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

0:01 Good morning, and welcome to the FORESIGHT GROUP HOLDINGS LIMITED results investor presentation. Throughout the recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right corner of your screen. Just simply type in your questions and press send. The company may not be in a position to answer every question it receives in the meeting itself. However, the company can review all the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand over to Gary Fraser. Good morning to you, sir. Good morning, everybody. My name is Gary Fraser,

0:34 and I'm the CFO of FORESIGHT GROUP, and I'm here today to present the results for the year ended 03/31/2024. So we could just move on to the first slide. So, I mean, in terms of FORESIGHT, we have three principal divisions, infrastructure, private equity, and FORESIGHT Capital Management, which is our open ended investment company business. And what we're trying to do is to invest to build a sustainable future and grow thriving economies. Over the next five plus years, we need to increase the amount of money that we're investing in infrastructure globally from about 1,800,000,000,000 currently up to 4,800,000,000,000 by 2050 and beyond. So there's a lot of work to be done there. We're one of the key, players in that market, and we're striving to raise more money and invest more money in infrastructure than ever before.

1:29 In terms of the private equity part of the division, it's regional private equity in The UK, so we're growing local economies, investing in small businesses, and also creating jobs around The UK in local environments. Moving on. So in terms of FORESIGHT, over the course of the last twelve months, we've had very strong earnings momentum, and that's as a result of multiple drivers of growth. Over the last three years, since we IPO ed in February 2021, we've had a demonstrable track record of profitable growth, and that's been driven by long term structural growth in our key markets. And it's a highly scalable platform. We can grow all three divisions, infrastructure, private equity, and FORESIGHT capital management.

2:18 This is supported by a high level of predictability in terms of our future revenue flows, are currently recurring annual revenues of about 87%. And it's very much built on the foundations of a diversified and resilient business model, which has stood the test of time. FORESIGHT has been going forty years this year, originally founded in 1984 by our still executive chairman, Bernard Fairman. Me myself, I've been here twenty years. So we've been around a long time. We've developed the business model over that period of time, it's proven to be very successful. And this is all underpinned by a culture of sustainability. In addition to publishing our annual report and accounts yesterday, we also published our sustainability report. And for anyone that has that little bit of extra time, I'd certainly recommend looking at our sustainability report and some of the areas we're really pushing hard in developing the business in terms of making it a really good sustainable partner for all the key stakeholders in the business and in our companies in which we invest.

3:18 Moving on. So in terms of the track record of profitable growth that I talked about a little bit earlier. So when we first listed in February 2021, just a month later, we produced our first set of annual reporting accounts as a listed company with profitability, which is core EBITDA PSVP of about 23,900,000. Over the last three years, we've managed to grow that significantly, last year hitting fifth just over 50,000,000 for the first time and this year increasing by 18% to 59,300,000. So we've continued to make real progress in terms of driving the profitability of the business. All of that delivers a 35 just over 35% CAGR over the three years.

4:03 And the vast majority of that is driven by organic activity, 70% or thereabouts. In terms of margin expansion over the period, we've gone from 34.6 up to 42, which is an expansion of about 7.4 percentage points. But in the last six months of FY twenty four just ended, we actually achieved 43.1% which hits our medium term target of 43 set out to the IPO.

4:33 So how does that look in terms of AUM, FUM? Well, over the period, since Feb February twenty twenty one, we were at 7,200,000 billion. Sorry. During that period, we've grown to over 12,000,000,000. And at the end of the first quarter, which we've also announced as part of the annual report results presentation, we're now we've gone from 12.1 at March up to 12,600,000,000 at the end of June. So we've made real progress during the last three months alone. So lot of lot of work still to be done, but fundraising during the last period has been exceptional. Why has that been? So we've had, a first fund close on FORESIGHT Energy Infrastructure Partners two, at 300,000,000.

5:22 That was announced earlier in June, so some really good progress there. And we've also had a really good start to q one in terms of retail fundraising activity. So how does that sit for the rest of the year? Well, 500,000,000 in the first quarter, you know, the the run rate is obviously very attractive in terms of what that can achieve for us during the period. And one of the that's one of the reasons that we've changed our guidance, which I'll come on to a little bit later. But just in summary, our guidance for the next five years is to double core EBITDA PSVP from just over 59,000,000 to a 120,000,000 over that five year period and purely through organic activity. So no m and a in that number. And that would be an annual return compound of about 15% growth.

6:13 Moving on. So in terms of the different parts of the business and how how they flow through in terms of the results that we're talking about today. So the investment divisions infrastructure is just under 60% of the business in terms of core EBITDA, pre SPP. Private equity is about 38% and FORESIGHT capital management is about 3%. It's interesting to note in terms of AUM, 24% is LP, 68% is Evergreen, which is a really high proportion. OICs are about 6% and other is 2%. But in terms of distribution of those, over two thirds is institutional LP investors and about 40,000 retail investors at 31%.

7:08 And then finally in terms of geography, 54% is UK based, 28% Australia, 15% Europe, and 3% US. And that's really changed quite significantly since IPO. Since IPO, I went about 80% was in The UK. So through a combination of investing in non UK assets both in Europe and Australia, but also the acquisition of ICG in Australia in September 22, we've managed to diversify away from being pretty much UK focused to very much international focus. And as we sit here today, about 80% of our pipeline of new opportunities is non UK. So we'll see further geographical diversification in FORESIGHT's asset classes going forward.

7:56 It's worth saying again, just coming back to Corey with that PSVP, that in terms of private equity, it's probably about twelve, thirteen percent of AUM delivering, you know, well into the thirties in terms of core EBITDA per SVP. And so it's particularly attractive margins. That said, the other two strategies, infrastructure and FCM, are very much more scalable strategies. Now they've been in a period where interest rates have been particularly high as everyone knows. And because they're interest rate sensitive assets, that's affected the fundraising in those areas. But as I alluded to earlier, we're starting to see fundraising both institutional and retail coming back into both those spaces, and I'd expect them to be significant contributors into our fundraising targets during the course of both f y twenty five and beyond. So I think what we'll see over the next six months plus is all three divisions really firing in all cylinders in terms of fundraising and that then flows through to further deployment.

9:04 In terms of financial results, so the AUM bridge. So at the end of March twenty twenty three, we're at 12,200,000,000. And then, you know, we had inflows and outflows during the period almost netting off, but slightly dropping us down to 12.1. On a constant currency basis, if you look at the acquisition we made in Australia, it would be slightly up. But either way, you know, we're roughly the same as we were at the start of the year. However, I think the important part is, you know, the outlook for FY '25 in terms of FUM AUM. And as I said a little bit earlier, you know, that's increased by 500,000,000 to 12,600,000,000 at the end of June. So we're making really good progress. I think the other thing in terms of the AUM bridge, although we were flat during the period, that belies the underlying quality of earnings driven by that flat, if that makes sense, because what we did lose was some lower margin OIC business, but we gained that in higher margin products as well. So although it was offset in terms of the AUM bridge, it was very much accretive in terms of both revenue and profits for FORESIGHT as a group.

10:17 So segueing into revenue, during the period, we increased revenue by about 19% from a 119,200,000 to a 141,300,000. Most of that was organic, so 12,500,000 of that was organic growth. And 9,600,000 related to the acquisition activity, which was principally in f y twenty three Australia and also an acquisition of the Downing Ventures portfolio. As I said right at the very start, 87% of our revenues is recurring annual revenue and remains well within our guided range of 85% to 90%. Slight increase in non GBP denominated revenues, which links back to the geographical diversification of our AUM mentioned previously. So up to 21% from '16 and we'll see gradual increments in that as we do more non UK investments going forward.

11:14 So in terms of costs, costs have gone up by about 12% during the year on a rebased FY '23, and that was rebased because of the acquisition activity during that year. This 12 increase excludes a 2,900,000 non cash adjustment for impairment of intangible assets, which is a non cash item. The rise in staff costs reflects a number of one offs associated with the delivery of cost saving initiatives, but it also reflects an extremely high inflation environment during the last twelve months plus. We've started to see that come down, it's hit 2% recently. So I don't expect to see the same level of cost inflation in the current year as we've seen in the prior year. So I think that will be to a benefit of margins in the medium term.

12:06 Next slide. So profitability, touched upon this a little bit earlier as well in the early summary, but we've gone from 50,200,000 at the end of f y twenty three up to 59,300,000 at the end of f y twenty four. And consensus estimates for next year between 64 and 68,000,000, and I'm confident that we'll be within consensus. I'm very much successful fundraising into higher margin products and longer tenure vehicles during the period, And the annualization of FY 2023 ms and A activity added an extra 5,000,000 as well. As I mentioned earlier, effective cost management during the period, albeit inflation did have an impact. We delivered 42% core EBITDA margin pre SBP in FY twenty four, which is slightly down from the 42.1 a year earlier.

12:57 But in saying that, the breakdown between the first half and the second half of the year showed a real improvement because of cost reducing measures that we took and we achieved the 43.1 in the second half of the year. So I think that augurs well for FY '25 and beyond in terms of margin improvement. Cash generation is always a key for me as an accountant, as a, you know, and as a CFO. And you can see a large alignment between our cash generation and our profitability measure in terms of core EBITDA pre SBP. So cash generation was around about 50,000,000. In addition, adding back debtors that were still over still outstanding, we paid post period end, you know, we get ourselves up to, for all intents and purposes, the 59.3 when you add back the cost saving initiatives as well, you know, one off payments with regards to restructuring areas of the business.

13:57 So really strong cash generation in the period, and that's given us a high degree of confidence in terms of both increasing our buyback commitment from 5,000,000 to 10,000,000, but also in terms of, you know, maintaining our 60% dividend payout ratio. And the dividend's actually increased from 20.1 p last year up to 22.2 p in the current year, which is an increase of about 10%. So and all of that's made possible because of the solid cash generation of the business. So moving on. So in terms of guidance, so since I just looking backwards before we look forwards in terms of guidance. So since IPO, you know, we set out our targets there in terms of AUM growth at 20 to 25%, and our compound annual growth rate was 19%.

14:57 85% to 90% recurring annual revenue, and we've been pretty much in the middle of that range ever since IPO. We targeted 43% core EBITDAP SPP margin over the medium term and was by the end of f y twenty four and achieved that in the second half of the the last year. And the 60% their payout ratio we've achieved every year since IPO, setting that target not long after IPO. Launch of IPO itself, it was 50%, but given the really strong cash generation I've just talked about, it was, you know, obvious to us that, you know, increasing it quite early was the right thing to do. So in terms of guidance, going forward, we've set ourselves a new target of doubling core EBITDA pre SBP in the next five years. And it's really the the business model gives us the confidence to do that. So all three divisions are contributing to the core profitability of the corporate group.

15:59 I you know, we've got high degree of high quality income, as I said earlier, 85 to 90%. So doubling from 60,000,000 just under right now to a 120,000,000 in five years seems like, you know, the obvious thing to do. Clearly, it's a challenging target. It's compound annual growth of 15%. I but it's something that given what we've achieved already since IPO, that we've got a high degree of confidence in achieving over the next five years. And if I look at the fundraising we've had in the current, you know, three month period, but also extrapolating that over the next couple of years in terms of both retail and some of the new strategies we have on the institutional side. I have a high degree of confidence as I sit here today that we'll at least achieve the doubling in the next five years, if not overachieve.

16:49 And I think that's all underpinned by strong organic growth, the institutional strategies maturing as we've seen from, you know, FEET one hitting its, you know, hitting its full investment period, FEET two having a first close less than six months after the closing of FEET one. And, you know, the retail fundraising is as solid as it's ever been because of the the strategies we're offering investors and the returns and performance that our funds are delivering for people. Now clearly, m and a remains a key part of the growth strategy, but that's not included in this new guidance. So that will really accelerate growth even further to the extent we do any m and a. Moving on. So I talked about the drivers underpinning guidance.

17:37 So, you know, just taking them in a bit more detail. You know, regional private equity. So what we're doing there, we're providing capital for regional SMEs in The UK and in Ireland, typically investing 2 to 20,000,000, but most of those are in the up to 5,000,000 range. And because of that strategy and that, you know, countrywide strategy, we don't really see that many competitors in the market. You know, there's one or two others that have reached regional UK and Irish coverage, but not that many. And so that really is a USP in terms of our ability to originate deals and also invest in the best deals. It gives us a really good choice. And you can see that in the returns that we're generating, but you can also see the ability to grow these small businesses.

18:24 So you're creating regional economic growth, and we're also generating a lot in terms of job creation as well. So there's a win win for our local investors in terms of these regional strategies. We're also seeing really good exits in from these portfolios at the moment, so often selling them onto strategic acquirers or, you know, even second reason to people that have more money that's in terms of private equity and want to grow them or take them into that next level, perhaps internationalize them. You know? So there's a lot to be said in terms of, you know, the exit strategy and the multiples that we've been creating and delivering returns for investors. So moving on. In terms of infrastructure, we're very much focused on real assets there as you would expect.

19:13 The energy transition has been a really strong part of that, and we see that as a very significant and expanding international investment opportunity. There's very strong demand for a flagship strategy. As I said a little bit earlier on, FIP one closed 70% over target, and FIP two is targeting 1,250,000,000. It's already had a first close at €300,000,000. You know, and I'm optimistic about a second close during the current financial year, so to March 2025. So two closes in during that one cal you know, one financial year, and that will really that's part of underpinning the guidance of doubling core EBITDA, PSVP over the next five years because we're starting to see a real momentum in terms of institutional infrastructure fundraising, which then adds to the fundraising capabilities that we've been delivering on in the private equity side of the business for the last few years as well. So, you know, we've got extensive experience and capabilities in providing end to end investment solutions within infrastructure.

20:16 You know, I talked about the international geographic reach that we have and successful track record of fundraising and deployment in these areas. Opportunity to launch multiple vintages of flagship strategies. So in addition to FEET, we're in the very early stages of pre marketing our hydrogen strategy as well, which is targeting €750,000,000. And that's a real growth opportunity building on our extensive existing real asset investment history in the space, and we've already made several investments into the hydrogen space. And we have a proven ability to identify, develop, and launch new products to meet investor demand. In terms of listed equities, this offers a highly scalable investment opportunity and leverages our private market experience.

21:01 That has suffered from the high interest rate environment. There's no question, falling from about 1,300,000,000 when I talked to you last year to about 750,000,000 as I sit here today. But we're starting to see the redemption slow down. We're starting to see performance come back. And hopefully, if we see an interest rate cut in August and maybe one more before the end of the year on top of that, then I'd like to think that we'll start to see, you know, wealth managers reallocating into these strategies, both a combination of improving returns, but also the need to deploy money as the safety of, you know, cash deposits. You start to see less returns on cash deposits. So I think, you know, the the the macro is moving in the right direction for that particular FORESIGHT strategy.

21:54 So in terms of outlook and trading updates, so I alluded to it right at the very start, but we've had a really strong first quarter to the end of June with AUM and FUM both up by 500,000,000,500,000,000. That includes the FEED two first close at €300,000,000. And we've also very recently completed a €300,000,000 Greek solar deal. So we're making larger investments, will then also drive operational gearing and flow

22:24 through to margin improvement over the medium term. We completed four exits, which had an initial investment total of 17,000,000, returning 66,000,000 in terms of sales proceeds. And I alluded to earlier, extended the buyback program from 5 to 10,000,000. Just flipping back to that, the four exits already. So exits are important because, you know, several of our funds have either carried interest associated with them or performance fees when performance is, you know, appropriate or over a certain hurdle. So with these exits and the returns being made, you know, it's very likely that we'll see performance fees and carried interest, you know, with a higher weighting in the first half this year compared to last year, which again underpins the f y twenty five, you know, as, you know, assertion, if you like, that I expect us to be within the consensus range for improving over the last year.

23:20 So prior year fundraising into higher margin vehicles has been very successful. Real quality in our retail distribution platform, continues to deliver fundraising success. We've got a robust institutional infrastructure fundraising and deployment pipeline. The deployment pipeline currently is in excess of 5,000,000,000, So we just need to go out there, raise more money, and we've got the deals ready to go. And there's a continued expansion of our very profitable institutional regional private equity strategy, and I'd hope to have good news about further regional offices and regional funds being launched, you know, by the end of h one. So by the end of September, I'd hope to have some positive news in that regard. So I think, as I said earlier, all three divisions within FORESIGHT have either, you know, gonna maintain their existing momentum or, you know, the macro moving in a right the right way for us in terms of a benign interest rate environment should see improvements in all three areas. And and it makes me very excited in terms of not only the current year, but the next few years for FORESIGHT in terms of delivering on our new guidance.

24:29 As I mentioned at the very start, strong earnings momentum and multiple drivers of growth. I'm not gonna go through the the slide again because I think we've covered it during the course presentation. But it's there, you know, sustainable, diversified, predictable, growing markets, scalable strategies, and extremely profitable in terms of FORESIGHT GROUP as a business. So with that, I'd like to thank everyone for listening to me for the last twenty minutes or so. Hopefully, that gives you a flavor of the real momentum behind FORESIGHT and its current strategies, the profitability that we're gonna deliver for our investors, and also what we're doing in terms of sustainability, you know, delivering on regional growth, but also international infrastructure projects that make a real difference in terms of, you know, the sustainability agenda, the decarbonization agenda, and the energy transition which in which we're all heavily involved.

25:25 So with that, I'd like to open it up to q and a, and thank you. Perfect. Gary, thanks very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. But just for the company to take a few moments through those questions that have been submitted today, I'd 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 your investor dashboard. As you can see, we have received questions throughout today's presentation. And, Liz, at this point, if I could just hand over to you to share the q and a, that'd be great, and then I'll pick up from you at the end. Thanks, Alessandra, and thanks, Gary, for taking us through those slides. So I think just I'm just trying to group the questions together a little bit. I think we'll start with the one on infrastructure. We have had a question about which area within infrastructure are you most positive about at the moment, and which of your geographical locations is looking most positive going forward?

26:17 So, I mean, in terms of infrastructure and the ones I'm most positive about, I think the energy transition and and wider decarbonization agenda is very exciting for us. So and Feet two is one of the the large investors in that area. So that goes beyond, you know, traditional renewables like, wind and solar, which are still important. But we're also looking at, you know, grid solutions both in terms of flexibility and connectivity. So in terms of flexibility, we're looking at long and short duration storage. So, you know, that can be things like pumped hydro, but also the creation of green hydrogen, which is a good long term store of energy. But it and and that all helps with the you know, in terms of flexibility, which you need to have if you have, you know, a lot of renewables on the grid.

27:10 But I think equally important is connectivity, and therefore, that is a wider grid piece. So, you know, the ability to be able to, you know, translate, you know, wind generation in The Nordics down to, you know, nighttime, you know, requirements in in Southern Europe and solar during the day up to, you know, The Nordics, etcetera. So it'd be you know, if we can work on the grids, you know, on an international basis, so it's cross border, it would give us a really far more efficient grid network across Europe and beyond so that we can really maximize the potential of expanding, the grid network, but also renewables across jurisdictions, not just within our own jurisdictions.

28:00 So I think a combination of traditional renewables, hydrogen throwing hydrogen into that mix, long and short duration storage, but also the connectivity of the grid, I think, will all be big investment themes in the next few years. Thank you, Carrie. We then have a couple of questions related to m and a. So if I may just ask you a couple of parts to the same sort of thing. The so the first is how do you plan to balance organic growth with potential accretive m and a to achieve the the new guidance we published today? And alongside that, in terms of m and a, are there any particular capabilities or asset classes which you would would be open to bringing to the group? So in terms of so the new guidance is all, predicated on organic growth.

28:48 I I think it's worth saying that. So the the 15% compound over the next five years that doubles profits is all based on on organic growth. So m and a activity would accelerate that growth or even increase it, and so combination of the two. So, you know, our real focus right now is organic growth, but we are looking at we're always looking at m and a opportunities. There's no question that's true. But I think, you know, how would we achieve that? So right now, I think our you know, the multiple we're trading on is between eight and nine times EBITDA. And I think we have a bit of a dilemma because you've got private market vendor expectations that are well in excess of that, sometimes even mid teens.

29:33 And therefore, what we're not gonna do in terms of m and a is pay those high multiples multiples and dilute existing investors. That's why we've increased our buyback from £5,000,000 to £10,000,000 because we see better value in buying our own shares at eight and a bit times multiple than we would in terms of overpaying for m and a assets. So until we see a rebalancing or resetting of private market expectations, then I think our m and a activity will be limited. But that is not to say that we can't make m and a activity, you know, can't do m and a activity when we see the right opportunities. Clearly, we will, but, you know, we're not gonna overpay for it. And so that's one of the keys around the balance is looking for those that are priced appropriately given the you know, what public markets are pricing businesses like FORESIGHT and others at in the current environment.

30:33 Thanks, Gary. And and any particular capabilities? Are there any sort of bold ones that would be more interesting than others? I mean, I think, you know, I think geographical expansion is clearly one. So we anything that will add to, you know, our international expansion, you know, would be of particular interest, you know, whether that's in Europe or beyond. You know, we've got a great regional and Irish private equity private equity network, but I would consider you know, as a business, we would consider, you know, looking at at m and a acquisitions in in the private equity space where you we could take our template in The UK and roll out that template internationally as well, you know, probably closer to home, so in Europe to start with and then maybe beyond after that in certain jurisdictions. So I think that would also be something that we'd certainly consider and look at and have been looking at in the past. So there's a number of areas that I think would be strategically, accretive to the business in terms of m and a, And those are areas that that we're constantly considering opportunities.

31:43 Thanks, Gary. And then one on the dividend. So the dividend per share increased by 10 to 22.2. Just wondering what factors influence that decision, and how sustainable is that growth in dividend payouts? So, I mean, the the dividend increased by 10%, but profits increased by 18%. I you know, and as long as profits are increasing, I think the general dividend payout ratio percentage is 60%. So, you know, we will increase the profit increase the dividend in line with the the profitability. So the payout will remain 60%, And providing we're continuing to drive profits upwards and onwards, then, you know, the dividend will increase as a result of the increase in profitability.

32:30 You know? So I think it's sustainable. You know, we're looking in terms of how fundraising and deployment are flowing through to increases in profitability over the next five years. So I think that 60% payout ratio will continue to, you know, help payout more as the business grows during that period. So I think it's very sustainable on the basis of the forecast that we currently have and the momentum that we have behind the business. Thank you. We've now got a couple that are a bit more specific to the business. So one here about using leverage for future investments. So will you be using less leverage for future investments given structurally higher interest rates, and does that mean you're likely to achieve lower returns for investors? It's a good question. I mean, you know, for existing investments, most of them have, locked in their, leverage, you know, over a number of years and and when rates were were were much lower.

33:29 I think the opportunity to use less leverage is potentially there. But, you know, we're we're also looking at deals where we can still generate attractive returns irrespective of the interest rate on, you know, on the debt piece if you like. But a a good example would be the solar deal in Greece that I referred to earlier. You know, that deal will will have leverage in it, but the leverage is particularly attractive because it's subsidized leverage through the, you know, European Union, fund into Greece. So, you know, there are opportunities to still use leverage in an appropriate way and still get attractive interest rates. You've just having that international coverage enables us to, you know, a, hopefully search out the best deals, but b, look at leverage that's particularly attractive in terms of the interest rate that we have to pay while still delivering attractive returns for investors.

34:32 I think as well, I would just say that, you know, over the years, you know, we've we've started to to work more with phase of our origination, and that helps in terms of delivering higher returns for investors despite the higher interest rate on leverage. I and you would tend to bring in leverage a little bit later into the project as well at that point in time, which again would help with with cash flow generation. So there are a number of, know, number of areas that we're we're looking at in that regard, which will help with that higher leverage piece. And I'm also optimistic that, you know, hopefully not falsely optimistic that interest rates are shortly gonna start falling die you know, you know, coming down, maybe even as early as August depending on the the Bank of England. We've already had one rate cut in Europe where we're doing a lot more of our investing as well.

35:26 So I think structurally, it's right that they're higher now than they have been historically. I but I don't think they're at levels that will make returns unattractive in the types of investments we're making for the reasons I've just given. That's good to hear. So the final one for the moment, unless we get another couple in through the next few is on private equity. So noting the four exits that we've delivered in in q one and the significant return on investment that those have generated, are there lessons that have been learned from those exits, and how would they influence future investment strategies in that space? Yeah. I mean, it's it's a yeah. I've not had that question before, so that's a really good question. I I I think often it's, you know, it's interesting because the buyers of these investments sort of help determine how we're looking at, you know, strategies going forward.

36:21 So we sold one business recently, in a specific sector to, you know, to a very large multinational company, international multinational company. And that's then determined, you know, how we're looking at origination in terms of, you know, potential similar deals or or bolt on type deals going forward. So there's no question that the buyers of some of these exits has determined how we look at origination for new deals into the future, you know, and pushing into specific areas that we may not have considered unless we'd had that specific success on the way out of the previous deal. So it it it does determine how we look at origination and how we you know, what we're looking to do in terms of sectors that we'll invest in in the future. So there's no question that these successful realizations make us look at origination in areas that we will specifically target going forward.

37:16 And so those are the lessons that we've learned from that. You know, and we're still pushing in terms of further exits, you know, hopefully, we'll continue that beat rate in the next few months. And as I say, you know, that could push private, know, performance fees, and they carried interest from the private equity division into the first half of the year in terms of our results reporting. So I think the other thing I would say is that the you know, it's a combination of strategic buyers and private equity buyers. And because we're in the smaller end of the scale, so we're we're not even mid market, we're below mid market, debt isn't really an issue in that regard because the buyers don't need, you know, large amounts of debt to make those acquisitions from FORESIGHT. So in the mid and upper market, you're seeing fewer deals being done, fewer investments being bought or realized because people don't want to, load themselves up with debt at particularly high rates, which was referred to in the previous question.

38:20 Because our investments tend to be smaller, even if we're selling them at five to 10 x, the buyers don't need to do a lot in terms of debt to make those acquisitions. So we're not seeing a particular slowdown in terms of realizations on our private equity side, which again gives us real confidence in terms of the the both the current momentum that we have, but also maintaining that for the rest of the year. So hopefully, that was quite a long answer, but, quite a holistic answer in terms of both the answer to the question, but also what we're looking at more generally within private equity and the realization piece. No. That's helpful, Gary. Thank you. We have had one further question, so I will just ask that one if if you're okay to do so.

39:05 And this is on the buyback. So noting that you've that we've increased the buy share buyback, which was announced yesterday, doesn't the very low valuation of the business argue for an even more aggressive approach in this space? I mean, it could do is the answer. So, you know but we've only we're limited to how much we can do in terms of buybacks. I think it's 20 to 25% of the average daily volume. So we have to be cognizant of the market abuse rules when we're we're setting future targets for buybacks. And therefore, because the relative liquidity in FORESIGHT stock is low, you know, setting it too high wouldn't be appropriate because we wouldn't be able to utilize, you know, a much higher number in at the current time. So I think it's a good question.

39:56 I think we will buy back as much as we can at the current rates because I think we're trading on a on a multiple that doesn't reflect where we're going as a business and where we've come from in the last three years as a listed business. So but it is something that getting getting the balance right of capital allocation between share buybacks and dividend policy, but also m and a when it comes along is something that the board takes a lot of time to determine. And so, you know, if and when, you know, the the sort of parameters allow us, you know, a more aggressive approach to buybacks, it is something we'll consider. But, again, within, you know, within the guidelines that we have to abide by. Thank you, Gary. So that's it for the questions online now. Perfect.

40:44 Thank you very much for answering those questions from investors. Of course, we will publish the responses on the investor meet company platform. But just before redirecting investors, provide you with their feedback, which is particularly important to you all at the company. Gary, can I just ask you for a few closing comments? Yeah. First of all, I'd like to thank everyone for for listening to me today to go going through the presentation. Hopefully, I've given you a flavor about, you know, the success we've had over the last three years since IPO, but also a flavor of the the momentum the business has and hopefully the excitement that we have as a business in terms of the growth that we see ahead of us, both in terms of profitability, but also in terms of, you know, our sustainability mandate as a business and and how we can deliver that, you know, in terms of investment both in private equity, but also in infrastructure and in our FORESIGHT capital management part of the business. So I think there's a lot going on at FORESIGHT. The momentum and I think the, you know, the direction of travel is positive. So, hey. Thank you for listening, and, you know, hope to see you all at an event soon.

41:48 Perfect. Gary, Liz, Steven, thank you very much for updating investors today. Could I please ask investors not to close this session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations? This will only take a few moments to complete, but some should be greatly valued by the company. On behalf of the management team of FORESIGHT GROUP HOLDINGS LIMITED, we'd like to thank you for attending today's presentation, and good morning to you all.