Cavendish (LSE:CAV) — 2025 Full Year Results - "A year of progress and profitability"

0:02 Good morning, ladies and gentlemen, and welcome to the CAVENDISH PLC Investor Presentation. Throughout today's recorded meeting, attendees will be in listen only mode. Questions are encouraged. They can be submitted at any time just using the Q and A tab situated on the right hand corner of your screen. Please simply type in your questions at any time and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the team would be most grateful for your participation. I'd now like to hand over to the management team from CAVENDISH PLC, Ben, John, Julian. Good morning. Good morning. Afternoon. Good morning. Afternoon, indeed, depending on which country you're in. Good afternoon, everyone. We're here to present CAVENDISH's results to the financial year 2025.

0:51 And as I'm sure you know, CAVENDISH, we are the only integrated investment bank focused on ambitious, growth companies. So we offer the broadest range of choice to our corporate clients. And what we're trying to do is give our corporate clients the best solution for them in any market. So we are market leaders in all of our markets from private m and a and debt advisory all the way to public markets. We have a very large client base across markets and asset classes who transact regularly. So this gives us very reliable, repeatable revenues. We're also very focused on costs, and our platform can can can transact significantly more revenue than we currently are doing with a very, very small amount of marginal additional costs. So that means we're very highly operational geared on the upside.

1:55 We're unique. We're we're pretty damn sure we're unique in being able to offer this client choice, and we're product agnostic. So we focus on the best solution for our clients, and none of our competitors have that advantage that we do to be able to give our clients exactly what they need. And all of this is underpinned by strong repeat revenues that we get from retainers and trading.

2:26 So briefly, we're gonna introduce you to the presentation team, today. So I'm Julian Morse. I've been in public markets all my life, and I started software analyst progressing through specialist sales to become CEO of SENCOSS. I was appointed co CEO of CAVENDISH at our merger,

2:48 but like John, my co CEO, I'm still heavily involved in supporting our clients, bringing in business, and getting the deals done. Thanks, Julian. I'm John Furujev, co CEO of CAVENDISH PLC. I started my career at DC advisory some twenty four years ago, focused on m and a advisory specifically within the technology sector. I joined CAVENDISH in 2008. And post the FinCap acquisition of CAVENDISH in 2018, I took over running the m and a division before taking over as CEO in 2022. And as Julie just said, upon the merger of both businesses, we became co CEOs. And as Julian stated, we're both heavily involved in executing and originating deals within our respective divisions.

3:37 I'm Ben Proctor. I'm the chief financial officer. I've had over thirty years in investment banking now, and twenty five of those were at UBS. I was running global teams across finance, risk, operations and technology. Half of the time was spent in The US, and I joined CAVENDISH to go through the merger and have been with them ever since.

4:06 To give you a bit back a bit of a background on the brand CAVENDISH. So it was formed some thirty seven years ago, and it focused on advising entrepreneurs at that time who wished to sell their business. That's all it did. Over that period, the company has advised on circa 700 or so m and a transactions. If we fast forward to 2018, FinCap, as I'm sure many of you know that brand name, acquired CAVENDISH to become a full service advisory in capital markets business. And in 2023, it merged with SENCOS, a well known nomad and broker, and the entire business was rebranded as CAVENDISH PLC last year. We are now a growing and profitable investment bank providing a full range of services to our clients, whether that be growth capital advice, equity capital markets advice, debt advisory services, as well as m and a advisory services.

5:03 So across the firm, we have 200 investment banking professionals, and that's across both public and private markets with offices in London, Edinburgh, Manchester, and Birmingham. In 2024, we did more than 4,000,000,000 in terms of, transactions with over a 100 deals completed. That's two deals a week. Specifically, on the equity side, we are adviser to 177 quoted clients. Again, that means we're adviser to more than one in 10 of all quoted companies in The UK. We have very broad research coverage, but more importantly, our research is very, very widely distributed.

5:54 And we get over 100,000 downloads of our research every year, meaning that our clients are getting very, very good airtime with institutions and retail.

6:06 Within alternative financing, we're now we ensure that our teams grow their relationships with over 250 UK, US, and US private equity and VC funds. As Julie mentioned earlier, there isn't one peer group within the public market as well that is able to offer this depth of relationship on a on a global basis. What does this mean? It means for those companies looking at financing their growth, we're able to provide rooms to IPO or, alternatively, raising capital from VCs or PE firms to assist in their overall growth strategy. Again, something that we have that our competitors do not have is our strong and significant international presence for our membership of Oakland's, where we actively work with our colleagues on a global basis.

6:55 We operate across 40 countries and cover 15 vertical markets. Such such exposure gives us market intelligence and reach that most of our competitors in our space are unable to compete with.

7:14 So some summary financials. The headline revenue, pounds 55,600,000, broken down by 38,300,000 in transactions, pounds 11,700,000 in retainers and 5,700,000 on our equities platform. The £3,700,000 adjusted profit, and we like to look at that number because it takes out the nonrecurring and noncash items, and that gives you a much better reflection of our underlying performance, gives us a 7% profit margin on an unadjusted basis. It's a healthy balance sheet, which we'll go into more detail later, but GBP 21,200,000 cash balances is significantly above our regulatory requirements and the more conservative internal thresholds that we hold ourselves to.

7:59 And we're proposing to pay a 0.5 dividend as a final dividend, which would make the total dividend for the year 0.8p. So we're constantly looking to grow our market share, and we do. We win more quoted companies from our competitors than we lose. Last year, we won 21 clients from our competitors, which is very, very good going with a reasonably large base. It's all about service. It's all about what we can do for those corporate clients.

8:33 We have an 8% market share of AIM on by market capitalization. And, again, that gives us a whole load more space to grow into, and we are doing that. If we look at the market cap of our client wins, they far outweigh the market cap of the clients, that are losing either delisting or some of the smaller ones going to other competitors. We've got a reputation for being able to carry out transactions in any market conditions, And this is borne out by the fact that we have raised 60% of all the capital from IPOs in the last six months, having completed four of them. And, also, we have not failed on any IPOs that we have undertaken, which, again, is a massive calling card for people who want to come to market.

9:29 Our success in the private markets business was achieved through the sale of 20 companies as well as working with three companies on on the buy side and also a number of companies providing debt advisory services. To maintain our current level of revenue within private, we aim to actually work with no less than 40 transactions at any one time. We achieved that last year, and we are currently achieving and exceeding that this year as well. Our current structure allows us to work with between 50 to on between 50 to 55 transactions without the need to significantly increase our headcount. The next point is critical. Our ability to maintain our growth within the private markets is underpinned by the current penetration level of 2.9%.

10:16 What does this mean? That is to say we work with only a small fraction of the deals we would like to take on in any given year. So our ability to grow is not generally underpinned by other market from the fundamentals which can impact the public markets.

10:34 So on public markets, I mean, there's there obviously has been a lot of press about the difficult time public markets are having, but actually wanted to give a bit of an overview of where we think public markets are and how they're going to perform in the future. So I think we all know that UK small and midcaps are very attractively valued compared to historics and, of course, global equities. And that's been recognized in the M and A market as we've seen a number of high profile takeouts of companies in our markets. Now, again, we have a significant revenue stream from public m and a. So if there are, public takeouts, we also benefit as a firm from that.

11:23 We also know that The UK economy is becoming more challenging, but this actually should help interest rates. And as you can see from the graph, UK small and mid cap equities, their valuations are very, very closely correlated to UK interest rates. Now we have a non consensual CAVENDISH view on where interest rates are going. We actually think the Bank of England are going to cut them more aggressively than the current thinking that you can see through the forward curves is indicating. But even those, those forward curves and and what people are thinking about at the moment are still pricing in a number of interest rate cuts between now and the end of the year.

12:12 So interest rates coming down will be positive for markets. Even if the economy is struggling a bit, it actually is more of a positive for markets with interest rates coming down. And as I said, internally, we think they're actually going to come down even more than the overall market is expecting. Recent trade deals, that The UK have negotiated make The UK actually a very good place for equity investment, especially the trade deal that we've managed to put off with The US. And on the subject of The US, obviously, Trump's policies have created a loss of volatility and turmoil in The US. And so we see we have seen over the last couple of months probably the biggest rotation out of US equities into European and UK equities.

13:09 Now the majority of that flows into the large cap market, and we can see that through the indices. But we're now starting to see that trickle down into mid and small cap. And there are a lot of anecdotal, things that we hear in terms of small cap managers winning mandates, winning pension mandates, and winning local authority mandates, for investment directly into small cap market, which obviously bodes well for the future.

13:41 And if you don't wanna believe me, you can believe Mary Fink. So I've put his quote there because that has actually, you know, sums up the whole market position for us quite well. On this slide, what we want to try and depict to those listening in today is the journey of a growth company, a type of company accountant should work with, and how we can effectively capture part of the wallet along their journey. So these are companies that start, that look to raise capital. That could be a series a or series b, and we have a team dedicated to providing that service with relationships in The UK, Europe as well. That company will probably then go on to perhaps IPO, and this is where we have a very strong team with over a 100 people dedicated to working with clients that want to list either on the AIM or public markets.

14:40 Then along that journey, they may look to raise capital where, again, our relationships with institutional investors are there to ensure that our clients can continue their growth while accessing the right type of capital. And what I mean by the right type of capital, sometimes it's best to take on debt, and we have a dedicated team of five people with relationships with over 550 credit companies across Europe who are there to provide the right advice and get the right terms for our clients as they look to take on, I don't know, it could be a large acquisition, it could be a restructuring of their their current debt facility.

15:16 And finally, along the journey, are times where a company may wish to consider divesting a division where we again have a dedicated team of 50 people working within in within m and a to find the right home for a division which will then allow them to perhaps deploy capital to keep growing in other core markets. I like to give just a couple of examples here. Two of them. One of them, Ideajet, is a relationship we held for fourteen years where they came to us with a market cap of less than 1,000,000. And on that journey, over fourteen years, we've assisted them with over 15 acquisitions. And in the end, two years ago, they were acquired by HG, a private European private equity firm for over 1,000,000,000. So this provided a great return for the shareholders back in that business while we looked after them. Another one being Marlowe, which has been in the in the press more recently.

16:08 We've held that relationship for close to eighteen years. We took them on with a 6,000,000 market cap, currently at 416,000,000.

16:17 And on that journey, we've helped them with acquisitions as well as divestments. So a bit about our strategy. So the first six months post merger, we focused very, very hard on integration, and this was a huge success. And really importantly, a shared vision and culture was created across the firm.

16:48 And then for the next twelve months, we wanted to concentrate on going deeper into what we do really well. So that's gaining market share and adding additional revenue streams, and you can see some of those coming through in the results that we've just posted. So we expanded our m and a division, into the regions by taking on some amazing people, in Manchester and Birmingham, and that is already bearing bearing fruit and actually showing really great, returns from from only a six month start, six month start away. Sector specialization, we've gone deeper across the firm into sector specialization.

17:38 Now that means our clients, when they're dealing with their advisers, know that they fully understand them, and that's absolutely key to be able to give them the right service and the right product. Monetizing other areas of the business, which we haven't necessarily done particularly well in the past, so easy wins by concentrating on research monetization, getting payment checks from institutions for all the pages and pages of really insightful research that we're producing, adding alpha capture onto our our business. Again, no extra costs, but that is also now bringing in decent revenues. We've increased our international distribution.

18:23 We opened up a European desk and a US desk, all in London. So, again, in a very, very cost effective way, but that increases our distribution footprint across internationally. And as mentioned before, The UK is looking very, very cheap to European and US buyers. So that is, again, already bearing fruit, and we're seeing significant and decent inflows from European and US institutions into our client stocks. In terms of the breadth and where and where we're going? Ben was gonna say a few words about data, I think. So Yeah. Just to finish up on the on the depth piece, the data analytics is an area of keen interest for myself.

19:12 I spent a large part of my career at UBS looking at building management information systems and, laterally, looking at prediction and machine learning techniques. And one of the key reasons for joining CAVENDISH was to try and escape the bureaucracy that slows down a large firm that operates on a global basis with deploying new tools and techniques, especially given how rapidly they are developing at the moment and actually have the agility in a small firm that isn't constrained in the same way to do exactly that. And and so in that space, we have managed to hire a small team of expert practitioners who are learning rapidly about our business and how to apply their stock and trade, and it's already delivering value.

20:02 The three areas that are worth mentioning is that we've taken the data that we use on a day to day basis from our traditional enterprise reporting requirements, and that's now made to be accessible through dashboards across the firm in a very self serve dynamic way. And that's enabled us to create much more intelligent KPIs, which drive the behavior of those teams in a more uniform and and value added way. We've also created a market intelligence, which runs every morning at 07:00 and scrapes all of the news and other relevant

20:36 information sources to provide a sentiment based view of this is what's happening in the market today. It's a leg up for all of the practitioners in our firm to be able to understand what they might then go and do to add value to the relationships they have with their clients and stakeholders. And finally, we've started on the journey with CAVENDISH AI, which is, at the moment, an an internal capability. It takes a large language model type interface that we're all getting very familiar with, the chat GBT style information, But it applies that interface to our own IP. So it uses our research. It uses our rule book in terms of the corporate finance practitioners and numerous other resources that we've developed over the years here to make our people more efficient and more intelligent in what they do.

21:24 And at some point, I'd like to think that that will be partially available for our clients to directly interface with. So it's a really exciting space. It's already adding considerable value, and it's potentially quite transformational for our business. And in terms of that breadth of where we're trying to reach through and grow to, so a few years ago, we started an origination team. These are not investment bankers. These are people who are highly specialized at being able to reach out to potential new new business. In this case, entrepreneurs thinking about doing something. We grew that team to three, and it's been working very, very well for the private m and a division. And what we've done now, as partly Ben said, now we have the right systems and tools in place, we're looking to double down on that integrated origination function.

22:17 So this is where, you know, we are training those individuals to reach out to clients and tell them about CAVENDISH, tell them about our brand, tell them about our integrated offering. And, again, to repeat, this is where we are able to provide a full range of services that an entrepreneur will go through. That could be the series a, series b, divesting part of private equity, divesting the majority to private equity, IPO in their business, and, obviously, selling their business to trend. So any phone call or debt advisory services. So any phone call that we put into an entrepreneur, we should have something that should resonate with them. And, actually, now through that merger with Cenkos and the resulting restructure, we now have an operating structure which we can leverage. We have the ability to add on complementary services, leveraging our fixed cost base. And what I mean by that is our fixed HR team, IT team, compliance team, finance team, where we don't need to increase the headcount as we look to increase our our top line.

23:21 Now that we have returned to profit, the management team have now begun to look at complementary financial service offerings where we're able to build organically, but also inorganically as well. Such offerings would leverage our low fixed cost base and equally provide incremental revenue synergies as we cross sell within different departments. Really exciting bit. Really exciting bit. So on the income statement, the headline here, of course, is the P and L, and that's a movement from loss making in the prior period. We've got a £1,900,000 on an adjusted basis for FY 'twenty four moving to £3,700,000 adjusted profit in FY 'twenty five.

24:08 And actually, that doesn't tell the whole story because if you look back at FY 'twenty four, the number didn't include six months ish of the same cost entity, which, in fact, was also loss making in that period. If you were to add that in, the movement from loss making territory last year to profitability this year is over £7,000,000 But again, underlying the reason we look at the adjusted profit as the measure of our underlying performance because it does take out the noncash and nonrecurring items. Unpacking the P and L number, having a look at the revenue first, and some of this has been mentioned, but to reinforce, the private side is really growing on all measures. We've seen a 15% uptick in the number of transactions and a 13 uptick in the average fees associated with those transactions.

25:02 And that's without the starting of the returns on the investment in the regions that John was mentioning. So it really is a significant growth story and one which is building. On the public side, although the revenues are relatively consistent with the prior period, It's the underlying drivers which tell the story. And here, you see a move from public M and A contributing a great deal in FY 2024, reducing 55% this year and a significant offset in equity issuance, which is made up of the IPOs, which Julian has already mentioned, the 60% we've captured of the capital raised on IPOs in the last six months. That brings a new client into the roster, one where we will earn future retainers and, ideally, if they go through the journey we were looking on the illustration, capture further transaction fees from.

26:07 And then there's also been an increase in secondary equity issuance, which is ongoing client relationships, also continuing to pay retainers and future transaction fee prospects. So while the top line level is approximately the same, mix is actually a compelling growth story. If you then switch on to the cost side of the income statement, I think it's all about discipline and determination across the firm to protect the synergies that we realized through merging. And one of the markers that you can call out there is is the 16% decrease in our nonemployee costs. If we switch over to the balance sheet, the it's it's a picture of strength.

26:53 We we are debt free. We have liquid resources, as I mentioned, which are above that regulatory requirement and enough above them for us to start thinking about the strategic choices we have, some of which John was mentioning. Other callouts here are we have 2,200,000 of deferred tax assets, which will enable us to offset corporation tax on profits of up to nearly £9,000,000 on a go forwards basis. We have rationalized the trading portfolio through the course of the year to make it more focused on our integrated business model, and that has meant that we have less exposure on the book. It's a lower financing cost to us. And unlike last year, this year, it's profitable in its own right.

27:43 I'd also call out the shares that we hold in our employee benefit trust. Those at the moment are enough to cover the vesting of all of the existing shared schemes that we have at the current share price without diluting shareholders. And then if we move on to the cash situation. So we've become cash generative, and there was a slight time lag here. I think that the there were were loose ends associated with the merger that included the building that used to be occupied by Sankos. It included a trading platform that had to run through its its license term. Those are all gone now. So that 3,300,000 you see, which is illustrated as this, the blue bar in the waterfall diagram at the bottom, that is your underlying cash generation from operations.

28:36 And what you can expect to see, all other things being equal, is that being much more aligned to the profitability of the firm going forwards. So I think all in all, you've got a really healthy financial picture for CAVENDISH. I'll hand back to John. So to close out where we started, we do consider ourselves a market leader in both the public and private markets. I'd like to think that you've taken away that we do have a reliable revenue stream coming from our large client base transacting across different markets and different asset classes. I think between Ben, Julie, and myself, we've explained that we do now have operational leverage through the restructuring, of our business through the SENCOSP FinCap merger, and we're now able to significantly grow our top line without really touching our fixed cost base.

29:34 Most importantly is increased client choice. This is where our clients can come to us for a range of their their requirements from, as I said, from raising capital through to IPO ing, through to divesting their their their their business. And, obviously, a key part of this is a lot of our revenue every year is underpinned by the repeat revenue generation from retainers and trading. That's great. John, Ben, Julian, thank you very much indeed for updating investors. Ladies and gentlemen, please do continue to submit your questions just using the q and a tab situated on the right hand corner of your screen. Julian, I hope you can see in front of you, you've had a number of questions from investors throughout today's call. So firstly, thank you to everybody for your engagement this afternoon, and I've got this afternoon correct now.

30:31 Julian, if I may just hand back to you just to read out those questions, if I may, and then I'll pick up from you at the end. Yeah. So let's, let's let's go for the top one from Sam. You have spoken about the breadth of your revenue streams, but is it still true that a return to a vibrant IPO market would be the biggest factor in creating a positive operating environment for CAVENDISH? So I'll I'll I'll start with that one. So the the point is we have created a platform here that is profitable in all markets. The private business is growing strongly, and adding profits to the bottom line, but then so is the public business.

31:20 And the public business, we all know the markets have been tough. To be able to be profitable in these markets, is a very good achievement, but we're not stopping there. We are adding additional revenue streams, as we said, which will continue to be able to grow the business, as a whole. That said, if the markets come roaring back, absolutely great. We will, you know, we will we will do very well after that, and that will kick in the operational gearing. But what I'm sort of trying to get across is we've got, what we think is very limited downside by the model and the platform that, that we've got. So there's another question.

32:08 In regard to m and a, what is the strategy here? Bolt ons adding more services to clients or scaling up existing parts of the business? I'll take that. There are two things we can look at here. We're looking at both. Where we can grow organically, we will. There are a number of areas where there are services we can provide to to corporates where we can either bring in individuals or teams to help us grow that. Again, that's pretty evident what we've done in in Manchester and Birmingham. But equally, there are inorganic type of financial service offerings we'd like to provide where it may be better for us to acquire than than building house. And the reason for that is if they have strong existing relationships with, let's call it, you know, referral platforms, then perhaps it's best that we we acquire.

33:04 But again, a lot of this comes through that origination function I mentioned earlier where we are talking to companies all day long and some of those could end up being an acquisition target for for CAVENDISH. Another question here. So, in your 2024 annual report, you said you had 191 listed clients, and today, you're saying this has fallen to 177. How many of the 14 lost clients is due to M and A activity? So and again, it's a good point to look at, and it's something that we absolutely track because we do get, as we've said before, retainers from our clients.

33:52 So to answer the question directly, it's about half of those of the change due to M A activity. The other half is to do with the smaller end of our clients' delisting. So there have been delistings off the market. Now when a client obviously when we do the client to m and a, we normally get a substantial fee because we advise them on that m and a process. So, if we think about retainers, you know, we'll be getting, I'd say, at least ten years of retainers from, from from from that on a on an m and a piece. So, overall, that is that is positive to us. When a client delists, they do pay us a small fee. But, actually, what happens when a client delists is those are the smaller clients which are not generally the ones that, have got the best fee profile for us going forward.

34:48 So actually quite happy to, for clients where the public markets are no longer the right place for them for them to delist, which frees up our time because a lot of it is about service levels to these clients. So it frees up our our time from our, you know, our professionals within the business to be able to concentrate more on existing clients and winning new clients. And also, overall, the new clients that we're taking on pay a higher average retainer than the clients that, we are that are going due to delisting because they they tend to be bigger clients and and and and and they they need they need more from us. I think we should answer the one by Vivek because that's come up a bit. So Vivek there's a question saying share based payments are approximately 70% of the adjusted PBT.

35:41 May I ask why they should not be considered part of employee compensation? As an investor, I care about dilution employee benefit trust as are funded by the company, its shareholders. So I don't think it's entirely accurate to say the EBT holding prevents dilution since it reduces cash that would be available to shareholders. Yeah. So that that's a it's an interesting space. We have a combination this year of the tail off of legacy schemes from the two companies prior to merging and then a new co invest scheme that we thought long and hard about as to the right way to incentivize employees and encourage ownership of the company at this stage. And at end the of the day, we are a relatively small company, and we need to be very careful about how we do that. So the co invest scheme encourages investment in CAVENDISH shares. People put their own money in, and then there is a series of thresholds, which you will have seen in the right pronouncements when it came out, that would give people shares back in addition to the ones that they purchased if we meet various share price levels.

36:55 And so firstly, my statement around VEBT's ability to cover any potential dilution is related to our current share price, and we have to manage that dynamically. The the way that we have to value the the share that that share scheme to put it into our accounts this year as part of the share based payments is is using an option pricing model. And and so that looks at what is effectively an illiquid stock, which drives a very high volatility value in our option pricing models and, therefore creates very high value to the scheme, which, you know, you could argue that these models are flawed, but they are the models that we have to use to apply the accounting standards.

37:45 And and so you you see a very significant value of the scheme going on on day one, and and that will continue through its life throughout to '27 as as part of this, you know, as I agree with the statement, it's a significant number in the shareholder based payment line, but it's a very good reason to adjust it now of your underlying operating performance. So that's the explanation. I appreciate it's a bit technical, but it is literally a function of, you know, having a small company stock being valued using a an option pricing model. Okay. Another question come in. What is the capital allocation strategy going forward?

38:34 Accelerating organic growth and stroke M and A or returning more back to shareholders via buybacks dividend? I can take that one. And effectively, I think we have just declared and paid a very healthy dividend, a covered dividend. What we want to do is keep growing the business both organically, but if we have the balance sheet to do it, as we mentioned before, to add on additional services, which we can can basically use our cost base, for actually adding no additional cost, but also but have services that we can sell and distribute to our entire client base, so so so proper revenue synergies.

39:25 So what I mean by that is as we continue to grow, we'll continue to pay the dividend, but we'll grow that cover for that dividend. So the dividend should continue to increase, but also strengthens the balance sheet even further if we want to make acquisitions into services that we don't currently offer, but that will definitely be complementary and also immediately earnings enhancing. Here's a topical one. Can you provide some more insight into the recent approach for the private side of the business? So again, effectively, as we've said in in this presentation, having a business that can offer multiple solutions for clients means that we can give the client absolutely the best, the best solution, but also means that we capture all of that revenue within our business. And so it doesn't go out the door if, you know, if we were just public markets and someone wants to sort of set up a division or go and go and and buy something else, they they might use someone like Mosschow's.

40:44 Now we do it all in house and vice versa from the from the private markets. If suddenly someone's they've done what they want to do in private markets, one to IPO, we can do that for them as well. So we're seeing a lot of crossover, and I think we're actually only just scratching the surface, but we're already seeing a lot of crossover between public and private where revenues are being earned for the firm, which otherwise we wouldn't have captured. So that means both sides of the business are worth more in an integrated house than they would be individually. That said, we do have an approach for our private business, which is which is flattering. It shows that we're doing incredibly well in that market and growing strongly.

41:33 And, of course, if the right value is put on the table, that outweighs those revenue synergies that we have internally, we, we, would consider that very strongly and and look what's best for shareholder value. Another question about exactly the same thing, so I won't answer that one. Yeah. Question, are you seeing any signs of institutional inflows coming back into small caps? Yes is the is the sort of brief answer. We are starting to it. It's they are smallish at the moment.

42:28 But as we said, there's a there's the Brunel pension scheme, which we're looking to allocate into it was about 1,200,000,000 into small caps, directly into small cap funds, which across six managers. Have been held up slightly because the government got their hand in there, but that is that is still coming. We've spoken to the fund managers who would be running that money, and that should be flowing in. Also, the international investment into The UK market, we are seeing signs of that coming down into, small and mid cap as well. So one small area doesn't make a summer, but, generally, you know, we can see it in fact in our the last fundraising we did for a corporate client, which was secondary, over two thirds of the investors into that round were new shareholders.

43:29 So that is a change from the last couple of years where a lot of fundraisings has been the existing shareholders effectively funding the vast majority. The fact that institutions are looking for new ideas and putting their money into new ideas means that they are in expansion mode rather than a more aggressive mode. Quick one from George. Do you see potential for margin expansion, or will cost pressures limit this? Now as revenues increase, we do expect margins to increase. Yeah. How's the average tenure of your retainer clients changed year over year, and what initiatives are in place to improve client retention?

44:24 So as I mentioned, the average retainer is increasing as we take on bigger and bigger clients. In terms of retention, it is all about customer service and it's being able to do what you tell them you're going to do. And so we have a laser like focus on that service and basically delivering what the what the customers ask for. And so far, to those retained clients, we have not failed on any fundraisings or IPOs that we've, that we've been asked to undertake. And so that's really the key to it. And and that's that that service level also comes with continuing. We are still hiring, very, very, interesting people in the market, and that adds effectively to the services and the service that we can give our give our clients, and so really give them absolutely no reason to go anywhere else.

45:32 Quick one here. It says, how's the merger going? You say that CAVENDISH has already generated revenues and won a number of live mandates as a result of the integrated offering. Can you give any examples? On a non named basis, I guess, one in the health care sector where we paid a private market sized picture alongside our public markets colleagues to divest the business, where we were up against some tier one advisory firms, so we won that process and successfully executed that. Similarly, we've also pitched for public to private with our with both combined public private markets and sector focused individuals. And, again, we we we are winning in that regard too. Yeah. So, effectively, I mean, you know, I was in a couple of pictures last week, on the public side, Nomad and Broker pictures, and you can see the clients just get very excited that we've got sex sex and expertise across the piece because a company doesn't necessarily mind or doesn't see themselves as purely a public company or a private company because they're competing with companies that are public or private.

46:48 So if we can talk to them from both markets, they see that as something unique and something that they they they want to join. And it's not necessarily they're gonna use all of our services, and we're not gonna try and sell them services that they don't want. But they know that in house, they've got trusted advisers they can use if they need those services. So I think more and more, it's people are that's affecting people's decisions to come to us, And it's something that our competitors, both in private and public, just simply don't have. And it's very, very difficult to build that from a from a start a standing start. So that's you know, I think we've got a huge advantage in having that.

47:36 K. Yeah. Fine. Yes. Thank you. That's great. Yeah. Thank thank you very much indeed, guys, indeed, and thank you once again to everybody for your questions. I can see a number of those themes that you've hit with those that you've answered. Julian, and I know that you and the team are particularly keen to have feedback from investors. I'll shortly redirect those on the call to give you their thoughts and expectations. But before doing so, I wonder if I may just come back to you just for a couple of closing comments, and then I'll send those on the call to give you their feedback. Yes. Thank you, Mark. So no, absolutely. I think we're in very, very exciting times. We've built a business, which has a profitable platform in all markets.

48:25 We're doing a lot of things to, add additional revenue streams, which will translate into growing profits. And then as we've mentioned before, you know, yes, if the markets turn around and grow significantly like we're expecting them to do, we're hugely operationally geared on the outside, so, a a lot drops straight down to the bottom line and shareholder returns. That's great. Julian, John, Ben, thank you once again for updating investors this afternoon. If I could please ask investors not to close this session as we now redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. This will only take a couple of moments to complete, but I'm sure it be greatly valued by the company. On behalf of the management team of CAVENDISH PLC, we'd like to thank you for attending today's presentation.

49:13 I wish you all a good rest of your day.