Premier Miton Group (LSE:PMI) — Full Year Results for the financial year ending 30 September 2024

0:02 Good afternoon, ladies and gentlemen, and welcome to the PREMIER MITON GROUP PLC full year results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the q and a tab that's situated on the right hand corner of your screen. Please just simply type in your questions and press send. The 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 will publish those responses where it's appropriate to do so. Before we begin, as usual, we would just like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. I would now like to hand you over to the executive management team from PREMIER MITON GROUP PLC. Mike, good afternoon, sir. Thank you, Jake, and good afternoon, and welcome to the presentation of PREMIER MITON's annual results for the year ended 09/30/2024.

0:54 I am Mike O'Shea. I'm the chief exec, and I'm joined today by Piers Harrison, CFO and Joffe Wilcox, Global Head of Distribution. Together,

1:03 we will be presenting the results for the year, covering the main events during the period and the outlook for distribution and the financial results. Without further ado, we will begin. So we closed the period with 10,700,000,000 of assets under management, and we saw good investment performance across many of our strategies over the period as investment markets broadened out and mid and small cap stocks performed better relative to large, which has allowed us to deliver good long term results for our investors. We reported an adjusted profit before tax of 12,200,000, a final dividend of 3p per share, bringing the total for the year to 6p, and we closed the period with 35,900,000 of cash on the balance sheet.

1:56 Assets under management have increased further since year end and now stand at £10,900,000,000 During the year, we saw continued inflows into our fixed income, absolute return and international equity funds, particularly The US, although The UK market unfortunately remained very much out of favor. We are pleased to report that we completed the integration of the Telworth business onto our platform, and we have delivered the synergies that we identified at the time of the transaction. It is pleasing to note that investment performance has been strong on the Telworth funds, and we have seen net inflows into these funds over the period since the acquisition. We have also been busy on the distribution side of the business with the launch of our managed portfolio service, the registration of a number of our funds in South Africa, and new funds planned for our Irish business to meet client demand.

2:52 And Joffe will cover all of this and more in a few minutes. This page sets out the results in their historic perspective, and peers will be going into more detail on the numbers here shortly. So I do not propose to spend time on this slide. In terms of the industry backdrop, during the year, this has really been quite challenging, and it's remained this way, really since the beginning of twenty twenty two. From our perspective, whilst we initially experienced something of a bounce in interest from investors over the early part of this summer with net flows turning marginally positive. However, the gloomy prognosis set out by the incoming UK government and the imminent threat of significant tax changes in the budget at the end of October made financial planning quite difficult.

3:44 This in turn impacted on fund sales across the industry, and the improvement we had seen reversed with record levels of industry outflows from equity funds reported in both September and October. What fund sales there were were in were in equities were global and typically passive, and investors continued to sell down UK equities. We've also seen a noticeable decline in demand for sustainable strategies as a combination of delays with the FCA's new SDR regime and weaker performance from these strategies has squashed demand. Our own performance during the most recent quarter very much reflected this with a 126,000,000 of redemptions from our UK value fund, largely driven by a single client making an asset allocation shift out of The UK and a redemption of almost £80,000,000 from The UK focused diverse income trust.

4:45 Across the whole of the rest of the business, we actually saw net inflows of around 70,000,000, mainly focused on US equities, fixed income, absolute return, and our diversified multi asset range, all of which were in net inflow over the quarter. Looking forward and as demand improves post The UK budget and the US election, we see demand continuing to be focused on these key areas, fixed income, US equities, and absolute return. We also expect demand to remain strong for MPS solutions and for low cost, high performance multi asset strategies where changes to The UK capital gains tax regime will help support demand. And this is borne out by our own recent experience where during the second half of our last financial year, we saw around 420,000,000 of net positive flow into those key areas.

5:40 And these sectors will be the focus of our distribution activity as we move through 2025, and Joffe will discuss this in more detail shortly. So we have remained absolutely focused on what we can, as investment managers, control in the difficult environment that we have been in for the last two and a half years. And there have been six key areas that we can influence, and this has very much been the focus of the team during this period. And they are ensuring that our product mix is well diversified so that we are not overly exposed in any one area, that we have an absolute focus on delivering strong investment performance, that we stay loyal to our principles of providing truly active management and original thinking, that we ensure that we can successfully execute m and a activity, that we maintain a disciplined approach to cost control and operational efficiency, and that we continue to develop our distribution reach, our brand and our client service.

6:45 And I'd just like to spend a couple of minutes looking at each of those areas in turn. This slide shows the breakdown of our assets under management, which are now well balanced across equities, multi asset, fixed income and absolute return. It is interesting that our exposure to UK equities has now fallen to 18% of our total assets under management, and within that, funds that have a specific UK small companies brief represent just 1.6% of our total assets under management. Most of our equity exposure is now international and is spread across US equity, Continental European equity and global equity.

7:31 Our multi manager business is now 11% of our assets under management, and our directly invested multi asset business, which has been growing well, now represents 16% And fixed income is 19% and growing well as is our albeit smaller absolute return business. This diversification by asset class means that we are not overly exposed to any one sector or strategy or investment team, and I think this is important because it creates a stable and diversified revenue base for the business. And this, together with our healthy balance sheet, allows our investment managers the freedom to manage money the way they believe will deliver the best long term outcomes for our clients.

8:20 It means they can take and manage the risks necessary to deliver outperformance against the individual indices against which they are measured. And it's pleasing to see that investment performance has remained strong over the long term. In the shorter term, given the high concentration of returns we have seen coming from a relatively small number of mega cap stocks, it has been a difficult environment in which to keep ahead of the index. But even over the shorter term three year period, we have 38 funds where we have delivered outperformance and where the distribution team can be having many positive conversations. And this does not include funds such as absolute return or risk targeted strategies that do not have a specific sector against which they are measured, but which have performed very creditably.

9:13 A good case study here is our US Opportunities Fund, which takes a very different approach to the S and P 500, focusing on domestically orientated US mid and large cap companies. This approach has led to an underperformance against the tech heavy S and P 500 over the last five years, but a noticeable outperformance against the S and P 500 equal weighting. The original thinking behind our US ops fund has been attractive to investors looking for a differentiated product that they can use in their portfolios alongside traditional US equity funds or indeed passive and index funds. As a result, we have seen strong flow into this fund over the last year, and as the S and P 500 equal weighted index has started to outperform the main S and P 500 in recent months, our fund has continued to deliver for investors.

10:13 A good example of active management delivering for investors. And this leads us neatly onto our belief that if passive investing will form the core of many portfolios, then active funds will need to demonstrate that they are worthy of a place in client portfolios. And to do this, they will need to provide something different in terms of risk management, market exposure, or diversification. We call this the edge. These active funds will need to have high active shares and high tracking errors against the underlying indices to deliver the outperformance that clients are aiming for. And our funds do as can be seen in the data on the left hand side of this chart.

11:00 And why is this important? Well, it's important because you cannot beat the index by looking like the index. So for example, we have seen that the Telworth UK Select Fund has compounded at 9.6 per annum over the last five years with a volatility significantly below the all share index, effectively capturing the alpha available from strong stock picking skills. And the PREMIER MITON European Opportunities Fund, a mid cap focused high alpha pure stock picking fund, has outperformed the FTSE World Europe ex UK index by 3.8% per annum since launch in December 2015, net of fees. You simply do not get that from an index fund.

11:51 When we look for acquisitions, we look for the following key attributes. Do they bring us scale to existing capabilities?

12:00 Do they bring us new investment capabilities that will be attractive for our clients, or do they bring us access to new clients? And those are our three strategic objectives when we look at m and a. And as we have previously discussed, the Telworth acquisition ticked two of these three boxes for us with very strong investment capabilities in interesting areas that are interesting to our clients as well as access to new client segments where we were underrepresented. But successful m and a is not just about identifying good opportunities. It is also about successful execution in an industry that is notoriously poor at delivering successful m and a. And we are pleased to report that we have completed a swift integration of the Telworth business onto the PREMIER MITON platform, and we have delivered the expected synergies.

12:54 Just as importantly, we are pleased to report that the business has benefited from access to the wider distribution footprint at PREMIER MITON, and this coupled with the Telworth team's excellent investment performance has meant that we've seen this business return to net positive inflow and increasing assets under management over the period. Turning to cost control and operational efficiencies. Towards the end of the period, we were joined by a new chief operating officer, Nicholas Stronach, who has extensive experience in the asset management operations area, having worked at Old Mutual, Merion, Jupiter, and Quilters. And we are in the midst of a review of our operational infrastructure to ensure that it is working as efficiently as possible.

13:41 We're in discussions with a number of our third party suppliers to ensure we leverage these relationships effectively for the benefit of our clients and for the firm. We are also introducing new risk analytics software and increasing the use of AI across our business for productivity, analytics, and client service. And all of this is to ensure that we maintain our reputation for effective business management and strong cost control with a clear focus on efficiency and productivity. And in terms of our distribution reach, during the period, we have continued to focus on ensuring that we are laying the groundwork for when market sentiment turns. You'll be hearing from Joffe in a moment about the work we have been doing on supporting our brand proposition in our key markets, and there are some exciting developments coming as we move into 2025.

14:37 On the distribution side, we have continued to leverage our experience in both of our key markets in The UK as well as building our presence in both the institutional and international markets. During the year, our fund managers held over 700 individual meetings with fund buyers in both one to one sessions and group presentations. Our fund managers have presented at almost 200 events in front of over 7,000 fund buyers, and we were very pleased to welcome 200 fund buyers to our flagship conference in February last year. And based on the early registrations we have seen for next year's event, we are confident that we will surpass that number at the end of February twenty twenty five. So we are ensuring that we are relevant and visible to fund buyers across our key market segments.

15:30 But just finally for me, I continue to believe that PREMIER MITON is well placed for recovery. We have spent the last two or so difficult years ensuring that we are controlling those things that we can control. The foundations are in place for a market recovery. We have strong distribution and marketing capability that has, as you will hear shortly, been working to diversify its reach into new markets and geographies whilst maintaining a strong presence in our core market. Our business is well diversified. Our funds provide high levels of differentiation against the underlying indices against which they are measured. We are not overexposed to any one theme, strategy, geographic area, market segment, or manager.

16:21 We have significant optionality across our business and significant capacity to run additional assets under management as conditions improve. We are cash generative, and our shareholders are paid to wait for recovery through an attractive dividend yield.

16:40 We have a robust balance sheet that can support our growth ambitions, and we have a management team that has a proven track record of successfully executing m and a. We remain focused on our organic growth plans and open minded about further m and a where this meets our strategic objectives. I'm now going to hand over to Joffe to run through the distribution side of our business. Joffe? Many thanks, Mike. We have made considerable progress in distribution and marketing since I joined in September 22, and we quickly reorganized the two separate ex PREMIER MITON sales teams into one team and brought marketing and PR into distribution so that everyone is aligned to one overall distribution strategy and a consistency of messaging to the whole market. And we also made our first hire in the institutional team. Once that was done, we focused on increasing our visibility and reach across our target distribution markets and really upped attendance at our events, as Mike referred to, which also shows that clients are into enough product offering and what we have to say.

17:47 We began marketing into institutional markets in The UK, Chile and Peru, whilst also registering a number of voids in Ireland. 2024 has been a really busy year for us as we laid the foundations for international expansion, more funds registered in Ireland, the establishment of our offshore fund platform, which Mike referred to, six funds being recently registered in South Africa, whilst domestic, we also launched our new MPS model portfolio service. Following the successful integration of Telworth, we've now got the full distribution team is now deployed and promoting the Telworth range of funds, and you've seen the impact that Mike referred to. We've also adopted FundPath, which gives the distribution team better MI and intelligence on which fund managers to target, when and on which fund. And in addition during the second half of the year, we've also been working hard on a new project for a new advertising campaign and rebrand to take to market next year.

18:42 So if I take a look at the growth levers, the long term strategic plan remains intact. With strength and depth across the different asset classes, covering equities, fixed income, multi asset and absolute return, where we have recognized and competitive investment capabilities. The launch of our new NPS allows us to target those advisors in The UK. Who've moved away from selecting funds and continue to outsource their investment propositions to discretionary fund managers or other NPS providers, a trend that we have seen accelerating since

19:13 introduction of consumer duty. And the NPS proposition leverages of our already strong heritage and legacy in the advisor community. A key focus for us this financial year will be to leverage off the foundations of our growing offshore fund range, allowing us to properly access for the first time. There's wealth managers in the Channel Islands Ireland and other offshore wealth managers based in London and long term, further internationally. We've also had the first inflows coming into the institutional channel from Latin America, and we can now properly promote our funds in South Africa, having spent the past year building up awareness of our investment capabilities in the region. The addition of the Telworth range and especially the absolute return strategy is now getting real traction with wealth managers.

19:59 And lastly on this slide, following the FCA thematic review into retirement income earlier this year, we're announcing advisors recognize that they need their central retirement propositions to look different to their central investment propositions by paying greater heed to cash flow modeling. And with our strong lineup of income generating products, we continue to feel this will be a growing area for us going forward. So as Mike highlighted earlier, it is important for us to maximize our strength when we see the evident demand pools. Our U. S. And European equity funds, our U. S. Smaller company funds, GAPS Return Fund and our fixed income funds are a core focus for our distribution teams with wealth managers and select institutional clients.

20:45 And our three multi asset propositions, which I've highlighted in green on the slide, are a core focus for us in the advisory market. And this clear distribution focus on these key eight areas ensures we can bring the right resources to bear on the opportunity set. Now coming back to NPS, you know, the inevitable growth of NPS continues apace, as I mentioned earlier.

21:08 Why do we believe that we can succeed in this space? Well, whilst we're not the first entrants in in the to the market, we do have a long history and legacy of managing multi asset portfolios for advisers and investors, leveraging off our multi manager team who worked to be working together now for the best part of twenty years or more. Our proposition is competitively priced. It's a clear investment process and with a strong service proposition led by a new investment director for MPS whom we hired from Tatton, Chris Robinson. And Tatton, of course, are arguably the lead

21:42 provider in this marketplace today. Now we know advisers are actively reviewing their roster of MPS providers, and a number have already signed up to our service already. So when we look at our growth and our target expansion internationally, what we're going to do is continue to grow and focus on that target international expansion to diversify away from just being dependent on The UK investor base. We hope to have three use of funds in Dublin early in the New Year. We've seen our first introduced

22:12 success in PREMIER, and I've already mentioned we now have six funds registered in South Africa where we can focus on raising assets there in 2025. As our offshore fund rate begins to grow and reaches critical mass, then we can turn our attention to the wealth management market in Europe. Meanwhile, we're also seeing growing institutional interest in our sustainable emerging market equity strategy in The Nordics, where we've been attending a number of events already. So let me come back to the brand positioning, which is going to be, for us, a key initiative in 2025.

22:44 Those advisers and wealth manager know us, know us well, but there are many out there who don't yet know what PREMIER MITON stands for. And additionally, in order to support our advisers, we need to project a stronger brand to end consumers. We need to project a brand that is bigger than what we are today. A strong brand can create such a positive power wave to help the distribution and marketing teams reach deeper and wider across the client bank. We fundamentally believe in active investing, as Mike referred to, so there's no point in looking like the index, which investors can act as cheap anyway. We believe we have a clear, differentiated proposition centered around the idea that we give all of our managers a blank sheet of paper, we give them the freedom to deploy their investment edge, and we do not impose a top down house beyond them. But anyway, more should be revealed in the coming months.

23:36 So finally, from me, you why do we think we will succeed? Well, we actually do have a very diversified fund rate, but we continue to focus on our core area of strengths where we see the demand pools. We have smarter tools to allow us to target the right wealth manager in The UK at the right time. We are expanding our distribution reach into new geographies and channels. Our rebranded advertising campaign, I think, would achieve real cut through. And as cash rates continue to fall and with our continued strong performance,

24:07 I think there are strong grounds for optimism going forward as cash gets redeployed to risk assets.

24:13 Let me now hand over to Piers to walk you through the financials. Piers? Thanks, Joffe. Afternoon, everyone. As Mike's already mentioned earlier, the assets under management, or AUM, ended the year at $10,700,000,000 and that represented an increase of 9% over the opening position for the year. Now the net flows for the twelve months were $318,000,000 out, but that was a significant reduction on the outflows of 1,100,000,000 last year. And this is after the inclusion of net inflows arising from fund or mandate acquisitions and disposals completed in the year, which totaled $440,000,000. Positive market and investment performance drove the balance of the increase over the opening AUM position for the year.

25:03 Now, the majority of the Group's revenue is generated based on the level of assets being managed by our investment teams. And and this is the key measure for the for the group in terms of the average AUM, and that drives our revenues. Now for 2024, this was 10,300,000,000,

25:22 and that represents a decline of 5% on the comparative period which really reflects the lower starting position for the year. Now we saw gross profits fall by 4,900,000 or 7% to 62,000,000 for the year. Again, the key driver of this were the lower levels of average AUM achieved when we compare against last year. And in in addition to that, we saw the net management fee margin reduced marginally to 58.9 basis points for the year, down from 61.7 in 2023. Now this decrease on the comparative year continues to reflect the sort of change in the group's product mix and the growth in AUM in some of our lower margin products and in particular strong growth as Mike mentioned earlier in our fixed income assets being managed.

26:12 Now the administration expenses, they decreased by 1% to GBP51.2 million. We'll discuss that a little bit more detail later on. And the adjusted profit before tax was £12,200,000 for the year, representing a decline of 22% on the comparative year. Now the amortization charge relating to the group's intangible assets was broadly flat at 5,100,000 and our share based payment expense fell by 28% to GBP3.4 million, which primarily reflects the rolling off investing of historic low cost contingent share rights.

26:48 Non recurring items of GBP0.5 million related to professional fees associated with the acquisitions completed in the year with comparative being related to the closure of Connect that took place in 2023. Now if we look at the administration expenses on Slide 25, again as I mentioned earlier, they're down by 500,000 to £51,200,000 for the year. Now this reduction was driven really by a fall in the fixed staff costs with the increase in overheads being broadly offset by a fall in the variable staff costs. As expected, people costs continue to be the largest portion of our cost base and represent circa 60% of our administration expenses for the year. Fixed staff costs were £22,000,000 which is a fall of 4% and really reflects a lower level of average staff or headcount throughout the year.

27:39 Notably at the year end, we had 160 full time staff including non executive directors and that represents an increase of one over the comparative period. Invariable staff costs totaled and that's a decrease of on last year. Now these costs adjust with the net revenues of the group and the adjusted profit before tax.

28:01 The overheads increased to £19,900,000 and the following slide shows a bridge of the key movements to get there. The increase includes additional costs associated with the dual running of the Telworth operations while they were integrated into the group's operating models, as Mike mentioned earlier. That was completed in June and there were also additional non recurring costs which I've just mentioned. The balance reflects an increased spend on sales and marketing activities and rebranding exercise which Joffe has highlighted earlier that commenced in the second half of the year. Now we continue to invest in our business to ensure that we're well placed to capture growth when demand returns. Managing what is in our control and our cost base continues to be a key focus as we move into 2025 and as mentioned earlier we've embarked on a further review of this area following the arrival of our new COO in September to see if there are any further operational efficiencies we can achieve.

29:03 The Group's balance sheet shows that we had £35,900,000 in cash at the end of the year and no debt. The other notable movement from last year was an increase in the goodwill and intangible assets arising on the acquisition that was completed in the year. Now turning to dividends, the Board is recommending a final dividend of 3p per share payable on the 02/14/2025.

29:31 When this is added to the interim dividend, it brings the total dividend for $20.24 to 6p per share, which is unchanged from last year and represents a payout ratio of roughly 95% of the adjusted profit after tax. The Group's stated dividend policy remains to target an annual dividend of approximately 50 to 65% of the adjusted profit after tax.

29:56 Now, the Board remains pragmatic when considering dividends and this reflects the Group's overall approach to capital management, considering balance sheet prudence, the market outlook and return to stakeholders and we continue to distribute twice yearly in line with our reporting calendar.

30:14 This slide sets out the regulatory capital of the group and shows what the surplus position is after the proposed dividend of a surplus of 15,500,000 The group maintains a strong capital base to support the future development of the business whilst ensuring compliance with both regulatory capital and liquidity requirements.

30:36 And with that, I'll hand back to Mike for the summary. Thank you very much indeed, Piers. So thank you, everyone for listening today. Hope you found the update helpful and that we've been able to set out our plans for the business and the outlook clearly for you. In summary, we believe that original thinking applied to active management in a well controlled business risk and compliance environment will be attractive to fund buyers as they seek funds that can add value

31:04 alongside their core passive strategies. We have invested heavily in our distribution capabilities to capture market share in our key markets and to create demand in new markets. Our investment performance remains attractive, and we provide a strong culture for talented individuals to operate within. We are cash generative. We have a healthy balance sheet. And whilst we have a clear focus on the organic growth opportunity, we also have a management team that is capable of successfully executing m and a in a sector that is ripe for further consolidation.

31:44 So that's the end of the formal part of the presentation. I'll just hand back to Jake. Perfect. Mike, Pearce, Joffe, that's great. And thank you very much indeed for your presentation this afternoon. If I may, I'll just bring back up your camera there. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated 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'd just like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can all be accessed via your investor dashboard.

32:15 Guys, as you can see there, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But Joffe, at this point, sir, if I may hand over to you just to chair the Q and A with the team. And if I pick up from you at the end, that would be great. Thank you.

32:32 Great. Yes, thank you very much, Nijay. And again, thank you to everybody for taking your time out to be with us today and submit your questions. We've got a few that have come through now, so I'll perhaps switch into a Q and A mode now. And maybe, Piers, I can begin with you. And one of the questions come through is do we plan or do you plan to maintain the current dividend?

32:52 Great question. I mean, I think, as I mentioned earlier, clearly, we've got a a defined dividend policy, which is a range of our adjusted profit after tax. Obviously, the dividend that's been proposed for the current year is outside of that range. And whilst I can't obviously forecast what the dividend will be or indeed what the board will decide at the time, I think it's safe to say that the Board takes a pragmatic view on deciding the dividends and it will obviously take into account the strength of the group's balance sheet, the macro outlook and indeed the capital requirements of the group. Great. Thank you, Piers. Right, next question is coming. Maybe one for you, Mike, this one. Does the company intend to look for further suitable acquisitions to grow the business? Yes. I think, you know, this is an industry that sort of is at a a juncture where there probably will be further m and a.

33:40 As I explained in the presentation, we when we look at m and a, we're always looking for those three key

33:48 strategic fit. So, you know, does a does an acquisition bring us additional scale to something that we already do? Does it bring us access to new capabilities that will be of interest to our clients?

33:59 And and does it bring us access to new client segments perhaps that we don't already operate within? So we're continually looking, for opportunities that that that tick one or more of those boxes. I think we shouldn't lose sight of the fact that m and a in asset management is is quite difficult to do. We are, in the end, people businesses, and there are numerous examples of m and a activity in our space that hasn't worked well. So it's critical, I think, when we look at at m and a that we focus on culture and we focus on strategic fit. So those are, you know, the key areas that we look at. And I think there will be further opportunities to do deals and to strengthen our business through M and A as we go through the rest of of next year and beyond. Thank you, Mike.

34:45 And actually, maybe another question that sort of kind of links to that. As demand for U. S. And global equity strategies increase, how well resourced are we to scale these offerings to meet expected demand? Yes, it's a good question. I think we strong

34:59 investment teams in these areas. And, you know, as we have seen, for example, with our fixed income team, which I think is now nine people Yeah. You know, as assets come through, as as the team builds, we're able to add resource to meet the needs of our clients. And I think we will see exactly the same thing, you know, taking place on on the, for example, on the US desk and the global desk as we build assets under management. And I think, we're in a position now where we could handle significant extra capacity. And as we attract that capacity, we have the ability to invest further, in those strategies to ensure that we continue to deliver for clients. Thank you, Mike. In fact, whilst you're in the chair, might as just keep going. And then the question's come up on on one of our investment trusts.

35:44 So can you give us an update on the current situation with investment trust MINI? Yeah. I can't really add much more here than has been sort of stated publicly through through the RNSs. You know, from from my perspective, it's it's a shame that that the, you know, investor interest in that strategy has waned. You know, clearly, The UK equity market has

36:07 been under significant pressure, selling pressure for for you know, really since the period, since Brexit in 2016. And that, of course, has exacerbated or or amplified for the very, very small end of the market. Structurally, I think the decline that we've seen in The UK equity market is is a, you know, nothing short of a tragedy for The UK economy. And I, you know, I do hope, that the government, are aware of the impacts, that the decline of of an effective and strong capital market will ultimately have on on the economy and and continue, as they did at the Mansion House, to to come up with ideas to help revitalize it. But, yeah, I I can't really add anything more specific on Mini than than the board have already added through the through the RNS process. So apologies for that. Thank you, Mike.

36:58 And then probably a question I have to answer, Oscar, myself. So what is our conversion rate upon meeting potential investors, investment product? And is there anything else, any more strategic distribution deals you can do? Conversion rates are very hard if you're talking in sort of wealth management advisory space, it requires multiple, multiple conversations with clients over a protracted period of time, and it's very hard to pinpoint one particular activity that results in specific conversions. So conversions are very hard. If you do the institutional space and you get invited to a pitch and there's three of you, then you can work out those conversion rates. But it's much more harder than kind of broader distribution channels, but we do track that, although I don't have numbers I can share specifically on this call. I think in terms of distribution deals, and again, if you think about the market we're trying to operate in, if you're talking to wealth managers, you're essentially trying to get your single structure, equity, fixed income funds on those buy lists, and we're having those conversations all the time. When you get to advisers again that you're offering either retirement income solutions or multi asset funds, where you kind of get more of that strategic distribution arrangement is when the adviser decides to outsource their investment proposition effectively to your model portfolios service, the NPS.

38:07 And that's when you can actually access maybe 25% or 30% of an IFRS book. And by the launch of our NPS, that allows us to have those conversations. And as a consequence of having this NPS proposition, actually, we're broadening out now with some of the large we're having much larger distribution conversations with much larger entities. So I think that momentum is building quite nicely. The next question, I think, maybe I'll answer that in conjunction with Mike. Do you think investors believe you are still a UK centric business? And is the idea you're more global resonating with investors, which is perhaps two ways to take it. Are we UK centric investment management business? Or are we UK centric distribution business? So maybe if we which way? But I'll hand you first. I think I mean, yeah, I think it's early days for us. You know, the the work that we've been doing over the last eighteen months, two years in terms of building our presence outside The UK is still at relatively early stage, but I think, you know, we're making decent progress. Yeah. And I think, you know, investors, I think, have a perception of PREMIER MITON that we are a very UK centric business that runs an awful lot of UK equities and an awful lot of UK small cap equities.

39:12 And and in actual fact, that's that's probably an out of date perception now, I think, as you've seen a much broader and more diversified business with a relatively small exposure to UK small cap and and UK equities representing just 18% of the overall. And and, you know, one of the things that we've seen over the last few years is, you know, effectively, as one part of our business has been going down, another better diversified, and I think stronger business has been growing. And we have suffered, you know, with clients who've reallocated away from The UK. I think, you know, we've lost nearly 900,000,000 of assets under management as one large client has reallocated away from equities and into into global. And I think, you know, we we've had to sort of build our business against that backdrop of one part going down as another part goes up. But we are, I think, a stronger and better balanced business today than we've probably ever been. Yeah. No. I think that's fair. And and going back to what Mike said at beginning of the answer, we are now active in Ireland. We are active in the channel line. It's where we weren't historically because most wealth management channel owners only want to buy offshore funds. We're now building out that range. We are active in The Nordics. We are active in South Africa. We are active in Latin America. So we're gradually broadening out that distribution reach and that awareness of who PREMIER MITON is.

40:29 Right. Let me swap tacking, bring Piers back in the conversation. We've been too quiet for a wee bit. So Piers, you know, given all the sales initiatives that we've been talking about and sort of next management sort of future bid, where do you think sorry, Mike, can I just scroll back up again? Oh, sorry. And if we look at some of the core profitability businesses, costs have been well managed, but it's surprising and one of the worst years for asset management overall that the cost reductions have been a little bit more aggressive. What say the peers? Well, there's two questions there, Geoffrey. One is the sales initiatives and the flow that's going to come, which I can almost bat over to you. If we look at that as a sort of complementary, think what we're looking at here is what is the core business, and what are these new initiatives such as NPS? And I think we look at that as complementary to what we are doing. The the cost is attached to the NPS and some of the other initiatives are already baked into our figures and our numbers and our cost base.

41:20 So really any revenues that come from those new initiatives, I think we just look on top of our core business as additional. So I think that's the first point. The second point is as flagged earlier in terms of the the cost base, yes, our overheads are higher than last year, but we did end up have effectively a dual running of costs for the Telworth acquisition while we brought it onto our platform that was about 800,000. So actually we were net net down in terms of cost year on year, which I think really is reflective of the environment we're operating. We're running with a tight focus on our cost, but we have spent a little bit more on sales and marketing as we've alluded to earlier. Indeed, we might say a bit more about coming through in 2025 as we build the brand out and really making sure that, you know, we've got a platform that is well positioned for growth and capture capture demand when it returns.

42:10 And I think our our new COO is very much tasked with ensuring that we review all parts of our business to to deliver cost efficiencies. So I think you'll see some more of that coming through as we move through FY '25. No. Agreed. Thank you. And then actually, one of the other questions that's come through, Mike, is, you know, there are lot of other asset managers who also struggling and pretty miserable out there. It's been a tough time for active asset managers per se in the last sort two, three years as we talked about. You know, how many more teams like Telworth are out there? Yeah. I mean, I think I I think there's very little point to being miserable if you run an asset management business. You have to you have to be optimistic and positive on the outlook. And, you know, I think there are opportunities out there. I mean, we actually looked at another opportunity over the summer. Unfortunately, we we weren't able to to bring it to a satisfactory conclusion for various reasons, but, you know, there are there are people out there. You know, we are a small business, but we're still 11,000,000,000 of assets under management.

43:03 I think for smaller businesses than us, the last two or three years has been really, really challenging. And I think that creates opportunities where people, feel that actually perhaps being part of a larger organization that still allows them that investment freedom but can bring, you know, enhanced compliance and risk and operational infrastructure and also, of course, a stronger distribution footprint can be attractive. So I think that, you know, there are other opportunities, we will continue to try and unearth them. Yep. Thank you, Mike. And then maybe getting back to peers, know, one of the questions that's coming on screen. Why share are based payments being adjusted out of EPS? Isn't this the cost that should be included or not? Yes. I think it's a great question. I think historically, we have always presented it in this fashion.

43:50 And the reason really is adjusted profit is the tool that the management team and the board use for decision making purposes. Really, is a proxy for the cash generation of the group. Obviously, share based payment charge is a non cash item. And so that's really why it's done in such a fashion. I think, obviously, when you get groups which are are much, much, much bigger, then they they do tend to assume that this goes into administration expenses, but we've always done that in a consistent way. Thank you, Piers. Can I just go jump on another question now? So one question, well done chaps and guys from sticking to the plan through a difficult time. Could you provide maybe Mike's a big one here could you provide the vision of the size and the shape of the business in five years? Yeah. That's, that's a great question. And I think, you know, we'd love to see this business going through that sort of 20,000,000,000, level. I mean, we're at 11,000,000,000 today.

44:43 You know, we have the capacity and the operational capability to probably run three to four times the level of assets under management we have today. And I think 20,000,000,000 will be a really, really strong milestone for us. So, you know, from a personal perspective, that will be something I would I would love to see. Thanks, Mike. Well, because I think we've got time for a couple of more questions. Maybe back to you, Piers. You know, one of the things you've done is include acquisitions within net flows. Is there a reason why you've done it that way? Yeah. So when we do the RNS on the quarterly AUM updates, we actually split it out. So we show the net flows by strategy, and then we'll show what has effectively been bought in through acquisitions and what's gone through disposals, whether it's been sold or left. It is presented in some of the other areas as net figure really for ease of understanding where actually if you don't include it you end up with a you could assume it was all market performance was the difference.

45:39 So really it's that but we do provide that level of detail within the RNS and other areas of market updates. Great. Thank you. I think we've almost got one more question on the board. If anybody has any other questions here, please do fire it in the next couple of minutes or so. So maybe this is perhaps back to you, Mike. You know, I think I've heard that you've got less than 2% of assets today allocated to UK smaller companies. Given the amount of M and A in this sector and the implications as much value in this, can you see this allocation towards what comes increases? Probably slightly different question. Yeah. Yeah. I think, you know, we have about in terms of funds that have a specific UK smaller companies brief Yeah. We have about 1.6% allocated to those specific briefs. However, within our broader UK suite, so UK growth, UK responsible, UK value, UK multicap income, UK income, we do hold smaller companies within those portfolios.

46:39 Our our managers have the freedom to move up and down the market cap scales as they see fit. I think the issue for UK smaller companies at the moment, and I I agree with the with the questioner in terms of, the amount of m and a in the space, I think, you know, one of the things that will be a real driver for a recovery in the sector sector is a slowdown in the level of outflows from UK equity funds. Because the the the difficult situation is that people are continually selling to meet redemptions, and that is driving down the value of UK small caps, which is then causing redemptions, which is then drive you know, we're in that kind of doom loop. And I think, you know, we we saw one data point earlier this morning that showed November was the first net inflow for UK equity funds in forty two months.

47:28 Yeah. Well, if we have a few more of those, you know, a few more positive months, I think that will support and improve confidence for for our for our investment managers to start looking a little bit further down the market cap spectrum again. So, you know, clearly, and if any of you have listened to Gervais' talk, you know, clearly, is huge value in this sector, but it's just you know, you we don't wanna get caught in the value trap. We wanna be able to invest in the area and and get the upside as and when market conditions improve. Great. Thank you, Mike. In fact, there a late entrance in the air question from Paul. Given the press share price, do have any thoughts on initiating share buybacks programs? I think, yes, obviously, as Piers has mentioned, you know, we have a we have a big debate in terms of, you know, our capital allocation, and and, you know, we've we've strayed outside of our stated dividend policy in order to, you know, to take a pragmatic view on that. I think my general view on share buybacks is that they you know, unless it's part of a long term program, it doesn't really help. And and I think, you know, small one off share buybacks are not really that much help. And we've also got to be, you know, aware of the fact that if we reduce our market cap still further by buying back shares, we potentially reduce our attractiveness to investors as well. We reduce our liquidity and so on. So it's a debate the board have, you know, fairly regularly. Should we use our cash for this or that? But I think as we've seen with the Telworth acquisition, you know, that's been that's been a a,

48:59 you know, a good a good use of our cash. And I think we you know, if there are other options out there along those lines, which which we've alluded to in one of the earlier answers, then I think it's right that we use our cash in that way to strengthen the business and and increase the profitability and revenues and so on rather than using it to buy back our shares. But I I understand the the question, and and it is regularly reviewed. Thank you, Mike. Thank you, Pearce. I think that's all the questions we got. So in that case, I'll hand you back to Jake. Thank you, Jake. Perfect. Joffe, Mike, Pearce, that's great. Thank you very much indeed for being so generous of your time there and addressing all of those questions, that came in this afternoon. And, of course, we'll publish all those responses, where it's appropriate to do so on the platform. But, Mike, perhaps before really just looking to redirect those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.

49:54 Yeah. I mean, just to say, you know, it has been a very difficult period, as you know, over the last over the last three years for the active management space. I think, you know, we've done what we can and control what we can, you know, actively taking the view to diversify our business, to build investment capabilities that will allow us to attract assets as and when market conditions improve. You know, we share we we we share your pain in terms of the recent share price movement. You know, we are, as a management team, all shareholders in the business, and we care very much about the direction of the share price. But we know that we have to focus on building and growing the business in order to deliver for shareholders. And primarily, we have to focus on delivering strong investment outcomes for our clients because we know that, ultimately, that's what will drive flow, and that's what will drive the share price.

50:46 So thank you very much for attending today. Thank you for for listening in. I hope we've been able to answer all your questions and and to give you a our views on the outlook for the for the company over the next twelve months and beyond. And we look forward to providing further updates in due course. Thank you. Thank you. Perfect. That's great. Mike, Pearce, Joffe, thank you once again for updating investors this afternoon. 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 PREMIER MITON GROUP PLC, we would like to thank you for attending today's presentation.

51:31 That now concludes today's session. So good afternoon to you all.