Altitude Group (LSE:ALT) — Preliminary Results

0:00 Good afternoon, ladies and gentlemen, and welcome to the ALTITUDE GROUP Investor Presentation. Throughout this 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. Simply type in your question 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. These will be available via your investment company dashboard, and we will notify you when these are ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, I'd like to submit the following poll. I would like I would now like to hand over to Nikki Stella, CEO, MP Talet, NED. Good afternoon.

0:48 Hi, everyone. Hopefully, everybody can hear me well. And we're very happy to be with you this morning, afternoon. And I'll kick right into things with our audited annual results for the year ended the 03/31/2021. Quickly to give you an introduction to me, I'm the CEO, Nicole Stella. I have, experience in the promotional products industry with seventeen years of US promo industry. I began my career in with Promo Marketing Media Group, which is a company that's based out of Philadelphia, and grew into the role of president of Promo Marketing Media Group and then joined ALTITUDE GROUP in 2017. And so, one important thing to note was that in, last year, I was named to ASI's power 50 list.

1:40 And this is of interest because the marketplace, is the most promote, most influential across the industry.

1:47 And so this is the leading trade publication across The US for the promotional product industry of industry influencers. And with that, I'll hand off to Peter Hallett, and he can give his introduction to his experience and his role within the company. Thanks, Nikki. Good afternoon, everybody. Not nice to be here. I'm running shotgun today as an NED stepping in for our CFO our current CFO who's as you probably saw, has sadly resigned his position, all very amicable, going off to pursue a passion of his relations to the motor industry. So the board felt it was better that we relieved him of this of this duty, and I'm stepping in. So I've been with ALTITUDE as a nonexec since 2015.

2:37 Came in really to to to assist Martin, regain control of of the business after he'd been ousted in some some unrelated circumstances. Anyway, it's all by the by. I've been been around since 2015. I I was I did the spell as an executive chair for a while, and my background is really turnaround, though, quite heavily in tech. My last public position in tech was as CFO of Custom Technology, which was the old redstone. I was put in there by the bank in 2009, first credit crisis in order to get their money out and turn the business around. Previous to that, I've I've had several roles mainly in retail and also turnaround on an interim basis. So that's me.

3:29 Thank you so much, Peter. And what I'll do right now is I'm going to turn off my camera. Peter, you may wanna do the same so we can enlarge the slides, and and then we'll kick off the presentation. So just some quick key highlights from the financial period. One of the most important things to note is that our financial period ends March 31. So we run from April 1 to March 31. Sometimes there's confusion around the time period where our our financial period ends. So and we saw some exciting things happen in in the twenty twenty, twenty twenty one year. Revenues increased by 1,100,000 or 16.7% on a pro rated basis. Our U. S. Adjusted operating profit increased $1000000.82.9 percent.

4:18 The adjusted operating profit for the group, 600,000 and an increase of 21.7%. We maintained our membership, throughout COVID, 2,079 members to date, and we retained 100% of our preferred vendors. So these are just some important notes, to keep in mind as we go forward with the presentation and then we'll dig into these a bit deeper as we go ahead and we move forward. Just a quick business review on who we are as a company. AimSmarter, which is our US subsidiary, operates the leading global marketplace within the $26,000,000,000 promotional products industry. And what we do is we deliver in industry SMEs, small businesses around the globe with best in class services from technology, marketing tools, as well as connecting them to our trusted preferred partners. And we'll dig into the business model and how we derive our revenues as we go a little bit forward.

5:18 Just a quick overview on the promotional products industry itself. Pre COVID, it was a $26,000,000,000 industry, healthy, competitive, growth oriented. And you can see the numbers 2017, 2018, and 2019, there was year over year growth culminating in that circa 26,000,000,000, number in 2019. We're 24,000 distributors, they are the industry sales force and we'll talk about that in the supply chain in a moment. 3,000 suppliers in the industry, so one again that was growing healthy and competitive.

5:57 And then when you look at the supply chain and this is a really important slide too because it talks about how we sit within the supply chain. But when you talk about the supply chain and for those of you who have heard me speak before, I'm sorry for, repeating this, but there are really it's a really an elongated supply chain from the overseas manufacturer that produces the product, whether that be a telephone case, a baseball cap, a hoodie, or pens, coffee mugs, any of the like. They create the products in their overseas, factory facilities. Those products are shipped to suppliers, whether in The States, The UK, or wherever anyone may be having those products delivered. And they warehouse inventory on massive shelves throughout their factories. And what they do is they pull products. They have decorating equipment within their facilities, and they are those, they are the companies that are decorating those products with the logos for the companies that they're, producing the product for. And then there's the distributor sales.

7:02 Those folks are the sales force, as I mentioned previously, to the marketplace. They are going to the end buyer company who is the, end circle there, and they are are selling products with decoration, with branding, with logos on it to companies like the New York Yankees, Chase Bank, the small plumber on Main Street. Any business across the country and across the globe that is looking to produce a product with a branded merchandise where they can advertise their business is a client of our distributor sales force. And so you can see that elongated supply chain and where we sit within that, we provide an online marketplace platform, ecommerce platforms, marketing services, finance and administrative tools, and we create an interconnected growth oriented marketplace that benefits all of the participants and delivers revenue and growth for the business for ALTITUDE GROUP.

8:01 But then you can see that it's highly fragmented, with the market leading distributor at 860,000,000 in 2019, the market leader supplier company apparel at about 1,600,000,000, and the market leading hardgoods supplier at 650,000,000. So you can see that it's highly fragmented and the eighty twenty rule applies here, that 80% of the business is done across 20% of the suppliers and the distributors in the network.

8:32 And so what are the services that we perform? What do we do to earn revenues, to drive forward the business, and to grow the business? Well, there's several of them and these four really encapsulate what we do within the marketplace to drive growth for our small businesses that we work with, for our VIP suppliers, and for the group as a whole. So our VIP supplier program, we provide select suppliers within our market access to the network, so access to the 2,079 distributors. We promote their products, and we direct purchasing to these preferred partners. They receive top placement on our online product search. They receive marketing exposure across our publications, our digital tools, and they also receive access to the network, through events and, all sorts of of face to face meetings.

9:26 Many of those have been virtual in 2020 and 2021, but there will be a return to in person events in the future. But these are all the ways that we and the areas that we promote and drive forward our VIP supplier program. And I'll touch on this in a few slides later on down the line, but our tactics and our methods work. A year to date, we've seen a 15.1% increase sales across our VIP suppliers. We also offer enhanced services and targeted marketing packages to the AIM membership. So our in house design agency, they work to create turnkey brochures, videos, marketing campaigns, and more to help our distributors thrive. So what do we do in those marketing pieces?

10:13 We also include our VIP suppliers. So we're always driving forth their products, their messages to help drive growth across that program. And so we also do a lot of work within this space to, provide social media access for our members, and and to, again, drive forward knowledge of the promotional products that our VIP suppliers offer. Then we have our technology tools, our industry specific custom built technology platform. We are in a agile environment where we're constantly doing improvements and feature enhancements. And so what we do is we deliver back to the members and our ACS affiliates, which which we'll talk about in just a few moments, an order management platform that includes a full search engine as well as ecommerce websites where an end buyer can come in and purchase products purchase products direct from their distributor, the affiliate that they work with.

11:14 And then finally, you have the AIM Capital Solutions program. It's basically the capstone program across our member enhanced services. And what this does is it provides the affiliates within the program access to our full complement of back office support staff. We extend funding for their supplier purchasing needs, and we make sure that those invoices are being pushed out from the system. So it's a full service, essentially providing them with the accounting and, and invoice know how, to help drive their business forward and keep things moving ahead for them. And so what is the business model? What are the routes to revenue? These are all really laid out for you very, very clearly.

12:00 Based on the services that I just walked you through previously, we derive our membership or our revenues through our membership from the AIM members, those 2,079 members, through discounted pricing, technology services, our elite marketing services, through supply chain management and then community and development to help them grow their business. We also have the ACS affiliate services program. It's fully integrated suite of services that requires mandatory technology use, marketing and business services, premium access to our merchanting and group buy, opportunities, and then all of the AIM membership, benefits as well. And then merchanting. So what is this? Our group buys program, which we'll talk about in just a few moments. But really, that offer, when we saw what was happening with the COVID nineteen crisis and we saw that there was bottlenecks in supply chains, what we did is we enacted a very quick program where we could work with our VIP supplier partners and be able to acquire and procure, for purchase personal protective equipment for our distributor members across, the industry. And so we are able to do that very, very quickly and drive direct sales to the membership fast and and to be able to to grow the business as well. And we've had a lot of learnings from this program, and we're able to expand this as we go forward into the future.

13:27 We also do in here our art services program and our merch box sales as well as other programs that would are within the merchanting program. And then we also derive our revenues through our VIP supplier partners. We promote and direct purchasing, as I mentioned, to them across every aspect of the business. And then we also have our our freight partners as well as other preferred partners that we work with. And so these are the four, primary buckets of our, routes to revenue. And you'll see as we go forward that ACS and our merchanting programs were newly launched in the financial period, and they provide revenue growth, and are integrated into our strategic future growth plans. So one thing that's really important to note is the full launch of AIM's AIM Capital Solutions program. And what does this mean for ALTITUDE GROUP?

14:21 This program, as I mentioned, is the full distributor business funding and back office support program. So previously, we'd spoken about why do AIM members leave AIM. It's very, very few reasons why they ever leave us. You know, we actually have very little attrition. And so why do they leave? One is because of retirement or, they leave the business. And and another reason that we know is because they're looking for this funding partner, and the back office support to help them process their their invoices, make sure they're getting paid, and and push those sales forward. And so we launched this program, very softly back in 2019 and have cautiously continued to grow this through 2020 and early twenty twenty one.

15:10 And how this program works is the affiliate pays a sliding scale fee, a a gross transactional fee from six to 12%. So what does this do? This increases our total transaction fee from our partner and from the affiliate to a max fee of 18%. This really drives forward our ability, to capture revenues across the pipeline. And so what are our growth opportunities post pandemic? In January 2019, we launched our VIP supplier program and generating an immediate uplift in revenue. In 2020, we launched our VIP, incentive program, and sales in 2021 with our preferred partners has done exactly what we wanted it to do. We wanted to help them grow, and we've increased spend with our preferred partners 15.1% year to date.

16:03 We also launched the AIM Capital Solutions program, adding the second fastest market revenue stream for the business and increasing our transaction fees, as I just noted.

16:12 In March 2020, we launched our group buys program, that we could sell to the network, generating 2,600,000 in revenue in the second and third quarter of twenty twenty. We have a focused effort in 2021 to expand and grow these opportunities through product closeouts, proprietary products, launched brands, direct print strategies, and we're also, working on strategic relationships and partnerships that can grow and enhance all of these various different opportunities, for the business.

16:45 And with that, I'll pass over to Peter Hallett to run through the financial results. Thank you, Nikki. You just click two to the next slide. Thanks, everybody. So what we've done here is just simplified the p and l and and it a little to, hopefully, to make it a little bit more meaningful in terms of future growth and and opportunities. You can see from the the top line, we we achieved some revenue growth despite COVID, achieving 7,700,000 in sales. But as Nikki has already said, a big part of that was our opportunistic sales of PPE merchandise through the worst of the pandemic, which contributed 1,900,000 of revenue to that. So that's 7,700,000. But I'll I'll I'll leave more granular revenue analysis until the next slide when when, hopefully, I I can put some more meat on the bones as to where the growth has come from, where we lost revenue, and where we can see it in the future.

17:44 The reported margin on a on a group basis was 7272%, which was diluted by PPE, which was sold at around about 17 of gross margin. So if we adjust for PPE to the the non PPE revenue and gross profit, that would restate our pro gross profit to 91.1%. So more or less the same as what we saw during 1920 through through that period. So margins held up well. We got a cash margin boost from from PPE, which added about 300 k to our to our gross profit. Very welcome. We can't we controlled our overheads pretty tightly as as most most companies did during COVID, the most natural response.

18:33 But we were quite soft in terms of what we did in The US, having spent a lot of time building a team that was ready to cope with what we're about to do. So we got the benefit of a of a US pay paycheck protection program of of 400 k in terms of sterling or the terms of which are all met for nonrepayment. So there's effectively a grant, but that is netted off against those overheads that you see.

19:06 In addition to that, what we've now done is we've pulled out our central costs, I. E, the PLC related costs of the business such that you can see the underlying profitability of the of the operating businesses untainted from from from PLC. So you can see there that we managed to hold on to our profitability in terms of adjusted profit if you compare to a a prorated twelve months for 1920 during the COVID period and indeed managed to grow profits after central costs by approximately 21% up to 600,000. One further point I'd like to make on this slide is this is a steady state p and l for the first time for a number of years.

19:51 We've always had disposals or acquisitions and and strange length accounting periods. We can now see a full clean twelve months evidenced by a lack of exceptional costs.

20:04 Exceptional costs were about 30 k, so it's not entirely zero. It's just lost in the rounding. But we're not envisaging seeing those being a significant part of our future profitability. So we're we're actually sort of seeing the wood for the trees now in terms of what what ALTITUDE is. So we've we've now got a stable business. I'll try and give you some more granularity now in terms of revenues and and and how that was moving during the current year. Next slide, please, Nikki. Mhmm. Okay. So what we've done here is is split The US and UK out. You can derive most of this from the annual report. I just think this is a better and more convenient way of of summarizing all all on one sheet.

20:51 And you can see that we're essentially a services business. And once we've got first time contributions of revenue from PPE, because of the very relatively low margin on that, most of our gross profit, 94% of it, is derived from services. And as you can see on the top line there, services, if you scroll across to the right hand side, you'll see that revenues in The US held steady on a on a pro rated basis, only down 2%.

21:20 But The UK did take a bit of hit, and I'll talk about that in a minute. So focusing on The U on The US. So within those services, remember, we essentially get services from services revenues from two sources. One is our distributor members, the 2,000 odd members of AIM, and the other is with our preferred supplier partners who we market their their products to members in return for a transaction fee.

21:47 So we're we're a little bit coy about actually splitting those revenues, disclosing those revenues because it is highly commercially sensitive in in terms of information. But what I can tell you is in The US, you'll see our services for 2021 amounted to 4,600,000 in Sterling

22:10 and compared to, on the total basis, 4.7, a 2% decrease. But within there lies a story because our membership revenues, I. E, the the revenues that we get from our members for all the services that we provide, that grew by nearly 40% year on year. And the reason it grew by more than 40% is that that that was the growth that we saw from ACS, I. E, this full enhanced package of services, including financing that we provide to affiliates who who who look for that. So that that gave us a real boost last year. So whilst that went up by 40%, the second part of the the revenues, the supplier to re derived revenues, that went down by 15% year on year on a prorated basis.

23:02 So that was really where we felt the the full impact of of COVID in terms of taking us backwards.

23:10 However, as as Nikki said earlier, year to date, those supplier based revenues are have have been growing at 15.1% for that first for that first period. So we're seeing a strong recovery in that. Okay. Merchanting, we're introducing this for the first time, and we'll probably move to segmented reporting on this on this split basis going forward in the in the annual report. Merchanting, 1,900,000. As I said earlier, revenue margin of about 17%, 300 k. That will grow significantly during the current financial period. You may have seen reference in the RNS to the fact that under I r f I r I IRFS 15, IFRS always go a long way around. Whatever revenue recognition is, we are now deemed to be the principal in that transaction, the underlying transaction to those ACS services.

24:14 And what that means is

24:17 in we we we we wrote about 400,000 in revenue on ACS in '9 in 2021. And going forward, we would have to recognize the full underlying revenue and and cost of sale of that of that business as well as just our share of of the margin, which was the 400,000. So whilst the 400,000 goes straight to gross profit, if we were to account for ACS in the way in which we're going to in the current financial year, because we have to, then that would restate that p and l quite substantially. The 7,700,000 of total revenue would be increased to let me just find it for you, to 12,800,000.

25:09 The gross profit would remain exactly the same at 5,600,000, which would, in fact, an a a a cost of sales would increase by a similar amount such such that the revised gross profit would be in the region of 43.75% for for exactly the same result. Now that's that's quite interesting. We we have to do this because that's the rule under the IFRS 15. We're actually quite amenable to it anyway because in future financial reporting, it will absolutely inflate the size of our business and actually give the market a better appreciation of the sort of volumes of trade that we're generating through through the marketplace, but also enables us to be a little bit more granular on on the rest of our revenues because they won't be so disproportionately large in terms of we were to granularly break them out at this stage. So I I I hope that makes sense.

26:11 We do believe ACS and merging have great growth potential. As I said before, the ACS throughput transactions during the current financial year were up 5,500,000. We're already breaking through that level year to date in the current financial year. So we're going to see a much bigger number attributed to ACS in the current financial year. And because of the success of of PP and the way in which we're able to pivot quite comfortably to achieve that has under our eyes to the fact that we can sell direct to end users. Now we have to be very careful about that because what we wouldn't want to do is upset our current members and be seen as in competition with them. So there's no way we're going to do that. But what we are able to do is identify adjacent markets which are not served by those distributor members in particularly in the public sector.

27:10 And we're we're pursuing several opportunities in in that regard currently, and we would hope to update shareholders on that in the course of the current financial year. But it it's the the there is some big growth potential in both those areas. Notwithstanding that, we're there there will be significant growth in our supplier base revenues as they recover post COVID, and we're already seeing that. And we're we're always trying to improve our our services to our members and looking to grow the membership base. Okay. In terms of adjusting overhead, you can see there that there was a 6% reduction in The US. We were fairly light in in the way in which we treated The US. I think as I said earlier, having spent a lot of time training staff, most of our costs in The US are staff related.

28:00 We didn't we chose not to drop too too many staff and simply use the benefit of the payroll protection program that was available to us there. We turn towards The UK now. You can see we had significant drop in revenue in The UK year on year, 40%. And that's ostensibly because we changed our revenue model in The UK towards the end of the previous financial year to put everything on a transactional basis in terms of charging revenue. So hence, with the COVID reduction, that had a significant adverse impact on on our revenues. We also have some applications for which we derive some legacy applications which would derive UK revenue that are currently not supported and are are dwindling down.

28:51 However, we would expect to see a significant recovery in The UK in the current financial year. Although we we have to say that the the recovery that we we're seeing in The UK is not as strong in the PPE sector as sorry, in the promotional sector as it is in The US. Okay. So all in all, good growth in in The US, some good foundations laid to enjoy some some significant growth in in the new areas and indeed the existing areas. And we continue, obviously, to control our central related PLC costs as we go forward. Next slide, please, Nikki. Mhmm.

29:39 To sort of emphasize the steady state nature of our business now because I think as I said earlier, we we have a clean twelve months where there's no disposals, no acquisitions. It is that is just laid bare as much as we can be. It's worth just looking at the the the cash flow where we've actually generated operating cash flow, pre working capital of 100,000 through through COVID. And because of the way in which we're really jealously holding on to our cash and and protecting it during the worst of times where we didn't know where we were going, we've we've actually had no net increase or decrease in in in in working capital. We've managed that actually completely neutral. But we will see some increases in working capital this year as we grow the the ACS business.

30:32 You'll note in the RNS that we have noted that we're in negotiations with a couple of well, more than negotiations. We're we're very close to signing up a working capital facility to drive that business. And I I would I would think that we would look to have a facility with about 1.5 to 2,000,000 very, very shortly. Last point on that slide, just point out the investment in intangible assets at 700 k. That's our sort of regular annual investment in our in the whole of our of our network and applications that support the the the AIM members in The US and indeed continue to do so in The UK.

31:18 Okay. That's been finished, think. Nikki, thank you. Thank you, Peter. I appreciate it. And so key corporate and operational highlights for the period. As we've spoken about previous slides, we enacted immediate and effective response to the COVID-nineteen pandemic and we quickly pivoted to offering, you know, establishing the 2,600,000 of direct to member sales of personal protective equipment via the group bias program. And then also, we mobilized the business quickly in our existing technology services, the government programs, and strong relationships through the supply chain to provide products and services most relevant to our members and to make sure that we kept our suppliers during this very difficult time top of mind.

32:10 And so we've enhanced the member services via the full year of AIM Capital Solutions program, which provides that full system order processing, innovative technology, administrative support, and supply chain finance to members. The membership remained stable, 2,075 79 members, up from 1,917 at the time of acquisition, and that has remained relatively constant throughout the period. And in fact, you'll see in the report that the average distributor revenue grew to 1,250,000. Our fiscal quarter one twenty twenty one, and this is an important one, the quarterly revenue via our preferred partners has returned to 95% of the pre pandemic levels of fiscal Q1 twenty nineteen.

32:56 So, you know, this is the this is that first quarter where we're starting to see things really shift forward into a recovery mode. And we'll talk a little bit about recovery and what's going on in The United States in just a moment. We are much more opened up and business as usual here in The States, so we are returning to normalcy. We have retained 100% of our preferred partners throughout the pandemic as well. And so this is the information about the industry will recover. This is an important one to note. And I will say, I've run through this slide before. This is, from the 2020 State of the Industry Report from Advertising Specialty Institute, ASI.

33:44 So you can see after September 11 in '2, 2002, we saw that economic, drop happen. The promotional product industry followed that drop. But year over year growth every year thereafter, 2003, 2004, 2005, we saw that come back and exceed the year prior expectations in growth. The same thing happened in 2009 with the economic meltdown that happened in The US. And again, 2010, 2011, 2012, 2013, '14, forward, we see year over year growth going forward as well. We don't anticipate the promotional products industry will be any different. We do expect there to be growth as we go forward into in the coming years.

34:29 I think that we had a bit of a protracted recovery because of COVID sort of, you know, sort of rearing back up here and there across various different areas in 2020, early twenty twenty one. But we do anticipate seeing growth as we go forward into the future. And this slide is is really just from some stats from industry, again, ASI, from the industry trade media publications and news. So just showing where where the market sentiment is right now across The US. So Counsellor, which is the magazine of ASI, their confidence index is at 96.

35:14 So right now, you can see there's a big bounce back from when we were back early on in the COVID crisis. And you can see sixty seven percent of distributors expect their q two twenty twenty one sales versus the expectations at the start of the quarter to rise. So we're seeing that optimism across the industry, and that's no different for us as a company. We are optimistic about the recovery and how we're moving. And as I mentioned previously, our quarterly revenues via preferred partners has returned to 95% of pre pandemic levels of financial Q1 twenty nineteen. There are challenges, and that is something that everybody should be aware of. We do know that their supply chain demands, products are, you know suppliers are having to have more inventory earlier, so they need to make sure that they're making those those inventory shipments to come in so that they can meet the demands.

36:13 Shipping demands. We know that the containers, the cost of containers to bring in products has risen. There's labor issues. There's continued global closures. There was recently just a a story about closures in Vietnam factories as well as Chinese factory do factories due to COVID nineteen spread. So these things are going to pop up, but the industry remains optimistic and we also remain optimistic because we have already navigated the worst and we have been able to be nimble and we've been able to move throughout recovery and continue to grow the the business as we go forward. So what is our outlook? Trading has recovered well in the first quarter of the current financial year with quarterly preferred partner service fees returning to twenty nineteen levels.

37:03 The group is accelerating its ACS offering now that cash flow has stabilized and continues to develop a program and services that will accelerate the growth of the group through group buys and merchanting activities as well. And we are optimistic as a board for the group prospects as markets begin to recover and we remain confident of the ability to respond to these challenging times. We're focused on cash conservation to make sure that we're responsible in protecting the business, but we continue to grow the business as we go forward and develop the product offerings that are beneficial to the group's clients. And we remain confident in the future success of the business and the group's ability to continue to evolve and respond to the times that we're in today. Nikki, Peter, thank you for updating investors this afternoon. Ladies and gentlemen, please continue to submit your questions using the Q and A tab situated on the top right hand corner of your screen. But just while the company take a few moments to review those investor questions submitted already, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed by your investor meet company dashboard and you'll receive an email notifying you of when this is ready.

38:13 I would like to remind you that your feedback is important to the company and immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Nikki, Peter, investors have submitted several questions during the presentation today and I wanted to hand back to you to respond to those where it is appropriate for you to do so. Please, could I ask you to read out the question and then who it is from? Sure. I can tackle off. I see Simon c. What opportunity excites you most in the business over the next six to twelve months? And I think, you know, as we see, number one, our our the supplier part of our business, those preferred vendors that we work with, that has really come back.

38:59 We're seeing that we've come back to twenty nineteen levels. We feel very, very confident in the growth and the business in this area because we know that we've seen that stabilization. But the exciting areas, and we talked about this, what our growth prospects are, is in the development of ACS affiliate services, that AIM Capital Solutions program, as well as our merchanting opportunities. Our ability to really, really put forth and develop and grow the ability for the group buys program, not only just in PPE, and I see Neville H. Had a question about likely PPE contribution this year. We've seen a downturn in in PPE as the as the manufacturing and the ability to access those products, increased really globally. Right? We're not seeing that that bottleneck and that shortage of PPE anymore.

39:51 But what this did show us is that we were able to have that direct conduit of sales across the network where we would be able to offer product. And so we see that as an opportunity, which we are working on and continuing to grow, today. So, that covers off, Simon c and, Neville h's questions. Shall I do the others too from from Mark Al? Hi, Mark. Sure. That'd be great. Was the deferred consideration from the sale of ad products paid by the end of March? If not, has it been paid subsequently? It has been paid. It was paid on time. We we oh, no. Actually, we gave them a little bit of leeway because of the impact of COVID, but it was all it it it has all been paid.

40:40 Second question, has there been any progress in getting customers to pay more regularly rather than once a quarter, once a year? I think you're referring to supplier revenues here, Mark. What would happen if you invoice them more regularly? We're not pushing them to actually confirm or or pay up on a on a monthly basis. It's sort of custom and practice in the industry because we're we're we're not the only sort of group that that that has these sorts of revenues within the industry. The customer practice is that they're either annual or quarterly. We we do have a couple of semiannual ones, but nobody who who does monthly. Why? Because they have to to for them to confirm their their rebate involves them in in quite a bit of detailed work, and they much prefer to do that on the on a quarterly six month or even annual basis.

41:35 And, And Yeah. To mark mark to Peter's point, it's it's very standard and custom in The States, for these to be paid on a quarterly basis. And, actually, even longer than that, we most of our program is across across a quarterly basis, but many other organizations, have an annual requirement, not a quarterly one. So this is very standard in the industry, to have this elongated invoicing. Okay. And Donald g, will Zeus be preparing a broker report? Yes. Very much so. It it is our absolute intention to get numbers into the market as soon as we practically can. We were hampered a little bit by our CFO resigning, and we don't feel it's fair just to encumber the the incoming CFO with numbers without him having some sort of input.

42:27 But we will be doing that with all due speed. Don't have more more to say about that. I know that we we do come in for a bit some criticism about the tardiness of our of our results and our reporting. I think it's just worth pointing out to to investors or something they may not appreciate is that we are reliant on suppliers to help us with their confirmations of reports, and that just takes time. So the timing isn't always under our control. We can only go as fast as we're able to to garner that cooperation from from from our suppliers. So that's worth bearing in mind. It is improving as we as we get more history with these guys. It it's it's a lot better. But that that is as one of the one of the the the the key reasons. Well and I can I can speak a little bit to that as well, Peter, is it's there would be a normal and there is a normal review because a standard promotional product purchase, there could be adjustments that need to be made post sale? There could be adjustments in shipping costs. There's always things that need and are tweaked post sale in terms of the invoicing and in terms of the sale. So it's something that has to happen across the systems to be able to review and then have accuracy across reporting. So we work very tirelessly to ensure that all the reporting for all of our

43:57 preferred partners is accurate and and delivers the most information possible. Yeah. Final question, Simon c. What's the plan re the CFO position moving forward? We we do have a CFO in the wings. As soon as we're able to appoint, will make the necessary announcements, but it it is in very short order. Nikki, Peter, I think you've actually addressed all the questions today from investors. And, of course, the company will review any any other questions that come in and publish responses where it's appropriate to do so. Nikki, if I could just ask you potentially for some closing comments before redirecting investors, that'd be brilliant. Absolutely. And I I see how can there's a quick question that came in that I'm happy to answer. How can you get AIM membership numbers up from here? So acquisition, we are at 1,900, circa 1,900. I don't know the exact number off the top of my head.

44:56 That number has risen to 2,079 to date. The quality of distributor has improved. We did see some attrition in COVID, but the average distributor turnover for the year is 1,250,000 now. And so how do we get those AIM membership numbers to grow? Well, we are actively doing that. We saw stabilization due to COVID because many distributors were not making any changes. They were not adding new services. But now we're starting to see, the opening up of that. And as the economy opens up, so do distributors and so does the marketplace in terms of growth. So we are adding memberships. We are working to continue to add memberships very aggressively. And in terms of closing sentiments and statements, we believe very much in the business. We're confident in the future success and and our ability to continue to evolve and respond to whatever the universe throws at us. We have actually managed the most challenging time and have grown in spite of it. And we intend to continue to aggressively work hard on behalf of shareholders, and we're appreciative of our supply chain partners, our preferred vendors, as well as our distributor members and affiliates.

46:09 So thank you so much, Mark, for having us here today, and we continue to be confident going forward into the future. And thank you for your support, shareholders. And that is it for me today. And Peter, thank you so much for joining me. Pleasure. And yeah, I echo those comments. Nicky, Peter, thank you so much for updating investors today. Could I please ask investors not to close the session as you'll now be automatically redirected to the opportunity to provide your feedback in order that management team can better understand your views and expectations. This this will only take a few moments and to complete, and it's 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.

46:54 That now concludes today's session, and good afternoon to you all.