Tpximpact Holdings (LSE:TPX) — Preliminary Results

0:00 Good afternoon, and welcome to the TPXIMPACT HOLDINGS PLC for your results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and they can be submitted at any time using 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 received during the meeting itself. However, company can review all questions submitted today on published responses, which is appropriate to do so. Before we begin, I would like to submit the following poll. And I would now like to hand you over to CEO, Conway. Good afternoon to you, sir. Thank you very much. Thank you for the introduction, and welcome, everybody. I really appreciate you joining this call to and your interest in TPX.

0:45 Before we get into the presentation in full, I think probably just like to make a couple of key points. The first is and these are sort of themes that you'll see coming through the presentation. The first is last year was a difficult and unusual year, and I'm very pleased with the way that the team has responded and the way we've navigated that. So you'll see as we go through the presentation, revenue is down, but absolute profitability as measured by adjusted EBITDA is up and is up by 21% in relative terms to the year before. So that's a good outcome, and we've also maintained a good position with respect to our net debt and our banking covenants. So we've demonstrated resilience in the business, and we've continued to improve it during what was a a challenging year.

1:32 I think the second aspect is that the business is well set up in the three business units that are focused on their individual clients. So we are sort of, you know, lean in those business units, and we are ready, and we are currently dealing with, you know, a high volume of client work, but we're also in a position where we can grow and expand. And then I think the third comment is we had the comprehensive spending review just over a week ago. Obviously, a large part of our business is our digital transformation business, largely focused on the public sector. That's quite quite key and critical to us. I think the important point to draw out is the spending review did not have any surprises in it. It talked very consistently about digital transformation, Areas that we are strong seem to get good investment and good assessments.

2:23 So things like social housing, planning, infrastructure, health. So for us, it seemed very positive and I think should, set the scene for a strong market over the coming months and next few years. So having said that, we've got a presentation to take you through. And before we do, I'd like to introduce Noel Douglas who joined as a CFO earlier this calendar year. So, Noel, do you want to say a few words? Yeah. Thanks, Bjorn. Thanks for the intro. My name is Noel Douglas. I'm a qualified chartered accountant having started my career at I've been working in finance for twenty years, and this is my third role in professional services, digital transformation specifically. I've come from a company called Amddigital who have annual revenue of about 140,000,000, and then before that, a company called Endava, where I spent five years during pretty high growth for the company overseeing multiple acquisitions and integrations, multiple setups in new countries over a period when the business quadrupled in size from 200,000,000 to 800,000,000.

3:27 So I've been here since February five months in. Really pleased to be here. Really enjoying my time so far working with Bjorn and very much looking forward to what's ahead of us. Brilliant. Thank you very much, Noel. So if we go on to the sort of the summary slide for what we've put out in our update. So key points to draw to your attention here. I mean, revenue is down 8%. We're still bigger than we were a couple of years ago, but that reflects the sort of market conditions of last year. We saw, to give you an example, some of our major frameworks were down 25% in revenue across the sector. So 8% reflects some of the backlog we have coming into the year and the way we navigated that year. As I said at the overview, we've concentrated very much on the things that we can control and then making the business better. So conversion from revenue through to adjusted EBITDA. So adjusted EBITDA is up 21% relative to the prior year and currently running at the EBITDA margin of 7.3%.

4:30 So we're pleased to have had that progression despite some of the challenges on the top line. Net debt, which Noel will talk about a little bit more, still very well the the the probably a unique organization the actually in our field in that the people that we have really turn up to their clients with a deep sense of purpose, and they're really interested in helping our clients deliver the sort of social impact, which is really important from a a public sector point of view, that they're looking to achieve.

5:16 And so one of the things about last year, we've navigated last year, and we've tried, and I believe we've succeeded in maintaining sort of the integrity of what TPX stands for, particularly for team members and employees. So the retention rate remains very, very comfortable for our business. You know, we're happy with that sort of level. Our headcount obviously reduced slightly because we made some structural changes to reflect both the trading conditions that we had, but also what we anticipated will be the future demand for our services in particular areas. It's good that our female representation remains very strong. So 51% is a good number. And also, we've continued to sort of focus on carbon reduction. So you can see the lowering of the figures there. In terms of our revenue split, it's pretty consistent year on year, so there's nothing really to draw to your attention there.

6:12 We're obviously still quite exposed to the public sector, which was a challenge last year and hopefully will be a benefit as we go through this year. And just as a bit of a reminder, this is important for us because it's part of our differentiation in the market. We talk about people power transformation. What we really mean by that is that a lot of what the work that we do is about the interactions with citizens, users of services. So it's important to take their perspective when thinking about how we approach work and the work that we do. It's a reminder that it's our people that make the difference. And in the world that we increasingly talk about AI and we talk about other tools, it is actually the understanding of the policy agenda if you're in a public sector environment and understanding of the particular challenges within the department and how you actually drive change and make things happen is really key to what makes TPX stand out and his support set our very strong delivery track record with clients.

7:16 We're in the second year or sorry. We're at the end of the second year of our three year plan. So in the first year, you'll remember that the business was in a very different position. We had quite high levels of debt. We had very low levels of profitability, and we had quite a fragmented business. So the first year was really about balancing sort of the impact we were delivering and the value we're creating for clients, but actually trying to do that on a more commercial basis and make the business more secure. The second year, the year we've just completed, was really about rationalizing our business into three business units, which have got a very clear focus on their clients and really setting that platform for future growth through that. And then the third year, as you can see there, is about growing and differentiating.

8:03 So it's really about using what's special about TPX, the deep relationships, the framework access, the track records, the people and capability we've got to grow as the market comes back. One other small point to make here is that we're obviously at the end of two year year two of our three year plan. We'll be working over the summer to talk about the next three years of TPX's journey when we come back in the autumn. In terms of some of the specifics on the last year, so key priority was to remain resilient, particularly what we saw in the market, in the public sector market, which is the largest part of our revenue. A lot of our bids and opportunities are quite large.

8:50 So you get quite binary outcomes. If something is delayed or canceled or descoped or we don't win it, that can have quite a big impact on the business. So it's quite a challenging environment to navigate our way through. So our priority was to navigate through that safely. We've simplified the businesses that I've just touched on. I think that leaves us in a really good position because each of those areas has got a very clear focus on the clients they want to deal with and the sort of services they want to deliver. As part of keeping the business safe and a part of improving the business, we've also looked hard at our internal processes and the data that supports those that we can actively manage utilization, which is both good for our people because it means they spend more time with clients to get on to more interesting work, but also has an obvious positive impact on our financial results.

9:42 I'll let Noel talk a little bit about headcount. And as I've mentioned before, one of the key things that's really important to to us and also the people who work within TPX is we continue to drive an inclusive or lead an inclusive and purpose driven business. So it's great to see the gender pay gap reduce over the year. Ethnic diversity remain very, very good relative to The UK population and our industry. And as I said earlier, we continue to put our focus on other ESG measures such as carbon usage. So I've got three quick case studies just to take you through, and we do we use sort of three every time we come come to market. It just gives you a bit of a flavor of the sort of work that we do.

10:28 So I mentioned earlier about people, and I guess a a great sort of manifestation of that is a city council. So Manchester City Council spends hundreds of millions of pounds a year, sort of the best part of a billion pounds a year, on delivering services for its constituents. And it's really important that they both understand and buy into what's being delivered. They understand the impact. They understand some of the trade offs that are being made, and they also appreciate the the outcomes that are delivered. Because otherwise, it's very difficult for a council to be sort of operating in a positive environment and particularly, you know, in the future if things like council tax are going up. So this is really an example of a piece of work where we bring some of the inherent thinking, the inherent approach that we have in TPX, and we help to upscale a very large council, Manchester City Council, to have some of those skills. So the ability to go out, understand what people need and want, articulate that in the language that's appropriate so they can engage with it and understand it, and then actually feedback some of the benefits.

11:35 So as we talk about here, we talk about 10,000 responses, which is pretty good. As I say, when you're spending hundreds of millions of pounds, you wanna make sure that that spend is being appreciated and recognized and seen positively by people in your area. The second example is really around health and the delivery, the improvement of care pathways. And the nice thing about this example is it actually brings together a lot of threads. So a lot of work was done to look at the underlying data and the data architecture that NHS Sussex had, to make sure that data was, accurate, it was up to date, and it could be presented in a way that was answering a real business need for them. And the need that they had was they needed to know exactly where patients were on the care pathway. They needed to bring that together onto a dashboard, so the data obviously needs to be very resilient and right.

12:30 And the sort of positive outcome that that gave them is it allows them to discharge patients safely and in many respects more quickly into a social care environment. And the obvious advantage of that for the NHS is that that bed can then be used to treat another patient and take them on their care pathway. So it's all about how do you actually get more efficient use of the assets that you've got in the NHS, which is very topical at moment. And then the third area that we're talking about is a client that we're really proud about. So Trussle Trust, the largest food bank provider in The UK. They have a because of their scale and because of the nature of what they do, they've got a very particular sort of need, and that's to engage with people who use the food banks. Some of those will be digitally native, and some of them will have some of the most basic technology that is available. So you need to provide a range of access points and keep things fairly straightforward for people to access their services.

13:33 You also have a very large number of volunteers who you want to keep engaged, and then you obviously have a large number of donors as well because you want to keep the sort of supply of food into those food banks going. So it's a real digital transformation challenge, a real opportunity for manifesto business, which led on this engagement to really look at, you know, how do you engage people? How do you promote sort of donations? So fundraising is something that's very, very a real strength of the manifesto. How do you do that in a way that you're providing additional infrastructure that is efficient in its use of carbon accessible to a wide range of people? So I think it's a really great case study, and it really supports trust or trust in their sort of charitable mission.

14:21 So I'm gonna hand back to Noel now to take us through a bit more of the financial and ESG results, and then I'll come back and talk a little bit about the market and the outlook. Thank you, Joel. Thanks very much, Bjorn. So just going through the headline numbers in a bit more detail then. Revenue for the year ended March 2025 was 77,300,000, as Bjorn mentioned, down 8% from the prior year of GBP £84,300,000 primarily as a result of the change in government, slower customer decision making and spending controls linked to that in place across most government departments during the period. Gross margin closed the year at 28.6%, an improvement of 3.5% from the prior year of 25.1%, driven by higher average utilization over the period.

15:06 And adjusted EBITDA was GBP 5,600,000, up 21% on GBP 4,600,000 in the prior period. As a group, we went through a restructuring in the first half of FY 'twenty five, reducing a number of roles, particularly in billable areas, to better align our capacity and skills to the level of client demand that we were seeing in the market. And that rightsizing has helped to underpin our gross margin and adjusted EBITDA progression compared to the prior period. So you see that flowing through as well into adjusted EBITDA margin, which, was 7.3%, up 1.8% on 5.5% in the prior year and also flowing into adjusted diluted earnings per share, which closed at 3p, up 43% on 2.1p in the prior period.

15:53 Net debt grew slightly year on year from £7,100,000 in the prior period to £8,500,000 at the end of FY 2025, driven mainly by movements in working capital and some in year restructuring costs. But leverage, important to say, as measured as net debt relative to rolling twelve month EBITDA at the end of FY twenty five was 1.51, broadly in line with the prior year of 1.54. So leverage is, in a good place and well within our banking covenants. And then just closing off this slide and the numbers here. Gross borrowings at year end finished at £13,200,000 down from £16,200,000 in the year prior, with a further £1,500,000 paid down post period end as we seek to optimize borrowings and minimize our interest charges.

16:42 So turning to some of the charts. On the left hand side, can see our revenue performance over the last couple of years in FY 'twenty three, 69,700,000, substantial growth into FY 2024 and then slightly more challenging market in FY 2025, but still sees us at 77,300,000 higher than we were two years ago. And then on the right hand side, you can see the positive progress we've made on adjusted EBITDA margin over that same time period, moving from 3.3% margin in FY 'twenty three to 7.3% margin in FY 'twenty five. So just turning to the reconciliations and going through the reconciliation of operating loss to adjusted EBITDA. We recorded a statutory operating loss of £8,700,000 in the year. And then moving to the right hand side, we have back 6,300,000 of amortization and depreciation, pounds 4,500,000 of impairment charges related to goodwill, and pounds 2,100,000 of restructuring and one off transformation costs, and £1,400,000 of share based payments charges linked to management incentive schemes, which takes us to £5,600,000 of adjusted EBITDA for the period.

17:52 Looking at our net debt waterfall, here we kind of see the bridge from the year prior to the to the closing point at the end of FY twenty five. So we closed FY twenty four with 7,100,000 of net debt. During the period, we generated 1,000,000 of cash from operations, which was sort of offset by would otherwise have been larger were it not for working capital movements against us over the course of the period. We received a further inflow of £400,000 of corporation tax credits. And then those movements were offset by interest payments on borrowings of £1,100,000 share buybacks of £700,000 and long term lease payments of £1,000,000 which takes us to our closing net debt of £8,500,000 for the end of FY '25.

18:40 Moving now to some of our non financial metrics. We closed the year with headcount of six zero eight, including associates, of which four thirty one were permanent TPXIMPACT employees. Our female representation remains fairly healthy and stable at 51% of our workforce. And we're also pleased to see our ethnic minority representation being broadly stable at 20% and comfortably above the average of The UK as a whole. Gender pay gap for FY '25 closed a little more than the year before and ended at 7%. There's clearly still more work to do in this area, but nice to see it moving in the right direction. And we're really pleased that our employee retention rate of 86% remains fairly high, certainly relative to the IT sector average that we're part of.

19:27 And finally, our carbon emissions during the period were twelve eighty nine tonnes, which is down 23% from the previous year. And our carbon intensity was down 16% from 19,900,000 tonnes per million pounds of revenue in the prior year to 16.7 per million pounds of revenue in FY 'twenty five. So with that, I'll hand back to Bjorn to talk more about the markets we see following the government's comprehensive spending review. Thank you very much, Noel. So I'll give a quick overview of the market, and I suspect there will probably be some questions in the following section about spending reviews and various other things. So over the last twelve months, we've seen if I talk primarily about the public sector market as that's where the majority of our revenues come from, we've had an election. We've had some challenges around the government's fiscal position with the £22,000,000,000 hold on in their finances and various spending constraints and changes that have come on since then.

20:29 About a week ago, on the June 11, we had the comprehensive spending review. Key things about that, it's the first time in the decade that we've seen a multiyear budget, so it gives people a bit more certainty. So effectively, the balance of this year and the two following years in terms of the budgets that they're likely to have to spend. It wasn't full of surprises for us. I think really it was a confirmation of what we've heard several times since the government came in. And you may remember when the new government came in, one of the first things one of the first structural changes they made was they pulled government digital services, the incubator for AI, and also the cabinet offices, CDDO area, which is a sort of digital data organization together in one area, and that was to drive digital transformation and AI across the government estate. So we've seen that echoed in the comprehensive spending review.

21:33 We've seen departments getting admin improvement challenges. They're about average about 10% across most of the departments over the next two years. So there's a real drive to improve effectiveness, improve efficiency, and use digital transformation services. I mean, things that we've obviously, key things to pick up, the investment in social housing, an area we're really strong is housing, planning, infrastructure, so anything related with the place agenda. So that will help sort of energize that area. It's good to see investments in health, and that's an area that we are investing again in our growth teams around the health agenda. And in terms of what we how we position ourselves, I think the way of thinking about TPXIMPACT is that we can provide the end to end service in government. We've got a very clear business in manifesto focused on charities, museums, and attractions.

22:32 We've got a clear business in kits that's focused more in terms of deep technical architecture questions and sort of more legacy operational IT. We've got businesses that have got framework access, good capability, good track records, have demonstrated that they can run large multiyear engagements. So as this market starts to come back after the spending review, we're very well positioned to actually grow. And the other aspect of it is there are certain things that we have to hold as a business because we are a listed business, and we are run on a professional basis. So a lot of those sort of core costs of the business will not scale as the business scales. So that, in turn, gives us opportunity to improve the financial performance of the business as we go forward because we can grow the revenue generating parts without having to grow the indirect parts by the same quantum.

23:30 If we go on to the next slide, just talk a little bit about current trading and outlook. So in terms of the outlook, key things around there on the spending review. I mean, that's obviously quite important to us. We'd expect to see because of the time that the spending review announcements take to get through into sort of authorization letters within departments and then for people leaving programs and then for procurement activities to go through. I guess new things we're probably expecting to see more sort of at the back end of the first half and the early part of the second half of this year. But we are seeing sort of increased confidence in government departments now, which is great. I think the we set out our sort of aspirations for the year. So we've talked about improving continuing to improve our adjusted EBITDA margins. And so we talked about a range of 6 to 7,000,000 for the year, which again continues that trend that we've had for the last three years of of improving our EBITDA.

24:32 Our focus is still on reducing net debt, and we'll continue to bring that down, and that will accelerate as EBITDA clearly increases. And one of the things that we're focused on over the summer period now is looking at because we're to the end of our three year plan, is looking at what we do for the next three years. So really putting together a strategy that will underpin how the market's changing for our services, how we're adapting our services, how we're embracing things like AI in both in the delivery of our services and in the types of services that we offer to our government clients, and we'll share that in the autumn. So in terms of current trading in the first couple of months of this year, I mean, the key key highlights around that is the pipeline remains strong, but it has remained strong for a while, but it's been slowed down as as things have moved to the right. We're still seeing a little bit of that, but not quite as much as we saw during the middle parts of last year.

25:32 Very pleased with new business performance in the first couple of months with a good engagement at the Department of Business and Trade. And then also, probably just worth emphasising the importance of the engagement with one of his magistrates prison and probation service. Because one of the things on the government's agenda, one of the things that they really need to focus on is prison spaces and prison overcrowding. And this is a digital solution that will help address some of those issues. So really, really high on the government's agenda. May not have featured hugely. The Ministry of Justice in the future featured hugely in the comprehensive spending review, but it just shows where you know, you've got a really important policy priority. We can actually provide really good support around that and make a big difference.

26:21 So that's the end of our formal presentation. I'm happy to go for questions, and then I'll do a little bit of summary at the back. So thank you very much for your for listening. Thank you very much indeed for your presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, I would 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. Bjorn, if I may now hand back to you and kindly ask you three other questions where appropriate to do so, and I'll pick up from you both at the end. Thank you. Perfect. Do you want me very much. Yes. So we have a question here on AI.

27:07 How are you using AI capabilities? Where do you see this going within the business? Yeah. Brilliant. Thank you very much for your question. So there's probably three parts to this well, three parts to my answer to this question. So we we clearly use AI capabilities ourselves. So we use it in running our own business. We're using we've been using AI for a long time in sort of previous formats. We use it for things like access to our pluses so that people get in there. We provide AI tools to our teams because it's really important that our own people are familiar with AI so they know how to prompt. They know the limitations. They know what some of the benefits are. In terms of our clients, we provide a lot of advice at the moment based on our own understanding and expertise we've got.

27:56 Particularly within the public sector, there's a lot of interest in the ethical use of AI and also how to use AI in a context where you want to keep your data secure. You don't necessarily want to put it on to big sort of worldwide commercial infrastructure. And then the third element is we sort of think we're incubating various AI tools that we can use to complement our work. So part of the sort of the heritage of this business is very strong data analytics background. So we're sort of looking at that sort of combination of data analytics and large language models, bringing those together to provide really tailored solutions for primarily for businesses at the moment, funnily enough, rather than public sector, but where you need to have really robust, really precise sort of dashboards and using AI capabilities to make those easier to use and easier to manage and more versatile.

28:59 Thank you very much. We have a question here regarding knowledge retention. How are you managing this and the delivery of quality when shifting the split of workforce between perms and contractors? Yeah. So I'll I'll I'll have a crack at this and then people will please do fill in afterwards. But, you know, I think it's worth saying that our employee retention of 86% is fairly high, so we're not actually getting that much churn. It's fairly healthy level. We're always looking at the split of permanent staff versus contractors overall and how we deploy to clients. It varies engagement by engagement. It's important to say that the contractors we present to clients present no differently to permanent staff. We're trying to put the best talent we can find in the market in front of our clients to deliver the outcomes they need. So if there are certain niche skill sets that we don't think have consistent demand in the marketplace, we'll happily find a contractor we think can meet that meet that need, and we'll keep them on for as long as the engagement merits it.

29:53 They'll be part of a blended team. So generally speaking, the client will see no difference between how they're interacting with a a contractor or a permanent member of staff. We look at the balance of permanent versus contractor staff mostly around, you know, somewhere between seventy thirty and eighty twenty because it's a natural healthy balance between consistency of delivery, understanding our plants needs a a deep technical level and remaining close to that counter over many cycles and and years and also optimizing the margin we can generate from those engagements. That's a good thing, Alan. That's good. Thank you very much. Could we probably stick with you now and talk about the net debt position and what our plan for that is? Yes. Yeah. The the net debt does show an increase from FY '24 to FY '25. It's important to call out. We had some working capital swings over the course of FY '25, which are the main driver for that. Our medium term aim continues to be to reduce net debt, and you'll see in our guidance that we're aiming to get to the bottom end of one to one and a half times leverage at the end of FY twenty six, so that will be a reduction from one and a half right now.

31:03 And I think we're making reasonable progress in that regard. We are also fairly comfortable relative to our banking covenants. So it's not an area that, you know, we're under any great stress or pressure from a banking point of view. Yeah. And I think probably just to add to that, we're in a very different position to the one we were in two years ago. At that stage, you know, our sort of net debt position was pretty much what was unsustainable. So it has come down significantly over that period. I acknowledge the person who asked the question that it has gone up slightly over the last twelve months because Noel says that's largely due to timing around working capital flows. Yeah. Brilliant. Thank you very, much. Yeah. Can we kind of talk to some of the the kind of benefits of B Corp certification and kind of our current position on that?

31:56 Yeah. So B Corp is something that we've held for just over a year. And, really, what it did is it it provided a provided a real Philip to our team members and also sort of demonstrated the the things that we were doing anyway. So our approach to business, our approach to being an inclusive employer, reflecting our clients really, which is one of the things we do very, very well. You know, we bring a a good diverse, gender diverse, neurodiverse workforce to apply to client problems. It was really a sort of external accreditation that what we were doing was recognized to be very good practice in the wider marketplace. In terms of B Corp itself, the cost of maintaining B Corp isn't a particularly high cost.

32:49 The regulations that all businesses now have to meet have in some way risen to be close to b corp level. So it's less of a question about, you know, is b corp a valuable thing from a financial point of view or not? It's certainly valuable for our employees. It certainly puts us in the right positioning around social value, which tends to account for between 1020% of marks on a government procurement. So we start from the right point in that respect. And I think B Corp at the moment, we've got a three year our accreditation lasts for three years. At the moment, it provides a really good external accreditation of what we're doing. And I think going forwards, we will either reaccredit with B Corp or we'll look for something else that provides that sort of degree of confidence and underpins the way we'd approach our work anyway.

33:48 Thank you very much. We move to our final question, so please do submit any more if you have them. The UK public sector is moving into your orbit following a difficult period with new administration. Do you have any line of sights on pricings or dayrates or how are these progressing? Yeah. No. It's a very a very good question. Maybe I'll talk a little bit, and I don't know, Noel, if you want to chip in on that one. I mean, certainly, the public sector is an inch is a very, very large environment, obviously. If you narrow it down, we think we're in the right place around digital transformation and the sort of approaches that we take. So, you know, we're agile. We can tailor things. We're very sort of empathetic with our clients' particular needs. So it feels like we're in a good position.

34:38 In terms of pricing or day rates, the environment is still dominated by frameworks, so they tend to keep day rates at a sort of a moderate fairly consistent level. So it's an environment that we do have to be very efficient and very effective in how we deploy people in order to meet those rates. We are looking as part of our strategy, and we're already doing it from a day to day basis as to how we can use AI and other tools to deliver more value and be efficient in that public sector environment. We're not seeing a huge movement towards value priced value based pricing or outcome based pricing. So we are still the majority of our work is still on a time and materials basis, so it is linked to day rates.

35:26 I think the general trend has been that day rates have been sort of relatively flat for several years now, so we have had to become more efficient as other organizations will be work pricing in this environment. And I don't see a particular reason to expect that to change in the near future. What we do try and do is we try and innovate, we try and differentiate so that we can stand out from the pack, and that does allow us to, you know, in some cases attract a premium. I don't know if there's anything that you want to add to that. Maybe just, know, the frameworks are on have lasted for some time, but the frameworks come out through new and every so often. So know, we'll be involved in positioning ourselves with any frameworks that does have and tech services for. But in certain frameworks, rate card increases basically aren't allowed for. In other ones, they are. And so we have benefited in some cases from uplifts of to framework day rates and even have fairly constructive and productive conversations with certain clients where we can demonstrate that we've experienced the cost of living inflation that many others have. They recognize the good quality work that we're doing, so they're open to discussions around moving up on rates. I think that's offset by, obviously, government, being in a mood of wanting to Yep.

36:47 Control the the spend they have on external consultants to a reasonable level. Yeah. Thank you very much. We've got two questions around EBITDA here, so you might be able to to to tie them all together. So, you know, well done for improving EBITDA with a lower revenue. Did you improve utilization play a part in this? And, yes, talking about margins and how they're improving over time kind of post all of the heavy lifting you did last year and restructuring it. Improved utilization did play a part in improving EBITDA for sure. Making sure that we consistently have the right balance of team and skills to meet market demand is key. And, you know, we can't afford to run large benches of teams who aren't billable long periods of time. So, yes, improved utilization is a key part of how we've turned EBITDA over time.

37:40 Is there anything I've not covered in that question, Luke? I think there was a question around, you know, the upturn from last year relative to the beginning of the year in terms of EBITDA. Mhmm. We concentrated very much on making the business more effective. So absolute EBITDA did grow. It didn't grow quite as much as we had anticipated because we had anticipated revenue being stronger last year because at that stage pre election, the signaling from government was that they were going to rapidly come to market with lots of ideas and lots of initiatives, and they hadn't talked about £22,000,000,000 spending shortfall.

38:27 So essentially, last year, we concentrated very much on improving the effectiveness of the business, which is why you saw EBITDA go up by 21% on the previous year and improve to 7.3% absolute margin during the year. And I think that sets us in a good position for times ahead because, you know, we have those well practiced disciplines in the business around cost management, utilization management, recruiting people on a strategic basis for the work and the capabilities that we can see are gonna be in demand. And it's probably worth also mentioning when we look at two of the largest frameworks in public sector, G Cloud and DOS, the overall aggregate spend was down 25% in FY '25 versus the year before. So what we've seen in terms of, you know, the market we've experienced in our revenue shortages are actually modest relative to the overall decrease in spending in public sector largely.

39:29 Brilliant. Thank you very much. We've had a question here regarding kind of leadership and board level and diversity on that. Do you want to pick that one up? Yeah. Yeah. So so a good question. So we've talked a lot about diversity. We had a question about this call and is it reflective of broader leadership team? So if we look at the leadership team we have here in TPXIMPACT, two out of our three business units are run by female leaders and run very well by female leaders. We have a lot of diversity at the senior levels of the business. At our board, we have a good gender mix in terms of diversity as well. As an organization, we also look beyond sort of the physical manifestations of diversity.

40:18 So one of the things that we're really proud about is that we have a very high degree of neurodiversity in our workforce, which means that we are can sort of really benefit from the areas they're strong. So we can be very innovative. We can sometimes come up with solutions that, you know, in a less diverse workforce, you wouldn't necessarily come up with as strong and as valuable solutions. So it's something we're really conscious of. I will make the point that for any role that we appoint to, we always appoint the strongest, most capable candidate, but we always start with the point of attracting a diverse pool of candidates. Because that way, we can actually ensure that the business is run as effectively as possible with the best people running it, but we have the largest catchment to sort of fish in, if you like, to to attract that talent.

41:13 So I hope that answers that question. That's great. Luke, if I may just thank you for addressing those questions for investors today. And of course, the company can review your questions submitted today. I will publish those responses on the investment company platform. But Bjorn, before we redirect investors to provide you with their feedback, which are in particular importance to the company, Could I please just ask you for a few closing comments to wrap up? Yes. So first of all, I'd like to say thank you for taking the time to join this call. Thank you for the questions. I think we answered all of them, which is good. As I said at the beginning, our main focus, this business has been on a journey. We're two years into our three year plan. We've done the simplification that we wanted to do. We've got those business units focused on the right market.

41:59 Last year was undoubtedly a more challenging year in terms of the availability of work and revenue to businesses like ours. We think we approach it in the right way and also made changes as we went through the year. And I think that's reflected in the results that we just talked through in terms of the improvement in proportional and relative adjusted EBITDA. There is still further to go with this business. We've got good frameworks. We've got good teams set up. We've got clear business structure. As the market comes back, and I think it will, based on what we've seen in the comprehensive spending review, we're in a position where we can grow the business, grow our sort of direct costs without proportionally needing to grow our indirect costs, which should, again, improve our profitability and our business performance as we go forward.

42:51 Finally, and most importantly, our teams are the people who show up to clients and make all of this stuff happen. We have a really passionate and motivated workforce, and we want to create the best environment we can to attract and retain those high quality people. Because even in a world of AI, it will come down to how we differentiate by the individuals that we can attract and employ in this organization. So it's a real focus for us. So, thank you very much for your time. I hope it's, been useful. It's been good to introduce Noel to you as well. And thank you for your support for TPX, and we look forward to updating you in a few months' time. Thank you. Fantastic. Pierre, Noel, Luke, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the board can better understand your views and expectations?

43:47 This will 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 TPXIMPACT HOLDINGS PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.