Sysgroup (LSE:SYS) — FY22 Final Results

0:01 Good morning, and welcome to the SYSGROUP PLC final results investor presentation. Throughout this recorded 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 hand corner of your screen. 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 will review your questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll.

0:28 And I'd now like to hand you over to Adam Binks, CEO. Good morning to you, sir. Good morning, everybody, thanks for joining us once again for SYSGROUP's full year results presentation for the financial year ended 03/31/2022. Just for those of you that don't know, as I'm sure many of you on the call are familiar with our our faces and sick of seeing this slide now, But I'm Adam Binks. I'm the group chief executive, and this is my colleague, Martin Austens, who is our chief financial officer.

1:08 So, again, for those of you that are new to SYSGROUP, what I'll do over the next couple of slides is take you through who we are, what we are, and what we do. So apologies to those of you that have heard this before, but I think it's always a good introduction for these things, especially for for people new to us. So SYSGROUP PLC, we are an aim listed managed IT services, cloud hosting, and managed security services business. We are operating six offices now across the country. Headquarters is in Liverpool. But as you can see there from the right hand side, we've five five other offices, our newly opened office in in Manchester, which we opened last year, technical operations center down in Newport, and new additions to the portfolio being Edinburgh and Bristol, which have come from the acquisitions that we've made earlier this year. And obviously, I'll talk more about later on.

2:13 So just a quick overview, the results we've posted, 14,700,000 revenue, which is down on previous periods, but we'll talk about that more as we move through the slides. Solid adjusted EBITDA of 2,800,000. We're now looking after more than 900 customers in the mid market through up into enterprises. We strengthened the team further with a 120 team members spread across those six offices that I mentioned earlier. And we're operating the business on a true twenty four seven three sixty five basis, so we're always available for our customers. You'll see a number of logos over on the right hand side of the slide, many of which I'm sure you're familiar with.

3:00 But this just demonstrates the the the caliber of vendor partners that SYSGROUP is working with on a daily basis, and also demonstrate some of the barriers to entry for becoming an MSP. So it's really, really important when customers look to contract with a an MSP and outsource their IT services. They want to see these low logos as true partner accreditations because they typically know that we are investing with the partner and the partner is invested with us. So it's not as simple as filling out a form on Dell's website, for example, and becoming a Dell partner overnight. We need to have our technical teams and our sales teams and our presales teams all accredited with the technologies that each of these vendors provide to show that we are well versed and technically competent in being able to deliver these solutions for our customers.

4:02 And, obviously, the accreditation speech, you know, we're big on accreditations. We operate the company and our processes to a very high standard, having ISO twenty seven thousand and one and nine thousand and one on there. And, obviously, the one that I always say I'm most proud of is our PCI DSS compliance where we meet Visa level one merchant service provider status, which is fantastic. And there's only about three other service providers in the country that that have that accreditation. So that's a bit about us. So in terms of our capabilities, you know, cloud is the is the the latest and greatest. It's the next big thing. The pandemic has helped business leaders understand that they need to make the the shift and the transition from on premise infrastructure outsource their IT requirements to businesses like SYSGROUP, which are my service providers.

5:02 So we operate our cloud hosting platforms from five key locations in The UK. The building that you see in the picture on the right hand side there, which is Vantage's data center down in Newport in South Wales, that really is the building. That's the data center. It's not a stock image. Fantastic facility. And it's also where Microsoft hosts their UK Azure presence from. So we have a footprint in there, about a 120 racks worth of infrastructure. We connect that up through our core network, which I'll explain on the next slide. You will have seen in our announcements that we've recently invested in our SYSGROUP platform, which is our multi tenanted hyperscale cloud hosting platform similar to that as an AWS or an Azure.

5:55 We host the the the main part of that from that facility. So fantastic, fantastic building, extremely secure, 100% uptime, well backed with, great power supplies, and generator backups in the event of power failure. You know, I hate to talk about it, but touch wood, we've got a 100% uptime on the platform.

6:20 And then our network, our network spans right across The UK. So, you know, it it's important that we connect each of these data centers by means of high capacity, low latency connectivity, and then that we're able to connect our customers' premises, be it their head offices, their satellite offices, their branch offices into our network to be able to bring their connectivity as close to the data center as possible where their applications and their data are stored and hosted, giving that real time user experience and reducing latency to an absolute minimum. So you'll see, you know, there's multiple connectivity points there. We run a a diverse redundant network around The UK, all running at 10 gigabits per second at minimum and utilizing multiple different service providers. So we've got no one single point of failure in that. Again, being able to provide a 100% uptime for our connectivity customers and keeping them connected to their applications within the data center.

7:31 So in terms of what we do as a business, we we split our service offering down into these seven key areas.

7:41 You know, recently, we did we did an analysis in in our business of our existing customer base and what the existing customer base buys from us. And on average, our customers only buy from two of each of the seven seven sections there on that slide, which demonstrates that we've got a huge amount of white space in our customer base and great opportunity to go after in order to return to organic growth in the future. But you'll note that I've used the word managed an awful lot on this slide. Everything starts with managed. We are a managed IT services provider, and that's where we add our value by being able to take away the pain for a customer or a prospect and manage each of the services listed under these headings and look after this on a twenty four seven three sixty five basis for our customers.

8:38 So you'll see the the product or the service portfolio is vast there. There's not a lot that we don't cover, especially since the acquisitions have come on board. We've even further strengthened the service offering, so we can go deeper, especially in the managed security, section of this slide. So real full, breadth and depth of services that we're able to offer to our clients.

9:05 And then the market, you know, what is our go to market strategy? So the biggest opportunity for SYSGROUP, we focus on The UK mid market. We we don't specifically focus on any one vertical. However, the verticals that you can see listed out in this slide over in the top left there is where we have got quite a demonstrated success. So we're well versed at being able to go into prospects in those verticals and give them real life case studies where we've worked with businesses similar to them in the past and currently. So the biggest opportunity for us sits within that UK mid market, kind of ranging right down the bottom end from 50 users up to a thousand users plus.

9:52 That's not to say once we get to a thousand users that we we don't want to deal in that area. In fact, we love dealing in the enterprise sector. However, the opportunity just becomes less because there's less of them. In terms of our marketing strategy, we're very focused on who we market to. It's all about knowing your audience and how to talk to them. So, again, just in the table in the bottom left hand corner, you know, we give examples of how we message our marketing collateral when targeting the different areas of the c c suite if you like. And then the table on the right hand side shows all the different methods that we use to get our reach out there and how that goes through the funnel.

10:39 So there is no there's no secret formula. There's no magic wand. We have to have multiple touch points within our business to get the reach out and get the name out and get the service offering out there to our prospects and help them understand what SYSGROUP's capabilities are. And, obviously, the further we move across that journey, the the thin the funnel becomes. Unfortunately, we don't win everything that we touch, although it would be great to do so. So that's a bit about SYSGROUP. We'll focus now on the FY '22 period. I'll surely hand over to Martin for him to give us an update on the financials. And then later on in the presentation, I'll give you an update on the acquisitions.

11:27 But just taking the highlights from FY twenty two, whilst we've had an impacted revenue down to 14,700,000, we still delivered a fantastic EBIT EBITDA outturn at 2,820,000. And Martin will talk to you more about the revenue decline and where that's come from and what that's about and why it's not a huge thing to worry about. But again, net cash ahead of our own expectations at 3,000,000, which really demonstrates the strength of our business model that we are turning EBITDA into cash. We're ahead of last year on both adjusted and basic EPS, which again is great news. You will have heard me talk in the past about Project Fusion. Project Fusion was the program that ran through our business for the last couple of years to unify all of our systems and platforms, CRM systems, billing systems from the previous acquisitions into a single business operating system.

12:27 So we Martin and I and the rest of the management team now have a single pane of glass to get business intelligence from and to manage the business. And that project has been really successful. Our teams have have welcomed it, but that's now complete as of the March 31. So, you know, in future slides, you won't be hearing us harp on about that anymore. Being a good corporate citizen that we'd like to be, we've embarked on an ESG project this year, which Martin has led and done a fantastic job on. We're not mandated, to make any ESG disclosures, but we think it's a good thing to do. And, Martin will take you through the ESG journey shortly. Last year, middle of last calendar year, we opened up our new Manchester office where we built a focused sales and marketing call. That office is now fully operational with a team of people in there working since January of this year, which is great news. We're starting to see very small green shoots of success come out of there.

13:32 And I stand by the decision that we made last year to embark on that journey. It was the right thing for us to do, and I think in future periods that will really start to bear fruit for us, which we'll be able to update on. We've gone through an office consolidation process. We've closed down one of the legacy offices, which was our Telford facility, which was also a data center facility. We were still running customer infrastructure from there.

14:00 That's been the planning for around about the last twelve months or so. That is now complete. That office is fully closed down. The data center has been migrated into our existing footprints within Vantage and Ldex and our SYSGROUP platforms, which is great news because we've we've had some operational cost savings that have come from that, albeit largely offset by increased power charges, but a good time to complete that project. And, obviously, the big piece of news is the post period acquisitions of Trussstream and Orchard, which we did in April. And as I say, further on the presentation, I'll give you more of an update on those two businesses. Martin, ESG. ESG.

14:47 Okay. Thanks thanks, Alan. So ESG, something we we thought about about twelve months ago. So if if any of you were on the call, certainly at the interims, potentially at last full year as well, it was something we've listened to from our shareholders that they're quite keen for us to get involved in this. Adam Adam has mentioned already, this is purely voluntary. We're we're significantly under the size threshold to do it. But but, essentially, we think it's well, it is the right thing to do. And I say that in terms of talking to our people as well internally, that they're very keen that we go on and did the ESG piece as well. So whilst regulation might come down the path in future, it's it's definitely something we want to get on board with this year. So the key key thing is we've partnered with a company called Inspired, a fellow a listed company.

15:38 So Inspired have a specialist ESG division, and they've walked hand in hand with us through this project this year. And what we have is we're making full disclosure this year of our carbon emissions and and our full social governance side as well as a baseline year one. So what you'll be able to find today, if you go on to our website, you'll be able to find the ESG link and find a report that you can see on ESG. That will actually be followed up when we come around to put in our annual full annual report on our website with the full ESG report, which is likely a fifty, sixty page summary. So so it's a good it's a good piece of work. Well done. Our senior leadership team involved in this and our and our wide team. Our carbon emissions are pretty low for those who are interested in this. We're we're office based, but we do use, obviously, data center energy for our scope too.

16:34 So that's captured in the carbon emissions. But in the next year, we'll be looking to set KPIs and and measures and metrics for this. We'll move on to the financials. So this this is just a highlight slide for you, and I'll I'll talk a lot more on on subsequent slides to talk about income statement in in more detail. So revenue is down this year. So if you look at the graph to the right, what what you'll see is we've had good few years of growth. And what you're really seeing there is the two years of the pandemic impact, unfortunately, which obviously many businesses and Newcomeria have faced. I'll talk a lot more about revenue on the next slide, if you bear with me, in terms of constituent parts, that's on margins.

17:21 But just to pick up a few other points on that slide, the adjusted EBITDA, we've been very pleased to be able to essentially maintain a good adjusted EBITDA level despite the revenue decline. And obviously, we've got these small tick ups in the earnings per share, which is good to see. So we can state again, I'll take a point that that some of you maybe on this call haven't looked at SYSGROUP before. Our revenue you've already seen a a slide from Adam which talks about the managed services. That's about 80%. I mean, and we target around 80% of our revenue to be what we call contracted income on managed services. And to put a little bit of a sort of finance spin on that, what's that mean? It means contracts that new customers will sign up to for thirty six months and then be on an automated twelve month rollover.

18:13 They have ninety days notice to give us at the end of the initial term, but, essentially, they don't give us notice. It rolls over. That that is billed on a monthly or quarterly in advance basis. So that's why when we come to balance sheet and the cash flow statement, our debt today is in about twenty five days. So it's in a very good position.

18:33 The other 20% of revenue is what we call value added resale. And value added resale for us is point of sale licenses and IT hardware. Essentially this is where we have customers who are taking contracted services from us and they want us to do the procurement of the equipment and licenses for them as well and that's one off sale. Now the key thing here is that the margin for managed services on a on a blended basis around 60% to 65%. The margin, obviously, on resale is 20% to 25%. So it's much richer margin in the and and stickier margin in in the contracted services. Kind of leads on to the the revenue decline just to just to cover that point. So £2,000,000 of the difference between FY twenty one and FY twenty two revenue is value added resale.

19:20 So that came down to 1,900,000 in FY twenty two. The the key points around this is, as as you probably have guessed in the COVID period, we saw lots of customers wanting to withhold CapEx spend to preserve the the strength of their balance sheet. What's also happening at the moment, which we're seeing a lot more of in talking to customers, is that customers are now thinking about the cloud transformation. So the old style of equipment by putting it on premise is now moving into a lot more customers, things like cloud transformation. So we think value added resell long term will be on a decline. But clearly, from our own business model, having that move into managed services and and cloud hosting is beneficial. The revenue for managed services is down about 10% year to year, and that was really from, again, a pandemic in impact of heart just high, quite frankly, quite higher contract

20:15 customer churn and, again, on on base of the saving costs in in the pandemic. Q four going into FY '23, we're now seeing that the green shoots of that growth, the interest in the customers coming back in. So the a the the revenue mix in in FY '22, 87% managed services, 13% bar is isn't really normal. That's always due to the bar lower sales value. We'd expect that to come back to $80.20.

20:42 Certainly, that's how you you should understand that gross margin. 58% in a normal model is about right. 61% is high because you've that revenue mix change. Overheads, what what we've had in the year is we've got the headcount in our business down to the right level, the size of revenue we have. So most of that overhead saving is through sort of made maturity acquisition synergies of of people leaving and not needing to be replaced. What will happen in FY '23 is we'll be recruiting more and bring it up to reflect the higher revenue level we expect. Just again for anyone who's not touched SYSGROUP before, no use of the furlough during the COVID period, No government support required, and and no one off items in in profit. It's also a good clean set of numbers to have a look at.

21:34 So in terms of balance sheet, I I always say this, and I and I think it's a it's a good point. It's a very simple balance sheet to understand. We're an m and a buy and build business. So, naturally, we have the intangible assets and goodwill as as you'd expect as we make each acquisition. What the the real interest, I think, in the balance sheet is is around working capital. So we've got strong cash balance at the end of the year. Again, I'll talk a little bit more about that on the cash slide. We are a cash very high cash generative model. In fixed assets, we've probably spent more CapEx this year than we'd normally do, but that's principally because we've invested in our offices for refills and fit outs. So 300 k's gone into that. We've also invested into SYSGROUP two, which Adam mentioned, about 130 k.

22:21 And in terms of fusion, we've had development costs for fusion, which again have come to an end in March. But, really, fusion's been an excellent project for us. It's it's been really important to get that unified platform in because we

22:34 now bring all our newly acquired businesses onto that single platform, which is quite imperative for us. Probably worth going to the cash slide. So overall, net cash is is up to $2.92990000 at the end of March. So that's 1,100,000 higher than twelve months previously. We target 80% to 90% cash conversion, and that's measured as the cash from operations after working capital movements over adjusted EBITDA. We've hit 88% this year. I think if you go back the last three, four years, you'll find we're always in that or above the target range. So and that that this comes through because of our billing in advance. We're providing critical services to customers, so we typically don't have customers who kind of not don't pay us because clearly we're giving them quite key supplies.

23:28 The CapEx I've mentioned already, which is fairly straightforward. Mentioned on the bank loan, that's ticked up a bit from 220 k to 417. That was just in the third year of the banking agreement, the quarterly fixed repayments just go up as anticipated. But it's a strong model and we've got 4,100,000 cash balance at the end. And in fact our cash generation previously and actually at the year end has enabled us to use some of that cash to buy Orchard which we'll come on to. So just flip to and maybe maybe this goes slightly beyond year end now in terms of April and and links to our acquisitions. So at the same time as we did the Truststream acquisition, we've agreed a new 8,000,000 revolving credit facility with Santander.

24:19 So we've been with Santander for a number of years. They've been a very supportive banking partner and seen us grow over these years. So the 8,000,000 RCF is a acquisition fund, and it's also for working capital purposes. We are highly cash generative, so it's very, very unlikely we'd ever need to use this for working capital, but it's just nice to know if it was needed. The terms of five years, we've got some good good, very fair covenants. We're about one and a half net debt leveraged as of today following the drawdown for trust stream. And in terms of minimum liquidity, we're around 6 or 7,000,000 in terms of that balance. So against 2,000,000 minimum, we've got very high headroom. So in terms of this facility, we use 4,500,000 immediately for the trust stream acquisition, which I know Adam will talk about at the moment.

25:11 But we also folded in 800 k of the outstanding balance on our previous senior term term loan. So that's a 5.3 today, which leaves us 2,700,000 in headroom, which together with our cash balance does actually allow us through the balance sheet and through the facility to probably do another smaller bolt on acquisition just within the the existing capability. So in a in a very good cash generative position and a and a strong balance sheet position. Very good. Thank you. Okay. So I'll move on to talking about two acquisitions now before we move on to q and a. So TrustStream was the first of the two. We acquired TrustStream at the start of April.

25:57 A managed security services business that's been established for just over eleven years, founded by two shareholders, both based in Edinburgh, who have joined SYSGROUP and will remain with SYSGROUP certainly for the next couple of years to deliver the the earn out for us. Truststream operates more at the higher end of the mid market and into enterprise customers. So, you know, you got some fantastic names on there, like Tesco Bank, MyDentist, and and DVSA amongst many others. It it's really enhanced our existing security offering. So SYSGROUP was in the the security space prior to the acquisition of TrustStream.

26:43 What this has done is really bolstered our position as a provider of managed security services and also give us two new strategic relationships with Zscaler and and CyberArk. So Zscaler is one of the industry leaders in cloud hosted endpoint protection, which is really, really relevant at the moment given arrangements for things like hybrid working, people working from multiple offices, and people even working from coffee shops and from home these days. So Zscaler is a great service offering, and we've got a great relationship with them, which is being filtered through into SYSGROUP. And against CyberArk, an industry leader in what's known as privileged access management.

27:32 So, you know, without boring you guys with the the technical details of all of that, what it does is simplify the process for a business that has multiple systems and multiple tiers of staff that need to access those systems without ever the need to give out the password. So when you have things like people leave a business or, you know, changes in role, there's no mass need to go out and change all the passwords on by the click of a button. An individual can be locked out. All their privileges can be lowered or hired as and when required. So, again, another great service offering to to our to our portfolio. We acquired Truststream for for what I think is a very modest 6.4 times f y '21 EBITDA of 4,800,000.

28:26 Even if the guys deliver the the targets that are within the earn out, We'll keep that multiple depending on where they land sort of between six point one and six point five times, which again, you know, I'll say again, for a managed security business, it's a it's a really good deal that we've that we've got there. And, you know, Martin talked earlier about integration and and project fusion. You know, previously in the past when we've had earn outs around because of the way systems work, it's taken us years to do integration. Now the way we can segregate systems but still be on the same platform and have the same access to information and reporting, we can integrate the businesses rapidly so it takes months rather than years.

29:16 And we expect to be coming back on both Orchard and Truststream when we do the interims update in November. You know, either that we're we're very, very close or both of those integration projects are are are complete. So then moving further south down the country to Orchard, business based in Bristol, established for some thirty years. Very loyal customer base, 20 team members added to the SYSGROUP business. You know, you might look at this and say, well, it's a really small deal. Why did you do it? And there's a couple of reasons. One, we got a great deal on it. We paid 3.3 times f y 21 EBITDA, so it cost us a million pounds.

30:08 But one of the other reasons, you know, we we've got an operation in Newport in South Wales, and that's where the majority of our technical people are are focused. But we've also had, you know, same as any other business across multiple sectors, not just IT, recruitment issues in in in that area and and across other parts of the business. So what this has helped with is by bringing in an additional 20 team members, 18 of which are technical. We've almost solved the recruitment problem that we that we have in that area, if you like. And the MD of the business, he has stayed with us. He's taken a role, within our existing sales team, which provides continuity to the Orchard customer base.

30:57 And we've actually already got the cross selling opportunity on the way with the Orchard customer base by introducing them to the SYSGROUP portfolio. So, you know, a small bolt on acquisition, as I say, I'm gonna say it was a bargain, at 3.3 times costing us a million pounds. And, again, bringing on a fantastic team of people that helps us accelerate our journey. So really pleased with that deal and another great one to add to the portfolio. So lot of reasons to invest in SYSGROUP. We we've got great visibility of future revenue, which is underpinned by contracted income. Many people talk about recurring revenue. When we talk about it, we talk about recurring revenue being underpinned by a contract, not just repeat business that keeps on happening.

31:48 It it truly is contracted income. As Martin's explained, we've got very strong cash generation. We're operating at the upper end of our own targets and probably upper end of our peer group, which is great. We've got a supportive institutional shareholder register. And despite the delays that we faced through COVID and the pandemic, they are still well and truly on board with us, all of which hold a medium to long term view on their investments. We've demonstrated success with our m and a strategy. I think we've definitely demonstrated our ability to source good businesses, buy them at good value, and then integrate them into the wider group to continue to operate those businesses with success.

32:35 And we're operating a growing market, which has got great future demand. You know, the pandemic has really helped demonstrate the relevance and the the reliance on IT. People have realized the complexities of IT and therefore understand that in order to evolve within their own businesses and employ technology correctly, they need to rely on businesses like SYSGROUP who have the technical expert expertise, to help them navigate the the complexities of the the technical landscape. And you've got a leadership team, Martin and I, our senior leadership team, who are committed to success. You know, it'd be very easy to to become disheartened with the the wider market, with the the challenges that we faced and also with the share price.

33:26 But, know, we understand it's bigger than SYSGROUP. We're still committed to driving this business forward, and we're going to take it to where we need it to be. Thank you very much for listening, and we've got some time for Q and A. Adam, Martin, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just using the Q and A tab situated in the top right hand corner of your screen. But just while Adam and Martin take a few moments to review those questions submitted today, I'd like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Adam Martin, as you can see, we've received a number of questions throughout today's presentation, and thank you to all the investors for submitting those. Could I just ask you to read out those questions and give responses where it's appropriate to do so? Then I'll pick up from you both at the end.

34:13 Yeah. Fantastic. Thank you. So the the first question we we've had in, say that m and a is picking up. What metrics do you use to make acquisitions? And does does this pick up, make it more competitive? It's always been competitive. You know, there are a couple of us out there on the the m and a journey. In terms of our metrics, we we have a very strict criteria, which I'm not gonna talk about in full because, you know, part of it sensitive to us. But one of the key things that we look for is is recurring revenue and what I was talking about earlier in terms of contracted recurring revenue or how we can drive contracted recurring revenue and accelerate it through an acquisition target.

35:03 We always look for businesses that are growing, so we we don't claim or profess to be turnaround specialists. We're not looking for businesses that are in a loss making situation where we can come in an asset asset strip and turn those profitable by largely getting rid of people because the biggest cost in in businesses like ours are people costs. So you already need the people. Hopefully, answers that question. But, you know, m and a is is big for us. It it feels like it's back. It's been a delay for the last sort of two and a half years. It's not not doing any deals. So it's great to to have done two already this calendar year and this financial year. And, you know, as I always say, there's a consistent pipeline of opportunity that we we continue to assess.

35:55 And the next question is, how are you managing the well documented IT skill shortage in The UK and the recruitment of talent, also increases in wage inflation. So the the IT skills shortage, I think, relates a lot more to businesses outside of the technology sector. You know, let's use an example. You're a bank for for for argument's sake, trying to attract IT people into into a banking environment. I think that's more where the struggle is. We don't really struggle on on skills. We've got 75% of our workforce now is technical. We have a huge number of skills across the business. We've got some really talented individuals that that work for us, and we're aware of that. We notice it. We know who they are. We we look after them well, so we retain them. So we are retaining top talent within our business.

36:57 With respect to wage inflation, we've put through pay rise already across the board in our business. We did that at the beginning of the financial year in April. We also did it in previous COVID periods, so we didn't stop because of COVID, which has been well received by our teams. So, you know, it's difficult to to answer in the short term. Have we tackled wage inflation? I'm not entirely sure, but we're definitely doing our best as a business to recognize our people and make sure that we look after them well. Adam, let me just add on that as well. I think one point I'll just draw on wage inflation is in terms of our within our organization at the moment, I'd say we've we've we haven't got any wage inflation pressures because of the the wage rise we put through in April was well received in our organization.

37:55 And I've mentioned that with two acquisitions we've made, we put early pay pay rise into those two teams as well. So there's no internal pressures. I think that where we will get it a little bit is probably on further recruitment going forward. Obviously, it's a candidate led market at the moment, so we might be looking at sort of high cost people to recruit. But in terms of our organization at the moment, I'd say we're we're we're doing well. Thank you. The next question we've got was with TrustStream. What scope is this across? I explained that in the in the slide where I talk about TrustStream. The there is a huge opportunity, I think, for us. So if you if you bear in mind that TrustStream is very focused just on managed security services, that gives them a relationship with their customers, but only for one piece of the pie, if you like.

38:52 If you go right back to sort of slide three or four where where I showed the whole service portfolio that SYSGROUP can offer, we've got the ability to plug into those customers now to talk to them about the bigger picture and being part of SYSGROUP. So I think we've got a great opportunity to cross sell and upsell that. Next question and probably the final question. Given the current share price, will this, I think that's supposed to impact on your ability to make further acquisitions other than relatively small bolt ons for cash? Mean, this is a really good question. So I think the underlying question is that would we like to to to do an equity raise at our current share price? And the answer is obviously not.

39:43 I don't think many people wanna raise raise money in in equity capital markets right now given how how tough it is and where their own share prices sit, and we're no different from that. However, we are being strategic about the opportunities that we look at, and we are making sure that we can either fund those opportunities from the existing balance sheet and our existing resources or where they may make sense to be able to to scale up the RCF, if you like, by the addition of the the EBITDA that comes through into the business post acquisition. All that said, if an opportunity came along that was, you know, extremely transformative to the group and it really made sense to do it, and in the end, it would end up accretive, you know, by all means, we'd look at that, and we'd take that to the institutions to to get the view and see what the the possibilities of of a raise was to support such a deal because it's opportunities like that that you you you you don't wanna miss, although, if you are far between. But I think the the short answer is, yes.

40:49 We're looking at opportunities that could be funded from our existing resources or through additional drawdown on our on our debt capabilities. Alright. I'll hand back over. Thank you very much. Adam, Martin, thank you very much for that. I think you have addressed those questions you can from investors, and, of course, the company will review all questions submitted today. We'll publish those responses on the investor meet company platform. But just before redirecting investors to provide you their feedback, which I know is particularly important to you both, Adam, could I just ask you for a few closing comments? Yes. Well, thank you, everybody, for taking the time to join us today. It truly is appreciated. I know a lot of you have given up your time when the weather outside is fantastic. I look forward to updating you further on our progress in November.

41:37 Adam and Martin, thanks once again for updating Investors Day. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few minutes to complete, but I'm sure we'll greatly valued by the company. On behalf of the management team of SYSGROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.