Netcall (LSE:NET) — Results for the year ended 30 June 2021

0:01 Good morning, ladies and gentlemen, and welcome to the NET Core PLC Results for the Year Ended 06/30/2021 Investor Presentation. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via your Investor Meet company dashboard, and we will notify

0:31 you by email when they're ready for your review. I'd also like to remind you that this presentation is being recorded. Before we begin, we would like to submit the following poll. And if you'd give that your kind attention, we'd be most grateful. And I'd now like to hand over to Henrik Bank, CEO. Good afternoon. Good morning, sir. Thank you very much, and good morning, and thank you very much for joining our presentation today. It was an excellent year for NETCALL, and we are very pleased with the performance of the business. Our cloud business continue to grow. And as we continue the transition to a cloud business model, we see a still see a very significant market opportunity, probably just further accelerated by the pandemic. And the and we are addressing this growing need for customer centric digital transformation and communication.

1:22 We still believe we have a very good competitive positioning. Our unique combination of intelligent automation and customer engagement help us. And the and the the four strategic pillars of the business that is referred to in our statement has also expanded and and grown very well. So we also in our existing customer base see a very significant untapped opportunity, and and and therefore, we we are very positive about how things are are looking for the business right now. As we go through the presentation, I'll turn off the video, the screen gets better, and we should utilize less bandwidth on on video. So I will switch that off now, and we'll go into the slide deck.

2:12 So if we start with delivering digital transformation. So we are UK software company, as you all know, and we help organizations implement digital first solutions selling our Liberty platform. This solution helps our customers to create leaner and more customer centric businesses. And today, we employ about 250 employees, a number which is growing. We have more than 500 customers who typically have large and complex ecosystems, and our top 10 customers represent about 24% of our revenue. You can see some of the logos on the left side of the slide. We go to market directly, but also have a growing network of technical and solution partners.

2:58 In the last year, 24% of new business came from indirect channels. As you can see from the donors on the right side of the slide, 85% of our revenue comes from three key markets being healthcare, government, and financial services. In terms of business model, we are moving to the cloud model, as I mentioned, and therefore, also to a recurring revenue model. Today, 64% of our revenue is recurring. Of this, cloud is growing rapidly. And we can see we exited the year with cloud revenues being the largest stream, as you can see in the donut to the right. Revenues exceeded CHF 27,000,000. Business is profitable with an EBITDA margin of 21%. It's cash generative, has a strong balance sheet, and these are all areas that James will cover shortly.

3:50 The problem we help our customers with is what we call the CS disconnect. We all know, as we talked about before, that the Internet has changed how customers perceive businesses and how they want to interact with them. The pandemic had only accelerated this megatrend with areas like ecommerce exploding in volume and big parts, of course, of the high street bleeding as a result. For instance, we saw a triple in digital volumes immediately after the pandemic started and lockdown started within customers in the financial services and retail. And and today, when we look at our digital communications volumes, they are up by more than 100% compared to to last year.

4:37 Generally, many organizations are overwhelmed by the digital requirements to stay competitive, combined with growing compliance, regulatory requirements, and, of course, an ongoing desire to remain lean and efficient. In addition, recently, many of you might have heard about the great resignation, the concept that people talk a lot about in The States where where in some industries people are leaving the industry and and and causing labor shortages. All things that's that helps with the digital our digital opportunity. So how do we how do we help customers solve these these challenges? What we do with our Liberty platform is really digital transformation software.

5:22 And with that, we mean software that help organizations implement solutions which increase automation and remove or or reduce human involvement to the most critical part of processes and interactions. It improves process speed, I will demonstrate a little bit later, and quality as well, and it improves customer experience, and it helps businesses become leaner and more customer centric. With Liberty, we bring intelligent automation and customer engagement technologies together on one easy to use platform. That means one supplier, one contract, one SLA, a one stop shop. Together, Liberty acts as a comprehensive digital transformation toolkit for organizations to use and benefit from. And they can use all of it, and they use part of it as they see fit.

6:17 With intelligent automation, so that's the left diamond on on the slide, we mean low codes. So that's our liberty create platform combined with the use of RPA as exposed to various AI technologies such as handwriting recognition, OCR, natural language recognition, and so on. Within intelligent automation, we have solutions for specific market segments like government sector, housing sector, and health care sector as well. The right blue diamond is customer engagement. It's all about how interactions how organizations interact with customers, suppliers, employees, and other stakeholders. The solutions here include omnichannel contact center, which have built in workforce management, quality management modules amongst a series of other capabilities.

7:12 This works together with our conversational messaging solution, which provides live chats, Facebook, Twitter messaging, and is integrated with our AI and natural language powered chatbots. So that is Liberty Connect. So you got these four main product areas on the automation side, create which is low code, our RPA solution, Converse with our contact center, and connect which is our conversational and chatbots. So together, this is supported by community platform that includes forums, support is app share, and the and we we where where organizations can download complete apps, prebuild accelerators, modules to enrich their solutions, as well as share solutions as we see in some sectors like the public sector where there's a lot of co development and sharing going on.

8:09 So the community is very active today. It has 1,400 members who collaborate on various things, and and and we have more than 230 pieces of content available to to use. We develop our own software, so we own the IP, and we have adopted an open architecture which integrates with a lot of other technologies technologies via a broad range of APIs. We wrap consultancy, professional services around the offerings to support our customers and and give them faster implementations and do skill transfer, etcetera, etcetera. So the reasons we built Liberty platform is that we believe automation and customer engagement is closely aligned.

8:57 Most customer engagement can be improved with automation or will be completely automated. Likewise, most processes in businesses involve communication with stakeholders, customers, suppliers, and other stakeholders, and that will also increasingly be automated as we see today. Hence, we are unifying intelligent automation and customer engagement on the Liberty platform. So how does it hang together in practical terms? And here, I have we have illustrated it with an insurance claims process. So we do insurance claims processes for a number of insurers, such as legal and general, Tesco underwriting.

9:42 This is a simplification, gives you an illustration of what's going on. In real life, of course, these processes are are far more complicated than we're able to illustrate on this on this chart. But it gives an example of Liberty acting as a one stop shop for engagement and automation. And many of us, of course, try to make insurance claims. It's not exactly one of the most exciting things to do, and often, there's a lot of criticism around how claims are being handled time it takes to handle them and the transparency of what's going on.

10:18 So that's the customer view for the insurers. A claim is typically complex, time and labor consuming and costly experience. So therefore, a number of insurers have used liberty to improve the claims processes, and I mentioned legal and general and just underwriting as a couple, and we have others as well. And and this example starts with with with a claim being made using a social media or a PC platform where you use our low code and our and our chatbots to make the claim. You have an interaction with with with a system. Somewhere along the line, you may need some human intervention, and that happens by seamlessly transferring the social media interaction into a contact center where an adviser can help you with any questions you might have. And after that, the claim or the first notice of loss is registered and the case is opened using our local platform. So at this point, use our customer engagement platform, both the contact center and the our Liberty Connect or the local platform, and that will kick off a series of automated checks, actions, notifications, including ongoing updates to the customers about stages of the claim.

11:36 This may then complete and part of that, there's maybe capturing from third party systems. You may use RPA RPA robots to do to do that, and it goes through this automated process that is driven by our our low code platform. This may complete the process at the end the or there may be a requirement for additional information which can be submitted via contact center or via self-service portal, ultimately resulting in the approval or rejection of of the claim. This example shows how our technology helps both reduce the organizational costs, improve customer experience, and it shows how Liberty platform can be a one stop shop for digital transformation. Tesco underwriting, who I mentioned, is one of the is one of the customers, and the numbers at the bottom right is from from from their experience.

12:28 When they implemented their solution, it improved the number of claims it could process by per hour by 57%. And it had a significant positive impact on their customer satisfaction as measured in the net promoter score, which increased by 7%. What they said at Tesco underwriting, and this is a quote, the speed and agility that the local platform had given us has meant that we were able to build, iterate, and change processes really fast and effectively. Without the project, I don't think we've been able to achieve the Net Promoter Score improvement and the efficient benefits that we derived. The speed and agility has been fantastic. This is an example of it, and and I have a couple of more case studies a little bit later in the presentation.

13:18 We go to the to the to the growth strategies. So we have the four strategic pillars. The first one is customer new customer acquisitions. And today is is our cloud solution that drives new customer acquisitions, and in particular, on the intelligent automation side. And and in in in this area, we have had new wins from both insurance customers, from health care, local authorities, market segments, and we have also entered into utilities where we had new wins. And we also launched Tenant Hub, which is a solution specific developed for for housing associations where we had a number of new wins. Land and expense is really cross selling and upselling to our existing customers where we have some interesting metrics that we'll cover in the presentation.

14:13 But today, 22% of our ACV recurring revenue are from customers that has both intelligent automation and customer engagement products. That's up from zero in 2018. And I mentioned the community. That's a key part of this land and expand strategy that now has 1,400 members and and a lot of content that is growing. Content is growing all the time. The third strategic pillar is our partner strategy. So growing partners, building an ecosystem of partners that has industry knowledge and the relevant capabilities in house to deliver and support. And here, we also made progress signing up new partners and indirect sales via indirect channels now increased to 24% of our of our sales.

15:02 The fourth pillar is our platform expansion, and we continue to release new expansions to the platform. We had a major release in July. There's just been a new release going out here in the end of September, beginning of October. We have a release coming out again in the beginning of the new year. And there there's very much focus on cloud integration, new functionality, and AI, and there's quite elaborative description in the statement if you're interested in reading more about the details of it. So a good progress on on this on the on the strategy, and I'll pick out a couple of cases that sort of underpins what what I've just been saying about it. The first one is is, Southam district council. It's a little bit unusual.

15:51 We received a birthday card from the customer one year after they had implemented, their Liberty Creator, the local platform and their citizen hub solution. So it was a one year birthday card from them where they said this is the progress we made in one year. So in one year since implementation, they automated 70 processes, brought them live, are and developing a number or more. They have over 200,000 cases that's been started by customers, citizens in in the council, and about 50% of the council's citizens are users of the platform. Solution is integrated with their Liberty contact center, and they also inter introduced Liberty Connect, so the digital messaging bot platform in in in in the year. That means that you sort of seamlessly integrate your case management with your communications, and there's a high level of self-service as part of it.

16:54 Specifically around COVID nineteen, the the of course, they emerge emerged the requirement to have a grant application, and they developed that, and they saved them £250,000. We've seen similar situations from likes of of Croydon Council in London, but also in a very short time, we're able to to build applications to to meet the specific requirement around around COVID nineteen and and save them a lot of money. Another example is on the partner side. This is DI Blue. DI Blue is a Dutch company based in Rotterdam. That's within digital innovation. And they were a user of our RPA solution, and we then, following the acquisition of Automatica, introduced them to our local platform, which they got very excited about and started using.

17:52 In this case, they have sold a a local based solution to a environmental solution company called First Climate. It's based in Germany and Switzerland. And it's really a complete digital business platform they're developing for them, including an ecommerce platform sitting on our Liberty Create local base. And in this case, our involvement has been minimal. We supplied the technology and a little bit of mentoring, but sales implementation developments done by our our partner in front of them. So a good case of a case study of of a a partner case. If you look at the markets, the digital transformation market is growing rapidly, and it's difficult to get numbers specifically for for The UK or for Europe. But we have some global numbers from from Gartner, which which believes that these markets are plus 20,000,000,000 on a global basis.

18:50 So very big markets. I mean, it's also big in The UK and big in Europe. And it's it's they're growing at at at at good rates. The double digit growth is is what what they are forecasting, which, of course, compares to our 25, 26% growth in cloud revenues. Interestingly, they they also believe that that the the the growth in in in local using local platform is is early stages. The forecasts are that by the mid twenties, more than half of all application development will be done on local platforms, and many enterprises will use multiple platforms together. And we see that today because we coexist with with other platforms on the local space.

19:39 We also see the same within the customer engagement side and digital adoption of of customer engagement, where more than 80% of enterprises that's been researched again by the same companies claim that it will increase the use of digital channels and self-service platforms as they move forward. So all things goes very nicely hand in hand with our transformation of unifying our strategy and our product platform of unifying customer engagement with the digital automation.

20:11 If you look at some of the milestones that we have achieved in the year before going to the financial presentation, then then the intelligent automation side of our business where we acquired MADSOFT in 2018. At that time, they did around 4,500,000 revenue. We have now gone through the 10,000,000. We did 10,800,000 of revenue in in in in the year. It represents 40% of our revenues. Good solid growth rate up from from the acquisition in '18 in August 18.

20:44 And what we see is, of course, that we as we we we set up the strategies, cross selling is successful. As I mentioned, 22% of all our recurring revenue comes from customers who has both intelligent automation and customer engagement solutions. And we now have sufficient data that we can say that on average, when when we sell automation intelligent automation into our customer engagement base, which is the majority of our existing customer base, then we get a three times uplift in recurring revenue. Cloud growth on the third on the third box is up 2526% in revenue. And, again, there, when we migrate customers from on premise to cloud, we, on average, get a 50% uplift in the in the in the recurring revenue.

21:36 And and and I within a customer base or maintenance base around eight and a half, 8,600,000, you see there's there's a there's a significant opportunity in our existing base.

21:46 So with that, I will hand over to James who will take us through the financials. Thank you very much. Thank you, Henrik, and welcome, everybody. We continue to execute well on our transition to the cloud and have delivered a good set of numbers in the financial year with growth in our in our key metrics. Revenue overall grew by 8% to 27,200,000, which is underpinned by high growth in cloud subscriptions. And we can see that increased by 25% to 8,300,000. And importantly, cloud ACV, which is the annualized value of those cloud contracts, we exited the year at 9,400,000, also 25% higher than the same period a year ago.

22:32 As a result of improvement in margin, adjusted profits increased by 20% to 5,300,000 and adjusted earnings per share by just under 50% to 1.49p.

22:49 On this slide, I'll talk you through our cloud revenue, which is our fastest growing revenue stream. And as I mentioned earlier, the the transition to cloud business continues with revenue increasing 26% per annum year over year. Our land and expand strategy remains integral to the business, and we saw continued strength in cross sales, particularly as more customers utilize low code to advance digital transformation initiatives, and or adopt cloud, contact centers. We can see the results of this in our net retention rate. That's the percentage of ACV retained from existing customers, including expansion, downgrade, and cancellations, which accelerated to a 116% in the year from a 113% a year ago.

23:37 What that means is that our existing customers' subscription base increased by 16% net year over year. Combining that trend with new customer acquisition gave a strong increase in bookings, and we can see that in our in our cloud backlog. And that's contracted revenue, which has not yet been recognized, which grew 28% year on year to 17,400,000. The backlog is approximately half short term, which will be recognized in revenue in the next financial year and half long term. And the long term element reflects the fact that our customers initially sign up for the three or a five year term, and we also, and then extend with the annual commitment thereafter. As a result of, the year's bookings, we reached a key milestone with cloud ACV now more than half of total ACV and our exit being 25% higher year over year at 9,400,000.

24:31 If we compare that to the booked revenue of 8,300,000, we can see there's further growth momentum coming into the new financial year. And you can see the developments of cloud ACV in the chart on the right hand side over the last several halves is increasing at a rate of about 27% per annum. So in addition to increasing usage of our subscription services with our customer base and also launch of of new customers and services. The base, as Henrik mentioned, provides two significant opportunities. The first is migrating our on prem contact center customers to the cloud. The on premise Liberty contact centers is, of course, a modern state of the art solution. However, migrating to the cloud provides our customers with greater flexibility and also lowers their support costs for their IT teams.

25:17 The initial migrations buck show a 50% uplift in ACV from a maintenance support contract. Therefore, the £8,000,000 maintenance base that represents a 12,000,000 cloud subscription opportunity if we were to migrate all of them, and we're actively working to move a significant proportion. The second significant opportunity and actually the greater opportunity is cross selling intelligent automation into customer engagement customers. As Henrik mentioned from a standing start a few years ago, now more than 22% of our ACV is derived from customers with both solutions, and the bookings to date show that customers triple their investments in our services with intelligent automation cross sales. If that holds true across the whole of the customer base, that also represents a £20,000,000 per annum recurring revenue opportunity that we're actively working on.

26:07 Overall, as I mentioned, revenue increased by 8% year over year. And in the table on the left hand side, I've separated that or analyzed that by, solution area. Intelligent automation solutions accelerated their growth rate to 20% compared to 17% in the prior year. So revenue of 10,800,000, in the period. Customer engagement revenues were 15,600,000, which increased 5% year over year. The transition to cloud contact centers is is continuing well. Actually, the cloud service revenue line grew the most rapidly of all products and services. It's just that's tempered by the 8,000,000 support contract base, which represents more than sort of half of the overall revenue. Recurring revenue maintained at 64% of overall revenue.

26:55 And due to the strong momentum in sales, you can see the total backlog is also higher 27% year over year to 33,400,000, and that gives good good visibility of revenue into future future periods. And we also saw that the total ACV from support contracts and cloud contracts also accelerated from 7% in the prior year to 10% this this year year to a total of $18.4500000. And you can see how that's developed in the bridge on the on the right hand side.

27:25 As we pass through the milestone of cloud being more than half of overall ACV and the and the cloud being a high growth category, we anticipate the growth rate in ACV should increase as the cloud share of ACV increases also.

27:42 And the table on the left hand side sets the trading performance for the for the period. Of course, one of our, metrics is improvement in EBITDA margin. We believe it's important to balance growth and profitability, and our objective is to cautiously and sensibly expand margins over time by focusing the cost structure on investment in high growth products and services and delivering a great service to our to our customers. So following on from last year's three percentage point increase in EBITDA margin, we've also, this year, recorded a further 2% improvement in margin to 20%. And this time is largely driven by higher gross margin to 90% with expense to revenue ratio maintained at about 71%. The higher margin coupled with revenue growth of the 8% drove EBITDA 20% higher to 5,300,000, And the chart on the right hand side shows you the contribution of revenue plus the £500,000 inflow from improved gross margin, offset a little by the continuing investment in in the business to 5,300,000 in total.

28:49 Depreciation and amortization charges were level year over year at about 2,000,000 and broadly in line with capital and lease cash flows. That results in a higher growth in adjusted profits to 3,300,000 in the period. The improvement in profit and margin flows through into earnings per share, and the chart here simply shows how that's developed on the left hand side over the last three financial years to 1.49p. And in line with the company's dividend policy, we've recommended a 25 of 25% of adjusted earnings per share. The board is proposing a final dividend of 0.37 p for approval in the December AGM. And the estimated amount payable is just over over £500,000.

29:41 An attractive feature of of the NETCORE business model is good cash conversion. We largely have a business based on annual and advanced contract billings, and combining that with the benefits of a blue chip diverse customer base with high satisfaction levels provides good cash conversion. Free cash co free cash flow, which is operating cash flow after capital investments and lease payments, was 4,700,000 or 17% of revenue for the year. The chart on the right hand side shows the conversion of EBITDA to free cash flow and the key items being a positive contribution from networking capital offset by capitalized r and d expenditure. R and d remains at 14% of revenue, of which 6% is capitalized in the in the in the period. And on the left hand side, you can see the free cash flow margins over the last several financial years with 18 being slightly lower than normal due to the acquisition of.

30:39 Adjusted net funds have improved further by 2,300,000 to a net position of 6,100,000. Net funds exclude lease debt, which we consider to be an operating item, but also include COVID nineteen VAT deferrals and contingent consideration, which we treat as debt like items, which you can see at 1,600,000 at the end of the financial year and will be repayable in the financial year '22. Gross cash of 14,500,000 more than offsets the loan notes, which have a £7,000,000 face value. They are repayable in equal installments from September 22 to March 25. And the bridge on the right hand side shows the year's movements in net fund starting with free cash flow of 4,700,000 with funds utilized for interest payments and the acquisition consideration for for Automagica.

31:31 So financial position provides us in a in a good and stable position and and provides underpinning for the future of the of the business. And with that, I'll hand back to Henrik who'll give you an update on sustainability. Yeah. So just sustainability and a sum up charts. So one thing that is, of course, is getting a lot more focused now is sustainability. It's something that we talked with a number of our investors about, some of the larger institutions, but also importantly, many of our customers. Now we we believe that our solutions help our customers to improve their carbon footprints. We we make solutions that automate processes.

32:20 We support homeworking, etcetera. We move customers to the cloud, which is a much more efficient way of of deploying deploying computing power, etcetera. So but we also, of course, look at ourselves in in that, and therefore, we started reporting on it because we we we see these question coming up more and more as we as we move forward. And the and the in the year, we lowered our scope one and two, so that's a direct emissions by a third. And the objective we have is that we'll be direct emission neutral this year. So scope one and two carbon neutral this year. We would then start measuring the indirect emissions, which is a bit more more complicated.

33:08 So so to to measure, and we will establish targets for that, and we'll provide a path this year to go net zero with the aim of the business being completely net zero in 2026. So we'll be reporting that in in the periods going forward. And with that, I will move on to the last slide just to sum it up. It's a large market. It's growing fast, and our market opportunity is substantial. And we've seen that in the pandemic, and we see coming out of the pandemic that there's still very good momentum in in the business. We are well positioned in some very attractive markets in health care, public sector, financial services.

33:58 We've entered into new markets like housing, and the three main sectors are 85% of our business. So it's good focus on on on customer segments, good focus on understanding what is moving in those sectors. ACV, so recurring revenue bookings, really good momentum. We've really seen the shift in in the last periods towards cloud bookings as we expanded our offerings in that and and the and move start moving our customers towards the cloud, 75% of our bookings and our our order inflow in the year came from cloud solutions. As James has described, healthy financial position, high recurring revenues, And and the trading conditions in the first three months of of the year has been good.

34:48 We continue to make good progress. We're very pleased with what's happened in the in the beginning of the new financial year. So therefore, we're very, very confident about the prospects of of the group. And that is the end of the presentation. That's great. Henrik, James, thank you very much indeed for updating investors this morning. Could I please ask investors not to continue to submit questions using the Q and A tab situated on the right hand corner of your screen? I'd like the company to take a few moments to review those questions submitted already. I'd 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 Meet company dashboard, and we will send you an e mail when it's ready for your review. I'd also like to remind you that your feedback is important to the company. And immediately after this presentation has ended, we will redirect you to the opportunity to provide feedback in order the company can better understand your views and expectations.

35:38 Henrik James, investors have submitted a number of questions throughout today's meeting. I wonder if I could perhaps ask you to open up the Q and A tab and read the questions and give a response where it's appropriate to do so. And then I'll pick up from you at the end. Thanks ever so much. Yes. Thank you very much. So we have a question related to our recurring revenue at 64%. And the question is, how far do you see this growing? And what are the typical contract lengths? So, James, will you will you answer that? Yeah. Of course. Thank you for the question. The typical contract lengths are an initial term of three or five years and then and then auto annual renewals thereafter. What we also try to do is where we cross sell, particularly where we cross sell or significant upsell, is to restart the initial restart the initial term.

36:29 Because of the large historic support contract base, I think the average duration is two years, but there's obviously a large portion mature at six months and annually renewing and and a number which are only just starting their five year term. I hope that answers the question on typical length. We would like to see recurring revenue overall as a proportion growing, not least of which now cloud is more than half of our overall annual contract value and is growing plus 20% as we can see in the chart, we would like to see that the overall recurring revenue, therefore, is accelerating. In fact, we can see that because our ACV increased by 10% this year year over year compared to 7% the year before.

37:15 And And underlying that, the Liberty ACV grew by 11%. So we we will see, hopefully, an increasing proportion of revenues as recurring as the business develops. Then there's another question, and that is who is your main competitors? What is your USP in relation to them? What are the two things you could do to double revenues even at the expense of paying dividends? So let's start with the let's start with the competitors. So we have, of course, a number of competitors. If we start in intelligent automation space, people will come up against people like Appian, OutSystems, Pega, which is a big global global players. Mendix was acquired by Philips a couple of years ago.

38:01 So there's a type of of of players we see in in in in that field. If you look at the customer engagement site, also the contact center, you'll see you'll see people like Avaya, Cisco, Five nine, eight by eight are are are companies that that will compete against us. So that so there's a broad range depending on which market or product segment you you you you operate in. I think on the macro level, the the biggest differentiator is that we unify the customer engagement and automation. So our competitors don't do that. If you if you if you take the the, if you take the low code automation players like Apps and OutSystems, they do not offer customer engagement solution or contact center solutions and do not have that as part of their product portfolio.

38:50 The one that come closest to it is Pega in in our view, but they do not have a contact center solution. Likewise, if you're on the contact center or contact center customer engagement space, and the likes of five nine and and eight by eight do not offer local platforms. And and so that that gives us a a a a strategically a a good positioning. The the second level down then is that we go very deep into certain verticals. And, again, they are, of course, in those verticals that we we we punch above our weight, say it that way, and we and we have a far bigger presence. And that is where we do that. And then thirdly, of course, we have this big customer base that James also mentioned that gives us a massive growth opportunity, and where we're basically having our existing customers, our existing relationships, and we are cross selling and up selling into those to those customers. A lot of these relationships have been there for many, many years.

39:50 The churn rates are are low, as James also alluded to, but the net retention rates. So you can see the fixed low churn rates and a lot of cross selling, and hence, the net retention rate of 116%. So what can we do to double our revenues? Well, that is really executing the four strategic pillars over the next years. And that will be cross selling. James mentioned the opportunity in in cross selling. That will bring us a long way towards doubling the revenue. And so that including more partners, new customer acquisitions, a high international presence will will get us a long way. And if you look at that three to five year lending, we do not think that that doubling the revenue is unrealistic if you also think about bolt on acquisitions along the way.

40:45 So of course, if you talk about it as the expense of paying dividends sort of implies that we invest more of the profits into the into the business. That that's definitely an opportunity. We are investing more in in in the business. What James mentioned is all the the the rules and the game that we comply with right now in terms of doing that. We have added people into the organization in in in the last year, mainly around in our sales functions and around our delivery functions as we as the volumes of business increased. So so there's various investment scenarios that we can we can think about where it could be that could be achieved. We have another question, and that is like dividends, but will we look at further acquisitions?

41:36 Yes. We we we are looking at at further acquisitions. As you can see in our history, it's not like we are dependent on on on on highly dependent acquisitions. We did Automatica last year. And before that, we did Metsoft in 2018. So so and, of course, depending on the type of acquisition we might end up with should one arise. It it does not necessarily have to be there at the expense of of dividends automatically. I didn't change our our dividend policy, for instance. Metsoft did, but that was another scenario for those who look at NET Core back in those days. So I think there's there's a number of opportunities. And and we we look at we look at acquisition opportunities in the traditional areas, customer expansion, potentially geographical expansion. If that becomes appropriate, there might be some technologies we want to add on to the to the platform if we see it beneficial.

42:33 So that's the that's the areas where we see where we look in terms of acquisitions. That is the end of the the questions on the on on the list. So That's alright. Henrik, James, thank you very much indeed. And of course, if anything further comes through, we'll make sure that we make those available to you. Henrik, I know investor feedback is important to you, and we will shortly redirect investors to provide you with their thoughts and expectations. But before doing so, perhaps I could just hand back for just a few closing comments, and then I'll redirect investors to give you their feedback. Yeah. Thank you very much. And then maybe I can sort of end up by having answering another question that just popped in on the on the platform about what is our three year ambition for the business.

43:19 So I think that the first of all, we we we we we have very good momentum as I alluded to. We've had that for a while. Pandemic did not slow us down. We're now, if not out of the pandemic, we're certainly on the other side of the worst parts of it as we're opening up, and we still see very good trading, very good pipeline, very good opportunities. So so we we continue to see growth moving forward, and that's, of course, the whole way we are we are organizing the business. So as I mentioned earlier, a three to five year landing zone, we see a significantly bigger business. We see a business where we have far more recurring revenue, far more cloud contracts, more international business, and more business via inter channel partners, and a revenue stream that is significantly higher than it is today. And as I said a few minutes ago, I don't think that in a three to five year period that adopting the size of the business is unrealistic with both when you combine organic growth with some bolt on acquisitions.

44:30 So that would be my ending comments. We think it's a very exciting business. We think it's a very exciting journey we're on, a good momentum. And I hope that you found our presentation of interest. And we thank you for joining, and wish you a nice day. Thank you very much. Henrik, James, thank you very much indeed once again for updating investors this morning. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback and all the management team can really better understand your views and expectations? It will only take a few moments to complete, but I'm sure it be greatly valued by the company. On behalf of the management team at NETCOL PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. So good morning to you all.