Foresight Group Holdings (LSE:FSG) — Full Year Results

0:00 Good morning, and welcome to the FORESIGHT GROUP HOLDINGS LIMITED Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just simply type in your questions and press send. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Gary Fraser. Good morning to you. Good morning. Thank you, Alex. Good morning, everybody. I'm here today to present FORESIGHT's annual results and to take any questions at the end of the meeting. So let's kick straight off into the highlights. So a very good year for FORESIGHT over the last twelve months to March 2026. In terms of business growth, we had double digit percentage growth in core EBITDA pre SBP, which was up 10% adjusted earnings per share, which was up 13% and also dividends per share for those investors that hold shares.

1:01 I'm very keen on the dividend, 12%. It's a very attractive yield there. In other key highlights, we sold FORESIGHT Capital Management post year end, but importantly, you know, it was included in the account as a discontinued operation. That really enables FORESIGHT to focus on its core private market, real assets and private equity divisions. It's also important because FORESIGHT GROUP HOLDINGS GROUP LIMITED, GROUP HOLDINGS And really to take it to the next level, I felt it needed a bigger platform, solely concentrating on the list of markets, which wasn't one of FORESIGHT's key areas of growth.

1:52 That's expected to complete in q three twenty twenty six, Although, on, you know, regulatory approvals, could be a little bit earlier than that. So we'll just have to wait and see how things go over the summer, but I'm anticipating an early close on that one and the funds to flow through there for all. So in terms of the overview, my priorities is really to take the market opportunities that we have at the moment in private markets into scalable, high profitable growth and high quality growth going forward. There's three or four key areas there. One, growth in distribution. So we're extending profitable growth through retail and institutional channels.

2:38 We already have a large retail sales team of about between fifty and sixty people in The UK, so very large indeed. And we're developing that institutional channel through a combination of internal resource, which we've increased from three to eight people over the last twelve months, but also we use placement agents as well in key geographies around the world, and we continue to grow that part of the business. So we'd expect that to have a material impact on institutional fundraising over the next twelve plus months. In terms of investing beyond capital, that's really about driving investment excellence across asset ownership, stewardship, and then flowing it all the way through to the exit, so full life cycle of excellence throughout the investment process.

3:24 Operational maturity, where we scale through a focused model, we include new products and leadership depth to drive the business going forward. Finally, operational leverage, which is extremely important, converting AUM into margin expansion, cash generation, and returns. Now a lot of that margin expansion will come through growing the real assets part of the business where, you know, effectively, whether we're investing in a £50,000,000 solar park or a £500,000,000 solar park, the actual amount of operational resource in terms of manpower required is pretty much identical, and that really then drives operational leverage through to the bottom line. This is all underpinned by FORESIGHT's investment case of high quality earnings, specialist capabilities, market opportunity and diversified product range.

4:20 FORESIGHT is in effect a specialist private markets investment manager. We've got 13,000,000,000 of AUM diversified across investor channels, real asset themes and private equity strategy. As you can see there, a 100% of it is long duration capital. Why is that important? Well, it's important because it really drives high quality earnings, high quality revenues, and effectively means that at the start of every year, we know pretty much where 85 to 90% of our revenues are going to be, which gives a lot of resilience in terms of the operating model that we work. In terms of AUM by investor channel, approximately 72% is institutional and 28% is retail.

5:06 And in terms of AUM by theme, you can see the largest part there is energy transition, but also transport, other real assets, and growth PE are obviously very big areas for us as well. And that's those are some of the key areas that we expect to drive the business and fundraising going forward. So in terms of market opportunities across FORESIGHT's key investment divisions, real assets, I mean, the opportunity is enormous across the, you know, the the global real asset space. But particularly in FORESIGHT's areas of expertise, we see that opportunity is $296,000,000,000 and in private equity, £65,000,000,000, you know, effectively addressing the SME lending gap in The UK.

5:55 It's important to say within that lending gap in The UK for SMEs, FORESIGHT is one off, if not the largest regional SME player. You know, we're there, we're delivering, you know, originating, I should say, 3,000 plus new deals a year to consider for investment. So having, you know, over a dozen offices around The UK really enables us to stimulate that origination process and gives us the choice of some of the best deals going in terms of small SME businesses. On the real asset side within that opportunity, that very large opportunity, we've got market tailwinds that are helping us. Energy transition and security has become a very big thing following the Ukraine war a number of years ago.

6:42 Digital infrastructure adjacency is a very big area that we're looking to invest in. Lower clean technology costs has clearly been something that has been a focus for a number of years now. And adaptation and resilience spending is increasing year on year on year. So within that opportunity, what are our fundraising investment solutions? So on the institutional side, for real assets, have Feet two, a FORESIGHT Energy Infrastructure Partners two, which is European energy transition. We have ARETH in Australia, which is Australian renewables. And we also have FORESIGHT Natural Capital, which is effectively forestry, land regeneration, afforestation, carbon credits. So a number of strategies there within the real asset space.

7:33 Within the retail space specifically, we have business relief. So we have our inheritance tax solution, our accelerated inheritance tax, and also our lending to wholesale lenders within that space. And we have our two flagship VCTs, FORESIGHT Enterprise and FORESIGHT VCT, which raised £80,000,000 within about two weeks earlier this year. So again, the demand for FORESIGHT products is very high. Within that retail space, we took about £630,000,000 in total, which was a record year compared to prior years. So again, we're seeing high demand in that space. Within the institutional space, on the real asset side more generally, we've got 16 active funds, and we're gradually increasing the number of vintages there. As if as an example, our first Northwest Fund was replaced by our second Northwest Fund, which is now being replaced by our third Northwest Fund. And each time, we're raising more money for those funds. So the strategy is in effect to build upon the funds that we already have, to grow them gradually, to invest, to raise more, to invest more, to create more jobs, to create more economic opportunity within the regions around The UK.

8:54 In terms of fundraising, just leading on from that last slide, FITED too has raised €595,000,000 to date out of total target of 1,250,000,000. Now it's got about just about a year left to June 2027, and we're still confident of raising that £650,000,000. Now it's never linear when you're fundraising. As you get closer and closer to a final close of a fund, the the monies tend to come in at a more rapid rate. So we're expecting a similar outcome for fee two as we saw in fee one. Within regional private equity, we raised 95,000,000 across our regional funds last year, and we launched our sixteenth active fund, which I mentioned a little bit earlier, a third vintage of our Northwest Fund, which again has proven to be a very successful strategy.

9:44 In terms of retail, we're number one in terms of uncoated business relief funding. And as I said, 630,000,000 raised across business relief from our flagship VCTs. Fiscal drag and IHT policy changes have continued to support tax efficient demand, and we expect that to continue to be the case under the existing and any future governments. You can see in the graph at the bottom of the page, the total business relief gross inflows have continued to increase year on year on year with a twenty four percent four year CAGR, which is exceptional in the current market environment. And we expect to see that type of increase going further and further over the next few years. Certainly, I'd expect the six thirty million dollars to increase to $700,000,000 and beyond over the next few years. And certainly, in our forecast out term period where we expect to double core EBITDA to £118,000,000 by 2029, I'd expect to see step changes in our retail side as well as the institutional side over that period.

10:51 In terms of deployment, a good year in terms of deployment where we increased by 96%, approximately flat on the private equity side, but a near doubling in terms of the the real asset side. So as I said, the key for us in terms of deployment is actually right at the very start of the process. It's origination. If we can originate enough deals, it gives us the choice of the best deals, the highest quality deals. And so origination is key to being able to deploy not only actively, but in terms of the best quality. And so origination continues to be a key flowing through to doing the best deals. And we've seen some of that in terms of the returns that we've generated both in terms of private equity sales in The UK, but also real asset sales in Australia over the last twelve plus months.

11:47 Talking of realizations, we've seen, as I said, in Australia, some very disciplined exits crystallizing performance. We've got a three plus year realization program to meet redemptions within DIT and EIT. Now that's driven by a structural shift in the Australian LP market where a number of the very large LPs, 200,000,000,000,300,000,000,000 Aussie dollars, now have their own infrastructure teams. So you've got a bit of a bifurcation in the market where the really large have their own teams and won't invest a 100,000,000,200,000,000, specifically in funds, but are looking to do direct investment into assets. Now that is a obviously, it's a threat and an opportunity for that part of the market. The threat is obviously you get these redemptions and that reduces the size of fund, but the opportunity is that some of these investments that we're selling, we can capture some of the remaining asset and turn it into a separate managed account with some of these bigger players. And that's exactly what we're doing to retain those assets under FORESIGHT's management.

12:55 And a good example of that is the 30% that we retained in terms of the stake in Kinetic, which some people might know slightly better as the go ahead bus company in The UK. And we've managed to retain that 30% stake, is about 600,000,000 Australian dollars. Those realizations collectively generated performance fees of about £6,000,000 sterling during the year, so very successful in that regard. Within the Australian market more generally, there's still a huge opportunity in terms of infrastructure, renewable energy more generally. 75% of Australia's coal fired power stations are beyond their design life. In terms of the target for grid renewable electricity generation, we need to get to, in Australia, 82% by 2030, and currently, we're only at 46%.

13:47 So there's still a lot to go at in terms of on grid renewable electricity generation construction over the next four years, and we're actively targeting raising money to invest in that area. In terms of value capture, I'm sorry. We we we jumped ahead there. You know, this realizes strong DIT and EIT performance versus a top target IRR. That gives us a high degree of confidence in being able to raise more money for ARRIF, which is our remaining Australian fund over the next couple of years and certainly in the outturn period to FY 2029. Next slide. So financial highlights.

14:33 I'll be brief for this one because it's pretty self explanatory, but AUM plus 8% to 13,000,000,000 and FUM plus 7% to 9,000,000,000. Revenues up to almost 165,000,000, so very attractive increase in the year at 11%. Recurring revenue down from 86% to 82%, but probably worth saying that actual recurring revenue was up 6% in the year to about 135,000,000. So the reality is that as a percentage, it dropped, but overall, as a metric, it actually increased in terms of pounds. Now the 82% as opposed to the 86% was it as a result of a particularly good performance year, mentioned it just a little bit earlier in terms of the Australian assets. So, you know, that was a one off. I expect us to go back towards the between 8590% in terms of recurring annual revenue next year.

15:30 And therefore, as I say, performance fees tipped up nicely. It's nice to get those performance fees, but I expect us to hit our normal trend of between 8590% next year. In terms of core EBITDA pre SVP, very good year at $68,600,000 10% increase and dividend per share up to 27.1p plus 12% and the final dividend within that 27.1 is 19p and that will be paid in the first week of October. So in terms of the AUM movements during the period, effectively, the key to the AUM movement were the gross fundraising and gross outflows, which effectively netted off at just over 640,000,000.

16:20 So, you know, that that was a great year, and that was principally derived from the retail side. That took us up from 12,000,000,000 to 12,700,000,000. And then we had some FX movements, effectively a reversal of negative FX movements in the previous few years. And so we've managed to catch a bit of that backup, if you like, but there's still a ways to go in terms of, know, the negative FX movement that we've seen since IPO. So in terms of financial summary, some of which we've covered already, Revenue's up 11, recurring revenue, which I've just explained, down four. Core administrative expense is up 8%. So probably worth just talking about expenses for for a couple of minutes here. So effectively, FORESIGHT's largest expense is its people. And so what we're seeing in terms of the overall costs increased by 8% is a combination of wage inflation for the existing staff, but also increases in in number of staff as well. Now across the business, we're always looking at the best way to structure the business more generally, and I would expect to see cost savings over the next twelve months within that regard.

17:39 It just as we become more efficient, not necessarily looking at losing people, but a good example of that would be, you know, we sold the FCM part of the business, and therefore, a number of people will leave FORESIGHT to go to Guinness Global Investors. In terms of core EBITDA pre SBP, as I mentioned earlier, up 10% to 68,600,000, and margin remained consistent at 42%. Really, as I talked about earlier, margin, but the key to driving margin even further is getting that operational gearing flowing through the business. And that will come from principally real assets and increasing the real assets funds, growing those bigger funds, doing those bigger deals with the same number of people so that then drops through to the bottom line.

18:30 Adjusted EPS and DPS up respectively 1312%. So again, it's an attractive set of metrics there in terms of the overall performance of the business. And I'm pleased with the the resilience of the model. You know, that's all underpinned by the number of funds we've had. And as I mentioned earlier, there's a number of tailwinds within both private equity and real assets that we can see pushing the business ahead going forward. So in terms of revenues, can see there during the year, recurring revenues increased from a 128 to a 135,000,000, and other revenues increased from just under 21 to just under 30. It's probably worth saying that, you know, marketing fees there were up 3%, but a number of funds entering the realization fees generated performance strategies generated performance fees. And that's the principal difference.

19:28 You're seeing other performance fees of 11,600,000, arrangement fees of 3.8, and as I mentioned, marketing fees of 14.2. Those marketing fees are up because we delivered more a record year in terms of retail fundraising. And if we continue to generate record years year on year and compound that $6.30 to $707.50 and beyond, you'll see marketing fees increase. In terms of other performance fees, as I mentioned earlier, with 6,000,000 generated from Australia in the year, that's probably a one off in terms of moving from our sort of standard 5 to 6,000,000 performance fees in a year, you know, up to 11, almost 12,000,000. But I certainly think we'll have years when the number of funds generating performance fees will be particularly high, and therefore, we might see that number increase in the future as well.

20:19 But an expectation would be $5.06, 7,000,000 as a standard year. In terms of core costs, you know, single digit core cost growth in the period, as I mentioned, we saw full full time equivalent numbers of staff increase from three ninety three to four one eight. Now some of that cost was around increasing the size of the institutional sales team, which I mentioned a little bit earlier on. We also saw some increases in staff from investing in, you know, tech technology in our IT team, which is you know, overall, I don't see that really as cost. I see that more as an investment. I'm I see us taking that you know, the the people that we've hired there, I see them driving technological change within the business over the next few years.

21:08 And over time, that will limit the rate at which we need to add additional people. So I definitely see an IT transformation with the business over the next few years that will really help in terms of cost consciousness going forward and reduce that cost inflation that we've seen over the last few years. In terms of staff costs, it's split there on the right hand side. What we're seeing there is FY '25, we saw a 59,800,000, wage inflation of three, other costs of 1.8, taking us to 64,600,000. Now, you know, I would say, you know, a lot of the time, you know, core costs are obviously in the rearview mirror. So often I get asked, what are your what's your outlook for cost inflation over the next twelve months? I mean, in terms of cost inflation, I would expect the 8% to drop over the next twelve months.

22:00 Why why so? I think we'll see wage inflation reducing over the next twelve months as a function of the number of people that we, you know, within the business already, but I would expect the average increase in pay rises to be smaller than it has been in prior years. I'd say as we start to see the sort of genesis of some of those technological changes, I'd also expect us to be adding less people to the four eighteen that we already have during the next twelve months. In terms of core EBITDA pre SBP and margin as well, what we've really seen over the last five years since IPO is an almost trebling of core EBITDA from GBP 23,000,000 up to almost GBP 69,000,000, which is a twenty four percent five year CAGR as I touched upon earlier.

22:53 And you can see that incrementally, we've been able to increase margin at the same time, 35%, 37 up to 42 And over that over that period, four it's remained 42 relatively consistently over the period from f y twenty three to '26. As said earlier, what we really need to do is scale the business now in terms of the AUM, FUM. So, you know, we've been $1,213,000,000,000 for a few years now, albeit the mix has changed to higher fee earning retail compared to institutional. What I'd really like to see the business doing is is grasping the the institutional opportunity, pushing ahead with that, driving the business forward to 20,000,000,000. And then I think we'll start to see a breakout in terms of margin expansion.

23:41 Expect us to see us heading towards, you know, up to 43 and a half over the next couple of years, then 45 and pushing 50 if we can drive that AUM up to 20,000,000,000 plus over the next few years. In terms of earnings and dividends per share, again, you can see from both lines very strong track record since IPO, twenty two percent four year adjusted EPS CAGR and 18 for DPS CAGR over the same four year period. As I said earlier, 19p final dividend due to be paid in early October following the 8.1p interim dividend paid in March sorry, in January. So, again, we're starting to see that tick up nicely. I mean, the yield on the shares at 27 p, albeit we've seen a bit of a tick up in share price since we announced our results, but you're seeing that in in between 67% on average when we announced the results. So in terms of the the yield attractiveness of FORESIGHT as a stock, it's also very attractive in addition to, you know, the profitability that we're generating, in addition to the potential capital upside that shares like FORESIGHT have given the resilience of its business model, given the recurring annual revenues, the high quality revenues that we have.

25:04 In terms of capital allocation, talked about the dividend a little bit already, the total dividend per share of 27.1p. You know, we're maintaining the payout ratio of adjusted profit at 60% and have done almost since IPO. I think at IPO, it was 50. Within the first year, we increased it to 60%. That's a sign of confidence not only in terms of the profitability business, but also the cash flows of the business. FORESIGHT is a very cash generative business. We sold FCM during the year and we're open to strategic and opportunistic M and A to accelerate growth. To be fair in terms of strategic and opportunistic M and A, it's worth saying that that really needs to be of significant size. Now given that we're $13,000,000,000 of AUM, we're unlikely to do too many smaller deals within M and A. It needs to be strategic, either adding a new area for growth or geographically strategic for us where we can drive into new markets.

26:03 You know, also, given where, you know, the rating of the share price at the moment in terms of whether it's seven or eight, nine times EBITDA, when you've got private markets, you know, potential M and A private market opportunities trading at mid teens, it makes it really difficult to use, you know, your shares as paper in any transaction. Therefore, a lot of our opportunities that we would consider would be cash only opportunities. So, you know, we're actively looking. We look at, you know, at any point in time, I'm looking at two, three, four m and a opportunities, but we'll only do those if they're strategically important to us. Share buyback being the the final leg of the capital allocation. You know, over the period to FY '26, we bought back £9,600,000 of shares net. Important to say net because we also issued 9,100,000 from the sale of treasury shares during the period. So in effect, we actually bought back 18,700,000, but we issued 9.1.

27:04 That's part of our three year share buyback program to spend up to £50,000,000 in shares. The reason being that if we can buy our own shares at between seven and nine x, we see that as a better way to utilize our excess cash than overpaying for private markets assets that, you know, that where you're effectively taking risk by buying those assets, the risk of integration, the risk that you'll be able to drive growth of those assets. We know all of that's coming within FORESIGHT because we're actively managing the the the business there. And therefore, that's why we're spending up to GBP 50,000,000 in share buybacks over the next three years. And finally, outlook and guidance.

27:51 Reaffirming So the guidance of reaching 180,000,000 core EBITDA pre SBP by FY twenty nine. I should just say there that the sale of FCN will have impacted profitability or forecast profitability during that out turn period. So although it was actually loss making over the last few months, in the out turn period, it had forecast, you know, profits of 1,000,002 million and 4,000,000 over the next three years. So while I'm reaffirming guidance, I'm just making the point that FCM would have been included in that original guidance. The key drivers continue to be the energy transition focused strategies, including Feet two's 1,250,000,000 target, and further RF fundraising that I met in Australia that I mentioned a little bit earlier on.

28:39 Continue to deliver 600,000,000 plus of annual tax efficient product fundraising. Said I'm hoping it'll be 700,000,000 plus building up to close to 800,000,000 over the next few years. 100,000,000 in terms of annual institutional regional private equity fundraising, very confident that we'll continue to be able to achieve that. And also, as the business scales collectively, but principally on the real assets side, as I mentioned earlier, we'll see that margin tick up beyond the 42 that it's been for the last few years. In FY 2029, we expect that to be a realization year in terms of a number of assets through a combination of both real assets and private equity funds across the board, and that will generate strong performance fees, hence the reason that we expect to continue to reach that doubling core EBITDA over the period.

29:29 In terms of current trading, AUM and FUM increased to $13,100,000,000 and $9,200,000,000 respectively. We've made progress on our SMA in Australia with the Kinetic assets. And as I said earlier, we sold the FCM division, and that's expected to complete in a number of weeks, certainly by Q3 twenty twenty six. And finally, we've got a strong five year track record to build upon since IPO. In terms of AUM, we've increased by 1.8 times from GBP 7,200,000,000 up to GBP 13,000,000,000. And perhaps more importantly, the average management fee rate has increased from 1.1 to 1.5%, and that's as a result of the the the sort of altering of the mix from, you know, institutional to retail in terms of how we've been fundraising over that period.

30:27 Recurring revenue has gone up by 2.4 times from 56,000,000 to 135,000,000, so very importantly. And there and we've delivered core EBITDA pre SBP, as I mentioned earlier, as a result of that of three x over the period from 23,000,000 to almost 69,000,000. So over that period, I think, you know, we've we've done exactly what we said we would do during that period. We've delivered the growth. We're pushing ahead in a number of fronts. We've got tailwinds that are really pushing both parts of the business forward at the moment, and that's what gives me confidence in the future of FORESIGHT. That's great, Gary. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the top right corner of your screen. The company take a few moments to review those questions submitted today, I would like to remind you that recording of this presentation, along with a copy of the slides and the published Q and A can be accessed via our dashboard.

31:27 Ben, at this point, if I may now hand back to you to take us through the questions, and I'll pick up from Gary at the end. Thank you. Thank you, Alex, and good morning, everyone, and thank you for your questions that you've submitted. Gary, maybe if we could start with a reporting clarification query, and this is in relation to f y twenty five figures and the comparative f y twenty five figures that were published as part of f y twenty six results being different to those FY twenty five figures published as part of FY twenty five results? Yes. I think it's really straightforward being close to the business on the reason, but I can understand why that would be raised as a question. It's effectively what we've done is because FCM was sold post period end is is a discontinued operation, we've stripped out its all its comparative numbers from FY '25.

32:19 So if you see a difference between what was published in '25 and what's been published as the '25 comparative this year, it's because we stripped out the numbers for FCM, FORESIGHT GROUP HOLDINGS LIMITED, as a result of the post period end sale of that business. Great. Thank you, Gary. The next one is around retail fundraising and how much of this record year in FY '26 was driven by existing advisers versus new distribution relationships. And are there any large institutional mandates in the pipeline to support f y twenty seven ambitions? So you said on the retail side? Correct. Yeah. I mean so in terms of the retail side, you know, a significant proportion of the retail fundraising is from existing advisers, and and that will continue to be the case. So you I hope people would expect me to say we've got real key relationships with all the big advisers already.

33:18 So, you know, it's where you're delivering growth, it's usually through increasing your ability to sell to those existing advisers. Albeit you're picking up, you know, other advisers along the way, so to speak. But, you know, our key advisers would be the ones you would expect. It would be Saint James' Place. It would be Barclays. It would be a number of the The UK you know, covering The UK advisers. So, principally, it will be through existing advisers would be the largest piece. But we're always you know, we're adding salespeople. We're pushing ahead trying to deliver increased retail sales. But a lot of that, as I say, will be through existing advisers. But we are winning new advisory investment all the time, But that takes years to build up, so it's a relatively small proportion.

34:11 Great. Thank you. And in terms of growth areas over the next five years, what do you expect to be the biggest growth areas? Would it be battery storage, renewable infrastructure, natural capital, private equity or other areas? Yeah, I mean, certainly energy transition as opposed to just purely renewable energy, but certainly transition assets, you know, pumped hydro storage, interconnectors between countries, you know, battery storage will form part of that as well. So I think energy transition assets will be will certainly be one of the key growth areas. I think natural capital will be a key growth area as well. Energy resilience, you know, energy security following Ukraine has become, you know, a really big investment theme for a lot of institutional investors as well.

35:03 On the private equity side, I think, you know, we'll we'll continue to see growth within the regional strategy. We're also looking at opportunities in how we can take the FORESIGHT methodology, you know, beyond The UK, beyond Ireland into Europe. You know, so we've got exciting opportunities that we're currently considering there. And if we can break the geographical shackles on private equity side, I think that could be a really exciting strategy for us going forward in terms of expanding into Europe as well. Thank you, Gary. The next one is around the disposal of the public markets business, FCM, and what impact investors can expect to key metrics such as organic AUM growth as well as EBITDA margin from the go forward streamline business?

35:56 Yes. I think I probably touched upon that a little bit earlier. I mean, certainly, the flows have been negative over the last four years for the FCM part of the business. So you know, without that negative flows, I think you'll see us push ahead in terms of the private markets businesses, real assets and private equity, you know, pushing towards that 20,000,000,000 plus goal more quickly. In terms of, you know, the margin, I think you saw that the impact it had on margin was about minus 3%. So if we hadn't sold the business, I think our margin would have been at 39. As it is, it's at 42. So in terms of margin growth, I would expect us if you're getting the AUM growth as a result of not having to offset the outflows, you're sort of pushing ahead with the AUM growth and margin growth should follow as a result of that. Specifically if it's on the real asset side as well as I talked about earlier in the presentation.

36:57 So, you know, I would expect potentially a consolidation year over the next twelve months at 42, building to somewhere between forty two and forty four in the following year, and then really pushing ahead in terms of '29 onwards. But my long term target for the business or long term, you know, objective, if you like, is to see us having the same types of margins that Partners Group and EQT have as as we build scale, And they've got margins in excess of 50%. Now they're much bigger businesses granted, but I think we can achieve the same margins with lower scale, albeit greater scale than we have now, GBP 20,000,000,000 plus. Great. Thank you, Gary. And the next one is in relation to capital allocation. You mentioned earlier that we would use cash instead of shares for M and A at the moment.

37:48 Do And you have the funding facilities in place? Do you have any sort of funding facilities in place as well, I. E. Debt? Or would you seek that out in order to allow flexibility to pursue M and A opportunities? Yeah. I mean, in terms of the M and A opportunities that I'm seeing, certainly, at any point in time, we've got between GBP 40,000,000 and 50,000,000 in the bank as a starting point. So we'd certainly be able to access the cash there. In addition, we would also be able to if we saw an m and a opportunity, there was a better opportunity than buying in our own shares, then clearly, we'd be able to to look at whether or not we continue to buy in the shares, and that's a 50,000,000 commitment over the next three years. So certainly, there's cash available to do medium certainly medium sized deals.

38:37 And I think pushing ahead with a number of the key things that we talked about earlier in terms of fundraising should effectively see a rerating of the business over time, and therefore, that would unlock the ability to use shares as well. But certainly, in the very short term, we'd be looking at using our cash resources. It's unusual to see an investment manager with with debt facilities, I'm being perfectly honest, you know, to to leverage up to make acquisitions. It's not that common. Certainly, we could do it if we if we chose to because of the, you know, because of the cash flow nature of the business, the positive cash flow nature. But I think if we were to do it, it'd be very short term in nature, and it's not something I'd commit to particularly. I think if we were gonna do acquisitions, we'd do ones that, you know, we could principally use some of our cash pile to make those acquisitions.

39:30 Great. Thank you. Moving now to consensus estimates and what would you see as the key risks around FY 'twenty seven consensus estimates? I mean the principal risk is around the final close of FEET two, I would say. That's due on around 06/30/2027. But there's an opportunity for us to be able to close that earlier or to have a third close before a final close. If we don't make significant progress over the next twelve months, and as I said earlier, we've invested in resource to help us do that, then that could be, you know, that could have a material impact on consensus estimates. But, you know, that's always been the case. You have a number of large funds that you anticipate raising money for, and as you get closer to final close, you know, it does become somewhat binary in terms of that specific part of, you know, revenue generated and profit generated from those assets.

40:31 But even then, I would say, there's the opportunity to outperform the retail side balancing it. You know, we haven't anticipated to have the same level of performance fees over the next twelve months as we've had in the last twelve months. So, again, there's the opportunity to outperform. So I think there's always a bit of a balanced scorecard, but when talking, you know, solely about the key risk, I would say that's the key risk. Great. Thank you, Gary. One final one is there seems to be a disconnect between FORESIGHT's growth guidance that was reaffirmed as part of FY 'twenty six results and the group share price. What is the market missing? Yes. I mean, hopefully, from today's presentation, you can see what the market is missing. But I you know, I it's a tricky one. I think to to a certain extent, it's it's where FORESIGHT is categorized.

41:28 I think FORESIGHT is being categorized as a general investment manager that invests in listed markets. And to a certain extent, because we had FCM, there was an element of that. So we were getting compared to to some of the the more traditional in systemic outflows, asset managers who trade in low multiples. And I think we've been we've we've been grouped into that cohort, if you like, and because of that, we're suffering. I think if you look at some of the private market managers certainly across Europe, they're trading certainly into the double digits, probably somewhere between twelve and sixteen x in terms of of EBITDA. And I think that's what the market's missing. And so the sale of FCM was strategically important for us. I think you'll see, you know, a number of areas that I talked about today where we'll push ahead with over the next two to three years. And I'm hoping as a result of that, that the you know, we'll get the rating that we deserve and the investors deserve for their their holdings in FORESIGHT as well.

42:27 But I mean, ultimately, you know, we're a business sitting here today generating almost £70,000,000 of profit with a target to go up to well over a 100,000,000 within three years. You know, as you push towards that number, you will have to get rerated as a result just purely of the quantum of money that you're generating, the cash flow that you're generating. Great. Thank you, Gary. There are no further questions. So I'll please pass it back to you for closing remarks. Yes. I mean, I'd just like to say, you know, thanks to everyone for listening today. Hopefully, for those of you that are new to FORESIGHT, that's given you a bit of insight into the business. For those of you that are existing investors or or know a little bit about FORESIGHT already, hopefully, that's given you a bit of an update of where we are over the last twelve months, you know, the outlook for the business going forward as well.

43:19 You know, and I'd finally like to say thank you for taking the time out of your busy diaries to to listen to me today. And, hopefully, you know, we continue to drive the business forward. And this time next year, we're sitting on extremely attractive profit number, and, hopefully, the share price is rerated. Thank you very much for listening. Fantastic. Gary, Ben, thank you very much indeed for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback, which will help the company better understand your views and expectations. On behalf of the management team, we would like to thank you for attending today's presentation, and good morning to you all.