Me Group International (LSE:MEGP) — 2023 Annual Results

0:01 Good morning, ladies and gentlemen, and welcome to the ME GROUP INTERNATIONAL PLC Investor Presentation. Company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, I would like to submit

0:33 the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I would now like to hand you over to the team from ME GROUP INTERNATIONAL. Vlad, good morning, sir. Good morning. Thank you. So good morning, everyone, and welcome to the ME GROUP twenty twenty three annual results presentation. My name is Vlad Krasnanski. I'm Head of IR and UK Commercial Operations. And alongside me is Stephane Gibbons, Chief Financial Officer. Good morning,

0:57 everyone. Today, we will start with a run through of the 2023 financial highlights. We will then provide an overview of ME GROUP, the business model and growth strategy, and then we'll talk through the group's financial performance, followed by key operational highlights from the period.

1:12 Lastly, we'll conclude with a summary of the 2023 performance as well as outlook for 2024. So we're delighted to report a record year for the group with revenue up 14%, EBITDA up 15%, and profits up almost 26% with a strong growth delivered across the business. We also continue to make good progress against our growth strategy and continue to modernize our photobooth estate underpinned by new product and technology innovation. We grew our laundry estate by 16% in terms of unit size, and we became the market leader for photo booths in Japan following a successful acquisition in Japan and continued our geographic expansion, increasing our presence in Australia. Throughout the year, we remain focused on creating further shareholder value, including our share buyback program and dividends.

2:02 So for those less familiar with ME GROUP, we'll first provide an overview of the business, our business model, and growth strategy. So ME GROUP is a leader in automated service equipment. We operate more than 47 and a half thousand machines, up from 44,000 in 2022. We have a presence in 18 countries situated across our three core geographies of Continental Europe, which is our largest region by number of units and revenue contribution, The UK and Republic Of Ireland, and Asia Pacific. Within the group, we have four principal business areas that largely make up our operations. Firstly, photo me is our photo booth and photo ID solutions business, known under the high profile photo maton brand in France.

2:48 This is our largest business area by number of units, revenue, and EBITDA contribution. WashMe is our estate of unattended laundry services and launderettes offering high capacity, energy saving, rapid self-service laundry solutions. This is our fastest growing and highest margin business area and a key focus of our expanding operations. Total revenue from this part of the business increased by 34% compared to last year, while the number of units only increased by 16%. We are also currently undertaking a major rebranding from Revolution to WashMe. PrintMe is our digital printing kiosk business offering a wide range of competitively priced print formats and personalized products, which also enables customers to print high quality pictures from their smartphone.

3:40 Lastly, Feed Me is our vending equipment business for the food service market where activities are focused on two areas, self-service fresh juice equipment and pizza vending machines. Our operations and innovation are supported by our in house r and d centers located in France and Vietnam, driven by a team of more than 50 engineers. Continuous technological innovation and diversification of operations are at the core of the group's growth strategy and underpins our global operations. So though many people will know us best for our photo booths, the group has continued to evolve and innovate over a number of years into a truly diversified business offering a multitude of instant services. For example, our laundry

4:21 business, which was launched in 2012. Many people in the market may remember us as Fotome, but we are firmly now ME GROUP, and and and that name represents the diversified business that we've become. So since 2012, laundry operations have grown significantly and contribute an increasing proportion of group revenue. In the last five years alone, laundry revenue contribution has increased from 21% of group revenue to 30%. And at the same time, that's not because the photo booth revenue has declined. In fact, it has increased, but the increase in the revolution laundry revenue has outstripped that. So on to business model and key strengths. At the core of our business strategy sits technological innovation and digital transformation. Our strategy is focused on the diversification of our product portfolio, expanding the number of units in operation and increasing the yield per unit while minimizing production and operational costs to the group.

5:18 Our machines are seen and used by millions of consumers around the world every single day, and so we are proud to provide best in class user experience. On this slide, we outline the nine key strengths that put the group in a dominant market position and able to meet the needs of consumers around the world. This includes predictable cash flows, established operational networks, and long term partnerships. These strengths are key drivers of our long term growth ambitions and ability to deliver value for all of our stakeholders. I'll now hand over to Stefan to take you through the financials. Thanks, Vlad. We have we have had a really good year and delighted are delighted with the record financial performance level of growth for revenue, EBITDA, and profit significantly ahead of prepub pandemic.

6:10 As you can see from the light blue line, revenue was close to 300,000,000. EBITDA grew to more than 100,000,000 for the first time, reflecting a strong operational performance across the group and delivered an EBITDA margin of more around 36%. Reported profit before tax saw good growth of up almost 26%. This strong performance reflects our disciplined focus on delivery of profitable growth and delivery against our long term growth strategy. The group remains highly cash generative with cash generated from operations exceeding $100,000,000 for the first time.

6:58 The declined gross cash position was largely due to a loan repayment of 31,000,000 As shown in the graph, our net cash position has remained robust. The slight net cash was due to an exclusion of convertible bonds and share buybacks. We remain well capitalized, well positioned to self fund our growth strategy and return capital to our shareholders. Diluted earnings per per share increased by 30%, which was supported by our share buyback program, which commenced in August 2023. Through the share buyback program, the group has repurchased 1,200,000 shares at a total cost of $1,900,000 We are pleased to continue delivering on our dividend policy, which seeks to pay out annual dividends of more than 55% of annual profit after tax.

8:01 The total dividend per ordinary shares for 2023 increased by 32% on last year. As shown in the graph, in 2022, shareholders also received a special dividend of 7.1p, bringing the total for that year to 12.7 per share pence per share.

8:25 The bridge on this slide shows the revenue performance of our key business areas compared to the prior year. WashMe, our fastest growing business area, contributed the largest proportion of revenue at almost £20,000,000 The growth in WASHME revenue was a result of continued expansion of our Revolution Landry estate. Photomi revenue also quickly increased year on year contributing $18,000,000 revenue as demand for official photo booth ID remained robust alongside the continued to expand the estate organically and through acquisitions.

9:08 Our print media business saw light growth and an increased revenue contribution. As a result, total group revenue increased by more than 14%. The bridge on this slide shows the breakdown of profit performance during the year. The improvement in our revenue performance drove a large increase in the profit contribution of our operations.

9:35 The $9,200,000 commissions figure reflected variable costs such as commissions to site owners as well as an increase in consumables and spare parts. Labor labor cost increased in the period reflecting increase in the staff member and inflation. Across the year, profit before tax increased by more than 25% on 2022 levels. The bridge on this slide shows the net cash performance during twenty twenty three financial year. As previously flagged, operating cash flow increased as we continue to expand the estate and improve efficiencies. We invested more than $48,000,000 in our estate and infrastructure, which primarily includes expansion of photomy and wash me operation and modernization of the estate acquisition costs related to the purchase of the photobooth business in Japan.

10:38 We also paid out $33,000,000 in dividends as the group continued to deliver on its policy of returning cash to the shareholders. The closing net cash at the end of October twenty twenty three was broadly flat with the prior year. Now turning to our three core geographies that we report on. Continental Europe remains the group's largest region, both by number of machines and revenue contribution. Our three markets key markets are France, Germany and Switzerland. A further 900 units were deployed in the region, and it represent represented 55% of the total lending estate.

11:25 We continue to build on our strong and established relationships with retailers. In France alone, we have long standing partnerships with key accounts such as Carrefour and In particular, WASHME and Fotomi revenue performed well driven by strong consumer demand and expansion of our estate. The region contributed around 69% of total group revenue. We were pleased to see a 22% increase in operating profit performance for the region.

12:03 In The UK and Puerto Rico Island revenue increased by nearly 15% driven by the continuous expansion of the Revolution Laundry Estate and strong demand for services across Rochely and Photomi. We installed an additional 180 laundry units, which supported a 46% increase in operating revenue for washing. The group has been active in securing and utilizing strategic partnerships with key accounts in The UK as it expands its available services in new market segments. This includes supermarkets, shopping centers and petrol forecourts. We have more than 3,000 photo booths and 1,300 laundry units situated on the sites of our key strategic partners, which includes the likes of TESCO, COOP and Morrisons.

13:06 The continued strong performance in the region contributed to a 6.9% increase in operating profit at $2,400,000 and an operating margin of 26%.

13:20 Revenue in Asia Pacific region grew 11%, largely driven by a strong performance in Japan. Revenue from Feed Me and other vending operations increased by 53%. This mainly related to the successful expansion of Freshly squeezed around shoes vending operations in Japan. Operating revenue from Fotomi improved by more than 5%, reflecting continued strong demand for photo items. Driven by a good performance in the region, operating profit for Asia Pacific more than doubled to 4,300,000 At the end of the year, we acquired a further 3,500 photo booths from Fujifilm Corporation, significantly expanding our photo booth presence in Japan and positioning us at the market leader as the market leader. In the current financial year to October 2024, we expect to deliver a 20% to 30% increase in revenue and add around $2,200,000 in profit from the Asia Pacific region as a direct result of the acquisition.

14:36 At 10/31/2023, we had 15,000 units in operation, a 28 increase on the prior year, representing just over 31% of the total lending estate. I now hand over to Vlad to take you through the business review. Thank you, Stephane. So I'll start with an update against the group's growth strategy before going into more detail on the performance of each of the group's principal business areas. So we're pleased to say that we've made good progress against each of the five pillars of our growth strategy. We continue to build our presence in Australia, piloting photo booths across Sydney and Melbourne, where we see significant opportunity for photo booths and other services. We continue to enter new market segments through new and existing partnership with site owners. For example, COOP IN Morrison's in The UK and Carrefour and Middle in France, introducing laundry and other services at additional high footfall locations providing convenient access for our consumers.

15:37 And, of course, the benefit to our long standing partners is that they'll have one engineer who goes and services the photo booth, the revolution laundry, kids' rides, the printing kiosks, the photocopier, etcetera, etcetera. It's convenient for them. We have continued to deliver our state modernization program to introduce the latest proprietary software to existing units, enabling us to deploy new functionalities, services and maintenance remotely. Our our next generation program continues to roll out at pace as we bring our newest multi service offering to the market, and we are installing these at a rate of 180 per month with this expected to move to two fifty per month through 2024. Our successful acquisition of the photo booth business of Fujifilm Corporation has significantly increased the number of photo booths that we have in Japan, which are now fully integrated in our network and already contributing to EBITDA.

16:30 It is our ongoing plan to continue diversifying revenue and expand both in existing and new categories, and we remain focused on key initiatives to digitally transform the group to improve operational efficiencies and the end user experience through modernization and modularization. I will now talk through our principal business areas in more detail. So we are a global leader for photo ID, providing integrated biometric solutions as well as portrait and fun photographs. Photo Me continues to be our largest business area by number of units, revenue, and EBITDA contribution. We operate just over 30,000 units, well, near nearly 31,000 units, which makes up 64.7% of the total group vending estates. Revenue increased nearly 12%, reflecting continued expansion of the estate and good demand for official photo ID across all of our geographic regions, and to a lesser extent, the annualized benefits of price increases implemented at certain locations during 2022.

17:33 EBITDA increased 14% and contributed almost 58% of total group EBITDA. EBITDA was 35.8% of photo booth revenue. Investment to modernize our estate, provide multifunctional automated services and enhance the user experience is a priority. We invested £9,000,000 primarily on the rollout of next generation photo booths with five forty seven installed in France in 2023.

18:02 We remain confident about the long term growth drivers. And in 2024, we expect to invest between 15,000,000 to 20,000,000 as we work to future proof our photo booth business. This will support the rollout of 3,000 units in 2024. We plan to deploy a total of 8,000 by the end of twenty twenty five.

18:22 On this slide, you can see the new functionalities that our next generation photo booths offer. These include mobile to print, user personalization services such as AI and photo filters, as well as new biometric systems such as fingerprint, iris recognition, and digital signature, all hallmarks of future security requirements and ensuring that our photo booths are future proofed. These exciting new functionalities are designed to enhance the consumer experience whilst offered whilst offering a diverse diversified multiservice offering. The group expects that these new functions will be added over time.

18:57 So on to wash me. Our wash me operations consist of unattended large capacity, energy saving, rapid self-service laundry and laundrettes, which operate twenty four seven. Laundry remains our fastest growing business area with 6,870 units in operation as well as our highest margin business area. Laundry units make up just over 11% of the total group vending estate with operations across 12 countries, and the number of units is up 16% from last year, whilst average revenue per machine increased also by 16%. Revolution Laundry is our main consumer facing brand under the WashMe business. Revenue increased by 34% and now represents more than a quarter of total group revenue, up from 22% last year.

19:48 Average revenue per machine increased by 15% demonstrating growing demand for our convenient access laundry services. Laundry operations cons contributed 37% of total group, reflecting the high margin nature of the business when you compare it to just, what, 34% of sorry, a quarter of total group revenue. We continue to increase the number of key partners, which gives us further access to high footfall locations locations and the opportunity to bring our convenient, competitively priced and high capacity laundry services to more consumers. The addition of our services on-site increase increases consumer dwell time, which benefits our partners. Through our through our ongoing investment and new strategic partnerships, we were able to install an additional 779 laundry units in France, The UK, The Netherlands, Belgium, and Ireland as part of our rolling expansion program.

20:46 As a result, CapEx increased to 25,000,000 from £20,000,000 the prior year. Last year, we began sorry. Last June, we began to roll out our new consumer app aimed at laundry services as a means of improving the user experience as well as providing better marketing insights on our end consumers, and we continue to work towards rolling out the app more widely this year.

21:10 Expanding laundry operations remains a key part of our growth strategy, and it will do so in 2024. We plan to invest between 22,000,000 and 30,000,000 in 2024 and install an average of 80 to 90 laundry units per month. We continue to improve the sustainability of our operations and plan to install photovoltaic solar panels across our revolution estate, including France and The UK during 2024.

21:40 The next two divisions are smaller parts of our business. So our printing operations consist of high quality digital printing services, offering a wide range of competitively priced print formats and personalized products. The group has 4,734 units in operation across eight countries, accounting for 10% of the total group vending estate. Print new revenue increased 6%, reflecting increased demand for the new digital kiosks, representing 4% of total group revenue. EBITDA increased just over 16% from 2022 and represented 4% of group EBITDA. We continue to focus more investment in our PrintMe business as demands for high quality digital printing services remains robust, and we see long term opportunities.

22:26 In 2024, we plan to install 500 kiosks targeting returns in eighteen to twenty months, and we continue to explore opportunities to extend services offered through the through throughout the wider vending estate.

22:39 Our Feed Me business is the newest and smallest business area focused on self-service fruit juice equipment market that's focused on the fresh fruit juice equipment market and pizza vending machines aimed at the b to b retail and hospitality markets.

22:53 The group currently has 441 units in operation across five countries, representing under 1% of the total group vending estate, and the business model is primarily based on the sale of vending equipment. The group also sells maintenance agreements, which services vending equipment for a for an agreed period of time. Total revenue increased to just over 13,000,000, and revenue from the sale of equipment, consumables, and services reduced slightly to 8,900,000. Feed me contributed just under 5% of total group revenue, and our fresh fruit juice vending operation is primarily based in Japan. And during the year, we successfully ramped up operation, increasing the number of machines in operation from two fourteen to four forty one machines.

23:36 Our other vending equipment operations include traditional amusement and interact interactive rides for children and photocopying services. These machines accounted for a relatively small proportion of revenue and profit. So here, we will recap on the 2023 financial year and provide an overview of the outlook for '24 and beyond. So 2023 has been a record year of financial performance and another chapter of solid pro solid strategic progress against our long term growth strategy. We were pleased to report a strong revenue, EBITDA over 100,000,000 for the first time, and a strong profit before tax performance driven by good demand for our services and our focus on expanding operations across existing and new geographic markets.

24:22 We continue to deliver long term value to our shareholders by way of our ongoing dividend policy as well as our share buyback program, which we launched in 2023. At the same time, we have driven forward on key strategic initiatives, including the ongoing deployment of next generation photo booths and proprietary software across our estate. The board is delighted with the performance of the group and continued delivery against our long term growth strategy. So looking ahead, we remain focused on the modernization and digitalization of our portfolio, which would improve efficiencies and enhance the user experience, and the expansion of our laundry operations will continue at pace with plans to install between 80 to 90 laundry machines each month this year. The group expects to install 3,000 next generation photo booths in 2024, and we will continue to leverage our innovation capabilities and explore additional services across our vending estates.

25:19 Whilst we remain mindful of uncertain of of the uncertain macroeconomic environment, the board expects the group to continue to deliver continued revenue and earnings growth in 2024. So we thank you all for listening, and, we will now move on to our questions. Perfect, Vlad. Stefan, if I may just jump back in there. And thank you very much indeed for your presentation this morning. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that situates on the right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Stefan Vlad, as you can see there in the q and a tab, we have received a number of questions from investors.

26:04 And thank you to all of those on the call for taking the time to submit their questions. Stefan, Vlad, if I may just hand back to you just to read out those questions and give your responses where it's appropriate to do so, and I'll pick up from you at the end. Thank you. Yeah. Absolutely. So thank you for that, and thank you for all your questions. We really appreciate it. We're just gonna be scrolling through and answering them as we go. So the first one we see is from,

26:26 which is why are the shares that are bought back being held in the treasury rather than being canceled? I'll hand over to Stefan to answer that question. Thank you, Glenn. Yes. So the first thing that I can say is that I confirm that this share buyback program was really the aim of this share buyback program was really to reduce the company's capital and to benefit the investors. So, yes, I would confirm that we will cancel shortly these share options. Great. So with the next one from Paul saying with the confident CapEx investment and growth plan for FY '24, why is the investment in Australia relatively relatively tentative by comparison?

27:13 What what what I would say in my answer to that is whenever we open up a new market, we are always very tentative in making sure that we have the operational capacity to service all the machines. We pride ourselves on having a really high quality of service and having an exceptionally high uptime rate for the industry. So Australia is by no means an outlier. When we open up a a new division in any any country, we start sensibly assess performance and make sure that we can grow organically and in a sustainable way. Yeah. But, anyway, we are really happy to in the future to to invest a lot in this in this country for sure. Yeah. Okay. So the next question, I promise we're gonna try and get to as many questions as we can. So from John, please, can you give a bit of color on why revenues expectations were 300,000,000 to 320,000,000 in in July, but then came in at 298,000,000?

28:03 What orders were you expecting that didn't come in? Have they been moved to the current financial year? Yeah. I can I can answer very, very simply on this? You know, we have we have performed during the 2023, we have performed extremely well in in all our market, I would say, main markets, so in photo booth and and and laundry business. We are we were in in really in accordance with our expectation. The only the only activity where we have maybe been little bit above our expectation was the pizza machine, and that's why we have just reached only 200 around 300,000,000, and we are we are just below our expectation in term of revenue. Great.

28:56 So I've been told not to read out the name. So with an aging population and declining and more expensive labor costs, do you envisage further opportunities in vending? And are you looking at new vending applications? If you look at Japan as the front runner, they have the most vending machines per capita in the world due to due in particular to demographic change. So I can answer this briefly and give you a little bit of color on it. From what I see in The UK market where I I primarily work, we see a lot of our retail partners looking to have as many services as possible on-site, but the important stipulation of that is that as many as many of them is are as automated as possible. They're trying to reduce down, obviously, their labor costs and and and significantly reduce down their labor requirements for ancillary services. So our range of products are absolutely ideal to take advantage of that. You know, when we install machinery with our site partners, we don't have any requirement for them to refill paper or to clean the machine or to maintain it. All of that is done by us and our excellent team of operational engineers.

29:56 So we really offer a hands off service, and that's one of our key strategic advantages. So we can scroll down to the next question. Do agree with me? Mhmm. Yeah. Take control of the mouse. So let's go to this one. Do you wanna do Yeah. Do this one? So in these results, you have 4,500,000 of impairments and provisions. Can you explain what is being written off here? The the written off was the impairment was mainly due to the pizza activity. As you know, we we have known some difficulties in in technical difficult issues with our consumption, and we have been bound to slow down a little bit our sales. And in the due to that, we have decided to to impair the goodwill and the intangibles.

30:43 And even and even the small stock of information that we have sold so far. Great. So the next question is, are there other automated service machine segments that you could enter in due course? I can answer that one. Obviously, we can't talk about any specifics on this call, but what I would say is that this ME GROUP is uniquely positioned to bring new products to market as we have operational coverage across all the countries that we operate in. For us, it's relatively simple to launch a new machine and install it where we already have existing site agreements and we already have operational coverage. So that's definitely one of the key advantages of the group. So there's another question on the share buyback. I think we've already answered that. What is the size of the laundry opportunity for the group? So I can provide a bit more color on that, and then Stephan, I'm sure, will will come in as well. I think that when you look at the breakdown per regions in Ireland, which serves as a very good example, we have over 500 revolutions in operation.

31:43 When you consider that the when I when I say Ireland, I mean The Republic Of Ireland. When you consider that the population of Ireland is around 5,000,000 and there are over 500 revolutions in operation, That gives you a good flavor of where we expect where where we believe the growth lies in some of our some of our some of our other countries. So if you do 5,000,000 by 500 units, that's one per 10,000 people, and that's certainly a metric that we look across the group in terms of not a saturation point, but where we're where we're heading towards. And you can see in many of our key markets, we're not even close to that ratio. So we expect there to be a a very long runway in that regard. And I can add also that this is in Ireland, this is where we have the the more the highest density of machine, and this is where we have the the better revenue per machine. So it's it's really something that that is interesting to see. Yeah.

32:36 It's it's almost inverse. The more saturated we become in certain areas, the higher the revenue per machine. So it gives us a lot of confidence moving forwards. So I don't think we'll give me a sec. We're just going through all your questions. Apologies. Should we do this one? Yeah. Yeah. So how do you design your equipment in house? How much do you spend on r and d? And how do you account for this expenditure? So I can answer the first part of that that question. So we do design our equipment in house. We have two r and d facilities, one in Vietnam, primarily focused on software and one in Grenoble in France where the company was founded. And that is a large r and d facility that designs and develops the vast majority of our products. So, you know, one advantage of the revolution is that it is completely designed by us, and that gives us a real expertise and advantage when it comes to operating and maintaining because we know exactly how every machine works because we, in fact, design them. In terms of the spend on r and d and accounting for that, I'll pass over to Stefan. Yeah. So I don't have the exact figure in front of me. I could say that generally speaking, the the budget is around 4 to 5,000,000 per year, and half of it is is directly accounted in cost, and and the other part is capitalized.

34:02 Great. So we'll look at some of the other questions. Apologies. Some of them quite long, you have to read through them. But, you know, you know So I'll I'll I'll read out this question and see if can get back to it. So can you please talk us through the balance sheet? What is the logic for having substantial cash and debt balances simultaneously? It it was just a question of opportunity. We have we have around 19,000,000, I think, 30,000,000 cash at the end of October twenty twenty three. We have raised loan. It was in 2022, 2021. The rate was extremely, extremely low, so it was for us real opportunity if we consider that now the the avail available cash that we have, we we place it at around 3%.

35:01 So it it allows us to have to have the possibility to do other acquisition if if needed. Absolutely. So we'll go on to our last question, which is obviously a pertinent one. So we have a question that says, I seem to recall that at some stage, there was a belief that The UK might discontinue accepting smartphone pictures for passports owing to a higher fraud detection burden. What is the latest on this? So to give you a little bit more color on this, and, of course, I work in The UK market so I can provide some more detail. The UK is one of very few countries globally. I believe it's just The UK and South Korea that offer this smartphone service. And indeed, and as we've shared with the relevant authorities, there is a risk of manipulation of photographs.

35:47 You can do some subtle editing on Photoshop and then upload upload that photo, and it is incredibly hard, if not impossible, to detect. With our booths, when you go into a booth in The UK or indeed in France or in any of the countries we operate in, we take that photo and send it directly to the passport authorities, and then you receive a digital code. You then put that code in when you're doing your passport application, and it ties the photo, which has been securely transferred to the relevant authority to your application, which means that it's a closed loop system and incredibly secure. We know that in Europe, that security and the closures loop system is an absolute priority for the relevant authorities there, And we need to see what the outcome of that is gonna be in The UK, but certainly there is a risk in The UK market through offering this smartphone integration.

36:38 But, you know, the wider point is that in The UK last year, we had one of our best ever photo booth years. And part of that is because consumers see the benefit of using our photo booths because we send the photo direct directly to the relevant authority, HNPO in this case. That means that it's much less likely to be rejected because we already run the checks in the booth to make sure that your your picture is perfectly in frame, that you don't contribute any of the rules and regulations. But, also, because it goes straight to HNPO, consumers also see that our service can be quicker in terms of getting your passport actually back in your passport application. So that gives you a bit flavor around that that that question there around The UK market. So I think that's about it in regards to questions.

37:24 Absolutely. Vlad, Stefan, thank you very much indeed for being so generous of your time there and addressing all of those questions that came in from investors. And, of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the platform. But Vlad, perhaps before really just looking to redirect those on the call to provide you with their feedback, I know is particularly important to yourself and and the company. If I could please just ask you for a few closing comments to wrap up with, that would be great. Yeah. Absolutely. I firstly wanna thank everyone on this call for their time and their interest. We are delighted to have posted a record financial performance, which is a real hallmark for the group and comes off a very, very successful year. And we we we we expect and we are committed to replicating the success this year and continuing on from strength to strength.

38:18 Yeah. Thank you to all to everyone, and and we stay at your disposal for any further questions. Absolutely. Perfect. Vlad, Stefan, thank you very much indeed for updating investors this morning. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of ME GROUP INTERNATIONAL PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.