Altitude Group (LSE:ALT) — Investor Presentation

0:00 Good afternoon, and welcome to the ALTITUDE GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated at the right hand corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question received in the meeting itself. However, the company will review your questions submitted today and have a response to it. It's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Nick Nikki Stella, CEO. Good afternoon.

0:30 Thank you, Alejandro. And, we are thrilled to be with you here today, to share with you, all of the details behind our record results, for the full year of 2023. And, with that, I can go into some quick introductions on the team. Presenting with you today, I, of course, am Nicole Stella, Nikki Stella. Eighteen years of executive level experience in the promotional products industry. I've got a track record of identifying and capitalizing on new revenue sources, launching products, services, and driving profitable growth, managing p and l's. I'm an experienced PLC CEO and board member, and I am truly thrilled to be with each and every one of you here today and tell you, our story and and truly how we are at an inflection point with the business going forward. So with that, I can hand off to Graham Feldham, and he can give you a quick introduction on himself as well.

1:26 Hi. Nice to meet everyone. I've been here nearly now two years and enjoying every second of it. I'm an experienced well, I qualified with in 2000 as a chartered accountant, experienced A and PLC CFO. Got experience with, Bellron, which is sort of us, Stack Pro, which is which is a fintech aim listed group and then got taken out and bought out by confluence. Safety clean, which is private equity owned services business with capital capital machinery and services, and then a Newmark Security, another aim listed group. And, yeah, I know, nearly two years here now and and really just I'm really working well with Nikki. Really enjoy it and and looking forward to take the group further.

2:22 Absolutely. And sometimes we get questions about how well we work together. I am based in The US. Graham is based in The UK. And each and every day, we spend our my morning, his afternoon together, working together on strategy and driving the business forward, and you'll see those results in today's presentation. So next, we can walk into driving the business forward at pace and how we have performed. So some of the key highlights. This year, we achieved $18,800,000 in group revenues. This represents a 57.2% increase over full year 2022. Our gross profit was 8,600,000, a 39.9% increase over financial year 2022. The group adjusted operating profit, 83.4% increase over twenty twenty two's results. And then our earnings per share, a 293% increase over 2022 at 55p.

3:20 Our cash balance at the end of the year was GBP 1,200,000. This represented an increase as well. And one thing that's not on this slide is that and I know that we've alerted the market and shared this in trading updates that we have increased our credit facility from a 700,000 credit line to a 1,700,000 credit line. So we have a lot of opportunities to to grow the business, and and we had a good cash balance at the end of the year and a growing credit facility as well.

3:55 So who are we? And I know that the business has shifted, expanded, and grown. And today, we are a diversified portfolio group. So we are the leading end to end solutions provider for branded merchandise merchandise across a variety of sectors from the corporate promotional products industry and print vertical markets to the higher education sector. One thing that I'll talk to you about today is how we have been able to take the engine of what ALTITUDE GROUP has, that technology base as well as our supply chain know how and marketing services know how, and how we've been able to take that engine and expand, what the group, is able to achieve and do and address vertical markets. So that's one really important factor is how we're able to take that engine and then branch off into vertical markets. So this will will showcase some of the success that we've had in the higher education sector for sure.

4:52 As many of you know, we have two distinct areas for our revenue, and we'll start here today to remind everyone if you're not aware, and to share that story with you. So we we break up our revenue buckets into two services and merchanting lines. Our services focuses focuses on operating distributor and vendor networks in the promotional products industry. And and these services are really based around our technology and software applications, our marketing services, our membership subscriptions, and our preferred partner programs. That's where we act as a service provider within that industry network. And then our merchanting arm is where we focus on the sale of the promotional products, and this includes our affiliate program, which we'll talk to you about today, and our adjacent markets programs, the AMPs.

5:43 One thing I like to remind everybody on when I talk about that engine is technology is at our core. We have our proprietary platforms, our product search engine, order management tools, design applications, and ecommerce solutions. And we are always looking at continuing our innovation and how do we drive efficiency and scale for the business and across the services that we provide. So we're always looking at new technologies, and artificial intelligence is one, where we're looking at the opportunity to deliver new tools to drive efficiencies and scale within our systems and within the industry as well. And then as many of you know, we had a trading update at the end of our financial year in March via our AMPS program. We identified, targeted, and seized a significant opportunity in the higher education space, and this is where we successfully launched our Gear Shop solution.

6:35 We expanded our pipeline and collaborated closely with our course material partner, which we'll talk a little bit about today as well, and this offering where we are solely focused on where we specialize, our skill specializes on that technology supply chain know how, as well as marketing services to be able to offer enhanced services and that has proven to be disruptive within the educational and collegiate markets.

7:02 We've delivered significant within the AMPS program significant multi year contract wins and maintained an ever growing pipeline. And this is one of those very important points for us to make. The business we were able to invest in pipeline growth and that has proven to be very successful for us in winning these additional contracts throughout the year. So we've continued expansion and delivery of this gear shop technology solutions and marketing tools and supply chain know how and delivering innovative retail experiences across The US market. This portion of the business, this vertical market that we've identified and proven that we can be disruptive within will continue to be a primary and growing focus within the group's business model. So the industry we serve, and we'll talk about this vertical markets as well as, the promotional products industry market where we have very, very, well reputation and growth for many years. So the market for promotional products in The US alone is estimated to be worth more than 25,800,000,000.

8:07 Throughout the pandemic previously, we know that that drops to somewhere around 18 to 19,000,000,000, and then we've seen that bounce back, since the pandemic has ended. And in in 2022, '23, the market is estimated to be at that 25,800,000,000. So we've seen a a nice rebound in the promotional products industry.

8:31 It continues to be highly fragmented, about 3,000 suppliers. I always talk about how the 8020 rule applies here. So about 80% of the business is done through about 20% of the suppliers, but that that fragmentation continues to to be true. And then about 23,000 distributors who are serving a very broad customer base spanning small businesses and corporates as, you know, such as your your Google or your Amazon or your main strip strip and streets businesses where they are conducting their sales. It's important to note that our AIM membership, we talked about that, you know, at the acquisition of AIM somewhere around 1,800, 1,900 members today sits at that global number of around 2,400.

9:20 And then also, we are serving the higher education collegiate markets. This market is estimated to be valued at about 12,000,000,000 with two primary competitors, which has proven to to give us the opportunity to be disruptive with our Gear Shop solution, and that's showing us great growth opportunity today. So combined, the group now has an addressable market of nearly 40,000,000,000. We have a lot of opportunity before us, and we are, as I mentioned previously, seizing that opportunity and proving to be disruptive in education and continuing to grow across the primary promotional products industry.

10:04 There are additional adjacent markets that are active in promotional product sales. We've talked about these before when we're discussing the adjacent markets programs that we have access to, and this has long been the strategy, which is, you know, been very exciting to see our capability now at taking that engine that I talked about in in the initial slides and being able to branch out, seizing the educational market as an opportunity. And then there's also the signage markets, uniform markets, and print markets, all with sizable opportunity for us as as additional adjacent markets for the future. So how do we serve? This is a slide that I've shown before. This walks through your basic supply chain and that fragmentation that we've talked about. It really begins in that lower gray column with your overseas manufacturer.

10:58 That is the facility overseas in China, Bangladesh, Vietnam, Mexico where they're actually creating product within a factory setting. From there, they will ship products to the supplier in that blue column. Those suppliers but those suppliers hold inventory within their facilities. When an order is placed from that mid column where you see the red, the green, and the purple, those suppliers will pick and pull those products, they will decorate them putting that logo onto the product, and then they will ship it to that end buyer in the yellow column. So in that middle, we can dive into that just a little bit deeper so everyone understands what we're talking about. That red column showcases the member of our AIM organization when we talk about this 2,400 global members.

11:53 And then in the middle green, that represents our affiliate model, which we'll talk about in a little bit later. And then you've got our gear shop solution in purple. So in that purple, they're delivering to the university spaces where we're serving universities and the communities the campus communities around them, and then that larger yellow is your corporate end buyer customer who is purchasing product from either our AIM member or our affiliate. So how do we make money? How does all of this work? How does that supply chain that I just showed you in that last slide translate into growth for ALTITUDE and how we drive our revenue. So first, and notice the the red color of the column, this represents our AIM membership.

12:42 In this first slide, how do we make money? We make money through our preferred pricing partner benefits, delivering these to our AIM members. We deliver freight programs and shipping discounts to our membership. We drive community engagement and networking opportunities through our membership. We deliver education and professional development, and we also offer those expanded marketing services, products, and tools to our membership. And how do we make money from this core? We do that through subscription fees, providing this broad range of services, including networking events and negotiating group discounts, and we also are able to drive revenue through artwork services, catalogs, exhibitions, and our marketing programs.

13:27 And you can see in the bottom there that our services revenue grew in 2023 to 8,500,000, a 35% increase in value across the AIM services. Also, a part of that 8,500,000, 35% increase is our preferred partner program, and this actually represents about two thirds of that growth in 2023. We had a very, very successful year in driving orders through our preferred partner programs. And what do we give our supplier partners, our preferred vendor partners? We deliver them top level visibility across our marketplace. How do we do that? We put them at the top of our search engine. So when an affiliate or a member is searching for product, they will see our preferred vendors first.

14:16 We deliver them preferred technology integration opportunities, guaranteed participation in our publications, catalogs, educational product programs, and our merchandising campaigns. And then we also give them expanded access to the AIM community via social media and our events. Really, what we do is we put our supplier partners and our preferred vendors together with our 2,400 strong AIM membership. And how do we make money? The group derives revenue through gross transactional fees on orders that are put through our supply network vendors and other service providers in return for providing those marketing services and the promotion of those suppliers to our distributor members. Revenues from the source reflect the value of resulting purchase orders placed with our preferred partners by our distributor members. And essentially, it doesn't matter how that order happens, whether that goes through our tech, whether it's telephoned in or sent via email, we collect those service fees through our preferred partner program.

15:16 And, again, that service revenue increase of 35% to £8,500,000 in in our in full year 2023. And then how do we make money on the merchanting side? So what do we do with our affiliate program? This is our capstone, program when we talk about taking our membership and driving them into into that capstone program for our affiliates. What we do is we provide our affiliates the ability to focus on sales activities, which is their true skill set. They are salespeople. And what they're looking to do is to become a part of our corporate business, which is driving growth and profitability as our skill set. We enable them to focus on selling, and we manage, all of the, other elements that are happening in the background,

16:04 which helps them to exceed their stand alone potential. We'd it's mandatory that they utilize full use of our technology. It's advantageous for them. It drives efficiency for their business, and it's mandatory from us to be able to track a business. And what does our affiliate program do? It delivers scalability, expansion, and growth back to the group.

16:26 We drive our revenues from the sale of the promotional products for the principal, which is procured via our sales affiliates who act as our sales agents. And along with our dedicated team of affiliates that utilize our technology, our preferred partner network, our efficient we deliver efficient processes and financial expertise, and all of these things drive back up for the growth of ALTITUDE. In 2023, we delivered 82% increase in our merchanting revenue, and this was

16:56 primarily driven through our affiliate program, which rose to 10,200,000 in 2023. And then we have our adjacent markets program. This started small in 2023, but you'll hearken back to the training update that we delivered, later in March and what I noted, earlier on today's presentation that we were able to sign significant contracts in the higher ed space through our Gear Shop solution. So what do we do here precisely?

17:26 We provide that specialist expertise on branded merchandise with access to our full product range from our preferred partners. So everything drives back to that engine that I talked about supply chain know how, technology services, and marketing, services and solutions as well. We provide ecommerce marketing know how and modern innovative spaces to drive brand awareness and community engagement across the campuses that we serve. And this has proven to be highly disruptive because the campus communities now are looking for engaging innovation and a different solution because they've only had choice from about two different providers for a very long time, and we are proving to be disruptive with the solutions that we provide in this space. We also have a specialized partnership with a course material provider, so we pair up our branding, marketing, technology know how alongside of a course material partner. And what we do is we deliver a seamlessly single solution in our gear shop solution, but we have two very focused specialists, us and our partner in the in the collegiate spaces.

18:37 And how do we make money? We make money from long term contracts that require a small initial upfront investment from us and specialized licensing via successful integration of our technology, marketing solutions, and from the sale of the branded merchandise through our adjacent higher education and collegiate markets. And, again, in 2023, this was a smaller portion of the sales, but we saw that we've got these larger contracts that we brought in, and our pipeline continues to grow throughout the educational sector. We also make money through our technology, and this is at our core. What does our tech do? It provides efficiency, intuitive online ordering experience for buyers, coupled with back end technology stack support the quick fulfillment of orders for branded merchandise.

19:29 This engine drives everything that we do across the business. It's effective, ensuring product inventory availability from whenever and wherever you are. So this is is one of those incredible aspects of what we can do. A distributor, a member, an affiliate can go online. They can check, through our system, find whether or not there's 500 t shirts available, in black in specific sizes or if there's only 200 available, and they can make their decisions on the fly with pace utilizing our technology stack.

20:02 And we have trust and reliability from being able to service from start to finish at our distributor membership as well as our affiliates. And how do we make money? We derive SaaS revenues, through our marketplace access, ecommerce solutions, and our proprietary ERP system.

20:23 So what have we been up to, in full year '23, to provide expansion for the group? And I can say we've been working really hard. And and, Graham, please, chime in at any time if you have anything that you wanted to share here at this point. But we have worked really hard through 2023, delivering strong financial health for the group, building a track record of trust and future growth through our financial banking relationships as well as with the market, investing in our teams, great people to deliver talented teams geared for expansion and ready for growth, investment in our pipeline and partnerships. I mentioned this, we've been able to really drive our pipeline growth across our higher education market as well as throughout our affiliate program because of the strength of the business that we've built throughout the pandemic in full year '22 and to '23. We've really gone from that ready to scale to scaling now to that inflection point that I spoke about earlier on the call. And we're geared for greater efficiency, delivering scalability for our customers and for our internal teams through greater gearing, operational gearing internally, and strengthening our core relationships.

21:39 One of the primary important aspects of what we do every day is making sure that we protect the core business that we have whilst we grow for the future. And, Graham, I would welcome you to share any thoughts that you have in terms of what we've been up to, the financial health of the business, and and some of our goals for the future. Yeah. Sure. So

21:59 one thing that I know Nick has Nick is done over the years is to put put teams in place and put great teams in prep in place. So starting from The US a few years ago with with just her and then and then building building that team around her. And that's exactly what we're doing on the AMP side of the of the business as well now. So we put we've started from a a small a very small team of of of Nikki plus plus one business development who's then driven and bought built built the success that we've seen in our wins that we've we've we've communicated to the market about. And so this year, what we've been doing is building up that team to ensure delivery, to get the right leadership roles in place in the in the key the key roles in place within that team. So then we can ensure delivery of those contracts or onboard them and then ensure they deliver and then understand exactly where we're going to, you know, the the value of those contracts to us.

23:04 So and that's been core to us core to our success and will be core to our success going forward. And and then that gives us an absolutely a bigger platform to then springboard from on the AMP side for next year. So that's really about where we're where we're heading in that direction. And I can add in too, Graham, that what's interesting about what we've built on the affiliate model as well as within the AMPS program, that higher education sector is compounding growth. So when we bring in and recruit a high caliber affiliate, that represents compounding growth for the group. And in 2023, we saw our affiliate program double in size essentially. Right, Graham? Mhmm. Yeah.

23:51 Yeah. Absolutely. And then yeah. It it doubled in size, but we but the because of the nature and where we've built the team up to right now, we don't need to double the people. So it's a it's a kind of marginal increment in in overhead, but we've got we we've build up that that top line and the fall through. So therefore, there's much more fall through to the to the bottom line on on the affiliate model. And then that compounding growth is the same for our our higher ed gear shop solution in the AMPS program. So that those are long term contracts. They last for five years. Basically, in in most instances, they're five year agreements. And so when we drop in more contracts as we win them, then those will continue to grow.

24:39 I would anticipate them being five year agreements as well, and that compounding growth will continue on through

24:46 2024 and beyond. So as I mentioned previously, we don't anticipate, slowing down the pace of of that pipeline growth and and investment into pipelines so that we can continue to grow, our merchanting lines.

25:04 So how we performed? Graham, I'll let you take over this one, and you can run through the financials of the group. Excellent. Thanks, Nikki. So regarding numbers, this is always this is a great slide to be able to present. The one big green arrow on the right is just denotes the the real positive performance we've had year on year throughout our p and l. So really, it's a it's a it's been very strong. 57% up in revenue. I had an underlying rate. If you want to know underlying rates, then I have a table within this within my CFO report, which shows the the underlying growth rates. But for just just to just to highlight a couple, sales are up 57%. That's 41% on an underlying basis. Gross profit up 40%. That's 26% up on an underlying basis. And adjusted EBITDA, 83% up, that's 53% up on an underlying basis.

25:59 So during the year, we came out to the and revised the market guidelines three times, which really is what, you know, support which is the strong trading that we've managed to deliver, you know, really supports those rerates. We've also and just to just to go a little bit further into as Nikki says, we've built in growth for f y twenty four. So within the affiliate model, we've grown from just under $7,000,000 to to just just under, you know, between 13.5 and $14,000,000 on an annualized basis. So the beginning of the year, it was seven at the end of the year, it was 14, just below 14. So then really that's been that we'll see the full year impact of that growth within f y twenty four.

26:47 So you'll only see a part of it come through in the revenue in f y twenty three. And, of course, with the contract wins on the on the AMP side, then that will mostly we we start off with with one contract in the beginning of the year. We added about three during the year and then we have the contract wins that we've announced at the end of the year, which we're we're currently onboarding now. And so they will be impacting f y '24 with with they won't have the full year impact as such. They'll have a three quarter type of year impact as as they're onboarded during the year. The aim is to get them to get them all in and done within the next by the next by about a week's time, we've got our last couple to go live. So then they're ready for the full rush as it's called.

27:35 So when when everyone comes back to school and and it's and it and it and it really picks up business.

27:43 So yeah. And so there's and as I said, there's some effects analysis in my report that you can can see in a bit more detail view on that. So then if we wanna dig in a little bit more detail to the to the divisional side of the business. So what you see here is that you got the services on the top and that that has as we've seen, the 8.452, that's grown by 35 percent or 22% on an underlying basis.

28:13 Now where's that come from? That's two thirds of that growth has come from the strong supplier revenue. So that blue column, those suppliers, supplier revenues are VIP vendors who we work with that they really form the bulk of that growth that's come through in the services and it's highly profitable growth that falls through at 90%.

28:32 A third of that a third the other so the third is the upsell into membership and our VIP partners out. That's all and that's all to do with creating activity within the market. More activity means more transactions mean more transactions funneled through our our VIP vendors. So, what do we do to upsell into the market? That's the events, that's the product collections, the catalogs, that's marketing packages, and the artwork tools. All all those add together and build up. We've had some good success of of of selling more in this year. Within merchanting, so as I mentioned, so revenue has gone up by 82%, that's 61% on an underlying basis. And that's really from onboarding new affiliates in the year. We had a very you know, we had we had that that, you know, low impact from the low number from our hand side that that has had an impact on the margin, though. So you see that margin move from seven to 9%. So on very on on on quite a low level of revenue, it impacts the margin. So you'll see that you'll see that playoff between the the affiliate model coming through, usually about seven seven or 8%.

29:47 And then the and then on the app side, that will come through at about 35%. So as that falls through and grows, then you'll see the increase in that merchanting gross profit margin.

29:59 It just says, especially if if if the affiliate model stayed the same, then you'll see that straight know, you really see the change in the gross profit margin. However, with the growth in the in the affiliate model as well, then they'll play off against each other. So what how that impacts on the group side is you got you you we see the gross profit margin fall from 40 fall from 52 to 46%. And that's really that interplay of that growth that we've had on the merchanting side of that doubling of revenue.

30:30 In merchanting is really then plays off against the services. And so therefore, you see that that fall in the gross profit margin. But really sorry. Yeah. Do you wanna say something, Nikki? Yeah. And so that would be something that just to remember that the affiliate model really is that volume play. Right? So high volume, lower gross profit margin, and then the the AMP's program, there's a there's vertical markets program, and particularly through the higher education sector, we'll see that higher gross profit margin. And so we'll be watching that one as we get through Fall Rush and going through into you know, once we get all of these contracts initiated and and and active through the fall months, we should be seeing you know, watching that profit, percentage margin and the growth of that through, the AMP's program, balanced against, the the affiliate program.

31:26 Cool. And and so, and then on overheads, I'm gonna talk about over overheads as a whole. So that's, operate you know, non non central and central costs. So they've increased by 1,500,000.

31:40 And what where where is that increase from? So there's no point 5,000,000 related to FX. There's no point 5,000,000, which is we we had the government retention scheme credit in 2022, which from the US government, which we didn't which we which was was only available in 2022. So that now you can see our normalized run rate of people of costs coming through there. So that no point five relates to that. And then a no point 5,000,000 on which is basically the normal increase

32:12 to do with the to do with the increasing and scaling of the business. So that's to do with investment in pipeline people and then regular other costs associated with growth where there'll be a bit of legal and professional and some travel as well. Really, that falls through to having that adjusted operating profit increase of 83%, which is underlying 53% growth versus last year, getting us to a 2,000,000 rounded adjusted operating profit.

32:44 So then if we look at our financial position, our we've got a strong balance sheet. It's it's increased from 8.11 to 9,430,000, an increase of 1.33. We've increased our cash from 0.9 to 1,200,000. We remain debt free at the end of the year and now,

33:08 but we have grown that facility to $1,700,000 that we expect to use in the in the very short term as we as we scale into that autumn full, you know, the full rush and we, you know, increase our inventory for that. So

33:25 then if I move forward onto the cash performance, so you can see that increasing cash at no point two, so a cash generative. And really all those the the working capital increases come from different parts of the business. However, they're they're all related to an increase in activity and growth. So there will be quite a bit of that. The trade payables and receivables are related to the the affiliate model. We've got the increase in inventory, which is relating to the amps model. And then there's part of that trade and other receivables related to the services side where we receive those services revenue that that have various variable contracts that are recorded to the semi annual annual contract. And so therefore, there'll be a buildup towards the year end as they as they become payable.

34:18 I'll hand over to Nikki. Awesome. Yeah. Thank you so much, Graham. And I just you know, from my perspective, I I would say when I talk about being at that inflection point, these are all the things that that throughout the past few years, we had envisioned in being able to divide diversify the group and tap into those vertical markets. I know I've been talking about the ability to to build out the affiliate program and tap into verticals for some time. And so quietly, quietly, quietly,

34:48 we've been working internally, particularly throughout the pandemic and beyond, is to build that out. And now we're starting to see the fruits of all those labors as we are winning those new contracts, bringing on more affiliates, driving all that business through our preferred vendor network, and utilizing that engine that I talked about previously, you know, that core of technology, our ability to utilize our second to none marketing solutions, and pairing that up with our supply chain know how has really enabled us to to hit that inflection point and and really start to see the hyper scale and hyper growth of the business. So preferred partner service revenues grew by 21.5% in The US compared to the reported 11.4 to 15.6% industry distributor sales growth. So what does this say?

35:39 This says that our membership and our affiliate program are healthy and active and driving business and writing sales and pushing that through our preferred partners. Our new ACS merchanting affiliates doubling expected annualized revenue signed during the year with a full impact that we'll be able to see in 2024. And again, as we recruit and bring on more affiliates, that will have that compounding effect and will drop that revenue right on to ALTITUDE and drive that growth into the future years beyond. Significant new adjacent market contracts won and expected to start transacting by September. So as Graham noted, we are nose down right now. We are prepping for fall rush. We're making sure that we have everything set so that when all the students hit the ground running, that they are able to purchase their branded merchandise. They're able to to, you know, enact and become engaged through our gear shop solutions and and essentially act as a branding arm for the campuses that we're serving. So that really comes down to when that student puts

36:43 on that cap or that hoodie and they walk outside the door that they're spreading that branding merchandising message throughout the communities that they're in. And that is highly attractive to the campus communities that we're serving and that those that are in our pipeline that we're talking to. The group remains debt free, but as Graham noted, we have that increased facilities to support our growth as well as as, you know, we'll be dipping into that and and dipping back out again. And the board is confident that the group will deliver substantial growth in full year '24

37:13 and win further material contracts for the future. So we are not slowing down. Our team is building out their pipelines, continuing to invest in that pipeline and going out there and and that business development element. Not only are we working hard to continue to grow through new contract acquisition and affiliates as well as our services arms, but we're also working very hard to make sure that we performed those contracts. And just one one extra point is that we've been really clear on the communications about coming out to the market with with our or, you know, we're all for Zoos to to come out to the to the market with new numbers. We're we're keeping we're you know, we we will come out at the half year with with our with our view on where we are and also from the from our experience of onboarding and and getting those contracts live and running.

38:11 And so therefore, we thought that's that's that's a better time for us to to then, you know, review where we're where we're heading and where we're landing for the year. Certainly. Yeah. We'll have a lot more visibility come August, September, and so be able to report that back to the markets at the half year for sure.

38:31 So our aspirations, we retain our high growth ambitions and we are confident in our ability to substantially scale and expand the business. The management team is focused. We are all working really hard internally on driving scalable growth in our new financial year and accelerated compounding future growth. So as I mentioned, as we win, as we add more contracts, as we add more affiliates, that all compounds for that future growth. And we are focused on delivery and committed to achieving our aspirations to build a $100,000,000 business. That is our goal. We're working tirelessly every single day to achieve that, and, and we're ambitious. And and Graham and I, we work hard and believe that we will get there in the near term. Absolutely. And I know as soon as we hit that, then then we'll be 200,000,000. Right?

39:19 Then we'll be going for 200,000,000. That's right. Never satisfied. So and we're always pushing further. So, questions. And Alejandro, I don't see the questions. If you could help me into pulling those up on the screen and and any others that may have come through, I'm certainly happy to answer those and and Graham can as well. Yeah. So, Nikki, in the bottom right hand corner, can you see a blue button that says chat? I can. Yes. If you click on that, then everything will become more apparent. And what I'll do is I'll just bring your cameras back up now for the q and a session. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just for the company to take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. Nikki Graham, as you can see, received number of questions, both presubmitted and throughout today's presentation.

40:19 If I could just ask you to read out those questions where appropriate, I'll pick up from you at the end. Absolutely. I can hit on the first one. Given the superb results and very positive outlook, how do you reconcile the poorly performing share price? And so I think that that's one that, you know, we've done analysis, and and Graham and I and the board were always discussing these matters. And and so Graham pulled together a quick analysis on this one that the share price has actually performed quite well performed quite well since we commenced forecasts in the 03/31/2022. We've actually grown by 23%, while the greater AIM all share has actually fallen by 27%.

41:05 So it's a net 50% better performance by ALTITUDE. Is that right, Graham? Absolutely. Yeah. And that's in the context of the market as it is. So it's it's been a relatively long bear market where we're yeah. Where where hopefully we're seeing some green shoots coming through right now. Yes. And we'd be really pleased to exit the bear for sure. So but but performing well, and we are continuing to always communicate with with shareholders to keep them, you know, up to speed on on how we're performing and making sure that we're continuing to generate interest and and tell the story and tell that with clear, you know, understanding of of our growth and that we continue to be focused on that growth.

41:51 So and underlyingly, it's underlyingly, the performance of the business will you know, the everything else will come. So we're we're absolutely focused on delivery and and and that growth because then it will it will slingshot at some point. Sure. But we ask those same questions too every day. So it's certainly on our minds and and something that we are always paying very close attention to. So then we have the question, can you please give us more information about the new contracts signed since, the year end and expand on pipeline of opportunities being explored? And I think, Graham, that you you mentioned this one, earlier. So we had one contract at the beginning of full year '23, and this was essentially our beta into the market to ensure that we could deliver and perform in such a way that would be highly attractive and disruptive in the marketplace.

42:46 Since that time, we added three more during the year and and then winning a further 13 contracts. So when we go out there and we are responding to RFPs and pitching against those two large legacy companies, we are winning about 60% of the time. So we're feeling very, very confident and bullish on our ability to continue to drive and be disruptive in that marketplace. We built key roles into that central team. So Graham had mentioned that to to go out and and assist in driving future wins and and giving us additional firepower to accelerate growth and disruptive in that to be disruptive in that marketplace. There's about 4,000 higher education college colleges and universities throughout The US. So that is really what is driving that $12,000,000,000 marketplace that we have access to, and we intend to keep on going after that and building out our pipeline of growth. And I can say that our pipeline continues to be growth oriented and strong in that space. And Graham, is there anything that you'd like to add in terms of the university space currently?

43:55 Just just the just the yeah. With the with the contracts being to, you know, tending to tending to be normally five years long. So there's there's there's usually about 400 or 800 universities that will be coming up for tender each year. So then so therefore, say, 1% of that about we're on the kind of kind of way we're looking at it is about, you know, somewhere between twenty and thirty universities. So so yeah. It'd be it's a it's an interesting market and one one that's right for disruption. We're building up our our, recognition. People know us. People are getting to know us, and, they're liking it as well. So Absolutely. They are liking it. And, yes, we are are continuing to to, be seen and and requested to present and and then winning those contracts. So we'll continue to push forward to drive growth there as well as on our affiliate side. Our pipeline on the affiliate side continues to be strong, and we are always, you know, investing in pipeline, investing in people that can drive the business forward.

45:12 And the third question that I see here today is, is there any possibility that ALTITUDE would consider buying opportunistically small competitors in order to stimulate further growth? Certainly, we're always open to acquisitions. We're always looking at potential opportunities. Right now, we are really singularly focused on on ensuring that all of our programs that we have, particularly on the merchanting side, are, you know, nose down focused and ready for delivery and growth. But there's certainly always the opportunity to look at potential acquisitions as we go forward. And and hopefully, too, as that as we exit this bear and enter into much more relaxed bull market, one can only hope that we would continue to look at the market conditions and whether or not we would raise any equity.

46:09 Then we have oh, what are the number of US colleges and college entities forecasted to be signed up with ALTITUDE? That we've covered. Yes. We've gone through that and and talked a bit about that one so we can move on to a couple of the new ones. So I so I have a look at the so has the ACS growth been driven by, I don't know, Edward c. What expectations do you have on emerging GM ceiling looking forward looking forward, and how long do you see the most in GM growth continuing? So so the clearest answer for that is that as we gain momentum and as we gain growth, certainly within the AMP side, then in the future at some point, we'll probably split those two out a lot more. So then you'll see so then you'll see that split.

46:57 Because really, what you because whether it falls or grows, it's not necessarily a a significant point of our success or not. It just means we're being more successful in one of the areas. So in our affiliate model, maybe if it if it goes down, then we're being more affiliate successful in our affiliate model. If it goes up, it means we've been more successful in our in our amps model. So, so the two play off the two play off against each other. So this year, maybe, you know, potentially the the AMS model may have a you know, with the new contract wins, we possibly have more of an impact in our margin for f y twenty four. So therefore, could see that that tending tending upwards. But, you know, we haven't finished the year yet and we and we and we we so we can't say exactly how the the ACS the affiliate model will will will deliver.

47:48 So to stay tuned for sure and particularly for as we go into our our interims at the half year. We also have the question. Has the ACS growth been driven by new sales recruits? Is there metrics to this? I e, 10 new recruits would generate x revenue and profit. If so, what is the recruitment strategy? I would say on our affiliate program that that it's twofold. So when we recruit an affiliate and if that affiliate has a $500,000 a year annual turnover, then that automatically drops into into our revenue. So because we're bringing them on, they're our sales affiliate, and they are running that business. So but we're also seeing that because of the services that we provide, because we're offering them that administrative assist and some of the other background things that we do to assist them in growing their business so that they can solely focus on selling. They're no longer worried about accounting matters and and invoicing and things of that nature, that they're able to grow their business. So not only are we seeing new recruits driving growth, but also those that we have as current affiliates really, really starting to grow with us just because they're they're an affiliate with with our program.

49:06 Absolutely. Somebody somebody can do the you know, have a have an order for, say, 750,000 for one one order, which they wouldn't have been able to do if they were by themselves. And it's something that enables you know, they can do that within the corporate environment that we we provide. So so it's it's a there's that organic growth that we're seeing as well as the the the number of those those affiliates joining. Absolutely. So that's, we we give them the ability to to grow, and, and that's proven to be, attract them to become an affiliate of ours. So I see we have a what is being done to drive market awareness. I think we discussed that a bit in that first question to get some more activity around the stock.

49:56 We're focused on the business and and making sure that we drive the business forward, providing that growth year over year, creating a really strong and financially growth oriented business. We're also communicating to the market regularly, keeping everyone apprised, meeting after meeting from our side with with a variety of different institutions as well as, you know, shareholders. So we're doing everything, working with, you know, investor relations and doing everything that we can to get the word out. And I think that, honestly, again, we performed better against the AIM All Shares. And, really, we're waiting for some breathing room within the market that to exit that bear, which has been an elongated bear market. And, Graham, I don't know if you have any thoughts additional thoughts on that one. Just that we've we've been putting the groundwork in. We've been doing the communication, and and and I and there's a there's a there's a lot of interest, which has been and there's lot of excitement in which is really good. So it's that's motivating.

51:03 And the the the the demotivating bit is more the macroeconomic piece. Yeah. So so I think the time that, you know, the the we'll we'll the time will come and and all that groundwork will will be, you know, come to fruition. So so it's yeah. It's it's it's a it's a positive environment even though I understand where the question's coming from. Yeah. And I actually see I see things starting to turn in terms of the market conditions. I'm starting to see that shift, and the interest levels are definitely rising in terms of of, you know, opening conversations and excitement around not only around the greater market, but also around what we are doing in ALTITUDE GROUP and our growth potential, what we see, our aspirations and our ability to deliver on those. So my goal is always to continue to deliver.

51:57 And I know that Graham is doing that as well, the two of us, just to continue to to deliver, and, you know, year over year growth and and meet the expectations in the market. And, and that's really the the best that we can do is to keep on getting the story out there and delivering. Well done on a great set of results. Can you talk about the competitive landscape? Interested to hear who you view as key peers in this broader $440,000,000,000 addressable market. Well, I think on the promotional product side, we've talked about that is highly fragmented. So and and and really our services and merchanting, those service providers, there's there's there's quite a few service providers in the marketplace. We are, and I've always shared this as an AIM organization, the largest distributor network in the marketplace.

52:46 When we speak with our supplier partners, we are always in the top five of their top five customers. So we are a large organization, larger largest distributor network organization. And and so, you know, we sit we sit very highly against other markets or other other businesses in the promo market. And then on the AMP side, there's really only two large competitive companies out there, and they are legacy competitors who are primarily driven by course materials and textbooks. So for us, what we offer is a very expansive and innovative program that's based on being an extension of the marketing arm for the universities that we serve, And this is highly attractive to them. So we're we're coming in, and we're offering, an engagement with the campus community that they've not seen before, and then being able to, you know, meet the students through our marketing services where they live on their telephone. We've got ambassadors. We've got all sorts of cool things that we do, to deliver a really modern experience, and getting their brand out there within the community. So not only on the campus, but also outside of the campus in in the greater community to help them drive their brand forward. So, in terms of of the ANPS program, highly disruptive, and our ability to continue to disrupt is is one that we're we're pretty fired

54:16 up about. Let's see. And on the and on the affiliate model, there's there's a handful of different types of models that people apply. And so that that's open to kind of the private equity world as well because it's quite a volume volume game of getting those affiliates in. And so so we we but yeah. And so so there's there's a handful of handful of others that would that we we we we see. And then I see, how do you see, any impact on promo product production of your forthcoming presidential election campaign? Whoo. It's gonna go up. It'll be interesting one to watch. And and, certainly, I I believe that and there's always a spike in promo against the presidential election campaigns, so we'll be watching that one. I don't have any percentage numbers for you, but could certainly dig in to see how the political space that that sector grows in that four year cycle.

55:18 And the last one, I know we're coming up on the end of our time together. I see a a comment from Edward c. Overall, thank you both for how you're driving this business forward, and it's greatly appreciated. We are we are, again, nose down on delivery, fired up to go into the future, and very much looking forward to, you know, what's to come. And and I have to say that I appreciate our shareholders and and all that you do in supporting the business. So thank you. Right back to you. Thank you for your support, and, and we will continue to keep you updated on the market and and, and how we're doing as we go through these next few months. Perfect. Nikki, great. And thank you very much for updating us today and being so generous with your time. I think you managed to address all those questions.

56:05 Could I please ask investors not to close the session as you'll now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations? It's only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of ALTITUDE GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Many thanks.