Personal Group Holdings (LSE:PGH) — Interim Results

0:01 Good afternoon, and welcome to the PERSONAL GROUP HOLDINGS PLC interim results investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab situated in the right corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question it receives to the meeting itself. However, the company can review all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Paula Constant. Good afternoon. Thank you very much. We're very happy to be coming to you on this wet Friday, but with a a good set of results that we are very proud to talk about. So I'm going to talk a bit about what we're doing in the company and just for anyone that that's new to the company, what we stand for, what we're about.

0:51 Sarah will press into a bit more of the financial results in detail, and then I'd like to talk to you at the end about our aspirations, and where we're taking the company to going forward. So, I think people will know, Sarah, my CFO, who has been in the business for some time, just in case you you missed the first slide. So, who are we? For anyone that's that's new to this audience, we're really about providing affordable insurance and employee benefits to a vast number of employees via their businesses. So we work predominantly with, employers directly taking our benefit proposition and the permission to engage with their employees on insurance, and then we go and visit people on-site talking to employees one to one about the whole suite of of benefits that we provide in the benefit solution, but also about insurance policies that are available to them. So it's a a b to b to c conversation at its at its kind of extreme with the the insurance conversation in that.

2:03 We're very proud to be quite unique across both the insurance offerings in the space that we play, but also the benefit solution offerings. So, you know, we are a a benefit SaaS provider, but we're the only benefit SaaS provider that sends people in to talk to employees face to face, offering the insurance solutions that that we do. And we believe that's a really great point of unique differentiation for us, and a and a foundation for our strategy. Of course, we also sell our benefits platform to client bases that might not be the right makeup for insurance, and that's also really important to us too. 50% of our clients that take our benefit solution are probably, you know, the not the not the right sectors or the right size to take insurance, but we're really proud that we've got an offering that transcends sectors.

2:58 And where we tend to play in the in the insurance space is more transport logistics, manufacturing, blue collar. So, you know, we're we're very proud that we've got a proposition that really appeals to employees that that do really need what we've got to offer. As well as some, you know, great unique points of differentiation and a strong proposition in that affordable insurance and employee benefit space, we are built on strong financial foundations and we continue to deliver. So we're we're very proud that the makeup of our revenue is predominantly, recurring revenue, 80% plus, across our entire base. And we are also highly cash generative, so you can see that we've generated again a good sum of money, in h one to date.

3:49 We have a a very strong balance sheet, so we hold, absolutely what what is necessary and a bit more for for prudency around insurance liability, but we probably have about 10 to 12,000,000 at least on that balance sheet that we can we can use more creatively going forward. So, you know, we're gonna talk about how we move from the phase that we've been in, simplifying the business, you know, really focusing on a benefits proposition and insurance proposition, clearing clearing the way with a a strategy going forward and and some really good options for us, which obviously are predominantly built on organic growth, but do offer some m and a and inorganic opportunities to accelerate where we want to go to.

4:39 So that's a little bit about who we are. Just some detail on what we do again for anyone that's not familiar with the business. On the insurance side, we have some very strong affordable insurance policies. We offer a hospital plan and a recovery plan, which compensates people for the money that they would have received if they were employment needing to go into hospital, or recover from a from a hospital, visit. So I think this is particularly prevalent for, again, blue collar workers that might get some element of sick pay cover or no element of sick pay cover, but but clearly not enough sick pay cover in the event that something happens where they need to be in hospital and then recover.

5:29 So we feel that this is a, you know, a continuing vital offer for employees, you know, to really support, gaps in in income. And then we also offer a a death benefit plan. It's a very straightforward death benefit, up to £20,000, and it's also accessible very quickly in the event of death. So it cuts through some of the bureaucracy that that you might find in other kind of other funeral death plans, in in providing cash flow instantly. And the premise of all all three of our insurance plans really is, that we want to be able to cover people, easily, quickly. So particularly for for hospital and recovering plan, preexisting conditions, you know, don't exclude you from the policy.

6:20 The policy is kicking very quickly. You know, the the premise is to be transparent, to be available, to be speedy, and to provide people real material cover. On the benefit and reward side, we obviously have the SaaS benefit platform. We've built our own platform over a number of years. We're just in the very final months of upgrading onto our version two, HAPPY two. Our platform is called HAPPY. And we offer the platform directly to a number of customers. We've got over over 200 customers that we would sell directly to, and they would be predominantly enterprises, some smaller customers. And then we go to market with a a SME proposition, which we we, in the main, sell through our relationship with Sage. So we white label our platform as Sage and bought employee benefits and to Sage customers.

7:16 A a long term relationship with Sage, five plus years, which we're extremely proud and continue to grow with additional opportunities in in segments and product variation, which certainly is enabled through the the release of Happy two, our upgraded platform. And then we also have a a pay and reward consulting division. We would offer, you know, in person, again, face to face consulting, but we also have a suite of digital propositions to assess pay and reward. And we're really pleased that we've got an increasing amount of ARR coming from those digital propositions as well. So that's a bit about what we do. We're very proud of our customer base, which we continue to add to. We have some tremendous brands as you can see, and, you know, have really enjoyed being able to add brands in in all areas of business and consulting in in the Happy SaaS platform and in insurance, and of course, in combination with with Happy Insurance.

8:17 I've talked a bit about our unique offering, with insurance. We've done a lot of primary research this year to really understand the relationship between benefits and insurance. And it's very clear when we've spoken to a nucleus of enterprise clients, some of which use our happy platform, some of which use many of our competitor platforms, that the proposition of going on-site face to face with a benefit platform and a suite of benefits and also a suite of insurance offers, Talking to employees about the things that really matter in terms of employee benefits, but also the messages that HR directors want us to land is overwhelmingly a a number one proposition. 90% plus of the people that we spoke to said that this was something that, you know, was really interesting for them to take forward.

9:09 And then I think finally on this slide, we have started to win some highly coveted technology awards, which really, I think, again, strengthens the belief that we've got a cutting edge leading technology platform. And once we finish the rollout for our existing customers this year, we will be formally launching that to the marketplace in November. But as important as the technology awards, we have spent a lot of time this year really focusing on what we need to do in the consumer duty space. We're very proud of our insurance propositions already with the transparency, the availability of benefits. But we've also taken the opportunity with consumer duty to look really holistically across the way that we offer service and support to customers.

9:59 We've spent a lot of time really looking at how we become, you know, best in class on claims. We're super proud of the the speed that we are responding and turning around to claims. You can see the results in our very strong trust pilot scores of of 4.7 and above. And this year, we we won consumer duty award for the way that we are looking at managing vulnerable customers. So very proud to win an award against many big competitors and some big FTSE players for the for the efforts that we're putting into really making consumer duty very front and center of our our plans going forward. So I think, you know, this is a a compelling story of really strong clients, good solid deliverable, dependable growth, very strong ARR in our business, and and also us really focusing on on doing the absolute right thing on every dimension for for customers.

11:01 A little bit about the market. So I think when I came into role fourteen months ago, it was really important for me to understand how much we've got to play out in both insurance and benefits. The good news on this in summary is there's a lot to go at on insurance if if we characterize our hospital and recovery plans as as sick pay cover. There are over 10,000,000 UK employees with no or partial sick pay. The presence that we have across the companies and employees today is probably 12% of that 10,000,000. Within that 12%, we've got an average of 12% penetration. So within the 12%, 12% of employees take up our insurance products. So clearly, 12% of 12% of 10,000,000 is a is a small area that we're playing today and there's a huge opportunity for for future growth really with the propositions that we've got and the way that we go to market with our face to face team.

12:06 But also broadening further in terms of our proposition, our routes to market in terms of channels. So there there's lots to go out there which is is, you know, really exciting for us to fine tune a strategy that we already have, you know, huge belief in. On the benefit and reward space, I mean, this is a huge market. So, you know, it's at least a 33,000,000,000 global market for benefit SaaS solutions alone. The growth is really strong. The growth will continue to be in the prevalent markets of The UK and and The US and Germany. Our focus is still very much on on what we need to capitalize in The UK before we look at international expansion. And I think we've been very clear that that we will look at international expansion down the line with with partners.

12:58 But for now, really, our opportunity is predominantly in SME. Our Sage offering, which is is highly favorable to employees, is is something that, again, we continue to expand with Sage, but we also look at other different types of partnerships to capture the SME space where over 50 of SMEs really have no benefit platform at all. And there is still some reasonable space for us to play in the enterprise space if we've got the right priced platform with the right tech, which we believe we we really do and we're at the top of the market in terms of that combination. So lots to play for in summary, which is a good position to be in. Okay, so a couple more slides from me.

13:47 This slide really illustrates the importance of our insurance revenue even in the event that we're not in front of a client, in front of their employees, for a year, even several years. So the graph really tries to explain that with this particular client who we've been with for some time, there was a period where we weren't able to gain access to employees. It wasn't about anything that we did. It was a principle that the the client applied, that no external parties could come in and and talk to their people about about other other policies or options. Of course, the the kind of salmony pink color is the existing book of business. So all of the customers that have taken up insurance policies prior to these years. And you can see that even when we're not in a client generating new business opportunities, the strength of our book takes a really, really long time to decline.

14:51 Of course, in in 2021, we were able to sign a new contract and be back in with employees and the impact we've clearly made from that point forward with new business, you know, obviously has an impact on the back book as well. So it gives us a lot of comfort that this is a very resilient business, and we have a very high retention rate with with existing in clients over 80% for insurance. And from an from a b to b perspective with our SaaS proposition, you know, over over 95% with the the clients that we sell direct face to face and a, you know, similarly competitive level of retention and and and churn with us me base. So we feel we feel that's just another element and another way of showing that we run a very robust, predictable, dependable business.

15:52 And then I think on the SaaS side, you know, we've talked a bit about these numbers already. The the, you know, the 2,000 clients that take Happy that we would sell direct to. We've got well over 4,000 SME customers through Sage. We're really proud of the market leading features and functionality that we've built with Happy two. But, you know, as critically as as the elements of improved user experience, the ability to personalize and favorite things, you know, the carousel scrolling facility, and a lot of that extra modules including, you know, what what what we've been told is is, you know, a leading reward and recognition piece of functionality. We've also been able to obviously rebuild a platform that allows us to modularize, allows us to turn functionality on and off, and therefore, we can we can price differently and variably.

16:46 We can offer premium products. We can offer lower cost products for certain customers. It gives us a whole range of flexibility that we never had before. And, critically, it means that we can operate on one single platform going forward instead of a separate platform that we would run for SME and a separate platform for enterprise. So, you know, there are huge benefits for us in terms of our ability to go to market, but also our ability to run our platform more efficiently and effectively going forward. And then finally, before I hand over to Sarah, I I think it's just worth really summarizing the success that we've had in in this half year and the trajectory that gives us.

17:31 So, you know, on insurance, we've done a huge amount of work, particularly since the new COO, Hal, arriving at the beginning of the year on the forensics of running the business. We are really clear on the profitability by sector. We are really clear on the level of competency we should expect from different quartiles in in the field. We're really clear on the support that we need to give on recruitment and the support that we need to give through training. We're very clear on the experience that really senior people in the field bring to certain sectors. So we have a whole range of analysis now that has allowed us to plan more effectively and deliver on the day more effectively.

18:17 And we can see that in the in the the various measures of uplift, you know, 20% up on sales year on year. We're presenting 10 more times to customers. We're enrolling customers 7% more than than we were at the end of last year. We've already again had our best day, week, month, you know, versus last year. And I think critically, we're still doing this on the backdrop of our existing client base. The difference this year, which will impact next year, is we've started to really go out and market and win some new insurance client opportunities. So some of that's come from our existing base where they take our happy product. Some of that is new clients, in entirety that are taking both our happy product and insurance.

19:05 And, actually, some are insurance clients that we used to work with years and years ago, that we have managed to be able to recontract with and start work again. So, you know, we we will be going out the end of this year, next year, to new clients that that haven't seen us at all or at least for a very long time. And we're really excited to see what that's gonna do to propel us forward in our in our insurance journey. On benefit and reward, I think, you know, we're we're extremely proud of the growth that we've seen in this half year versus last half year versus the end of the year against the backdrop of migrating over over 4,000 clients onto a new platform. We're seeing really strong ARR growth. And again, we've won, you know, the recognition of of awards as well.

19:57 And as we mentioned in March when we were presenting our 2023 results, we've really won such a significant contract with British Airways on on pay and reward, building a great digital product. So, you know, not only is that a a a good sizable opportunity for us in terms of contract and, you know, contract duration, but it's also a really great digital product that we're building as well. So, you know, really good success on on all all sides. And then finally, organizational simplification, which I I set out clearly as an agenda item this time last year when I was here. We have thought really hard about going to business with just fewer, simpler, consistent, dependable revenue streams. Now we've now got a benefit business and an insurance business, which have all the parallels of 80% plus recurring revenue.

21:01 We we've explained how they're inextricably entwined in terms of how we go to market and and sell them. Let's connect was an important decision for us and and we evaluated a number of strategic options earlier in the year. And one of them was to sell the company to a home which focused very clearly on technology, salary sacrifice. So we're very pleased to have completed the sale on a number of dimensions and, you know, not just in terms of simplifying our business going forward, but the right place for for customers and employees to land in an area which will continue to grow. And we continue to work with the buyer of of Let's Connect on, you know, an ongoing relationship still selling Let's Connect products into into our client base going forward on the commission base going forward. So, you know, of course, in the construct of that contract, we we thought very, very carefully about how we protect customer relationships going forward. You would do that in any contract.

22:09 But but also the makeup of Let's Connect customers was predominantly public sector where we play dominantly in the private sector. So the entanglement of relationships going forward is is is rather minimal in terms of customers that we would serve with our products that would also have Let's Connect from the base that we've moved over. So I hope that addresses one of the questions that we had in the chats beforehand, but do let me know at the end if I need to elaborate. And again, you know, more simplification across the organization, and the rights capability in in role. There's still a little bit to do on on that around my table in the sales and marketing space, but we are really set up to attack our aspirations and growth plan with vigor going forward. So I think that's enough from me for now.

23:05 If there's anything left in your financial presentation to share, I'll hand it over to you. Okay. Thanks, Paula. Good afternoon, everybody. So I think in terms of the financial highlights, obviously, we were really pleased to have a strong H1 performance. We saw double digit revenue growth across all areas of the business. And as Paul has already mentioned, strong element now of recurring revenue such that these results are stated, which exclude the results of Let's Connect, which we're now passing as discontinued operations. So the continuing operations that we've got left, over 80% of that revenue came from one of those recurring revenue streams, be that the premium income or the ARR that we get with the SaaS business. We also announced an interim dividend of 6.5p.

23:53 So that was up 11% on last year and the second year in a row that we've had double digit growth in terms of the dividend. Those of you that are holders of our stock at the moment will know that we tend to look at the expected dividend for the full year and broadly try and keep it equal first half, second half. So we've obviously considered the level of that dividend in the context of our expectations for the full year. And then Paul has already mentioned, I think, we remain in a very strong financial position, highly cash generative, cash and deposits of just over £23,000,000 at the end of June. So just for those of you that perhaps on the call who don't know our business, this is just really to summarize the types of income streams that we get in the business. So insurance, obviously, we report in two segments, insurance and benefits and reward.

24:42 Insurance is very straightforward in terms of premium income that we get from the products. In terms of the benefits platform, there are two different streams that the income that we get through there. The majority of it, so best part of 95% probably is the SaaS subscriptions that we get on the products. So whether that's from the happy clients or the the SME clients via Sage employee benefits. But we also generate an element of income through monetization of the platform. So that might be from taking a small margin on the discounts that we offer through the platform or also getting commissions from some of the third party products that sit on there. So a cycle to work scheme, for instance, we we would get some commission for any bikes that are taken out through that scheme through the provider that ultimately provides the bike. And then similarly on pay and reward, I think Paul has already mentioned, you know, some face to face consultancy income that comes through there, but also increasing amount of SaaS income through the digital platforms that division has, whether that's job evaluation tools or pay benchmarking.

25:44 We're getting an increasing amount of ARR on that side of the business as well. So just looking in summary then across those two areas, certainly, probably the red boxes of the area to focus on. So these are those recurring revenue streams. So size of the insurance book up just under 34,000,000 at the end of June. The majority of all of those policies are on rolling weekly or or monthly contracts. Premiums are collected through payroll again in the main, so very repeatable business coming through. And then GBP 7,000,000 of ARR across the SaaS platforms and the Pay and Reward digital solutions that we have. Just in terms of some of the other income, obviously, the cash balances and interest rates in the year were favorable to us in terms of the amount of revenue generated there.

26:30 And then I guess on the EBITDA contribution, admin costs and central costs, which cover our sales and marketing costs because we have a more holistic route to market across benefits and insurance. We don't allocate those costs directly to each of the segments. But also we have all of our sort of head office support costs, so finance, HR, cost of being a listed business, all those kind of costs fall into our group admin costs, which remain fairly flat year on year despite some, obviously, salary increases coming into play there. We also had a few one off costs in the previous year associated with failed acquisition costs and also the onboarding of a new CEO, so flat year on year. And if I just move on to the insurance, look at that in a little bit more detail.

27:16 I think Paul has already mentioned some of the best that we've seen this year, but our new insurance sales were up to GBP 6,900,000, up over 20% year on year, majority of which came from face to face activity and, yeah, new best week, week month coming through there as well. Retention of existing policyholders also remained strong at over 80%. And we've continued to see that I think post COVID and post our ability to maintain policyholders when they leave their employer through our ability to transfer them onto direct debit payments at that point. So those two factors combined meant the book increased to 33,800,000 at the end of June. Just a little bit on our claims ratio. So we saw that go up year on year to just over 30%.

28:02 A couple of things coming into play there in terms of, I think last year H1, our death benefit loss ratio was particularly low, Probably that in itself will rebound to the the high level higher levels that we saw, during COVID, mainly driven by activity, through the NHS as they continue to address waiting lists. I think I saw one of the questions, that was pre submitted around this. I mean, we do we do track, the NHS, admissions data very closely, both outpatient and inpatient, levels. And, you know, our claims activity is is mirroring, what we're seeing there. I think in the question, it spoke about other hospital plan or hospital benefit providers. When I think our our hospital plan is probably slightly different to most other cash plans. In that most of the cash plans will have a broader coverage that include other things like hospital, dental, and probably restrict the amount that you can pay out on hospital visits to maybe five or ten days. Our plans are quite different because you can actually claim for up to a two year period in hospital for the same condition. So it's probably not quite like with like. But certainly, one of the other points I think was around it's not the new business. It's not our new our levels of new business that have been generated that are increasing the loss ratio there. Because although we do cover pre existing conditions, the way we sell by going in face to face at a time of our choosing, people can't just decide they want to take out policy because they know they're going to be going to hospital. It's just fortuitous if

29:32 that's the case when we happen to have our sales team on-site. And then finally, just in terms of EBITDA, so we obviously saw a slight decrease in terms of the underwriting profit coming through. But in terms of our cost base, certainly in terms of customer acquisition costs, we're seeing quite a lot of operational efficiencies coming through there. So that despite the fact of a 12% increase in the size of the field sales team, we saw those customer acquisitions cost held year on year. Just moving on to benefits. I think we've probably already spoken about the combined ARR there up to GBP 6,300,000 at the end of June. That's coming through from both the HAPPY platform and Sage Employed benefits. External revenue was up slightly slightly higher percentage, 21 versus last year. Again, of those third party commissions and other monetization of the platform starting to come through.

30:29 And although this doesn't really come into the numbers, there's just a bit here that really highlights, I guess, one of the the value messages that we're able to give to our employers in terms of the amount of savings that their employees made through the platform in the first half. So you can see that £25,000,000 worth of spend through the platform buying discounted vouchers, which meant that those employees saved over £1,300,000 in the first half of the year. And then just in terms of pay and rewards, I think Paula mentioned earlier, Inexo and QCG, which were a couple of acquisitions that we've done over the last five years, are now functioning as one one group. So we're obviously getting operational efficiencies there. They have the significant contracts win in the first half, which is obviously contributing to the results this year.

31:14 And the ARR from those SaaS products now up to GBP 700,000. Okay. And then I think my last slide is just around capital allocation. And again, this might address one of the questions that's come in whilst we've been talking. So I think, obviously, we underwrite our own insurance. So we have two subsidiaries within the group that do the underwriting. So we have an element of cash that we need to hold for our regulatory capital, probably in the order of just over 5,000,000 across the two entities. But as a business, we conservatively tend to hold around double that set aside just to cover that requirement. That obviously still leaves us in a good position in terms of the 23,000,000 on our balance sheet to both do CapEx investment to help with our organic strategy, also enable us to continue with our progressive dividend policy And then subsequently, you know, look at any M and A that we feel will help us accelerate our growth going forwards.

32:13 But equally, you know, at a point in time, it may be that we'd start to consider any buyback or special dividends, but we're probably not at that point at the moment. One of the other points just on here, I guess, around the disposal of Let's Connect. There's a few things that's obviously brought. Obviously, the simplification of the business that Paula spoke about is beneficial in terms of bandwidth, you know, of our senior team. But also what it's done is probably removed that lower margin element of income from the business as well as stripping out seasonality and really does help us to focus on how much of our business is coming from recurring revenues. Okay. So I'll answer any more questions that come up at the end, but I will hand back to Paula to talk about strategy. Great. Thank you. So we have spent a lot of time over the last few months since the sale of Let's Connect really fine tuning our strategy.

33:10 I think we've had really positive feedback about setting out some aspirations to 2030. And, of course, we've spent a fair amount of time looking at what needs to be true to deliver these and underpinning these with a level of maths. So our strategy on on the insurance side, clearly, with the employee paid insurance proposition that we offer today, improving penetration is is a key element. If we're an average of 12% penetration today across our client base, we we also know that we've got clients in the eighteen, nineteen, 20%. So, some of that comes with time and and tenure of revisiting a client, but there are lots of other ways to increase penetration as well. So even a couple of percentage points of our overall penetration, you know, from 12% up, would make a sizable difference to our our number and our output.

34:08 And, again, the forensics of how we run the operation, how we get access into into clients, how we're effective on-site. All of those elements are are really important for us. There are opportunities to broaden our portfolio. We've already looked at options this year in terms of enhancing some smaller elements of our our benefits. So, again, opportunities to that to to kind of progress there. And then simplifying our digital offering, as well. So we do have a digital offering today. It's in some of our enterprise clients. We absolutely want to put a particular focus on how we simplify that digital offering for our SME base, but there's also an opportunity to do the same across enterprise in our own client base and more broadly.

35:00 And finally, I think partnering white labeling with other benefits providers, you know, we're in conversations already about taking both face to face and digital insurance. And the uniqueness, as I mentioned, is what we offer on insurance, we can offer face to face, and we also have some really great elements of, our proposition, that Sarah's talked about in terms of our hospital cover that make us quite different to anything else that you you find online. So I think the question that that that came in, during this presentation about, you know, what's unique about about your benefits and insurance, you know, you can you can get that from a number of other players. And then I can't find from the example that's been sent any any example of selling that face to face. And, you know, certainly, I think when we've looked at what we offer in in a hospital plan, you know, we are different and competitive.

35:52 But having said having said that, you know, it makes sense for us to also be able play in the digital insurance space and as well as the uniqueness of our face to face. And and clearly, there are lots of opportunities there. Partnering on white label, be that face to face or digital, gets us into big insurance opportunities and probably in in large volume possibly in areas that we wouldn't we wouldn't play directly. For example, you know, public sector, large scale customers that would want to take insurance wouldn't be something that we would approach direct with a HAPPIN insurance proposition. So I think, you know, that really just opens up lots of avenues and it's clear that, you know, our benefit provider competitors recognise the real uniqueness of what we offer on insurance.

36:44 And then employer paid insurance, so we have a group cash plan today. We sell that successfully into a number of our clients either in combination with our employee paid or, in isolation. We think it's important to strengthen our proposition there. We've done a lot of work around what we need to do on that in terms of the benefits that we offer and the price that we offer. And, of course, our USP as well as being a a cost effective modularized employer paid cash plan, we'll we'll mainly focus on the fact that we can obviously then come in and have conversations to sell the hospital and recovery plans, which don't typically tend to be offered or at least not offered, in in the holistic way that we offer them in an employer paid cash plan.

37:29 So, you know, there's clearly opportunity there. The the upside on EBITDA will be more likely to come from that up sell opportunity if the employee paid on the employer paid, but there is still a stream of revenue that we've modeled on employer paid in isolation. So again, another opportunity to to to, you know, progress there. And, you know, what we sell today on an employer pay proposition is all direct client to client, but we will be exploring other avenues such as brokers, etcetera. On the benefit side, I mean, clearly, our opportunity in SME means let's do more, with, our current relationship with Sage, new segments, new product variants. We're really excited to be progressing conversations on that front. We spent a lot of time with Sage this year really fine tuning, the process between us, which has been a a great collaborative effort.

38:24 So we've we've got much more automation. You know, we're slicker around how we we market and sell the proposition. But clearly, additional SME partners have a different characteristic and makeup than a than a big stage player, but there's plenty of other technology routes to to selling to SMEs, be that HR technology, accountancy technology, or a number of really, you know, frankly unrelated HR options to go to market. So, you know, lots of opportunity there that we need to capitalize on. More that we can do as any benefit player would to monetize ecommerce partnerships and options across our platform. You know, we spent a huge amount of energy building what we believe is a really compelling happy 2.0 version of our platform, but there will be some mini releases that we want to do next year because we want to lead on elements like AI and gamification.

39:22 And then, of course, our digital consulting propositions, you know, which continue to grow. Sarah talked about the amount that we're generating on ARR is an opportunity for us as well. So lots of lots of routes on on benefits. And I think I think, you know, everyone that we've spoken to this week would agree that there's plenty to go out in insurance and benefits. There's some stretch there, but there's a lot at our fingertips that's really a case of, you know, now getting into the detail and and making the plan happen as as quickly as we can. Some people have asked us about m and a. We haven't had much time on our hands this year with the workaround Let's Connect and really underpinning the fundamentals across our business to think about where we go with m and a. I think we were quite clear that, you know, we needed a good twelve months to to set out our store and be clear on our strategy.

40:15 We've got very strict criteria about what we would want to focus on. Clearly, you know, earnings accretive, recurring revenue. We know we want to buy businesses that would have a uniform pattern of ARR because that just makes things much easier to manage and much easier to go to market. There are some really interesting vertical vertical integrations along the benefit spectrum. They could be buy options. They could also be partner options. There are likely to be build options. And then I think in the insurance space, clearly, there's there's some work that we need to do on that insurance column that that is billed. It's it's minimal amounts of, spend on CapEx to bill versus something like a happy replatforming.

41:02 And then we continue to have a watching brief on some interesting elements across that kind of health and well-being space. So, really, our task for h two is to scrub down that m and a list and think clearly about the types of businesses that fit that priority. And that 10 to 12,000,000 that we could spend on m and a, you know, we certainly need to be coming back this time next year with a view of whether there's an opportunity to spend that money on m and a or whether there's an opportunity to do more with the money. So, you know, it's it's clear that we need to really think think in in the next six months about the right the right use of that money to grow the business. Okay. And then for anyone that's tried to bottom up model our aspirations already, and we've we've enjoyed conversations this week with a number of investors, but that have to really stress test this, which has been super useful.

42:04 What this really means for us in 2030 is, you know, access to to 300,000 new employees, a really compelling level of premium income, the work on digital insurance products, and the group cash plan we've modeled to be about 10% of our EBITDA. So I think that's a powerful story that 10% of our of our EBITDA comes from new insurance. And then on the benefit size, you know, that that gives you a view of the scale that we need to achieve on the platform, the the additional partnerships, the number of client leads that we need to get through. So and of course, we've, you know, started to work to bottom up, build this across the year to to get us very focused on what needs to be true. And our twenty thirty aspirations then, you know, revenue in excess of a 100,000,000, EBITDA to 30,000,000, a sizable portion of increase and absolute on our ARR across both the happy and reward digital propositions.

43:07 Just in case you wanted to look at the impact in a in a different way, mean, this gives you a view of the waterfall and the contribution of those various elements. So clearly, a big portion of the increase still comes from that employee paid cash plan, the work that we can do to win new clients, and the work we can do to penetrate within clients. The second element is is that new insurance revenue and EBITDA. And then three and four are, you know, how we how we sell direct on our our benefits platform, and then, obviously, how we go to market with partners as well. So and and it would be foolish to build a plan predicated on any m and a. So our route to a $100,100 mil is clearly organic, and we believe achievable organically.

44:00 Any m and a would really just accelerate how quickly we get to that end goal on the EBITDA front. Okay. So just to conclude, and then we will we will address some of the questions that we haven't addressed already. You know, we're very happy and confident with the results. We remain on track for the full year market expectation. Really proud of the the double digit growth across all areas, highly cash generative, you know, focused again on what we can do with the accessible cash, that we don't need to hold to cover the insurance liability. We're very confident now with the strategy work that we operate and really in a fraction of a large growing and unpenetrated market.

44:52 And we have a very clear strategy for growth which we are keen to get on with. Right. Shall we spend a few minutes going through some of the questions? There's a couple on kind of insurance underwriting. Do you want to take some of those first? And I can go back on some of the others. Yeah. So this one here, did you retain all underwriting risk on balance sheet, or are you able to reinsure this? How would you characterize the key risks around your insurance business? So, yes, we we underwrite, I think, we we we underwrite all of the plans within the group, two within The UK insurance subsidiary, one within offshore subsidiary out in Guernsey.

45:38 We don't reinsure generally. We've we've had these products for a long period of time with very sort of stable metrics in terms of retention and and loss ratios. We probably the biggest risk, I guess, is because we tend to go into employers places of work where a large number of employees are operating in one site. I guess some kind of concentration risk is probably in a, you know, some kind of catastrophic event is the key risk. So that that is the one element of reinsurance that we do have on our death benefit policies where we basically insure for anything happen happening in a single site. So that's that one. There's one around recurring revenue now accounting for 81% of total revenue. How do you expect this percentage to evolve over the next few years? Well, probably from the, you know, the piece Paul has just been through there in terms of our aspirations. Obviously, growth of the insurance book is a significant element of that.

46:31 Now we've no longer got Let's Connect. The only nonrecurring elements, if you like, are the consultancy income from the pay and reward division and then the monetization of the platform, you know, through the third party commissions. So we certainly expect the recurring revenues to, you know, continue to grow as we move forwards. Do you want? Yep. There there's one on consumer duty. Congratulations on awards. How much engagement have you had with the FCA on your route to market, vulnerable customers, pressurized selling as areas, and they're obviously laser focused on value for money. You can you can talk about value for money in a second, but I think I mean, the award we won was for our thinking on vulnerable customers, but we've now replicated something that I I did throughout my telco career and particularly from from BT, which is a vulnerable customer forum. So we held the first one, I think it was a couple of weeks ago, inviting a number of charities to come and talk to us about, you know, additional things that we need to think about and be aware of. So, you know, we we really want to be leading in the way that we manage valuable customers across not just our interruption in the field, but particularly, you know, customer service and and claims handling as well. So, you know, we're expecting to run those forums at least once a quarter and really get some

48:01 outside in in feedback, you know, to keep the lens very focused. So that is that is forefront for us and something that we we absolutely want to lead on. Do want to talk about value for money? Yeah. I can probably I was gonna say there's a few questions around consumer duty, including those that are pre submitted, think, around the impact of the FCA's latest thematic review in terms of pure protect protection products. I mean, most of the things that come out from the FCA are centered around fair value. Even the latest pure protection one is really a variation of theme in terms of value for money for the consumer. That that review in particular is in its very early stages. And it's it seems to be based around the distribution model and the focus on whether people could potentially receive more than they pay in premiums or they need to be able to potentially receive more than they're paying in premiums. I think because our premiums are so low, you know, very low premium products, it's fairly unlikely that people couldn't receive more than they pay in. The hospital plans I mentioned earlier, making up to two years claim for a single condition.

49:08 But obviously, value is something we talk about a lot as a board. We have to do our first review of the annual consumer duty report. We look at fair value not just in the context of the levels of claims that we pay out, but all of the other bits that sit around that. Obviously, we're, you know, we're we're selling insurance to, you know, an element of population who probably don't have easy access to insurance without those face to face conversations that we bring into play. But, you know, we we have no underwriting on the policies, similar premium whether you're, you know, 20 and healthy or or or 16 with a preexisting condition. You know, we can cancel in time, fast, you know, low complaint levels, good service. So all of those things come into the mix when we're looking at fair value and as a board, you know, we're we're comfortable that we, you know, are comfortable with that with the level of claims and etcetera that we pay out. But obviously, all of the the reviews that come out, we take seriously. We'll be doing the gap analysis and and consideration for the FCA put into play and and acting accordingly.

50:09 Yeah. I think I'm gonna add a couple of points that I probably forgot to add on vulnerable customers. We've got a number of charities actually coming in and sitting with our customer service and claims handlers as well. So it's not it's not just kind of the forums to gain advice, but it's it's getting people to come and and look and listen. So, for example, you know, Dementia UK are coming in, I think, at the beginning of October to deliver an awareness session for all of our claims handlers. And then I think that kind of brings to life a bit more bit more of the issues in a bit more of a meaningful way. So and that's, you know, that's a lens we haven't we haven't kind of shone into the business in terms of that engagement, you know, on the park before, which is really exciting.

50:56 It was probably about it. Yeah. I think and there's some questions about, you know, how much face to face work have you you won. I mean, we've I think I've talked to you. We've we've we've got five new, you know, opportunities that we've we've landed and and signed up and now just thinking about how we roll that out in the field on insurance. At least two of those are over the the kind of 2,000 employee mark in a very big scale, and some of them are probably around, you know, a thousand, a 500. But obviously, they have to be of a certain size anyway for face to face to make sense for us otherwise. You know, we're we're never gonna get the economies of scale. And, of course, you know, part of the the composition of our cost for insurance anyways is the cost of, you know, running a a face to face team on the ground, running the the support mechanism that sits around that business in terms of people doing the planning of site visits and and all of the associated, you know, claims and customer service handling as well. So, you know, there there's a fair amount of cost that that we put into to service an insurance in a face to face model.

52:09 But, you know, we we we believe that that that creates a really unique way of engaging with customers and reassuring and and asking their questions on the ground and bringing that kind of personal experience to their particular need. Hopefully hopefully that's a whiz through of of the of the questions. Paula, Sarah, I might just jump in and thank you very much for answering those questions you can from investors. Of course, the company can view all the questions submitted today, and we will publish those responses on the investor meet company platform. But just before redirecting investors, provide you with their feedback, which is particularly important to you both. Paula, could I just ask you for a few closing comments? Yeah. I think, I mean, our last slide sums it up perfectly. We've got good solid results again. We're predicting good solid results against expectation for the end of the year.

53:02 We're a simplified, streamlined business going forward, with a clear strategy and a a huge opportunity to go at. We're really excited and and geared up for the future. So thank you very much for listening. Thank you very much. Paula, Sarah, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. This will then take a few moments to complete, but some should be greatly valued by the company. On behalf of management team's PERSONAL GROUP HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.