Empresaria Group (LSE:EMR) — Full Year Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the EMPRESARIA GROUP PLC Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted any time using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company review all questions submitted today, and we'll publish those responses when it's appropriate to do so. Before we begin, we'd like to submit the following poll. And if you could give that your kind attention, I'm sure the company

0:31 would be most grateful. And I'd now like to hand over to CEO, Rona Driggs. Good afternoon. Thank you so much. Good afternoon, everyone, and thank you so much for joining us for our full year results presentation for 2021. Briefly, the contents of the presentation is giving you a quick overview of the year, our strategy update, financial review, then moving to the operational review, and then into 2022 priorities and outlook. And, of course, as usual, the full deck has the appendices in them as well. So first, moving into the overview. We have shown definitely shown strong recovery in profits. Our adjusted profit before tax is up 65% on prior year.

1:17 As well our, we've shown progressive growth in net fee income. Our h two was up 26% in constant currency and full year up 14% in constant currents currency showing growth in all five of our key sectors. Our adjusted net debt, despite the increase in more increase in working capital, is up only 400,000 from 12/31/2020. And the three key themes we'll we'll be talking about throughout the the presentation and giving you some more color on are we have, we felt the shift from recovery mode to growth mode about midway through last year. We continued we continued our focus and progress on our operational efficiency through our stronger together initiatives aimed at making EMPRESARIA more join joined up global business.

2:07 And we've made significant investment in senior talent to lead EMPRESARIA through its next phase of growth. We feel well positioned to deliver on our ambition of 20,000,000 adjusted operating profit in the medium term.

2:25 Some of the operating highlights mentioned earlier just a few minutes ago or a few seconds ago, actually, the we've made appointments of three experienced regional leaders and created a regional structure probably at the end of first quarter twenty twenty one. That was a really important turning point for us to really start to accelerate the first of all, the change in culture, accelerate our growth, and really become more joined up as a group. In addition to that, we have hired a new chief marketing officer whose focus is to elevate the EMPRESARIA brand and improve our overall branding and communication strategy, which is critical for us, to achieve our our ambition.

3:12 We have invested, and we talked about this at our last on our last call that we've invested and continued to invest in our common front office system. We have an additional nine operations that went live during 2021. We have already had one go live in 2022, and we're just over halfway there. And we expected that we will complete that toward the end of twenty twenty two and at the latest beginning of twenty twenty three. We have launched a new offshore recruitment services delivery hub in The Philippines, which is super exciting. That is enabling us to drive organic growth in that business after a successful trial. And we did this trial in collaboration with our our brand in our business in Fill in The Philippines.

4:01 And that, a few years ago, just wouldn't have happened. We were very fortunate to have had an operation already there with another one of our businesses, and they really supported us in helping to open up and launch our pilot in The Philippines. The benefits from our operational initiatives, continue. I think the a couple of highlights there are our US health care business maximize the benefit of strong demand, and you will see that in their results. We they had a significant increase in demand for nurses both in for for testing programs as well as vaccination programs in The US. And they utilized our offshore recruitment services business in India exclusively for the recruiting. There was no recruiting done in The US market at all. It was all done with our India operation.

4:52 That has proven to be extremely successful, and we were able to hit all time highs in that business with the support of our India operation. We also continue to move a number of operations to a more focused sales and delivery model, which the timing couldn't have been better for that given that the talent short market that we're we're experiencing today and really are laser focused on candidate attraction right now as much as sales, if not even a little bit more, to ensure that we are able to provide the talent to meet the client demand in this tight labor market. Our diversification continued to be a key strength of ours. We had record net fee income and profits in both health care and offshore recruitment services. We've more than offset the challenges in two of our key businesses with, aviation and also our German logistics business.

5:45 Aviation has continued to struggle and is not expected to significantly recover in the short term. As as you may or may not be aware, most of our clients for the aviation business are in APAC, and that region has not recovered with, the flying like the The US and The UK markets. So that is taking a little bit of time, but we are confident that that will come back, and it will come back strong as there are significant pilot shortages that will play to our advantage in in if as and when the the business recovers. Then we've had significant challenges in the labor market for the German logistics business, which we'll talk about in a future slide. So update on strategy.

6:31 Wanted to just highlight the new team we've brought in. The, you know, the idea, again, of moving to more of a regional structure is and and it the timing of that also, it was really advantageous for us because as we look, you know, it's a tight talent market not only for our clients, but for us internally and making sure that we're retaining talent in in our local markets and making sure that we have career development paths for people and that people are able to realize the benefits of being part of a of a region and a global group. So we have hired a few people that are very senior in the industry. We've got Julie Smith, who is our regional CEO for UK and Europe. She comes to us with more than thirty years of staffing industry experience, and the expertise that she brings, is is different than than, you know, the expertise that we generally have had in the group. She comes with the RPO and MSP background and is really well versed in the services aspect of the business as in as and is one of the leaders that is really helping us to drive diversifying our service offerings to expand within our existing client base and attract more clients and new clients.

7:48 Next is Rafael Mollano who was is comes to us from Adecco and has more than fifteen years of staffing experience with significant international exposure across APAC. He has moved into Singapore, and he is based in Singapore. And it's great to have that now kinda be the central regional hub. And then we have the addition of Derek Cooper, president of North America, who's got more than twenty years experience delivering staffing solutions in in primarily the IT and engineering space, which will be a great advantage to us as we look to scale our IT business and grow into the engineering and statement of work in The US market.

8:28 And then finally, last but not least, we have Lucy Sharp who is our chief marketing office with officer that we, we were able to bring on over from Adecco as well. She was previously group, SVP of corporate communications. And she has more than fifteen years in the staffing industry, and that really rounds out. And, of course, the person that's not on this slide was was, already here, Amit Samaya, who runs who is the CEO of our offshore recruitment business. So we we have a strong leadership team, really excited, and we've already started to see the impact of having this team in place. So our progress on our strategic initiatives, you know, we have the four pillars of of building scale in key markets is is the first one.

9:19 Of course, we just talked about our enhanced leadership team. We also have implemented regional sales strategy in The UK and Europe and are just in the early stages of doing so in the Asia Pac region. We have a successful trial, as we mentioned, in The Philippines for offshore recruitment biz services. We've embedded improvements to our operating models in key business as mentioned with the pivot to a more sales and recruiting focused operation operational structure in our businesses. And, of course, the growth in the health care sector is not only you know, we we benefited from the pandemic, but what we're now seeing is the ability to take that experience and talent that we've been deploying for for the pandemic and now move those into travel nursing, which is a huge market in The US.

10:13 In the next strategic pillar, we have the the increase in diversified profits by sector market and service. So our net fee income and profit recovery with all sectors are ahead of or in line with 2020. Temp to perm ratio reduced sixty two thirty thirty eight in 2021. It was sixty five thirty five With permanent revenue, it was recovering a bit more rapidly than temporary. Permanent is growing a little bit at a at a more faster fast rate than the contract business right now because it's a it's an education process with our clients, and they're they're realizing that they need to offer that permanent role to attract a really strong talent. We do see that that will shift in in the contract, will come back and it is in pockets, but the perm is definitely recovering much more quickly, especially in this market.

11:09 Increased productivity and efficiency. So our ongoing investment in technology implementation with around half of our operations now on our common, front office platform, as mentioned, Later on in the deck or in a few slides, Tim will talk about the case study that we've got from the early we're seeing successes already with our technology implementation, and we're moving toward a global candidate database, which is, again, will be a key, I think, differentiator and game changer for us in our markets now that we, you know, we have seen during the pandemic that clients are more open to remote work and remote work that is possibly in different locations or in multiple locations. Our operating our operating model, improvements with dedicated sales and recruiting, as I've mentioned, And then the increased utilization of our offshore recruitment services business within the group, has just been incredible and with notable success in scaling our US health care business. We would not have been able to achieve the results we've achieved with the demand spiking so high during the pandemic in the health care sector without without the leveraging of the success that we've seen with with our offshore business.

12:26 Targeted investment and growth. Again, our investment in in our senior sales team, our our leadership roles, investment in scaling offshore recruitment services into The Philippines. We'll talk a little bit more about future plans for that. Our dividends restarted in 2021, and our adjusted net debt only increased year on year about point four even though even though our working capital has increased this year. So looking at our adjusted net debt, it remains below pre COVID levels.

13:11 Thank you. Thanks, Rona. So just moving on to the technology case study that we've included in the pack. So this is this is really our first group wide tech project. That's that's something which really wouldn't have been possible in the group a few years ago. You know, this really is evidence of how far we've come in terms of of becoming much more joined up and and and operating as a as a group. And, Rona, touched on on the benefits of a single system, but we you know, the aim is to have a single candidate database across the globe. That will have any number of benefits, whether it's from, you know, cross selling with with clients or or utilizing candidates in in different markets. This also brings all of our brands up to a to a a very strong technology level, whereas previously, all of those operations would have would have had their own individual systems, and that one made keeping us at the at the the cutting edge of technology. It's a lot more difficult whereas having a single system across the group. And particularly, systems such as Bullhorn, which is is well regarded in the sector, is gonna enable us to keep moving forward from a technology perspective and and make sure that, you know, technology is helping us to to derive a competitive advantage.

14:20 We also, by using this technology, get access to a to a whole raft of of partnership products, which again enables us to take that core system and add on the functionality we'd need in individual operations or or enhance the functionality to to add new features and and improvements and really increase that productivity, increase fill ratios, increase our speed. One of the the examples of of one of those partnership products is is HairFish with HairFish, which we've we've talked about a little bit on this slide. It's it's an automation package, and it enables us to to automate actions whether that's in in how we contact candidates or on on how we manage the database. And the example we've given here really is is how it's helped us to to a combination of clean up the database, make sure that we're we're we've got an effective database that we're then able to to, you know, maximize benefit from. Also enabling things which are important, but maybe a bit less

15:13 exciting, like compliance with with GDPR, etcetera. And it saves us an awful lot of work and time in in using that product. There are a lot more commercial benefits that we will be accessing as well. So just moving on to the financial review. So Bron has touched on some of the high level numbers, but net fee income up 10% for the year, 14% in constant currency, and that's flowed down very strongly to operating profit, which is up 50%, and profit before tax, which is up 65%. Our EPS is is up by over a 100%, although that had dropped a a bit more significantly during 2020, and and that is impacted by factors, obviously, such as minority interest and tax rates, which are a bit more variable.

16:04 So very, very strong recovery in profits and some good growth in net fee income. Sentry costs have increased year on year, and that reflects that investment in the regional teams. Some of that is paid for by sort of within the brands. Essentially, you know, we we have been able save on on some MD cost within the individual operations. So a couple of those regional leaders, for example, are also MDs of a specific business. So we we we're able to to, say, offset some of that cost within the within the operating businesses. And, of course, there were a lot of short term cost savings that were put in place in 2020, so they reversed, and there are increases in provisions for for items such as share based payments. Just moving on to our net debt. So as I wanna mention, net debt has increased slightly year on year, only up by naught 400,000.

16:54 So although we have had quite a significant working capital outflows during the period because of the improved trading, The strong profit improvement has has largely offset that. So we've only seen a a small increase in net debt, and that remains well below pre COVID levels. Headroom is strong, 12,900,000, which means we've got plenty of of capacity to invest and and grow the business. Interest charge, you know, remains low and continues to be very affordable. We would expect that to start to increase as you see base rates rise into next year into 2022. Sorry. Revolving credit facility was refinanced at the start of the year. 15,000,030, that was refinanced for two and a half years through to June 2023. So just moving on to the operating review.

17:46 This slide really just gives an overview of the diversity of the group. Yeah. We are very well diversified by both region, by sector, geography, and and by service line. A A couple of highlights to pull out. I mean, health care had a very strong year, so that's now up to 7% of group's net fee income. The Americas, which included health care and IT, they also had a good year, and they're now up 16% of the group. 75% of our income our net fee income is outside of The UK, so, you know, we're not dependent on on on one market, and we're not dependent on The UK markets either. Ron has touched a little bit on the the temp to perm split that has reduced with with perm revenue growing faster than temp in the year, and we'd expect that trend to continue certainly into the beginning of twenty twenty two.

18:34 And then this also highlights the strong growth in our offshore recruitment services sector, which is now up to 12% of our net fee income.

18:45 So just looking at professional. We're seeing strong growth in professional across all of our operations with the exception of our aviation business, particularly strong growth in the second half of twenty twenty one when net fee income was up 42% against the prior year. So you've seen that that growth accelerate in in in that period. Just touching on the aviation piece, I mean, this was very much a big profit contributor to us pre COVID. Are seeing that demand continues to be weak, particularly in Asia where the majority of our clients are based. Although, of course, in The UK and The US, we have seen a lot more planes flying. We've seen, you know, return to international travel. That hasn't really been the case in Asia so far where COVID restrictions have continued and and international travelers continue to be very very subdued.

19:34 However, that's very much it's something that we expect to reverse. You know, that that travel will return. So we continue to believe that this business has good medium and long term prospects. So moving on to IT. Profit growth has been strong across all of our locations. So we're in The UK, Japan, and The US. NFI growth strong in both The UK sorry, in The US and Japan, although we did fall slightly in The UK where we've had challenges with our contract business, although we believe that we are well placed to, to start moving that forward again in 2022. We've continued to look to grow our temporary and contract operations in The US, and we've put investment into getting a team together to to grow in that area. We expect to see the results of that in 2022.

20:25 In health care, we've had a record year, significant growth across all revenue, net fee income, and operating profit. And, really, that was driven by the high demand from the vaccination and testing programs in in both The US and Finland. And whereas that is something we expect to drop back as we move through 2022, what it has done is it's enabled us to get into other areas such as nursing, which we weren't significant into before, and it's given us a springboard into, you know, growing our presence in areas such as US travel nursing. So although we would expect activity levels to drop back at the start of 2022, we do have significant demand, and we do have a very strong plans for growing this business in the long term.

21:10 Obviously, very good prospects for it. Project search and engineering, very, very small now for the group, only 1% of net fee income. The moment, we're we're seeing very subdued demand for temporary sales staff in the new home sector. So at the moment, it's been a case of minimizing the the losses there. We're looking to diversify that business, but it's not a it's not a significant area for the group. Just moving on to commercial. Commercial has had a a fairly mixed year, and overall performance was in line with 2020. Our temporary businesses in Germany and Austria performed very well. We we did a lot of work on the operating models in those businesses in in 2020, and we really saw the benefits of that in 2021.

21:56 There have been ongoing challenges in the automotive sector with supply issues, and so those did slow down our growth, but despite that, the the business has still performed very well last year. In Germany, logistics has been challenging. So it was a real start performer in 2020 where we saw a very strong demand, and we had access to a very big can pool of candidates. However, in 2021, although demand has remained strong, we are finding it much harder to find workers to do these lower paid roles due to the strong German labor market and challenges in recruiting workers from Eastern Europe. In our town, we saw a very good performance from Chile, offset by a weak performance in Peru, which has faced greater challenges with COVID over the last couple of years.

22:46 And just moving on to to offshore recruitment services. I mean, this is a very big very big area for us. And, Rona, I'd I'd suggest maybe you want to do a bit bit of an overview on on that business just to pull that out a little bit more. Sure. I'm gonna pull this out a little bit more because we've had a lot of interest in this over the course of today. So wanted to just remind everyone, for those of you who aren't familiar with it, but also for those who who are familiar with it, what the what the business does and and the client base it supports. So our offshore recruitment services business is now 2,000 people strong in India. As evidenced in their numbers and their performance here, their headcount in 2021 grew by 900. So it is a a very large team of people.

23:36 And they their primary role is supporting

23:40 and their primary client is the recruitment or staffing companies, in The UK and The US. They provide recruitment services from either, you know, just screening and and, you know, screening and down selecting to actual end to end recruiting for staffing companies. In addition to that, they also have a back office team that supports back office functions across a number of our recruitment and staffing industry competitors. This business is what we're seeing today is that the demand is driven partially due to the demand in the in the market coming back, but also due to the fact that many of the clients have realized during the pandemic that, you know, it really it really doesn't matter if the person is actually sitting physically in your office and that, you know, the the the the term outsource is not so scary when when it comes to utilizing, you know, a lower lower cost labor, pool like like the team in India.

24:45 Now, their results have been outstanding, and one of the big benefits to staffing companies and using them as evidenced by our even our health care business in The US who relied exclusively on them to navigate through the demand they were seeing from the pandemic is their ability to to scale up and down, very quickly. So, you know, that is, very hard to do in our industry even though that's what we do for a living in the industry is is try to help clients scale up and down.

25:16 It is a it is a an essential part, I think, of of many of our clients' business strategies going forward, and we look at the we look at that market as continuing to grow. And, you know, the we were able to to successfully pilot the the a new location in The Philippines, which also offers us the ability to,

25:37 diversify the business a bit more outside of India. So we're excited about that business, and I just wanted to remind everyone about, you know, really what it is they do. Their clients are are not third party clients. They are recruitment and staffing companies, and they have a real core competency in being able to deliver and recruit. And and, specifically, health care in the in The UK is a very strong area for them as well as IT. And in The US, the same, IT and engineering is probably, you know, the majority of their business with health care following short close thereafter.

26:15 And moving on to our 2022 priorities. We talked about implementing regional sales strategies. We have, appointed, two sales leads right now, one for APAC and one for The UK and Europe, and we're looking at the possibility of doing the same in The US right now to really start selling solution selling, of other offerings beyond staffing that include RPO or SOW or even delivering behind, MSP programs. We're expanding our IT offering in the Asia Pac region. That region has largely been, with the exception of our our business in Japan, has been largely professional. And while that's still a good business for us, and they they actually had a a very good year last year.

27:02 We are taking advantage of the high demand in IT, from our clients in that region and putting actual people dedicated to growing the the IT offering across a larger geographical area in Asia.

27:17 As we mentioned, we are gonna further establish our Philippines office as a second country hub for our offshore recruitment services business. The prospect for the for that the prospects for that business are are great. We have a high demand for people to be based in The Philippines from our US clients, so we see great opportunity there. Targeted investment in sales and recruitment teams. We really do need to reinvest in our on the ground teams and make sure that we have the the bandwidth we need to grow. And we are developing a group wide brand strategy to create more of a regional to create more regional and global opportunities because we really need to we need to make sure our clients know who we are and what we're capable of delivering, not only on a local basis, but on a regional and a global.

28:05 We're also developing our expertise and material and training on the different buying models, including SOW, vendor on premise, which is a very big market in Germany, and then RPO, which is absolutely booming in in the APAC region right now, and it we're seeing demand also in The UK and in The US markets.

28:27 We're focused on growing temporary contract IT in The US. That is, a key a key charter of our our new president coming in is to grow that contract business where currently the vast majority of their net fee income is from permanent recruitment. And they had a, again, a record year last year on the permanent recruitment. So pivoting that into contract will really make a difference for our US business. And then, of course, aligning our marketing and sales strategies across the group so that we're sending a unified message to our clients and our candidates about who we are and what we do. We're continuing to implement our front office technology. And as I mentioned, we look forward to, closing that out by the end of this year at the latest, you know, few months into 2023.

29:17 We have our more difficult, countries to to implement now either that have language or have different types of businesses.

29:25 We predominantly focused on English speaking, countries, so we're moving moving forward with with the rest of the implementations now. We are in our second phase of the technology pro project. It is focused now on increasing productivity through the use of partnership problems partnership products like the one Tim, illustrated earlier with here HereFish.

29:52 We're continuing to drive internal utilization of our offshore recruitment services offering, and I think that is, again, something that we we have done a much better job in the last several years, but I think we have a lot more that we can we we can do with that business to help create efficiencies and productivity gains for the group itself.

30:16 And then, of course, in key key for us is investing in the organic growth. We have as you know, we have as you're all familiar, we have a lot of businesses, and we cover a large geographic footprint or global footprint. Now we don't expect to open up any new locations per se because we feel like we're pretty covered. What we need to do is really focus on investing in the growth and getting scale in the markets that we're currently in, and in particular, those with high areas of demand and opportunity. And we're also investing in additional office space to enable expansion in the offshore recruitment services business. Continued investment in our technology road map. One of the reasons we chose, our front office provider is the ability for us to keep up with the technology changes that are happening on a daily basis and make sure we never become outdated with our technology. So part of the benefit of using the front office system that we purchased is their ecosystem

31:19 of suppliers and and partner, companies that will easily integrate and plug in to our front office technology so that we can stay current and won't have to continue to reinvest or redeploy new software. And we're continuing to, identify and review m and a opportunities. Again, our focus right now is investing in organic growth, but we are still always looking for those opportunities for m and a. We will only do that if it is additive to multiple parts of the group, and and that's when we will look at an m and a opportunity and, again, with the primary focus being on organic growth. So on our outlook, we're continuing to invest in the business. We're investing in our sales and delivery teams. We're embedding our regional structure right now and our regional strategies.

32:10 We're continuing our technology locate our tech technology rollout. The skills shortages and wage inflation is expected to have a more significant impact in 2022. What we're seeing right now is, of course, the talent shortages are really worldwide. For the most part, there is, you know, high demand for for talent in the marketplace. And what we need to do is make sure that we're continuing to educate our clients on making decisions more quickly, providing the right opportunities for people because they have multiple offers and and multiple opportunities. And I think that's a lot of the the the changes are kind of the the great resignation is being driven by people wanting more flexibility in their work, more work life balance.

32:58 So we we're continuing to make sure that we're working with clients who can offer that to our candidates to make sure that we have the people in the talent pool available for them. COVID nineteen, of course, remains a risk for ongoing new waves, but we have proven that we we have been able to navigate COVID very well, and I think we we're stronger for it in a lot of ways. So I you know, even if there are new waves, we don't expect that to be a a hindrance to our business. And we have a strong we've already seen a strong start to 2022, and we're extremely optimistic for the year ahead. Obviously, we're you know, we have the situation going on in the with Russia and the Ukraine right now, and we do not have any operations in either of those countries.

33:46 And so we are not seeing any direct impact. But, again, you know, there could be other things that, that we don't see that could change. There certainly is the political uncertainty that we need to be cognizant of. We are absolutely well positioned to deliver on our ambition of 20,000,000 in adjusted operating profit in the medium term. And with that, I would like to conclude the presentation for today and open it up for questions. Ladies and gentlemen, please do continue to submit your questions using the Q and A tab situated on the right hand corner of the screen. I'd like to remind you that a recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your investor dashboard.

34:36 Randotem, you can see that investors have submitted a number of questions throughout your presentation, and thank you to all of those who have taken time to submit questions. If I may, hand back to you to read out the questions and give a response where it's appropriate to do so. Yes. Thank you. So we've got one question that says ask if we can talk about our plans for investment for the rest of the year. So, obviously, we've we've been investing through 2021, and we talked a bit about the the regional teams. I mean, the investment is 2022. We're going to be investing more in our our sales and recruitment teams where we see opportunities for growth. You know, we really want to try and build the teams that can capture the opportunity while it's there, so we'll be investing in in those areas. But we continue to invest in the the technology rollout, so moving that forward and getting getting as many of the rest of the group on as we can over the next twelve months and and looking to finish off that project as well as investing in the the complementary products that that that work alongside that.

35:33 Any of the bits we'd wanna highlight, Rana? No. I I think that you covered it. Excellent. Another question. What are the SOW and BOP buying model? Okay. That is a question for me. Are you sure you don't wanna take that? So the statement of work is what SOW stands for, and I realize we use a lot of acronyms in this industry. But statement of work is basically a time and materials type project versus a temporary or permanent type position. And those are are generally very very popular in the IT space as well as the engineering space. So that's an area that we just haven't tapped into in in many cases. So it's an opportunity for us to to really capture some of that market share.

36:21 And then the vendor on premise is what the VOP stands for. So a little bit different than an MSP. So an MSP is a managed service program where one company comes in and they manage all of the suppliers, and they may or may not be a supplier themselves, but they are responsible for delivering to the SLAs of the client regardless of of who the supplier is. Whereas a vendor on premise is really a master vendor program where you're you're moving on-site to a client, you're physically sitting at their location, and you receive the majority of the job orders, but you're also working with secondary supply suppliers in making sure that the talent needs are met for that individual client. So, again, different ways and different service offerings. You know, we've been pretty traditional historically when it comes to we either do perm or we do contract.

37:11 And so we're really trying to explore other ways to get in the door with our clients and create value for our client base. Thanks, Rona. And then another question saying, you see central costs increasing further through the year, and what do you view as the greatest opportunity to the business? In terms of central costs, there will be a little bit of a sort of run rate increase where we've made some hires during 2021. Although May mainly, they were in the first half, so I wouldn't see that as being a significant increase. And as I mentioned, to an extent, that was was offset by, you know, cost savings within individual businesses. I mean, in terms of the greatest opportunity to the business? Greatest opportunity to the business. I mean, there's so many. I mean, the the staffing industry is is really experiencing, you know, some great demand out there today.

38:07 And, you know, with the talent shortage, you expect to be able to capitalize on that even more so. So I think our greatest opportunities right now, as I see it, are to continue to do the things that we're doing in the business in terms of of cross selling. I mean, we've got opportunities right now where we've got The US working with China passing leads. We've got Australia working with The US passing leads. We've got our aviation business trying to start up some some business activity in The US market. So there's a very heightened and increased level of collaboration and cross selling happening across the group, which is exciting to see. And in terms of actual sectors and and hotspots, I would say IT and health care are gonna continue to be really solid.

38:55 We're we're gonna see a lot of growth in those those particular sectors moving forward. And our offshore recruitment services business, of course, is we expect them to also have another great year. So And then one one last question. What impact has the digitization of the workplace having on the market and your ability to drive revenue? You know, I I think, you know, digitization has been going on for some time now, and I I you know, it is increasing, you know, the demand. I mean, you could see the demand in in digital and IT is continuing to to have a a great impact on on our ability to deliver into those spaces.

39:41 I don't think I have anything else to add on that. Yeah. I don't have anything else. Perfect. And, Tim, as you as you said, I think you addressed those questions you can from investors during today's call. And if any further questions do come in, Ren and Tim, we'll make those available to you post today's call for your review. I know investor feedback is important to you both, and I'll shortly redirect investors to provide you with their thoughts and expectations. But I guess before doing so, if I may, Rona, just ask you for a few closing comments just to wrap up with. And as I say, I'll redirect investors to give you their feedback. Certainly. Thank you. First of all, I appreciate and sincerely appreciate the time that you've taken to, participate in this presentation today.

40:29 You're valuable to us, and and we wanna make sure that we're we're communicating and reaching, reaching you in the best way possible and as transparent as we can be. We are optimistic for the year ahead. And as as we stated, I think, on our last slide, we are seeing a strong start to 2022. There is no doubt we're doing the right things in the business. I'm confident of that. I'm confident of the team we have in place to deliver, and I look forward to, being on this call and continuing to deliver, strong positive news in the future. So thank you everyone for, again, your time today. Rhonda, that's absolutely brilliant. Thank you so much. Could I ask investors not to close this session as we'll now automatically redirect you to provide feedback in order that the management team can really better understand your views and your expectations.

41:16 This only take a few moments to complete, but I'm sure we'll be greatly valued by the company. On behalf of the management team of EMPRESARIA GROUP, I'd like to thank you for attending today's presentation. That now concludes today's meeting, and good afternoon to you.