Christie Group (LSE:CTG) — Full Year Results

0:02 Good morning and welcome to The Christie Group 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. Just 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, the company can review all questions submitted today and publish responses where it 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 Daniel Prickett. Good morning to you. Good morning. Thank you, Alex. Good morning, everyone. Thank you for joining this morning. In terms of just some introductions, I'm Dan Cricket I'm the Group Chief Executive Officer for CHRISTIE GROUP I'm joined today by my colleague Simon Hawkins who's our CFO Myself and Simon been with the group with the combined nearly forty years between us, so four decades of experience We've held a number of roles across the business both in the operational businesses and more laterally obviously at the group level I've been with the group since 2007 Originally from 2010, CFO, served in roles as COO and was appointed CEO in July 2023 Simon joined me on the group board in 2017 having previously worked as the Finance Director for our CHRISTIE GROUP businesses for twelve years. So that's us and we're here today and we're here to talk through the results for full

1:33 year '25 that we released yesterday and give an introduction really to the business and the group and explain what we do and what we're trying to do in the years ahead. And that's really what I've run through there. So who are we and what we do? Well, CHRISTIE GROUP, we're a leader in the provision of professional and financial services to selected sectors, and we're very sector focused, sector specialists that's where we bring value. We exist, as we say there, to help our clients buy, operate, develop and sell their businesses, and that really breaks down into a number of services across some brands that we hold. We hold five brands: CHRISTIE and Co, CHRISTIE Finance, CHRISTIE Insurance, Pinders and Venners.

2:21 CHRISTIE and Co brokers the sale and purchase of businesses. We sell consistently over a thousand businesses a year. We also value businesses. We offer consultancy services. We have complementary services elsewhere in the group with other brands where we can raise money and help people finance those businesses The acquisition of them, development, asset finance, etc We help cover risk by securing insurance for them and appropriate insurance that also supports those lending requirements when they need to take finance Pinders is a valuation business which along with CHRISTIAN KOH are two of the national valuers and sit on all the major panels but they effectively value businesses for lending purposes, refinancing purposes, and so forth. And we have the leading stock audit business which is primarily focused on the hospitality sector business called Benners, which as I say is the number years, and really gives us repeat work in that sector, and has about a thousand clients itself.

3:27 We operate through the life cycle of business ownership so from acquisition as I said a moment ago through developing growing businesses, divestment, strategic disposals, restructuring, reorganisation we're there and like to be there at every part of that cycle for people as they build up their businesses throughout their own life cycles and ultimately we can work with them on a recurring basis as we do when we do a good job people come back to us and we're very proud and focused very much on building long term relationships with clients that we can point to in a number of instances. We've got a very established market presence, and we think we've got a number of strong growth opportunities. As I said earlier, we operate in headline sectors that we're very proud to be in and happy to lead the way in We list them across there They're all operational real estate backed businesses and markets where we think there's sufficient volume that we can help broker a transparent level of business and business values, but ultimately activity that's recurring and sustainable and resilient that we can point to. Having been around in a brokerage sense for over ninety years.

4:39 CHRISTIE and Co was founded in 1935, celebrated ninety years last year. And that points to the resilience that we've got and the recurring nature of our markets, and we see that continuing. The size of our markets in The United Kingdom is significant. As I said earlier, we operate in sectors where we can see sufficient volume to generate activity. And really all of that in that spread of businesses helps support the volume that we consistently do. I mentioned earlier that we sell regularly a thousand plus businesses a year. In fact, we've averaged a thousand a year. Over the last eight years, which includes the pandemic period, which points to the resilience and recurring nature of those volumes. In Europe, we have principally for twenty years been very much hotel focused and actually seeing what we do so well in The UK on a multi sector basis, we're looking to broaden and deepen our sector offering on the continent to more closely mirror what we do in The UK where we think there's significant opportunity.

5:44 We've got markets there, hotels, we've opened a healthcare or started a healthcare operation there through our German and French businesses, so we now have a healthcare presence in those two countries which we're looking to grow and expand in the years ahead. And we see receptive markets, we believe, for some of our other sectors in the years to come as well. Doing what we do in transparent, well structured markets that are attractive to investors and lenders, we can bring a real value to owners and investors in those sectors, and we're looking to do more of that in the years ahead. So what's our vision and strategy? Well as I just commented really with our international focus, we aim to be the internationally recognised knowledge leader and pre eminent advisor. We operate at scale and that's something that I would reiterate and I think is not necessarily appreciated by us. We're very well known in our trading sectors.

6:47 Businesses like the CHRISTIE brand, CHRISTIE and Co, VENNERS are very well established in Pindus, but not so much known as well as an investor proposition with CHRISTIE, and we're looking to change that. The sheer volume of what we do isn't just brokering businesses, it's actually we value them as I commented as well. We valued over 8,000 businesses last year, with a combined value of around 14,500,000,000. The businesses that we acted on selling were nearly 2,000,000,000 in value. So we have huge transaction and advisory volumes It gives us huge data and real time market intelligence and a real strong deal flow that's diversified and spread across those sectors Probably our strongest sector at the moment and our strongest presence is in healthcare twenty years ago that was maybe more pub focused but we're very strong in healthcare, childcare, dental, pharmacy so sectors that alongside some of the leisure and hospitality sectors are actually demographically underpinned and very attractive to investors both in The UK and overseas The group in itself is very much premised on an integrated service offering We can offer multiple services to our clients that are relevant to them and help them add value and that's key for us And we very much drive a culture in the business that is based on collaboration, sharing of client relationships appropriate for those clients and where we can bring value.

8:17 We've invested in the last year in building a system that enhances that. It's an in house system for our teams to be able to collaborate more seamlessly, And we believe that there's real value for us and our clients in doing that and doing more of that. If someone's looking to buy a business, or they ultimately need finance, and that's where CHRISTIE Finance can support, They may need a valuation to support that finance and that's where both Pinders and CHRISTIE and Co can work with lenders and the clients to provide that valuation that supports really the or evaluates the ability of the business to repay any lending on it. CHRISTIE insurance will help arrange trading insurance and protection insurance for any of that borrowing requirements And then in the hospitality sector people need to control their stock, their margins on the ground and Benner's is significant in that and undoubtedly the market leader So we can offer multiple services to clients and we do that as consistent as we can and do in many instances work for clients and provide several of those touch points. And that means that where someone might only be doing an M and A activity to buy a business every few years, can stay in regular contact with them, understand their business really in-depth and bring them value on a recurring basis which is good for our quality of earnings.

9:38 We are absolutely sector experts where we talk about knowledge leader we are very happy to be seen and want to be seen as the destination not just for clients but also for professional advisors and staff in our sectors That is what we do If people come to work with us they know they're speaking to people who understand the sector in which they work we invest in our people knowing that that is really the advantage that we can bring to our clients. The scale of what we do, the data points, the information, the real time intelligence we believe is unrivalled and we're very happy with what we do in that sense. We look to deliver best in class advice. And we have real time information through both the valuation and the reality of the volume that we broker of what businesses are really worth in our sectors at any point in time.

10:34 It's underpinned, as I've said, by a longevity and an established track record that goes through multiple cycles. We've seen every economic cycle, the ups, the downs being founded shortly CHRISTIE and CO were founded shortly before the second world war and as appropriate have expanded over that period to be what we are now as an international business And Ben, as I say, has been around since 1896 from its original foundings. Other brands, Pinders was founded in the late 60s and CHRISTIE and CHRISTIE FINANCE late 70s. So we have huge resilience, but now what we're looking to do over the coming years is really optimise the opportunities that we see in our markets and our brands to do more of what we do well.

11:21 And that's where we're focused on scalable and sustainable growth. We operate with just the pyramid on the right hand side of this slide. We operate best in the mid market. So in all of our sectors there are a variety of competitors. We typically occupy number one to three in most of our sectors in terms of our market position, in terms of the number of businesses we sell or advise on. Some of those sectors have some of the larger players that we would know of like the SABLs and the JLLs for instance in the hotel sector, but in other sectors we'll be operating against people who are very focused on that sector. No one does what we do on a multi sector basis and targets the mid market in the way we do which gives us a combination of the best aspects of both volume and qualitative earnings and the actual value of quality assets that we're selling I'll come on to later when we talk about the financial performance and some of the progress we've made in 2025 So on to that, in terms of summarising the financials for full year '25, we grew revenue from our continuing operations by 19%, over 19% to £70,600,000 That was strong progress from the prior year, and helped to really drive a strong move forward in our operating profit to £6,900,000 So just under 10% operating margin from the £70,000,000 of continuing operations revenue.

12:48 The continuing operations actually relates to the fact that towards the year end in December, we agreed the sale of a software business that we'd held for a number of years with Benesys and that was a loss making business and had been a long term loss making business We identified that as non core and that we were no longer the right ownership for that business when we took the decision to divest that, and we completed that in early twenty twenty six. So that business no longer forms part of our continuing operations. And so our core brands are those five businesses I talked about earlier: CHRISTIE and Co, CHRISTIE Finance, CHRISTIE Insurance, Pinders and Venous. They are our core and what we're very much focused on investing in and growing in the years ahead and as I say really maximising the opportunities that we think exist with those brands both in The UK and in CHRISTIE and CO's perspective particularly on the continent in Europe.

13:45 The revenue growth was driven by strong revenue growth in our Professional and Financial Services division So that's the three CHRISTIE branded businesses and Pindas, the Valuer They make up our PFS division as we call it And revenues there were over 20% growth We sold, as I said, over 1,100 businesses again eleven sixty four businesses we sold last year We principally act on sell side but we can act buy side as well We would never act in both aspects because integrity and independence is absolutely key for us and objectivity But typically we act sell side We know we'll be paid if we do that because we get paid on a success basis as a commission for brokering the deals when they reach effectively contractual exchange and completion.

14:37 And the businesses we sold totaled nearly £2,000,000,000 in value and that was up 45% our value metric on the previous year as we moved forward. The assets and the asset values that we sold and our fees. And really that speaks to the value in which we're held by clients and the increasing trust of clients entrusting us with higher value or more complex deals where they recognise us as the specialists in the sector really being immersed because of the volume that we do on the valuation and brokerage side that I talked about earlier. Because we've moved strategically to focus on trying to grow our international operations and broaden and deepen them, we're at the start of that process having added the second sector of healthcare in the last couple of years to our longer standing hotel offering, but we were pleased to deliver 37% growth in fee income from our international operations and so that's a continued process. We think that we're subscale there compared to the opportunity that exists in the European brokerage market and our sectors as I talked about earlier It was a record year in that sense for our French team, they sold 57 hotels and to give a flavour of that, we were recognised as the most active hotel property agent across The UK and Eurozone by the MSCI Real Assets Global Brokerage Rankings, and that really speaks to the volume and the quality of

16:08 our pan European hotel offering. So looking to replicate that in other sectors as I mentioned, I think again really speaks to the standing in which we're held in the sector and the quality of the people that we have in our teams. All of that linked together to mean that our earnings per share from continuing operations increased significantly, so from 10.3p in the previous year to 19.37p for the year we're reporting now That was a significant move forward and really that alongside the 9.7% operating margin on those continuing businesses We think forward evidences really much better the operational margin capability of those continuing businesses and the kind of profitability we want to be reporting on a sustainable basis and believe we can in the years ahead All of that positive trading really has meant we've got a significantly improved cash balance at the year end, which Simon will talk about in a moment in a bit more detail, so well ahead there. And having a strong balance sheet is key for us. We want to have capital that equips us for downturns when they come in the M and A markets, and we know they will. We've been around a long time, as I mentioned earlier, and we've seen all the ups and downs of cycles. We know they'll come, they don't frighten us, we expect them, but we need to have resourcing where we can trade through those cycles, and we want to be able to return a good, strong and attractive dividend to shareholders at the same time based on in year earnings.

17:39 To that end, the board is recommending a final dividend of £2.75 P that's a 57% increase in the final dividend compared to a year ago, and really speaks to the confidence we have in our businesses, the outlook, but also absolutely reflects the in year earnings for last year, recognising that our total EPS, including the losses attributable to the now sold Benesis business, was just over 5p. So we're balancing that with the dividend decision we've made, very much with the desire to return an appropriate dividend that reflects our annual earnings and obviously having now sold the loss making Venesis business, which followed the divestment of another loss making business, Orig, a year earlier, We're very happy with the brands we now have, and as I mentioned earlier, we think that sets us well to deliver more sustainable and more attractive profits in the years ahead, and obviously investing to try and grow that offering.

18:39 At that point, I will hand over to Simon who will talk us through the financials. Good morning all. I'll just run through the key highlights of full year '25 financial highlights. We've touched upon some of these, but it's also interesting to look at some of the bar charts to see where we've moved these numbers over from 2023 to 2025. As you can see, revenue top line improved by 19.2 to £70,600,000 and we'll come on to a split by division on the next slide. Operating profit was significantly increased to just £6,900,000 which was a 95% increase. This was ahead of our board expectations, reflecting the underlying momentum across the business.

19:26 In addition, we had a particularly strong unexpected deal flow in the final weeks of the year, which effectively brought forward predicted income from 26% into 25% and boosted our 25% results. As a result of that, we had a healthy operating margin of 9.7 Dan just talked about there about we're trying to get to a 10% plus and that'll be on a blended basis across all of our brands. But you can see it's evidence there that we're very close in 2025. As a result of this, PBT was very strong and up to 6,000,000 with 133% growth. Cash similarly moved forward significantly by 4 to 9,400,000 from just under 5,000,000 in the previous year.

20:14 EPS, as Dan alluded to, was again strong on a continuing basis at 19.37, an 88% increase on prior year, and I'll come on to look at EPS, including discontinued and dividends in a few slides time. And then finally, we had the total dividend for the year of 3.5p, which is 55 percent up on the prior year. So looking at by revenue by division, you can see there that both these divisions delivered meaningful increases across '25 and that was following strong growth in '24 and '23. In the PFS division, income increased by 10,800,000 or 22%, and we had growth across all of our brands.

21:04 Transactionally, we sold over 1,000 business again, and our average fee transactionally increased by over 26%. That was primarily due to sector mix and more high value assignments in '25 compared to '24. In our valuation businesses, which is CHRISTIE GROUP PINDERS, we had a 25% growth in income and a 63% increase in valuations to just shy of 8,000 units compared to just under 5,000 units in 2024. As Daniel mentioned before, that valued over $14,500,000,000 of assets last year, so it just shows you the insight we have within our markets. In our finance business, CHRISTIE Finance, fee income was up by 15%, driven by increased cross selling from our other services originating predominantly from CHRISTIE and CO.

21:59 In addition, we had additional income from website inquiries, where we would continue to invest in our digital marketing, and we see more opportunities for that for '26 and beyond. In our insurance business, client retentions rose to 87% compared to 84% in the prior year. Good industry, the average is around the 80% mark, so we're very pleased to report that metric of 87%. And more importantly, the gross written premium or GWP value of the renewal book increased by 23%. This is one of our key measures in this business as we try to build and seek to build accretive revenues going forward.

22:46 Then finally, looking across our SISS division, this is now our stock taking brand Venice. And we delivered, revenue growth there of just 5.4%, and that was really pleasing given the continuing challenges and conditions affecting the pub industry. So what did that do to turn to operating profit margins? As I said previously, operating profit increased to 6,900,000 or 95%, and that followed a strong period of '24 on '23, so we've had two years of significant operating profit growth. The margin was 9.7%, and as I say, the more underlying operating profit potential within the group and the opportunity to achieve margins in excess of 10% across our remaining high margin brands.

23:43 Most significantly, growth within the PFS division has increased by 5,000,000 profit since 2023. And this equates to a 29% margin on the 17,000,000 increase in revenue, as the benefits of the operational gearing model delivers. In the PFS division, the margin was 10.3, and this is inclusive of our ongoing strategic investment to grow our headcount across all of our brands, and in particular new sectors internationally, as Dan outlined earlier. This return on investment is impacted impacts short term profitability, as all our cost of investments are people related and go to the P and L as incurred.

24:31 However, this investment will ultimately lead to reduced sector risk, increased capacity and thus the ability for enhancing operation gearing to further improve margins going forward. In the SIS division, as we spoke previously, we divested the two loss making businesses, Orig in '24 and Venice in '25, so we now have a profitable and cash generative division. The operating margin here is just short of 7% at 6.8%, and that's from recurring demand services. We have opportunities to grow our higher margin compliance and consultancy services to augment our market leading premium stock branding offerings, which offers opportunities within this division to enhance margins going forward.

25:26 Turning now to cash, as you can see there, our net cash has significantly improved over the last two years. Our net cash at the December 31 was 9,400,000, an improvement of 4,500,000 compared to the previous year. A strong cash balance sheet is resilient, enables us to trade through cyclical downturn periods, which typically last twelve to eighteen months when they incur. So that will enable continued investment to invest in our teams and grow them with confidence. In terms of our banking, we have great relationships with our banking and we've got flexible covenant life facilities and we've renewed our overdraft of 4,500,000 post the year end.

26:13 So in summary, we entered 2026 with a strong cash position. Turning now to EPS and dividend, and this EPS is on the continuing basis. As we've seen on previous slides, EPS increased to 19.37, so a significant improvement of just short of 88% compared to '24. However, total EPS including the discontinued operations from the Venasys disposal was 5.08p. Following the divestments of Audit and Venasys in '24 and '25, this has repositioned us to deliver significant improved earnings in the years ahead. Turning to dividends, as we said previously, the dividend in the year increased by 55% to 3.5p, and this equates to 69% of the total EPS, including discontinued operations, reflecting the strong growth in continuing operations and the Board's confidence in the future.

27:19 Thank you Thanks Simon So in terms of looking where we are now and the year ahead outlook and current trading, we've had a strong start to 2026 with continuing demand, robust instruction levels in terms of new mandates for the selling of businesses, finance applications, and that really speaks to what we can see as continuing and robust investor and lender appetite for our sectors. We started the year with a brokerage transactional pipeline up 9.6% on the same point a year earlier, and that's in value terms, and that really gives us good visibility of deals that we would probably expect to transact over the next ten months or so And that, what we call pipeline, is where deals are agreed between the parties, buyer and seller, and are passed to solicitors' hands So we have good visibility there We have further visibility beyond that of our stock levels which is where we've been instructed and we're marketing businesses before we've actually reached that deal agreed position So we have good visibility of our flow of business and we can see continual instruction activity and it's been a positive Q1.

28:30 We've strengthened our international capability in a leadership sense as we look to equip that business to deliver our ambitions in the years ahead on the continent, and we appointed an international MD in early twenty twenty six for CHRISTIE and CO to capitalise on those opportunities that we see both in the near term and the long term, and to help us with the leadership of the business there and the execution of that strategy, and we think we're well positioned to do that. As Simon just mentioned, we invest in our people to grow headcount, and that really means that we're expensing costs, taking salary and other costs in the years as soon as we're actually employing anyone. But typically for us, a transaction time can last anything from instruction to completion across our sectors and there's a blended rate, but it really can take between twelve and twenty four months depending on the sectors.

29:22 That means when we're investing in headcount, we know there's a lead time before we start to fully monetize and see the productivity of those people that we employ, and obviously there's the expertise and the training that we put into that process. So because we do that, we're making medium and long term investments when we put headcount in, and we're looking to expand that, and that brings the cost upfront, but the benefits come further down the line. And for us, the ambitions that we've got where we see those opportunities in our markets, we're looking to invest next year to grow our headcount, and be that expensed in our P and L and effectively is netted against the underlying operating performance of those businesses. So we're committed to that international expansion process as we can identify people and teams that can strengthen what we do and help us penetrate those markets further.

30:16 Against that headline sort of growth in pipelines and ongoing instruction momentum that we see, We do see, and this has been a trend for a number of years really, do see some increasing elongation in terms of the timescales taken I mentioned that twelve to twenty four month period that we typically see I think that's nothing to do with us or our lack of efficiency that we're seeing. I think it's just that as we move through the value chain and the complexity of transactions and as investors become more complex with REITs, property REITs, investing in healthcare sectors, with private equity interested in our various sectors, we see due diligence timescales stretching and we see lenders taking longer to do their own due diligence in terms of making credit decisions.

31:03 So we think that's just a slight offset against the otherwise good underlying fundamentals that we're seeing in instruction levels. But again, I think that's something we see. Nonetheless, looking at everything that we've got, confident and very optimistic that once again we can broker the sale of more than a thousand businesses, and therefore we see clear growth opportunities ahead, supported by the positions we've got in those sectors. Our balance sheet, as Simon just touched on with the cash, is important for us. It's important for us to be able to have the strength to make those confident investment decisions, to know that if there's a slight downturn, we've got resilience and flexibility. I've already talked about how long we've been around and the resilience of our actual markets and the demand for our services and the interest in our sectors, and it's important for us that we are able to weather sort of short term fluctuations in M and A activity when they come, And we saw the last one really in 2023 off the back of the autumn twenty twenty two budget and the large inflation and interest rate rises, and that just caused a slight delay in deal activity.

32:16 But we also know from our experience of that, previous recessions, even COVID and the depths of COVID that we bounced back and M and A markets bounced back strongly after those periods. So we're focused on long term growth across our priority markets. We want to drive investment into those areas of the business where we see those scalable growth opportunities, and we're optimistic as we look at our business and our markets for the years ahead. Despite the full year 2025 outcome that was significantly ahead of expectations and driven, as Simon mentioned, by a stronger deal flow in Q4, We take quite a cautious view when we look at certain seasonal periods, particularly around Christmas, where ultimately you need a variety of advisors to be working on deals to push them through, and we've traditionally seen from experience a more cautious approach to the latter end of the year purely because of those holiday periods.

33:12 What we saw in Q4 twenty twenty five was very strong deal flow both in The UK and on the continent all the way up to the December 31, and that kind of boosted our income levels above our original expectations, and that followed what had been good strong October and November trading periods for us as well. So we had a very strong finish, notwithstanding that we still started the year as I mentioned earlier with pipelines nearly 10% up on a year earlier, good instruction levels and compelling growth opportunities. So we sit here optimistic of a positive year ahead. We're very happy with the markets we're in, we see opportunity to do more, and we're looking forward to the next twelve months as they are. At that point, I will hand back to Alex. That's great. Thank you very much guys for your presentation.

34:00 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 the recording of this presentation along with a copy of the slides and the published q and a can be accessed by our investor dashboard. I'm Daniel Simon. As you can see, we have received a number of questions throughout today's presentation. And at this point if I may hand over to you to read out the questions where appropriate, and I'll pick up from you both at the end. Thank you. Thank you, Alex. Yeah, so we'll work through some of the questions we've got. So if I start with one question we've got here, can you share some color on the strategic divestments made? What was the rationale behind making these? Well, to do so, and expand on what we touched on very briefly earlier.

34:51 We sold Orange in late twenty twenty four. Orange was a retail stock taking business, and I think important for us to differentiate that business in terms of model risk and its performance from the stock taking business we're very happy to continue to hold which is better So, Orig operated in the retail sector, was extremely high margin I used resourcing that required sort of casual workforce to deploy high volume but flexible labour, operating in an environment that was very exposed to minimum wage legislation risks, operating in a market where pricing was really set by very large clients in a very competitive environment. And what we saw there and have seen from a period where that business had been profitable in the global financial crisis but really started to deteriorate in performance from 2013 onwards and it made us losses for a number of years.

35:48 We couldn't see a way of returning that back because it required, with all those metrics I talked about, significant scale and that would have required investment to compete in an area where frankly we couldn't see the margin proposition that we could see from our other services and core services that we now retain. So we took the decision to divest of that. We completed a sale in late twenty twenty four for a sort of £5,000,000 of proceeds and we were happy with that divestment and that removed us from that area that was A) using cash resources and stopping us from investing more strongly in those core services and core brands where we see stronger profit opportunity but also obviously there's management time and all sorts of other issues that go into that. So we took that decision.

36:34 Also, although we were in the retail space and we're strong in retail on the brokerage, finance, insurance side, the actual segment of the retail market was different in terms of the clients, so the cross selling opportunities there actually were very limited for us. We did achieve some cross selling success with our smaller pharmacy stock taking element of that brand, but the actual retail side, we traditionally broker the sales and finances of convenience store retailers and groups. And that Orange business was focused on large high street brands with a lot of stores and high volume count requirements and it was a different sector So we weren't getting any cross selling benefits or tangible cross selling benefits that alleviated the losses and the investment required in that business and the other risks So that was the reason for exiting Orange If I compare that to Venner's, Venner's has a very different pricing model, a different cost model with the market leaders by some margin in that business, in a sector in pubs and hospitality that is absolutely sort of we've got a long history in and are very happy to be in. We've got some very strong clients, corporate clients and independent clients.

37:42 And Venice has about 1,000 clients in that sector, which obviously have cross selling opportunities for us as well. It's cash generative Venice, it's profitable. It's only not made money during the sort of couple of years of the pandemic period when pubs and hotels were obviously closed due to the restrictions placed by the pandemic and that exceptional nature. Otherwise that business is a robust and recurring profitable business, cash generative, and as I say has complementary flows that we didn't think Orange had. That's the differentiator there. For Venasys, was a software business, and strategically the original intention with that business was to build a more recurring non M and A aspect of business with recurring income flows What we found was the development costs, the capital costs required to continually invest in developing a competitive software product where we're actually absorbing cash and resources that we felt would be better deployed elsewhere on our core brands.

38:42 And ultimately we were not achieving the scale, we had a couple of years where we were encouraged by growth levels, but we were not achieving scale and pace of growth that we needed to make that business a positive contributor to the group. So again, we took the decision of having sold Orange, then took the decision that we would divest of Venesis. So having completed those two, we're very happy with the remaining five brands we have. They're all core. We believe there's significant opportunity in the five brands we've got that we've talked about. And so from our perspective, there are certainly no plans to divest anything else. We think we've done that aspect of our strategy and that sets us up, as Simon mentioned earlier, for what we think can be transformed earnings potential in the years ahead. In terms of another question we've got here, what's driven the increase in brokerage fees?

39:32 Simon touched on this earlier in one of his slides we grew our business brokerage fees by about 26% and to put it succinctly that's a combination of two things. Simon mentioned sector mix. We're obviously spread across a variety of sectors, and they do have slightly different factors and values that drive the incomes in those sectors on the value of the assets we successfully sell. And so the more complex assets and the higher value assets we're doing that helps drive average fee growth as well. So we think we're as we look at it, we certainly I think it was very strong growth in average fees in 2025 compared to 2024 We certainly don't see ourselves moving backwards on those average fees the visible period ahead. Think that was we're increasingly trusted to sell good value assets in a good sector mix.

40:32 Another question that we've got here what other sectors would you like to move into? That's a great question Our UK business, and we had the slide earlier which showed the variety of sectors we're in, but some of those sectors in which we're now recognised undoubtedly as the market leader like childcare twenty years ago that would have been a much smaller team and almost a sub sector of our healthcare division at the time As markets change and evolve and we can see opportunity, the ability to bring our skills and our expertise and apply them to a sector specialist way to vibrant sectors that are attracted to investors offers us opportunity. We've developed a market leading position in childcare, we've done the same in pharmacy, and the same in dental for instance in recent years. We're now developing and have been doing so for a couple of years in sectors and increasingly strengthening our presence in sectors like garden centres and caravan parks for instance which we are attracted to investors. There's obviously land and property backed elements to that which are attractive to investors.

41:38 The garden centre presence really for us has developed strongly from 2018 when we were instructed to sell the entire Wyebail estate for our TED client. We did that successfully. When people come to us they recognize that if you're looking to break up something bigger and achieve value we're the experts at doing that because we know regional buyers, we know regional markets, but we operate with real national scale as well. And so we broke up YBAL, which was 146 garden centers at the time, sold them to a variety of buyers, but established a position in that sector as a result of that with some really good relationships and we've built a really strong garden centre team. Another couple of questions here, If I look at this, there's a question There was talk during a recent company interview of CTG targeting 10,000,000 PBT versus the current 6,000,000 Could you please provide any comment on this? A slight correction in that because I did that interview, it's a good question, but I talked about £10,000,000 of operating profit rather than PBT.

42:47 But it's a great question. I think what we talked about earlier was that £10,000,000 and the £100,000,000 position kind of interrelated. We think as we spoke about earlier and we think we've evidenced with the full year '25 results is that our core brands are absolutely capable of delivering 10% plus operating margins. Then the question becomes when you're doing that, how do you get to 100,000,000? Well, we're at sort of 70,600,000 on the results we've just done. If we were to deliver compound growth around 7% a year across our core brands, we'd get to £100,000,000 in a kind of five year timeframe. So I think we work in markets where tight deal timings, as we've spoke about earlier, can be difficult to predict, and we're always cautionary about geopolitical and economic factors that can affect M and A appetite for short term disruption, again as we've talked about earlier.

43:46 But certainly we wouldn't look at that kind of level of growth as unachievable for our core brands. And certainly as I've talked about, we look at that profit level as being absolutely achievable for those core brands as well. So that's how we get from the current kind of position to those kind of aspirational numbers that I talked about in that particular interview that's referred to. Just another question we've got here: How do you look to manage earnings volatility across cycles? And what do you see as a realistic target for cross selling? Earnings volatility across cycles really speaks to our balance sheet requirement We know from the ninety odd years that we've been brokering business sales Mine and Simon's own combined forty years with the group We've seen a lot of cycles Everything seems to be unexpected pandemics, global financial crisis and everything else Brexit votes and the like But we've seen all of those cycles and we know from doing that that typically those downturn periods last twelve to eighteen months the longest recession on record is actually the global financial crisis, was officially an eighteen month period.

45:02 And we know from those and even the depths of the pandemic that if we can maintain our teams, they can service what bounces back as quite strong M and A flows immediately afterwards. People see opportunity post downturns, they see value opportunity and demand comes back in M and A markets strongly. What we want to be able to do to maintain a more consistent growth trajectory in the years ahead is to ensure that our teams remain in place. We spend a lot of time and investment, as I mentioned earlier, in developing experts in the sectors. We're very proud of our length of service record, we're very proud of our culture, people when they work for us enjoy working for us, they enjoy what they're doing and they enjoy working and delivering excellent outcomes for clients, but it's key for us to keep those teams together, and so to be able to do that, we must maintain an appropriate defensive balance sheet strength so that we can weather those storms when they come, continue to invest in our business on a consistent basis, and ultimately we want to be and we recognize we must be a dividend returning stock and we want to be able to do that on a consistent basis as well, even recognising there may be some downturns in that period. So all of that is about managing volatility across those cycles. We maintain our teams. We know our brands trade through cycles. We know there's demand for our services that comes back.

46:22 It's about giving us the resources and equipping ourselves to cope with those downturns when they come. Think it's worth just spending a bit more time on in the left do you see the increased average fee being maintained at higher levels? As I sort of mentioned, we certainly aren't seeing anything that suggests the average fee levels we delivered last year are unsustainable given our spread of sectors and the instruction mandates we're getting and that again speaks to our expertise, it speaks to our relationships, it speaks to how we're trusted by clients and the value that we bring to them in terms of helping them transact successfully deals when they're looking to do them So certainly don't see our average fee levels as being above all at all We had strong deal flow as we talked about in Q4 last year but the average fee levels I think were reflective of our underlying business strength.

47:21 Just scrolling down some more. There's a question here, depending on the answer to one of the other questions, if the company is so cash rich, what is the intended use of that cash? I've just sort of touched on this, capital allocation is quite simple really, and to reiterate the point because it is key and it's relevant question. We expense our investment that Simon talked about earlier, so our profits that we report each year are effectively net of the investment in people when we're trying to grow headcount, develop people and improve performance And so largely we're expensing our investment as we make it That means when you look at our balance sheet it looks very asset light It looks investment light If we've gone out and bought a lot of teams we carry a lot of goodwill and we'd be able to capitalize that investment We don't do that, we're expensing it because we're paying people to develop that talent.

48:16 So our assets are our talent but it doesn't carry accounting value, it comes through in that P and L. What that means is when we report a profit before tax figure if you like or even a profit after tax when we're very happy to pay tax because it means we're making money, when we report a profit after tax figure really we've already covered a lot of that investment. So the use for our cash is twofold, is to consistently ensure that as our business grows and gets bigger, noting my point earlier about the desire to keep our resources in place to weather cycles, as our business and our headcount gets bigger, we expect to need to build a stronger balance sheet to reflect that, and so there will be a defensive element of the cash use. Beyond that, we want to return dividends to shareholders, and so that's the use of I think.

49:06 And it's maintaining a balance between those two things. If we got sort of more compelling investment opportunities or a way to accelerate growth, then we would look to do that. But it's ultimately about people and whether you're doing that organically or attracting a team to you by other means, that's what the cash is used for building our resource strength, maintaining a defensive resilience through expected downturns when they will occur, and ensuring we can return a good, attractive dividend, compelling dividend to shareholders that reflects in year earnings and outlook to the best of our view. I'm just looking through I think that's probably a good coverage of the questions we have got.

50:02 Fantastic, that's great. Daniel Simon, Thank you, Alex. I'll hand back Thank to you, guys. But, Daniel, before we direct investors to provide you with their feedback, which is important to yourself and the company, Daniel, could I just please ask you for a few closing comments? Thank you Yeah, thanks Alex Well, thank you everyone for the time you've taken today to join this, that's appreciated I think really the key messages from us are we think we've got strong businesses, strong brands We think there's continuing demand and will be for our services for many, many years ahead as we've shown. We're optimistic of the year ahead and of the strategy that we're now following, and I'm very much looking forward to a positive few months ahead. Fantastic. Daniel Simon, thank you once again for updating investors today. Could I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback, will help the company better understand your views and expectations.

50:58 On behalf of the management team, we'd like to thank you for attending today's presentation, and good morning to you all.