Activeops (LSE:AOM) — Results for the year ended 31st March 2023

0:01 Good afternoon, and welcome to the ACTIVEOPS PLC Results for the Year Ended 03/31/2023 Investor Presentation. Throughout this recorded presentation, investors are being in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. Simply press q and a, scroll to the bottom, type in your question, and press end. Company may not be in a position to answer every question received during the meeting itself. Have the company review all questions submitted and we'll publish responses where appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Richard Jeffrey, CEO. Good afternoon, sir. Good afternoon, and thank

0:32 you very much, and welcome to everyone on this call. It's a pleasure to present our results. And interestingly, this is also the first presentation we've done directly to a more retail audience for our shares. So, you know, in that sense, I'm also particularly excited. Alongside me, have my colleague, Ken Smith, who's our recently joined, finance director, and, he's got the benefit of, of only recently joining us, but he's got the blessing of now coming in with a slightly new new perspective. So I look forward to bringing some of that to life in the as we go through this this presentation. Now as we are, new to this process and for many of you who may not have heard of ACTIVEOPS, I thought I'd kick off with a little bit of overview of the company. We're an enterprise SaaS based software company. So that means we sell our software to large blue chip enterprises primarily in the sort of banking and finance related industries where they have a lot of people doing, let's call it, administrative type work.

1:25 It's SaaS. That means it's a recurrent software license. And if you look at our figures, which we'll talk more about, over 90% of our revenue comes from our SaaS revenue, so that's that's booked month on month. And also in there, a k key statistic for you is that if you look at our our net revenue retention, which is the amount each of those customers grows in every year, like last year, 10 we we we had a 110% net revenue retention. So in other words, that that 90% of our revenue is growing itself by 10% before we add in any new customers. So it's a very, well, structured business. We also do some training and implementation work, which also is is is high margin, and is related to the amount of sort of support work or installation work we do. We have some other sort of great stats in that sense of the business model means it's annual in advance, so we also accumulate cash. We we've been running the business since our IPO pretty much on a on a a sort of marginal level. In other words, we haven't prioritized EBIT. We've just run ourselves to grow as much as possible. We've turned that kind of dial up a little in the last year, and I'll talk more about that. So the business is definitely running profitable.

2:29 But the key point is we don't have any debt, and we've never borrowed any money. We actually have a have a business which is growing cash year on year. We've consistently done that. We operate across three right structurally three regions around the world, North America, EMEA, and Asia Pacific. And although there's differences in every region, I think the the key message for that you'll hear here is that each of the regions in their own way is responding to the market in a similar way, and we're achieving some sort of good, great results across the world. So just to sort of give you some context for the solution of ACTIVEOPS, the world of work is not getting any simpler. I'm sure your papers and my papers are the same, are reporting on concerns that CEOs have over the managing productivity of the their people when they're not working at the offices anymore. But we have a whole lot of stuff like, for example, you imagine if you were working in Silicon Valley Bank recently where suddenly the finance of the business implode, but the people actually running those offices, operating those consumer products and the and the products they offered, suddenly, their their their parent company is in terrible shape and and the operational risk associated with that. That introduces for regulation for regulatory environment for all our sort of target customers, huge sense of they have to be able to demonstrate they're in control, which is absolutely about what we do.

3:42 Skills development is another key concern we've talked about. We hear a lot about well-being, people having to learn it up from home, and that is a real issue for these specialist type organizations where you need to run your operations well, but nurture talent and capability. And, again, the more in control you are, the better you respond to that market. And so ACTIVEOPS' product is absolutely in the sweet spot of helping organizations, if you like, do more with what they have and to respond to in an agile fashion to the challenges, let's say, of the increasing amount of x y zed product or the reduction in mortgages being sold and so on. We're all about organizations being able to control their control their operation better. And the context for it, the business environment which ACTIVEOPS is operating is is that, you know, I think you could describe it as febrile, which is great for us because it means we sort of number number three or four on the top 10 list rather than perhaps further down others further down the list.

4:31 In terms of our publicity, what we put out to market is things like, yes, the ops index, which is a we have colossal data across the on on activities in in this kind of sector across the world. And and what we do with ACTIVEOPS is is publish that for for our customers to provide them with a unique sense of benchmarking data around how their particular performance or indeed their suppliers, if they're an outsourcer, perform against market industry standards, which we're the we're the standard setting for. So we have some fairly unique features about our product, which you can't get if you effectively solve the problem of planning, say, locally using an individual spreadsheet. That's a huge advantage for customers having that. Now in terms of our customer base, as I mentioned, we we solve a problem which they have myriad of systems of work. They have their workflow tools. They have their their case management systems. And they also on the on the other side of the equation, they have their things that measure what your time and and and people, their human capital management systems like Workday.

5:30 ACTIVEOPS' solution is to synthesize all those different pieces of information so that you and I as operational leaders have a kind of perspective which is consistent in this independent of of what type of work we're doing so that I may be in underwriting. Someone else could be in claims, but the language of how busy I am and what help I need from you and your team is actually a common one. And that's a real issue because most of these organizations frequently talk about the the problems of silos and the inefficiencies of scale rather than the efficiencies of scale. And ACTIVEOPS' solution is to overlay that, bring a common frame of managing work and capacity, which unlocks that capacity, which particularly in current environments where you have issues of of of productivity and and and pressure on cost is just a huge, huge huge need.

6:19 This is the way we articulate some of the value we add. So customers using our software get more from their capacity, from their teams, and that and they use that in a lot of different ways. In many cases, it's it's a cost reduction. In many but just as many times, it's it's about using that time for better value. We had a fantastic case, which is on the screen, one of those on the screen where a customer improved their Net Promoter Score from a a rather desperate 8% to over 80% on the back of the time they were able to release to focus on customer service queries. It can just as much be a value in terms of the internal working environment. Some of it can be very stressful when you're working to deadlines and pressures, and ACTIVEOPS brings that control to an environment, which means hugely improved sense of well-being and stability for the teams within organizations. It's just like any any truism. You know, the more in control, the safer I feel, the better able I am to perform. And ACTIVEOPS is absolutely in that space.

7:12 Our customer base, there's some names, the brand names there. We operate globally. We're we're pretty much dominant in the Australian market. We have lots of customers in The US and in in in EMEA in the in The UK. And as you can see from the brand names, these are all organizations with large cost base under a lot of pressure, both regulatory efficiency, but also service level to to adapt and respond to the challenges of evolving market. So it's a really interesting workplace. The other facet to be aware of is our solution is essentially generic. It doesn't really matter what type of work it is. You can see on the left there some processes that we cover, but the point is it's just as relevant for any type of work. Could just easily be in government departments in The UK like the passport agency or the DVLA where people are doing admin work. We're not operating there, but the solution itself is entirely applicable to that.

7:59 We have three core products. We provide a planning system called Control IQ. We have a Casework IQ, which is an expansion of the functionality to for where more knowledge intensive work is being used. It's a particular problem for many banks. They have case management systems where individual types of workflows through your company, but on lots of different systems. ACTIVEOPS provides an overlay to that so that at an aggregate level or an individual team level, you know what work you've got. You know you've what you've got to do, and more importantly, you can tell anybody else who needs to know about it what it is. Also have a desktop intelligence package, which is widely used in The US. We have one customer with 31 21,000 desktops, which is effectively giving visibility over the use of applications, how people are spending their time, how long they're at work. Great case study recently where we used we we used it and to show actually a problem with the technology because some of their employees are having to get up at 4AM to sort of free their desktop to sign in to the VPN to to get access to start work at 09:00.

8:55 Visit things like that, which makes it have incredible power when it comes to, understanding their use of technology in companies. So let's let's move on then. This is the results for the presentation about our our year. And there's really two parts to this. Firstly, there's the headline financials, which we'll come to, and the second is really what we've done under the bonnet to make the business, if you like, looking forward even better. Now in terms of the business year, we've we've had a a really very strong year against an interesting context, and I think that's seen in that that critical SaaS based revenue growth. You can see there we've had enjoyed a 13% growth in that recurrent revenues. That 90% of our revenue just getting more is increasing all the time, and that's that's that's great. But I think just as significantly and a business that's always been very sort of cash generative but run for sort of just marginal profitability, we have deliberately, started to demonstrate the ability to throw off and generate EBITDA.

9:50 So in in in terms of our our profitability, we've moved from, if you're at a at a reporting level, minus point three last year. We've actually joined a a reporting 700,000 profit this year. But I think the the mess the important thing, and Ken can speak to this, is if you look at the half year, the ability now to turn new sales into bottom line profit is there.

10:09 Reflecting the cash generation, which I've touched on year on year, our cash also grew by 1,600,000, which which, you know, the business has got no debt. So we have the cash to do what we want to do, and we can expand and expand, you know, expand our capabilities, you know, reflecting that. And and that's a nice position to be in from the point of view of a biz you know, at the end of the day, against the current share price, you know, the cash actually in the bank represents about 25% of the of the enterprise value of the company. So that's a very strong and safe position from the point of view of the investor. So under the bonnet, though, I think this is the exciting bit. What we've really done alongside the business growth, which I've really touched on already, is we've worked over the last three, four years of completely replatforming our technology to maximize our capability to respond to what's, you know, the exciting opportunities through machine learning and AI. We talk we call it management process automation, which is actually nothing more than, if you like, bringing a really new level of decision intelligence to how operational leaders can manage teams.

11:07 That means about how how many people they need, but it's also how people are performing. It's how giving people in the business how they are performing, you know, so we're all working from the same data. And the impact of that is going to be huge because what it means is I am more able to know what's going to happen next week, which means I can interact with my colleagues as leaders around the company. We can articulate our we can be more confident of getting the yield from our our new investments in workflow technologies and other things that these companies are doing. So I think our our performance and our build building on our platform for growth for next year, we've got some some great things to talk about, in there. And, also, more generally, in terms of us coming to the public markets, developing some relationships with key players, that side of the business is also getting very strong. We've entered date. We we have enjoyed a very strong relationship with Microsoft. We're a key supplier the key key poking that people buy a lot of Azure consumption through us, which gives us some high high, you know, level of visibility with our sales teams.

12:03 But just as importantly, they support us in the in the boardrooms of our major banks and customers to to what an enterprise grade cost provider we are. And then also importantly, in terms of our revenue opportunities going forward, we've undertaken a quite a substantial pricing review to layer in so that we can maximize the revenue from our our new product set and our go to market. For those of you who track us, you'll see quite a a step change in those sort of messaging and the way that we effectively articulate what ACTIVEOPS to some very niche providers in the coming months. So there's an awful lot, I think, to be sort of quite excited about. But and then before we sort of go into more of the strategy, I think I'll hand over to Ken to talk a little bit about the the finances of the business. Yeah. Good afternoon, ladies and gentlemen. So I've only been with the company about twelve or thirteen weeks now, so it's been an interesting journey.

12:55 My career has spanned over thirty years. I'm a chartered accountant by Origin, and I've I've been been in a lot of dis different businesses, private and public, but nearly all of them in technology. And so I've seen different models for raising revenues, and, you know, it's very nice to know that ACTIVEOPS a SaaS business. That's to say customers are billed in advance, typically a year in advance. That gives you the comfort of knowing that this month's revenue is largely last month's revenue plus a little bit extra, so you don't have all that concern concern as to killing what you have to eat every month. It also means that the cash flow is very positive and predictable. So the business is a very predictable business. Most of the revenue, that's almost 90% is this SaaS model, which is a great place to be in the modern world.

13:44 The four kind of key messages in in this slide just showing how this all works. The two kind of key measures that SaaS companies are measured by are ARR, annual recurring revenue, and NRR or net revenue retention. And so both of those are very positive in the year, 26 22.6% ARR at company's year end. That's grown by just under 13%, slightly helped by currency, but always a double digit growth. NRR, which is a measure of the stickiness of customers, is up to 110%. And, again, that's that's a very positive movement across the year. I guess the key highlight of the year, though, is the EBITDA position. Companies moved into an EBITDA positive situation, and that, especially when you look at the first half, second half split, was fairly firmly in the positive territory in the second half.

14:34 So we enter the new financial year this year with a very strong profit springboard to move forward with. And as Richard's mentioned, with the SaaS model as it is, our profits tend to turn into cash flow. So we ended up with a a very healthy cash balance at year end of over £15,000,000, and that tends to be second half loaded. So we should expect that to grow further later on this year. In terms of the detail, again, the shows the benefits of this split of the revenues and SaaS revenue. 22,000,000 is the SaaS the current revenue we've just described. The other source of revenue is t and r, training and implementation.

15:20 That's where we help customers install and and support the product to train the trainer or or more important nowadays, digital training solutions. Both of those sources of revenue are are very profitable, especially the the SaaS side of things. The margin held up very well, grew slightly, and that's partly a product mix thing. But, again, 81%, 82% gross margin is a a really nice place to be from a technology business point of view. OpEx, slightly upper last year, but this is kind of the way the model is starting to work. If we can get more than double digit revenue growth and single digit OpEx growth, then you don't need to be a mathematical genius to work out that that becomes a very profitable business going forwards, which should, you know, get us into very interesting bottom line territory in the years to come.

16:15 Otherwise, we did capitalize on labor as all software companies are now required to do, so we don't have any choice in that. That's kind of the rules. This is pending standard for it. So we we try and keep that to a limited extent. So we did capitalize about 900,000, which was up in the previous year. As Richard described shortly, some of the things that that's gone into are extremely exciting bits of technology that will benefit future year profitability. The EBITDA bridge just describes starting last year, negative territory and ending up in the blue section on the right, very positive territory, so £1,000,000 overall growth across the year. One of the things that is interesting is if we look at the customer support side of the business, which we've invested a bit more money on that, probably is one key reason why the NRR has grown across the year. And so we've got some very, very happy customers that are very sticky.

17:12 Cash flow bridge, again, describes the cash journey. So this is the movement across the year, but the key factor there is very positive positive cash flow from operations and also the 1,000,000 of investment into new product, which I just described. So there's a very new person on the block here. I can look at the business with a very positive feel. It's got a very healthy balance sheet, £50,000,000 of cash sitting there. This is a very strong position to underpin the business and no debt as as as we described. Very predictable growing recurrent revenue, so that's a very safe place to live as well. As we'll see across the coming years, strongly cash generative, so we expect our cash power to grow further. The business is positioned across the globe. Each part of the globe has grown across the year, that derisks the recession and risks across the the world as well. So that's a nice, safe metric.

18:10 And our exit run rate, our EBITDA run rate, really takes us into an exciting place going forward.

18:17 I'll hand it back to Richard. Thank you, Ken. So so looking, if you like, a bit more forward now, I want to come through go talk us through some of the activities, if you like, we think are gonna make a a potential shift in our sort of run rate. I think I've I've touched on some of this already, but you've got a situation where the you know, given the complexities I touched on, our software will be able to both see things, in other words, diagnostic AI where you actually have a visibility over things that you wouldn't otherwise have appreciated. Predictive, the ability to give information to our customers about what is likely to happen and therefore inform the choices they're able to make, and then this critical bit of prescriptive AI. And this is where our software will not only help you know something's about to happen, but give you choices and suggestions about how to respond.

19:06 So from an operational level, that might be things about there's an opportunity to move resources or work between teams. It might be about how you manage your people. Even some of our, predictive AI now around the actual likelihood of of a member of staff wanting to change jobs or looking for new roles and so on. I think that the the potential in this area is is is incredibly powerful. And what that adds up to in terms of our our our our business model is is through those different products, whether it's the Control IQ expansion, which is the planning tool into, for example, our American Health Care, Work IQ base, there's a huge need there for, if you like, improved agility and control. That's one upsell opportunity. Equally, we have plenty of examples where customers are using our Control IQ product, but a lot of their work, which is to do with, for example, money laundering activities and and and or complex claims investigations.

19:58 There's an awful lot of work which they need much better visibility over. And similarly, CaseworkIQ, in that sense, is a is a big upsell opportunity. And just to complete the triangle there, you've got customers who've been long standing. I mean, many of our customers have been with us for going on twenty years using our planning software, but this desktop intelligence product I've mentioned, WorkIQ, has huge application across a base where, if you like, the visibility of where people are, the the need I mean, just in the Australian market, for example, there's a there's a huge amount of regulatory reporting requirements to to be able to you know, and the duty of care evidence the fact that you're you're protecting your employees from extended working hours, from working home, and so on. So we see around 90,000,000 of of across and upsell opportunities within our existing customer base. That's to be absolutely clear, the extendable market of addressing software on top of or extending to customers with whom we already have a contract we already have a commercial contract, which I think is, you know, again, part of the reason we're exciting, partly because we have the products that meet specific needs.

20:57 And as an example of that, we launched last year, the Casework IQ. That's already up to a million of ARR. Probably, though, more importantly, in terms of the growth trajectory, however, most of our customers are now at some stage of trying it. Specifically, seven out of our top 10 customers are now in active involvement with with Casework IQ in various levels of of of scale, and that creates a sort of solid opportunity for full year '24. I think, you know, one of the things we were concerned about is the extent to which any one of our products start to overlap in terms of, you know, revenue cannibalization. The great news and from our experience, just one case study here, if you look at TD Bank, who are well known as one of our our signature customers in The US and Canada, they found using all three products entirely complementary.

21:44 So whether it's a Control IQ, which gives them the planning, whether it's the Work IQ on the desktop activity, or indeed the casework, which is about that complex overview of lots of activities. All of those things are inherently valuable, but importantly, add together to give the greater visibility. So I think acting in tandem, they've all added value, but there's still that growth opportunity as the casework use becomes wider. You know, again, it's it's it's a it's a it's just an early adopter stage of of of our custom of our of our product set, but it's a it's a it's a great also, advocate to to communicate to other other customers about. So I think this is our our development specifically in in in for next year. We're bringing out smart planning, which is leveraging some of the AI facilities that we've talked touched on to improve the the the precision, if you like, of what our software will help you with. And we see it you know, what we've seen through our beta testing just as a, for example, is a 4% improvement in productivity of teams that are deploying smart plan. You know? If you've got let's say, one of our bigger customers might have 8,000 people on the software, you know, eight 4% of 8,000 is a big number. Huge value, direct return on investment, very easy upsell.

22:53 Similarly, smart skills. This is the ability to eliminate all the paperwork and, judgment attached to trying to maintain an appreciation of the skills across big numbers of people. Our software will be able to determine does determine, if you like, what people are good at. Learning curves, people are varying from the learning curve, trajectory, and people who are perhaps peaking and then need to be rotated or might have other needs for cross drilling. All that kind of the analysis side of things, which relied on individual local experience to maybe call it. Suddenly, we can build that into the software. Hugely valuable, hugely impactful at scale. And, of course, critically, not something you're ever gonna solve using your own little spreadsheet. So we're starting to be able to have more and more reasons why this is an enterprise adoption tool. It's worth noting, also, one of the things we did last year was we commissioned quite a detailed investigation or a study of our pricing model, which is something we've lived with as a single product company since pretty much I founded the business back in 2005.

23:50 What that came back with was was hugely reassuring, firstly, that our customers think we offer very good value for what we already do. But what they also said was you can now strata your products into this series so that some of the features I've been talking about are worth more money, and you can package them to exploit that. So over the course of what will affect to be a three year project given the level of recurrent revenue we've already got customers with, we see this as a big revenue uplift. The ability to package that those products into into new series of software, which add incremental value to our customers and, and, therefore, greater revenue generating opportunity. So so that's because it's all very well building these products, but, clearly, we need to be on top of monetizing it, and and that was part of the logic behind that that story. So in terms of the actual, looking forward, the the the priorities of the year, now this is something which, I guess, anyone who's been tracking us for a while would look at and say, that's a the the the important thing is this is all about execution.

24:45 There's nothing in our priorities for the current year other than let's do what we've already said, and we've got a pretty good track record to doing that. There's no pivot. There's no sort of random acts of, of chance in here. What we're doing is driving through the marketing activity which we've invested in, the the pricing strategy we've invested in, the new product set we've invested in, the new technology we've invested in so that we can drive up the revenue drivers, and we can turn what is effectively, let's say, six new customers a year. We we know we we we are we we sell to big customers. They take time to sell, and and and we sell most new business to existing customers. But, clearly, you need that pipeline of new customers coming in even if they are large enterprises, and they take a long time. So we need to we're we're really focusing on accelerating that sort of new customer acquisition.

25:32 We're looking for getting the value out of the investments we've already made. And and, really, alongside that, keep our customers loyal because our NRR, at the end of the day, is the thing that is the engine room of growth. If we can drive what is still a good result, a 110 better than most software companies, I think, if we can get that up and, know, up north of here, because I consider n a 110 just the baseline, the opportunities for really changing the the the the revenue and profitability company is is pretty pretty large. I'll finish the full presentation with a quick sort of specific update on on I mean, the first quarter of year has now passed, and, essentially, we're we're we're in line with expectations. We've we've sold a couple of new accounts as well, but but more more importantly, what we're seeing is that take up of our new product set. So I think we're on we're we are are well on track for our our current activity. And or, you know, you can can tell, I think, there's so many of the elements of the journey we've been on over the last three or four years, which are effectively coming into place now, that we do think it's it's quite an exciting time for the business.

26:31 So that's the formal side of this. However, one of the real values of this presentation and the and the the the the platform is the ability to take questions. So so what I think I'll do is is is open the floor. Fantastic. Richard, again, thanks indeed for the presentation. Ladies and gentlemen, as Richard said, please do continue to submit your questions using the q and a tab situated on the right hand corner of your screen. But just while the team take a few moments to review those questions submitted today, I'd like to remind you that a recording of the presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard. Richard, Ken, you haven't had a great deal of time to look at them. But if I could ask you just to click on that Q and A tab and where appropriate to do so, just read out the question and give your response, and I'll pick up from you at the end. Okay. Well, we've there's some good questions, Nir, and thank you, and do keep them coming. I think if I pick up specifically on one of the the the the the interest rate question, I see one of the questions is the cash flow bridge shows naught percent interest earned. I hope you are now earning a better rate than that. And the short answer is we are. But, of course, reporting on last year's results with the sort of money rates, essentially, it was not a it was not a it it didn't figure greatly in in, last year's results. But as the interest rates have come up, it will in the future.

27:38 But it's also worth noting, we have quite a complicated business because our our operating units are in Australia, in South Africa, India, Northern in Ireland, in in in The UK, and in in Canada and The US. So from a just cash flow management perspective, that makes our treasury quite a sophisticated function. So we are pretty adept at that, and the team are obviously onto spot rates and overnight rates. But to be honest, as we all know for the last ten years, that's barely been a a wrinkle in the system. So I think that might change. But, you know, we we we are and and we're on it, but I think it'll make a a marginal difference to the, to to the really, to the figures. The perhaps the bigger question there is in when at what stage do we expect to deliver a substantial profit and cash flow, assuming new wins from here is mainly profit? We are in that lovely stage where, in effect, subject to anything else, we choose to pull or leave of you know, for if we sell a 4,000,000 ARR, then 3,000,000 of it drops through to the bottom line. And I think that the the the message for us is when we came to the market, we see massive growth opportunity and shame on us if we don't take it.

28:39 The market context in the last two or three years has been to ensure, if you like, that may be true, but let's make sure we deliver profit. So we we're we're still on that that that game. Effectively, we we see the process over the next two or three years converting more and more, if you like, of that that operating leverage to to bottom line growth. But that said, we'd still be in a position to say, you know, if the growth's there, we should take it. And and I'm also I don't think we'll ever run the business for, if you like, a you know, borrow money to leverage up. That's just not the game we're in. But if the marketing means the the prospects and opportunities are there for us to really accelerate, you know, six new logos into 12, into 20, into, who knows, 40 in a couple years time, then clearly, we we would we would take that opportunity. And importantly, we have the funds to do it. So at the moment, we're not calling, if you like, our our our cash versus, you know, policy per se, but that the sentiment of this company is still a sort of in the method in a sort of rule of 40, I'd have a 30% growth and 10% profitability company if we can create that sort of momentum in the in the company.

29:40 Looking at other questions here, How much of your cash is actually available for acquisition or support growth? Most of it looks advanced pay well, the nature most of it looks like advanced payments for customers for next year's services. Well, it well, it sort of is, but the whole that's the dynamic of this business. I mean, effectively, you are taking an advance on, but you've also got 87% gross margin. So it's not like we're storing up a lot of cost base that then has to be delivered. If it's 8087% gross margin, that gives us the discretion to use that money to invest in the business in a variety of forms. And the actual delivery cost of it is is is fairly nominal. You gotta be careful with that and make sure that's sort of carried in lots of ways, but it does give us the opportunity, let's say, to to drive the growth in different areas. I mean, in terms of our actual sort of metrics, we we track pipeline, and we track growth. And and, you know, as you'd expect, we we we have all sort of, know, interesting data on that. What's what is interesting, I think, in in terms of the question is how much view do we have on future pipeline conversion rates?

30:41 Current historically, ACTIVEOPS' fastest growing phase was in 2008 to 2011. That was the last financial crisis. And there's no doubt there's something about, if you like, that that need when companies feel the squeeze to do more with what they already have is is is one that plays to our type of environment. So we're seeing a little bit of that already, and we've seen some good uptake this year. And I think that in conjunction with some exciting products that sounds like they could be real silver bullets to a lot of big institutional problems starts to create the engine. We we you keep the interest, and then you need to sustain it to sit in a in the sales cycle. So I think I think we're quite optimistic, and the metrics in the pipeline are all to do with the expansion in different product sets. So it's probably never look you know, never never looked as healthy as it does now just because of those different opportunities.

31:30 But then there's the velocity through the pipeline, which is actually a far more important thing. And, I mean, I'd still contrast it between a fast tortoise and a slow tortoise. You know, we we are talking about selling to large enterprises, but ACTIVEOPS has SOC two compliance, which is a major hurdle, a lot of bridge for a lot of software companies. You know, our our we have the credentials of having sold over many years to some of the biggest companies in the world, and we're just in a good place. It doesn't make it easy. It doesn't make it happen quickly, but but we're in a very good place compared with a lot of our competitors. So I think there's some interesting stuff there. Question here is, so when you it says, so when your kit seems such a no brainer, why isn't your sales growth higher? It's interesting. One of these one of the conundrums we've always found in our stuff is that it's one of those things which at the senior management level, they sort of assume it's done well already.

32:19 But COVID's done us a lot of favors because what that crystallized out was the fact that, firstly, some of the ways that people had control in terms of the stuff we're talking about just didn't work when people were working from home. So that's brought an awful lot sharper focus on why better ops management, if you like, is is so fundamental to almost every aspect of the business proposition. And I think, generally, that sort of efficiency, sort of cut tone at the moment doing more is also something sort of sharpening people's sensitivity to it. I think one of the, the the areas I'm most, excited about for the coming year is the impact that our new marketing strategy is having. We recruited a CMO last year for the first time. We've already had a marketing activity, but we brought in somebody with a lot of experience around SaaS based marketing of of b to b products.

33:05 And you'll see a lot of that in terms of our messaging coming out, which is very much more around the value story. And and, hopefully, you know, that that that well, I do know that will have a big effect in conjunction with the kind of technology, which is genuinely innovative. What do I see as a normal level of share option remuneration going forward? Is this not really something that should be in the adjusted profits? I think one of the things that we've gotta be mindful of is is the kind of trade off between public and and private equity here. I lost the we lost our recent finance director who had been with me for a long time because in the private sector, he was able to move to a firm which was able to offer him very, you know, generous terms, which he couldn't possibly have earned through our sort of scheme. So we I I the the first principle in ACTIVEOPS, I think, is one of transparency and disclosure. So the whole idea of this is that anything in there has to make sense to any eyes.

34:00 I'm personally as a as a as a heavily invested shareholder founder, I've gotta be careful because I assume everybody's already motivated in the way I am. But, realistically, part of the options you know, part of the important facets for anybody and and and and given the business gearing is to have the right option scheme in place. That said, I think ACTIVEOPS, fortunately, is blessed with a a proposition that actually many people feel pretty motivated to be part of without getting too evangelical about it. You know, we we have a lot of people in our company who came because they were part of they received it as cons customers and then wanted to join. And that's always affected our remuneration and and all sorts of other sort of elements of the company in terms of our retention and our sort of sense of loyalty, which I I think we've got a lot to be grateful for. So so I haven't got a specific answer on the on the option plan. I certainly as point of principle, I just think it's important to be completely upfront about it. And, also, I don't believe that if you like options are, if you like, a fundamental driver to to get people to perform. I think it's the environment you give them, the belief and the passion that's the in the product they own, and that ultimately drives our drives our success.

35:04 Just reading the other questions here. What level of ARR growth do you think the company is capable of? Well, there's a there's a $64,000 question. I mean, I think what I'm trying to paint here is an awful lot of elements that are possibly you know, I think an awful lot of elements of the context could achieve a shift change. Now that's a that's a call, and I have every reason to believe, you know, to to to believe my smoke in that sense. But I think I think there is huge opportunity in this market. There isn't really much solution, you know, a competitive solution in in in in in a general sense that we've got. We have some unique features about our data, our IP structure around the solution, and our sort of our user base. So I think there's a lot of opportunity here. It's it's it's down to us now to to execute against that strategy. One of the questions here is is, again, interesting one. As well as Microsoft, could you have a lot of partnerships with other large players which could help sales?

35:56 I think the the key point here, and we found in the past, it's having the level of market sensitivity to our product. We we have some really excellent relationships with a number of the leading partnerships and the consultancy advisers as well as other technologies. We're on the Blue Prism exchange as well as with SS and C. They're a supplier as well as a customer, which is exciting, as well as Microsoft. I think what we what we having gone down and, know, support a lot of partnering activities, what we observe is it's when the market is is really vibrant for, a particular product is when you see those kind of supporting teams spring up in in the in the in the, consultancies and SIs. I think we will get there, but it's a question of when, you know, not not now, but, but when.

36:43 Are large inefficient government departments a potential target? Oh god. I wish. I mean, absolutely. And I've been and it and, genuinely, and when you when you look at the sort of various things in the recent history around this, it's not just about, you know, sort of bringing some, you know, sweating assets or anything glass like that. It's about bringing transparency so that hardworking people in any form of work have the means to show and tell how hard they are working. You know, it's a two way bet here. And I think that's part of my frustration with that kind of world is it too often, it becomes a kind of binary sort of rather ill informed data free argument rather than you know, if we could give Reese more visibility that that he knew people on DVLA were working comfortably and working hard, that would be a good thing and vice versa. There is an accountability to the public that says better data supporting it would be a good thing. So I think there's massive opportunity there.

37:32 I think with that, Richard, Ken, you've covered off every single question that's come through. And, of course, there are only further questions that do come through, the team will be able to review those. We publish responses where appropriate to do so on the investor meet company platform. Richard, just before redirecting investors to provide you with their feedback, which is particularly important to you and the team, can just ask you just for a few closing comments, please? Very much. I hope that's given you a reasonable picture of ACTIVEOPS. We're very excited about where we are as as a business, which has got steady revenues, good growth from our existing customer base, and lots of opportunity. But thank you again for making the time to to watch this this this webinar. That's fantastic. Richard, again, thanks indeed for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected to provide your feedback in order the team can better understand your views and expectations.

38:17 This will only take a few moments to complete. We know it's greatly valued by the company. On behalf of the management team of ACTIVEOPS PLC, we'd like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.