more focused commuter and contracted transport business with lower capital intensity, reduced exposure to discretionary consumer spending and a more stable earnings base. We're committed to strengthening the balance sheet. Through earnings growth, strong cash generation and disciplined capital expenditure, by 30 June of this year, we have brought leverage within our targeted range of between 2 and 2.5x underlying EBITDA. This was achieved before completion of the tourism portfolio divestment, and the receipt of these proceeds has since further strengthened our financial position.

We also committed to greater discipline and transparency in how we make investment decisions. We introduced our capital management allocation framework, setting clear targets for leverage, dividends, capital expenditure and investment returns. Within our core operations, we said we would focus on efficiency and operational excellence. In Australian bus, we've improved returns from our Sydney contracts and secured an extension for our Region 6 services. We said our international platforms will provide opportunities for growth. In the United States, we've delivered exceptional growth from both new and existing customers, supported by investment in fleet, depots and local management capability.

In Singapore, we have secured contract extensions and expanded our core public transport operations. We've also diversified by winning and transitioning the new Sentosa services.

In the U.K., we are one of only a handful of operators to be awarded bus franchise contracts as a significant regional bus market undergoes a structural shift to a contracted bus public transport model.

And in New Zealand, we have secured long-term Auckland ferry contracts, providing an entry into an attractive and adjacent market. We've also continued to invest in the long-term capability of the business, including in new corporate systems.

Taken together, these achievements put Kelsian in a much stronger position to grow. We have a more focused portfolio, a stronger balance sheet and established operating platforms in markets where we see substantial opportunities. Our responsibility now is to convert these opportunities into sustainable earnings growth and improved returns on capital. We plan to pursue that growth with ambition and discipline to deliver long-term shareholder value.

Before turning to the FY '26 result, I want to provide some background setting out the scale of our operations and the key characteristics of our business. Kelsian is a leading multimodal transport operator, connecting people and places across Australia, the United States, Singapore, the United Kingdom and the Channel Islands. As at 30 June 2026, we employed 13,300 people and operated more than 6,300 buses and 120 vessels. Over the last 12 months, our services delivered 384 million customer journeys.

In Australia, we're the largest multimodal bus and ferry operator. In the United States, we're the second largest motor coach operator. In Singapore, we're the third largest public transport bus operator. And in the U.K. and Channel Islands, we have established a platform from which to pursue regional bus franchising opportunities. Our operating capability, scale and long-term customer relationships provide the strong foundation from which to continue our growth.

Turning to our financial performance for the 12 months ending 30 June 2026, representing another record result for Kelsian. Group revenue increased by 8.8% to $2.4 billion, with growth achieved in all geographies. Underlying EBITDA increased by 10.8% to $315.8 million, which, after adjusting for the delayed Kangaroo Island mobilization costs, was at the top of our FY '26 guidance range. With this result, over the last 3 years, underlying EBITDA has grown at a compound annual rate of approximately 25%. Underlying EBIT was up 14.5% to $155.7 million and underlying net profit after tax and before amortization was up 17.2% to $111.1 million.

The result demonstrates the resilience of our business model. The majority of FY '26 revenue is contracted, and contractual indexation mechanisms provide important protection against inflationary pressures, including the significant volatility in fuel prices witnessed in the second half of the period. Growth was supported by new contract wins and existing contract growth, including in the United States, the full year contribution from the Bankstown rail replacement services in Sydney, contract indexation and improved performance in Marine & Tourism.

Importantly, the earnings result again translated into strong cash generation and a stronger balance sheet. Net operating cash flow was $220.1 million, up 7.3%, and leverage reduced to 2.46x within our target range. After one-off costs associated with acquisitions, the tourism portfolio divestment and the implementation of the new group finance system, statutory net profit after tax was $63.5 million, up 16.6%.

FY '26 was a year of operational execution and meaningful strategic progress. The United States continued to perform strongly with the ramp-up of new and existing industrial contracts, solid growth in corporate and technology employee transport services and a stronger charter contribution. In Australia, operating performance in our key urban public transport contracts improved as service changes were implemented and the impact of depot electrification and government fleet replacement delays became more manageable. These initiatives helped offset the higher repairs and maintenance costs associated with operating older diesel vehicles. We signed a 2-year extension of our Region 6 contract in Sydney on improved terms and commenced the Ipswich and Logan services in Queensland.

In the U.K., the award of Liverpool bus contracts validated our strategy of establishing an operating presence ahead of regional bus franchising. We also acquired South Wales Transport, positioning Kelsian for the pipeline of franchise opportunities expected across Wales. In July, we were awarded new long-term ferry contracts in Auckland and entered into an agreement to acquire Belaire Ferries, establishing a platform for further growth in New Zealand.

Across the group, our focus remains on operational excellence, disciplined capital management and growth that meets our investment return hurdles.

As Fiona has emphasized, safety remains our highest priority. It is also fundamental to the quality of the service we provide and the confidence our customers place in us. The improvement in our workplace injury frequency measures in FY '26 is encouraging. Our responsibility is to keep strengthening safety leadership and the controls that protect our people, passengers and other road and waterway users. We must apply that focus consistently, across every operation.

We continue to work with our government and corporate partners to improve service quality, support mode shift to public transport and enable the transition to lower emission fleets and infrastructure. As at 30 June, we operated 454 zero-emission buses across Australia, and our Australian bus Scope 1 emissions intensity reduction target remains on track. We directed $4.2 million to indigenous suppliers during the year and continued our partnership with the Royal Flying Doctor Service. These partnerships reflect the contribution our businesses make to the communities in which we operate.

Our capital management allocation framework provides the discipline for our next phase of growth. It starts with cash generation and the investment needed to maintain safe, reliable operations. Following the divestment of the Tourism portfolio, our average annual net sustaining CapEx requirement has reduced from approximately $85 million to $73 million. Our leverage target remains between 2 and 2.5x underlying EBITDA, and our dividend payout ratio is 40% to 60% of underlying net profit after tax and before amortization.

All growth investments must be aligned with our strategy, accretive to earnings per share before amortization and deliver returns above our pretax cost of capital within 3 years. At the group level, we are targeting a return on invested capital of at least 200 basis points above our pretax cost of capital over medium term. Today, we are reporting our progress against these targets we set out in the framework with our recent initiatives and financial performance driving improvements against all key measures. Importantly, as at 30 June, leverage was within our target range, and the Tourism Portfolio divestment has further strengthened that position. We also continue to make steady progress improving the group's return on invested capital, with this measure now central to how we assess performance and prioritize investment decisions.

We've made a solid start to FY '27 with first quarter trading in line with our expectations. It was pleasing to successfully complete the Tourism Portfolio divestment on 30 September, concluding the sale process we first announced in April 2025. The sale delivered gross cash proceeds of $149.9 million. We've retained the Rottnest Island ferry operation in WA, which was previously included in the sale perimeter. Kelsian will continue to operate the Rottnest services alongside our contracted Transperth ferry operations in WA. With the divestment complete, Kelsian is a more infrastructure-like contracted people transport business with lower capital intensity and a more stable earnings base.

Moving forward, our focus and resources will be our core bus, motor coach and marine transport businesses. We also continue to progress the new opportunities that will commence in FY '27. In the U.K., mobilization is underway for the Liverpool bus contracts, and we've been nominated as preferred bidder for contracts in West Yorkshire with services scheduled to commence in the second half of FY '27. In New Zealand, preparations are progressing for the Auckland ferry contracts commencing in July 2027, with the acquisition of Auckland's Belaire Ferries expected to complete in the coming weeks. This service will give Kelsian its first operations in New Zealand, an attractive and adjacent market for contracted public transport services.

In the United States, we continue to see strong momentum in industrial employee transportation with growth in FY '27 from both existing and new contracts. Given the start to this financial year, today, we reiterate the earnings guidance provided on the 30th of September for underlying EBITDA of between $295 million and $310 million, assuming no significant deterioration in the operating environment.

Turning now to important updates for Kangaroo Island and the commencement of our new long-term agreement for the KI ferry service. Under this new contract, SeaLink is delivering 2 new vessels and associated land side infrastructure that will support this critical transport link for the next 25 years. I recognize that the delays in the construction and delivery of the new vessels have been frustrating for both the KI community and Kelsian shareholders. Despite these delays, I'm pleased to be able to confirm that the new infrastructure works and ramp upgrades were completed successfully during the 3-day service shutdown last week. One of the existing vessels recommenced services utilizing the new infrastructure on Friday, and the first of the 2 new vessels successfully commenced operating full passenger services today.

The second new vessel departed in Indonesia this past weekend and is expected to arrive in Australia by mid-November, with its entry into service to follow the required preparations and approvals. The new and identical vessels will deliver greater operating flexibility and provide a significant improvement in customer experience with a more spacious, comfortable and accessible journey between the island and the Mainland. The purpose-built vessels are 10 meters longer and 2 meters wider than the existing vessels, offering around 65% more vehicle lane capacity per sailing. The roll-on, roll-off design and new shore infrastructure support faster, safer turnarounds and more daily sailings. The additional capacity will support demand growth over the life of the contract.

Delivering a project of this scale has not been without its challenges, but the commitment, determination and collaboration of our team has been instrumental in reaching this point. Our focus now is completing the transition to the expanded ferry service safely while continuing to deliver a reliable and efficient service for Kangaroo Island.

As I noted earlier, the Capital Management and Allocation Framework guides our future investment and capital management decisions with clear targets for leverage, return on invested capital, capital expenditure and dividend payouts. The proceeds from the Tourism Portfolio divestment will be applied in line with the framework and directed to where they best grow and optimize shareholder value. We see a compelling opportunity to build on the businesses we know, grow with our customers and scale our international platforms.

At the FY '26 results, we outlined our 3 complementary growth pillars. The first is to protect and grow our core markets, retaining contracts, improving service quality and expanding with existing customers provide the foundation for sustainable growth. The second is international growth, scaling the established platforms we have in the United States, the U.K. and building our presence in New Zealand. These are markets where our experience and local capability give us a credible basis to compete and grow. The third is to pursue strategic opportunities, including selective bolt-on acquisitions that provide a strategic advantage, add capability, scale or geographic reach and meet our return requirements. Across all 3 pillars, the objective is the same: growth that improves earnings per share, cash generation and return on invested capital.

For each of our 3 growth pillars, there are several near-term initiatives that we are focused on. Starting with our core markets. The Australian bus business has secured important contract extensions, and we continue to focus on service improvements, operational efficiency and delivering growth services. There are also meaningful opportunities to expand. We have submitted a tender for bus services in Wellington and are pursuing a new tender opportunity in Queensland. In Melbourne, tenders covering around 40% of the city's bus contracts, representing approximately 800 buses are in the market, providing a significant organic growth opportunity.

In the United States, the immediate opportunity is to build on the strong momentum in industrial employee shuttle services. We continue to grow our services for our existing clients and are actively pursuing new contracts. These large industrial projects require reliable mass transport solutions, and our established facilities, fleet and local relationships position us well to capitalize on the ongoing investment into LNG, energy, infrastructure and data center projects.

In Regional U.K., the shift to bus franchising is opening markets in which we can apply our proven operating expertise and skills from our long track record of successfully delivering contracted public transport bus services. The Liverpool contract wins and preferred bidder status for contracts in West Yorkshire are important first steps with mobilization of these contracts underway and services commencing in FY '27. In New Zealand, the awarded Auckland Ferry contracts and planned acquisition of Belaire Ferries provide the initial platform from which to build.

Alongside organic growth, we continue to explore targeted acquisitions that strengthen our existing platforms. Further acquisitions in the United States are being explored. Although AAAHI is the second largest motor coach operator, the market remains fragmented, providing scope for selective acquisitions to add local capability, customer relationships and improve our geographic reach. Outside the U.S., in our other existing markets, we continue to identify and pursue strategic acquisitions that will enhance our position for key identified growth opportunities. Our approach will be disciplined. Any acquisitions must have a clear strategic purpose and meet our stated return requirements. We have an attractive pipeline across the 3 growth pillars. Our task is to convert the right opportunities into profitable services while continuing to improve the performance of the businesses we operate today.

To conclude, I believe Kelsian is well positioned for the next phase of its development. This confidence is grounded in both our proven capabilities and in the opportunities we are actively pursuing, growing in the United States, competing for regional bus franchise in the U.K. and adding to our contracted operations across Australia, Singapore and New Zealand. We have a more focused commuter and contracted transport portfolio, supported by long-term government and corporate customers with the divestment reducing our exposure to discretionary consumer spending and lowering sustaining capital requirements of the portfolio.

Our defensive earnings have protections from fuel price movements and other inflationary pressures through direct contract indexation mechanisms or cost recovery arrangements. The FY '26 result demonstrated how these protections support the resilience of the business. We operate established platforms in our existing markets with their scale, local expertise and customer relationships supporting further growth. Our markets offer strong organic growth with a pipeline of contract opportunities across all 3 operating divisions. And we're also actively exploring several attractive acquisition opportunities.

The last 2 years have shown how we execute against our stated priorities. Now we plan to build on that progress, retain and improve the core business, deliver on the contracts already won and convert our pipeline into sustainable growth in earnings and returns. I'm confident in our people, our operating platforms and the opportunities ahead, and I look forward to continuing to report to you on our progress. Finally, I would like to thank the Board and also thank all of our people across the group for their dedication and the service they provide to our customers and communities every single day.

To our shareholders, thank you for your continued support.

I'll now hand back to Fiona to continue with the meeting.

Thanks, Graeme. We'll now move on to the formal part of the meeting. The Notice of Meeting was distributed to all members on the 25th of September 2026 and lodged with the ASX on the same date. A copy is available on the Kelsian website. As Chair of the meeting, I will take the Notice of Meeting as read. The Notice of Meeting provides details of the motions to be put to this meeting, and I will give shareholders the opportunity to ask questions and comment on each motion. Today, I'll be voting on all resolutions by conducting a poll. I'll go through the voting instructions again at the end of the meeting and where members have a reasonable opportunity to speak.

On entry, you each will have been issued with a card: a pink card that entitled you to vote on resolutions 1 to 6 and to ask questions, an orange card that entitled you to ask questions but not to vote, or a white card for visitors who cannot vote or speak at the meeting. Only holders of the pink cards are entitled to vote. The poll for each resolution will be open during each item, and the polls will be conducted for all resolutions at the end of each of the meeting.

I have been advised by our share registry that all proxies received have been checked, and I declare them valid for the meeting. The proxy votes for each resolution will be displayed on the screen for information. A summary of proxies and voting outcomes will be lodged with the ASX once finalized. As Chair of the meeting, I will vote all directed proxies in accordance with directions given by shareholders. I'm also holding open proxies as Chair of the meeting. These will be voted in favor of resolutions 1 to 6, where I have been duly authorized to do so. Any directed proxies not voted at the AGM automatically default to the meeting chair, and I will vote those as directed.

In accordance with the company's constitution, each shareholder entitled to attend and vote at the meeting is entitled to a direct vote on a resolution. I will provide an opportunity for questions and comments in respect of each of these items as we're introduced. We'll also outline proxies received for each resolution as they are put to the meeting. Shareholders and proxy holders will also be able to ask general questions relevant to the AGM near the end of the meeting.

At the appropriate time, please raise your pink or orange card to indicate that you have a question or comment you wish to make. When I acknowledge you, please wait for a microphone to be brought to you, state your name and put your question or comment to the meeting. I do ask that you keep your questions short and to the point, and each member should restrict themselves to no more than 2 questions per shareholder or proxy holder to enable as many shareholders to participate as possible. We will endeavor to answer as many questions as possible in the time allocated, but deserve the right to rule out questions not relating to the meeting or out of order.

There are 7 items of business on the agenda with 6 of those items containing resolutions as listed in the notice of meeting and before the meeting today. The first item of business before the meeting is to receive and consider the financial report, the directors' report and the auditor's report for the year ended 30 June 2026. No vote is required for this item. The financial statements have been made available through our website and lodged through the ASX. Now is the right time to ask questions about the business or anything contained in the financial report, the Chair's report and the group CEO report.

We also have Nigel Stevenson here from Ernst & Young, our external auditors. Nigel is able to answer any questions that relate to the conduct of the audit, the independence of the auditor, Kelsian's accounting policies and the preparation and content of the auditor's report. If you have any questions on the remuneration report, could you hold them to the next item, please?

So I now invite any questions you may have on the financial statements or the company's operations, and please raise your pink or orange card to indicate. And James.

Good morning, Chair. My name is James [ Hun ]. And along with my colleagues, Greg O'Connell and Tony Greco, we represent the Australian Shareholders' Association. Today, we represent 16 shareholders with 138,000 shares. And thank you for meeting with us and discussing issues that we brought up. For the general meeting's information, I have a couple of following questions. I had 3, but I think you've answered one.

As a background, I will just say from our observation, Kelsian is a complex -- is in a competitive business environment operating in 5 different regulatory environments: Australia, U.K., U.S., Singapore and the Channel Islands, and 3 transport industry domains: buses, motor coach and marine. Necessary skills for the Board and operating business include government procurement, industrial relations, service performance, route economics, franchising and the list goes on.

The first question I had, but I think has been adequately answered is how do you determine the capital allocation and pricing of each different contract in each precinct to maintain profit above weighted average cost of capital. If you wish to say more on that you can, but we are okay with the statement of 2% being the target for this coming year. And how are the skills required by both the Board and the Kelsian organization identified, tracked, managed and developed to ensure opportunities can be identified, won and executed for the long-term benefit of the company, including customers and shareholders?

So basically, what we're asking is how do you guys identify the skills that are required and then go about putting them into your organization because we see it as having a fairly high level of complexity. And just a quick question if Chair wishes to answer it. Just what have been your major challenges in the past 12 months, for example, divesting tourism business, the division, renewing the Board or changing the company's management, which is an acknowledgment that you guys have basically been through the ringer. So feel free to make a comment on that.

Thanks, James, and welcome. It's good to see you again and Greg and Tony. I think you've actually answered the questions you asked, but I will have a bit of a go at it. And I might hand to Graeme because I know you heard from me last week, so you might want to hear from Graeme's perspective. I have talked to the Board, and I did mention in my address that, obviously, with the diversity of thinking, it's really important to pull together a Board that has a lot of different cross-section of skill sets, international and local experience, industry experience and the list goes on.

My role as Chair, I work closely with the Board to make sure we've got a really clear succession plan in place and to make sure that we feel that we are getting enough refreshment of the Board. I do feel really comfortable that we have had some really solid refreshment and some great additions to the Board, and I'm really comfortable that we've got a good Board moving forward for the next stage of Kelsian. In terms of attracting those people, it's obviously -- I was clear to say that today, we've got a recruitment process in place where we've done a global search, and we look forward to announcing something at the right time about our next Board Director.

I might hand to Graeme on the -- around the attracting of talent globally. I think that was another question.

Thanks, Fiona. Yes. I mean, I think it's clearly a very important issue for us. At the end of the day, we are a people business. I mean most of our operations are moving people, but we also employ 13,300 people across soon to be 5 different countries, and that does come with its challenges. I think the important way to understand our approach to how we manage that is we do consider ourselves a decentralized business.

And what I mean by that is we do actively try to empower our people who are on the ground in each of those jurisdictions to be able to make the decisions and find the solutions to problems that they have in their individual market. So our job centrally is not an easy job, but we -- our focus is making sure we are working to have the right people on the ground in those locations who have the capability, capacity and knowledge to make the right decisions for their local environment, which means we are not trying to solve the problems of 5 different countries and 3 different subindustries that we operate in centrally in the one location here in Adelaide. Our focus is very much decentralizing and empowering our important people in each of those markets to make sure they do what is right for the challenges that they face.

Just to suggest what was your greatest challenge in the year?

That's where I thought you answered it very well. Obviously, one of the biggest challenges we had was finalizing the divestment. Things without -- beyond our control made it take a lot longer than we wanted, and it did put enormous pressure on the team, and I express my gratitude to the team that really put a lot of work in to make sure that we continue to deliver safe and reliable services whilst knowing that a lot of them were transferring to a different company. So we're very grateful for that. Probably the other one, and I'm sure Graeme would feel the same, is obviously the frustration we had around the second vessel. Again, that was something that was very challenging, but we have got a great outcome, and we're really pleased that the vessel was on its way.

Any other questions from anyone else on the floor? Okay. I might keep moving. That's all right. Are there any other questions for our auditor? No. The Notice of Meeting also invited shareholders to submit questions to the auditor in relation to the audit or accounting policies. We have not -- no written questions have been received at this stage.

I'll now move to the next agenda item. A resolution for adoption of the remuneration report is required to be considered and voted on in accordance with Section 250R of the Corporations Act. The remuneration report is set out in the 2026 annual report and details the company's remuneration framework, the remuneration outcomes for key management personnel, including directors and senior executives. The vote on the remuneration report is advisory only and does not bind the directors or the company. However, the Board will take the outcome of the vote into consideration when reviewing the remuneration practices and policies of the company. I also refer you to additional comments that I made in my address about the significant progress we have made over the last few years.

Moving to Resolution 1, as shown on the screen. The details of valid proxy votes received in respect to this resolution are shown. And is there anyone who wishes to speak in relation to this motion?

Thanks, James. As detailed in the Notice of Meeting, the Board recommends that shareholders vote in favor of this resolution and the meeting Chair intends to vote undirected proxies in favor. Voting exclusions apply for this resolution, and these were outlined in the Notice of Meeting. I now call for a poll to be held on Resolution 1. The poll will be held at the end of this meeting together with other resolutions being put to vote.

Resolution 2 is the reelection of Caroline Elliott as a Director of the company. Information about Caroline is set out in the Notice of Meeting, and Caroline is considered by the Board to be an independent director. I now move Resolution 2 for reelection of Caroline Elliott as shown on the screen. And I invite Caroline to say a few words to shareholders regarding her reelection as a Kelsian Director.

Thank you, Fiona, and good morning, shareholders. It has been a privilege to serve on the Kelsian Board, and I welcome the opportunity to stand for reelection. I bring financial, commercial and operational experience, having spent much of my executive career leading businesses through growth, acquisitions and change as well as serving on boards across a range of industries. As Chair of the Kelsian Finance and Audit Committee, my focus is on rigorous oversight of financial reporting and on supporting the Board's scrutineer of financial performance, capital management and investment decisions.

The establishment of a separate Safety and Risk Committee when I joined the Board has enabled more focused oversight of these responsibilities by the committee. The capital management and allocation framework implemented in 2025 provides an important foundation for assessing investment opportunities. Following the recent divestment of the Tourism Portfolio, Kelsian has greater capacity to pursue growth opportunities across its core bus operations, particularly in the U.S. alongside U.K. bus franchising and organic growth in Australia.

For me, the focus is on making sure we're financially disciplined in how we pursue these opportunities. We need to deploy capital in a way that delivers sustainable earnings per share growth and returns above our investment hurdles. We must also assess the quality and durability of those earnings, the risks we are taking and the implications for the group's balance sheet. As Committee Chair, I've also overseen the scoping and implementation of Workday, a new global finance platform, which went live on the 1st of July this year. Its implementation was a significant undertaking. The focus now is on ensuring the platform delivers the intended improvements in financial controls, reporting and efficiency.

During my first year on the Board, I served on the Safety and Risk Committee and have more recently joined the Remuneration Committee. Both are important areas of governance, particularly in a business of Kelsian's size and complexity, where safety, leadership and accountability are critical to performance. My executive experience has taught me that having a good strategy is only part of the equation. Having the right people, systems, accountability to deliver on that strategy are equally important. As a director, I see my responsibility as testing assumptions, challenging where appropriate and holding management accountable for delivering results. I remain committed to ensuring Kelsian delivers on its growth opportunities through disciplined execution, strong governance, particularly in relation to safety and a continued focus on shareholder returns. I would welcome your support for my reelection. Thank you.

Thanks, Caroline. Is there anyone who wishes to speak in relation to this motion or has questions for Caroline?

Details of valid proxy votes received for this resolution are shown on the screen. The Board, other than Caroline, who makes no recommendation, recommends that shareholders vote in favor of reelecting Caroline Elliott as a director and the meeting Chair intends to vote undirected proxies in favor of this resolution. I now call for a poll to be held on this resolution, which will be held at the end of this meeting, together with other resolutions being put to vote.

Resolution 3 is the reelection of Jacqueline McArthur as a Director of the company. Information about Jacqueline is set out in the Notice of Meeting. Jacqueline is considered by the Board to be an independent director. I now move Resolution 3 for reelection of Jacqueline McArthur as shown on the screen, and I invite Jacqueline to say a few words.

Thank you, Chair. Good morning, everyone. I'm Jackie McArthur, and I joined the Board in 2024, and I put myself up for reelection today. I've spent most of my career in supply chain and logistics and transport and a few other industries, mainly in leading large and complex multinational businesses, both in Australia and overseas. Since becoming a director, I've served on several ASX boards. I'm currently on the Boards of Cleanaway, Orora, and I chair Strait Link. All of these experiences have shaped my pragmatic and commercially focused approach to strategy, operations and people.

And this is particularly relevant to Kelsian. And you saw in Graeme's presentation, more than 13,000 employees globally, delivering over 380 million customer journeys in the last year alone. That's why I love this company. So it's truly exciting. At Kelsian, I chair people, culture and remuneration. And over the past 2 years, we've been a busy committee and a busy Board. We've made significant changes to executive pay to align executive reward both with performance and shareholder outcomes. I've also been an active contributor to the Safety, Risk and Sustainability Committee, bringing all of my practical experience to bear.

Looking ahead, I believe there are 2 priorities that are critical to delivering shareholder value. The first is something you've heard a lot about today, ongoing and continued disciplined capital allocation; and secondly, ensuring that our growth strategy delivers not only great financial performance, but also is underpinned by strong operational performance. And I believe that given my experiences, both in executive career and as a director, that I can be a strong contributor to the Board on these priorities. I'm committed to Kelsian delivering on its potential and hope you both share in my excitement for the future and that you support my reelection to the Board today. Thank you very much.

Thanks, Jackie. Is there anyone who wishes to speak in relation to this motion or has questions for Jackie? Details of valid proxy votes received for this resolution are shown on the screen. The Board, other than Jackie McArthur, who makes no recommendation, recommends that shareholders vote in favor of electing Jackie McArthur as a director, and the meeting Chair intends to vote undirected proxies in favor of this resolution. I now call for a poll to be held on this resolution, which will be held at the end of this meeting, together with other resolutions being put to vote.

Moving on to special business. Resolution 4 is an ordinary resolution for the approval of grant of FY '27 performance rights to the Group Chief Executive Officer. The purpose of the issue of the FY '27 performance rights is to appropriately remunerate Mr. Legh and to encourage him to have greater involvement in the achievement of the company's objectives. The Board considers that the grant of these performance rights creates alignment between Mr. Legh and shareholders whilst ensuring that he has not -- does not enjoy the full benefits of share ownership such as dividend and voting rights unless and until these performance rights vest. Performance rights have been selected as they are a cash effective and shareholder-aligned mechanism of incentivizing the group CEO in a manner that is not overly dilutive.

Further information on this resolution was provided in the notice of meeting. Voting exclusions apply for this resolution, and these were outlined in the meeting. I now move Resolution 4 as shown on the screen. And is there anyone who'd like to have a question or queries on this motion?

Okay. Details of valid proxy votes received for this resolution are shown and the Board recommends that shareholders vote in favor of this resolution and the meeting Chair intends to vote undirected proxies in favor. I now call for a poll to be held on this resolution, which will be held at the end of this meeting, together with other resolutions being put to vote.

Moving to the next item. Resolution 5 is an ordinary resolution for the approval of grant of restricted rights to the Group Chief Executive Officer. Consistent with current short-term incentive arrangements, these restricted rights form part of the short-term component of the group CEO's remuneration arrangements in satisfaction of the deferred component of his FY '26 STI award. As described in the remuneration report, the actual FY '26 outcomes were determined based on performance hurdles aligned to the strategic objectives of the company and its operating business units.

Outcomes of 2 of the STI objectives were awarded on a conditional base and the associated restricted rights are included in the total number for which shareholder approval is sought. Offer of the relevant number of restricted rights, reflecting the amounts awarded on a conditional basis will only be made once the conditional amounts become payable by the company. In the event that the conditional amounts do not become payable, these rights will be canceled. Further information on this resolution was also provided in the Notice of Meeting. Voting exclusions apply for this resolution, and these were also outlined in the Notice of Meeting.

I now move Resolution 5 as shown on the screen. Is there anyone who wishes to speak on this motion?

Details of valid proxy votes received for this resolution are shown. The Board recommends that shareholders vote in favor of this resolution, and the meeting Chair intends to vote undirected proxies in favor. I now call for a poll to be held on this resolution, which will be held at the end of this meeting, together with other resolutions being put to vote.

Resolution 6 is an ordinary resolution for the approval of the insertion of proportional takeover provisions into Kelsian Constitution. The Notice of Meeting includes details for this item. But in summary, reinsertion of the proportional takeover provisions into the constitution will provide shareholders with a choice of considering whether to accept a proportional takeover bid for what might become control of the company. If Clause 25 is reinserted and a proportional takeover bid is approved by shareholders under this clause, each shareholder will have the right to make a separate decision whether that shareholder wishes to accept a proportional takeover bid for their own shares.

The new clause 25 is substantially the same form as the expired clause 25 included in the company's constitution at the time of its submission into the ASX in 2013. The full text of Clause 25 is in the Notice of Meeting and annexure A. I confirm that as at this date, the Board is not aware of any proposal for any person to acquire or increase the extent of a substantial interest in the company from its current level. I now move Resolution 6 as shown on the screen. Is there anyone who wishes to speak in relation to this motion? Details of valid proxy votes received are shown on the screen. The Board recommends that shareholders vote in favor of this resolution, and the meeting Chair intends to vote undirected proxies in favor.

I now call for a poll to be held on this resolution, which will be held at the end of this meeting, together with other resolutions being put to vote.

Now that we have finished the item of business of the meeting, I will address any general questions that relate to this AGM.

If there are no questions, we'll now move on to the poll on resolutions 1 through to 6.

The share registry, Boardroom Limited, has been engaged to conduct a review of the poll papers and procedures before a determination of the results on any resolution are made. I appoint [ Stacey Spence ] of Boardroom Limited as a returning officer. Once all poll results are determined, I will arrange for the results of all the polls to be announced and advised via the ASX shortly after this meeting.

As a reminder, on entry, you will have been given a pink, orange or white card. The persons entitled to vote on the polls for resolutions 1 through 6 are all shareholders, representatives and attorneys of members and proxy holders who hold pink voting cards. If you're attending the meeting in more than one of those capacities, for example, as a shareholder and also as a proxy holder, you should have been issued multiple voting cards. Detailed on the reverse of your voting card are the resolutions being put to the poll and relevant instructions are also printed on the reverse of your card. Please ensure that you print your name where indicated and sign the voting card. Unfortunately, unsigned voting cards are not valid.

If you have any questions or require any assistance, please raise your hand with your pink card. When you have finished filling in your voting cards for resolutions 1 through 6, please place them in one of the poll boxes provided by Boardroom.

[Voting]

It appears that most people have completed voting. Would shareholders please raise your hand with your pink card if you require more time to complete or lodge your cards. Thank you for voting on the resolutions.

There being no further business, which may be properly brought forward, this now concludes the formalities. As Chair of the meeting, I declare the meeting closed. The results of the polls will be lodged with the ASX and will also be available on the company's website. Thank you for coming today or for being online, and thank you for your interest in Kelsian and your attendance today. Thank you.

And I will also add that the Board and management will be having a cup of tea and something to eat afterwards, and we welcome you to join us.

Thank you for standing by, and welcome to the Kelsian Group FY '26 Results Briefing. [Operator Instructions] I would now like to hand the conference over to Mr. Graeme Legh, Group CEO. Please go ahead.

Thank you, [ Mel ], and good morning, everyone and welcome to Kelsen Group Limited's Full Year Results Presentation for the 12 months ended 30 June 2026. I'm Graeme Legh, Kelsian Group's CEO, and I'm joined this morning by Andrew Muir, Kelsian Group's CFO. Today, I'll begin with an overview of the group's record results for FY '26 and the key strategic, operational and sustainability achievements that have been delivered during the year.

Andrew will take you through the detailed group financial performance and the results from each of our operating divisions. I will then discuss the outlook for FY '27 and provide details of our growth pipeline and priorities.

FY '26 was an important year for Kelsian. We delivered another record result, strengthened the balance sheet, advance the streamlining of our operating portfolio, continued the disciplined execution of our growth priorities, and positioned our operations to capitalize on the growth pipeline across our markets.

Before turning to the FY '26 results, I want to provide an overview of the Kelsian Group's global operations and the key characteristics of our business, which is set out on Slide 3. Kelsian is a leading multi-modal transport operator connecting people and places across Australia, the United States, Singapore, the United Kingdom, and the Channel Islands. To give you a sense of our operating scale, at 30 June, we employed 13,300 people and operated more than 6,300 buses and 120 vessels for more than 100 operating locations. Over the year, our services delivered $384 million essential customer journeys. In Australia, we're the largest multi-modal bus and ferry operator with significant contracted bus operations across all mainland capital cities and a portfolio of contracted marine services.

In the U.S., we are the second largest motor coach operator with operations spanning 7 states across the South and Southwest of the country. In Singapore, we're the third largest public transport bus operator, and in the U.K., we have an established operating platform, bringing bus franchising expertise to the regional U.K. bus market.

A key feature of the portfolio is the quality of the revenue base. More than 90% of group revenues contracted or non-discretionary in nature, primarily backed by government and high-quality corporate customers. The combination of our proven operational capabilities, our scale, long-term customer relationships and predictable, resilient revenues provides a strong platform for our disciplined growth into the future.

Turning to Slide 5. I'm very pleased today report another record result for Kelsian. Group revenue increased by 8.8% in FY '26 to $2.403 billion, with growth across all geographies. Underlying EBITDA increased by 10.8% to $315.8 million, which after adjusting for the delayed Kangaroo Island and mobilization costs is at the top end of our updated FY '26 EBITDA guidance range of between $303 million and $312 million.

Underlying EBIT was up 14.5% to $155.7 million, and underlying net profit after tax and before amortization was up 17.2% to $111.1 million. The result demonstrates the resilience of our business model. The majority of FY '26 revenue was contracted and contractual indexation mechanisms provided important protection against inflationary pressures and the significant volatility in fuel prices witnessed in the second half of the period.

Growth was supported by both new contract wins and existing contract growth, including from employee shuttle service contracts in the United States. The full year contribution from the Bankstown rail replacement bus services increased service levels and contract indexation from our bus public transport contracts and improved performance in Marine and Tourism.

Importantly, the earnings result, again, translated into strong cash generation and a stronger balance sheet. Net operating cash flow was $220.1 million, up 7.3% and leverage reduced to 2.46x, meaning we are now within our target leverage range of between 2x to 2.5x underlying EBITDA. Over the 3-year period to June 2026 underlying EBITDA has grown at a compound annual rate of approximately 25%.

After one-off costs associated with acquisitions, the Tourism portfolio divestment, and the implementation of the new group finance system statutory net profit after tax was $53.5 million, up 16.6%.

Moving to Slide 6. FY '26 was a year of strong operational execution and meaningful strategic progress. Operationally, the United States continued to perform strongly with the ramp-up of new and existing industrial contracts, solid growth in corporate and technology employee transport services and a pleasing charter contribution.

In Australia, operating performance of our key urban public transport contracts improved as service changes we implemented and the impact of depot electrification and government fleet replacement delays became more manageable. These initiatives help offset the higher repairs and maintenance costs associated with operating older diesel vehicles.

The mobilization of the new Kangaroo Island ferry contract has been delayed with commencement in now scheduled for October 2026. Approximately $3.5 million of mobilization costs for this new service were not incurred in FY '26 and will now be incurred in FY '27. In Australian bus, we signed a 2-year extension of our Sydney Region 6 bus contract from 1 July 2026 on improved terms and successfully commenced the Ipswich and Logan services in Queensland. Both provide us with a stronger operating platform as we enter FY '27.

In the United Kingdom, the award of Liverpool bus contracts commencing in January 2027 and validated our strategy of establishing operating presence ahead of regional U.K. bus franchising. We also acquired South Wales Transport positioning Kelsian for the pipeline of franchise opportunities expected across Wales. In July, we were awarded new long-term ferry contracts in Auckland and entered into an agreement to acquire Belaire Ferries, establishing a strategic platform for further growth in New Zealand. Across the group, our focus remains on operational excellence, disciplined capital management, and growth that meets our capital management and allocation framework returns.

Alongside the FY '26 results, today, we've also released an update on the proposed Tourism portfolio divestment from within our SeaLink, Marine and Tourism division. In February, we announced the Journey Beyond had agreed to acquire the identified Tourism portfolio operations for total cash consideration of $161 million. The transaction was subject to ACCC and FIRB approvals and other customary conditions. Since the announcement in February, the ACCC has been assessing the potential divestment of 2 transactions. The main Tourism portfolio and separately, the SeaLink operations to Rottnest Island in WA.

Kelsian and Journey Beyond have agreed that SeaLink Rottnest will no longer form part of the Tourism portfolio. Having removed SeaLink Rottnest from the transaction perimeter, we are confident we have a compelling case for ACCC approval of the remaining tourism transaction. SeaLink Rottnest is a profitable, stand-alone commuter ferry business with a strong brand and from Kelsian perspective, it is business as usual for our WA Marine operations team.

Kelsian has significant Marine operations outside of the Tourism portfolio, and we now intend to continue to operate SeaLink Rottnest alongside our transport commuter ferry operation and the other retained ferry operations around Australia and soon-to-be in New Zealand. We continue to work with Journey Beyond to satisfy the acquired regulatory approvals for the remaining Tourism portfolio, which accounts for more than 90% of the original transaction value and we still expect this transaction to complete in the first half of FY '27. Post completion, Kelsian will be a more focused global commuter and contracted transport business delivering bus, motor coach, and marine transportation services.

Before handing it to Andrew, I want to acknowledge the important role Kelsian plays with the many local communities we serve and in enabling cleaner, more accessible, and more connected cities. Kelsian is a people business. Our employees provide important transport services that connect communities every day and a thank you to our people and passengers remains our highest priority. We continue to work with our government and corporate partners to improve service quality, support mode shift to public transport, and accelerate the transition to lower emission fleets and infrastructure.

In FY '26, the group delivered improved safety outcomes for our workforce with a 24% improvement in lost time injury rates and a 23% improvement in total recordable injury rates. It was pleasing to see the improvement in these key injury frequency measures while maintaining our focus on continuing improvement to deliver stronger safety outcomes across the group. We now operate 454 zero-emission buses across Australia, and our Australian bus scope line intensity reduction target remains on track.

There was 0 significant spills to the environment across our operations, and we exceeded our target for female Board representation. We also directed $4.2 million to indigenous suppliers and continued our partnership with the Royal Flying Doctor Service. Overall, our services played a critical role connecting communities, delivering more than 384 million essential customer journeys during the year.

I will now hand to Andrew. He will take you through the group's detailed financial performance and the results from each of our operating divisions.

Thanks Graeme, and good morning, everyone. I'm really pleased with the record full year financial results that Kelsen delivered with revenue growth across all divisions and group margin expansion.

Revenue increased by 8.8% to just over $2.4 billion. Key drivers were the ramp-up of new and existing contracts in the United States, the full year contribution from the Bankstown rail replacement project in Sydney, the benefits of the contract indexation mechanisms we have in our long-term contracts with government, and service growth across the group.

Underlying EBITDA was $315.8 million, up 10.8% and margins improved. The margin improvement reflected growth in key USA employee shuttle contracts, the Bankstown rail replacement contribution in Sydney, and fuel mitigation strategies in the non-contracted operations. Below EBITDA, depreciation increased, reflecting the expanded USA motor coach fleet , new vessels coming into service in the Marine business, and the broader asset base supporting recently commenced contracts.

The effective rate of tax was 20.1% and slightly below our expectations for an effective tax rate of between 22% and 25%. This was due to international tax rate differentials and the benefits of shipping -- exempt shipping income in Australia. Underlying EBIT was $155.7 million, up 14.5%. Underlying NPATA was $111.1 million, up 17.2%, and earnings per share before amortization increased 16.8% to $0.49 per share.

Statutory NPAT of $63.5 million was an improvement of 16.6% on the prior year. Included in the statutory results were one-off costs associated with several small acquisitions completed in the period. Costs associated with the divestment of the tourism portfolio and implementation costs of the new global group finance system. Combined, the totaled $14.5 million after tax. Reflecting the strength of the result and cash generation of the business, the Board has declared a fully franked final dividend of $0.10 per share, an increase of $0.05 per share taking the full year dividend to $0.18 per share.

Turning to Slide 11. Cash generation remains the strength of the business and continues to be well-supported by long-term contracts and a high proportion of contracted or non-discretionary revenue. Gross operating cash flow was just under $300 million and net operating cash flow increased by 7.3% to $220.1 million. Cash conversion was just over 91%, underpinned by the predictable and defensive nature of our contracted earnings.

Investing cash flow was $136.6 million and reflected a combination of sustaining maintenance expenditure and targeted growth investments, particularly in the United States and U.K. as well as the 2 new Kangaroo Island vessels and associated infrastructure. I'll provide some more details on the split of capital expenditure on Slide 13.

The group ended the year with $176.3 million of cash reserves, providing strong liquidity and flexibility as we move into FY '27. The business is generating meaningful cash while funding growth CapEx and increased dividends and continuing to bring leverage lower as earnings grow.

Slide 12. Leverage reduced from 2.7x a year ago to 2.46x at 30 June 2026 and is now within our target leverage range of between 2 and 2.5 times. The reduced leverage has been underpinned by earnings growth, strong operating cash generation, and disciplined capital expenditure. In relation to our borrowings, it's important to distinguish between Kelsian's corporate borrowings and special purpose vehicle debt on our balance sheet attached to government-backed contracted assets because the economic risk of these is quite different.

Limited recourse SPV debt funds government contracted assets. It's a ring-fenced from the rest of the Kelsian Group, is serviced by the associated contract cash flows. It amortizes with the assets and importantly, is excluded from our covenant leverage calculation. In addition, a small component of our corporate debt relates to government-backed contracted assets that are expected to be recovered at the end of the relevant contract or moved into an SPV structure.

At 30 June, we had $32.3 million of government-backed contracted assets on the Kelsian's balance sheet, pending transfer into the SPV wingspan structure. Excluding those contracted government-backed assets and the associated earnings leverage would have been 2.37x at year-end. The key point for investors is that this financing structure supports government fleet investment including the rollout of electric buses, while materially reducing stranded assets and residual value risk for Kelsian.

We remain focused on maintaining a strong balance sheet while retaining flexibility to invest where opportunities meet our return hurdles. With leverage back inside the target range, we retain the flexibility to take advantage of organic and inorganic growth opportunities we see across the group.

Turning to capital expenditure. Total net CapEx in FY '26 was $133 million after taking into account proceeds of $8 million from asset sales. The largest chunk of CapEx investment was in the International Bus Division, principally relating to new and secondhand motor coaches to support the ramp-up of new and existing contracts in the United States, buses for the new Liverpool contract, which commences in January, plus new buses in Jersey, which we anticipate will move into an SPV structure.

Marine and Tourism CapEx was $31.6 million, reflecting the Kangaroo island vessels and infrastructure expenditure and vessels in Southeast Queensland. $15 million has been carried forward into FY '27 because of the revised delivery timetable for the new Kangaroo Island boats in infrastructure. Australian bus capital investment was $14.9 million comprising motor coaches in the resources sector of our business, replacement buses for Stradbroke Island and electrical charging infrastructure.

FY '27 forecast CapEx is approximately $123 million, including $85 million of sustaining maintenance CapEx, the carryforward of $15 million from FY '26, and approximately $23 million of committed growth CapEx in various operating divisions. Any additional growth CapEx will remain subject to meeting our strategic and investment return hurdles.

Turning now to the divisional performance and starting with Australian Bus on Slide 15. Revenue growth was underpinned by contract indexation and the full year contribution from Bankstown rail replacement services. The division delivered an improved margin despite inflationary pressures and fuel volatility. The contractual indexation mechanisms provided effective protection against fuel price movements and other inflationary cost pressures and the operating improvement initiatives implemented during the period improved performance.

Sydney operations improved and stabilized over the year as network service changes were implemented and the impact of depot electrification and government fleet replacement delays became more manageable. We signed a 2-year extension of the Region 6 contract in Sydney, which commenced on 1 July 2026 on improved terms, providing a stronger foundation for FY '27.

The Bankstown rail project continued to make a meaningful contribution for all of FY '26 and is now expected to wind down during the first half of FY '27. The division also successfully commenced the Ipswich and Logan contract during the year, representing Kelsian's first competitively tendered fast contract in Queensland and establishing an important platform for future growth in state.

To Slide 16. International Bus was the strongest divisional contributor to group growth, with revenue increasing 17.4% and underlying EBITDA increasing 28.1% led by the United States as a key contributor to the FY '26 results. AAAHI achieved strong revenue and margin growth as new industrial employee shuttle contracts commenced and ramped up much faster than expected and existing contracts expanded. During the period, we leased 2 additional depots in the Gulf region to support the larger fleet and improve maintenance capability and vehicle availability.

Corporate and technology employee shuttle activity continued to grow, including a new data center contract, while charter activity was supported by major events, including the FIFA World Cup. The USA pipeline of new and existing industrial contracts remain strong. We continue to see opportunities to grow with existing clients and opportunities for new work across LNG, energy, data center, and major infrastructure markets.

Singapore delivered another stable result. The Sentosa contract commenced successfully during the year, and the Bulim contract expanded with additional services, supported by strong operational and maintenance performance. In the U.K., our strategy was validated by the award of Liverpool City school bus contracts commencing in January 2027 and the acquisition of South Wales Transport also provides local capability and incumbency ahead of significant regional bus franchising pipeline.

For Marine and Tourism. Marine and Tourism delivered revenue growth despite subdued consumer confidence and fuel price volatility with yield management, surcharges, and operational initiatives helping to protect earnings. The business also managed the uncertainty associated with the proposed divestment of the Tourism portfolio as well. Performance benefited from contracted ferry demand, improved utilization of new vessels and yield management. Elevated fuel costs impacted the non-contracted part of M&T but was mitigated through targeted surcharges, fare adjustments, and operational efficiency initiatives.

The team has continued preparation for the launch of the new Kangaroo Island vessel contract. Service commencement is now scheduled for October 2026, and our focus is on a safe and reliable transition while maximizing returns from the increased capacity, frequency, and improved customer value proposition.

Post divestment, the retained Marine businesses have similar infrastructure like characteristics to our public transport bus contracts. Revenue from the division will be less sensitive to changes in economic conditions, and will be backed by long-term high-quality service contracts with lower capital intensity.

Finally, turning to corporate costs. The increase during the year related to several items. These included the performance of our captive insurance structure and elevated claims activity for bus accidents, the recognition of non-cash long-term incentive expense and continued investment in cybersecurity. The key corporate milestone was the successful go-live of the global Workday finance system on 1 July 2026, supporting stronger governance, controls, data visibility, and process consistency across the group.

The platform standardizes processes, strengthen governance and control, and provides a more scalable finance environment for the group. Work on the Workday HR implementation has commenced and is scheduled to go-live in the first half of FY '28. The anticipated FY '27 implementation cost for Workday HR are $12 million. While implementation costs have affected near-term earnings, the new platform is expected to deliver efficiency, governance, and controls over time, as more than 13 legacy systems are retired and data and processes are standardized and automated across the group.

The successful finance go-live establishes a stronger platform for governance, control data visibility, and process consistency as the group continues to grow. I'll now hand back to Graeme to discuss growth and the outlook for FY '27.

Thanks, Andrew. Turning to Slide 20. The foundations are in place for another strong result in FY '27. In FY '26, our focus on operational execution delivered another record result. We strengthened the balance sheet, and we continue to build a significant growth runway across several geographies.

Our key focus areas are continuing to drive operational efficiencies, contract extensions, new contract wins, delivering service growth, and capitalizing on growth opportunities in the United States and the United Kingdom. Specifically, we will transition and mobilize the new Kangaroo Island contract prepared for the New Zealand ferry contracts commencing in July 2027 and continue the orderly separation of the Tourism portfolio from the retained Marine operations.

In terms of guidance for FY Underlying EBITDA is expected to be between $320 million and $335 million, assuming no significant deterioration in the operating environment. Guidance is inclusive of the $3.5 million of mobilization costs for Kangaroo Island, which due to delays, will now be incurred in FY '27. Importantly, because the Tourism portfolio transaction remains subject to regulatory approvals and the timing of completion is not yet known, FY '27 guidance includes the contribution from the Tourism portfolio for the full year, assuming no change to the operating portfolio. We will update guidance when there is sufficient visibility on completion and the financial impact of the transaction. I'm also pleased to report that the group has commenced the new financial year strongly, with July trading being in line with expectations.

Slide 21 brings the growth strategy together under 3 complementary pillars all anchored in disciplined capital allocation, a focus on our core strengths and sustainable shareholder returns. First, we will protect and grow our core markets across Australia, the U.S., the U.K., and Singapore, by retaining and expanding contracted bus and marine services, improving the performance of existing networks, and leveraging our customer relationships, operational capability, efficiencies of our scale, and our track record.

Second, we will selectively grow our international platforms and enter attractive new markets. The immediate priorities are continued growth in the U.S., execution of the U.K. bus franchising opportunity, and expansion in New Zealand, targeting long-term contracted earnings in markets with strong fundamentals.

Third, we will pursue targeted strategic opportunities, including bolt-on acquisitions in our existing geographies that enhance capability scale or geographic reach while recycling capital from non-core assets where appropriate. Across all 3 pillars, underwriting and returns discipline remains central and all growth must meet our strategic and financial hurdles and support long-term value creation.

Slide 22 sets out an important structural tailwinds supporting the long-term outlook for Kelsian. Investment in better public transport creates a reinforcing cycle of improved services, higher patronage, and further network investment. With households increasingly focused on transport affordability, governments are investing in more frequent, reliable, and accessible public transport as part of broader cost of living, congestion, and sustainability objectives.

We are seeing tangible evidence of that policy support. New South Wales is investing $452 million to expand bus services. Victoria is enhancing its urban bus network, and Western Australia has announced additional investment in ferry services and electric buses. Governments are investing in service frequency, infrastructure, and technology at the same time as households are increasingly focused on transport affordability in the context of ongoing cost of living pressures.

The opportunity exists to convert that investment and affordability support into sustained passengers growth through improved frequency, connectivity, and customer experience. Better frequency, reliability, and connectivity can attract and retain passengers. Higher patronage then supports stronger asset utilization, more efficient network planning, and the case for further investment into public transport services and infrastructure. The broader system benefits are also important. Reduced congestion, lower emissions, more affordable transport, and reduced pressure on road capacity. Kelsian is well-placed to participate in this cycle as a trusted operating partner with scale, local relationships, and a strong track record of mobilizing and improving complex transport networks.

Turning to Slide 23. The United States is 1 of our most attractive growth markets, and we believe the platform we have established provides strong foundations for the next phase of our growth. We are positioned across high-growth sectors, including industrial, corporate and technology employee shuttle services. In particular, major investments in energy, data centers, and infrastructure are supporting sustained demand for workforce transportation. AAAHI is already the second largest motor coach operator in the United States, but the market remains highly fragmented with more than 87% of operators running fewer than 25 coaches. That creates a significant opportunity to scale from our established platform.

Our customer base also supports recurring organic growth. Since the acquisition in June 2023, we have maintained a 100% renewal track record for key contracts while expanding services with a number of important existing customers. The growth pathway is, therefore, multi-dimensional. New contract wins, expansion with existing customers, entry into adjacent geographies and end markets, and disciplined bolt-on M&A where it strengthens our capability, scale, or geographic reach and meet our return requirements.

The U.K. represents 1 of the group's most significant capital-light organic growth opportunities. The tender pipeline is building progressively across multiple regional authorities with more than 2,000 buses currently anticipated to be franchised in the next 12 months and an estimated addressable market of approximately 10,000 buses over the next 3 to 5 years.

Our recently announced Liverpool contract wins provide important early validation of the strategy. The contract commenced in January '27 and together with our operating platforms in Liverpool and Wales, strengthen our local capability, our relationships, and our incumbency credentials. The opportunity is attractive because the franchise model can provide long-term contracted earnings without requiring the same level of balance sheet capital as a traditional asset-heavy expansion. We'll remain selective and disciplined, focusing on markets where our operating capability, local position, and customer proposition gives us a clear strategic advantage and where returns meet our investment hurdles. Our objective is not simply to build scale, it is create a high-quality defensible regional platform that can compound through successive franchise opportunities.

In closing, FY '26 demonstrates the quality and resilience of Kelsian's business model and the progress we have made in positioning the group for its next phase. We delivered record earnings and strong cash generation, reduced leverage into our target range, and continue to simplify the portfolio. At the same time, we are well-placed for the next phase of growth with credible growth platforms in the United States, the U.K., and New Zealand, while retaining strong positions across our Australian markets. The priorities for FY '27 are clear: deliver operationally, progress and complete the Tourism portfolio divestment, maintain capital discipline, and convert the best opportunities in our growth pipeline into sustainable earnings and long-term shareholder returns.

Finally, on behalf of the Board and the management team, I would like to thank our people right across the group for their commitment to the transport services they provide to our customers and communities every day. And with that, I will now hand back to Mel who will facilitate any questions for Andrew and I. Thank you.

Thank you. [Operator Instructions] And your first question comes from Cameron McDonald with E&P.

Questions from me. Just in terms of the Tourism portfolio and the slight change to that. You've previously guided that the portfolio generated about $24 million, $25 million of EBITDA. If we're adjusting our expectations to now keep Rottnest, what's the adjustment to the group earnings that we should be expecting off the back of that?

Thanks, Cameron. Look, the Rottnest portfolio is pretty much in line -- Rottnest business story is pretty much in line with the rest of the portfolio in terms of its contribution. So I think it -- you can see that we've outlined the difference in the total consideration and the contribution that was expected from Rottnest, which is slightly under 10%, and that's similar from an earnings perspective.

Okay. Awesome. And then just on 2 questions on AAAHI, if I can. The -- you've called out some benefits from the World Cup. Can you quantify that so that we have an understanding of what the potential headwind next year actually looks like with that?

I mean it was certainly a few million dollar benefit directly out of the World Cup. Now whether that's a direct headwind or not is to be seen. We certainly plan on getting utilization out of those assets that were used by the World Cup. But it was a nice bonus in FY '26 with that peak in demand in that June period, which is typically when we see our charter services start to wind down for the year. So repeating that size and opportunity at that time of the year is probably more difficult looking into FY '27 than it was -- that was delivered in FY '26.

Okay. And then just staying on AAAHI, you've got some good growth in that contract market and corporate market. When are you starting or have you started turning your mind to more public transport type services and contracts?

We certainly have. That's a focus, and we've had a pretty good track record delivering on those contracts since we bought the business in 2023, having renewed all of our existing relationships with some key state transport authorities in Texas, Colorado, and New Mexico. So they certainly remain a focus, and we continue to go after them.

They probably do get a bit round out in the grand scheme of things when you compare them to the contribution that comes from those significant industrial sector clients in the Gulf area. That's probably why it all gets to be round out, but we certainly have not lost focus on the opportunity in the transit world in the U.S. for the AAAHI business.

Are there any contracts coming up that you'd potentially be interested in bidding on either in the existing states or new sort of adjacent states?

So our focus at the moment is very much within our existing geography. And there's a pretty steady pipeline of ongoing opportunities. The nature of the U.S. business is that the contract size is probably smaller than we see in Australia and the contract term is not quite as long. So it's really an ongoing cycle of bidding for those opportunities. But our focus at this stage is on bidding for opportunities where we've got existing or adjacent operations as opposed to bidding in new cities where we don't have a presence.

Your next question comes from Aryan Norozi with Jarden.

Before I get into my question, just a clarification on the last question, please. When you said the World Cup is a few million dollar benefit for this year, is it -- was that to the EBITDA line? Or are you talking the revenue line?

That was at EBITDA. I mean, just to clarify, though, we're not expecting that to completely drop out. There will certainly be utilization from those assets this year. It's just whether we get that sort of peak in utilization at that exact same period like we had the benefit from FIFA this year.

So maybe $2 million or $3 million EBITDA, but not all of that winds out. There's obviously we're going to replace some of the it. Is that the message?

Yes. Correct. Correct. It doesn't just drop to 0.

Yes. Perfect. Just on my question. Just in terms of -- can you just talk through the -- maybe for this year, what the incremental EBITDA contribution was from sort of the LNG projects that you've won ramping up? And the incremental benefit into FY '27, please, just in terms of finishing to annualize because, obviously, first half 2016 was ramp-up mode, second half more normal of '26, and then FY '27 is probably the full run rate for those 2 contracts.

Yes, that's probably right, Ary. So -- I mean, obviously, a big component of the growth delivered in the international bus segment, which was, I think, 28% growth in EBITDA, a big proportion of that was driven by the ramp-up in those industrial sector contracts. Now they probably ramped up or they did ramp up faster than expected during FY '26 and we got a bigger earnings contribution out of those contracts than we expect it -- when we're sitting here at this time last year. What that means for FY '27 is the growth rate, we're certainly expecting to moderate out of those contracts.

There is still further growth to come, but the rate of growth is going to be at a much lower level than what was witnessed over the course of FY '26. We do expect those new contracts to both reach full capacity at some point in FY '27, but that is dependent on the EPCs, the prime contractors and their ability to continue to hire. So a bit beholden to how quickly they can hire the construction workforce as to how quickly we get to that full capacity. But sitting here today, we would expect to get the full capacity for both those contracts at some point during FY '27.

Got you. And like back of the envelope based on my just rough calc, like that should be another -- the LNG ramp-up in '27 or '26 would be another $5 million to $6 million of EBITDA. Is that roughly in the ballpark of how -- am I thinking about that the right way?

Yes. I mean roughly, probably not quite that high, but roughly, that's probably not a million miles away from the mark.

Got you. And then last one, just in terms of oil prices, obviously, you've delivered a very strong result despite oil prices going up 50%, 60% from a few months ago. To what extent are you factoring headwind -- net EBITDA headwind from oil prices into guidance for FY '27? And to what extent is that realistic versus just obviously provisioning for some uncertainty, rightly so.

Yes. So I think the result really demonstrates how limited the impact of oil prices is on our business as a whole. To deliver this result in an environment where we've seen oil prices move to the extent they have, given we're a very significant user of diesel, I think, demonstrates the market, how well our contracts protect us from movements in things like fuel price when you look at the group as a whole.

Now there are pockets of our business that are more exposed to oil prices. The big 1 of that is in the Marine and Tourism division where we don't have that contractual protection in a number of our operations. And we certainly saw some headwinds in the final quarter of FY '26 in those operations, both from higher input prices for our operation in diesel, but also more generally, just in terms of reduce demand given higher cost of living pressures on the consumer side.

Now we're expecting that to continue for those parts of Marine and Tourism business. So looking at that division on its own, there is certainly some headwinds there as we look towards FY '27 but I think from a group perspective, we remain very comfortable that, as a whole, our business is well-protected from changes in oil prices for any further change in oil prices moving forward.

Got you. And sorry, very last one, if I can sneak 1 in. Just the Aussie bus EBITDA margins, they stepped up in the second half to about 11.5%, and the first half was 11%. So you're making progress there. How do we think about the ramp-up into FY '27? Should there be a further step-up progressively in first half 2017 above the 11.5% and then second half further improves? Or is 11.5%, probably the run rate steady state for the business in FY '27, please?

Yes. I think 11.5% is probably pretty good. Look, we want to keep pushing and we -- there still is improvement to be made out of that business, but it is probably more incremental, and it is probably driven by delivering on some of the growth initiatives that the government has out there in terms of investment into the bus network. As those growth services come in, they come in at a higher margin than the baseline business, which over time gives us further incremental margin expansion. But I think looking at second half FY '26 to first half FY '27, not expecting any big changes either up or down from where that margin was...

For the previously mentioned issues -- so the previous mentioned issues like the congestion and the EV delays that sort of -- this margin reflects the resolution of that. So we shouldn't be factoring any benefits from that flowing through?

Yes. So I think -- I mean, I think there's still probably room to play out on the congestion side where we did get -- did make material improvement in the second half of FY '26 was on resolution of some of the delayed electrification projects that -- with some of our major state governments. So they have acknowledged those delays. They've started compensating us for the maintenance cost of maintaining the aging diesel fleet. And alongside that, some big projects, particularly in Sydney, are now nearing completion or have completed, which have allowed a significant number of new electric vehicles in the service, which come with lower costs and obviously flow through to the bottom line and are driving some of that margin expansion that we saw in the second half of FY '26.

Your next question comes from Owen Birrell with RBC.

Congratulations on a pretty solid result. Just wanted to ask, I guess, a further question or follow-up question on AAHI. Very, very strong revenue results during the period and obviously very strong EBITDA margin for the international group. I'm wondering if you can give us a sense of what the EBITDA margins expanded by in the U.S. alone, so that we can sort of split out what that U.S. business did versus Singapore and U.K.

I mean we don't split it out, but I think it's fair to say, Singapore and the U.K. were pretty much in line with previous periods. So the incremental earnings and margin coming out of that international bus division were driven by changes in the U.S. or improvements in the U.S.

Okay. That's understood. And can I ask on the CapEx guidance that you've provided, I think $7 million for the U.K. Is that all for the Liverpool buses? Or is there anything else in there for some of the other regions or the proposed tenders that are coming through over the next sort of 6 to 12 months?

Yes, there's the Liverpool buses, so there's some further buffers we need to buy for those school bus contracts. And there's some further capital, we think, for some new contract -- small contract wins in the U.K.

Can I ask, you mentioned that the buses for Liverpool, the Liverpool contract in Jersey will be moved into an SPV structure. I noted that the SPV debt balance has reduced almost about $10 million. Just wondering you've -- what is -- firstly, what's come out of the SPVs. But also, is it fair to assume that, that $7 million is going back into SPVs?

Yes. So the majority -- it's only for Jersey where the SPV structure will likely to take effect. So there'll be some assets transferred into the SPV structure for Jersey. And then on the remaining portfolio, it's the normal amortization that exists on those assets.

Okay. And just 1 final 1 for me just on the CapEx theme. You've called out $11 million for U.S. CapEx. Is it fair to assume that's all organic growth? Or is there anything in there for any potential bolt-ons?

No, yes, all organic growth.

Okay. And in terms of potential bolt-ons, is there any things that are obvious at the moment? Or is it very much sort of a wait and see?

I mean, I think there are certainly some attractive opportunities in the U.S. that we're keeping a very close eye on. But as we stand at the moment, there's no huge time pressure for us to rush out and do anything in the U.S. So the overall focus remains getting an outcome on the Tourism portfolio. But we're certainly keeping a close eye on the key targets in the U.S. And if there is a need to act or anything sooner rather than later, we think we're in a position where we can do that.

Your next question comes from Allan Franklin with Canaccord.

Just hoping to get a bit of color. I know you referenced the LNG side of things ramped up better than expected over the course of the year. If you were sitting here last year versus now, just sort of frame perhaps what didn't go as well as expected, what underperformed during the year, just sort of bridge that gap between what could have been low end of guide coming to this point?

Is that in AAHI specifically or...

No, sorry, just broadly across the group, just sort of noting we obviously have hit above guide, probably carried by LNG and perhaps KI pushing back. But, yes, looking back what perhaps didn't work, didn't perform in FY '26 that then you hope carries forward stronger?

Yes. I mean I think if you go back to this time last year, I think certainly, at least in the first half, Australian bus underperformed where we expected. We continue to see that margin deterioration in the first half when we were sort of hoping that we've seen the worst of it at the back end of FY '25. Now pleasingly, we managed to turn that around or the guys mentioned turn that around due to some changes in the second half. So I think we got that back on track. But over the full year, probably was a bit under where we were expecting just purely on that margin side given some of those cost base pressures around maintaining older vehicles and operating performance associated with congestion and other things around the network.

So that was certainly 1 of them. And then Marine and Tourism, I mean, Marine and Tourism came off a very, very strong FY '25, and it started FY '26 very positively, but there was certainly some impacts from March onwards as we started to feel the impact of oil price movements and what that did to sort of consumer sentiment, particularly for the more tourism-exposed parts of Marine and Tourism.

So I think Marine, Tourism, we're pretty pleased. We actually got a better result than FY '25 and FY '26. But if you go back to March this year, that could have actually done a fair bit better if the world hadn't changed back in March. So they're probably the 2 areas. I think it's fair to say, internationally, U.K. and Singapore did as expected, both had pretty solid performances and then the U.S. was the one where we certainly did better than expected given the faster ramp-up of those 2 new LNG contracts.

And then just perhaps looking into that FY '27 guide, yes, I appreciate we've touched on AAHI in bit of detail so far. But perhaps where are the conservative -- the sort of cautious elements within that FY '27 guide, I assume it sort of sits within M&T again, given how we sort of came through the fourth quarter? I assume there's levels of conservatism around Bankstown and redeploying those assets. Is that sort of fair?

Yes. I mean you pretty much hit the nail in the head there, Allan. So Marine and Tourism we sort of called out, had a bit of pretty soft final quarter of FY '26 and with probable expectations are that probably continues, barring sort of some material external shifts. So that's probably the 1 area. Australian bus, pretty comfortable where the margin got to. But we are expecting, as we called out in the presentation, some further growth in some of our key markets off the back of some announcements of government about investments into our bus networks.

Now the timing of that growth is a bit uncertain. And earlier that happens, the better for us, both in terms of the incremental margin from the growth services. But the change of the network gives us a chance to find efficiencies across the entire network. So the more of the year we've got that to play with, the better. So the timing of those growth services does have a bit of an impact.

And then in the U.S., as flagged in 1 of the earlier questions, we are a bit beholden to the EPCs, the prime contractors in terms of the further ramp-up from our industrial contracts, how quickly they can employ their construction workforce really drive how quickly we get to the full complement of buses operating on those contracts. So that is a bit uncertain. And some of the guidance range takes that into account in terms of that potentially taking a bit longer than we might expect.

Super helpful. Just 1 other 1 on corporate costs. Any sort of color and sort of look forward on that, noting, call it, $40-odd million for the year. Are we thinking that $12 million is expensed and on top of that? Or what are the gives and takes for corporate, please?

Yes. So the $12 million is on top of that, Owen. So that's below the line. And corporate costs will be pretty stable now at these sorts of levels.

Your next question comes from James Wilson with Macquarie.

Just on the U.K., can you sort of speak to us about maybe the materiality that earnings of the contract wins over there? And also any other U.K. opportunities that are on your immediate radar? I'm conscious you've just acquired a regional bus operator in the region?

Yes. Look, I mean, I think, we announced the -- in the announcement of the Liverpool contracts. You can see the scale of them. So from a group perspective, these initial contract wins are not material and are not going to move the dial. But what they do, though, is build credibility for the team. We are now, from what I understand, 1 of only 3 companies to have won 1 of the franchise contracts in regional U.K. So making us 1 of those 3 as the market continues to go through the structural change, and we continue to see the consolidation of the operators in regional U.K. into the various franchise networks.

That's what we want to be part of. So that's why that initial contract win was so important. So we've got a seat at the table, both with the authority where we won those contracts in Liverpool. But also when we go to the other authorities around regional U.K. and have the ability to point to a contract win in Liverpool. So to give them confidence that we can do the job just as well, and hopefully better, than some of the big incumbent U.K. regional bus operators.

So that's the real benefit of the contracts that have been announced. And as Andrew mentioned, we think we're in a good spot for further contract wins off the back of those contracts that were announced in Liverpool. In terms of other upcoming opportunities, we try to put it out -- in 1 of the slides, to give a bit more color, but there is a significant wave of opportunities really over the next 6 months and certainly over the next 12 months with at least 2,000 buses going through our franchise process were it to Tranche 2 of Liverpool. So the contracts that we were awarded were part of Tranche 1. There's a separate Tranche 2 in Liverpool, which is about 650 buses in South Yorkshire and West Yorkshire. They started their processes and there's about 700 buses across Yorkshire.

And then the Midland and Wales would be the next ones off the bat. And there's another close to 1,000 buses across those 2 that are going to be in the market in the next 12 months. So a very significant pipeline for us to participate in. And we think, given our presence in those markets and incumbency position, particularly in Liverpool and in Wales, we're in a good spot to continue to pick up more contracts.

[Operator Instructions] We are showing no further questions at this time. And that does conclude our conference for today. Thank you for participating. You may now disconnect.

Thank you for standing by, and welcome to the Kelsian first half FY '26 results briefing. [Operator Instructions] And finally, I would like to advise all participants that this call is being recorded.

I'd now like to welcome Graeme Legh, Group CEO, to begin the conference. Graham, over to you.

Thank you, Pauly, and good morning again, everyone. Firstly, I would like to again apologize for the delay in commencing this morning, but also like to welcome you to the belated half year results presentation for Kelsian Group Limited for the 6-month period ending 31 December, 2025.

Today, I'll provide an overview of the results and also talk to the important transaction that has been announced this morning in relation to our Tourism Portfolio, which was identified for divestment last year.

I'm joined this morning by our Group CFO, Andrew Muir, who I'll hand to shortly to run through the detailed financial performance for the period and our divisional results before I conclude with an update on our outlook for the remainder of FY '26.

If we move into the presentation and the first half results overview on Slide 3. I'm delighted to be delivering a record result today for the 6-month period to 31 December, 2025, along with an upgrade to our earnings guidance for FY '26. Pleasingly, the record result was delivered through revenue and earnings growth from all operating divisions.

For the group, revenue was up 10.6% to $1.186 billion. The strong revenue was driven by the expansion of key contracts on top of the revenue indexation mechanisms embedded in our public transport contracts. These mechanisms provide a natural hedge against inflationary pressures and reinforce the defensive characteristics of our contracted earnings.

The group delivered improved earnings margins with underlying EBITDA up 16.4% to $153.8 million, EBIT up by an impressive 26.5% to $75.3 million and net profit after tax and before amortization, up 32.2% to $52.5 million.

This earnings result and the group's margin expansion was driven by significant growth across key employee shuttle contracts in the U.S. The ongoing contribution of the Bankstown rail replacement bus service in Sydney and strong trading from across the Marine & Tourism portfolio.

The business continues to generate strong cash flows with net operating cash flow increasing by 26.1% to $83.1 million during the period. Leverage at the end of the period was 2.7x underlying EBITDA, and we remain on track to reach our target leverage range by the end of FY '26.

The result this period demonstrates the defensive nature of our business with our diversified portfolio of long-term transport service contracts, providing predictable earnings and cash flows.

On the back of the trading performance in the first half, we are upgrading our earnings guidance for the full year. Underlying EBITDA for FY '26 is now expected to be between $303 million and $312 million up from the $297 million to $310 million range set at our full year results presentation last August. I'll come back to discuss outlook in more detail later in the presentation.

Turning to the strategic and operational highlights for the period set out on Slide 4. Alongside our half year results, we have also today announced that we have entered binding agreements for the sale of our Tourism Portfolio to Journey Beyond for total cash consideration of $161 million. We first announced the intention to divest the portfolio of Tourism assets in April 2025, and we have since run a competitive process, solicitating interest from multiple domestic and international parties.

Today's announcement is a culmination of this process, and we'll now work through the required regulatory approvals with completion targeted for the first half of FY '27. I'll provide further details about the divestment announced later in the presentation.

From a strategic perspective, several other notable outcomes were delivered across our operations. Within the Australian Bus division, we continue to work towards finalizing the 2-year contract extension for our Sydney Region 6 contract.

The extension period will commence on 1 July, 2026 and will be characterized by revised contract terms alongside a step change in the shift towards a zero-emission bus public transport network in Sydney with Transport Minister for New South Wales to add more than 190 new electric vehicles to the Region 6 fleet.

Another highlight was the Queensland government's decision to award Transit Systems the contract to deliver new bus services in the Ipswich and Logan areas, our first franchise bus contract in Queensland. Services commenced in November 2025 and are expected to expand over time, including the introduction of new electric buses to be operated from a new state-owned depot. Queensland remains a key long-term growth market for the division, and we look forward to continuing to strengthen our position in the state.

In the U.K., we completed the acquisition of South Wales Transport. Founded in 2004, the business has a strong reputation for service reliability and deep regional expertise across the South Wales region. We intend to leverage Kelsian's global best practice in bus franchising to position this business for the upcoming contract opportunities in Wales.

The Marine & Tourism division was successfully reawarded to Moggill and Southern Moreton Bay Island ferry services following tender processes, reflecting the strength of our operational performance and longstanding partnerships in the region.

Operationally, we saw continued momentum and service growth across our employee shuttle contracts in the U.S. To support this growth, we are investing further in the Gulf Coast region and have leased 2 new depots to support our operations, including associated facilities and workshops.

We also continue to deploy new growth capital to increase the fleet size in this region. This investment will support our expanding footprint and ensure we continue to provide safe and reliable services as the scale of our operation increases.

A highlight of the half was the operational performance from across the Marine & Tourism portfolio. This improved performance was driven by several efficiency measures being successfully implemented and the ongoing enhancement of our yield management solutions.

The Bankstown rail replacement bus services were operated successfully throughout the period and will now continue at least until the end of the financial year. There is already strong interest from our government clients in leasing the 60 buses that were acquired for this project when the Bankstown services come to an end.

There were continued operational challenges across our Sydney bus operations. These relate to delays in the electrification of depots, which has consequences for our repairs and maintenance costs as we continue to run aging diesel fleets. The need for investment to improve service in Sydney has been recognized by the New South Wales government and a program of improvements is now being implemented. The initial stage of these improvements was successfully delivered in September.

I will now hand to Andrew, who will provide a detailed run-through of the financial results for the period.

Thanks, Graeme, and good morning, everyone. Kelsian has delivered a record financial result for the 6-month period ended 31 December, 2025. Pleasingly, we've seen good revenue growth and margin improvement across the group.

Underlying EBITDA increased by 16.4% and underlying EBIT increased by 26.5% compared to the prior year. Taken together, these results demonstrate the resilience of our multiyear contracted revenue base and the operating scale benefits coming through the portfolio.

Let me now walk through the key drivers in more detail. Slide 6 provides a high-level comparison of the consolidated first half results for FY '26 compared with the 6 months to December 2024. The revenue increase of just over 10% was achieved through a combination of the impact of contract indexation mechanisms we have in the majority of our Australian bus contracts, a full period of the Bankstown rail replacement project in Sydney, which began in September 2024, the ramp-up of a number of existing and new contracts in the U.S.A. and good growth in the Marine & Tourism business.

Overall, portfolio performance was strong and the group delivered an additional $21.6 million in EBITDA compared to the same half last year. The effective tax rate was at the lower end of guidance, reflecting the geographic earnings mix and ongoing marine training incentives consistent with prior periods.

Underlying net profit after tax and before amortization for the half was up 32.2% to $52.5 million. Earnings per share and before amortization of $0.193 increased by 31.9% compared to the prior year, reflecting both earnings growth and operating discipline. We've maintained a fully franked interim dividend of $0.08 per share, which is the same as last year, and we continue to offer a dividend reinvestment plan for shareholders with no discount.

Statutory net profit after tax for the period increased by 62% to $32.4 million. There were several one-off abnormal items in the period totaling $3.4 million on a post-tax basis. These are primarily associated with the implementation of our global Finance & HR platform.

To the cash flow on Slide 7. The quality of earnings remains strong, underpinned by contracted and nondiscretionary revenues across the portfolio, with a cash conversion of nearly 95%, translating to gross operating cash flow of $126 million in the period.

During the half, we invested $78.3 million (sic) [ $78.4 million ] in new and replacement assets, including vessels, buses, motorcoaches and land and buildings. This expenditure remains in line with our previously announced capital program and guidance. At period end, we finished with a healthy cash reserves of $141.9 million.

Turning to the balance sheet on Slide 8. At period end, we had net debt of $664.9 million. This excludes the limited recourse SPV financing of $83.8 million relating to government-backed contracted assets. More on that shortly.

From a leverage perspective, we finished the period with pro forma leverage at 2.7x, down from 3.2x at December 2024, excluding SPV government-backed contracted assets and all bank covenants are comfortably met.

The main changes to the balance sheet during the period relate to assets acquired as part of the capital program and the accounting changes in right-of-use asset and liability associated with leasehold properties in the USA and WA and operating leases for motorcoaches in the USA.

We continue to hold approximately $33.5 million in government-backed contracted assets on our balance sheet, which haven't yet moved into a ring fenced SPV structure. We anticipate they will move into the SPV structure at the next contract renewal date. Excluding these from our leverage calculation, leverage reduces to 2.56x. Finally, we remain on track to be within our target leverage range by 30 June, 2026.

Turning briefly to the special purpose limited recourse arrangements on the next slide. Since July 2023, we have utilized limited recourse asset financing arrangements, whereby Kelsian warehouses, government-backed contracted bus assets on balance sheet, along with the corresponding debt for the duration of the relevant government contract.

These SPV facilities effectively enable unlimited scalability for governments across the globe seeking to improve and upgrade public transport buses and infrastructure. Importantly, these limited recourse financing facilities are excluded when we calculate our bank covenants.

Structurally, the asset value and debt profile are matched and amortized over the contract term, and if the contract is not renewed, the assets and corresponding debt revert to government. As a consequence, there is no residual risk or financial exposure from a Kelsian Group perspective. At 31 December, 2025, government-backed contracted assets totaled $117.3 million of which $83.8 million are in the ring fenced financing structure.

Turning now to capital expenditure on Slide 10. Net capital expenditure during the period totaled $76 million. This comprised growth CapEx of $78.3 million, offset by proceeds of $2.3 million from routine asset sales and disposals. This was in line with expectations.

Key investments in the period included ongoing expenditure on new vessels and land site infrastructure for our Kangaroo Island ferry service, the final payment for the second South East Queensland vessel, which was delivered and commenced services during the half and growth CapEx of $23 million for the purchase of new motorcoaches for the 2 LNG contract wins in the USA.

Full year FY '26 CapEx is now expected to be $135 million. This includes carryforward of $20 million from FY '25 that we flagged at the full year results in August and an additional $7 million of growth CapEx to meet the demand and increased scope of services we are experiencing and providing to clients in the USA.

Turning now to a brief overview of divisional performance, starting with the Australian Bus division on Slide 12. Revenue growth in the period was underpinned by the contract indexation mechanisms we have in our government contracts. We continue to benefit from the contribution from the Bankstown Rail project, which we anticipate will continue to operate at least for the remainder of FY '26.

During the period, we saw the completion of the level crossing replacement work in Perth. This was in part replaced by a tram replacement project in Adelaide. The Adelaide tram project commenced in August and ended in July this year.

The Bus division's margin was impacted by a small number of largely temporary factors, primarily in South Australia and New South Wales. These included delays in service change approvals and higher repairs and maintenance costs associated with an aging diesel fleet, reflecting the later-than-expected delivery of government-funded electric replacement buses.

Importantly, underlying operational performance remains stable, and we expect a progressive improvement in the second half. While congestion continues to affect reliability and drive performance penalties, these issues are expected to moderate as service changes are implemented. Margins were also affected by the non-cash accounting impact arising from depot sale and leaseback arrangements we had in WA.

In Sydney, negotiations are on track to commence a 2-year extension of our Region 6 contract effective 1 July, 2026. This is our largest contract and historically delivered lower margins relative to the divisional average. The extension provides improved pricing certainty and operational stability and something we are really looking forward to.

In Queensland, we were awarded a new contract to operate bus services in the Ipswich and Logan area. This is our first contestable contract win in this market where both buses and depots are provided by government. This contract commenced in November 2025, and although small, it provides us with an important foothold from which to expand.

Finally, our natural resources and charter team was awarded a new 5-year contract to operate zero-emission buses for South32 in the Pilbara.

Overall, turning now to Slide 13, the International Bus segment with operations in the USA, Singapore and the U.K. Overall, the International segment delivered very strong revenue growth, costs were well managed, margins improved and underlying EBIT increased by more than 130%.

In the USA, the AAAHI business performed very well. The performance reflects our ability to scale rapidly in complex project environments while maintaining disciplined cost control. Throughout the period, we saw good levels of activity on both the Golden Pass and Port Arthur LNG projects, along with the commencement and ramp-up of the CP2 and Louisiana LNG contracts, which we announced in June.

These contracts are multiyear in nature with potential extension options. To support this growth, we acquired a combination of new and used motorcoaches to operate on these new contracts.

To further support our position in the region, we procured 2 new leasehold depot locations, one in Texas and one in Louisiana. This will assist with the ongoing maintenance of the expanded fleet and improved motorcoach availability.

In the corporate and tech shuttle space, business activity levels have improved and service frequency and volumes have also increased. In Singapore, we commenced operating the new capital-light contract with the Sentosa Development Corporation to provide bus services on the island of Sentosa. This contract is for 5 years and commenced in September 2025. Operationally, the business continues to receive performance incentives, albeit at low levels.

In the U.K., we completed the small acquisition of South Wales Transport, a regional bus operator in Swansea, Wales. South Wales Transport provides us with access to buses, drivers and leasehold depot. We are confident this acquisition will further strengthen our relationship with this regional U.K. government client.

From a tendering perspective, the priority and focus of the U.K. team is on the upcoming tenders in Liverpool. Although, we were unsuccessful in Tranche 1 of the Liverpool tender, we remain competitively positioned for a number of upcoming school bus contracts and Liverpool Tranche 2.

To Marine & Tourism on Slide 14. We are delighted with the results from the Marine & Tourism division. The division delivered very good top line growth and a 15.7% increase in EBIT. The strong operating performance supported the value case as the divestment process progressed, demonstrating the quality and earnings potential of these assets.

All business units performed in line with or ahead of our expectations, and it was pleasing to see the improved performance from our Sydney, K'gari and Northern Territory businesses. Once again, a number of fare increases were implemented throughout the half and the dynamic pricing initiatives we have in place contributed to improving returns.

During the period, we had a number of our larger fleets go through their scheduled out-of-water maintenance. And as a result, the business incurred nearly $4 million of additional repairs and maintenance costs compared with the previous period.

The construction of the new -- 2 new Kangaroo Island vessels and work to upgrade the landing infrastructure progressed during the period, and we are focused on preparations for the revised mobilization plan and service commencement in the middle of the year.

Finally, we took delivery of the second of 2 Southern Moreton Bay Island vessels in November, and this immediately provided increased capacity and improved operational performance to the region.

For corporate costs on Slide 15. The increase in corporate costs reflects several factors, a number of which are one-off in nature. First, the underperformance of our captive insurance structure has seen us recognize approximately $2.5 million due to claims performance and elevated claims activity generally.

We've continued to invest further in cybersecurity enhancements across the group, and we also recognized a higher non-cash expense associated with Kelsian's long-term incentive program.

Finally, there were implementation costs associated with the Workday Global Finance and HR platform. While the Workday implementation costs impact short-term earnings, the AI-enabled platform is expected to support margin stability and cost discipline over time through efficiency, governance and control benefits, process standardization and the retirement of 13 legacy platforms across the group.

I'll now hand back to Graeme to talk about growth, strategy and outlook.

Thanks, Andrew. Before we look at the specific outlook for the group for the rest of FY '26, I would like to provide some further details on the important announcement we made today, that we have entered binding agreements with Journey Beyond to divest the Tourism Portfolio.

As detailed on Slide 17, we are happy to announce that all operating businesses identified as part of the Tourism Portfolio last year will be sold to Journey Beyond for total cash consideration of $161 million.

After running an extensive sale process, it is pleasing to reach a significant milestone today, and we will now commence seeking the required regulatory approvals, including from the ACCC and FIRB with expectations that transaction completion will occur in the first half of FY '27.

The operations that make up the Tourism Portfolio contributed $23.7 million of EBITDA for the 12 months to 31 December, 2025. And on a pro forma basis, the expected net transaction proceeds would have brought the group's leverage into the target range of between 2x and 2.5x underlying EBITDA.

I would like to take this chance to thank our great people that make up our tourism teams. I acknowledge it has been a difficult period for you, and I would like to thank you for your professionalism and the dedication you have shown in continuing to deliver brilliant experiences for our customers every day.

In addition to the transaction with Journey Beyond, a number of other tourism assets, including 2 properties will be sold to separate parties. The additional proceeds from these transactions is expected to be approximately $3 million.

Following the sale of the Tourism Portfolio, Kelsian will emerge as a streamlined global commuter and contracted transport business, delivering essential passenger journeys through our bus, motorcoach and marine operations.

On Slide 18, we set out details of what the divestment will mean for our retained marine operations. The retained marine businesses have similar infrastructure-like characteristics to our bus public transport contracts. Revenue from the division will be less sensitive to changes in economic conditions and will be backed by long-term, high-quality service contracts. And the retained marine operations will have a lower capital intensity. Details of the business units that will make up our Retained Marine division are set out in the table on this slide.

Turning to Slide 19 and the solid foundation we now have to deliver sustainable long-term growth. The growth pipeline is significant, and we have positioned ourselves in each of our markets to capitalize on the opportunity in front of us. Our operational excellence is our greatest asset and provides a platform from which we plan to continue our long track record of delivering organic growth through contract extensions, service expansions and new contract wins.

In Australian Bus, contract extensions and service growth opportunities will be pursued. Our state government clients have acknowledged that patronage levels have grown and congestion has worsened, leading to them making new investments into bus services and service quality that we have not seen since before the COVID pandemic.

In addition, new contract opportunities will be pursued in existing markets and in new markets, including the Newcastle contract in New South Wales and bus contracts in Wellington, New Zealand.

Our International Bus division has material growth opportunities in each of our 3 markets. The organic growth opportunity for employee shuttle contracts in the U.S. remains significant and historically elevated.

In the U.K., we now own 2 small regional operators, which gives us a solid foundation from which to bid for the very significant pipeline of franchise opportunities with some 10,000 buses to be contracted over the next 3 or 5 years. The management team we have in the U.K. is awaiting the outcome of contracts we bid for in Liverpool and is actively working on the next round of franchise opportunities in Liverpool and in West Yorkshire.

In Singapore, a further LTA bus contract is in the market with bids due later this half for a 400-bus contract that will commence operations in 2027.

Our Marine division continues to deliver improved performance from our investments in yield management and in high-capacity vessels, and we expect this to continue with the delivery of the new larger Kangaroo Island vessels later this year. We are also actively pursuing new contract ferry opportunities with the outcome of Auckland Transport's ferry service tender expected before the end of FY '26.

Looking forward, we will continue to focus on capital light organic growth opportunities while also selectively pursuing investments that both meet target returns and bring a strategic advantage for our operations.

So the outlook for the remainder of FY '26 and our guidance update as set out on Slide 20. January 2026 trading was in line with expectations with continued strong performance delivered by the International Bus division. January is always a key trading month for the Marine & Tourism division, and it performed in line with expectations.

Looking forward to the remainder of the second half, in general, we expect the key trends and drivers of performance we saw in the first half to continue. We will continue to see expansion of our employee shuttle contracts in the U.S. and the Bankstown rail replacement bus services will now operate at least -- until at least the end of the financial year.

The operational challenges across the Sydney bus contracts will continue, albeit some improvement is expected as additional services are added to networks and more electric vehicles are introduced. We expect to incur approximately $4 million of mobilization costs as the new Kangaroo Island vessels come online. The outcome of new growth contract opportunities in New Zealand and the U.K. are expected to be announced prior to the end of the financial year.

The separation of the divested Tourism Portfolio from the Retained Marine division will commence as we work towards completion of this transaction in the first half of FY '27.

As for our earnings guidance, as flagged in the introduction, off the back of the strong first half result and the solid momentum heading into the second half, our guidance range for underlying EBITDA for FY '26 has been revised upwards with full year EBITDA expected to fall between $303 million and $312 million.

So in conclusion, I'm very pleased to deliver the record result for the half today alongside the update on the Tourism Portfolio divestment. Both of these outcomes set us up well as we look ahead to the remainder of the financial year and beyond.

Before we take questions, I would like to say a few words about Neil Smith, who announced his retirement from the Kelsian Board yesterday. Neil is one of the founders of our Transit Systems and Tower Transit businesses. From humble beginnings in Perth back in 1995, Neil built the dominant Australian bus public transport operation and then took the success offshore, taking Tower Transit into the U.K. and Singapore.

Neil's unrivaled passion for buses and public transport has driven the culture of our bus operations, and this passion has certainly had an impact on my career within the industry. I've had the privilege of working with Neil for the last 16 years. Throughout that time, I've benefited enormously from his deep knowledge across all aspects of public transport, his drive to solve the transport problems of our major cities and his wise and measured professional guidance.

On behalf of the Board and all of our employees, I would like to sincerely thank Neil for what he has done for all of us over the last 30 years.

Andrew and I will now take your questions.

[Operator Instructions] Your first question comes from the line of James Wilson at Macquarie. James your line is open. And I'll return James to the queue. He might be on mute, and I will go with the next question.

We have Allan Franklin of Canaccord Genuity.

Obviously, great to see the asset sale. Maybe just sort of in that vein on the asset sale, just when we're thinking about the remaining assets within Australian Bus, how do we think about the seasonality of these assets moving forward, if there's any sort of draw outs? Is there any scope for KI to push out later with those mobilization costs?

Yes, Allan, there's not a lot of seasonality in that remaining portfolio. Obviously, the Kangaroo Island services sort of peaks over holiday periods. But the rest of the remaining portfolio is very stable sort of from a seasonality perspective.

And just on KI, any sort of risk that gets pushed further out, or do we think that, that $4 million hit is a clean hit in the second half '26 and then we get clean operations thereafter?

Yes, that's what we're currently working towards, Allan. And that $4 million is included in our guidance.

Yes. Just on the U.S. or International Bus, just to sort of clarify, majority, if not all, of that sort of uplift in EBITDA coming out of the U.S. Is that a fair assumption to work from? And then just looking into the second half, how are you feeling about the lead into the key charter work period? Are there any items you'd like to call out on the second half cost of the depots, as an example, that might weigh on profitability?

Yes, that's correct assuming the majority of the uplift in International Bus in the U.S., but Singapore also had some positive trading in the half. But yes, the majority of the improvement is out of the U.S.

Looking into this half, very comfortable with how things are tracking in the U.S., our underlying charter businesses are performing well, really just kicking off the really busy months as we speak and heading into the warmer months over there. And initial indications are everything is looking pretty good on the charter front for the second half.

Yes. And I mean I assume that the depot costs are obviously rolled into the guide. Is that a headwind into FY '27 at all? Or is it not material?

No, they're not -- they are rolled into the guidance, but it's certainly not a material cost.

[Operator Instructions] And your next question comes from the line of Aryan Norozi of Jarden.

Just first one, so I think in fiscal '25, you guided to abnormal costs from the Finance and HR systems of $9 million. And then in the present today, you said you incurred $5 million. Are you now taking that cost above the line versus below before?

No, that's all below the line, [ Ari ].

Okay. So out of the $21 million of cost -- sorry.

So there was $5 million incurred in the half.

Yes. Okay. So out of the $20 million of corporate costs, sort of $6 million -- about a $5 million step up year-on-year.

Yes.

How do we think about how that steps down into second half '26 and then moving forward? Does that fall by $3 million, $4 million sort of costs you called out?

Yes. So the $2.5 million for the self-insurance costs is kind of the main driver of that. So the performance of our captive in Singapore, which we don't expect to repeat. And then there's some other costs we've invested in and around IT, which are one-off in nature. So there's sort of $3.5 million in those -- between those.

Great. And can you give us some color around how much of the $85 million of sustaining CapEx is now ex new sort of sold assets or divested assets?

Yes. I mean we'll provide a full update on all of that, Ari. Yes. But I don't have that number to hand at this point in time.

So I think that...

That's fine -- yes, I'm sorry.

Sorry, I was going to say, I mean I think the key thing there is if you look at the retained marine businesses that we set out on the slide, they are either businesses where we've recently invested significantly in the fleet or businesses that are capital light with the assets provided by our government clients. So there will be a material step down in the capital intensity of the Marine division moving forward.

Got you. And then last one, just on the U.S. LNG part of the business. So obviously, CP2 and LALNG sort of ramping up this year -- this financial year. Assuming you can't recycle buses, because Golden Pass potentially continues for longer. How much more CapEx do you need to incur to get you to the full manpower or run rate of buses and to deliver full run rate of earnings?

Yes. So as we flagged in the presentation, there was the $23 million of growth CapEx that we announced last period, plus another $7 million that we expect to incur this period in growth CapEx. Now that gets us to what we need based on what we know today. Our view is there is further upside in those projects if they ramp up faster than expected or the client puts on more people than they originally thought.

So we feel comfortable with what we've got in the contracted pipelines, but potential further upside with new things coming online in relation to those existing contracts.

So these contracts do $30 million plus revenue per annum at full run rate and good margins. So you've now got enough buses to deliver that AUD 30 million per annum revenue in FY '27 onwards, you don't need to invest more growth to deliver the full run rate of earnings?

Yes. So as we sit today, we're happy with the outlook that we've got, acknowledging that these projects do move pretty fast, and we do think there's potential more upside, which would be in addition to what we've allowed for in the CapEx at the moment.

And that does conclude our Q&A session for today. I would like to hand back to Graeme for closing remarks.

Thanks, Pauly. Thank you, everyone, for joining us and for your time today. Again, I sincerely apologize for the delay. I know it's a bit frustrating on a very busy day for everyone, but I appreciate those of you who stuck around and got there. So thank you very much for joining us. Thank you.

This concludes today's conference call. Thank you for joining us. You may now disconnect.