Liontrust Asset Management (LSE:LIO) — FY25 year-end results

0:02 Good afternoon, 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 they can be submitted at any time using the Q and A tab situated on the top right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today and publish responses, which is appropriate to do so. Before we begin, I would like to submit the final poll. And I would now like

0:32 to hand you over to CEO, John Irons. Good afternoon to you. Good afternoon, ladies and gentlemen, and welcome to the LIONTRUST ASSET MANAGEMENT PULLIO RESULTS PRESENTATION. With me this afternoon to my left is Stephen Corbett, head of investor relations, Mark Horton, head of global equities. I'm John Iron, CEO, Vinny Abrol, finance director, and Simon Hilberry, marketing director. A broader team than usual because I felt it would be good to go a little bit more in-depth into some of the reasons we have, you know, opt going forward. And LIONTRUST ASSET MANAGEMENT, seven strong investment processes, a clear investment philosophy, and that process captures that.

1:29 The presentation today will will touch, first of all, on some of the the highlights of of the results. Then we'll go into case of why we feel that the investment background is looking more favorable going forward. Some of the enhancements we've made on the sales distribution side, Simon will cover some of the marketing side, drill down further into each of those seven distinct investment strategies, then I will touch on the financials, and then we'll be more than happy to take questions. It should take about thirty five minutes. If I go through into the the highlights, obviously, it's been a more challenging year for the industry, and LIONTRUST has not been immune to the assets at the year end, so the 22,600,000,000 and around that level as we speak today.

2:27 Still means a a profit before tax of 48.3 e million, and we've maintained the dividend for the full year commitment we made at the interim period to to pay the final dividend of 50 p and 72 p for the year. So to later on the changes we've made to the business transformation program, which will generate roughly 6,000,000 of annualized cost savings and also the new capital allocation policy, which will be change in payment of 50% payout ratio, which we feel better reflects the business and supports it in terms of moving forward with its growth objective. So I think, maybe if I hand on to Mark, he will sort of outline why we feel the the outlook for for active management after several disappointing years now looks more favorable.

3:26 Thanks, John. Thank you very much. So this first slide shows you the trend of American exceptionalism that has driven significant index share gains over the last fifteen years. This has been a great deal of what has driven relatively easy market gains overall and therefore a much better passive investment environment to the detriment of active managers. In fact, over the same period, the mutual fund market in The United States has gone from very little and passive to over half of the mutual fund market. So there's not been an ideal environment for the active investor. At the same time, as that huge increase in The US share of the world equity market going from 47 to 68%, US GDP as a share of world GDP has remained pretty flat.

4:17 So this has been a reflection of valuation increase, but also a reflection of some of these companies that began their lives in the early two thousands and have become some of the biggest companies in the world today. Such that on this slide, as you can see, the weight of the largest seven companies in the s and p, 29% currently, a touch of its high, but at the highest levels that we've seen in terms of concentration for almost a hundred years. You'd have to go back to the industrial revolution to find a similar level similar level of concentration. And passive flows have helped drive this. It's been relatively easy to push money into these few names and generate perfectly respectable equity returns without having to think beyond that. And that narrow focus of investment, of course, comes at the expense of many tens of thousands of other equities globally that really look very cheap.

5:17 This next slide shows that same performance of The US equity market in terms of the output that it's generated for the world index year by year. There are only three years prior to this year that we're in now where The US has underperformed the world index, again, making that push to pass it into US an easy call. But the question really is, has The US outperformed for long enough? And if it has, then you probably don't want to be passive. In those years where The US market has outperformed, we've also tend to see US dollar strength. In The US. It's underperformed the dollar weakness. We're in a dollar weakness year this year, a couple of numbers that I think make this point very interesting.

6:03 So in sterling terms this year, the S and P is down 4% at the half year point. The FTSE one hundred is up seven and a half percent. The DAX in Germany is up 24%. So already, you can see that the opportunity set outside of that small group of American names when active investment investment becomes more powerful can be really quite polarizing and generate very significantly different return levels. Three out of seven of the magnificent seven are down this year. Two of them are down quite a lot. Tesla and Apple are down 20%. Its sterling terms down over 25%. You know, the opportunity set is clearly changing. This next slide shows the correlation over the last thirty years between The US Dollar and the out or underperformance of The US equity market. When the US dollar strengthens, the equity market tends to perform much better and outperform world equities.

7:04 Again, if we're heading into a period now where the US dollar becomes weaker, where the exceptionalism of that currency versus the rest of the world, its reference point, is maybe beginning to change. That could also be a key dynamic in promoting the opportunity for a diversification both outside The US market and within The US equity market itself. And my final slide,

7:32 this these are some numbers produced by Goldman Sachs in December of last year. The US equity market has more concentration, higher profitability, and a higher level of valuation than it has had pretty much for all of the last one hundred years. For me, as a portfolio manager, that represents risk. It's why we've seen this tremendous run. The bar the first two bars on the right hand side represent the performance of investing a thousand pounds over the last ten years. You had a 13% compound return, very healthy return. Goldman's expectations are those returns are gonna be significantly less for The US market in the next ten years, 3% in fact, and that's in dollars. Your £1,000 would only generate you £345 in that situation.

8:20 That's probably not enough for most equity investors. It certainly won't be enough for most wealth managers. And so this is really the reason why I think everything is setting up for a significantly better backdrop for active management because active management is going to be what is needed for wealth managers and equity investors to generate the type of equity returns that they have come to expect. Thank you, Mark. So now we've and and looking forward in building for growth, there's an investment case why we believe that, you know, these seven very strong active investment structures we have would be much more appealing to clients. We're moving towards distribution and what what we're doing there. I you know, how are we getting this message across to our our client base?

9:10 We've, if you like, deep channelized quite a lot of of the distribution groups here, and that's more a reflection of the evolving landscape that is taking place with a lot of m and a activity going on in the in the wealth management space. What we have now is larger pools of cash handled amongst few fewer people. So effectively, you know, apps are wholesale, institutional, and even without international is to have one standard platform that that the business operates across. It allows us to be much more data driven in the execution of those plans and allows us to upgrade the mess the the message message going out to clients. What we find with this smaller number of larger people, it becomes more consultant driven, and therefore, data we provide to them has to be much more timely and detailed than it has been in the past. This plays well to LIONTRUST very much, you know, well documented and detailed investment processes.

10:16 We can clearly see we'll see where how that plays out alongside the brand and the strength and the positioning of the business a bit later on. So it's all about activity. The operating platform that we build the business on now allows us to be much more

10:35 age much more timely with the data we have. And to give an example of that, to sort of how you know, know what clients want and how we deliver that. Return to to the the next next one, Steven. You'll you'll see in the last quarter, there was a 82 meetings take place. I'm just. Of those 85 of those meetings with what percent of of those those meetings were what we classified with our tier one or two tier tier two clients at top level. And within 70% of those, we targeted with with with the active decision makers there. So it's very much a data driven approach, giving market intelligence, timely reporting, and digital enhancements there. There are 47 client events, of which 682 clients attended on the other side of that.

11:26 Our annual investment company attended by 300 people, a sustainable conference ended by about 80 people. And, recently, even though with the weak outlook of outflows of of money out of The UK equity market at six only a couple of weeks ago, 60 of the top fund buyers in The UK for a UK economic advantage presentation at the Mountain House. So it's very very much much showing that I just still has that ability to target the right clients, get the message in front of the right clients even though we've gone through a a weaker period in in terms of flows. And I I think think with with that that change in market sentiment that Mark has already alluded to, that very clear explanation of the processes which Steven will go to align with the the brand that that Simon's now gonna move us forward with.

12:23 Thank you. As as with any company, the brand is really important in terms of reflecting the awareness, knowledge, engagement that our clients and potential clients have with us. I think a few stats from independent research shows that we've managed to maintain a very strong high profile brand both with professional intermediaries and retail investors. Look at brand familiarity amongst financial advice, we're second, and we're fifth amongst wealth managers. We're consistently in the top 10 named as the best asset managers in the market by professional intermediaries. And when it comes to advertising recall, we're third unprompted amongst professional and second amongst retail investors.

13:10 This, we believe, puts us in a very strong position going forward.

13:15 Second point I want to raise is about the of the investment teams. Research shows that clients and potential clients still rate our investment teams very highly. Amongst retail investors, we're still number one for sustainable. Amongst professionals, we're market leading for sustainable. Second, for UK equities and third, for both European equities and multi asset. Our one investment trust, Endwear Investment Trust, we've managed to narrow the discount quite significantly. And our engagement with retail shareholders is shown by the fact that we had well over a 100 investors at a recent retail investor event. On service, service, obviously, is very important both to retail investors and to professionals.

14:02 And we've put a lot of store by the level of service that we provide. Indication of this is the white labeling bespoke service that we offer for financial providers for multi asset. One of the documents was rated as the second best document under consumer duty by an independent consumer duty panel, and we are rated as fourth best client service amongst financial advisers. In terms of engagement, we produce regular, clear content that is engaged by our client base. Over the last year, over half a million views of our investment fund manager videos, and we are also rated as fourth best for communication.

14:48 Finally, understanding clients. John talked about the physical presence that the sales team has with clients. We also digitally understand clients through their behavior and through their interests, and we work in terms of providing a personalized and more bespoke service based on those interests and the content they want to see and when they want to see it. And we believe this will increase engagement and understanding of large jobs going forward. Yes, hon. So the investment case of the distribution and the strength of the brand. I explained you'll see the teams that we have, the seven distinct investment teams. We thought in this case, you'll see see if we could drill down through each of the teams and and and where we see them and how they're positioned at the moment.

15:37 So we have a statement of 50 funds across seven investment teams, all active funds delivered through through investment process. Looking at the teams in turn, just to give you a flavor of that breadth and the styles and the opportunities backed by that strong brand that Simon mentioned and taken to market by our investment process specialists in distribution. We heard from Mark, head of the global equities team, a highly experienced team managing funds across emerging and developed markets, including global long short, global long only, US, LATAM, EM, China, Japan, India, and Russia, which is currently closed or suspended. 10 funds with 1,000,000,000 of assets under management. The global alpha long short fund was transferred to LIONTRUST in the new in the year and has a ten year track record under Mark Horton. Besides another alternative fund to our stable, and it's one that's delivered over 13 year to date and is taking flows.

16:34 The cash flow team grew their AUM last year by £650,000,000 taking total AUM to over £3,000,000,000 for the team. This high conviction, high active share investment process is delivered throughout the cycle. The European dynamic fund has grown from GBP 300,000,000 to 2,000,000,000 over three years. The strategic equity fund is now GBP $264,000,000 to GBP 100,000,000 a year and a half ago. And newly launched offshore pan European fund has raised GBP $346,000,000 this year. Investment in Europe is getting more attention, and and the funds offered by the team are well positioned to capitalize on the opportunities there, especially for Eurodynamic, a fund which has outperformed in its benchmark in nine of the last eleven years. The economic advantage team are one of the most respected UK equity teams in the market with their twenty seven year track record and team of seven.

17:25 The headwinds facing UK equities since 2022 have been very well documented. I think we will share them on this call. But specifically for the team, the headwinds have been threefold, size, style, and sector. They're naturally skewed to mid and small caps. That's the size. The style is one of growth and not value, and not only banks being the being the sector headwind. And this has meant that performance has been challenging. The economic advantage funds play that crucial quality growth role for investors in those balanced portfolios. And you see what we regard as the hallmarks to quality in the economic advantage funds here, and this specifically for the special situations fund. Each of the five funds the team manage are a basket of world leading businesses with those barriers to competition that are difficult to replicate.

18:12 And what we're seeing already is corporates or private equity beginning to appreciate that value with four companies being taken over so far this year and three others subject to a bid. We have set out our stores to be quality growth with the EA funds, and we continue to play that crucial role for investors. So the sustainable future team. We believe investing sustainably to be a long term megatrend. While performance in 'twenty two to 'twenty four for all sustainable funds in the market has dented retail demands, there remains there remains, an expectation for corporations to be investing responsibly themselves. In the shorter term, we see increased demand from institutional investors, think corporates, endowments, charities, and improving retail sentiment.

18:58 In The UK, ESG is embedded in our education system, and it's backed by government. Those institutional investors require funds with pedigree and process. We've been pioneers in this space for twenty two years, and I'm breaking twenty two year year track record with these funds under Peter Macales, underpinned by their clear process and with tentative teams funds being awarded s d a SDR labels by the FCA recently. And they've got a broad range of funds. They've got single strategy funds, managed funds, and fixed income funds, and they serve various parts of the market. The the IFAs get serviced through the managed funds, the single strategy funds, the solutions for wealth managers, fund to fund managers, and and, of course, those fixed income and, of course, institutional investors through both the funds and segregated accounts.

19:45 And these are all avenues into what is a very large and adjustable market, particularly in Europe.

19:53 Looking at the global fundamental team, they managed 1,800,000,000, with 1,200,000,000 of that being at the Edinburgh Investment Trust. The trust has now been managed by that team for five years. Strong performance, as Simon mentioned, with the discount narrowing to 6%. Very stable shareholder register and certainly a potential mother hen for other trusts looking for scale. The team also managed an income fund and UK equity funds. So they've experienced in managing funds, investment trusts, and segregated accounts, again, positioned to to capture opportunity should they come their way. The multi asset team, as Simon mentioned as well, they provide solutions to IFAs in this fast evolving market and this regulatory in environment. It's increasingly popular amongst IFAs for two principal reasons, suitability and crowd risk profiling.

20:41 Outsourced multi asset simplifies the advice process for IFAs and meets regulatory demands. Secondly, doing the investment bit. So IFAs can focus on the financial planning and those client relationships. And the team we have here are very actively different. They're reaping the benefits of enhancements made to the multi asset process over the previous few years, very strong performance. They offer a first class level of service, client engagement, and they're very open and communicative with the IFAs that are utilizing their resources. And they like to form partnerships with IFAs and offering that white label service. The portfolios and funds have delivered very strong performance, and we look to capitalize on the opportunity set out in the market for them at the moment as and as a result of their quality and the RFAs seeking solutions to their problems.

21:30 Finally, global innovation. The global innovation team managed 840,000,000 across their three funds, global dividend, innovation, and technology. So that's an income fund, a growth fund, a pure pure tech pay fund, all being global.

21:44 The teams have a highly distinctive investment process, investing in disruptive innovators. The funds are differentiated to peers in the IA global fund sector. Only 41% of the innovation fund portfolio is not owned by the 50 largest funds. They are not reliant on the MAGEMENT seven companies, finding more compelling end of innovators lower down the market cap spectrum. So with a low crossover to other funds in the IA global sector, our innovation funds can add genuine diversification for investors with extremely strong performance. And this dynamic and bright team are making inroads into what is a very large addressable market. What we see from briefly digging deeper into the seven investment teams is the scope of opportunities in the product range, Marrying this with our brand that Simon touched on and and and and with the distribution team that John talked about, it's they have that opportunity to take a lot to market.

22:37 Yes. Give me a second. Seven special investment teams focus exclusively on active management, offering exposure to undervalued segments that can deliver alpha in a low return environment, strategies that have over 80% active share on a benchmark agnostic. As a house, we tend to have a bias towards small and mid cap growth companies, but we get a strong suite of products and fundamentals. So, again, ideal for that world in return. Now, obviously, with advantages and sustainable investing, remember, the two bigger blocks, which have been more more challenged. If I look at the economic advantage, the UK team, we've got I think there are only four funds left now in the small company sector that are in excess of 500,000,000.

23:26 And if we if we looked down at those, let's say, four funds, three three of them have moved more mid cap and value, and one with with my way, I was still very much in that small mid cap growth sector. All of these things are important, though. Again, when we were talking to clients at the management house conference recently, you know, I would be you know, that people are going full circle on on UK equities, but but certainly that deep revaluation of UK equities downwards and the opportunity set, the pickup in bids and activities we're seeing. If think about how our clients use our funds, they tend to to to blend them with others to get that move that client output me too. And the institutional space is the fact that we have a a higher portion of our small caps in the aims side side is is appealing because the aims stocks actually fit in with the unquoted allocations for the local authorities, which the mansion has the gold is driving.

24:31 The sustainable is, again, the focus maybe on in the retail side where we've we've moved away a bit from that big drive behind sustainability, struggle more performance wise and an ability to hold. We've got a larger the large companies. Obviously, oils, carbon emitters, not there under that small mid gap bias. So but short terms, if you think post Asia and people's focus more towards those small mid gaps and very much, as Steven was alluding to, that the drive from institutions still still to allocate to sustainable. So two more two very challenging areas for us as two years, very much when we work with the teams looking to make sure that our process is adhered to and the companies that own through that building that want want to move moving forward.

25:29 On the other side, the cash flow European dynamic, back to what Mark mentioned earlier, that sort of outperformance of Europe, that drive there, there's been 650,000,000 even in in this one in this calendar year of net inflows in there. And the pipeline there, certainly from institutions now where people are screening and, you know, those numbers. And we've had incomings from internationally that's really incoming inbound built from databases where investors looking to allocate internationally. They've seen the numbers there. We have either Australian superannuation funding last week, and that's came from an inbound.

26:14 But then we have a team internally who've probably done two and a half hours of meetings with them before they came in, me, and that team. So the pipeline of inquiries from there, the strong numbers with the global innovation team, that team now is three years behind it. And, you know, very much in in that top quartile. Mark's team, performance across the balanced fund, the hedge fund up 10% year to date. The the multi asset portfolios where we put a new risk modeling tool in place for that access into the intermediary market marketplace

26:50 years ago. That's just started to generate stronger numbers. So across the group, we're beginning to see Adam's optimism. The marketplace where, if you like, price discovery or research starts to get rewarded in a low return environment gives me much stronger grounds optimism. So it's been strategic repositioning. But also in the last year, we've posted more as well on on the tactical cost management and maybe with the operating model, Yeah. Thanks, Sean. So maybe I'll just spend a few minutes talking about our operating platform. One of our strategic objectives is to have a efficient, scalable, and reliable operating platform for our fund management teams and our operations team.

27:44 And maybe I'll just talk a little bit now about some of the recent developments that we've made to our.

27:51 During the course of the year, we implemented BlackRock's Aladdin system. So Aladdin is a front office based order management system for fund managers to use and a portfolio management system to support those fund managers in managing their their portfolios. It's a leading system in the front office, and putting that into LIONTRUST allows us to gain efficiencies using, you know, the technology platform that's been developed by one of the world's largest asset managers. Alongside that, we've strengthened our partnership with Bank of York Mellon who provide a lot of our outsourced services. So we've taken additional services for them in the from them in the front office.

28:36 So they now support us in running the Aladdin system as well as implementing the data vault solutions. So data vault provides a

28:46 backbone for the business where all our outsourced data comes into one one place. The other two elements that we've done during the year, we've outsourced the the production of our fact sheets and and regulated documentation, again, adding scalability to our operating platform. So we transfer that four people and effectively taking a service from from Broadridge. So it gives us immense scalability in our ability to

29:15 deliver fact sheets and other regulatory reporting. The last pillar that we changed in our planning platform is a more recent change. We we've outsourced our trading team. So in the past, we carried out our trading in house for our funds. That has also been transferred to Bank of New York, again, a a leading provider of what they call buy side solutions. So they now provide us twenty four hours, six days a week training facilities for our fund managers. So when orders come into, they're automatically routed through to the bank. K. Let's follow-up. So we've got that that strong platform. That's fine. Basically,

30:04 it's been that we only want to do the things inside of LIONTRUST where we can add value, be it the fund management side, distribution, or the brand. But it's key for us to have all our data in one place, and that operating platform now has helped us to, a, to deliver cost efficiencies, but also business efficiencies. Perhaps we can do a little bit more on on the full year results. Yeah. So so maybe I'll start by just talking about some of the financial results. So the business remains in good financial health. We have a strong capital position. Service capital in our business is just under 60,000,000 at the end of March.

30:49 And even after we take into account the dividend that we're due to pay in August, we'll have service capital after foreseeable dividends of over £25,000,000 in the business. Moving on to the results themselves. We had a 157,000,000 of revenues, which includes 3,600,000 of of performance fees with a a gross revenue margin of 60 basis points. So that has come down a little bit from the previous year, which is 62 basis points, but pretty much in line with our guidance to the market that we would expect our revenue margin to reduce by one or two basis points per year. That's led us to a adjust adjusted profit of 48,300,000, which is down from from the previous year, really a reflection of reduced AUM over the over the period.

31:42 Our operating margin was just under 30%, again, down from the last year,

31:49 partly a reflection of the lower when compared to last year performance fees, which do give a little bit of a boost to to operating margin. That has led us to a being able to pay a second interim dividend of 50p per share to shareholders. So if we go to the next slide. The next slide shows you a reconciliation between statute profit to adjusted profit through some adjustments. I'm not gonna dwell on this other than just refer to the, you know, the professional services line, which includes the cost of business transformation service, which we talked about previously.

32:35 Moving on to the next slide, we have the adjusted income statement, which just shows you in detail the flow from revenues, costs to adjusted profit. Key things to pick up from here. Our cost income ratio is up slightly. We have when you look at our our cost side, fund manager remuneration linked to revenues, so we'll deflate as revenues deflate, come down. But there is an element of fixed cost in there for other staff, which is is not particularly linked to revenues. So so that really will lead sometimes to a small uptick in the in the compensation ratio, but still, you know, only up by just one just over 1%.

33:24 Move to the next slide. We've got our our capital position. So as I mentioned earlier, we have 75 just just say 75,000,000 of capital after regulatory exceptions. Our regulatory capital is 18,000,000, so that gives us a surplus of 57,000,000. And when you take foreseeable dividends into account, which are due to be paid in August, we have a surplus of 26,000,000. So less than it was, but still in a in a healthy capital position. I'll just now move on to our new capital allocation policy. So you will see in our results, we announced a a new capital allocation policy. And it's probably worth talking a little bit about the background as as meant that we've put a new capital allocation policy.

34:18 If you look at our the amount of dividends that we paid out in the last year, we've paid out 72 p of dividends. We will be paying out 72p of dividends on earnings of 57 p. So we've got a payout ratio of a 127¢. We also did a share buyback during the the period, which is equivalent to 14% of our earnings. So for FY '25, the financial year just gone. We paid out over a 140% of our our earnings that we've made during the year. So not a not a position that we can sustain for very long. So that has led us to put in place a new capital allocation policy, which combines investing in the business, inorganic opportunities, and where we have incremental cap excess capital share buybacks.

35:16 So move on to the next page. So the next page just sets out our capital allocation policy. The priority is to make sure that we have sufficient cash in the business and sufficient regulatory capital. After that, we'll we'll pay out 50% of our adjusted diluted earnings as a dividend to shareholders, split approximately one third, two thirds across the interim and second interim dividends. We then allow for any investments that we need to make in organic in organic investments and inorganic investments. And if there's any excess capital, then we'll look to return that to shareholders through share finance. So, see, over the past year, you know, I said now, we've focused both the tactical cost management, strategic repositioning.

36:08 We streamlined our operations, reduced nonessential costs, and completed the the integration of Black Box, the Latin platform, and Bank of New York's data board. Strategically, we've expanded our international footprint, particularly with operations government operations in Switzerland, The Middle East And Asia, and we've enhanced our investment offerings with new fund launches, team appointments. Mark's talked about, you know, active management is far from dead, and we may looking to enter into a period where that price discovery, I good old metal research starts to get rewarded and plays more to the to the seven distinct strong investment processes we have. So it gives us cautious optimism on the outlook going forward.

37:04 I mean, the the strength of the brand, the power of the distribution, especially having gone through two challenging years in terms of challenging years in terms of flow profile is testament, you know, to the to to the core strengths of the business. I think, you know, on that outlook, we can probably turn it around for for questions. Okay. So thank you for the questions that have been sent in. To kick off, how are management aligned with shareholders? Management are aligned with shareholders. Vin and I are both equity holders in the in the business, and we have numerous performance targets for flow, profitability, and the fund management performance.

37:52 Yeah. Think, yeah, John and I hold sort of over 3% of the equity between us. You know, we've been buying shares this year. You know, we bought shares in in January and February. So, you know and, you know, we we have, you know, we have you know, when you look at how we remunerated, there's those scorecard, which is very much linked towards, you know, how the business is performed. Great. Well, for you here, I think, Bene, when do you see large large current adjustments ending? Yeah. I think, you know, we've we've we've seen some we've probably seen larger than what we've seen in many previous years before in the last last year, which which has been mostly due to our business transformation program. So so we we've taken the opportunity over the last eighteen months to invest the business. So, you know, that's that's been in terms of, you know, the Aladdin system that we've talked about, the outsourcing or trading, implementing data faults. So so the bulk of that works behind us.

39:00 You know, we would expect the adjustments that are related to professional services to reduce more to the sort of long term long term trend. So we wouldn't expect to see the same level of adjustments going through in in FY twenty six and and beyond. You've left them for buybacks. How might they look? Obviously, people ask about quantum and timing. We can't comment on that. How are they? The moving to the pop the new allocation policy is that to support the, you know, the growth, the organic and and inorganic growth growth of the business. It's at at a 50% ratio service. They'll be looking at, you know, having for earnings, maybe a 7% deal on a current share price next year.

39:52 But what we said, that's a minimum. And having done a smaller buyback this year of 400,000,000 ended in March, all of the tools available to us are there. And depending on where we get to with, you know, sort of what we would believe to be excess capital, a lot of the returns to, you know, high levels or or buy back bucks to clients. What we have not wanted to do is put too many restrictions on the certain minimums of that because because it will become a bit like, you know, the unsustainable position we have with the dividend by the business is is driven more to maintain the payout at the dividend level rather than to invest in the future growth opportunities within the business. Yeah. There's probably some more we've set minimum payout ratio at 5050%.

40:45 We we we recognize that asset management is a cyclical business. So the profits will will will go with the cycles. So, you know, and it's a minimum payout ratio, not a target payout ratio. Simon, there's a question on on brand here, you know, that we we're scoring a very credible second and third or fourth in in in things. How how do we get to one, it says? Well, I think we well, we we are one for sustainable, so we will continue to strive for that. But I think it's a very, very credible result given the the competition we've got across the industry. But we are consistently well above. Consistently market leader. Yeah. Great. Well, that kind of rounds up. We we've combined a number of questions here, and it kind of wraps that up. So I think back to our you. Presenters. That's great, Steven. Thank you, John, for addressing all those questions for investors today. And of course, the company can review your questions submitted today, and we will publish those responses on the Investor Me Company platform.

41:48 But, John, before I redirect investors to provide you with their feedback, which I know is particularly important to the company, could I please just ask you for a few closing comments? Thank you, everybody, for your time. We're well aware it's been a challenging period, but, hopefully, there's a more opt more positive on the environment for active managers going forward. We have a strong suite of products and fund managers supported by strong brand and leading distribution teams. We'll continue to focus very much on being active asset managers. I'm looking forward to reclaiming that sort of position we're in and to capitalize on the opportunities we have ahead of us.

42:36 So thank you very much for your time. That's great, John and team. Thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the Board can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will 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.