Elixirr International (LSE:ELIX) — H1 25 Results

0:00 Good afternoon, and welcome to the ELIXIRRINTAL PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can 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 end. 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. I'd now like to hand you over to Steven Newton, CEO. Good afternoon, sir. Good afternoon, everyone, and thank you for taking the time to, listen to our presentation today. I think you probably have seen at the beginning of the week, we had some very exciting, results and an announcement around an acquisition. And this is off the back of, obviously, our move to main market, which was, July 1. So it's been a very exciting half for us. We've been pretty busy with all of those things, and it's all it's all been coming together very nicely. So if you look at what I what we plan to take you through today is a little bit of an introduction from me.

1:04 Then I'm gonna hand over to Nick who will cover our financials for you in a bit more detail, And then Graham and Em will sort of bounce between the business review, and then I'll come back to me. And, I'll talk to you all about how we see the future and, how bullish we are about, our positioning in that marketplace. So let's talk about the introduction. As I said, we've had a fantastic half. Our results are brilliant. You know, we've we've managed to move to to the main market, and now we've also announced the TRC acquisition. We've got all our main levers are working really well. We've got, you know, the organic growth happening. We've got the inorganic growth happening, and we've got, the performance in the market and our our profitability happening too. So we are very encouraged to be getting more diversification in the business, which is making us more resilient.

1:57 If you look at our business as we were in at the start of our IPO journey on to AIM versus now, we've got so much more resilience in this business. We've got so much industry diversification, capability diversification, and, and also geography diversification. We've got, obviously, four I think five of our last all five of our last acquisitions have been in The US, so this has meant we've got a very strong positioning in The US. Our geography, diversification is working really well. And the team are simply performing simply brilliantly. The entrepreneurial packages we have for our partners and them embracing those packages as well as the flow down we have for that into the into the employee pool is really meaning that, our people turn up as real owners, and it makes a difference when you're doing a a a silver service or a white glove service like we do at the top end of the market, in consulting. So our clients love the way our our people turn up every day. They're very ambitious, motivated people who, like to deliver real value to their customers, and I think it's showing in the marketplace, and hence, we're gaining market share.

3:06 Looking at some of the numbers, you can see that, our revenue is up 35%, and and what's particularly pleasing, obviously, is the organic growth revenue there of 17%. As I've said many times, we we like to have organic and inorganic growth, you know, working together, if you like, to to kind of deliver on, an overall growth objective of around 30%, year on year, which we've achieved since, actually 2012, but since IPO as well. So, the reason we think the range of 10 to 20% on organic is a good range is that if you think about a business which is growing at, say, top end of that range, 20%, plus you've got an unnatural attrition in consulting of somewhere between 1015%, you actually have to hire 35% of your workforce every year if you go beyond the 20% organic growth number. And in doing so, you will be changing the quality standards, the cultural integration standards, and it's actually, almost too much to swallow. So the natural growth rate of a consulting firm that's doing really well organically somewhere between the 10 of 20 10 to 20% range.

4:13 And, we've been doing that consistently, so very proud of that. And then you couple it with Graham's inorganic strategy, which he he can talk to you about the TLC acquisition in a little bit more detail. If you couple that 10 to 20% that we would look to buy in the same model, you you get the averaging out at 30 to 35%. And and, of course, we've been consistent with that, and we will continue with that as, you know, it's, proving a very, very successful strategy for us, I'd say. And and what's also particularly important here is you can see that we've gone from, I think the number there is, 31 new, gold clients or gold clients this year for up from 22 last year, which, means that the the depth of our relationships with our clients is is expanding, and it it it goes alongside the acquisition strategy. As we get more capabilities, we can sell more capabilities to our clients.

5:04 And that means that we have deeper relationships, touching more buying centers, making more impact, delivering more value. So this is all very good. And and in addition, we're obviously acquiring a whole bunch of new clients. And we had a fantastic quarter, as I said. We had five of those months for record months. If you look at other angles to this, obviously, our brand is being developed. It's, I think in The UK now, we we we we're known by everybody in the industry. Wouldn't be a player in The UK industry who would not have heard of us by now. Quite not quite the case in The US, but it's getting much, much better. We've got some fantastic awards. Forbes giving us the best, consultancy award there. And, actually, for our US business, they gave us the best the best AI consultancy too. So, we're getting some fantastic recognition, and that's help helping build our brand. And and, we're starting to see inbound client requests as a result, which is fantastic.

5:55 And then the other two things, touched on the TOC acquisition, that we've just done. Graham will go into that in a bit more detail for you, but it's a really, really exciting top of the house company that is considered by their clients as a mini bane and believe they are better than the MBBs of the world. So this really rounds out our strategic capability. You know, it's almost the the end of their projects that they do with their clients is almost the the starting brief for our execution opportunity. And this is exactly what TRC have seen with the the ambition and interest to to to join our group. And we're getting six fantastic partners, all of whom have worked together at Maricon, all of whom are a really well formed team. And we we we we had them along to our partner quarterly, and they were certainly almost felt like they were had been with us for years and years. So, it it was a fantastic thing to see.

6:46 And and, you know, I'll touch on this now, but you you Insignium, who we we acquired in October 2023, are sort of the cultures culture end of strategic change, and their relationships are all top of the top of the house. And in this half, we've sold £10,000,000 of ELIXIC Consulting services into their relationships, which we would never have had access to if we hadn't bought Insignia. And and the thing about TLC is that they're almost well, they are exactly in the same, situation. They have top of house relationships and most of them American head office businesses that allow us to really start growing our other consulting services into these businesses. And to give the Insignium comment some perspective, Insignium's own revenue is 9,000,000. So what we've taken is we've taken a single relationship and essentially, across the board, doubled the value of the relationship to our business and our shareholders, which which we believe is at the heart of our strategy, and and it's just coming to life. And the TLC acquisition is is yet another fantastic opportunity for us to do this. I think it's probably gonna be our biggest opportunity in the space. So I'm really excited about that acquisition. And then I'll just round off by talking about our talent.

7:55 Clearly, on the organic side, to grow our firm organically, we have to promote and and hire partners, and we've brought in, a number of partners, promoted three, brought in two. And I'll just touch on one because, I'll just tee up Emma a little bit later. She talks about AI. We brought in Conrad Troy from Deloitte who ran, the the global, SAP business there. And Conrad's particularly excited about joining us because he was so stifled in Deloitte being unable to essentially use the AI type technologies to really transform the way SAP is handled by by clients. And and, you know, he is he's frustrated by that, but we on the CEO and most of the leadership team, they were so excited about the potential of working with a disruptive consultancy like ourselves to really disrupt what is a massive revenue earner for the big firms, and they and they have almost no motivation to go off to those kinds of, opportunities because they our Turkey is ready for Christmas in that instance. So fantastic opportunity there, diversifying our capabilities also not only through acquisitions, but through strategic hires like that. And, you know, we're looking for team hires in a similar context. And then finally, just to say, to see the participation of our employees in our employee share purchase scheme, you know, they turn up every day as owners, and and it makes such a real difference to the way they turn up on our clients.

9:20 And and, I think you see that the performance is is flowing through to our financials, which is the ultimate measure measure of performance in this context. Just a couple of things on on the market I'd like to make a comment on just before I hand over to to Nick who will continue with the finance side of the business, the financials in a bit more detail. This industry is a a growing industry. I've been in it for over thirty five years, a couple of start ups in between, and then, obviously, this this business. And every year, the industry's grown. And, Em will show you later that that, you know, AI is growing fastest by a long way, but in every sector, you'll see growth. And it's been like that for thirty years through .com bubbles bursting, through two thousand and nine recession, you name it. The consulting industry is just the juggernaut that keeps on growing. And it's it's quite obvious when you stand back and think about it because, you know, business is getting more and more complicated, not less and less complicated, and with the introduction of things like AI.

10:18 And and if you make things more complicated, people need more advice, and they need expertise in areas where they don't have expertise. So, you know, the the the things you see in the Feet with, you know, 2,000 people being laid off at Accenture or KPMG or McKinsey or you name it. These are these brands just using never wasting a good crisis. Right? They they're using the the the banner of market turbulence for their customers as a way to prune and and eradicate the underperformance in their business. It's almost certain if you go look at Accenture's figures, their profit's not going down. If you go look at, I mean, they've got a different challenge actually because of the whole AI challenge around technology. But but the consulting businesses are still growing continuously. And, the the KPMGs and PWCs, they don't pay their partners any less. They keep paying them more. So, you know, it's an industry that keeps on growing, and and we're excited to be able to present an opportunity opportunity to shareholders to invest in this industry. Because if you take these comparators, none of them are actually directly comparable to us even though we outperform all of them.

11:20 None of them are directly comparable to us. Only one that's perhaps the closest is Booz Allen, and Booz is listed in Chicago. But the difference between Booz and ourselves, they're almost exclusively. I think it's about 85, 90% government sector, and we're exclusively private. We refuse to work in government because it's a race to the bottom on price. And, you know, that's the the real difference. So there's no real public sector strategic, consulting firm that that's out there. Accenture, FRP, IBM are completely different businesses, really. Accenture is SI outsourcing, integration and outsourcing, IBM is product and outsourcing, and and FRP is a slight albeit in services is in a different services around restructuring and things like that, which is not true consulting. So well, it is consulting, but it's not the type of consulting we do. So it's not directly comparable.

12:12 So, we're very proud of our performance vis a vis others, very proud of our, performance vis a vis our team's performance, our our own our own individual acquisition performance. But, also, we're in an industry that is getting more and more exciting. I mean, I was around when I did a .com start up around 2000, and, you know, the hype back then was almost like you see it around AI. It's it's actually laughable to see the same thing unfolding, and people making the same mistakes. Like, the high street's gonna be dead. Right? We're not gonna no one's gonna buy anything in in through a physical channel anymore. Everyone's gonna buy everything through digital. The truth is things are bought through digital, but it's just a different way of buying. You have to complement the relationship between the physical presence and an and an online presence. And today, we're still teaching people how to use digital to make their businesses more efficient and to get more get more revenue through that channel. And AI is just that gift that's gonna carry on giving.

13:11 You know? That that is the opportunity, and Em can go into this for for you in a little bit more detail. I've spoken enough. I will hand over now to to my friend Nick, who will take you through the finances. Thanks, Steven. Good afternoon, everyone. Actually, it's a real pleasure to be able to present such a strong set of financial results for for the half, the half one twenty five. So all our key metrics you can see are are up significantly. So revenue for the half was 71,400,000. That's up 35%, of which 17% is organic growth. Gross profit, up 40%. Adjusted EBITDA up 42%, and that's delivered at a 30% margin. So right on target for where where we want to be. Adjusted profit before tax of 21,100,000, up 38%, slight a slightly lower increase than the increase in EBITDA because the interest cost is obviously factored into that. And then adjusted diluted EPS, up 35% with the impact of fractionally higher tax charge.

14:08 But all those key p and l metrics are up significantly. Cash as well, good cash performance. Free cash flow up 12% on the prior year at 7,900,000. Just a reminder, have a lot of seasonality in our cash flow because we pay our annual bonuses in half one. So free cash flow in the first half is not representative of the amount you would we would expect for the full year. And we closed the year with net net debt of modest net debt of 6,800,000, and I'll go through the bridge to so that those movements in a moment. But if if you put our results of course, I'm pleased with where the results were for the half. But if you put that into context of our track record, that's, I believe, a more important that, you know, what we set out to do since IPO is every year deliver significant growth in revenue matched by growth in EBITDA, and this half is no different to the the track record you see there for the last five years on on the on the on the slide.

15:03 And we've done that, you know, we're consistently following the same successful strategy that that that that works for us. We we stretch our partners. We increase revenue per partner for the half year from 2,100,000 in half one twenty four to 2,300,000 in half one twenty five. As Sumit mentioned, we we promote partners. We we hire partners from outside, and then and then we acquire businesses. Obviously, the half numbers don't include any impact from TRC. The full year numbers will will include a three month contribution from TRC. This is wants to give you the same transparency we always give in terms of what how we've the building blocks of our revenue growth period on period. So this is our building blocks from half one twenty four when we had £53,000,000 of revenue to half one twenty five to £71,400,000 of revenue.

15:53 The three blocks on the left hand side of this are our our organic blocks, which which netted off to be a net 17% organic growth in the period. I'm writing in or or the top end of that range of 10 to 20 that Steven was talking about before that we we target every year. And that's comprised of end of program what we call end of program clients. We we previously called these end of life where where projects and and that whole program work came to an end, but we've renamed it end of program because the reality we see is that clients might finish, and we have no revenue from them in a particular period. They often come back in the subsequent year as there's new work to be done at the client. So the the end of program number was was larger than we would normally have in the period because a number of programs came to an end, but that was more than offset by our growth in existing clients, not 9,700,000, and new clients, 9,400,000.

16:43 We like to see that that blend of both penetration deeper into clients and having more gold clients in the period and but also making sure we're getting into new clients, which is the the engine for growth in in in future periods. And I think the fact that we had such a large number at end of program while still delivering extremely strong organic growth overall shows resilience of our model and how we met we're dependent on particular projects finishing. We're always able to keep delivering growth irrespective of the particular the mix of where we are in in the program life cycle. And then if you add on to those organic levers, the the £9,600,000 contribution from hypothesis that we acquired in quarter four last year. That that takes you to the overall 35% growth we had for the period.

17:30 In terms of cash generation, this continues to be an extremely cash generative business, the most cash generative business that I've worked in in in my career. If the building blocks there on the on the chart you see are how we moved from 7,500,000 of net cash in December last year to 6,800,000 of net debt at June 25. Operating cash flow was 8,800,000. We spent 4,800,000 on acquisitions. This was deferred consideration payments for previous acquisitions, the acquisitions of ILAP, Insignium, Responsum. There was a net cash outflow for the EBT share purchases and shareholder loans of 13,900,000. Of that, 12,000,000 of that was net share purchases for the EBT.

18:17 That is a, I guess, an abnormally high number, more than I would expect for a period. And two reasons for that. Firstly, we had restricted share awards associated with board changes that we would not expect to have on on a frequent basis. And and, secondly, we're right in the middle of exercising our pre IPO options. Those are the most dilutive options, and and that £12,000,000 of purchases contributed towards us. I mean, now we've now bought enough shares to cover about two thirds of those dilutive options. And once we get past those options, the options are very, very much less dilutive because the vast majority of them have been granted a share price of £5 or above. Just while I'm on the subject of of cash, perhaps I'll just touch on where we are from a net debt perspective post the period because we as you would have seen, we drew down £30,000,000 from our extended debt facilities to fund the acquisition of TRC.

19:10 This will still you know, with TRC, our pro form a EBITDA is now, you know, around 50,000,000 or slightly in excess of £50,000,000 per annum. So with a net debt number, you know, at the end of the year, probably round about 30,000,000 or so, we're only at 0.6 times leverage from an EBITDA to debt perspective. And even next year next year when we pay the the earn out amounts for FY '25, we would I would still not expect us to be much more than about one times leverage from a EBITDA to debt perspective. So our debt our debt is very cheap. It's roughly 6%. So it's all tax deductible, so roughly 4.5% net cost to the company. And from my point of view, with such a cash oriented business, these are very relatively modest and and manageable debt levels.

19:59 From a balance sheet perspective, I mean, the balance sheet continues to be very, very straightforward. And there was if I just pick a couple of points on the on the chart, there were there was an increase in trade and other receivables to 20 almost 23,000,000 in the period. This is really associated with the growth in the business. We had very good debt collection at December. It was still good at June, but we did have we obviously had quite growth a lot of growth in the business. June is a much bigger revenue month than December, usually. Our debt is our trade debt is about forty five days outstanding, so right where we expect them to be. We've had zero bad debt issues, so we're absolutely comfortable with that. There from a continued consider consideration perspective, there's still about there's only about £4,500,000 on the half one balance sheet. Obviously, that's pre TRC.

20:47 That's all the continued consideration we have left from previous deals. And net net assets, perhaps unusually, there's a small decrease in net assets to a £120,000,000 in the period. That's really a result of the £12,000,000 of EBT share purchases, which obviously don't count towards net assets. And the fact that just the timing of our dividend declarations, both dividends, both the interim and the full year, were actually charged in in half one. But overall, we are we're very as I say, I'm very happy with the where we are from a debt and leverage perspective and very happy with the balance sheet and how the business is performing financially. Now I'll hand over to Graham. He's gonna start on the business review. Thank you, Nick, and hello, everyone. I'm Graham Busby.

21:33 Just to give you a view of some of the big things that have happened in the half, indeed, since as well. First of all, as Steve mentioned, the move to the main, we did, obviously, all of that work going on in the background in the half, but we didn't actually move until July 1, but that went extremely well. It was we see it as a natural progression for us getting into the next stage of our growth. AIM was fantastic for the size we were and and where we were in a a kind of trajectory, if you like. And we we now the main market as being the ideal place to continue that momentum. You know, it's got a world class brand as a market, which is helpful in my acquisition conversations, just to name one place where it's helpful. You know, before there was a fair bit of education around AIM and what that was and what it meant about liquidity, etcetera. But, obviously, everyone has heard of the main markets, and and that is very helpful.

22:29 Not least because it has deeper pools of capital, And we're already seeing more conversations with international investors, which bodes well for our cap table going forward. The the move to main, you know, was was positive for the share price. It went up nine and a half percent in the month following, and indeed, it's gone up since, I think, we're about 20% up from when we moved. So things are going in the right direction from that perspective. From a client point of view, Steve mentioned our gold clients at 31. That's in the trailing twelve months at the end of the half. That's up from 22 looking at the same period of the year before. And indeed, TRC will give us more gold clients on top of that as well, and we're looking forward to broadening our relationships between our two sets of clients.

23:17 We have 35 new clients, which you saw in that kind of new revenue bucket that that Nick went through just now. And, you know, with the cross sell is is working extremely well. Steve mentioned the cross sell that we got from Signium in the half. And if you add in all the other brands and capabilities we have selling into each other's client bases with capabilities that we couldn't sell into before, that's nearly 15,000,000 for the period, which is up from 8.3 last year. When you look at the cross sell total since IPO, when we really started to to acquire businesses, we're over £60,000,000 now of new of new revenue. And when you look at, you know, the EBITDA of of that revenue and apply it by multiple, you know, there is a lot of enterprise value being created here. And that is really behind that acquisition strategy rather than looking for cost saving synergies in the back office, etcetera. Of course, we go after that if it's low hanging fruit.

24:16 But, really, the focus is on the market, and it's on expanding, you know, but bringing in more capability that our client partners can then sell to their their clients, and and we can get the revenue at the back of that. And that was really behind the TRC move. Steve mentioned them as a mini bane. They are very at the top table in the in the c suites. They give, you know, that strategic advice to the chief executive and and their board. It's our biggest acquisition to date. It's our eighth in total, seventh since IPO, and, again, fifth in a row in The US. It's quite nice because they have a Chicago hub that kinda completes coverage of The US. We we have the East Coast, the West Coast, and and Dallas, Texas, and this really gives us that kind of hole in the middle and to the north that that we had. So we have fantastic coverage now.

25:09 And really what they do is they focus on kind of growth strategies, commercial effectiveness, value acceleration, and I'll come back to it. Once Sam's gone through some of our AI and client work, I'll give you more detail on TLC in a second. And just to add a couple of points to Steve's points earlier about people culture, you know, we we had 14,000 applicants last year for roles, and that's 100 applicants per role that we took on. So we really are able to bring in the best of the best, and that is why our client satisfaction is so high and why, you know, our growth continues at the rate it does, particularly from an organic point of view. We had great participation in our share purchase plan. In the consulting group, it was over 70% and up from the previous year. So, you know, as investors, I think that's a great indication of of what, you know, almost people with the knowledge of the business, the day to day knowledge, and and kind of behind the vision and the the ambition if they're, you know, participating in these schemes.

26:15 I think that's a a great kind of leading in indicator, if you like, of of where they they think we're going. And we've had, you know, partner promotes three in the period. We've actually did two more since then after our last partner quarterly. And what I like about the two most recent ones are they have come from an two acquisitions as well. So it's you know, we're not just promoting partners from our consulting principle base, if you like. We are really a true meritocracy, and anyone in the business, if they deserve to be a partner, then then we make them a partner. We have the external partner hires, Conrad in particular, and Stuart also. Stuart was the next client, which it it it's fantastic to bring in, and we're looking forward to continue building out our kind of entrepreneurial culture with the team that we have.

27:07 I'll hand to Em to take you through a bit of client work and particularly double clicking on artificial artificial intelligence, and then I'll come back to you with TLC. Thanks very much, Graham. So the the half has been another fantastic year with our clients. We've expanded our capabilities that we can offer to clients, particularly with the acquisition of TRC. And we've deepened the work that we're doing within industries, but also continue to diversify across different industries. And we've been delivering some real outcomes for clients in the work that we've been engaged to help them with. So so what do we do? A quick recap. Obviously, we are deep in the capabilities of of board level strategy and transformation.

27:52 With the addition of TRC, we can specifically get more granular into growth strategy, commercial transformation, and pricing, and also into resource productivity. So our organization's really pulling the the levers they need in terms of the way they're deploying their resources to get return on investment. We continue to work with clients in research and insights. So from the acquisition of hypothesis, we have very strong consumer insights capability to understand what customers of our businesses that we work with really want and need from future propositions. And we continue to help clients in their digital transformation, not just a change from one technology to another, but also the way that they are using digital marketing to grow their revenues. We continue to work with clients in the realms of operational excellence, so helping them think about their operating models and how they can become more efficient in their processes and the way they deliver their client products and services.

28:48 And we not only look at the data and technology strategy of our clients, but we can also help them design and build for the future by using our technology engineering capabilities. We're doing this across a range of industries. And as you can see there, some of the the clients that we work with, these are market leading in their field. So banks such as HSBC and Bank of America, luxury brands and retailers such as LVMH and Farfetch. And in terms of the outcomes we're delivering for them, I've just picked three specific examples that really demonstrate the value and the outcome led approach we take to client work. For a leading insurance, MGA, we have built them a real time and customer data lookup engine, which is enabling a 100 quotes per second to optimize the pricing they can offer to their clients.

29:39 The average response time per lookup in this new engine has reduced to five milliseconds. And because they can therefore do more business more quickly, we've seen an increase in their premium revenue by 8%. For a global leader in the electrification and automation space, they're a tech company. We have defined a future operating model for them and supported a sourcing process for their IT hosting infrastructure. This has resulted in the identification of $71,000,000 of savings, which represents a 57% saving of their of of their cost base over a five year period. And then finally, for a global financial services business, we've delivered for them a digital transformation program where we have immersed and trained 250 of their leaders in our design thinking methodologies to make them more agile and innovative as an organization, and we've launched new products.

30:37 This has resulted in a $100,000,000 of financial benefits that have been identified across a number of their business lines, and also within their operations teams through robotic sort of processing, automation, and also optical character recognition, which enables data ingestion in a in a far quicker way. The really exciting thing for us in the half has been seeing our AI business come to life and the consulting work that we've been doing in that business. As Steve alluded to beginning of this presentation, we've been doing some research into the way that this market is growing. It's phenomenal that it's seeing a 27% growth rate in 2025. So the AI consulting market is set to grow by 2027% in 2025.

31:27 And this compares with sort of high single digit growth that we see in other areas of the consulting market. And this says two things to us. It says that AI consulting is a real area that we need to be focusing on and building our capabilities in in order to deliver to clients. But it's also showing us that we are winning market share from our competitors as well as growing organically in line with the growth rates we see in the other areas of the consulting market. Returning just to AI, 99% of executives are expecting that generative AI adoption happens across both internal and external use cases to their businesses by 2027, and there was a spend of 250,000,000,000 US dollars in 2024.

32:13 The generative AI proportion of this is set to increase to a 100,000,000,000 US dollars by 2028. So these numbers are just staggering and show the phenomenal white space that we can be growing into in terms of our growth in the AI consulting market. And how are we doing this? Well, we're we're pulling very intentionally four levers in the way that we're using AI within our organization and how we're going to market in supporting our clients with their AI challenges. The first way is we are looking at protecting and delivering superior margins by using AI to become more operationally efficient within our own organization. We have so far transformed 45 different internal use cases, which is producing 25% faster results in the way our teams can work.

33:04 And this is protecting our margins and and also helping us drive superior margins across our business. The second lever that we're pulling is around differentiation. So it's it's really important to us that when we show up in the market, we're doing so in a way that is very use case and industry specific. So we're applying our industry, our deep industry expertise, and strategy consulting experience to identify those use cases that are really gonna deliver value for our clients, and I'll talk about that a little bit more in a minute. This has meant that we've managed to contract revenues of £10,000,000 since the beginning of twenty twenty four for AI specific use case work. We're also intentionally pulling the lever to accelerate revenue growth through through AI.

33:54 So by using AI tools in the delivery of our work, we are able to increase the speed to value for our clients. So say we were working on a phase one project, and it doesn't matter whether that's in the realm of AI or not. But using our own AI tools, we're able to accelerate the delivery of that value, that outcome to the clients, which very quickly then takes us on to phase two of the work with the clients. And so in doing so, you can see how we're accelerating our own path to revenue and building out client accounts. And potentially, this is what's driving this increase in gold accounts that we're seeing from 22 to 31 at the end of the half. We also have another eight eighty client opportunities in the pipeline, as well as the 10 client accounts that we started to expand in this way.

34:42 And then the final lever that we're pulling intentionally in the realms of AI to differentiate ourselves is to me the most exciting and strategic. We are future proofing the way that we do consulting and essentially creating a market leading playbook for how the industry will start to work. We have reinvented 12 of our consulting methodologies using AI, and we are using an AI led consulting process in certain areas of our work now. But we're also seeing that clients are prepared to pay for the value that those consulting methodologies are bringing. So just because we're not using people, our clients are still willing to pay us the same high premium revenues that we we or premium fees that we are charging for them for the valuable outcomes we can drive with AI. And if anything, they are more pleased because we're able to deliver that value quicker.

35:33 So what are we actually doing with clients in the AI space? Well, invariably, when they come to us, it's because the board has mandated someone needs to do something about AI. So we always start with education because we found a number of our clients have jumped into using AI, maybe a set of tools that's available to them very freely through potentially Microsoft or another provider, but they don't really know what they're doing. And so they're seeing a little bit of wasted investment and false starts. So we take them on a journey, and we look at the maturity level of their organization from a data and technology perspective before we recommend to them where they need to start. So at the base of that journey, where there are lower levels of maturity, we are helping clients with entry level pilots and foundations.

36:20 So for NPS, we've created for them a a data platform that enables scale and also enables them to start building use cases. Because without getting their data in the right place, they're unable to leverage the power of AI. For Convex, on the other hand, their data was in a place where we could start to use it. So we looked at the most immediately value creating pilots that we could create with them, and we, have worked on six so far to deliver real value quickly. At the next level of investment where companies are starting to scale, Houston Airports, for example, we created for them a customer app. So if you're traveling through Houston Airport, you're able to use this app to use AI to interrogate where you can get a seat or find a coffee or what time your flight is or whether there are any delays.

37:09 NASA built a repository and and helped them to interrogate that repository of over 17,000 research papers and are helping them use AI to interrogate those research papers more quickly and more deeply for their own research internally. And then at the very strategic end of the scale, we're helping companies such as iRobot to create AI enabling data platforms that enable AI analysis of the way that customers are using their devices. So iRobot manufactures, remote, vacuum cleaners, robotic vacuum cleaners that run around our houses and also mops and other cleaning equipment. This data platform enables iRobots to look at the way that their devices are being used and serve up the client experience in a very different way to ensure that they continue to get quality from the products that they they buy over their life cycle. So for example, giving them alerts when factories need replacing before they run out, etcetera.

38:11 So those are some examples of the way that we're working and intentionally pulling those levers in AI to differentiate ourselves against competitors who maybe are looking at things that are far more scale AI engineering level. We're trying to deliver real value to our clients using our industry experience. I'm now gonna hand back over to Graham, who's going to tell you a bit more about our exciting TRC advisory acquisition. Thank you, Em. So TRC was founded in 2014. I actually reached out to them in August last year, and we first met in October last year, physically met in January this year, and have spent the time in between getting the deal in place. We're really excited because it it deepens that that US presence that we have as ELIXIA.

39:03 But also they whilst they do span multiple industries, and certainly their experience spans many, many industries, their sweet spot is in industrial and manufacturing sectors. And we do have clients in that space and revenue in that space, but now we can go much, much deeper. We can start bringing the capabilities we have as a group into their client set and vice versa. You know, the the playbook that they leave behind, you know, they they do a lot of strategy, go to market models, pricing, discipline, resource productivity, and what they leave behind is essentially our project brief. You know, we can pick that up and work out, okay. So now what digital tech, AI, culture transformation, all of the capabilities we have, how can we wrap all those together to be able to execute on the recommendations that come out of TRC's playbook, if you like.

39:56 In terms of size, they're roughly about 50 people and very strong margins, and I'll go go on that in the next slide, but we're there's a 16 to $17,000,000 expected on an adjusted basis in f y twenty five from from their earnings. And you can see the client set is a full set of blue chip clients, and we've already actually started talking to them. Not least, a big part of our due diligence on all of our acquisitions is talking to their clients beforehand to see what the clients actually think. And we spoke to roughly 30 of TRC's clients. And what I love about them is that they are such they're right at senior grade, you know, round round about 25 for chief executives, and the others were board members or or c level.

40:46 And they got the best results we've we've had to date since we've started doing this on on potential acquisitions. And you can see that they were rated 8.9 out of 10, which was 35% better than the competition, which were classed as McKinsey, Bain, and Boston by their clients. So their client set think TRC are 35% better on average than, you know, the the MBBs in this world, and that fits in perfectly with our quality bar as well. The type of work, just give you a couple of examples that they work with yeah. You can see the the kind of public companies above, but also they work with the portfolio companies of private equity. And there's an example there with one p backed manufacturer where they looked at the strategy, the pricing, and how they executed.

41:35 And the CEO said directly that it was TRC's impact that enabled revenue to grow by 333% over two years, and EBITDA grew a 166% in that same period. Another example, another CEO's attributing this to TRC was a client where, because of what TRC did, they increased the cash conversion from negative to over a 100%, and they managed to double the operating income as well. So, you know, they make really significant impacts based on what they advise. And another way to think of it is that they're very good at taking a p and l and a balance sheet and breaking it down into the component parts, finding where the value leaders are, and then matching that across to the business challenge or the business problem and coming up with recommendations out of it. And we can, you know, we see huge potential for ELIXIA's broader capabilities to help execute those.

42:33 Having a better look at the numbers, their revenue tripled from f y twenty two to what they expect at the end of this year. They're expecting roughly 35 to $37,000,000. They've always been profitable. And when you adjust it for some of the compensation changes that the partners are coming in on our our ELIXIA partner packages. Plus, we've put some cross charges in into the p and l to for some of the infrastructure that we'll be providing. But taking all that into account, there's a 46% adjusted ELIXIA EBITDA basis, but, you know and we're we're running at about 30%. So, yeah, it's gonna be great to have them in our numbers going forward. And like I said, 16 to $17,000,000 is what they're expecting in terms of the adjusted EBITDA at the end of this year.

43:26 And how did we look at the deal? It's the the multiple ranges from a day one multiple of 4.2 rising to 7.8 if they earn everything. Maximum purchase price of a 125, 57 of that went out at the weekend. 16,000,000 of that was shares in ELIXIRR, the rest was cash. They have targets to achieve above. You can see the 16, 17. If they hit the targets that we've agreed for f y twenty five, then that releases another $32,000,000 to them. 24 of that is cash and 8 in shares, and that would be paid out in April next year after we've had the audit.

44:13 And then for f y twenty six, '27, and '28, there's another 36,000,000 available. That's 12,000,000 in each year, and that is based on EBITDA growth targets. So we've set them targets of growing EBITDA 10 to 25% over those periods. And then if they do that on a sliding scale, starting at 40% and ending at a 100% of the $12,000,000, they will achieve that. And and we have full discretion as to using cash or shares to settle that. One thing we have put in the deal shape is once it gets to 12 and a half percent growth, we have an agreement in place. They can start counting EBITDA of ELIXIA projects that have been sold into their client base. So over and above their organic EBITDA, if you like, they can then start bringing in some of that cross sell EBITDA against the targets. And again, that just aligns all of us up to maximize for shareholders the impact that TRC can have in totality for for ELIXIA.

45:12 And also included is half of f y '25 EBITDA in market priced options for the team. 4,000,000 of that $4,000,000 of that will be allocated imminently. And then the remainder, wherever that ends up, will be another 4 or $5,000,000, that will be released in line with earn out over the three years. So, So again, you know, we wanna make sure that everyone that is part of ELIXIA has that kind of equity opportunity and, you know, we also will allow them to enter into our equity scheme that I spoke about earlier. So everyone's building up a really nice position in ELIXIA to to help us all achieve the growth targets that we have.

45:59 So I think all in all, you know, really exciting acquisition, culturally perfect as Steve mentioned. You know, the partners fit in a couple of weeks ago when they came over as if they've been with us forever. They have strong financial track record. They have consistent revenue growth, great margins. It's an immediately earnings enhancing deal. And, yeah, we're looking forward to add to that £15,000,000 across sale from h one through looking at each other's respective client sets. And just to touch a reminder on a broader acquisition strategy. So, you know, we're not changing it. It it it is working. It has worked for six or so years since we started.

46:44 We're looking to do one or two deals a year and looking to bring in, you know, 10 to 20% of EBITDA in in across those one or two deals. That's better than doing lots and lots of small deals, and it's better than doing, you know, one gigantic deal. And we will continue to do that alongside our organic growth. And we'll be looking at capabilities that we don't have to add. So an example is cyber. I mentioned that last time. We're still looking for the right fitting cyber firm because that will, again, give us a whole bunch of capabilities that we can give to our clients. And also looking at industry, you know, the last two or three acquisitions have really opened up new industries for us or or at least deepened relatively small presence we had in those industries.

47:31 Looking at Insignium in back end of twenty twenty three, were very strong in health care, pharma, biotech. Now that's a big industry for us at doing all the other consulting that we do in those spaces with them. Looking at hypothesis last year, very, very strong in media, tech, and entertainment. They went with five and the magnificent seven amongst other household names. Again, opening up that industry for us. And then TRC in in the industrials manufacturing, again, an exciting space for us to explore with them. And geographically additive, so obviously, The US, you know, The US is twice as big a market as The UK and Europe, and it's four times bigger than Europe. So over time and actually, we're we're not far apart from the Asian part. But when I when you think of the mix of our US and Europe slash UK revenue, it does actually reflect where that spend is.

48:19 That said, we are still looking in other places, particularly on the continent, you know, the DACH region, the Nordics region. These are huge consulting markets with international world renowned brands. And and, you know, we we have a pipeline of firms there that we're talking to. But whoever we're talking to, it has to be extremely high quality service. You know, that is an absolute must. We're we're not gonna dilute the service that we give to our clients. And everything is aligned from a deal structure point of view. We wanna make sure, as I've just described with the share component on on the previous page for TRC, we wanna make sure that the founders are aligned with us and with you guys as investors so that we're always making the right decision for for shareholders.

49:04 And we have the firepower to to go forward. You know, Nick spoke about how cash generative we are. That's not gonna stop. Obviously, we'll be repaying down the debt. We've got the equity now on the main market. The debt facility, the particularly the RCF is still there. So there's plenty of firepower that's kind of giving us, you know, the the support we need if you like to have interesting conversations to continue this strategy for for the foreseeable future. And you can see some of the sorts of numbers, you know, that that's just since IPO on the right hand side there, you know, in terms of a pipeline and forward looking, you know, that sort of top of funnel conversations through to quite advanced conversations is it always has been. You know, we don't take our eye off the pipeline whilst we're doing a deal. We we run both of those simultaneously.

49:55 And I'll hand over to Nick now to talk through how all of this growth translate translates into growth and and dilution. Thanks, Graham. Those of you who've been on this call before will have seen a similar slide to this. This is an update of our of our model where we we look at making sure that we're measuring the any dilution compared to the value that it's creating and growth. And just a reminder, you know, since IPO, we well, at the half year, we've diluted 7% over the five years since IPO, and that that's 10% today, including the shares for the acquisition of TRC. But all of that 10% is through acquisition. We haven't options. So even though we do grant we've made sure that we've actually had no dilution to date. We've used our cash to buy shares, and that was a point I mentioned about buying shares during the period to to satisfy our our pre IPO options.

50:54 So, you know, so over those five years since IPO, know, our market cap has, you know, roughly quadrupled over that period with 10% dilution for acquisition and no dilution for employees. Looking forward, this model demonstrates if we continue to grow you know, this is taking a 20% growth rate. So just looking at the organic side of growth, but keeping all the metrics the same, EBITDA to free cash flow generation, keeping the multiple the same, and looking at the employee incentives we have in place today, the employee and partner options, additional options for partner hires, for the employee for the growth in the employee base as to grow in line with revenue, the employee share purchase plan that we mentioned that we have very high take up. That's the that's an optional scheme for our employees, and replacement options for partners once once their existing options mature to ensure they remain incentivized.

51:47 Even when you you put you put all those metrics together, it only results in 19% dilution by 2030. So in a in a world where we can we continue growing organically at 20% a year and the 400,000,000 roughly market cap we have today grows to 1,200,000,000 by 2030, all of that dilution is only 19%. So the the shareholders today who are diluted would still have 1,000,000,000 of that 1,200,000,000. So still a 2 and a half times return on money. And and that's and this is a model where we don't use cash. Clearly, we have the opportunity to reduce this further if we use cash to buy shares rather than diluting, which is the strategy we've followed so far. And just for those of you new, just to remind you that the reason this dilution is much less than you might expect when you look at the number of options as disclosed in our results that we actually have granted, our options are all at market price. So there's no there's no free gift here of zero price options. These are options where there's only value if the the partner or employee contributes to the share price growing and the share price grows above the the exercise price of the grant, which which is the market price of that grant.

52:54 And all of the options have performance conditions, and employees have to be in our top two performance categories. Partners have to hit their revenue and profitability targets. So there are stretching targets for the options to vest. And all of our options have four or five year first exercise dates. So if an employee leaves within four years or a partner leaves within five years, all of those options are forfeit. So so in reality, only about a third of the options we grant will will actually vest as a combination of those, the performance criteria and and the attrition assumptions. And that's why, you know, from our point of view, clearly, everybody on this call, all of us us presenting our shareholders ourselves, we think the dilution of this this the the model that we have in place, yeah, is very modest compared to the growth that it's going to going to generate. And and that's exactly what we've we've seen so far.

53:47 And now I'll hand over to Steven who's going to close with the outlook. Thank you, Nick. Yeah. I think I'll do the outlook. There's a couple of questions we can quickly see if we can, address those two. But let me just, say, you know, the the thing that invest we we think investors should consider when looking at our business because it's the way we look at our business. We we see our businesses in in short, medium, and long term. You know? We're all actually long term investors. If you if you sign up for a partner position in ELIXIA, you're actually taking a five year position. And and and in actual fact, fact, most of us, after those five years, see it as a as a ten, fifteen year position. So, you know, we're not that concerned about intraday movements or intraday movements. We're more concerned about the long term growth trajectory organization, and and we turn up every day and see the right things going in place. And and so but we've we set ourselves objectives, and our and our and our immediate short term objective is to hit the the FTSE two fifty, which we hope to do within six to twelve months, which we think starts to change the the liquidity profile of our of our of our stock. So we're very keen to to do that as soon as possible, and we think we're on the right trajectory to to get that to happen.

54:57 We've done the calculations. It's around 515,000,000 market cap. We're currently at around 400,000,000, so we're not far off. Some organic growth next year, maybe an acquisition or two, and we we're we're flying straight into the two fifty, which is a short term objective. Then the medium term objective is that, you know, we think we we we wanna build a unicorn, so a billion dollars would be pretty nice after that. And we wanna do that in if you compound the business at 20 to 30% to somewhere between three and five years, we will be a billion dollar market cap company. And then our long term ambition is is to be a FTSE one hundred, which is somewhere around 4,500,000,000, I believe, is the entry point to the FTSE one hundred position. So those are our short, medium, and long term goals. And, you know, we're all holding our shares with a view of of of building out to those ambitions, and and it's certainly very achievable. If I look at the end, there's a con a question here from from, John, I think, who who who asks, how do we differentiate ELIXIA from the larger consultancies?

55:55 I hope through this presentation, John, you you you said that early on, but you can see some of the that answer. But just to to make to give you a way of thinking about it, you know, if you think this is a trillion dollar industry growing at somewhere between 510% a year depending in which which area you're looking, Half that trillion dollars is actually in the hands of boutique firms. Brands none of you will actually know. They're just individual partners or groups of partners who've put together a capability, a skill, a talent, a service offering, and they beat the big firms every day because no one ever got fired for hiring IBM, you know, or McKinsey or or Accenture. And the the the other half of the trillion dollars is is those big branded names.

56:42 Now what we're doing really is we're providing a platform for those boutique firms to scale and fight with the big boys in a way that they can't because those boutique firms, they they never lose on quality, and they never lose on on on relationships. But what what is the problem for the boutique firms is that they don't have the same access to market as the big firms do. So what we're we're doing is we're providing them that access, and that's what our cross sell revenue is is the is demonstrating. You know? We're just showing that if we can give, our consulting capability access into into Insigniums, we get £10,000,000 worth of additional revenue. And and and that's the the the real value here. And and you platform it on the entrepreneurial equity ownership model rather than cash model. It it creates such a different behavior pattern in the organization. I've worked in KPMG, IBM, and Accenture, and I've never worked in a partner group as dynamic, entrepreneurial, and teamwork oriented as this group of partners I have I have here. It's unbelievable how the compensation model and the culture has aligned itself so well. And you couple that with the boutique story I was talking about. So we're very, very bullish about the future. There was another question here that I could just address. Someone asked, what if we can't find any quality consulting outfits to buy or acquisition pipeline dries up?

58:09 I I think, Graham, I'm not I'm not even gonna pass that to you because I think you've already really answered that. The pipeline is so full. There's so much opportunity. There's so much space to grow into that, you know, we will continue to to to pursue brilliant acquisitions. You know? And and as our platform becomes more robust if you talk about Tim, who's the CEO of TRC, he his idea just one simple example of what he can't do that we can provide because we've got the platform. His business is about the size we were at the AIM IPO, you know, not dissimilar in in size that we were when we we were doing the AIM IPO. And, you know, just a simple example of what we've been able to build and and and therefore can deliver value to him immediately.

58:59 They we get over 12,000 applicants a year from Berkeley, Stanford, MIT, Oxford, Cambridge, you know, the best universities in the world. We've managed to build a brand where the youngsters love our challenger positioning. If they're going into consulting, we get tons of applicants. Now TOC get none. Now there's we we don't hire, you know, 1,200 applicants a year. So, 12,000, sorry, people who who apply to us a year. So there's so much opportunity for us in in that simple space, for example, to provide value to the people we acquire, and then, obviously, the cross sell. So there's such a big differentiation around that that that it's that it's really starting to pay off. A few other questions here. Nick, do you wanna answer these questions from quality around some of the EBITDA and net debt numbers? I don't know if you you wanna just quickly touch on those. Yeah. Sure. Thanks, Tim. Yeah. So, Alejandro, net debt to EBITDA at the end of the year, currently think that's gonna be around about naught point six.

1:00:01 And next year, probably at a similar level, maybe falling to naught point five. Obviously, it's very dependent on what we do in terms of future acquisitions. Yeah. The reason it wouldn't it isn't necessarily full significantly next year is that we have the the what we call the top up payment that we're going to pay for TRC based on f y twenty five EBITDA once we've validated their f y twenty five EBITDA through the through the audit. You also asked about employee share purchases, and is that because it's to help increasing shares outstanding? That's that's exactly right. We we as I said when I was talking about the dilution model, we haven't diluted at all for the employee options that we've we've granted, and that's because we bought shares, and we've been buying shares this year to satisfy our pre IPO options, which are the ones that are the most dilutive.

1:00:47 And for us, we see that much more valuable for shareholders than we we like to avoid dilution shareholders unless it's really essential. Free cash flow, you asked about 28 it was 28,000,000 last year. Last year was particularly strong. There is a bit of volatility in working capital at year end. Obviously, we have some big clients, and just depending, you know, whether they pay their debtors the their their invoices the week before, year end, or the week after can make a bit of a swing. You can really think in terms of free cash flows. You know, whatever our EBITDA number is, take 25% for tax and roughly, on average, 75 turns to free cash flow. You know, some years, might be a bit higher. Some years, it's bit lower just depending on the working capital swings. But that's the that's the long term trend. Just looking to see if there are any more financial questions while I'm and then there was a question from Mark early on. Think Graham probably covered this, but the impact of TRC on the on the full year results.

1:01:40 I think, you know, we we put up on Graham's slide just in sterling terms. I think full year revenue of TRC is about £27,000,000. EBITDA about £12,000,000. You can expect roughly a quarter of that in this financial year and obviously a a full year impact next year. I guess and actually, maybe just actually just one other point just thinking about it on on TRC, of course. With their own out structure, they have to grow EBITDA by 25% a year to get all of their earn out. So if you think about it over the three year three year earn out period, for TRC to get all their earn out, they've got to roughly double EBITDA from that that £12,000,000 point where I'm saying that they're starting today. Okay. I think that's we've covered most of the the key questions there. There's one final one here from from Alejandro, relating to The US listing potential.

1:02:30 You know, we're business people, and we like to sell our assets at fair value. So, you know, we're all shareholders, and, we do believe that the current valuation is undervalued by a significant number. Therefore, you know, I always find it quite amusing when people say there's no liquidity in the stock. Well, there'd be liquidity in the stock if the price is right because they are they are they are lots of holders of the stock that are not prepared to sell. And I I can speak for almost all my partners when they say see a a valuation as it stands today because they feel that they they work in this business every day. They see how it's growing. They see the performance with our clients. They see the potential of the market. So there'd be there'd be sellers when the price is right. So, you know, that liquidity point is a bit of a interesting one to me. But but the other one that I'd like to refer to is, yeah, if there are markets that would value us better, then we'd be looking to go to those markets. This is the reason we moved from AIM to the main market. So, you know, it's just a natural progression. We see it as a natural progression.

1:03:29 I I I believe that, you know, at some point, we will be listed in The US with a secure listing. It's inconceivable to me that we will be add the e to m MBB and make it eMBB if we're not a global business with global scale, and and that, you know, makes a lot of sense in that context to be you could be listed in both locations. So, yeah, the long term journey for us is is to find the market that that rewards us for our for our performance in the market, and, you know, we'll we'll go where the the capital pulls, understand that, and and and reward us accordingly. So I think we're slightly over time here. I hope, you know, we let we let it run a little bit longer because we thought we'd let, we'd answer some of these key questions here.

1:04:14 But, thanks very much for your time. Very bullish about the future. The business is growing. There's no we have no less expectations of our business going forward as we've done delivered in the past. You just need to look at our historic performance, and I think you can safely say we expect to be delivering those kinds of performance going forward for all the reasons we've been discussing on this presentation. So thank you for your time. Thank you for your interest, and and truly hope that you jump on board with us, on our journey to become a FTSE 100 company in the long term and a unicorn in the medium and a two fifty in the short. So thanks very much, everyone. That's great. Thank you all 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?

1:05:02 This will only take a few moments to complete, and I'm sure be greatly valued by the company. On behalf of the management team of ELIXIR INTERNATIONAL PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.