Eql Pharma (Stockholm:EQL) — Full Year Results

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

0:32 I'd now like to hand over to Ian Stratford Taylor, CEO. Good afternoon. Thank you, Mark. Welcome, everybody. I'm Ian Stratford Taylor, chief executive, as as Mark just mentioned. And, Richard, perhaps you'd like to introduce yourself too. Yes. Hello, everybody. Good evening. Richard Cooper, CFO here. And thank you all. I realize it's quite late, especially if you're dialing in from, Continental Europe, etcetera. So, thanks for attending. So we'll crack straight into it. So, starting at the beginning, you know, obviously, this is the annual results roadshow. So we'll talk a bit about 2022, and, obviously, there's a lot of focus in terms of what we're doing from here. So I will go over where we sit macro wise and a few highlights from 2022.

1:23 Richard will then run you through a bit more detail, bringing to life the kind of bridge from 2021 to 2022 in a in a few areas. Some highlights of q one twenty three so far. Suffice to say we've done a lot. And then some looking forward points and then end with a summary. So you may recall in the past when I've I've done these, if you've attended them before, I've talked a lot about own name Ibands and the products that we have and how we differentiate. And this is a kind of recap of that. The core original products of accounts underpinned by the Ibands cards, we now have debit and prepaid payments, Can be FX or can be same currency.

2:08 And differentiators of the platform itself, the connectivity we've built up over the years, strategic focus on compliance, and we have people that people can speak to. That is a a key differentiator between us and a lot of the fintechs. And you end up with the platform itself, unified platform. You can pay out, by bank to bank or cards, and the own own name multicurrency underpins all of this. You can have unlimited number of accounts or subaccounts however you want. You can configure it however you want, for approvals, permissions, etcetera, and we can onboard you rapidly. And so the manifestation of all of that is the EQUALS mod money product that we sell to SMEs and the EQUALS solutions product, which, is designed for larger corporates.

2:59 So nice, you know, few little mottos here about what we're trying to do. The last, little sentence there is the key part. Make money movement simple for our b to b customers is really what we're all about. So where does that put us? I think what we're trying to show here is that the incumbent banks still, I know, trust may be a bit dwindled on some of them in light of recent events. But, ultimately, people still default back to banks as a safe place to put their money, which kinda bizarre when they relend it. But, anyway, that's the way it is, and it's secure, and it's safe.

3:37 The neos, fintechs are all about innovating high-tech, but they tend to be self serve only, tend to be b to c. And we put ourselves firmly in the middle. You know, we've been around for for fifteen years. We're profitable. We're cash generative. So we combine the best of both is really our mapping. And this slide we've iterated since this time last year, you see we've moved further towards the right hand side there, the top right. So we're very much a platform player. I'll bring that to a bit more life later and very much b to b. And just a few highlights of 2022.

4:23 I think the numbers speak for themselves. Transactions grew strongly, 9,200,000,000. Revenues grew even faster than that in percentage terms, and EBITDA grew even faster than that. And Richard will highlight a few more aspects of that later on. We did a lot to the platform, not least some of them are listed there, but, a lot of additional development and more to come. EQUALS solutions, key thing there that we're starting with there is the API integration. So now we can integrate customers via API links rather than just logging into the platform, and that unleashes, a lot of use cases for us as we go forwards. And we upgraded the reporting suite during the course of the year. The card platform, we can self issue now, removes another player from the equation.

5:12 It used to be 21 currencies. One's dropped off. That was Croatia. We can do prepaid and debit, as I mentioned, physical and virtual cards, and they're all tokenized. So you can do Apple Pay, Google Pay, and Samsung Pay. So, full suite of services there. In connectivity, we integrated Zepa. You may recall at the beginning of the year, We have a unified process for all the card platforms now, and we started to integrate directly into accountancy platforms, which can be a barrier. You know, we could be at a corporate. They love the products that we have. Do you connect to zero? No. Oh, I can't use you then. So what all these things do is widen the addressable market for ourselves. In sales and marketing, we hired, a chief commercial officer in the middle of last year, and we followed that up with key hires across the piece. We've got a very strong overall management structure there, both, in sales itself, marketing, sales enablement across the whole the whole spectrum.

6:13 Compliance, super important. Many of you on this call may be aware of FCA's increased focus on, payments as a space in general, which we broadly we definitely welcome. So we continue to invest in compliance, and we'll do so more this year as as we move on. I think on people, the exec team's built out and the layer beneath is very strong also. We've had very high retention of key people. The SIP and L tip awards that we may definitely play a part in that, but also, some fintechs in fact, most fintechs have been laying off staff. So we're able to be a employer of choice. We're definitely seeing very good quality candidates wanting to come and work here rather than have to go prize them out.

7:02 Moving then over to Richard. I'll pass you to Richard who will give you a bit more insight into 2022 numbers. Thank you, Ian. And there are a few slides here and a few appendices on Cosmix liquidity and revenue split. But before we go into that, I would just like to try and iterate three messages. The first is that not only has our revenue been growing, but we've increased the margin on that revenue too, which has led to higher gross profits. We continue to exercise very strong cost control yet, at the same time, ensure that we do make product investments to to drive our product forward. And thirdly, the combination of all that has led to our increasing cash balances our ability to pick up some small businesses and invest in the due diligence that we need to investigate acquisitions.

8:01 So without further ado, I'll move to some the the shape and size of our business. But this is just really to set the scene for for those who are not so familiar with us. So we put 9,200,000,000 of transactions through our pipe last year. Now, also, we do have a legacy and very important foreign exchange business. And we've got two points here on this slide showing that 80% of our book is represented by spot foreign exchange, and average the average transaction size remains around 30,000. Now that's very reassuring because what it actually tells you as investors and readers is that there are no hiccups in this business at all.

8:52 We have grown the international payments business line, which means that if the percentage of spot and transaction size have remained static, What's happening is that we've got more transactions and more clients. In a similar vein, for our card product, you know, we we did 1,200,000 loads per day. And if you do the maths on that, one sort of 10 every minute in relation to the card transactions. Now that's grown from eight point sorry. It's grown from 4,200,000 to 8,000,000, which is the equivalent of 75 every minute. So incredibly robust platform, which and all of this is really part of our solution sale.

9:42 And then you may ask, why am I showing the number of bank accounts? Well, Well, again, again, this underpins what we are saying on solutions, which is that to run the solutions product, we need a lot of infrastructure beneath the surface. And the 600 bank accounts that we have serve that for our customers. And then lastly on this slide, you know, have we been productive? Yes. We have. We've risen the revenue per employee from a 100 and 73 k to 260 despite raising the headcount in the year by actually slightly more than 10%. So just to repeat some of these key messages, you know, revenue growth, 58%.

10:28 EBITDA growth, even higher, 81%. EBITDA margin, higher still, increasing to 17.4%. And, you know, we're very anxious to get that number closer to 20%, believe it will be in 2024. We do make continuing investments. We're not shy about this, and the investments that we're making from capitalized software are now lower than the expense for capitalized software in in terms of amortization. Now after all of that and after repaying the CBILS loan, we have increased our cash balance by the year end. And And by last week, that number was, you know, 10 p a share, 18,300,000.

11:16 And all of that has led to a very, very substantial increase in adjusted diluted EPS. And there is a slide on how we come numbers. It's quite a complicated calculation, and we are trying to harmonize what the analysts say on this. This is my Damien Hirst picture with all the blobs. Some of you may have seen it before. And this shows the huge variety of methods by which within each product set we can make money. I mean, cards, you can see there pretty much touches all the sides there. Solutions Solutions is more interesting because we are moving much more towards a fee based model in that business line.

12:02 And as you will have seen from the underlying p and l, which we'll come to in a moment, you know, it is the solutions business that we are very, very keen on and developing. So this is a bridge now between the 44,000,000 of revenue in 2021 and the almost 70,000,000 of revenue in 2022. And for those sharp eyed amongst you, you'll see one red blob in the middle. And in 2021, we made a a material trade, contributed 1,500,000 of revenue, 800,000 of gross profit. That was a one off. We announced it as a one off. It wasn't repeated this year, and it is the only downer in this bridge here. The bulk, again, as you can see, is from solutions, white label, a tremendous purchase that we made in 2019, and we bought out the minority share in 2022 as well. That's used to be called CASCO.

13:00 It's now called EQLS Connect. Again, will talk more about that white label capability when we return to him in a moment. Just a simple reminder of our p and l walking down from revenue to gross gross profits, contribution, staff costs, other costs. There is an appendix where we lay out these costs in a little bit more detail, and there's a bridge on EBITDA in a second as well. And what's happened to our EBITDA? Well, I've mentioned it's gone up. It's gone up a lot. It's almost doubled, and you can see what's really driving this. Yes. We have increased the staff costs. We've increased the staff numbers.

13:45 We've had both aggressive and defensive pay rises around 8% last year in a very tight labor market. Inevitably, with increased volume, we've increased our IT costs, Amazon web service hosting, and similar. We are very proud of our compliance capabilities, and we have both upskilled, upgraded, and built our compliance team even higher in the last year. We're doing more prospecting and t and e. Last actually, last fortnight, I I went to Malta to do a bit of prospecting for some old contacts that I had from previous companies and and very promising they look to. But the bulk of the EBITDA raise is the increase in contribution.

14:31 So, again, if you're not familiar with that, that's gross profit less marketing. And there's a big interaction between what we spend in affiliate costs, which come to gross profit, and what we spend below the line in marketing and branding. However, we continue to invest, and this slide here shows, you you know, the very substantial investment that we have made since 2019. And boy, has it paid off in 2022 with, you know, 15,600,000 from solutions. This wouldn't if if the solutions revenue just would not have happened if we hadn't made these investments. And as mentioned earlier, you know, the capitalized software is now lower than the amortization cost.

15:21 However, we've we've also made external business acquisitions. Iger, Hermex, Effective, and now Haimer and Haver. Haimer and Haver, I do beg your pardon, are are, you know, lovely entrepreneurial FX businesses that we can pick pick up on an accretive basis. They contribute not just to our revenue, but our talent pool, and we've very successfully grown all of those. I've already mentioned the Casco white label business where we bought out the minority share in the last quarter of the year. And in the last part of 2022 and on the sixth of January this year, we concluded the acquisition of of Rocket, the open banking platform.

16:09 Again, more

16:12 arrows to our quiver, if that's the expression. So we're not shy about making investments. Investments lead to growth. And I believe that Canaccord, who are our house broker, have issued a note suggesting that we will do something like 88,000,000 of revenue this year. That's twice what we did in 2021.

16:37 So after all of that, we are still generating cash. Yes. We're making investments. Yes. We're making acquisitions. And, yes, we repaid our loan, the CBILS loan. Underlying all of that is our fantastically strong trading capability. And I think at that point, I will close my presentation just with the earnings per share figures. So what we're trying to do here is really I won't say educate, but help people understand what other brokers are using to to give rise to the adjusted earnings. And these are not atypical. They are the share option charges and the amortization of acquired intangibles.

17:25 And should we have made any exceptional items in the year, which we did not,

17:30 they would go in there as as well as the acquisition costs and any tax impact on any of those above items. Now the denominator of earnings per share is not as straightforward as the number of shares we have in issue. It is a weighted average number. And when you dilute it for the share options, you don't take the total number of share options. You effectively take the in money proportion of share options and use that as the denominator.

18:01 And what we have at the bottom of the slide are all four different variables, and you will see that basic and diluted compared to the previous year not have a bracket behind them. And we're very proud to say that, you know, after a really fantastic year, our p and l account is positive positive all the way down to profit after tax. And at that point, I'd like to pass back to Ian to talk about our progress in the first quarter of this year. Thank you, Richard. So q one. First of all, let's have a brief look at the numbers. Numbers, obviously, we're delighted with them. As of Friday, we're at 20,200,000 of revenues, up 54% year on year to the same period.

18:51 And so we can extrapolate out in terms of where we may end up for the whole of q one. So very pleased with that. And if you look at the revenues per working day, that's a massive increase. And similar to, the story for the last year or so, the underlying products themselves are doing well and growing nicely, but it's solutions when you layer it on top where the sort of supernormal growth is. So same theme, very delighted with that set of numbers. But I think more of the q one story is about the other stuff that we've been doing, a lot of which was announced today. So Unix, if I coulda had a template for the type of licenses and capabilities of a European business that would enable us to expand into Europe, it would be what Unix has. It's absolutely the perfect fit for us.

19:53 Why does this matter? Well, because right now, as you as you know, the solutions revenue is the bit piece that's growing the fastest, and that's underlying that is powered by the I band. And the I bands that we issue now are issued out of The UK, and they're prefixed with a GB for Great Britain. We are turning away business literally every single day because we can't also offer an EU domiciled IBAM. If this deal and it obviously is conditional upon approval by the National Bank of Belgium. If this deal goes through, then we will be able to offer BE prefixed IBAMs, and that opens up the whole of the Eurozone. That's just for the solutions piece itself. That's massive.

20:39 The addressable market is, you know, multiples of what we already do, and you'd look at the revenues that we've done in The UK from UK customers and extrapolate out, you can, you can do your own math. We could also sell our other products, be it, you know, traditional international payments, card based products, through that same licensing across the whole of Europe. So massive opportunity there. We also, as part of the transaction, should it get approved, get two new banking partners, ING and KBC. The reason all of this matters is, let's say, today, we decided to, go for a license in Belgium. That would probably take at least a year, maybe longer, just to get the license. You also need banking partners.

21:29 You also then need them to start issuing I bands, and then you need the other banks around the world to recognize those I bands and populate their big tables and swift and everything else. That can take eighteen to twenty four months. You have to think ahead. This gets us there way, way quicker. And I think when you look at the total ball total addressable market for the company as a consequence of this transaction, you can start to get excited. We certainly are extremely excited about the capabilities that this opens up for us. I think it's fair to say that we probably couldn't have done this a year ago, not in terms of finances, but more in terms of bandwidth of management. This will be, you know, a big exercise for not just the exec team, but everyone in the company to get this business where we want it to be as quickly as as we want it to happen.

22:26 But we're perfectly placed to do it now in terms of resources we can allocate to it. The other acquisition we mentioned today is Hamer and Hamer. It's a b to b dominated international payments business. There's two principles that founded it. So they're coming across together with five salespeople that they also have working on it. Very entrepreneurial pair of guys. Done this from scratch without all of the advantages that a company like ours has. This is all self gend, no affiliates. There will be a real boost to our capabilities in terms of sales and also dealing, fresh blood talent. But in pure economic terms, you know, we're paying two times revenue, three times EBITDA. It's a very, very good transaction for us quite apart from those subjective

23:21 measures. Rocket, we actually completed the deal, you know, early q one, and I'm delighted to say that, you know, the first milestone we had was putting Rocket into the, into the payout or the checkout process on, Fairfax. So you can load your Fairfax card now by clicking a button that says instant bank transfer. It'll ask you who you bank with, take you straight into that app on your phone. You press the button. It's prepopulated everything. You can release the money. We've done that to Fairfax first because we want a real live example we can show to prospective customers. Say, look. We use it. This is how it works. It's simple. You'll get paid quicker, cheaper, easier by this route and accepting debit and credit card. Still do debit and credit card.

24:10 Please do because, you know, a lot of people are comfortable with using that, but this gives you an alternative. And, actually, I should mention I've mentioned earlier, what Unix also has is a merchant acquiring capability, which is the the ability to take debit and credit cards on behalf of our customers and push those through. So all of a sudden now, if UNEX goes through, we'll have the ability to say to our customers, not only do we have everything we have before, that once you get paid, we got a global collection account for you. You can move the money around. You can do what you need. We can actually help you get paid in the first place from your customers. So the full suite, if you will, from, first transaction, to, whatever you choose to do with your profits.

24:56 We also sold the cash business. Why? Because it's clearly noncore for us. It's largely b to c. It's you know, banknotes is not exactly the our direction of travel, So it should speak to focus. So in those four boxes, you've got we bought a geographic expansion with more capability. We've bolted on another dealing business, and we we've shown we can do them before. Pick it up. It's literally a lift and shift. You wanna think of it like that, keep the revenue generators move on. We bought a business that has technology that we showed that we can plumb it in very quickly and efficiently. And we've, improved focus by dispersing of a business that's, noncore to to ultimately what we're doing.

25:44 We've also done more product development. A few things are listed there. The, you know, hidden there is the fact that we actually do have our corporate card now live in The US. It is the single currency version. The multicurrency version will come very soon, and we integrated into Xero, as I mentioned earlier. And also in the quarter, quite apart from the numbers, which we've already seen, sales cadence, overall sales discipline since we hired Tom Kiddle as our chief commercial officer. We've got far better visibility now in terms of pipeline and where the business is going so we can sort of forecast out with, with, with more certainty. And, we've got agreement to open the Dubai rep office, So that'll be coming very, very shortly during the year, but we've done all the hard work to do it.

26:39 If we're moving on to the next slide, let's have a look a bit further forwards. So what I want to introduce the concept now, and we very much are I've been saying we're more of a platform business than a product business for some time. But imagine that the center of EQUALS is what we call EQUALS CORE, which is the platform itself, all the settlement rails, the direct connectivity, that stuff, all the licenses, the regulatory licenses, etcetera, the tech itself, compliance operations settlement. And what we have now is the ability to sell what that core produces in four different ways. So top left is what we've always done. So we can sell it ourselves. We can sell it ourselves through our products equals money, equals solutions, fair effects, and card one money. The latter two being the currency card and the, and the current account, product of card one.

27:36 But on top of that now, we can sell those capabilities via API. That's the sort of bottom right. That means rather than someone having to log in to our platform to do all this stuff, they can integrate their platform direct to us on a technological level, much easier for us in many ways because the whole toing and froing is done, you know, over over systems, and so we have lighter touch. We can also white label it, as Richard mentioned earlier. Traditionally, over the last year or so, we've had the white label capability just for international payments, which was, EQUALS Connect. So we're just offering the international payment capability via white label. Now we can offer the full suite and hence why we bought out the minority because we're gonna iterate that white label product to focus more on, higher margin type businesses than just just FX to other brokers.

28:32 And the last top right, bring your own license, is, is basically to to to drop in the notion that we could we can allow customers to use some of the core but not all of it. They might have their own license, so we'll do everything else for them. Or they might have their own settlement rails and licenses, in which case they just want the tech. So platform as a service or payments as a service, if you want to think of it that way. So where we used to have just the top left, we now have four routes to market. The bring your own license will come during the year. The other three, are live, and increasing. We overlay on top of that, the notion that we can expand geographically, and Unix is is the first instance of that. I hope you can see that from where we were to what's in front of us, the addressable market and our opportunities for growth are significant and, hence, our confidence as we look forward from here.

29:34 I think this is an interesting slide. We try to outline here our capabilities on the right hand side with capabilities of some of our competitors. I never have a bad word to say about Alpha. I think they're a very well run business. They're different to us, though. As you can see, we have more capabilities than they do, but what they do, they do extremely well. But if you look at, let's say, the middle one, Clearbank there, Clearbank did a fundraise a year or so ago where they raised more money than our market cap. And yet you look at their capabilities compared to ours, night and day. So I think it illustrates here when you look at the valuations ascribed to each of these businesses that, you know, for sure, we're being valued fairly traditionally based on EBITDA, PBT, EPS, those sorts of things. But the the value of the platform that we've assembled and the capabilities that we've assembled whilst, you know, we are listed, and, of course, there's many benefits to that. In the nonpublic arena, you know, the value of that platform would be, more more ingrained into, the valuation of the business as a whole.

30:50 Ultimately, what matters, is the revenues and profits we can generate out of building that platform. But as I think Richard showed you earlier in terms of what we've invested, you know, that's whilst a decent sum of money, you know, we can do that in solutions in one year, which wouldn't have been possible without without this investment. We move on from there. So we want to grow fast. I won't labor on all the boxes here. You can read those at your leisure. But, scaling sales through tech, HubSpot is a key thing I've been talking about for a year and a half. We're utilizing that way, way better now. And part of what we've done since Tom arrived was not just hire more salespeople, but this whole concept of sales operations, which is optimizing the CRM plus QA ing, if you will. So quality assurance such that we're only pushing, leads from sales into compliance, etcetera, that's that that weed out the stuff that we just don't want to do. We do turn away a lot of business.

31:58 And the more you can triage or refine the funnel at the sales end and have your salespeople doing the kind of almost, you know, we we talk a lot in, compliance and risk about three lines of defense. You could almost use sales team as the pre first line, if you will, then, we are doing more and more of that. Digital marketing, we had an okay capability. Now we have a great one. We've made some really good hires. I'm much proud of that. However, I would I would caution that with saying that whilst that's obviously really important, for solutions in particular and a lot of b to b sales, it is sales. It's people on phones. It's people going to meet people.

32:44 You clearly need digital assets that work. So if you, you know, you're selling to a customer and then they go and look at your website, it needs to work. It needs to sell. But it's an augmentation to the sales process rather than the driver, if you will. So we won't acquire a solutions customer typically by a random person clicking on a link from social media onto our website. Just doesn't happen that way. But it's very important to optimize that whole digital suite, which we now have. And that cascades also into the organic growth slide there, better SEO, better website capabilities, more testing, a b c split testing. And to the extent we have more mature products, for instance, Fairfax, more automated communication, more data as well, far more analytics in terms of working in you know, working out customer behaviors and when to target them with what type of communication.

33:40 And hiring excellent talent. We've got more and more specialist teams. In solutions, in particular, we're hiring salespeople. We tend to look at it vertical by vertical. So we'll try and hire people who have worked in that vertical to sell to that vertical because they'll understand better the types of problem that, businesses in that vertical will have and can say therefore, say, we understand you've got this, that, and the other issue. Here is a platform that will fix it for you. Whilst growing fast, you wanna grow sustainably. So clearly, compliance and operations, very important here. Investment in tech, it's it's fair to say that when we build new products and roll them out to customers, we always, I repeat, always involve all areas of the company when we build this stuff such that it's not just a front end with no back end. It'll cascade all the way through, to finance, operations, etcetera.

34:43 So we don't put stuff live and then create problems for ourselves. Feature space, which I mentioned there, is a state of the art transaction monitoring system used by some very large banks and financial institutions, has machine learning capability. So as we automate more stuff, and get bigger, having the investment in that type of capability, we think, is, is more than worth it. And in operations and settlements, themselves, we're integrating into more and more direct settlement routes directly, mostly via Citibank. So we'll have more instant transfer currencies. We automated the process of payments in to start with because the the key initial product was this concept of a global collection account.

35:36 The next thing we're doing during the course of this year is to automate more of the payments out. And we do next, we get additional banking partners, but we're always on the lookout for more because we're we're big enough to support many now. Scalability, we've built a platform for scale. As Richard says, you know, we've we've doubled in a couple of years in terms of volumes through the platform. We can do a lot more. The tech is you know, we've basically removed the vast majority of technical debt now. So we have an evergreen so called evergreen technology stack. And we the vast majority is in AWS, and we can scale that up and down as we need. Compliance and risk, we've got 32 heads in risk and compliance. It's over 10% of the workforce. Of course, you'll never ever catch everything, and it's a it's a constant battle.

36:25 We do train our people religiously. Everyone has to do monthly, compliance courses. People do not qualify for an annual pay review unless they're up to date, but it's a never ending task. And, fraudsters are extremely sophisticated. So, unfortunately, you can never catch all of it, but we are investing all the time to make sure we we are best in class, if you will. And, you know, right okay. 32 heads is great. 10% of the workforce is great. I'm constantly trying to upgrade the people we have in there. So it's not just headcount, but also experience to spot the type of patterns. And if we can automate, which we are doing, more of the kind of easy to automate checks, then we can have more experience in terms of people looking for patents.

37:19 And regulatory compliance is a focus. We've increased the headcount of that within the '32, during 2022. Consumer duty is coming in in The UK, supposedly in in July from the FCA, which, again, ups the ante in terms of the protection of, of consumers as we go forwards. Also, we have to comply with operational resilience. ISO 27,001 is, in flight to land this year. It's basically the highest level of digital security badge you can get. So we expect to get that, and that will be another, to the badge of honor, if you will. And all the while, we have to keep an eye on what's coming.

38:06 The FCA are obviously more and more focused on payments overall, which we we welcome. There's authorized push payment fraud regulatory changing coming, coming. Again, you know, it's a it's a very painful area for many people to the extent they've been fallen victim of it. And senior managers and certification regime may come in for payments firms, may not. So there's a lot of debate about it. So we have to keep across all of that type of stuff and do so. And so that leads us to the focus areas for this year. Obviously, EQLS money and ergo solutions will be pushing as hard as we can whilst looking for more and more, efficiency and expanding overseas.

38:54 And this concept of embedded finance, is broadly the ability to offer the nonfinancial institutions financial products. So, you know, recently, Uber now has an Uber card that it gives to their drivers. We could do that type of thing for people and allow them to consume our capabilities, payments as a service. So we're moving, as I say, more and more towards being a platform business with annuity revenues. So to wrap that up, what is EQUALS now, it's a strong growth company. I think we've shown that consistently with 50% type growth numbers, turnover, revenues, profits, all moving, and distributable reserves in the right direction.

39:40 We're generating cash whilst investing, as as Richard mentioned. As we sit here now, it's 18,300,000 in cash, which is 10 p a share, which one could say isn't necessarily reflecting the share price. This is all built on the platform. The platform is the key, equals core that powers everything that we do. We'll continue to invest in it. But we're growing with control because we take care of that. We know that you could grow and, leave things behind. We don't do that. We do have a strong compliance culture, and we will continue with that. We have numerous external audits, which you don't have to have, we choose to have, and, have good dialogue with the regulators.

40:26 And we have a proven track record delivered by a stable team, you know, strong, consistent market beating. And although we're only not even at the end of March, we're ahead of expectations, which we've told the market for this year already. So, hopefully, you can all see the direction of travel. So on that note, I'll That's great. Pass over to Mark. Thanks, Ian. Richard, thank you very much indeed for updating investors this afternoon. Ladies and gentlemen, please do continue to submit your questions. Just using the Q and A tab situated on the right hand corner of your screen, but just while Richard and Ian take just a few moments to review your questions submitted already. I'd like to remind you that recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard.

41:14 Mindful of time, but of course, Richard and Ian, you can see you've had a number of questions from investors. So firstly, thank you to everybody for engagement this afternoon. If I may just hand back to you both. And if I could ask you just to read out the questions and give a response where it's appropriate to do so, and then I'll pick up from you at the end. Thanks, Mark. Rich, I'll read them out if you like. Do we first one is do you ant anticipate ever paying a dividend? I think the honest answer is yes. As we sit here now, and hopefully, you can see that whilst we're generating cash, we found good uses for it. That won't always be the case. And if we carry on growing like we are, we'll be throwing off even more cash. So, we won't just sit on it for the sake of it. And if it's so I would like to be paying a dividend if I'm honest.

42:02 Richard, I don't know if you want to add anything to that. Yeah. I I I think a medium term objective is to pay a dividend, but we are conscious that we can use our cash very wisely, the type of acquisitions we've done so far. And these low level acquisitions do really require cash, and they are more accretive than I think for us more accretive to our share price, these acquisitions, than simply paying a dividend. Thanks. There's a couple of questions which I'll paraphrase, noting that Alpha forecast, they might earn 45,000,000 of interest, on customer balances, for the next twelve months. And, where are we on this? I'll let Richard talk about it in a second. But as both questioners have pointed out, we are a different animal to Alpha. And where they've gained, large customer balances tends to be in the fund administration space, most of all.

43:10 When the euro was negative, we absorbed that cost and Alpha passed it on to their customers. And so I get their stance. Ours is somewhat different in that we we categorize interest as part of our revenue stream because we we took it as a cost. And when we're negotiating with people, we bear it in mind. Our number is nowhere near theirs, but which will give you a little bit more flavor. But we allocate it to the business line that's generated the balance if that makes sense. So if it's a solutions customer that's holding x y zed with us, then it'll be part of the solutions revenue. Do you wanna give it more bit more color, Richard? Yeah. Yeah. I mean, in in the same vein that we not to publicly analyze either the industry sectors or the revenue con components, I would echo Ian to the extent that we do get interest, and and we we do. We got a seven seven figure sum last year.

44:09 It follows the revenue line, and it's quite often a negotiating point with our customers as to how we build them. So it's it's definitely good for us, and it's definitely helped a bit. It's not anywhere near as material as it is for those guys. So and that may change over time. Now would we go out and try and win business for the sake of acquiring bigger balances? Maybe. It depends on your view on the interest rate cycle and where we are. I wouldn't want to be saddled with, with customers that deposit a load of money with us where we earn nothing and we're not charging them anything else. So it's a moving feast. Yeah. I think the other interesting thing about what Alpha has said in the week is that they plan to move up to the premium segment of the main market. You you may know that there are two segments of the main market, the standard and this premium.

45:05 Now by doing so, they will void their inheritance tax benefit by being on AIM, which some people have remarked that this possibly represents a good arbitrage to sell alpha and buy buy EQLS. I couldn't possibly comment any You can't possibly comment any further. No. No. But that would be our take on the alpha statement. Similar question, but slightly different. What are you as a board together with Canaccord doing to promote the profile of the company given that your results performance are all excellent? Is there a prospect of the dividend? At what stage would you think of implementing one?

45:50 I'd give the same sort of answer. Mean, the business, we don't need to be a household name in terms of how we go about acquiring customers. And we are well known in the payments industry and getting more well known, and we'll continue to attend trade shows and do that kind of promotion. But as I as I said, I'd like to be in a position to pay a dividend. And then if we grow like we think we can, then the cash generation carries on as it is. But we'll if we could find a a good acquisition to do, we'll always do that first, if that makes sense. A question, why was the deal done today in shares rather than cash? The honest answer is I wanted to tie the principles of Unix into, so skin in the game, if you will.

46:44 So it suited us better rather than just acquiring the license, and they will run off to the hills, especially in light that we need National Bank of Belgium approval for the deal, it made sense to lock them in in that way. It's very small amount of dilution, as you can see, if we get approval less than 3%. So, in that instance, it made sense. But, obviously, I'm very, very careful, with the equity of of my shareholders. Hayman Hayman at three times EBITDA looks like great deal. How deep is the market for similar? It it it is, but you need you need a few things before we'd acquire a business.

47:31 First of all, it has to be b to b more than b to c. We're not really interested in acquiring businesses that are b to c focused, which second part of that question says, you know, people on the white label platform, they tend to be a bit more b to c, for our taste. Second of all, you want the people that you're acquiring to be people that you'd want to have working for you. So cultural fit, attitude, general general way they go about things, and they definitely tick that box. And third of all, they gotta be sensible in terms of what they're worth. You know? Some of them are just a little bit bonkers about what they think their businesses are worth. This is a very sensible pair of principals who recognize that on our platform, they could make a lot more money, and that's kinda capped out.

48:21 So we're absolutely delighted with them. And, yeah, we could do more. We will do more if we find them, but it's you gotta have those three things. The next question is about ROCKET. When do you expect it to be fully intro integrated in the EQLS offering? Well, the stage one was getting it into Fairfax, which it now is, which is great. So now we can say to our b to b customers, here's the thing. You take your payments by debit and credit card. Fine. But we've got an alternative which is quicker, cheaper, and, easier for you. So, why not try that? So that'll happen during the course of this year. The other thing we want to do with it, right now, it's sterling, open banking sterling. We're gonna add euro functionality into it, so it will, definitely marry up together.

49:14 Question next one is cross selling opportunities synergies from Haymer and Haymer acquisition. Are there cross selling opportunities? Definitely. The short answer, they're selling vanilla FX products to a b to b client base. So, yes, for sure, we'll be able to sell more stuff to their current customers, and they'll be able to acquire more customers by having more stuff to sell. Next question is why can't big banks replicate what you do? I mean, we're we're a big customer of big banks, and each one of them will give us one account per currency, and it takes forever to to open them up. And, you know, they're constrained by their systems, and they're constrained by the rails upon which they operate.

50:09 We're not. So they just can't. And, actually, the most enlightened of them is probably Citigroup that we're dealing with currently who aren't trying to do what we do. They're happy for us to do what we do and for them to help us. And, actually, all the banks have a similar sort of attitude. They're not trying to do it. Now does that mean that a a large bank would never buy us? No. I don't think we should ever exclude that, but, that's really why they can't do it. An Feet article last week This is about the FCA letter. There was a a letter written by the FCA recently to the CEOs. It was you know, it said, dear John, it was dear CEO.

50:56 And it was to all payments companies basically saying that the FCA, you know, is looking at the space. The the intention of the letter really was to allow the FCA, should it so choose, to to go into any company, should it so choose, and have a deeper look. We're in regular dialogue with them. They're broadly I won't put words in their mouth, but, and I'm broadly happy with what we're doing. But I welcome this attention from them in terms of increased focus on the space because particularly in terms of e money licenses, there were a lot of e money licenses handed out by regulators around the around the globe, sorry, in Europe because it's, it's very much a European construction.

51:44 And, having increased, observation of that and a little bit increased focus, I think, can only be a good thing. So, we welcome it. Yeah. We welcome it. What area of your current business now would benefit most from a small bolt on acquisition? Yeah. The international payers business. The easiest way to buy more scale and more more turnover and profits is to buy smaller FX businesses. How last question is, do you think the value of customers recognized in the share price? No. I don't think it's got anything to do with share options, which is another part of the the question. I think I think, you know, if you think back not too long ago, we were at 20 p, and I think people have made look at the chart. They think that's gone a long way.

52:39 You know, let's sell into some into some good news, take some profits, realize profits, especially if they got losses elsewhere. So I think there's an element of that and a certain resistance levels at 90, maybe a pound. So So we have to get through, those layers. And let's not forget also we had to place during the course of 2022 the entire position of Crystal Amber, which was, you know, basically 25% of the issued equity of the company, which got placed over the course of the year to various institutions. So I think there was a kind of a a pause for breath. And maybe, you know, the market wanted to see how we would do for first quarter had our growth stalled. So, you know, if you look on the chat rooms, which try not to do, but people tell me anyway, you know, you know, q three and q four were sort of flattish, but albeit at big numbers.

53:33 So the line of sight to growth in q one of this year, I think, has removed some of the doubts. So, hopefully, we can push on from here. I think that's all the questions. You've been very generous in, and and, Richard, you've taken those questions from investors. And thank you very much indeed once again for everybody's engagement this evening and bang on time as we come up to 7PM. Ian, I know and Richard, know investor feedback is particularly important to you both, and I'll shortly redirect investors on the call to give you their thoughts and expectations. But I wonder before doing so, if I may, Ian, just hand back to you for a few closing comments. Yeah. Well, firstly, I would like to thank, everybody for taking the time to to listen to us. It's been an exciting day for us, not just the results for last year, this quarter and the, as you can see, we've been very busy and the outlook as we look forwards. So for those of you who are shareholders, thank you for investing, and I hope, we're justifying your faith. And for those of you who are thinking about it, hopefully, we've demonstrated that we're a a growing company with enhanced growth potential now with everything that we're opening up. So thank you again for your time.

54:50 That's great. And, Richard, thank you once again for updating investors. Please ask investors not to close this session as we're now automatically redirect you for the opportunity to provide your feedback in order the management team can really better understand your views and expectations. This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of EQUALS GROUP PLC, we'd like to thank you for attending today's presentation. Good evening to you all.