Liontrust Asset Management (LSE:LIO) — Final Results

0:01 Good morning, and welcome to the LIONTRUST ASSET MANAGEMENT PLC investor presentation. Throughout this 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 hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives to the meeting itself. However, 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 you over to John Iain, CEO. Good morning to you, sir.

0:31 Good morning, everybody, and welcome to his presentation for LIONTRUST's final results for the year ending 2024. With me, I'm John Irons, Chief Executive. With me on my is Vinny Admiral, chief financial officer and Simon Hilby, marketing director. Presentation today will cover a bit on the financials, a little bit on the background of LIONTRUST and a bit of our strategy going forward. I think to put it in context, maybe a few comments at the start on sort of where we have been and where we get to. In the background, LIONTRUST is very much a specialist asset management business focused on active fund management. And in twenty eight years ago, I became chief executive a little over fourteen years ago. We've got offices in London, Luxembourg and Edinburgh.

1:32 As I said, you know, very experienced management team here. We have eight different teams very much, you know, focused the areas that they invest in. Assets under management, currently a little under 28,000,000,000 and the market capitalization of the business is a little over 400,000,000. And they say, well, you know, base tenant behind LIONTRUST, try to keep the business model as simple as possible. If you've got a good strong investment process, we try and create the environment for managers to be free to on the money they want to, to be able to add value to client portfolios. The importance of that ever more so as you get into other organizations or with index funds where money is, if you like, deployed on a market weight basis, it provides little opportunity for price discovery, cash being allocated to holdings on the back of news, not in advance of good news.

2:35 So we believe that if we can provide that freedom for the fund management teams and they have a strong disciplined approach to that, we'll get the best results for our clients in the long run. The other side of that contract very simply is if they do that, we provide a route to market services. We'll talk a little bit later on about the strength of LIONTRUST brand. It's a third best recognized

3:01 amongst the intermediary marketplace. 90% of our clients are in the retail space and we have excellent distribution which we'll go on to talk about.

3:17 I hand over to Vinay first of all, and he can go through these financials. Yeah. So we've got the financial slide. There's a lot of numbers there, but maybe I'll just pick up some of the highlights there, right? So just to show you the business performed over the last twelve months, twelve months at the end of March twenty four. So if you look at our yeah, before we go into the actual results, if you look at the cash position and the balance sheet. So LIONTRUST has a very strong balance sheet, no debt. We have GBP 104,000,000 of cash on our balance sheet and we have a very strong capital position, service capital. As a regulated business, we're required to have a certain amount of regulatory capital. And for us, it's 23,000,000 just under $23,000,000 And our surplus capital is just under $80,000,000 So the business is in strong financial health in terms of its balance sheet and its capital position.

4:19 In terms of the results themselves for last year, if you look at revenues, I think the revenue margin, revenues are down with as AUMs come down. But one of the key metrics that we look at is our revenue margin. So that is effectively revenues divided by our assets under management. So that tells us, you know, what what are we how much are we earning on the assets that we we manage. And over the course of last year compared to the previous year, our revenue margin was reasonably stable. So it was at 62 basis points, so just 0.62%. And that is very similar. It's down slightly. The number for the previous year was 62.48 basis points. So on rounding, it's unchanged, but it's down half a basis points. So, you know, a very, very small small reduction.

5:10 And that that should give you some reassurance that, you know, we are not slashing fees. We're not totally trying to sell our funds at below our average revenue margin. So it shows that the business is being able to maintain the revenue margin its AUM without having to cut those fees, which should run well for the future. So a good strong revenue margin. In terms of costs,

5:39 we've also had a strong performance in in the light of revenues coming down. You know, and if you look at our if you look at our costs, there's really two main elements to our costs. Our our people costs, staff costs, and other admin costs. So that's everything else that a fund management business does in terms of property, you know, rent rates, marketing, you know, administration, etcetera. So in terms of non people costs, you know, in in a in an environment where, you know, it has been an inflationary environment in terms of the costs that we incur, where inflation has come down, it has been high during the course of the financial year. But our our total admin costs, I. Non people cost was reasonably flat. So it's up just under 2%.

6:25 So our non people costs were strongly under control. In terms of staff costs, our staff costs come down just over 20%. Again, shows good discipline. We've seen our, you know, we've seen our headcount come down as our as our revenues and AUMs come down. And also the way that we remunerate our fund managers, we we have a revenue share arrangement with them. So for every pound of revenue that comes in for the team that manages funds, they get a portion of that revenue as remuneration. So so we have a flexible cost base. So as our revenue has come down, you know, our staff costs have come down, in particular, our fund management costs. And what has that resulted in? That's resulted in a an operating margin of 35.5% for the year. So that's a key metric for us because that tells us how efficiently we're generating adjusted profit from the revenues that come in. And if you look across our peers in the asset management world in The UK, that's a very strong number. We're at the may not be the best, but we're at the top end of operating margin compared to our peers. And that shows you that we've got good control over our costs. Just to give you some context of that, last year was 35.5%, the year before was just under 38%.

7:46 So the operating margin has come down and that's just part of operational gearing, which is which just works in reverse as it works when we're growing. But it just shows that even though it has come down, it's only come down marginally. And it still shows that we are running a pretty efficient business. So that financial performance has led to a ultimate outcome is a dividend to shareholders. So so we've maintained the dividend for the full year at 72 p. So that's that's the third year that we're gonna be paying out 72p dividend. It's covered by earnings, so it's 90% covered, so 1.1 times cover. And that 72 piece made up of final dividend or a second interim dividend, which is effectively a final dividend of 50p per share or should we pay to shareholders. We went ex dividend yesterday.

8:43 Today is a record date and dividend will be paid on the August 9. So overall, although it's been a tough year in terms of flows and our AUM has come down, you know, it has been, you know, in the light of that, you know, it's, know, we've maintained our we've maintained our revenue margin. You know, we've seen us, you know, we've controlled our costs and, we've got one of the best operating margins amongst our peers. So that's sort of a high level summary for financial performance of the business. So I'll hand over back to John. Thanks, Vinay. So on tax background, mean, as Vinay said, you know, conditions have been challenging over the last couple of years and and they remain challenging, but that sort of depressed demand, you know, is cyclical and that long term view adhere to. If I drift back over the last few years, obviously, we've seen interest rates go up, inflation return, geopolitical uncertainties, and, you know, very narrow performance in equity markets. And effectively, you know, we went from very much years ago when we had strong inflows into the business and, if you like, a risk on environment for investing to a risk off environment.

10:07 The book of business that LIONTRUST operates is very much equity orientated as a bias towards UK equities. Within that has a bias towards mid small cap, big book of business in the sustainable arena, which is very much interest rate sensitive. So it goes to show that even if we're a very strong brand and strong distribution franchise, if the part if the investment products you have are not pertinent to where investor demand is, I. E, investors move away from risk on to risk off, it creates a very challenging environment and backdrop for us. So at the beginning of last year, we looked at an acquisition for GAM Asset Management.

10:53 Ultimately, were unsuccessful in that, the purpose behind that acquisition was to broaden out our product range, our investment offering into products that were less correlated to the ones we had and offered wider investment choice, and also to develop a broader distribution franchise in Europe. We know we have a very good market share in The UK, and we're looking to broaden out our European distribution. As I mentioned, we were unsuccessful in that, and I suppose there were two things that came to mind for me. What did we lose? Well, obviously, primarily we lost eighteen months of product development and with the headlines that existed at the time, reputational brand damage.

11:45 The way that we monitor the brand and the external sources say that that brand now is back to the position it was, if not slightly stronger than before. And in a moment, I'll talk about where you know, what what we've done on the product development and making sure that the business is in a stronger position as possible, you know, for future growth going forward. I think, you know, having highlighted the the challenging demands of, you know, interest the rise in interest rates where investors were getting compensated not to take risk, maybe not in real terms, but to to stay away from volatility that we see in markets, and also a cost of living crisis which saw more raise on people's savings and withdraw some pensions.

12:38 Obviously, two pulls against us. But I think it's important to look at, and we sit here this morning with the dawn of a new government, and the market's reaction to that has been, you know, you know, saying that it is maybe slightly positive. But I think in the interactions I've had with the labor policy side from Rachel Reeves is very much a pro, you know, business, pro growth environment. The fact that labor now have a large majority give some stability to the outlook. That's important given the very small percentage of The UK equity market that we own domestically. The UK government has, you know, less than 1% in UK equities there, and as a whole, we own about 4%. So much lower levels than international marketplaces.

13:33 To get economic growth, which is the forefront of you know, you get economic growth and investment, you get a bigger tax take. So, you know, what does an asset manager do? We, you know, we deploy the allows the economy to function, and I've been encouraged from, you know, governments have got the, you know, of the pensions system and encouragement to get more people to save. At present, the savings rate in The UK is only 8%. Even if it doubled to 16%, it would be somewhere behind the likes of Australia and the savings levels around the world. So the demographic is very much a driver and flows. I think the encouragement to drive savings towards the equity market is is a tailwind because without getting efficient public or private markets working, we won't get the economic growth that is there. I also see that, you know, The UK market, I'll talk a little bit about later, is very cheap on a national basis.

14:43 But international investors want to see, you know, of the turmoil that has existed on the political front over the last four years, international investors have stayed away from The UK. And I think this period of stability will help bring us back. And I read a report this morning, you know, which is a survey of wealth managers across The UK who all see, you know, and it goes something like 94% of them see The UK as offering good value. This is after a period where, you know, outflows from UK equities, you know, over the last four or five years have got us back to this very low level and the de equitization caused by sort of trust and quasi with ambitious borrowing plans that led to further withdrawals. So I think a period of stability and some long term planning is a favorable backdrop for the investment of MENA.

15:43 I want to have you got that slide there? Yes. As Willie said and touched on that, start with a strong platform, a strong basis. Investments in process, automation, centralization, outsourcing. The things that we want to do inside the LIONTRUST are the things we can add value on, I. The strength of the brand, the distribution, and the investment forces. Everything else, we need to have relationships with to make sure that not only do we offer the strongest and most robust services, but the most competitive ones. On the global equity side, we recently made a hire in Mark Horton.

16:29 He's come with a Marshall Ways and Amp background, and we're a fund with him, but also we'll we're in charge of 1,100,000,000 of our global equities teams. We we had existing global equity franchise. We've got a very strong India fund and a Japanese fund, but we felt that in that space, there's 550 funds in the global space, and we needed to get a better categorization and the nation, for a better word, of our product offering. Mark brings with him, you know, a a team which is, you know, highly regarded and over the last over the first couple of months has integrated well into the business.

17:16 But that you know, the global equity franchise is an area that where we see we want to grow further. And that will sit alongside our global innovation team which run one tech fund in the last year, an innovation fund, and a global dividend fund. So really a strengthening of the investment proposition there. Looking for that next area, you know, where we can grow significant assets in the business. And the long term performance, I can talk on a moment, but, you know, what we want, you know, is well articulated investment performance and processes with, you know, excellent long term track records. We've made changes to the sales side as well.

18:04 I will touch on but it really, I suppose, post COVID, and the back to work of, you know, work from home, most most of the management team here are in five days a week, but obviously, we have to offer that kind of flexibility. I felt that maybe LIONTRUST had a bit of long COVID. There were a lot of things we were doing, you know, that we were always doing. I just didn't think we were doing them to the standard that that we should be doing. And I'll talk a little bit in a minute about what what how we've changed both the distribution in The UK and internationally. And finally, you know, we are moving to, Aladdin, a black rock technology for a front office sort of portfolio management and research centering system.

18:53 So we'll have, you know, state of the art information sharing and management system that combined with a very strong middle back office that we have, all out support to leading providers either with Bank of New York or through Aladdin will enable us to have significant scalability, flexibility and efficiency across the business to go forward. I touched about the brand briefly, and I'm not gonna read the these points out, but it does show the levels of engagement and and then the fact that we're we're sort of unprompted advertising recall with investors is getting us back up to the level, you know, we needed. We are very much a client centric business.

19:42 Talked before about, you know, the the change from defined benefit to defined contribution where the individual takes control of their own pension products. This you know, so trust is one of

19:54 the most important things with clients. Recognition, comfort, and that is why the brand, you know, remains vitally important to us and to have you know, our retail offering with a strong brand is is key and crucial. On the distribution side, we had two sales teams in The UK, one covering more the multi asset or broader part of the market and covering the top side. I felt that as the product suite developed within the company, that it was important to bring those two teams together to give us a level of consistency and targeted ability to use data and to support, you know, our client lines in the best way.

20:43 It changes at the top with bringing in Christian Ku. Christian had been with us for six or seven years, and he has made some changes that had entered there with our strategic partners and key areas of client services. And that's brought, if you like, a new energy, bigger, and consistency

21:03 across that sales team. And again, there's data there just show showing you where the level of engagement remains high with with all clients. So even in depressed flow environment, clients ask, you know, you could do provide as much activity or events or meetings for clients, but clients have to want to come and hear what our view is, and that very much remains you know, true today. On the European side, we brought Jeremy Robertson to head up at European distribution. We already had five people in Europe on the sales side, but it felt that that international distribution was quite narrow, and we needed to broaden out the breadth of of clients we spoke to. We launched a European pan European offshore fund four months ago. We've raised 200,000,000 with that.

22:04 It's on the back of our cash flow team, the where we run the European Dynamic Fund, which in over eight in eighteen months has has gone from around 400,000,000 to $1.61700000000. So it's won kind of, one of awards in the last three years and has strong performance behind it. The key with launching a fund at 200,000,000 in Europe, yeah, and put it bringing in Michael Bullock well, Buckles and Jeremy Roberts, is that 200,000,000, we can go to a broader range of of clients and to larger clients. So the likes of UBS would not put it into one of their model portfolios unless it was above 200,000,000 in size. So achieving that, actually, early on in the launch of a product provides a very good platform for us to grow, and we've seen how the growth of The UK fund has performed.

23:02 The operating platform and very much centralization and efficiencies. The control of the costs that Werner has talked about with, you know, on the RAM, how it's linked to asset size as well. But I desire to create that platform that gives us that scalability to grow the business going forward and to be able to be confident to take on new teams and new businesses as we go forward.

23:34 Here are, you know, the the eight teams, the two biggest blocks of business. Obviously, it's sustainable economic advantage. But and also showing where the global innovation team and that was at half of the size, it was a year and a half ago, and adding in the new core global equities, proposition as well. So really broadening out the funds that we can show. I wanna pick up on one bit sort of bit of performance. It's very basic and simple chart here, but I think it captures the last three years. Oh, well, let's move from risk off to to risk or risk on to risk off. You can see through '22 and '23 the effect it had on performance, and there will be some drag in that obviously through the three and five year numbers.

24:25 But very pleasing to see as we see a thawing of risk off, we look for interest rates coming, maybe one as early as the end of August, but certainly looking at September, and that better investing environment for the companies that we invest in. I've highlighted, you know, two big books of business was that, you know, the struggles with The UK market over the last five years, very much that the equitization, really with the change of government,

25:00 liberalization of pension laws, and encouragement by local authority pension funds, particularly to invest back into The UK to help power that growth that will give us more economic prosperity as a nation. And it shows you that the very depressed level, The UK equity market sits certainly relative to to US. And again, referencing the report, I think, the Rathbone's produced this morning showing that over nine out of 10 managers are looking at The UK for you know, for going forward over the next one, three, five years. It's important for us that even though, you know, showing the the four funds that we have there, you know, very much that focus on process, consistency.

25:57 You know, we are the building blocks for a lot of client portfolios. And so the clients invest in this even if they maybe used three or four groups before, they've gone maybe to two or they've halved their weightings. We've managed to be be kept in client portfolios. So so those, if you like, pipes or routes to market are open, for that. And if you look at, you know, the the exceptional sort of long term performance of the funds there, you know, it is a very compelling proposition for clients looking to invest in all parts of The UK market from small cap or micro cap through to large cap. The sustainable investment team, again, for every challenging period performance wise, we're in five years reflecting that interest rate sensitivity.

26:49 But, you know, whilst you talk about the ifs and whens of allocations back to The UK equity market, I still think, you know, investment in sustainable is very much, you call it, all of a mega trend. And and I think the recent sort of regulatory changes in Europe with the SFDR and the introduction of the FCA's sustainable classifications this month will provide an area of competitive advantage for us. You know, a team which has got a a plus twenty year track record and a very focused, know, investment process owes what it's doing will help us to stand out both with an intermediary market who is questioning about what are the implications of the changes, but also with the general public that will be allocating more money towards, you know, sustainable investment.

27:49 And also at a time when you can see that groups in Europe moving backwards from, you know, SFDR nine categories to six or eight, reflecting this. If we do not do exactly as it says on the tin, we are subject to regulatory fines or and so really, if you like clarifying that, the greenwashing. So having an investment process that stands true to what it is, is key for us. And again, very pleasing to see an improvement in the short term performance going forward there. So really, to summarize and to finish, there's a very good base to the business.

28:39 The brand is strong. I think the distribution is there. I think the investment, the improving outlook and ability of UK economy and the Aspen outlook is favorable for us. Our job is to be you know, where the wind blows in that direction, want of a better word, is to have as much sale up as possible. You know, we have a phrase internally, which is always the relentless pursuit of the basics. So I think with a good solid operating

29:07 platform, a strong brand, a well differentiated investment proposition, that it puts us in a place, especially having come through what you know, across the industry has been an incredibly challenging two two year environment.

29:30 At that point, if I'm very happy to take questions or move on, but thank you very much for your time. Yeah. Perfect. John, Vinay, thank you 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 corner of your screen. But just while the company take a few moments through the 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 both pre submitted and throughout today's live presentation. And Simon, if I could just hand over to you just to read out those questions where appropriate to do so, I'll pick up from you at the end. Just hold the analyst one. Yeah. Thank thank you. Thank you. Just there's a number of questions. There's a few themes.

30:16 So the first one, the first theme is about analysts and their kind of notes online, Justin, the downgrade online. So they're going to respond to the analysts all the time. Yeah. No. I I I think, you know, we have seven analysts who cover us. I think if you if you look at their notes, you know, the majority are going over a positive on the They highlight the concerns around flows. They note the improving performance. So yes, so I overall, if you look at the seven who cover us, we have you know, four of them have a buy rating, you know, two are hold and one is sell. So overall, you know, a a strong bias towards a a buy.

31:03 In terms of downgrades, yeah, that is right. So, yeah, the analysts have done a small downgrade to their numbers. Think, you know, it's some one actually has upgraded slightly, but they were a little bit lower than where we ended up last year. But small downgrades, percent to 3%, think, across the board. So I think that just reflects the flow outcome for last year and where we've ended up AUM wise. We gave an update of AUM on the June 20 with our results, and there'll be a further update trading update next week. So so, you know, so in light of that, there's bit of mark to market. You know, when you get your annual results out, there's always a realignment of numbers going forward as we give greater guidance and actual hard numbers on revenue margin and the like. So yes, I think it's a caution from from from the analysts, you know, which, you know, is is taking it into account the the tough year of flows that we've had and looking forward, you know, into the next three years. So I I think, you know, no, and actually, the reassuring part is that you have got four of the analysts who cover us with buy ratings.

32:26 So the next question kind of picks up on some of that in terms of the area. When will it start increasing? I know you've you asked Yeah. It I mean, I think we're look at where we are. Obviously, billion of outflows is a good position. It's roughly down to about 1 and half billion a quarter, and guidance at the market at the moment about, you know, just a little shy of 900 probably. So there's been there's been a churn down and in, you know, as in we have less on the outflow side, but still, you know, not necessarily we'd want to be. I think when I talked about the two big books of business, if I look at those flows, it was probably around 200,000,000 a month coming out of, you know, The UK book of business.

33:17 In the short term, you know, those flows have slowed outflow slowed, you know, more considerably. And I think the outlook, again, you know, the reference points which you look for as to where people's attitude are, that valuation opportunity that exists, maybe in a the direction of travel. I think, you know, things like the British, honestly, the quantum doesn't change anything, but the mood music around things probably does does change. And I think, therefore, the attractiveness of The UK equity market comes more into play. So really, you know, to get away from the outflows, you know, or to get into inflows, it's that I mean, is that outflow position. So I think a combination of clients now being much happier with those levels. And when I say happier, not want you know, not wanting to take the money lower, and now that it'll be more about the outlook going forward and what people allocate there. With the sustainable side, I think more that there'll be more clarity around the position with FCA regulations, more focus on the space. I think more money is more likely to be channels to that those areas. And again, in a very much interest rate sensitivity, so I could see the outlook on those books changing.

34:44 And and then, again, the other side, you know, we've had, you know, against that, we've had, you know, good growth, you know, in a poor market with the European products that we have. And I think the efforts we've put, you know, into the global equity side is there. If I look across the industry, you know, it's pretty much a similar position. Maybe some of the groups that have a product suite, which is more well, either one of two places more in money market or MPAN positions have had, you know, better flow profiles. But as that money that has been in those more defensive begins to see, you know, move more to that risk on environment, I think the suite of products that we have, you know, provides opportunity there.

35:32 And so and you can see with in some of the other groups where you've got more, if you like, risk on products, the more adventurous investor is is investing in those areas. So I think I'm not looking for a dramatic change, but I certainly think as we go through the course this year, we will continue to see good improvement in the flow profile. And certainly, as we, you know, go through the rest of the year into next year, market will start to anticipate us going into positive flows. Very much if you look at an asset manager, the old adage is, they behave a bit like a warrant on the stock market. If the stock market is go look looking to perform well, the the asset manager will perform well. If this if the outlook for the stock market is not good, it is a more challenging environment, you know, for for the asset manager. So I think a combination of stability, lowering interest rates, and turn to more sustainable and better economic growth provides a good backdrop for the next three years.

36:44 Next question is about the dividend. Can it be maintained, particularly if the company stays in terms of where it is financially? Yes. I mean, I think we paid out we're paying out 72p dividend for the just gone. So 50p is going be paid to shareholders who are on the register as of today, actually, ended today on the August 9. And if you look the analyst forecasts, they normally have good guidance. They're all 72p for this next twelve months. So for our year that ends March 25 and and the 72 b in in the next two years as well. So so the analysts are forecasting that. If if you look again, if you look at consensus numbers, so the average of all the analysts who cover us, you know, the consensus is a little bit under, so just under 71 piece. So a little bit under our dividend, so it's uncovered. But as when I talked about our financial position earlier, we have a strong balance sheet with over $100,000,000 of cash. We are profitable on an adjusted basis.

37:59 We're generally profits every month. And even if you look at where the market thinks we are, that's roughly almost averaging $5,000,000 a month of profit. So yeah, so we we are we are in a strong financial position. So even if our earnings dip a little bit below the dividend next year, we've always seen current financial year, the dividend is maintainable, and and the board are very comfortable with, you know, the position that we're in. So you have seen other asset management companies, some of our peers pay uncovered dividends. So pay a dividend that is slightly more than, you know, the earnings the after tax earnings that companies generated. I think for us, it's about outlook and confidence. And hopefully, if you read our results statement, you'll see we have confidence. Although it's been a tough time and it's probably gonna be another quarter or two tough tough flows, you know, we are confident about the future.

38:57 Our funds are, you know, on the whole, you know, showing an improving trend in terms of performance. You know, the interest rate environment will hopefully start improving. I think there's no no commentators talking about interest rates going up. It's gonna be going down. So so I think there's some some confidence to be had for the future. So yes, I think the dividend and the market is strongly saying that the dividend will be maintained. The final question is about the balance between organic growth and acquisitions and our strategy in terms of that. Yeah. Our strategy is very much, you know, the things that I know myself, Simon, can affect on a day to day basis happen inside the four walls of this business. We have always said that organic growth is the most important to us.

39:53 The growth you know, it is the growth going forward. The growth forward will be from the things that we have, hence the changes and the better clarification on the global equity side and the position positioning of the product suite. The other point there though is to, you know, how do you broaden out the range of investment offerings you have or enhance distribution opportunities that you have. Two ways to do that. One is to hire new teams. If you hire a new team, it takes three years to get a three year track record, and you pretty much have to nickel and dime it with all the clients before you can build a product up to a size where your larger clients will engage with you because of their fear of concentration of ownership within portfolios.

40:41 So that brings in, if you like, the third opportunity, which is acquisitions, you know, be bigger or bolt ons. They and then what we're looking to do is we're not looking to buy things just to fill silos. We're looking to bring in a new skill set either on the investment side or on the distribution side. So really, if you like, a fast forwarding of that grow your own side. And that's important when we see, you know, when we went to with the new front office system and the strong back office system. You know, technology is our friend. It's not an expense. To be able to get scalability and flexibility to run a business, having an industry leading margin enables us when we do look at acquisitions to take them on efficiently, quickly and to get the values out of them.

41:39 So, you know, we always do need to look at where the dynamics of the market are. You know, we are very much a client centric business, so we need to know what what are clients invested in, what did they or are they looking at. If we haven't got that skill set inside, we would look at the acquisition side. And I think, you know, product development, having very focused teams as opposed to if I was at BlackRock, I would have, you know, 800 fund managers behind me. If I wanted somebody to run a rates product for me, there would be managers there. Here, we've got very clear teams. We can do product extension. So a classic example of that would have been taking the small cap fund. As that got bigger, we had a redundant, if you like, investment capacity in the bottom end of the small cap, So we launched the micro cap funds to give us that product extension.

42:38 So it's really all I'm trying to do there is just put in context why where we use them. We do look at very much from what does it give to us, what is it adding, any acquisition we make, we're looking to grow and develop take it forward. But whilst they get the headlines more than anything else, the focus of the business is very much on the day job and the organic growth. Great. Thank you, John. Thank you, Vinay. Alessandra, that concludes the questions. Perfect. John, Vinay, Simon, thank you very much for answering those questions. You can, of course, the company can review all the questions submitted today and we'll publish those responses on the investor meet company platform. But just before redirecting investors, provide you their feedback, which is important to the company. John, I was just wondering if you had a few closing comments.

43:27 Just to thank everybody for their time. We very much appreciate it, and we appreciate the support and investment that we have from people. So thank you very much. Yeah. Thank you very much. Thanks, Perfect. Thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations? This won't take a few moments to complete, but I'm sure it be greatly valued by the company. On behalf of the management team of LIONTRUST ASSET MANAGEMENT PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you. Thank you. Thanks so much. Thanks, Mike.