Elixirr International (LSE:ELIX) — Investor Presentation

0:00 Good afternoon, ladies and gentlemen, and welcome to the Ixia International PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time using the Q and A tab just situated on the right hand corner of your screen. Simply type in your questions at any time and press send. The company may not be in a position to answer every question it received during today's meeting. However, the company can review your questions, and we'll publish those on the Investor Meet company platform. Before we begin, we'd like to submit the following poll. And if you give that your kind attention, I'm sure the company would be most grateful. I'd now like to hand over in the first instance to CEO, Steven Newton. Good afternoon. Good afternoon, everybody, and thanks very much for attending this presentation. Hopefully, you'll find it enlightening. We're we're certainly very excited with our results and with our company's potential.

0:46 So, hopefully, we can portray that to you in this conversation as we go. And as as

0:52 as we said, if there are any questions, please submit them, and we'll pick those up as we go probably more towards the end because this is a fairly lengthy presentation and just see if we have enough time. But for those of you who don't know me, I'm Steven Newton, founder and CEO of this company along with Graham who will introduce himself shortly. South African accent, yeah, you can tell. So been in the country since '95. Qualified with KPMG as a CA, did an MBA with them as well. And then five years with them consulting in in the city and then start up around .com, another five years with IBM consulting leading their financial services sector, then another start up, which also failed, and then five years with extension. During that time, I did another start up in the evenings, if you like, and that also didn't come too much. And then Graham and I decided in 2009 that itched to start a company. I needed a scratchy. He wanted to join me, and we started ELIXIA in 2009.

1:51 And we've been growing at roughly around thirty thirty five to 37% CAGR depending on where you peg the stock position over that time, and we're very proud to say we've got a fantastic company here. I'll let which we'll talk you through. I'll I'll talk let Graham tell introduce himself a little bit, and then Nick, and then we'll dive into the detail. Hello, everyone. Graham Busby. I'm the CFO. My background after Cambridge, I went to Accenture. So consulting, strategy consulting, technology consulting, ended up selling large outsourcing deals. That's where I met Steve. We worked together for probably three or four years at Accenture. And as Steve said, in 2009, decided to start ELIXIA.

2:37 What I look after

2:39 since IPO is inorganic strategy, so all the m and a related activity. And I'll be able to take you through that today. So nice to meet you. Nick. Hello, everyone. I'm Nick Wallach, finance director and company secretary. I'm a charged accountant by background. I I trained with Deloitte. Before ELIXA, I I spent nine years at a FTSE two fifty firm. Well, actually, my last FD role there, I worked with ELIXA as a client. And I came on board with ELIXZA in 2020 for the IPO and day to day responsibility for finance and company secretarial matters.

3:12 Thanks, Nick. So let's dive into the the detail. You can see here I'm gonna give an intro. Graham will talk I'm sorry. And then I'll talk you through our journey since IPO and our and what we've achieved in that time. Graham will talk through our strategy, and and Nick will go through our financial performance. And Graham will come back to you with a business review, and then I'll I'll

3:33 talk about the the outlook and what how we see the business in the future. So that's our agenda for the day, and let me just give you some opening comments. There's a there's a a quote here, but I wanted to talk about something in context. For those of you who may be a little bit unfamiliar with the consulting industry in general, it's a massive industry. It's over $1,000,000,000,000 in in in revenue. It's kind of split fifty fifty between the top 10 consulting firms who you've probably all heard of. It's the McKinsey's, Baines, Boston's, KPNG's, Deloitte's, PWCs, IBM's, Accenture's, etcetera. They take up half that marketplace. Almost 50% of that revenue goes to them. And then 50% of the rest of the marketplace is filled filled in with boutique firms.

4:18 And boutique firms like us varying in size and but many, many, many of them are of a size where it's one, two, or three partners working together and outperforming the big firms. Otherwise, they wouldn't have their market share. So that's a very interesting perspective on on the boutique firms. They're obviously former tend to be former big firm partners who've gone in into the market and served clients in a boutique niche sense in the sort of boutique boutique space. But just to comment on our global ambition, if you like, macro ambition, if you look at the top 10 firms, there's only three listed consulting firms in that top 10. There's a couple of messages in that that the the partnerships are so profitable that they don't really want to go public and share returns with shareholders.

5:04 We feel that that that's an interesting opportunity. Why? Because I I think that the industry's, unlike the accounting industry or unlike the legal industry, the consulting industry doesn't have any governing or regulation. I mean, the the the accounting profession is governed by its, institute membership, and, obviously, the fact that they have to sign public accounts makes them a very publicly accountable industry, and therefore, are regulated in that sense. The consulting in the legal profession very similar. The consulting industry doesn't have that, and I feel that the listing of of consulting firms will hold them publicly accountable to outside shareholders. And therefore, the vagaries of what some of the consulting firms get up to in terms of accountability and regulation, if you like, is could be well managed.

5:56 So there's that there's that, but there's also the opportunity to ensure that the owners of the business, which are the currently the partners, are also shared sharing the ownership responsibility with shareholders and have absolutely aligned interests. And and we've we've built a model which we can talk you through that does that. But it's very important to have equity incentive at the heart of it. So our partners get 30% of their remuneration in cash and way more 70% and plus if if the if the share price works in equity, whereas this is very different in the seven top firms in the in in the big in in the top 10, if you like. There are only three listed, as I said. Two of them, Accenture and IBM, are very, very different. They Accenture is about 80% outsourcing assistance integration, and IBM is that and about 50% more in terms of hardware and software sales.

6:48 So very if you wanna invest in consulting, it's you know, investing in those two firms is a very it's a very well, I think they're consulting investment. Whereas the only other firm is Boston sorry, Booz Allen. And Booz Allen is listed in in Chicago, but they do 80% of their services into public sector, whereas we we're trying to focus entirely on private sector, which we think is a far more profitable marketplace. I can go into the vague reason of why, but I I won't for the moment. I think I'll stick with that as as as at the moment. But suffice to say that our global ambition is if we can get into that top 10, eventually, we would have made all shareholders a ton of money, and we will have succeeded in disrupting the industry a bit with regards to, you know, how it's regulated, how it's governed, the the rewards of the the partners, and therefore alignment with both clients and shareholders, which makes up a a really, important part of our our strategy. And we we see that working exceptionally well in the in the marketplace, well, with our business, and you'll see this in our results.

7:51 So here, you can see just my highlights for the financial 23 gram. Nick will will go through this in a in a lot more detail with you. But just to say that we're up 20% revenue, 15% underlying organic, underlying organic. Inorganic growth prospects are are very good. We bought two businesses. Graham is, as you said, focusing almost entirely on our m and a strategy at the moment, and he's doing fantastic job. These are two great businesses that he'll tell you about that we acquired during that time and we will continue to do. Just just a point on organic inorganic. If you think about what I described in the macro industry context with 50% of the marketplace being boutique firms, those firms exist because they outperform the big firms, as I said. They they literally have to be better than the big firm because no one ever got fired for hiring IBM, McKinsey, Bain, whatever.

8:39 Whereas if you hire a boutique, you have far higher risk in a political context in in in the in the in the corporate life. So you have to you have to perform, and you have to have almost a better service offering than the big firms would have. However, they've they they struggle to scale because they don't have access to markets. So what we're doing with our proposition is providing a one equity model, and they're all entrepreneurial because they've started firms, they're accountable to the marketplace. They understand the issues, of selling services, paying your people, delivering profit and returns, and being accountable to the market every day for that, where in the big firms, that's far more shielded because they're more order takers than than market makers. Whereas in the small firm, you have to be a market maker. So we're searching in that pool to buy businesses that complement our proposition, diversify our proposition, and I'll I'll touch on that, quite a lot when I give you the highlights since IPO because that's been a big strategy of ours to make our business very resilient.

9:37 I think we've done a fantastic job with that. But diversify our proposition, allow more services to be sold to our clients, get give our all our partners more access to market because it's very simple. If we have 500 clients and we buy a business with 50, we can now sell services to those two businesses. And I do see a question there from Damian about cross cross sell of services, and and, Damian, we will answer that question as part of this presentation, an example of how we've cross sold this. Actually, to date, quite a lot of revenue has been sold that we would never have had access to, £23,000,000 worth of revenue. And and I'll Graham will give you a couple examples of that as we go through this. But those inorganic prospects are are are hugely important to us. Obviously, our reputation is building, very important brand building exercise we're doing. We're starting to get inbounds. You can see that, yeah, a 193% growth in inbound revenue from marketing where, you know, previously, we used to well, almost always, we've got our revenue from networking and relationships that we have and and clients recommending us and and that kind of thing. But, now we're starting to get people approaching us because we're putting a lot of effort into our brand as a challenger consultancy and, you know, standing out in the crowd in terms of how we incentivize our employees and and our partners. So we have a fantastic employee proposition. I think this is the one thing that when we talk to other boutique firms as Graham does all the time because he's looking to acquire, we see two things. I don't think Graham has found a single company which is as profitable as ours. I think maybe one or

11:07 two. He's got an EBITDA margin of around 30%. And the other thing that he constantly sees is that these people struggle to employ top talent because they don't have a brand. Now we had 10,000 applications last year and 4,000 from the top universities, Cambridge, Oxford, Durham, Stanford, Berkeley, you know, you name it. We've we get the very best candidates. They love our brand. That means we've got brilliant talent to choose from. That means we perform with our clients brilliantly because the underlying skills of our people are so so good. So, you know, really very happy with the way, everything's evolving. So I'm super super proud of all all of the team's efforts in that regard. Let me now just talk a little bit about our growth since IPO.

11:52 So you can see here our growth since IPO. And you can see that, obviously, we've we we had revenue of 25 point 24,500,000 in the financial year '19 prior to IPO. We're now sitting at 85.9. So our IPO has been a a stellar success, 37% CAGR during that period, versus an industry CAGR of nine. And just one thing on the industry just to point out for for those of you who are worried about the consulting industry because you see all these headlines with McKinsey's laying off a 100 and 1,400 people, etcetera, etcetera. This industry has grown for the last twenty five years every year through two recessions. So whatever anyone tells you about this industry being a volatile industry because the people walk in the door or they make comments like that, it's actually simply not true. This industry is growing continuously. It's why? Because businesses are becoming more complicated, and you need more expertise in the areas that businesses can't afford to carry in house.

12:52 So they're buying it from consulting firms. So if you build good consulting firms, this is a very, very good industry because it's a continuously growing industry, and the the the seven partnerships are just proof the top 10 in the top 10, the seven partnerships is just proof as to why those partners wanna keep all the profit for themselves. Right? It's a very profitable business. When McKinsey lay off 1,500 people, it's because they've overhired, and they're protecting their profits. So they're not actually shrinking. They're actually just probably pruning out the people that are underperforming and using the market conditions as a as a foil to to make those sorts of announcements. Right? But I don't see if you look at Companies and grab any of the the the partnerships on Companies House and look at the average partner pay, it hardly ever goes down.

13:39 Okay? It's a continuous, juggernaut of profitability for for the partnership. So, you know, to to invest in this industry as a shareholder, I think, is a is a interesting opportunity. EBITDA, just to to quote our EBITDA this year, 25.4, little interesting stat. Our EBITDA this year is more than our revenue was in financial '19. So that just gives you a sense of how how we've grown and and how we've been able to manage our business. 30%, we've kept our our our margins at EBITDA 30% since I b o IPO. And the only stat that we're we're a little bit disappointed in is our market cap. But this represents an opportunity for investors because, you know, we're we're we're almost trading at a lower multiple than we we were at IPO. And I can guarantee you when I show you what we've done in this business, this business is three, four x less risky than it was at IPO. We've made so much diversification into this business. We've built so much infrastructure in terms of the infrastructure to run the business, if you like, that, you know, it's it's it's just in such a such a stronger position than it it it was at IPO.

14:49 I've been Graham will talk a little bit later in more detail about our four pillars, so I won't belabor these. But just to say that our our increasing revenue per partner since IPO is is, almost doubled from 2.2 to 3.9. And a couple of reasons for that, people always ask how far can that go? Well, if you're in Accenture, that could be 20,000,000 a partner. Why? Because they sell outsourcing and they sell systems integration. If you're in McKinsey, it could be 8,000,000. If you're in KPNG in tax, it could be 4,000,000. So it it varies depending on the services that are being sold. And as we add services to our our our team or to our our business as Graham buys complimentary service propositions in the marketplace and we build them organically, we will be able to get more revenue per partner. And the the number is is kind of moot, but it's just the point that we should be monitoring it and getting it to grow as much as possible.

15:41 Seven principles promoted to partner, all very, very successful. This is our most, successful, route to to to partners. Six hires, and and this is actually the the the the example of the point I was making about people in in the top 10 firms. Partners in the top 10 firms are are more order takers than market makers. If you look at the six we've had successfully hired in the since IPO, we've actually hired 12 and had to get get rid of six. The reason is and this is typical. Right? So since 2009, Graham and I have experienced this all throughout building this company that when we hire in the market, we get about 50% success rate. It's no better than tossing a coin, in fact. And the reason is because you can't tell from interviewing someone whether they actually make markets themselves or whether they actually sit there and rely on the brand to bring them business. You know? So when you're in a big firm, the tendency to be somebody who takes orders as opposed to mark makes markets is is extreme because no one gets disproportionately rewarded for making so much more revenue. So there's not actually an incentive to do that. So we find that if we get the wrong eggs into our business, we have to exit them pretty quickly because they they don't make enough market for us, and and we need people to be far more out there on their front foot. So this goes to point as to why their acquisition strategy is so important because these people are already successful making markets.

17:08 Their their business would not exist if they didn't make markets themselves because they don't have the brand equity that the the the top 10 firms have. And then you can see that Graham will talk you through the the five acquisitions since since IPO. So let me just I won't drain the slide, but you can see you can see this the detail here on on all our acquisitions. The most important put number for me on this chart, which is the question Damian actually asked, is, the 26,000,000, the cumulative cross sell revenue from acquisitions to date. So these five brands, Coast, Return, Eye Lap, Response from Insignium, and ELIXIA have sold a total of 26,000,000 to each other's clients. And that is the real power of the strategy at play. Right? We we would never none of us would ever have had that access to that revenue, and that's just bringing bringing this to light. And so when people think about our acquisition strategy, it's very definitely a market consolidation of market integration strategy as opposed to a back office operational efficiency play.

18:13 We're not buying companies to get leverage out of the the back office cost reduction opportunity and at one plus one equals, you know, 1.5 in a in so operational efficiency sense. We're looking at this as multiplying revenue, and and that's where the real kicker happens for us in these opportunities and, obviously, adding adding skills. Graham could talk to you about the numbers and the skills that are added. I I will just leave it at that for now because he's gonna come back to that. In terms of diversification, I mentioned this point. What we see on the left here is our position at pre IPO 2019. So you can see revenue by geography there, seven and a half in The UK, 4.2 in The US, and 12.8 to the rest of the world.

19:00 You can see that in the right hand side is the position we are in today. And The US is particularly I'm particularly proud of The US. When we did the IPO, Graham and I did the IPO roadshow, many investors said to us, you wanna go into The US? Many AIM companies fail. This is the sword they die on. Well, we haven't died on that sword. We've got 37,500,000 of of revenue in The US. It's our biggest geography. It is, by the way, when you look at the market at a macro level, it is twice so for every pound spent in Asia, there's £2 spent in Europe, and there's £4 spent in in The US on consulting. And that's why it's such an important market, and, we suddenly get a really good presence there. We spread all around The US. We've got we were in Dallas. We're in New York. We're in, in in San Francisco, and in Chicago. So we're spreading ourselves all around, and, we've got clients all over the place, and it's, it's it's really a growth business for us. Clients love our proposition there. The challenger status, the, you know, digital AI, data centricity that we have around change in the boardroom is so sweet.

20:10 It's such a sweet spot for the The US market. The European market is catching up, but, it's a it's a it's a lot more skeptical, a lot harder sell actually, into, into, the European markets. Asia will come, but it's not our priority right now. We need to get The US and Europe set up. And once once we've got those two set up, we we will be spending a lot more time on the on on Asia. So, essentially, what we've got here is you can see in the second line down there below the pictures sorry. Below those, the the sort of geographic version of it, you can see the industry versions. And, again, just to make a point, picking out one, manufacturing was a 100,000 k in 2019, and we're now doing over 10,000,000 in manufacturing.

20:55 And you can see that in in all our industries. All this industry diversification is an crucial part to the resilience of our business. You know, there are other consulting firms out there that specialize in industries, and and that is risky because if that industry struggles, if it has any

21:14 sort of headwinds itself, they they they will cut consulting cost. And and then what happens is you you've got a problem. But if you've got a multi industry firm, which one industry is doing well, others are are doing not so well. So for insurance banking in for example, banking in The UK is doing terribly at the moment, but our insurance business in in in Europe and in in The US is doing amazing. Right? And that's just testament to this strategy at work. And and and the same applies to geography. You know? We had difficulty in January, February, March last year. Actually, in the year we're talking about, yeah, 2023 in The US, but Europe was pumping. So that was brilliant hedge for us. And now The US is coming back very strong, even stronger than than than Europe right now. So so this is why this this diversification strategy that we built into the business since IPO is so crucial. And and, candidly, it's it's it's a bit of a shock to us that that, you know, we're we're undervalued relative to our IPO price because there's so so less risk so much less risk in this business than there was at IPO.

22:24 The final, layer of capability sorry, of, of diversification that I wanted to build in here was the the top horizontal that you see on this chart. The other two horizontals are there for your information. It's another view of what we showed you on the previous slide. That's the geography split. You can see, obviously, we've gone from 21% US revenue to 44% US revenue. And likewise, you can see the the colors in the revenue split by vertical show you the diversification we have in industries now that we never had at IPO in the same way. But the final one is that top bar where you can see at IPO, we were 97% capability. 97% consulting at IPO. Now we're only 57%, although consulting revenue's doubled. So our consulting business was around million, $2,829,000,000.

23:17 It's now million. And the rest is data and digital. And, that's very, very important because if you think about our strategy as as artificial intelligence and data and AI sorry, AI data innovation. The reason AI, if I would just may touch on it and and and give you the reason why these these services go so well together. If you think about AI, it's actually like the Internet. For those of you who can who remember back to when the Internet emerged, it's roughly in the mid nineties, and then we had the .com bubble around 2000 where everyone thought that the high street would die and all sorts of things. I started a company around that time trying to exploit that bubble and and and paid for it, because the idea wasn't very good. But, it it was a learning experience in and of itself. But the interesting thing about the Internet is we're now with '19 2000, we're we're almost twenty four years later, and we're still helping companies with digital strategies.

24:16 Helping them understand how to engage their clients using the Internet as a platform in which to to to address their their marketplace. And this is the same for AI. AI is gonna be exactly the same type of technology. We're gonna see peaks and troughs in in in the deployment of AI, but it's not AI itself that matters. It's how AI is used. And that's the same thing with the Internet. It's not Internet itself. It's how the Internet is used, and and that's where consultants have a field day. Right? We are still advising, as I said, on digital and data strategies. And and why is data so important to all of this? Because if you think about it, same as the Internet, artificial intelligence is is only as intelligent as its underlying data. And if you're using rubbish data, you're gonna get rubbish output, the same as the Internet.

25:01 So the the crucial thing here is to be able to help businesses understand that our clients' businesses understand that data is the the cornerstone of anything that you put on top of it to be able to provide insights and drive your business journeys going forward. And and that's where so if we can add value across that entire value chain, that makes us a very valuable proposition, and it's a very c suite conversation with executives. So that's exactly where ELIXIA wants to be positioned. So I think hopefully, I've given you the main points, key diversification strategy since IPO, fantastic growth since IPO, ambitions, we are looking to be a billion market cap company in three to five years. And at the very macro ambition is top 10 consulting firms in the world,

25:51 hopefully disrupting around things like the challenger brand, the the challenge the the digital AI lens we look at things through, the and and and and essentially driving the boardroom agenda around those topics. So, hopefully, that gives you a good overview. I'll hand to Graham to give you the strategic overview, and I'll speak to you again towards the end of the presentation. Thank you, Steve. So just to give you a sense of how we position ourselves in the marketplace and how we're building a foundation to to grow from, I thought I'd just take you through kind of we look capability industry and geography wise. So what we are building is deep kind of capability in emerging technology.

26:40 So Steve mentioned artificial intelligence data. There's digital innovation. You can see in the center of that wheel on the right there. But there's also some greenfield kind of white space that we can buy into or build into, and that's a lot of what me and my team are looking at is how do we get brilliant boutique businesses that can give us that extra capability such as cybersecurity, machine learning. And all of these things in the center there are actually defining the c suite agenda today. All of our clients in the boardrooms and the executive rooms are dealing with these emerging technologies and and need to understand how to use them to to perform their day to day, but also to beat their competition. So our strategy is to build out in those in those spaces so that we can create breakthrough performances with our clients, and that then influences all of the strategic advice that we give. So whether or not we're doing a corporate strategy or market research or doing some m and a work with our clients, all of them have digital data, data, need to leverage innovation, and increasingly, and this is why we did an acquisition in this in this space, we'll need to use artificial intelligence if they're gonna win against competition.

27:53 So that's from a capability point of view how we're thinking about it. Around that, you can see the industries. Now we have, you know, a lot of clients and and really good revenue streams in several industries. So we are we are an industry agnostic firm. But as you saw from the previous slide, we are stronger in some industries revenue wise than we are in others, but that therein lies the opportunity. We can either hire in partners who have black books in those industries that we're not that deep in, who can then help, you know, open that up, or we can make strategic acquisitions to open up new markets for us. And actually, Insignium, who joined us in December of last year, is a great case in point in that they have very strong client sets in healthcare, pharmaceutical, and biotechnology. We have done some work in those spaces previously, but now we have real access to, you know, the world's top 10 farmers who they work with as an example. And we can now work together and put a lot of what we do into their clients to add more value, and then a lot of what they do can come into our clients to add more value. So that's really where the cross sell plays out and where that £26,000,000 you saw in the previous slide plays out as well. So that really is a one plus one equals three scenario.

29:05 And then what's written rather than shown

29:09 illustratively here is is the geography. So Steve mentioned £1 to spend in Asia is £2 to spend in Europe, and then there's £4 to spend in The US in consulting. Our revenue profile kind of matches that, albeit not too much in Asia at the moment, but certainly our inorganic pipeline matches that. So, you know, it's no accident that our last three acquisitions have been US headquartered firms. The reason being that is the biggest market. But also, also, we have a very strong pipeline in in Europe. And if you think about the DACH region, that's actually the second biggest geography behind The US in of its own rights. So that is an area where, you know, we have a strong pipeline, and and we will be looking to see if we can actually get into that region through a strategic acquisition.

29:56 And on the left, you can see why, you know, AIML by 2030 is predicted to be $1,800,000,000,000 of spend, you know, three three quarters of a trillion in data, nearly 500,000,000,000 in cybersecurity. Security. We don't need very much of a decimal point of that spend to be doing very well. And obviously, if we can get good market share in these spaces, not and and also the the industries that I've mentioned and the geographies, that is how we're going to get our macro ambition, you know, of top 10. And the micro ambition, well, it's still a great ambition of getting a unicorn in the next three to five years. So that is how we're gonna be playing that out. How we do that is across our four pillars. So just to remind you what the four pillars are, and then I'll give you some detail.

30:42 There's four ways to grow consultancy. Three of them are are organic, and then there's one that's inorganic. So the purple ones there are the organic levers or pillars as we call them. The first one, stretch your existing partners. So you can increase the amount of revenue each partner can deliver. The second is hiring new partners. You you know, Steve mentioned the numbers game and and the success rate that we've had there. But when when they are successful, our experiences, they are incredibly successful. And and and, of course, it's a lever that we're still gonna be using. The third is promotion from within, you know, from our principal team, which is the one below our partner level. And then, obviously, there's acquisition, which is the inorganic. We are constantly looking at all of these pillars at all times, and we're doing what we can to maximize each pillar because that is where the growth has come from and and will continue to.

31:34 So stretching partners. You know, last year, we had £3,900,000 per partner. That's up from 3.6 the previous year and up from, I think, 2.2, as Steve said, at at at the time of IPO. So we've seen really good traction there. And if you think about it, as we build capability and buy capability, that actually gives our partners more things to talk to their clients about, more ways to add value by putting them together with what we do in other spaces, and therefore, the revenue follows out the back of that. So, you know, if if we can still if we can keep buying brilliant boutique businesses that do stuff that we don't do today, that that adds to what we do do, and that adds to what we can deliver to our clients. And the other point tonight in this space is we have raised revenue targets as well.

32:21 So we are, you know, constantly working with our partners to get them to increase that metric. Hiring partners, you know, fifty fifty success rate, but like I said, very successful when they are successful. We've onboarded one new partner already in 2024. We've got a brilliant pipeline of potential partners that we're talking through. And, indeed, we've had another partner signed up who will be, you know, really bolstering up our financial services business, and they start in August 2024, which we're very excited about.

32:54 Promotion, you know, this we love this one because this is kind of promoting people who've been with us for a while. They understand that culture. They understand how we work. They understand how we you know, the quality expectations, how we engage with clients. Because of that, they are, you know, very successful when they do get promoted. And we actually give them kind of six to nine month runway, if you like, from telling them they're promoted to actually, you know, formally promoting them, wherein wherein that that period they are a partner in all but, you know, accountability, I guess, for for revenue. They'll there's still a partner accountable for that revenue, but they have to sit around the partner table and own those clients as if they were a partner. And that means when the day comes when they officially are, then they hit the ground running, which which is something that we'll keep doing.

33:43 And we're looking to promote one to three principals each year to to feed this pillar, if you like. And the great news is that if you look at the tenure of the principal team, the average tenure with ELIXIA or or the companies that that joined us if they're sitting within, you know, one of the acquisitions is four years. And why this is quite important is if you look at our current partner team and the promotions that are within the current partner team, so who were principals before, they had about three point seven to four years at principal as an average. So the the fact that our entire principal team is at that kind of tenure, that means we've got a very, mature pipeline of principals to to kind of feed into this pillar. And then acquisitions, I'll I'll come to it again in a bit, but we're doing one or two acquisitions annually.

34:35 It's it's the programmatic way of kind of approaching this that we do with the aim to increase enterprise value by 10 to 20%. So So you could you could do tons of small deals in a year, but the problem with the small deal is it takes about as much time as a medium to large deal, and actually the impact on shareholder value might be suboptimal. So this this is kind of renowned to be the, most successful form of m and a strategy, in the marketplace and one that we've adopted and and has been very successful so far. And if we keep, you know, building on all these pillars, driving these pillars, growing these pillars, then we will increase the power and the value of the cross sell. Now that will lead to more gold clients, which are over a million pound of revenue as we think about them. It'll lead lead to longer and stronger client relationships.

35:24 It'll allow us to get more of that market share that Steve was talking about. And ultimately, it will help us build on our vision of being the best digital data and AI consultants in the world, and that is how we're positioning it. Just to tell you a bit of the kind of foundations of how we're doing it if you like. Previously, we've been building out a house of brands, but now we're thinking about it more as a branded house. And the reason we're doing that is our ELIXIA is the the name ELIXIA in the marketplace, so it's got a lot of brand equity now. And actually, as we're getting more boutique businesses come join us, if we think about having a team where we've got some data from ILAP, we've got some AI from response, we've got some change from insignia, and then we've got some consulting from ELIXIR. You know, don't wanna be going as a four logo team. It would just confuse the client.

36:18 So more and more now, we are having the ELIXIA brand lead, such as ELIXIA digital, you know, then and coast to our forces eighteen to twenty four months months ago, and that's been very successful. But we will do it on a case by case basis. So as businesses do come in, if they have a particular brand equity in what they do, then it makes sense that we would leave that brand name, then we will do that. But we will be looking at each on a case by case basis. How we think ourselves, from a market positioning point of view, client positioning, we've actually run a trial where we've aligned ourselves, vertically by industry. We trialed that in insurance where we have one of our partners own the insurance vertical and treat it as a business, you know, within the guide rails of the budget that we set, but to make the decisions and to grow that industry as a business. And and and he he and they have done amazingly well.

37:15 Yeah. This was a nearly £6,000,000 business at IPO, and it's it's tripled since then. So it's it was 18,000,000, give or take, last year. That has given us the confidence now to align ourselves more broadly. We have four of our best salespeople now owning one of our big, mature industries, so insurance, financial services, energy, manufacturing, and we've also doubled them with another less mature industry if you like or even two in some case so that we are growing all of our industries in that way. It may be, and it hopefully will be, a point where, you know, the revenues within those other industries, if you like, rather than the the top four become such that they need someone owning that individually so then we can break out and and do that.

38:05 So we're thinking about the world in terms of an industry p and l with a secondary overlaying capability, so whether that be digital data, artificial intelligence. But I think, importantly, we're not thinking about it in terms of a geographic p and l. So the reason we don't want to do that is, you know, in a lot of the big firms because I think about it from a drop fee p and l, a client gets, you know, the available local team who might not be the a team from a global perspective. And we're very clear that we want to put our best talent in the right places regardless of geographic boundaries. So that is something that we'll continue to do. And then finally, incentivization is a big part of of making this all work as well. We continue to use equity and options to incentivize our talent. The better they do the better that they perform, the better they do from an options and shares point of view.

39:00 And also the way that I structure our acquisitions is also a mix of cash and equity. And the reason is we want the leaders and the founders of the businesses joining us to be as hungry, if you like, to grow enterprise value as we are by having a significant equity stake. That has been working very well since IPO as well. Thinking about how we've done against the market, Steve mentioned that the consulting industry grow has grown year on year, and that that is a fact. You know, slightly more in some years, slightly less in others. You can see just since 2019 here, the orange line being the market and the line above that being ELIXIA. Every year, we have grown market share. So, yeah, if I think about it in that period, we've grown 37%.

39:51 If I go all way back to 2012, we've grown 31% revenue CAGR. The market's done 12%. You can see last year, we were at 20% versus the market at 6%. That percent from Lixi point of view is often dependent on when an acquisition joins us. So, you know, 20% there reflects in Sydney, and for example, joining us in December. So there was one month of Sydney revenue there. Had they come in in March, April, May, that 20% would be 30% or something larger, and we'll see, you know, the the other the other eleven months worth of that revenue will will come into FY '24. So that diversification is working and getting market share each each year, you know, versus the market in the top and top and bottom right there. You You know, know, Steve mentioned that many big names are reducing headcount. We're growing. We're increasing headcount.

40:44 Revenue has been going at 6% last year as an example. We're we're more than triple that. Inorganic growth and less than half of firms said they're looking at acquisitions proactively. We've made it very clear that's the central pillar of our growth, and we will continue to do that in that programmatic way. And I will come back to that after Nick takes us through our financials. Thanks, Graham. So it was a very strong set of financial results for f y twenty three. Revenue increased by twenty percent to £85,900,000. Gross profit was up 26%. Adjusted EBITDA was up 24%, and our adjusted EBITDA margin was 30%.

41:30 And one of the reasons we were able to maintain our level of profitability and, in fact, grow it slightly ahead of revenue growth is that we for the first time, we have now got we got all of our subsidiary companies operating at the same level of profitability as the core consulting business. So ELIXA digital ELIXA technology that we acquired in previous years with lower levels of EBITDA margin than the consulting business, last year, those were now operating at the same level. Our profit before tax increased by 40%, and that includes the impact of a £2,000,000 net m and a credit for f y twenty three deferred consideration for ILAP that we didn't pay. It's worth mentioning that we didn't pay it because they didn't meet very stretching targets. ILAP grew in revenue terms and grew in profitability, as I just mentioned.

42:20 But we do have very stretching targets for deferred consideration to make sure we're getting value for our shareholders, and that's really our model working. And that that was a question that that that Damian asked. Our our adjusted diluted EPS increased by 22%. We work hard to minimize dilution. We we did it in the early part of last year, pay the first tranche of the ILAP deferred consideration, and we did that through a structure we use where we pay the sellers cash and they buy shares from our EBT for their deferred consideration rather than just issuing new shares. So whenever we're not in a closed period and we're able to, use that EBT structure, we always try you know, every time we are making a decision, we think about the impact of dilution on on all shareholders, and we're working very hard to minimize that for the benefit of of all shareholders.

43:11 Free cash flow increased by 11% to 16,100,000. I've got a slide to take you through that. And our dividend per share increased by 37% to 14.8p. We paid our interim dividend of 5.3p in February, and our final dividend of 9.5p, we payable in August. I think we had a question from Ben about, dividend in future years, and we do expect that dividend to increase proportionally as as revenue and EBITDA increases in future years. Just this slide, really, just to mention that put f y twenty three in in context. You know? Yes. We had very good revenue growth and maintenance of profitability, but that's really continuation of the trend we've had in every year since IPO. And that's what we wanted to draw out here that, you know, the FY twenty three results are not a one off set of strong financial results.

44:03 They are the continuation of the trend you see in that graph there at the bottom right of this slide that we've had in in each year since two thousand nine nineteen. Moving on to, the progression of our of our revenue. These slides, this one and the following slide give you some transparency around how our revenue has grown year on year, and we've we've done this format in previous years. So revenue grew by 20% overall. Of of that 15% was our underlying organic growth in revenue. And organic revenue growth is was really split very evenly between existing client growth of 11,500,000 and new client growth of 10,400,000. And that really shows our our model working where we have a concept of double count and single count partners. Some partners are focused on growing existing clients and and and increasing the range of services we sell to those clients. Other partners are focused on opening up new clients for the for the group, and, and that's what gives us that nice balance of of growth between existing and and new clients.

45:04 That that growth was partially offset by end of life projects, which is the negative 11,500,000 you see on this on the in the bridge there. And that that included the impact of one very large five year long change program successfully coming coming to an end. And then the the impact from acquisitions, the 5,400,000 growth, a a relatively small, contribution in f y twenty three. And as as Graham said, we've got the eleven month benefit of Insignium coming through in f y twenty four because there's only one month in f y twenty three. This is the same view from a from a partner perspective. So how how do I how did our partner partner revenue grow? And we Steve touched on it earlier. I mean, we're pleased that the overall revenue per partner increased from 3,600,000 in f y twenty two to 3,900,000 in f y twenty three.

45:54 And then going from left to right, there's a reduction in revenue of 7.6 for partners that exited the firm, and and those exited partners were partners that were not performing at the level of revenue, and and other behaviors that we expect in our firm. Established partners increased from 4,100,000 revenue per partner to 4,800,000 revenue per partner in f y twenty three. We're very pleased with that 17% increase in the year, and and that really and that does reflect the fact that our partners have a wider range of services to sellers. We've built out our service offering, including through the additional capabilities from the acquisitions. Our promoted partners added 7,200,000 of revenue in the year. Our promoted partners performed very strongly as we as we've said and 2,900,000 revenue per partner in their first year as partners.

46:42 And then we added 4,100,000 from our hired partners, 1,400,000 revenue per partner, and it takes some time. You know, that's not uncommon in the first year, and those partners will then get fully up to speed in the in the second year. And then the 5,400,000 addition for acquisitions, as I mentioned on the previous slide. Moving on to cash. The business continues to be very highly cash generative. Unlike many other businesses, see our EBITDA less corporation tax really does turn to cash. So we generated 16,800,000 of operating cash flow in the year, which we deployed primarily on acquisitions. So 15,800,000 outflow of acquisitions, which was the initial consideration for Responsum and Insignium. And then the f y twenty two deferred consideration for ILAT, which I which I just spoke about, with with share consideration, but we did that through using cash and EBT shares to minimize any or or avoid dilution.

47:40 A relatively small impact from net EBT and shareholder loan transactions, net inflow of 2.6, and then we paid our cash dividend last year of 4,900,000, and and the cash number is 7,000,000 for to be paid in cash terms in f y twenty four. But we closed the year with 18,100,000 of net cash and no no debt, so we continue to have a very strong cash position to deploy for both covering dividend the increased dividend, but also future m and a. And from a balance sheet perspective, the balance sheet continues to be very strong. If I just pull out a a couple of the main movements in here, intangible assets increased by 17,000,000, which is the increase due to goodwill intangibles on the acquisitions of insignia and Responsum.

48:27 Noncurrent tangible assets increased by 5,000,000, which are loans to new partners to acquire equity and deferred tax assets, and our trade and other receivables increased by 5,500,000. We we continue to have no issues with our our trade debt collectability. We've collected all our twenty twenty three debtors. We have a blue chip client base. The number grew because of the acquisition of Insignium, grow business growth, and and a couple of clients that where their debtors were collected in January rather than December, but we continue to have no no issues with that with our debtors. And then with it, I think I saw a question, I think, from Damien about how much do we still have on the balance sheet for deferred consideration. So within the trade and other bill trade and other liabilities line there, there's 7,400,000 remaining for deferred consideration.

49:14 And now I'll hand back to Graham for the business review. Thank you, Nick. So to give you a quick overview of our clients, we had a 12% increase in gold clients. I said earlier that's £1,000,000 plus, which we're very happy with. I think someone asked the question. I think we have 17 in total from last year. Got lots of great awards, which we're very proud at proud about, marketing is really coming into its own now as well. You know, we've invested in this actually since day one, and we're getting a a real pull from the market now rather than, you know, a push uphill the whole time. We're actually getting big blue blue chip companies coming through the websites and engaging engaging us for work. You can see some of the brands that that joined us from a client client portfolio perspective on the left at the bottom.

50:07 And on the right, I just wanted to give you a a view of the diversification of clients. Clients. So they're our top 10 clients. On average, they used three or more capabilities from that wheel I showed you earlier. Our top 10 clients now span seven industries, which is fantastic. Just shows the industry agnostic view that that I mentioned. Location wise, mix of The UK, Europe, US, you know, if we went further past number 10, you'd you'd add in South Africa as well. And you can see in the middle that we're doing, you know, different things with each of them. Length of relationship's a big one for me. You know, you you always want to see some some high numbers in there because that shows that you've been working with them and adding value for a long time, but equally important is a couple of ones because that shows that you're adding, you know, big clients into your pipeline at each year.

50:58 To give you a quick view of the the two acquisitions from last year. So Insignium joined us in December. They really pioneered organizational transformation. So, you know, in a very simplistic way, if you think about a large transformation program, they work with the executive team to kind of build the hearts and minds and the the kind of commitments to each other to make that transformation work. They also help come up with the road map, you know, for success. And off the back of the work they do before joining ELIXIA, you know, a lot of that execution work would go to the big four or to MBB to actually execute and carry out. The beauty now is that we can give them an end to end offering now and actually do a lot of that transformation alongside in Sydney and doing what they do along the top. Brilliant partner team.

51:46 There's a there's a case study in the middle there just to show, you know, this was working with a a new executive team in a leading global food company across 200 of their team underneath them as well where they wanted to make them more highly performing. And through, you know, the the brilliant work they do, psychometric portraits, upskilling, empowerment of leadership, coaching, The CFO at the end said that the project generated a return on investment of 10 to $20,000,000, which is which is great feedback. And just at the bottom there, just a couple of numbers. We bought Insignium last year with f y twenty three revenues of £11,000,000. You know, as we sit here today, they've contracted for f y twenty four, nearly 10,000,000 already. And to build on the EBITDA point that Nick said, we bought them at 17% EBITDA year to date. They're already at 24, which we're very proud at, and and we'll continue to work with our acquisitions on that point.

52:46 Responsium, there was a couple of questions. I think Peter asked about AI being a big topic. Absolutely. I saw you showed you the numbers involved earlier. I did go into a lot of detail in the last meeting about what response do, but just to give you an idea of recent a project, one of the world's biggest insurers asked us if we could help their underwriting team basically cut out highly manual time consuming tasks so they can actually spend more on value. So we used Responsum, which is our AI capability and the services around that. We actually built a generative AI chatbot for them, which is available within the client's environment, which is an important aspect of response. It it allows, you know, plugging into enterprise data and not outside, if you like, into, you know, the open Internet of chat GPT four or whatever it might be. So it can be protect very protected.

53:44 And we achieved 80% plus accuracy in just three weeks of tuning and testing. So the underwriting team were raving about the tool and the results. And we actually reduced the number of manual time consuming tasks by about 90%. So in terms of that 1,800,000,000,000 spend in 2030, we're hoping that the more of this we do, the more we scale, the more we build, the more of that market share we can actually get into the business. From an inorganic point of view, I've mentioned some of this, but just to remind you, you know, the programmatic approach, so once to a year, 10 to 20% to be EV. We want to be geographically additive, industry additive, and capability. So boardroom issues, that's the three lenses we look at.

54:30 Got a very strong pipeline across these those three lenses. It's gotta be high quality service. You know, that's a massive thing for ELIXIA and our clients, so we don't want them to dilute our quality bar. And, you know, the way that we structure these deals is such that they come in, like I said, with equity as well, which is good for all shareholders. And you you can can see see some of the the numbers, the pipeline on the right since IPO. We've already stopped kind of 20 to 30 companies at various levels of discussion. That that's important because it's a you know, the numbers in the pipeline get smaller, the more progressed you get. You can see we've I've I've personally met nearly 200 companies, and we've got into due diligence of 11 of them. We've done six deals. And I think just one final point, that's important because we've pulled out of due diligence after signing heads of terms within two hours before, and we've also pulled out one day before signing the actual shareholder purchase agreement, which would have, closed the deal.

55:31 So we're not afraid to pull out Indeedee at any point when something happens or we find something that is not right for our shareholders, and we will continue to do that. But suffice to say, just in summary, very happy with with with the strategy as a whole and very happy with the pipeline going forward. And I'll pass back to Steve. Get on to the right slide. Okay. So just in summary then, these sort of five areas give you a sense of how we see the business well okay. These five areas are the the how we see the business in summary. 3037% CAGR and fantastic margins.

56:18 We've spoken about the partner team, very motivated, very incentivized revenue per to produce revenue per partner. By the way, just on that, every partner has a p and l right the way down to EBITDA that you can reconcile to the the published and audited financial statements. If you cross cost that spreadsheet, it actually adds up. So each partner knows exactly their contribution to our actual EBITDA number in the published accounts, and that's how they get rewarded. That's how they get the equity, and that's why it's a 100% linked with shareholder value and and and shareholder return. So very, very important part of our strategy. Obviously, our inorganic growth growth strategy is is is import sorry. Our organic growth strategy is important. Graham has spoken about the industry aligned partner industry alignment.

57:08 That's another resilience building thing that we put into the business. And, obviously, Graham has mentioned these acquisitions and the 26,000,000 number of cross sell. What you'll find is there's a I think there's a question here from, I forget who it was. How do I think Joshua asked a question on how do we get newly company acquired companies, to cross sell existing clients that they don't know. The one thing that is fantastic about our model is if you take Insignium, we bring in the the the three or four partners that are part of that team. They come to our partner, they see all our partners talking through their clients and their propositions. And they and what's actually really good about all of that is they know that we all have the same equity participation, and we all have built up our businesses, our own p and l's to a point that which we wouldn't survive if we didn't have that p and l there. So there there's a lot of trust and respect around the table, and people are very quick to introduce and cross share opportunities because they know it's value creating and that the the the competence of the people around the table is exceptional.

58:18 I've worked in three consulting businesses, and and none of them have the same collaboration and teamwork that we've got here. And I think it's got a lot to do with the reward structure we have in place. There's no dog eat dog culture. Everyone wants to help each other because it benefits everybody. The the maximum return we can make is in the equity, and and that's really important. And I'll come back to the equity because there is a question of what are we trying to do to get ourselves more fairly valued. Now I'll come back to that, if I may. Just to close out on this, we're obviously very highly rated by our clients, but let me just talk about outlook because you're probably wondering, we've got a couple of minutes left, actually. Let me just go to the next slide and talk about outlook. So q one has been a fantastic quarter. We've had a 24% revenue growth in q one.

59:03 All three months were record revenue months, and we are forecasting in the range of 104 to 110,000,000, which is a and and EBITDA is in the range of 27 to 29. Now the reason the EBITDA number is slightly down is because we've acquired Insignium, and they were down at 17 when we acquired them, I think, and we're pulling them up to us. And and by the time we get towards the end of the year, we hope to have them right up at the 30% margin. And, but along the path, we'll have a little bit of a drag on our EBITDA, but it's nothing fundamental in the business to worry about. It's just a a process of bringing, acquired businesses up to speed. Just on the question here, because I know we've got only a few minutes left, on the question of, what are we doing? It's a tough market.

59:49 We're we're great believers in, you know, we can control three things in our business. We control revenue, we control costs, and therefore profitability, and we can provide we can control quality of service to our clients. And all three of those, we're smashing out the park. Right? What we can't control is market rating. Right? And market rating is a is a combination of investor sentiment and capital flows that are really out of our control. What we will do is we will continue to deliver. We will grow this company at our stated in accordance with our stated objectives as we did when we came on to the the the public markets back in in 2020. We've done exactly what we said we would do. We've never missed a number. We've always forecast the numbers and hit them. In fact, oftentimes, we upgrade them. So, you know, we will continue to do that, and when the market corrects, we will get the correction. I'm I'm absolutely certain. Quality money money flows to quality or quality attracts talent, you know, or money money attracts talent is is the same kind of principle, and we we follow that principle in our business throughout. So my closing comments, because I now know we're one minute over, is if you just think about our business, at IPO, we raised £20,000,000.

1:01:01 We said we'd grow our company between 2530%. We've grown at 37%. We still have £18,000,000, call it £20,000,000 in our bank, and we've made three acquisitions, and we've grown 35% CAGR or 37% CAGR. I forget the exact number. So, you know, we're proven management team. In each position in leadership, I've got a, alternative. Graham is if something happened to me, Graham could easily step in. He's helped me run this company from the very beginning. In Nick's position, we've got two candidates. In my COO's position, we've got two candidates. So this is a very resilient leadership team, and, we built in a ton of diversification. And and and, candidly, it's a we think it's a very good investment proposition for investors. And thank you for your time. I know there's a few other questions I can't get to because I'm is over. So thank you.

1:01:50 Steven, I was just gonna say, if there is anything, feel free just to just to take a couple of moments just in case there's anything there that you would like to just And just to say really, Stephen, that any questions that we don't get through, we can always add a response and publish these back post today's meeting. But just have a just a quick scour through just if you if you may. And I'd just like to remind investors on today's call that a recording of today's presentation along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard. Thank you to all you all for your presentation as well this afternoon. So if there is anything there, Steven, feel free to to just take your time, read those out. And if not, I'll redirect investors to give you feedback. I think I think we've covered. You have. Perfect.

1:02:35 Lovely. Thank you very much again to you all. Ladies and gentlemen, if I could ask you please not to close this session as we'll now automatically redirect you for the opportunity for you to provide your feedback in order the company can better understand your views and expectations. This may take a few months to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Vixadia International PLC, we'd like to thank you for attending today's presentation. I wish you all a very good afternoon.