Altitude Group (LSE:ALT) — Investor Presentation

0:01 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 on 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 it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to make the following poll. And I'd now like to hand you over to Nikki Stella, CEO. Good afternoon.

0:30 Thank you so much. I appreciate the handoff. Welcome, everybody. We are thrilled to be here today, discussing with you the robust trading that we've experienced throughout the first half of our financial year. Quickly, I can run through some introductions to myself and Graham Feltem, our CFO, and, and where we are today. So, again, I'm Nicole Stella, seventeen years of executive level experience in the promotional product industry across The US, experienced AAM PLC CEO and board member. I have a track record of identifying and capitalizing on new revenue sources, launching product services, and driving profitable growth, while all doing strategic planning and raising finance. I'm I'm happy to share with you all that I've been named to ASI's power 50 list. This is the most influential leaders in the promotional products industry.

1:21 And with that, I can hand off to Graham, and he can run through his introduction. Hi. I'm Graham Felton. Good to be presenting to you today. I've qualified with Ernst Jung in 2000. I've been in many different few different businesses in Bellron with Autoglass, Carglass, in Statpro as it moved from traditional software services to cloud software services.

1:47 And then also in Safety Clean private equity group and in Newmark previously for the last for a couple of years. And then I've really enjoyed over my first year now with with ALTITUDE. So really happy to be here and presenting to you. Thank you, Graham. So briefly, what I can do is run through some of the key financial highlights. And as I mentioned to you previously, we have experienced continued robust trading throughout the first half of our financial year. The foundation when the last time that we met with you and we we presented to you, we had talked about how the foundation was set and we were geared to grow. And so the business is scaling as we discussed with you all at the last, presentation and meeting that we had. So the group revenues are up 29.3% at 7,700,000.

2:38 Our gross profit has increased by 39.5% at 3,900,000. Group adjusted operating profit up 50.5 at 760,000. And one of the nice, highlights that I'd like to share with you is that adjusted basic earnings per share. We've increased that to 44 p, 145% growth in the first half of our financial year, and we are just about where we were, last year at the full year. So we've seen some really, really tremendous growth across the adjusted basic earnings per share. And with that, I can hand off to Graham, and he can run through some of the, you know, some of the details on those key financial highlights. So just well, we make revenue via servicing our network of distributors and and partners and via merchanting where we're the principal in the sale of the of the promotional product. So our sales are up 29.3, which is 16% at constant currency.

3:39 Our services are up 36.5%, which is 25% at constant currency. And our merchanting revenue is up 22.8%, which is 8% at constant currency. In merchanting, we've we've brought new signings of circa $6,000,000 in the first half of the year of an of expected annualized revenue, and that's really scaling as we as we set out to do this year. The adjusted operating profit is up 50.9%. That's 26.3% constant currency, and that's on a comparative of 500,000 last year, which was related and where we received a 500,000 government retention credit on employee retention scheme.

4:27 So therefore, the underlying growth of the business, if you look at constant currency, like for like, that's not 600,000 this year versus a level position last year. So we've really, really shown the growth.

4:40 And our net assets are strong with an undrawn facility of $700,000, which we brought it earlier in this calendar year, so around January, February. And that's that was really to fund the growth in merchanting that we're experiencing now.

5:02 At last previous slide, can share with you that, it does show that underlying growth of the business, which as we have mentioned to you in that last presentation, we anticipated, expected and we're thrilled to see happening. And and one important note too, just to really, you know, hammer home alongside of Graham is that 6,000,000 in annualized expected revenues that we know it will be dropping in throughout the second half of the year. Both very important things that showcase that that underlying growth of the business, which we had, hoped for, expected, and, and is happening now. And so, you can advance, Graham. Thank you so much. So that industry that we serve, and we'll talk about this. I know we've spoken about this in previous presentations, but just to give everybody that background on the promotional products industry across, The States as well as as UK markets.

5:52 Most recent reports state the market for promotional products, in The US alone is estimated to be worth about 23,000,000,000. This is post COVID, and this robust trading that we're seeing, we anticipate seeing a return to pre COVID numbers. I can't expect when, but we do know that the market is strong, and pre COVID numbers were somewhere around twenty five billion. UK is reported to be about one billion. It is a large and highly inefficient marketplace with 75% of transactions still carried off, carried out offline.

6:30 And then additionally, in this fragmentation that we talk about, there's approximately 3,000 suppliers. We know of that 3,000 suppliers. It's about 300, that are those highly important ones and probably even somewhere between a hundred and seventy five and two hundred suppliers that drive, you know, that eighty eighty twenty rule. So 20% of of or 80% of the business is carried out by 20% of the marketplace.

6:56 And and then it's got that 23,000 distributors serving a very broad customer base, spanning individual consumers, very large corporates and institutions alongside of nonprofits. So it's really from Wall Street to Main Street.

7:13 And then that industry that we serve, just walking you briefly through, the the pipeline and the the the sort of the the pathway of a product and this way of of arriving at an end buyer and customer. So if you were to have a company such as IBM or Amazon or Chase Bank that were purchasing products, they were purchasing drinkware pieces or T shirts for their clients or for their employees. At that top yellow column, you would see that that is the end buyer customer, and they would be interfacing with your distributor sales person. So that salesperson in the red column would be processing that order. They are basically the sales force to the industry.

7:58 And in our company, for ALTITUDE, we refer to those folks as members, and that is on our services side or affiliates that participate with us from our merchanting side. And we'll dig in a little bit more into that, as we go through it, but that red column represents the Salesforce to the marketplace. And we have somewhere around 2,245 members, so, that's about 10% of the market as we talked about that 23,000, distributors across, the marketplace. And then in that blue column, you've got your supplier. This is the organization company that warehouses products. They have those drinkware pieces. They have those t shirts. That might be in a massive warehouse where they can pick and pull it, and they actually put that corporate logo onto the product for Chase Bank, Amazon, IBM, whoever it might be, and then they blind ship that off to the customer. Once they've received that order from the distributor, they print that they pick that product, they they print it, and then they, ship that out.

9:03 And then at the very bottom there, you see your overseas manufacturer. That Chinese company, Bangladesh, Vietnam, or somewhere that's overseas that actually is creating the product and then shipping that into the supplier.

9:19 So who are we? Who is ALTITUDE in the entire process here? So who we are is we act we are a technology company with combined technology and an experienced team that has a proven service offering, delivering industry scalable growth opportunities and expansion into adjacent markets. It's really important to note that at our core, at the heart of the business is our tech stack, and we'll be talking about that quite some bit today. But then we've surrounded that with experienced team that can go out to market and provide, that opportunity to bring in, new agreements, new affiliates, new members, new service offerings, and, and provides us that scalable growth. So where do we sit and what do we do?

10:09 And we've been speaking about this quite a bit. Right? So how how does ALTITUDE make money? There's two very distinct segments, that drive growth for ALTITUDE GROUP. To the left, you'll see services. And our services side of the business is comprised of technology and software applications, membership subscriptions, preferred partner programs, and our marketing service programs. And to the right of that is our merchanting programs, which includes our affiliates, AIM Capital Solutions, and our adjacent market programs. And this is where, as Graham mentioned previously, we act as the principal in the sale of the promotional product. So how do we make money? So we'll break this out now. So from the business services perspective, we have, for our membership. And so that is that when we spoke about earlier, when I mentioned earlier that 10% of the marketplace, we have somewhere around 200 and or 2,245 members.

11:08 What do they receive for being a part of our community? They receive preferred partner pricing benefits. We manage that entire supplier relations angle for them. So we deliver back to them a preferred pricing across, our supplier partners as well as our vendors who, deliver back, freight programs and shipping discounts. We delivered to them community and networking opportunities, and this is very important aspect of the promotional product industry. So delivering those community and networking opportunities are very, very important to our distributor members. We also deliver to them education and professional development, expanded marketing and service services, products, tools, and then access to our products, via our our technology platform. So our systems where they can go in, they can search for products, create a quote for their client, and actually push that product straight through, not only to our supplier partner, but also to, their their client as well. And so these, these set of of services, we derive our subscription fees revenue from providing a broad range of services to distributors, including those supplier relation services that I mentioned, negotiated group discounts, events and exhibitions, catalogs, artwork services, and marketing programs.

12:27 And we saw in in the half year of '22, our services revenue, increase to 3,850,000, a 36.5 percent increase, over last year. So on the other side of the coin, within that services program, we have our provide preferred partner services. And so this is where we provide our supplier partners with services to expand their visibility and sales to the AIM and ACS community. So we drive them to the top of our search engine. So just as if you were searching across Google or another search engine, you're really only going to be searching across maybe the first one to two pages, before you click on something to get the information that you needed. So what do we do? We drive our preferred vendors to the top of our search engine so that they are easily found across our 2,245 members.

13:21 We provide top level visibility across our marketplace, product search engine, as I just mentioned. We also give them preferred technology integration opportunities so that we can improve and and, make more efficient, purchase orders. We we provide them with guaranteed participation in our publications, catalogs, merchandise campaigns, any way that we can increase their visibility across our membership. And, additionally, we provide them with expanded access to the AIM community via social media, events, every possible way that we can drive them to the top of that search. And we derive our revenue through gross transaction fees on orders throughout our supplier network and other vendors and service providers in return for providing those marketing services and promotion of those suppliers and just to our distributors.

14:10 The revenues from this source reflect the value of the resulting purchase orders placed with our preferred suppliers, by our distributor network. So that membership is very, very important. And we've seen that our membership throughout this first half of the financial year have really, been growing with our supplier network. And, again, our service revenues in the in the half year of '22 increased 36.5% to 3,850,000.

14:38 So merchanting, how we make money. This is that other side of the column that we discussed, a few slides back. So our merchanting programs are focused on operational gearing that drives efficiency and feeds into our services and preferred partner programs. And how do we do that? What we do is we recruit high caliber sales professionals to to become affiliates with the group. We are, as I mentioned previously, the principal in that sale. Our technology use is mandatory, and we provide scalable expansion. This this provides scalable expansion and growth back to the group. So this has a compounding effect. Every time we sign an affiliate into our program, that book drops right onto the ALTITUDE, ALTITUDE merchanting, revenues. So this provides that scalable expansion that we've spoken about previously and that springboard into the future for us. We're So providing administrative support to allow sales professionals to focus on what they do best, and that's driving sales growth. And we've seen across the affiliates that we have within the group currently that that administrative support is helping them to really grow their business.

15:55 And we've seen some some really nice upticks in, you know, what we expected from them and the growth of their business. So we're deriving our revenue from the sale of the promotional product, which is procured via our affiliates who act as sales agents. So where we had previously been receiving anywhere from three to 5% from the supplier from our preferred partner services revenue, now we're capturing revenue from this distributor affiliate as well. And this has resulted in a 3,820,000 in merchanting revenues for the year or for the half year, my apologies, an increase in 22.8%. Additionally, we have our adjacent markets programs.

16:41 These are noncompetitive spaces where we integrate our ecommerce driven technology, which is highly attractive. We provide that supply chain know how, and we have the facility, that remains undrawn, that helps us to support future growth. When we last spoke to you, we had, one one agreement in the adjacent market spaces that we're we're working through. Today, we have four. So this, again, is that gearing of the business and that scalability for growth. And we derive revenue from the integration of our technology and the sale of the branded apparel and promotional products in alliance with our adjacent market partners. And we're working within education sectors right now, and previously, we'd spoken to you about the opportunities that we have in other adjacent markets as well.

17:30 So I mentioned to you previously how vitally important our tech stack is. So it is really the heartbeat of everything that we do. And, again, we have that experienced team that is really driving home the growth of the business, but our tech stack is what delivers that scalable growth. And our teams, we work within an agile environment making feat feature improvements for our industry specific marketplace, and this provides various design tools, applications, website sites, and pop up stores for, our distributors and suppliers. And and what we'll find is something that we can we can share with you is that tech stack is built. So this is over the course of many years. We have really, really built that system for the industry.

18:18 And so what we do now is, again, we've dug that foundation out. So the the investment in that is, you know, those micro improvements, those micro feature improvements that we make each and every, you know, release cycle that really is bringing in high caliber distributors into our affiliate program as well as our membership. So it's very important to note that that that has been built, and it is really just us continuously improving upon the tech stack, continuously building out feature improvements that are attractive to the marketplace. And so TechSuite adoption has increased to 524 users. That's a 32% increase. And we now have 2,658 unique web stores live.

19:06 That is something that sort of ebbs and flows. We build a pop up store, and that pop up store might be for a nonprofit doing a fundraiser or for an employee incentive program, and then those sites come down. So we see those numbers ebb and flow, but we have continued usage of our pop up store technology as well as our search engine and other design tools and system applications. So some of the efficiencies that we have, and integrations that we've developed, these are really important aspects of what we've delivered back and what's driving those high caliber distributors to affiliate in our merchanting side as well as membership. And we've seen an increase in the average size of our distributor. We're attracting higher value distributors now. Those that have $2,000,000 in a book of business, that are becoming our affiliates, or a $1,500,000, distributor that's becoming an affiliate of our merchanting program. It's because of the effort that we've made and the the work that we've done to provide those vitally important integrations.

20:11 So we we partner with a variety of companies, TaxJar. Sales tax in The US is very complicated, so our integration with TaxJar delivers sales tax know how within the system so that it doesn't have to be calculated by hand. It's something that just happens for you across our platform. Authorize.net, PayPal, CardConnect, these are all elements of our business that provide that ecommerce experience so that when an IBM, Amazon, company comes to, one of our affiliates websites, they can process an order quickly with a credit card. We integrate with QuickBooks, which is a highly a highly used accounting platform across The US. We have integrations with, ASI that provides our data feeds so that we have a million products that all, as I mentioned earlier to you, break out our preferred vendors and make them rise to the top for when an affiliate or a member is searching for products that helps to feed into that services so that we're driving that purchase through our preferred vendor network.

21:16 And then we have integrations with with FedEx, one of our preferred vendors, as well as many suppliers so that it all feeds into the system that we can process that order efficiently, take it from an offline transaction to an online transaction that we process through our platform.

21:37 So this slide may look very complicated, but it is actually a very, very simple slide to take in. So spend some time with it. But, really, the purpose of this slide is to show in that bottom left hand corner our AIM development team. That team works again in that continuous, agile, flexible environment where they are making system improvements every six to eight weeks. And so, again, platform built, ready for scalable growth, and we just continue to improve it from our side. But one improvement, one effort makes everything better. So one change benefits all. So what does this do? It supports our affiliates' growth, and it attracts higher value, larger affiliates into our, into our merchanting programs, as well as bringing in new members into the AIM community.

22:30 So and then to the left of that, you can see our supplier partners. So this pushes their products to the top of that search engine, and then it pushes from there, that center column, through to our members and our affiliates who are able to view stock inventory management levels so that they know, especially with the supply chain issues that have been occurring, they can find if there are 500 black hoodies or or 15,000 pens in stock, or do they need to search elsewhere across another supplier that might be on our platform for that same product? It provides them order status information. So there's a great amount of information that our technology delivers back to our members and our affiliates. And then you see that pushing out to that mBuyer client, the corporate customer, whether that's IBM, Amazon, or somebody, you know, Joe's Plumbing Group who's purchasing t shirts for their team.

23:25 All of this feeds data back to us that we are able to decipher, to track trends, to to deliver back to our supplier partners, and it is that virtual cycle of success that drives growth across our entire community and growth back to ALTITUDE GROUP. So what have we been up to? And you can pop this one over. So if you recall in our last presentation, those four, squares or rectangles on the left hand side of your screen, we had talked about we had talked about building out the foundation and and, that gear up for greater efficiency, creating that springboard to success. And so that foundation is built. We are geared for greater efficiency.

24:13 And the most important, rectangle to see in that quadrant is we've gone from ready to scale to scaling now. And you can see that across the numbers from the group. So if you take a look at that right hand green column with, what we like to refer to as smashy guy, smashing the targets, the period ended March 31, 2022, for our half year, I'm sorry, that seven point seven million in revenue and that growth that we've seen across this first half of the year, you know, we are able to exceed our expectations and grow the business. So, Graham, I can hand off to you now to run through the group performance from a financial perspective.

25:00 Thank you, Nikki. Yeah. We're looking forward to having a having a having a record breaking year this year. That's what we that's what we'd like to achieve. So performance has been strong. Revenue is up 29% to 7,700,000. Our gross profit has increased by 1,100,000 to 3,900,000, and I'll be I'll go over some more about with the margins on the next slide. Overheads have increased by naught 800,000. And to break that down for you, that's naught 200,000 of currency increase. Naught point 5,000,000 are related to the benefit of the government grant that got set set against payroll costs last year. So now we have a more normalized run rate.

25:42 And on real underlying increases, there's a naught 100,000 of increased expenditure on travel and marketing, is really this the expenditure on growing those pipelines, building those pipelines, and and getting back out post COVID to to the events and relationship building. We've introduced a new tax transfer pricing program at the end of last year, so that will that will see us through with benefits and making sure we're effective tax within The US and The UK, especially with the changing of The UK r and d claim amounts from a 130% extended cost deduction to 86% from April, but we'll we'll be efficient

26:31 going forward on that. And really, that all falls through to our adjusted EPS, you know, for the half year, which is which is nearly reached the the full year of '22. So a naught point four four p compared to a naught point five eight p naught point four eight p for the full year last year. So then just digging into the revenues and margins. So in services where we've got the membership, the VIP vendor throughput, and the upsell into our membership, we have a high fall through to gross profit of 93.5%. That's improved by 1.2 and that's with the weight of vendor throughput. So we had a larger larger amount of our services revenue relates to the vendor throughput and that has a higher fall through. So therefore, that's improved our gross profit margin.

27:25 Also, with the vendor throughput, that's increased by underlyingly 31%, which has outstripped the industry growth rates of circa 13% for the same period, which has been a really strong strong strong performance. And then within merchanting, the ACS and that's with the ACS affiliated selling agents as well as our adjacent markets.

27:48 We have a full through of 9%, which has increased by 1.8% compared to last year. And that's with ACS ACS attracting supply and throughput revenues across a wider range of suppliers outside even outside of our VIP list as as it performs transactions in its own right. And also with the adjacent markets, even though lower revenue, it has a 40 plus percentage fall through. So therefore, that actually starts impacting the gross profit margin even with a low low level of revenue. And to improve the gross profit margin circa 0.5% with the percentage points with ACS improving it about circa 1.3 percentage points.

28:35 And so I think that it would be fair to say that that merchanting turnover and gross profit is one to watch and the and the gross margin as we grow. Those will be really, really scaling over time, and you'll see those, that that sort of foundational springboarding effect that we're talking about. And so that's one to watch as we go forward. I would also add to that just, something to really to really have heard a point that Graham would make was that 31% across our services increase versus the industry average of 13%. So this is, from an article, posted throughout the industry, that was stating that 13%. But what we know that we have done and what had we experienced throughout COVID was that our distributors, you know, joining the membership had grown. So we had some attrition, which we've spoken to you all about previously, from those lower value distributors who decided to leave the membership to, either close down their businesses, sell their businesses, or retire.

29:42 And what we replaced that with was distributors within the membership that have a higher turnover. And so what we're seeing now is that higher value distributor churning and increase across our services because the growth of our membership and the value of those businesses and the usage of our preferred vendor network all feeds into our services revenues as well as the merchanting as we sign high value distributors that will also feed into our supplier partners and our preferred vendor network as well.

30:18 So then we move move towards our financial position. We've got a strong financial position, improved cash, and facility remains undrawn. But I delve into a little bit more in-depth in the trade and other receivables and payables, and therefore, I won't repeat that in the cash cash flow on the next slide. So trade and other receivables are up 900,000, and that's related to increase in FX and or the FX impact on the increased trading activity. That's countered by the unwind of the government retention scheme that we received at the end of this time, well, in September last year.

30:53 And therefore, we said we over a period of about eight or eight or nine months or so against the against our payroll taxes. So then then we're trading other payables again. We've got FX impact and increased trading activity, and that's countered by the repaying of all our time to pay cash management

31:17 strategies that we put into place with VAT and PAY with with the UK HMRC. They were they were fully paid off within this within this half year and and unwound. So now we are we've got a COVID free balance sheet, and and there's no nothing outstanding due to due to the due to the last couple of years. So we've got a current position, which I'm very happy to say. And then on our cash flow, so with overall, if you look at the net increase, decrease in cash and cash equivalents, 0.16 in the half year, that's comparative with 1,500,000 in the half year last year, where it was coming back where it was the business coming back in after COVID really with all the activity increasing, therefore, there's a bigger outflow.

32:08 However, along with the items I've mentioned about, you know, that are countering the unwinding of the government retention scheme and the and the repayment of the HMRC in PAYE. Therefore, that's that's flat. That's reduced our cash outflow to 0.16. Thank you, Graham. So so from an outlook perspective, again, the group experienced robust performance across both key services and merchanting programs showing significant growth on the same period last year.

32:45 Strong, consistent and upward momentum in the performance of the business in both revenue and profit growth that's demonstrating our ability to execute on the strategy that we've set out. And that continued robust, growth is anticipated into the second half of the year as well with new partner agreements signed across all key programs, and the growing, new business pipeline. So when Graham spoke about earlier in the financials, we have, been working through and investing in and and that travel has opened back up again. We

33:17 are building a pipeline, and we are working to bring in new business, and that is showcased in that 6,000,000 of annualized anticipated new revenue that will drop through. That's gonna start to drop through, across the business now. And we've seen that consistent robust trading continue through, this half year period. So we've started off the the first couple of months of our second half of the year very strong. I'll add to that that we are cognizant of the macroeconomic conversations that are happening, particularly across The UK. I've shared this with with all of the folks that I've met with with across The UK as well that those recession woes and concerns about inflation in The US, it's sort of divided into three aspects.

34:07 One third, of of the experts in The US are talking about, recession now. You know, it's going to happen. Please be mindful of it. Watch for it in the future. Then you've got one third of them,

34:20 experts stating that we've been in a recession and we're starting to come out of it. And then one third are saying what recession? From the perspective of the promotional product industry, we've not seen a slowdown in growth. So that is really, one of the one of the important factors that robust continued growth has happened and it continues throughout this early part of the second half of the year for us. Are we watching it? We are indeed, and we are spending a great deal of time ensuring that we are paying attention to it, but we are also, very, very confident in the future scalability and success of the business. And also the executive management's team's ability to successfully execute on the group's strategy.

35:08 So finally, I can read this off for you. In the first six months of the current financial year, the group experienced a robust performance across key services and merchanting programs, showing significant growth on the same period last year. The continued strong, consistent and upward momentum in the performance of the business in both revenue and profit growth demonstrates the group's ability to execute on its strategy. Based on the performance in the year to date, the Board was pleased to announce on the 11/22/2022 that the group will exceed market expectations for the full financial year and achieve record year end results. With continued focus on scaling the business and a healthy new business pipeline, the group is well placed for accelerated future growth, and the board is confident in the long term success of the business and its positive outlook for the future.

36:03 So I think that it's really important to note as we we discussed previously that we've gone from ready to scale to scaling now, and you're seeing that fall through and you're seeing that happen, as we progress through the first half of our year and into, into the the beginning part of our second half of the year. So then just by increasing activity within our network with our affiliates, with our members, then it it's it's it's the kind of it's a symbiotic relationship, really. The affid affiliates, when they when they come on, they can they use our tech. They get our support. And they actually now then can double in size compared to if they're on their own.

36:49 They they would be they would be capped to that. So it's something that we're really seeing and and it's a and it's a true part of the scaling that we can we're offering.

36:59 Exactly. Exactly. And so, we have a question here. What investment is needed moving forward into the technology stack, and what does the road map look like? So as I mentioned previously, our tech stack is built, and it is built, for growth. So I'm really, really thrilled with where we are in terms of our technology systems' ability, to grow with our vendors, to grow with our affiliates, and with our members. So, one of the important aspects of that is that we work within a continuous improvement agile environment that's highly flexible. So we have a dev team in in The UK, and, and we have a we have a road map, with releases that happen every every six to eight weeks.

37:49 But it's really not for business development or or technology development, the full tech stack, because that is there. These are small micro improvements that continue and integration projects, that continue to drive high value distributors. So going from the average turnover of 500 k in a year to bringing on, and attracting the 2,000,000 the 1.5, 2,000,000, 3,000,000, dollar per year, affiliate or member.

38:20 And then from, another question that we have is, which, in your opinion, offers the group greater upside services or marketing? And can you please talk a bit to your plans to grow through m and a?

38:38 So you were going to merchanting in the services or merchanting, probably. Oh, yeah. I think so as well. Thank you, Graham. And and and please chime in along with me. These programs really dovetail. And so as we grow

38:53 affiliates in the merchanting side, I mean, I think you're gonna see accelerated growth on that side. Wouldn't you agree, Graham? Yeah. It's the I what so what before before before I join, what Nick what Nick has done is grow the services business and and and really get that working working very effectively and efficiently and with with fantastic relationships. That's funded the growth in merchanting. And then the focus now therefore is growing on that in on the merchanting arm whilst getting the benefits and keeping the services working effectively. So that whether there's a higher high fall through in services, there's there's a level playing field. Well, there's a level kind of people resource to keep that keep that going. But with the merchanting, then then that's something that we can we're growing steadily and within our means so that then we can deliver sustainable profitable growth. So they do work together is it would be my my quick answer.

39:58 Yes. So as I mentioned, it's that dovetail effect. And but additionally, as I had mentioned when Graham was going through the financials, you can really watch the scalability happening on the merchanting side when you look at the turnover when we when we release, you know, next next results, the results after that as we go forward. And and I see that there's a a question around overheads, which we can also tap into, Graham, speaking about how much of the overheads is UK based and and, you know, what is the what is the scope to reduce? We have our dev team, so continuing to manage our UK development as they as they work in that flexible environment and an agile environment in development of of of feature system integrations and driving greater efficiency is very important.

40:52 However, I think the question is really, you know, will we need to drop in overheads to scale the business? And that's one that we can certainly speak to because that growth in terms of of staffing and overhead is really incremental. And and, Graham, you can you can speak a little bit to that. Yeah. We've got we've in the so UK based, we've got a UK we've got UK operations that support The UK revenue, which is a profitable arm. So so therefore, that's the that that satisfies itself. Then over and above that, there's the central PLC costs, which are which are based in The UK. And and we keep a very close. We could we'll keep a close eye on on all costs everywhere, but but we keep a very close view and and me and Nikki keep very tight on decision making process about what what we spend money on and and why.

41:46 So so therefore, why would we reduce The UK overheads? We wouldn't. Yeah. We we wouldn't right now in the way of it. It's it's it's delivering. And, yeah, it would be that would be that And I think that also to the the incremental additional of and hiring, it's not an area where in merchanting that we would anticipate, you know, excessive hiring having you know, we really are geared, for that growth. So I think from, as as Graham mentioned, we are we are always carefully watching, overhead in all of our all of the things that we spend within the business. Absolutely. So I see also a question around, given the recent good results and upbeat forward looking statements, why is appetite poor?

42:42 And, and also, what are we doing to increase investor awareness in the company? And so what I would say to that, I think that we've seen a a you know, just The UK markets in general currently have been fairly dour. Would you agree, Graham? Absolutely. Absolutely. It's it's it's it's we're seeing what we're seeing is there's quite quite a lot of retail. You know, so there's there's some retail who are exiting the market in effect, I e taking their cash out. And but there's also low liquidity levels within institutions. So and that's a problem across the board, not just for us. So but then again, what what what what's happened is we've we've been building communications and trust up with that certainly been our aim with our shareholders and our investor community.

43:37 And so we're doing a lot a lot relating to going out on road shows and and and telling, you know, telling the story, trying to you know, telling a repeat story. So this this presentation here is similar in style to our last one, and it's about reiterating what's important and building that and and hopefully exceeding our expectations. So so that's that's what that's what we've been doing. And I think that's that that we you saw the uptick in the share price. I think I think that's because, you know, therefore, we've been we've been doing that. Communicating up to market. Yeah. And I think that really is a part of the macro environment that sadly we just can't control.

44:27 And I'm just sort of taking a quick peek through some questions here, other questions. So talking about expansion plans, and there I saw previously a question about m and a, and we're always looking for opportunities. Right now, we're very focused on delivering this financial year, but we're always looking for opportunities to expand the business. And so expansion is something that we are building upon currently, that scalability and that springboard into the future. We're seeing that again happen right now, highly, highly focused on on this financial year and are always eyeing opportunities in the future to grow. Yeah. I think, and on just on one question, there's about churn rates.

45:22 I suppose just if you look at the affiliates on the ACS side, that that was, being built up over the last couple of years throughout COVID, And there was there was an element of churn and necessary churn in that. However, where we hit the f y twenty two close position, that was where the platform where we felt where we had a good platform. That's where the the affiliates were of high quality and we were we had a, you know, aligning the stars with our technology, platform, then basically, it's ready for scaling and that's what's happening now. So we really have very, very little churn. It's and it's really about growth. Absolutely. And and you see in in in the two angles of merchanting, for some of the adjacent markets, those are very long longer agreements.

46:15 So the churn on that is very, very low. And then, and as I mentioned, we had one agreement in that space, and now we've increased that to four. I I expect that to scale as well. And then with, the affiliate program, that also has a a very, very strong, vetting process, and, and the churn on that is very low as well. You you would anticipate seeing long term affiliates. It's something that's very difficult to move away from, and and it's it's sort of an investment in that growth of the community, which is what affiliates are looking for. So strong services, providing strong services back to them, and and they stay long term. And working with them on the tech as well, I think it's been really improvement. That referral processes so when when we when we we really listen and and understand what what's if this you know, what what their feedback is on the tech and and they see responsiveness on that. They they they they bring they they they that repeats around. So they they they they they tell their friends in effect, and they they come they come along and join us as well. So it's it's really strong.

47:29 And so what opportunities for new business? What do they look like? And, typically, how long does it take to convert? I can share that we are building our pipeline. We have very strong pipelines currently, and we are converting. And that really shows in that 6,000,000 of annualized anticipated revenue to drop through. We're not stopping. So that will continue to grow, and and that has that compounding effect that we spoke about. I'm just making sure that we're we're hitting the questions. And then what does merchanting business look like in five years' time? I think that it's something that, you know, if the if the average affiliate has somewhere between, you know, 500 to, you know, 500,000 in annual, turnover, you can sort of do the maths on that one to to think about what that could potentially be. And we are as good as our sales team is because the systems, the programs, everything that we do has been built out.

48:37 And again, it's really about that springboard into the future and and continuously improving on our technology in those micro. Again, very important to to hit on that micro improvements to, to thrill and delight them. And so really, this is now, you know, a job for the Salesforce. And we have a very strong sales culture, and, we'll continue to grow into the future. I think that's I think that's everything. Correct, Graham? Do I am I missing anything else? I think so. There's that's the certainly, the main lot of them there. Let me look. So given that, I don't believe we have any further questions. If I've missed anything, we will certainly, reach back out to you and answer, any questions that we may have missed.

49:33 But thank you so much for your time in in joining us today. And, again, we're looking forward to that continuous springboarding effect and that that, that growth into the, you know, to the annual, year and, and beyond. So thank you so much for your time with us today, and we look forward to meeting with you again in at the year end. Absolutely. Nikki, Graham, thanks once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback order that the management team can better understand your views and expectations. This will only take a few minutes to complete, but I'm sure we'll be greatly valued by the company. On behalf of the management team, ALTITUDE GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.

50:23 Thank you, Alexandra. Thank you.