Mission Group Public (LSE:TMG) — Final Results

0:00 Good afternoon, and welcome to THE MISSION GROUP PLC investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time via the Q and A tab situated on the right hand 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 during the meeting itself. However, the company can review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to submit the following poll. And then I'd like to hand you over to the management team from THE MISSION GROUP. Mark, good afternoon, sir.

0:32 Hello. Thank you very much, Lily, and welcome to everyone who's on the call. My name is Mark Land. I'm the interim chief executive of THE MISSION GROUP, and I'm joined by Giles Lee, who is the CFO. And what we'd like to do is is just take you through about twenty minutes or so of presentation about where we are in terms of positioning the results for 2024 and a few thoughts about where we're looking for where we're looking in terms of our priorities for 2025. Just a a word about me because Giles, I think, is probably a familiar face to any of you who have been on these calls before, and I'm not. I'm I'm standing in as as chief executive.

1:18 I've been a nonexec director of the MISSION for the last two years, and my background is very much in marketing and communications. I've had a career of both working for big multinational networks. I spent the last ten years or so managing McCann World Group in The UK and in Europe. And I've also worked for the government running behavior change marketing for them. And I set up and subsequently sold an independent agency back in the two thousands called the lady that unlocks Warren. And delighted to be in this role at the moment. So let's just start by saying what what how we've been sort of sharpening up our positioning for for MISSION.

2:11 We think the next sort of couple of years is going to be pretty demanding for clients, and there's going to be a lot of what the the sort of strategists among you will know as VUCA, volatility, uncertainty, complexity, and ambiguity. And we think that this this positioning, the the alternative group for ambitious brands is a very good sort of call to clients in that sort of time. We're kind of highlighting the fact that we're a smaller, more independent and closer to their business group than the traditional sort of agency networks. And we think that that's kind of an important thing to do because we're actually growing at the moment. We're winning business in the market, but we want to make sure that people know exactly why they're choosing the mission rather than someone else.

3:12 And we're also sort of emphasizing this thought, work that counts, which is how we've been describing our approach to creativity for the last few years. And I think there's still a a view that in some circles that advertising is a bit of a self indulgent craft that exists in order to create beauty for its own sake. And what we're saying is that that's very much not our approach. Everything we do is designed to get to work that makes the difference

3:44 that clients are looking for, whatever their ambition. In other words, we're interested in making the sales curve move up rather than simply winning awards. And what are the cans we know resonates very well with with our clients. So the structure of the mission is is kind of is is kind of pretty simple. We've got five areas that we're sort of we're focusing in, health and wellness, business and corporate, consumer and lifestyle, property, and sports and entertainment. And we'll talk more I'll talk more about why we're focusing on these when we look at the the future in 2025 further on. But important to say that what we've been doing recently is sort of effectively making sure that within that five group structure, we've simplified the way that our agencies go to market.

4:40 So we've got, in effect, a kind of dominant brand for each of those areas. Solaris in health and wellness, Brayleno in business and corporate, CROW with STORI in Scotland in consumer and lifestyle, THINK BDW in property, and Mongoose in sports and entertainment. And all of those businesses have sufficient sort of fame, scale, and client credibility to to be able to compete really well. And we think that the way that one of the ways that we can kind of sell the mission very effectively is to talk about the relationship that we have with clients. Because particularly in times when things are tough, clients are looking for an agency that's going to be a really great partner with them long term and have their interests very much at heart.

5:39 And we think that our client story backs that up. Not only do we work with some really excellent global and UK clients like AVEVA, the Mercedes Formula One team, Bellway, post office, department of trade business of trade, Porsche, PLC, Molson Coors, and LVMH, to name just a few. But our record of working with these clients for a long period of time in building partnerships that really help their business is is pretty spectacular. In an industry where the average client sort of relationship with an agency is probably three to five years, over half of our clients, 56%, have been working with us for five years or more.

6:30 29% have been working with MISSION for ten years or more, and 19% have been working for twenty years or more. Now these, I know from my experience in elsewhere in the industry, are superlative figures and and really kind of tell a story about an agency group that works very well with clients, builds strong relationships, and is sticky in terms of holding on to business with those clients. And I think that's something that, you know, that we we feel is absolutely massively important in terms of both the stability and kind of reliability of our income, but also gives us a terrific platform from which to raise margin. Because when relationships are strong, you can you can kind of effectively solve more problems for your clients, And potentially, you can charge a little bit more for doing it at the same time.

7:26 So that's kind of where we are in terms of our our agency positioning. I'm gonna come back and talk about where our targets for 2025 and beyond are in a while. But I'm just now gonna hand over to Giles to talk a bit about some more detail on the 2024 results. Yes. Thanks, Mark. So 2024, in summary, for those of you who have sort of followed the story, was it very much a year of delivery? So delivering revenue growth, delivering the value restoration plan, which was the plan put in place in October 2023 to to bring the business back into health. In doing so, delivering significant margin improvement, delivering a profit in line with expectations.

8:14 And into doing all of that, being able to improve our debt leverage significantly and repairing the balance sheet. So fundamentally, a year of achievement. If we look at sort of at a very highly summarized level, the p and l, taking the the right hand side of this page for the minute and just seeing the the total business, we can see that the change is quite dramatic from a relatively modest increase in revenue. We've been able to deliver an 80% increase in operating profits, headline operating profit. We've been able to therefore improve margins significantly, almost doubling margins at that total level, and, obviously, improving our profit before tax after adjustments, but to the tune of around £15,000,000, so a big swing.

9:08 Looking at it even though on a like for like basis and maybe more sort of a business as usual perspective and looking at the continuing operations, we see the revenue growth still well, revenue in growth, which is a good thing in the marketplace at the moment. Operating profit coming through 20% as the value restoration plan improves. Seeing increase in our operating margin to to just over 10%. I don't think that's the end of that trajectory. You know, we 10% is is great compared to where it has been, but it's not where we want to be. And a profit before tax, after all is said and done, increasing by 19. If we take that p and l a little bit little bit further into more detail on the continuing operations side of things, you could well, you can kinda see for yourselves in your own time, I guess, how this will pull through. But you take into account the excellent client retention stats that mark Marcus talked about, the the headline operating profit increasing by 20%.

10:09 That strengthened strengthened margin, obviously, being driven by some degree headcount reductions, like for like down 3% and staff costs down around 5% year on year. That is the impact of the value restoration plan coming through. Slightly further down the page, interest charges going the other way and and I I hope peaking in 2024 compared to 2023 and prior and since. All of that driving a headline profit before tax, which is up 19%, and headline earnings per share up 15%. When we look at that just for the second half of the year, Missions has a has a history of being in relatively second half weighted, and and that was certainly the case in 2024. But I also think it shows how the value restoration plan really kicked in. So you can see revenues for the second half of the year, broadly similar, 14 45 to £45,500,000, roughly the same level of seasonality, 52% of our revenues delivered in the second half of the year. But the profit operating profit delivered from that significantly up. So £4,000,000 increase in operating profit in the second half of year. And obviously, that's the impact of the value restoration plan, both in terms of the cost savings, annualized cost savings delivered in that period, and the efficiencies in using the centralized resources more effectively.

11:40 All of that driving a profit before tax, which is three times what it was at the equivalent period last year. A lot of numbers on this page, but see, this is around how we segment the business, and so Mark's talked to that structure already. But just to pull out some some of the main story here. On the upside, now clearly, there's two levels of performance here. On the one hand, you've got the underlying

12:10 improvements in the business or or reductions in the business. On the other hand, you've got the impact of the value restoration plan has had on a year on year basis. Now those in green have come in the right direction overall in terms of headline operating profit year on year. Within consumer lifestyle, there's an increase largely driven by the value restoration plan. And similarly, on the right hand side of the page in the sort of central and advantage section of our business, again, improvement in headline profit, again driven by savings and efficiencies generated through that process. In the middle of the page, have property. Now property benefited somewhat from the value restoration plan work done towards the end of 2023, but also had a really good year in its own right, and you can see that coming through in a very strong set of numbers for 2024.

13:02 On the other side of the of the page, if you like, Health and wellness started the year relatively slowly. We we reported that in the in the first half accounts. And whilst the second half was better, it never quite recovered from from the first half, and consequently, it was a little bit down year on year. Sports and entertainment, reasonable you know, reasonably strong revenue performance. Headline operating profit down a little bit, and that was fundamentally the results and timing on some of the larger sponsorship deals that we have in play at the moment. But, again, you know, we're a strong business going in the right direction. Worth noting as well that in terms of revenue growth, The UK revenue growth that we look at up 3% year on year. So against the set as well, that's that represents a good result.

13:54 I won't talk too much about the adjustments, but twenty twenty twenty twenty three, a large number of adjustments which fall between headline profit and reported profit. 2024, still more than I would like, but probably indicative of a very busy year from a corporate point of view. So some start up costs going through by a lot less than 2023, particularly as we invest behind new areas within influence, which is sports marketing. In terms of the acquisitions and disposal side of things, clearly, we this is all on the continuing side, so it excludes the six disposal, but some of the earnouts increasing in the amount we might pay because they're going better than we thought, which is a good thing. And so a small amount of m and a costs there as well.

14:41 Some restructuring costs, not as much as we had last year, but obviously associated with the value restoration plan. And then right at the end there, just the costs associated with the bank refinancing and equity equity placing this time last year coming through. Now a lot of those won't clearly will not repeat in 2025. I thought I'd just spend a little time just talking you through the divestment of April 6, you know, kind of what was it, why did we do it. On the first page page of this, so what what was it? What did we sell? So April 6 fundamentally was our tech and mobility operation. We received an offer for The UK and US tech components of that, and that is the piece of the business that we disposed off. As a result of that, unfortunately, we had a small German Germany office kind of in start up mode that we have consequently had to close.

15:43 But on the other side, the good news is we've been able to retain The UK automotive specialist that we've had in the business for some time. That now forms part of growth. The the price, as you say here, £12,500,000 of cash upfront and then an earn out, deferred consideration based on December 2024 to February 2025, maximum value of about 4,000,000. I mean, that very much is a cap because you have to have a cap, but we're assuming in our report on accounts that we get somewhere around £2,000,000 as extra consideration on the deal. So all in all, so between $1,415,000,000 pounds worth of consideration. Clearly, there's costs associated with that, one form or another, whether it's restructuring or deal and and so on and so forth.

16:32 And there'll be excuse me. For 2025, at least, some lag on overhead as we have we have an under recovery on our London office costs. Fundamentally, though, if you look at it from a sell side point of view and this this was a deal that worked, I think, for for all parties. From from the seller side of things, if as I'll explain in a second, from the buyer side of things, this is a US buyer looking for exactly this sort of operation and exactly this sort of space. And from a people point of view as well, the opportunity for the people within this business to be part of something going in a in a faster direction that felt more more appropriate to it, a good response too. So from our point of view, though, why does this feel like a good price for for for April 6?

17:22 Well, it it's quite a complicated asset for us and and certainly non core. And you can see the chart there represents the volatility in terms of the profit that it it delivers. So so over the last ten years, so it kinda goes up and down between a million and billion and a 0.5, if you like. Obviously, through the pandemic, it went down a bit. Came out the other side of the tech boom in 2021, 2022 delivered some strong results. Last year in 2023, for those of you who were part of our journey then,

17:55 it's it was one of the reasons why we we had we struggled in the way we did, had a bad one, and then came back a bit last year. So for us, it's sort of it's our only real exposure in The US of of size. The UK operation is not going quite as well as it as it had been. Always been some foreign ex exchange exposure there, working capital risk because it's quite volatile in terms of client prepayments and not in particular. So for us to get us of what

18:24 effectively is a 10 times multiple on on the last five years, 13 times multiple on 2024, felt like a good deal to be doing. Clearly, there'll be a large interest charge saving as a result of that even though we have a slight overhead lag for for a year or so. Which kind of leads on, I suppose, to okay. So where's the debt?

18:45 At the end of twenty twenty three, our total debt position, including the time to pay arrangement we had with HMRC, was about 25,000,000. Over the course of 2024, we've been able to reduce that by £11,000,000 to £14,000,000 all in. Bearing in mind as well that even then, some of those acquisition obligations could be settled in shares in part.

19:09 That takes us back to net bank debt leverage ratio of just around one mid one times EBITDA, which is a much better place to be. And the charts on the right, if you look at in your own time, gonna show how within a year or so, we'll have those acquisition obligations out of the way as well.

19:29 In terms of the cash flow, there's obviously a lot of numbers on that page, but the areas I would draw your attention to really is a, there's a substantial increase in operating cash flow year on year. B, underlying, the working capital position is flat, which is a good thing. We obviously have repaid HMRC time to pay. That's a big outflow for this year. And then down the page, once you get below the operating factors, so nonoperating spends really reigned in year on year. And all of that has enabled us to inject much needed cash into group.

20:14 That chart already says a bit better. So it just demonstrates as well that once this is a business in a sector that where operating profits convert to cash on a very efficient basis. And so if you don't have too much coming out on the on the nonoperating side of things, you really can throw off cash.

20:37 Almost the last one from me here in terms of 2024 with the balance sheet. There's not really a lot to say here, although I haven't already covered. You can see those numbers repeated there essentially. But on the right hand side, I just outlined again that capital allocation plan that we put to the market at the start of the year where, you know, that focus on operating margin, and Mark will talk a bit more about that shortly, holding working capital sensibly. That will drive efficient cash generation. Keeping our capital expenditure, routine CapEx under very much under control, being sensible,

21:19 but brave if you like in how we invest behind our AI. For the moment, pausing the dividend for 2025, and that's a pause. It's not an end to it. You know, we want to restore dividends. And also importantly, not looking at new m and a until we feel that the share price has recovered somewhat because our plan really here is to use going forwards, not rely so much on debt, but rely more on on paper if we're gonna go back into the market in terms of mergers and acquisitions and investments. I just wanted to also address, we we put into the market that we're looking to buy back. We've started that process through the year. The plan there is not to buy back the shares and cancel them, but actually, in our minds, take advantage of a relatively low share price or I think a low share price and and effectively bank a few. So spend some money, put some of those in our treasury so that when the time comes, we can deploy that stock

22:20 down the line, whether that's to fund some of the earn outs that are currently in play, whether that's to fund future acquisitions some way down the track, or even employee incentives in the form of LTFs and so on. But fundamentally, always with an eye on that debt leverage ratio and keeping it below one times EBITDA, preferably less. That's that. The one thing I'll just leave you with is we have moved now in the last few days onto a new banking facility back in our commercial terms, long term facility, three years plus, R15,000,000 loan immediately, opportunity to increase that if you so wish by 5,000,000 and 3,000,000 support working capital, improved rates. So at least at least half a percentage point, if not more upside on our rates over Sonia.

23:12 Covenant tests offer us a lot more headroom as well. And, obviously, what you would expect to see from all of that is that plus the reduction in debt is gonna be much lower borrowing costs year on year. So in summary, just to leave you that pattern again of delivery for 2024 and move into 2025 with that repair balance sheet, significant margin improvement, and more to come. Brilliant. Thank you, Giles. So 2025 looking forwards, I think we're very much sort of focused on the fact that although the value recovery plan is over, we want to continue to drive efficiency of the business and therefore margin as we go forward.

24:04 And pretty much everything that we're doing in terms of focus is designed to create a simpler, leaner, more accountable business. And in that area, we're really looking at sort of four key areas. Structure, how to make that simple, accountable, profitable. We are, as Giles remarked, pulling back from the businesses that we've got largely outside The UK, and we're focusing on The UK. And I'll talk a bit about why I think why we think The UK is a great place to do business both locally and globally. Why we're targeting the areas and the niches that we are how we can use that to strengthen income dependability and raise margins.

24:54 And finally,

24:56 AI, obviously, a massive buzzword in our sector as in many others over the last months. But we have a plan for MISSION where we really want to use AI quickly this year to reduce our cost cost base and and add speed and, again, back to raising margins. So structure, basically, it is all about simplicity and accountability. We've now got very much fewer businesses than we had this time last year. Five five key the five key brands that we looked at at the beginning of the presentation really hold all our kind of client facing assets.

25:44 And that means that as a CEO, I've got sort of five reports through whom pretty much everything is going as opposed to the double digit number that that that I would have had this time last year. We're kind of controlling our cost base very much in real time, and we're using as a sort of principal lever here, a ratio that is sort of axiomatic in in the creative business sector, which is that if your staff cost and your revenue ratio is at 60%, in other words, if if your staff cost is 60% of your revenue, that leaves enough enough sort of space in order to pay your overheads, pay your central costs, pay your property, and still create a pretty good margin. And

26:40 historically, we've been running in the mid sixties on this. So you can see that the sort of the discipline of getting down to and keeping at 60% is liable to add a few points to the margin. Because we've now got fewer businesses and they're more clearly defined, it means that the go to market sort of strategy for each of them is clearer. As the Americans would say, swim clear swim lanes. And that means that each business has very defined distinct business areas, which means that they know what they're doing. They're not competing with other businesses in the group. And finally, we've kind of revamped the entire incentive plan for management, which is very much to focus it on delivering that budget based on 60% staff revenue and margin improvement on a continual basis.

27:40 So everyone's very clear what they've got to do and what the kind of the accountability for that, both positive and negative, is in terms of getting there. We're focusing on The UK. We've pulled back from Asia. We've pulled back, as as Giles was saying, in relation to April 6 in terms of of of America. But but I think that's no bad thing. The UK is a great place to create marketing communications. Why is that? Well, first of all, it's got a very powerful growing market. The UK ad market has grown in real terms, that's constant pounds on inflated pounds, by something like 70% since 2012.

28:26 And and extraordinarily, it's second only to China in in spending in gross growth in ad spend over the last ten years. The UK is also the biggest exporter for its market size in the world. And our own agencies, you know, like Mongoose, Solaris are all heavy exporters of of work into other parts of the world. It's also a massively high creative quality market. UK sort of wins more awards for for its size than than than any other market and is second only to The US in absolute accolades. And and finally, the sort of the the location of The UK's language, time zone, and currency, all favor.

29:15 This is a great place to do to do business. So we're we're unashamedly sort of doubling down on The UK, we're doubling down on our locations within The UK, which we have an office in London, but we also offices in Norwich, Edinburgh, Bristol, North Devon, Bournemouth. You know, all of those are places where we can be closer to regional clients than a London agency could, and we could also take advantage of a different cost structure in those areas in terms of cost of living. The sectors that we're sort of looking at in terms of value added, again, there's a sort of re a rationale for all of them. Business to business where Braleno leads is the fastest growing sector in markups.

30:06 Because business to business tends to be sort of occupying more of the mind of the CEO as well as the marketing director, it creates strong client retention. And some of Ray Lena's amazing sort of client retention stats are probably down to that. And it's also an area in which fewer of the big groups are kind of notably active. So it's an area in which we can kind of compete more strongly. Sports and entertainment with Mongoose. As you all know, most of the marketing that we now see is a kind of individual screen to eye experience. Sports, live sports, live entertainment is one of the last great shared experiences that is open to brands.

30:59 And that explains why the emotional engagement is so much higher and why they're in such demand from from big big global brands from Europe, UK, US, The Gulf and Asia. And and Mongoose, we think, is is very well placed to exploit this. The reason that we're sort of looking at at sort of having a sales office in Saudi is because there's so much more activity in that part of the world. In property, think BDW is is is a leader. If not the absolute leader, certainly one of the top two agencies. And we think that with the position of having a government that is committed to building 1,500,000 houses over the next two or three years, this creates a real tailwind for what is already a very strong business.

31:53 Consumer, GROUP is a very strong business with a real strength in retail service sector, which plays to The UK's strengths. So clients like the post office, clients like Benson's Beds and SCS are all examples of businesses that need to advertise on a constant basis in order to keep up demand, which means that they're demanding to work with, but it means they've got to keep advertising. And finally, health care Solaris. The UK pharma sector is famously a kind of a national champion in The UK. And The UK offers high value, low cost resource to be able to export to other markets as well as service UK players, of which there are many.

32:42 So all of those feel like strong defendable areas to be in. And then finally, systems. We think that AI is going to be an increasingly important part of of our business, not necessarily initially as a creative generative tool, but as as a facilitator and and creative efficiency within process. So central accounting production HR systems, by the second half of this year, the mission will all be powered by by AI and should be creating more time for talented people to do more interesting creative things rather than sort of pushing paper.

33:30 We're also going to be looking at how we use content creation, particularly in the areas of automation of versioning and kind of adaptation of creative work rather than necessarily the the sort of the the the foundation view of of making ideas originally. And we think that that sort of over over time, this this sector is gonna have to move from a time spent to a unit cost pricing model. And we would rather do that, you know, proactively and on the front foot than be forced into it. So we're gonna be experimenting with that in the second half of the year as well.

34:16 And, again, all of these things are, you know, are kind of gonna be backed by investment. We've appointed a transformation director in from in from internal resource to do this. And we think that our structure and our size is gonna allow us to do it more quickly and more completely than many of our bigger more bigger rivals. So I think that brings us Giles? Yeah. Just I mean, just quickly, when I look at the consensus forecast in the market for 2025 at the moment, What do I see? I it shows me the relatively modest revenue ambitions on a like for like basis versus 2024. That focus on margin improvements giving incremental benefits in terms of profit before interest and tax.

35:08 Clearly, we are anticipating large savings on the financing charges side of things. And all in all, when you're looking at it from a a net earnings point of view, that would see whether it's compared to a like for like basis or 2024 as a whole include prior to the disposal, significant improvement in EPS versus 2020 for 2025 versus 2024. Excellent. So, I mean, look, thank you very much for your time and attention so far. And I think that concludes the sort of the formal presentation bit of it. And we're now gonna try and take some questions that are coming up as having been either asked before or or asked now.

36:03 Giles, are we are you gonna sort of manage the Yeah. Sure. I'll I'll ask some questions I see here. We've just been talking about AI, and there was a question here. AI is a beneficiary to smaller ad agency firms, slight emission versus the bigger behemoths of the industry, Omnicom, Publicis, WPP. Are you seeing any market share gains? Well, I think both I think both are both are interesting. I mean, actually, I think over the last year, MISSION has taken share from the market because its growth has been slightly ahead of market growth. And I think our predicted growth for this year slightly AG is going be slightly ahead of market share growth. We're not seeing any of that yet, I think, from the way we're using AI.

36:51 But I'm very confident that we will because having worked in very big agencies and very big networks, you know, what's true is that they've got a lot more to defend in terms of structure and the way we do this stuff around here. And I think MISSION will be able to outpace them in the speed and the completeness with which it changes. So I'm looking forward to that during the course of the next six to nine months. Good one. There's a couple of kind of capital allocation related questions here, which we can take. One says, please clarify the dividend strategy you've received in the current year and future. And the second says, please clarify the effects of the share buyback program so far. So we possibly already answered some of this, but dividend the dividend's on pause at the moment for 2025, and but that is as is as I say on pause. We fully intend to return to progressive dividend policy, distributing a fair set a sensible allocation of retained profits as soon as we can. That way, we see that 2026, but we have to see how we get on. That's the plan there.

38:03 In terms of that share buyback, as I said, the piece I really want to reiterate is this isn't about us buying back shares to cancel them. This is about us buying back shares to hold in stock, effectively holding treasury to use at a later date when the share price hopefully in market is a lot higher. So effectively, we're we're buying shares now at twenty six p, twenty seven p, thirty p with a view to using them when the stock price is, dare I say, 50 p. And that's the that's the plan there. I think that's that's sort of sensible use of money to a level. We're not planning on using a lot you know, spending a lot in that area, but that's the that's the plan on that. Okay. Another quote. The next question up. Specific operational efficiencies from the value restoration plan, which ones of those have had the most impact on the increase in headline operating profit that we've seen? I think it's probably a blend. The the value restoration plan was a blend of three things. It was fast and effective headcount reduction in those agencies affected by the downturns at the end of twenty twenty three.

39:10 That took around £2,000,000 of annualized cost out at that point. We also were able to take around a million and half of cost out of some more central activities early in 2024, and that's around property and not doing stuff fundamentally. And the and the third component was just being more efficient and using the sort of central resource functions that we have, you know, for example, share production facilities and the like, more effectively and more frequently. And that in itself delivered another sort of million, million and £0.5 worth of efficiency through the business. So I would say it wasn't one specific area that had that big impact, but it was a blend of all three. Question for you here, Mark.

39:56 So how does the group's margin improvement to 10.3% compared to the industry, and what further efficiencies can be implemented to close the gap with high margin competitors? So I think, I mean, we we're we're kind of pleased that the margin is improving, but we would regard 10.3 as being not by any means the the end of the journey. You know, we're the ambition is to is to get to somewhere in the mid teens over the next couple of years. And the way we're going to do that is by making sure that we control our cost base on a kind of continual basis, and the 60% staff revenue ratio is kind of a good and powerful lever in that respect. And if we can deliver that, that will add percentage points to the margin.

40:52 And I think we're going to see a kind of an efficiency gain through better systems during the course of this year and into next year, which again, I think will release high value, you know, high value time to do high value things rather than more menial administrative stuff. And all of that should get us much closer to to the kind of the the competitors that we're we're looking at. Thank you. There's a couple more questions I think here. One, regarding the disposal of April 6. Just when you made the disposal of April six, you made the statement that the pro form a net bank debt at 12/30/2024, including the £10,000,000 worth of net proceeds will be 6,500,000.

41:42 Was that correct? Because the statements made following this seem to be different. And then I think separately, can you simply explain the current debt position was expected to be received and paid in terms of deferred consideration? So the first point, and this is it is somewhat in the detail, I guess, but the announcement that you that's being referred to in this question relates to the bank debt as of the December 30, and, obviously, we report on the December 31. And it's just a a function of our working capital cycle, if you like, fundamentally as regards the 6,500,000 versus the 9,400,000. Some of that is things like payroll goes out and things like that at the end of the month. Part of it is also the amount of cash that was actually in April 6 when we disposed of it. That note, if you look in the report accounts at the notes due at April 6 disposal, you'll kind of see that coming through, I think. The second point, where, as I said, probably in my bit, you know, there is a deferred consideration in play. There's a cap of 4,000,000. I don't think realistically that we're expecting to get near the cap, but we we have in our report on accounts allowed for 2,000,000 deferred consideration in in terms of timing.

43:02 It'll be somewhere in the middle of the year, I would hope. Let's call it due. I think I think one more question here. Just reading this myself first. Yes. Okay. So revenue growth is 2.1%, and your client retention is excellent. Thank you. I appreciate the market is very difficult. However, it implies to me your new business success is tight. Are you pitching and losing or not getting invited to pitch? What are the manager actions to resolve this? I mean, I I I think there's a big difference. Think wait. John, do you wanna take it? Yeah. I mean, I think I think we're we're sort of you know, we we regard I think the market is expecting this year to be pretty much flat in the creative sector.

43:52 So anything that you can do above zero in terms of percentage growth is likely to show that you're taking resource away from other agencies. So I think that the sort of I think our new business performance is, you know, it's it's probably not as good as we'd absolutely like, but it's certainly not terrible. I as far as I can see from the figures I've looked at, we're pitching, you know, about as as much as we would expect. We're probably winning a little bit less than we than we would like to. But we've got a group looking at that right now with as part of the sort of the revised agency structure, we're looking at the way that that we go to market and pitch.

44:43 And and I think, you know, there's there's potentially some some upside in that. But I wouldn't regard it as being the kind of the fundamental sort of focus this year. If we can grow and the market is flat, we're taking share. If we can keep clients and raise the revenue that we take from them or get from them, then that's more important because it's more efficient. And our crucial target this year is to raise margins by running the business more efficiently. So we're definitely looking at new business, but it's not a primary consideration. That's all the questions. Splendid. Oh, hang on. Sorry, Mark. Giles, thanks for answering all those questions that you can from investors. And, of course, the company can review all questions submitted today, we'll publish those responses on the Investor Meet company platform.

45:35 Just before redirecting investors to provide you with their feedback, which I know is particularly important to the company, Mark, could I please just ask you for a few closing comments? Yeah. Look. I mean, thank you very much all of you for for your time and your attention and your your very good questions. I think we we feel that we're sort of at a very interesting and exciting point for the mission. We've had a kind of a year of very tough sort of rebuilding and kind of strengthening of the basics of the business. And that process goes on, but it's going to go on from a more front footed position and faster during 2025. And I think what we've got is a simpler, leaner, more accountable business for that year.

46:24 And I think we're going to have a business that is able to spend more time doing the really fantastic creative work and interesting thinking that kind of defines our agencies rather than either worrying about debt or worrying about admin. And and I really look forward to to being on that ride. And I very much hope that you're gonna be with us and that we can all benefit from a shared price that rises as well. Thank you very much for your time. Mark, Giles, thank you for updating investors today. Can 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 may only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of THE MISSION GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.