Eql Pharma (Stockholm:EQL) — Interim Results

0:00 Good afternoon, ladies and gentlemen, and welcome to the EQUALS GROUP PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time. Just use the Q and A tab on the right hand corner of your screen, type in your question and press send. The company may not be in a position to answer every question received during today's meeting. However, the company will review questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll, and I'm sure the company will be most grateful for your participation. And I'd like to hand over to CEO, Ian Stratford Taylor. Good afternoon. Thanks, Mark. Welcome, everybody. Thanks for listening to us at this sort of antisocial time of day. We've had a busy day, as you might imagine.

0:46 Richard, if you just wanna say hello also before we get there. Good morning. Well, good afternoon, everybody. Early evening. Early evening. All of the above, depending when you're listening to it.

0:55 If you could flip the slide, Richard. So we're gonna whisk through a macro view of where we sit within the payments universe, what our products are, how we differentiate ourselves, how that leads to the platforms that we now have, and really where our growth is gonna come from. Quick operational review of the first half. Richard will then go through a bit more detail on the financial review of the first half. I'll sketch out, how we've done in, q three to date, the product road map, and how we're gonna grow and then wrap up at the end. So where do we fit? And this is you know, it would take you a little while to get your head around this. If you look at the axes here, x axis is, like, on the far left, a complete one product type business, and on the the far right, a platform based business, and then y is b to b or b to c. And you can see where we started off, bottom left corner.

2:00 And, you know, this is by no means exhaustive in terms of the of the competitors that we put there, but we were a card business, b to c very much. So we're a single product. And you can see how cluttered it is in that space. Revolut came in 2016 or so with a freemium model, and it was clear to me, that we needed to iterate away from b to c towards b to b. And that was the first leg of that journey as you can see us, sort of making our way up towards '2 2018. And around that time, it was also clear that we needed to add in further capabilities that drive us further over towards the platform set.

2:45 Clearly, diagrams of this type are designed to tell the story they want us that we want it to tell. But in this case, you know, what you can see is some well known names on there that we've sort of plotted a course into an area where there isn't a lot of clutter. There aren't a lot of competitors. People are always asking me, who who are your competitors? And I say, well, it's a mixture. And you can see it now. You know, we've got Argentex. If you look on top left. You know, that's just an FX business. That's all it does. Even Alpha is a payment only. It doesn't have cars like we do and isn't isn't as much of a platform. You've got various well capitalized in terms of funding, but at least for now, fintechs like Pleo, DV.

3:33 There's also another one not on there called Soldo, which all do corporate cards. They do one thing, and that's all they do. And, actually, they don't do it particularly well. You got Wise there, which is more b to c dominated, you know, in the, bottom left quadrant but towards the middle. And each of these businesses compete with us in various aspects. Funny enough, I got a a very nice email today from city Citigroup saying, oh, look. You know, they saw the deck, and it's very nice to see that you're on our tails because it kinda looks like we're we're trying to intersect with them. But it does show how actually the partnership we have with them is actually productive for both of us. We can take on business that they can't do directly, and we're a trusted partner there. So, hopefully, that gives you some flavor as to where we sit within the overall space and some businesses that you've heard of. I can flip the slide, Richard.

4:30 So the products we do, the three main products, very simple in in many ways, international payments. So wiring money, you know, from one place to another across currencies, either spot, so immediate movement or forward contracts. You can self serve or you can speak to a dealer or a hybrid. And we have a white label offering in that. That's the EQUALS Connect business where effectively our customers are other smaller FX businesses who have their own customers, and we facilitate that on our platform. We have cards that can be b to b, so corporate or b to c retail, which is the Fairfax card. The platform we now have can support debit and prepaid physical cards or virtual tokenization is basically Apple Pay and Google Pay.

5:19 We have all of that. And we've internalized a lot of the supply chain, which, improves the economics. Then we have current account products. So like a bank, but we can't lend money, and we can do all of that under what's called an eMoney license. And as we've just seen, competitors can do, you know, typically one of those three things, but we do them all together. And so first part of where we differentiate is that we have a platform that wraps all this together. And, basically, our customers can send money out. They're in different way. They send it out via bank transfer or pay by card, which is increasingly important these days. We've also, invested in the last three years in connectivity where we see the benefit we will integrate directly.

6:09 Good example was into faster payments in 2019. And this year, we announced that we're directly into SEPA. We've also invested heavily in compliance, to make it as easy as possible to become a customer. I'm sure we've all all experienced becoming a customer of a bank can take weeks, wet signatures, branch visits, you name it. That's if they'll take you on at all. We can automate the vast majority of that, and we have highly skilled people that can do what's called enhanced due diligence where necessary on the more complex cases. And all the while, we're very transparent with the banks that we deal with to make sure we're doing what they want us to do. And last but by no means least, people.

6:55 A lot of the fintech businesses I mentioned earlier, you can only self serve. You download the app, and you you do it yourself. There's no one to speak to. We have fintech capabilities, fintech quality platforms overlaid with human interaction, and I think that's a real positive differentiator. You flip the slide, Richard. So you take those products and those differentiators, wrap them together, you get the platform or the platforms that we now have, so EQLS money and EQLS solutions. It's a unified platform combining account to account and card payments, all underpinned by this concept of an own name multicurrency iBAN, which underpins everything that we do. Our customers can have one own name multicurrency iBAN or unlimited if they want, and they can have unlimited subaccounts.

7:47 It costs us literally nothing to open one up. It's ledger entry. That's all it is. It's just a a string in a system. It's why banks charge so much for it is who knows? The platform itself is highly configurable. So not only can we set up whatever account structure a customer needs, but we can also customize approval hierarchy. You know, we've got one customer that literally wants 10 stages of approval before releasing a payment. It's no problem. So however a a business is set up, we can support it. Overlay that with rapid onboarding and enhanced due diligence capability, and you get quite a compelling case. So then we have the EQUALS money platform, which is the bread and butter, if you will, to SMEs, everything I just said above, and EQUALS solutions, which is a to larger corporates with typically more complex problems to solve, typically global in nature, receiving money from all over the world and having to disperse it elsewhere and move money around quickly.

8:53 So we're supporting a lot of those, and we're in the process of making it so that they don't necessarily just have to use our platform. They can consume this capability via an API, which will further drive growth as we move forward. Next slide, please, Richard. Just a quick slide on on revenues showing quarter by quarter and the growth. Don't need to labor on this. I think a lot of this is in the r and s, which I'm sure you all have read. But you can see how solutions is really, really grown as has white label, but the trend everywhere is is positive. We'll get to q three later in the piece, but just, you know, I'll I'll mention it here as well. You know, whilst h one, it's fantastic performance. I'm really proud of what we've managed to do so far in this quarter, in, let's let's face it, testing economic conditions and also, a lot of people being away in August.

9:51 Flip to the next slide, Richard. A little bit more, graphical breakdown for you showing in the top left, bar chart, where which sort of product has grown the most. I worked obviously, it's international payments and solutions. I draw your eye to the banking one where you can say, okay. Well, that's flatlining. Get rid of it. The banking capabilities, without them, we wouldn't be able to do own name iBands and everything that's happening in solutions. So what we have there is a platform that's supporting those revenue lines. That makes some money in its own right. And our strategic internal objective is to keep it around flat year on year so it's actually doing exactly what we want it to do. So it's it's it's not a negative.

10:37 We've also attempted to start producing a little bit more transparency on customers, I. E, where we make our revenues from. So you've got, in that bottom bar chart, the sort of micro corporate slash, b to c section, then corporates, then a larger corporate, which is obviously mostly solutions, and then the white label just so you get a flavor as to where the revenues are coming from. Flip slide, Richard. Just a few, narrative highlights for first half. Strong growth. Obviously, all the KPIs, transaction volumes through through our through our systems, revenues, profits, be it EBITDA, and also statutory profit, as you as you can see, and cash generation, all strongly positive.

11:26 I think historically, maybe the last gripe that some shareholders might have had is, okay. Well, you know, the numbers look good, but you're still making a loss at PBT. That's no longer the case. So everything's flushing through now, and the business is set fair. On the payments platform, we completely upgraded the end to end self serve journey for in terms of user experience, which is a big exercise, and it's way more intuitive now, which will lead to further growth. And we've tiered our customers such that we have now aligned the service they get with their wallet size. So someone that's you know, we're not gonna earn much from. We we may not allocate a dealer to, whereas someone we're gonna earn a lot from will put the best dealer we can on it.

12:12 On the card platform, we've now got the ability to issue shared cards as well as individuals. Some corporates prefer to have one card that, you know, a few people can use in a department or individual as we already had. We can do all of that. We've got physical and virtual cars live, all multicurrency between one currencies. The platforms, so equals money and equals solution. We had great capabilities in there. Obviously, still do. But it was the reporting end of it needed a bit more work, which we've now fixed so that, you know, we can say that we've got a full multicurrency business account with statements. So we've kind of bankified the reporting end of great capability, if that makes sense, which, will obviously, again, help grow the product.

13:02 We also have brand new native apps for iOS and Android for EQLS money. And the API access now is launched. We have the capability. Everything we can do in the platform is now you can consume via an API. We've got a couple of friendly corporates in beta test just to make sure it all behaves as it should before we try and push that further in terms of rolling it out. Connectivity will always be a key theme. We added SEPA at the beginning of this of this beginning of the first half. SEPA is the payment network in, across Europe. We're actually in SEPA instant, which actually most banks are not. So we've even got a superior capability to banks. Essentially means separate inbound and outbound.

13:52 Euros will move in and out of us instantly, which obviously helps corporate customers of ours manage their working capital. We've now got one process across all our card schemes, which is Marketa. And in fact, you'll see later that the tech stack for cards is now standard wherever we choose to put it, which, is a massive achievement. And we've done the first v one of accounts integration. That's actually into a software called Xero. Accountsi packages are super important for us in that if we are an approved provider to an accounting platform, that's a selling channel. We will be able to pick up customers, through their customers and also widens the universe of who we can sell to in that, some customers will ask, do you integrate to Xero? We'll go, no. And they go, sorry. I can't use you. Whereas that will then be removed.

14:50 Sales and marketing, big investment into data in the first half. The data team is fully staffed now producing ever more fantastic KPIs I get. Every two hours, I can see how we're doing revenue wise. I'm, you know, really finger on the pulse in terms of what's going on and more and more insightful analysis that we can use to optimize how we manage the business day to day. Compliance almost appears on every slide because it's that important. We're investing a lot. We automate where we can overlaid with highly, highly skilled professionals to look at the the more esoteric cases. And we're putting in transaction monitoring system called FeatureSpace, which is sort of gold mark industry standard machine learning type of software that's coming in.

15:44 Well, the main part of it's done already coming in the rest of the year. On the people team, we've refined the exec structure. So I've with the hiring of the chief commercial officer, I think I've now got an exec that's really, really strong. And, actually, the level beneath the exec is also strong. So we've got great bench strength to manage the business as we, you know, go through this rapid growth phase. We've also moved towards having an annual pay award and three sixty degree appraisals. Someone asked me in the analyst meeting, does that mean you're becoming, you know, like, sort of bureaucratic corporate? And the answer to that is definitely no. You know, I want to retain the the feel of the company, which is sort of familial, business, nimble, all in it together.

16:33 But, you know, I think having a proper properly run appraisal process was important. People need to know how they're doing, and it sort of we've reached that size that that's important. So I'm glad that we did it. Flip the slide, Richard. So on that note, I'll pass over to Richard for a deeper dive into the numbers. Thanks, Ian. And so what Ian has done so far is is talk to you roughly about what contributes to our revenue. So what I thought I'd do here is just start off by just reminding everybody how we get our revenue, in which product, and what sort of revenue silos. So that this is a mix. You can see there are 21 blobs on this on this slide, but there are many more underneath all of these.

17:24 And these blobs could really be broken down into three main categories. The first four, FX spreads going down to ATM, are really transactional driven revenues. Customer spends money in an ATM. We make money on the card.

17:41 Customer or client doing a foreign exchange transaction in international payments, white label solutions, travel cash, all cards, we make a spread. The the second revenue component is fees, and we earn both account fees and additional fees across a variety of products. And that fee basket now represents about 15% of our revenue. And then bringing up the rear of things such as partner rebates from Mastercard and similar and corporate interest across both the card platform and banking platform, really relating to how we hold our money. And that represents about one and a half percent. So the bulk at the moment is transaction transaction amounts, but fees will become more and more important as we go forward.

18:33 And so I will now take you to the next slide, which tries to give you a sort of fag packet review of how that translates into revenue, profits, and cash. So at the top of the slide, this is quite stylized, this one, but it attempts to show the sort of underlying transactions and deposits per day in the first hundred and twenty three trading days of h one. I won't dwell on the underlying numbers, but that converts to revenue per day. And so we hit 255,000 revenue per day in the first half. In q three, we've done 289,000.

19:22 We also show on this slide the various gross profit margins, which vary, obviously, and they vary quite a lot. You can see that the banking business has the highest gross profit margin, but it is the most mature. The the fastest growing is white label and solutions, which appear to have lower gross profit margins, but actually, they have higher EBITDA margins. And that is really witness where you can see the adjusted EBITDA there of 4,900,000, which is significantly up on the same half last year. It was 1,600,000 in h one twenty twenty one. And, you know, what drops down to cash generation, you can see there. And of the 1,400,000 of earn outs, that's it. There are no more until such point in time where we might do another acquisition.

20:23 So that converts into a real high level revenue and p and l summary. So revenue, 86 up half year on half year. Adjusted EBITDA, up 203%, which rather echoes my point about the profit conversion. Delighted to be able to announce a positive EPS, and that flows through into positive operational cash flow and a very robust cash at bank figure at the June 30. Since when we have repaid in full the CBILS loans, so we have no borrowing and no debt.

21:07 Here's a slide on the sub slicing of our revenue, and we've done it in a couple of ways here. Think of it as a matrix. So the top box is really the traditional way we have displayed our revenue, and you can see very clearly what has been growing international payments, including white label there. And just as a sort of touch touchstone, about 78% of that revenue came from spot transactions. And back in the pre COVID days, that would be probably 90%. So the value of that for us and you as shareholders is that forward transactions are more profitable, And so moving the dial from 10% to 22% is another feature of our revenue growth.

21:57 And then in the second half of that slide, you can see the sort of composition of customers. Now this is, by its very nature, somewhat subjective. You know, what is a small business? What is a corporation? What is a larger corporation? But we know what it is internally, And larger corporations really mean large, high volume, reasonably complex. So you may recall last year in October, we did a material trade, and, you know, that that type of enterprise would be regarded as a larger corporate. And interesting to just end this slide on showing that the white label clients much higher degree of spot transactions as we would expect than the the core international payments book.

22:49 And on that note, I will show how we get from revenue to adjusted EBITDA. And in this slide, we've done it by quarter as well So you can see exactly the revenue and cost trends. I think the important thing about this slide, which I quite like to show, is the comparison of the costs moving from q one twenty twenty one of 3.6 to 4.7 in the second half of twenty twenty one, where we had done a big recruitment drive. We spent much more on tech. We spent much more on compliance and professional fees. And that level of net spend has broadly stayed flat in the first two quarters of twenty twenty two. It is moving up. We make no apology for investing more in compliance and onboarding and the sales function, but it's all within our market expectations of profitability.

23:50 And some people like to see a sort of UK GAAP measure of profitability, so we show on this slide the adjusted EBITDA after rent. We've also shown here a comparison between the last half of 2021 and this half. I'm not gonna go through this slide line by line, but it rather echoes the point about growth, 13% on the last half, and it also echoes echoes the sort of conservative points we're making about staff increases and compliance, etcetera, etcetera. And at that point, I will come to my last two slides, which are showing how the profitability converts into cash.

24:35 I've mentioned the the earn out being a a sort of one off, and and that's clear to see on this slide here. We do capitalize some software. And, course, we do. It's about the same run rate as the second half of last year. And we are taking the advantage of our profitability and cash generation to accelerate some of our development, which is what Ian has spoken about, and I think we'll come back to in a moment. So, again, a very, very healthy cash position. Cash isn't the full story, of course. Liquidity is much more important, and this is a snapshot of our liquidity at the the June 30. Of the the net position, I'm often asked, you know, how much cash could I take down to the bookies?

25:27 And it's about 10,000,000 at any one time, which means that we've got a very, very robust liquidity position, and that allows us to really consider investments. We may think about a dividend policy. We can now. We can invest in more marketing. I mean, we are going, for example, to to the boat show in in Southampton in in late September. You know, we've decided that that's a really good opportunity to to focus on that market, and we can afford to do so now. And so at that point, I'm gonna pass back to Ian and his look forward position. Thank you.

26:12 So the first slide I've alluded to q '3 so far this year. I'm exceptionally proud of what we did in h '1, but, really, what we've done in July, August, and September to date, I think is amazing, and points the way forward. You know, clearly, we could have taken the decision to upgrade again, today. However, we you know, given the uncertainty in the world, we thought it's prudent to just, wait, a little bit longer and see, you know, get q three over and done with and and see see where we are before we do that. You can see we're running around 6,000,000 a month so far this quarter.

26:59 And so if we did that for the rest of the year with no growth, that would be 36,000,000. It would take us to 67. I think the market consensus around 65. So, you know, we're being cautious. I think it's the right thing to do given, you know, the uncertainty that's around at the moment. Nevertheless, 55% increase q three on the same period last year. Let's not forget that q three last year was when we started to take off. So this is 55% over a much bigger number than we had in q one and q two. So I think I think we should all take a lot of encouragement from that. And if you look at the year to date number, 44.7, that's more than we did in the entirety of last year.

27:47 And that's entirety of last year included the material trade around 1,500,000. So we are really motoring still, and the trend is is highly positive. We've drawn out the solutions number and travel number. Just solutions is the I like to characterize that the business, the sort of legacy businesses, if you wanna think of it like that, or the product driven businesses are all performing well. But we've overlaid 9,400,000 of revenue from solutions on top of that. So the business would be doing great without solutions, but with it, it's doing super great. And the numbers there are a writ large. And the travel revenue, there were a lot of people suggesting maybe in 2020 when COVID hit, shut it down, get rid of it.

28:37 We didn't because the infrastructure we need for travel cars is the same as we need for corporate cards, and it doesn't really cost us a fortune to have kept it alive. And it's starting to pay back now. We're I would say we're at eighty percent of 2019 numbers now, something like that. So getting back to pre COVID type of activity. But this slide and these numbers should give current shareholders and prospective shareholders a lot of encouragement. Next slide, please. So what are we gonna do for the rest of this year and beyond? A lot. There there will be a lot of new functionality coming out. I had a session yesterday with my chief product officer where I looked at the technical road map, and there's a lot of things coming.

29:31 Some may be announceable, some not, but there's we're overlaying more and more functionality and capability onto what's already selling well. So I'm optimistic. On pay the payment side, $24.07 FX, you might think, well, that's everyone does that, don't they? Well, they really don't, especially when you take weekends into account. The markets are closed. So if you work well enough with your liquidity providing banks, it is possible to provide that pricing. It's typically wider spread than you would get during a normal working hours. But, I think that would be an important capability to add, and we can do it without taking risk ourselves. And we'll further refine the platform to make it even better in terms of the user experience. But, the core capabilities are all there.

30:18 On cards, we're as I say, we're now on a single, unified platform structure. We will self issue, and apart from in The US where we will issue via, you know, the bank we we partner with there that has the relevant licenses. But the tech stack is all new, so called evergreen, I. E, as new tech comes in, it's it gets upgraded for its architect in such a way that's easy to do. So it's not like, you know, in ten years' time, we have to rebuild from scratch. And that unified tech stack allows us to put that card businesses in other locations should we choose to do so. You overlay on top of that that we can now white label for larger partners via API integrations.

31:09 It could be in some geographies we decide we don't wanna go there ourselves, but we can allow someone else to use our tech or our platform to do it themselves. Or we could do both. So we could go into a country and also enable someone else for our API to do the same thing. And once you start thinking about the capabilities and the possibilities of that, it starts to get quite exciting. On which note, then international expansion, we will be launching our card product in The US this year and the full EQLS money platform. That does not, repeat, not involve a ton of costs. We don't need boots on the ground there. We can do it all from here. We know we have demand for the products, based on the customers we already have, so we can do the classic land and expand.

31:58 You know, we can get live, have the product up and running. We can, sell it via our affiliates to start with. And if we see traction, we can add resource as required. So it's not a bottomless pit of, of of money going into some, white elephant, US venture. Equally, in Europe, that seems an obvious business case to expand the capabilities and have a European license. But just because it's obvious, we don't won't just decide to do it. You know, we've we're coming up with a far more robust business case internally, and that that's the responsibility of the chief commercial officer to put together before we go to the expense and effort of of doing it. But it seems obvious that we will expand geographically rather than just being UK focused as we move forward.

32:52 Connectivity is always gonna be a theme. My CPO coined the phrase today, which I rather like, that we can collect funds globally but distribute them locally. So we allow, our customers to you know, if they're receiving money from all over the world, receive it all into one account here, one account, multicurrency in their own name. Easy. Easy. But if they need to make outbound payments, if we can do that locally, it just moves quicker. So, that's a great sort of, sound bite for what it is we're trying to achieve. And that's you know, ultimately, that translates to better working capital management for the underlying corporate. We'll also do more account c platform integrations as I alluded to.

33:37 We'll continue to invest into tech. It's driving it's driven us to where we are now. We'll continue to drive where we're going. Platform as a service, the the whole API suite that we've built out now, you know, there's a reselling opportunity there. We are keen to have more fee based revenues, as a percentage and and to move that needle such that annuity based. We get paid over the weekends when the lights are off. Love that type of business. And we have full white label capabilities now. So that's an exciting, additional, way to to, to earn revenues. Efficiency gains. The tech that we're producing isn't just for the customers, also for ourselves internally, more straight through processing, more capacity.

34:29 You know, that'll either reduce headcount or more likely free up headcount we can use in revenue generating roles. And all of which means that, you know, our cost base will not or should not grow as fast as our revenue top line, which will improve the profit percentage that Richard has alluded to. People, we can't get anything done without good people. Touch wood, and I am genuinely touching wood here. You know, our staff turnover recently, you know, this year has been pretty good, I e low. The retention measures we put in place last year, LTIPs, SIPs so that people have been here more than twelve months and all got shares seem to really be valued.

35:15 We're a good place to work. You know, we're reading in fact, One of our shareholders who I know is watching sent me an article in the Feet today about Revolut, you know, laying people off. A lot of fintechs laying people off. You know, we're a good employer, growing fast, profitable. It's a good place to work. And I'm a big fan, always have been, of training, professional development, and sending people on courses and education in general. So we'll continue to do that. Next slide, please, Richard. And just in some other growth measures, data and KPIs, can't overemphasize the importance of them.

35:56 The data team now is churning out way more, analysis. And even we're getting to the stage I mentioned machine learning there, you might just think that's just a load of puffer nonsense. But we have, the ability now to spot customers who might churn out so we can we can go and sort of communicate with them before. So we're looking for telltale signs that predicate a customer that will become dormant or churn out. Stuff like that, which you can then see how that's gonna improve the revenue we make out of existing customers. New customer acquisition, we are we've aligned now what we do in marketing. You know, we're b to b focused, but we're still doing a lot of b to c stuff in marketing that we'd always done.

36:45 Whilst it works and is okay, it's not the thing that's gonna move the needle as we need it. This is all about aligning our resources,

36:54 because we don't have unlimited resources as you well know, but aligning our scarce resources to where we'll get the biggest bang for our buck. Existing customers, whole win back program, you know, identify dormant customers, communicate with them, try and win them back, or it's another place where we think we can make, significant additional money. Marketing, I think I've covered, but, generally, the marketing focus now of b two b is industry specific. We're going after particular verticals. Richard mentioned the boat show. Actually, that's we're sort of the lead sponsor with British Marine. So we're getting through industry bodies, if you will, accounts, the associations, etcetera, to use those bodies to distribute our message.

37:46 And going and attending conferences is, I know it sounds, the lowest of low tech, but it's a great way. Go where customers congregate rather than trying to find them digitally. Our customers or our target customers tend not to be we don't want, you know, the sort of particularly, we don't want, you know, that's a two employee coffee shop on Bromley High Street. You know, we can't make money out of a customer like that. We'll take it on if they if they come that way. And that's the sort of business that tends to hunt online, looking for a solution that they can use themselves. And so it would be a sort of Revolut customer or a Pleo or, know, those type of fintech y customers. That's not where we're fishing. We're we're more likely to get a customer, you know, who we call directly, be it the MD of a business or, you know, the chief financial officer, something along those lines.

38:42 So the marketing and the digital presence is there to augment that direct sales, if you will. Clearly, a digital presence has to be good. Your website needs to convert well, all of that good stuff. But that's augmenting the message rather than driving customer acquisition. CRM, we've had HubSpot in for a year and a half now. Absolutely. It's one of these things. I'm trying to think of a good metaphor for it, but, you know, when when you've had to when you use an upgraded system, it takes you forever. Just you tend to do what you did on the last version and not learn the the extra capabilities. And for sure, there's a lot more value add pull out of HubSpot than we've got out of it so far. We've just hired I'm sure they won't mind calling that this a HubSpot nerd who knows that platform inside and out has worked in this industry sector too.

39:36 To to we'll have a team of super users, if you want to call them that, to educating everybody how to get more out of it such such that we will definitely unlock more revenue potential out of it. People and culture, FX, salespeople tend to historically be you know, they think the customers that they bring on are their customers. We're actually their EQUALS customers. They're not your customers. You so this kind of changing that attitude from, you know, all about me, me, me to being part of a a larger whole, and we will take pride in the performance of the company. So move towards more variable compensation, not just salary and commission such that everyone participates if the business does well is is where we're moving towards. That clearly takes time, but that's in train.

40:31 Alignment of resources to where we make the most money, I've talked about already, and similarly geographic expansion. So if you could flip the slide, Richard. So just in summary, if you hold equals or you're thinking of it, you know, why would you? Well, we're growing. We're growing rapidly on every single measure. We're operationally geared, so more of that growth of revenues is dropping through the profits. We've got an exceptional platform that incorporates cards and transfers underpinned by this whole own name multicurrency iBank capability, which is amazingly configurable and is very much in demand. We've proven this platform is scalable. And in fact, we spent some time in August sort of triple checking everything. Just take a a breath for a couple of weeks in the engineering teams to, you know, go back and check our homework, if you will, to make sure everything's robust as we push forward to the next level of growth.

41:32 So, you know, we've got almost unlimited ability to grow further from here. We're throwing off cash. That opens up all sorts of opportunities for us. As Richard said, you know, we now have distributable reserves. We could pay a dividend. We could buy back stock. We could could could. There's you all those options are now available. So we're in a good position of, you know, a good problem to have of what's the best use of cash that we have that's available. I I tend to think it's still growing the business faster at this stage in our in our corporate development, but at least we have those opportunities to make those decisions. All of that with a strong really strong emphasis on compliance and control.

42:21 We've invested a lot in compliance. And even the fact that, you know, those of you who held the stock for a while, you know, we Rich and his team report our numbers, you know, weeks and weeks earlier than we used to. The the level of control that we have over the business day in, day out is is night and day from where it was three years ago. So this is a well run company. And last but by no means least, you know, the management team have a proven track record, delivered consistently, upgraded consistently. I had to put that last line trading in line with market expectations. The the compliance police at Canaccord maybe do that. But you can see the direction of travel. You look back over the last few years.

43:07 So, hopefully, that's given you a decent insight into the business and where we are now. That's great. Ian, Richard, thank you very much indeed for updating investors this evening. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated on the right hand corner of your screen. As well, Ian and Richard take a few moments to review your questions submitted today, I'd like to remind you the recording of this presentation along with a copy of the slides and the Q and A will be accessible via your Investor Meet company dashboard. Richard, Ian, we did receive a couple of pre submitted questions before today's meeting, and I wonder if I may just start off with those. The first one reads as follows. Do you have any medium term aspirational goals for the solutions business? Is it approaching maturity within The UK market at any time soon, and is there any potential to expand this outside The UK?

43:57 Yes. Yes. And yes. I think with solutions, there were some low hanging fruit. And if you recall earlier in the presentation, I said that we we put in a lot of capabilities, but we had to, you know, spend some more time putting in the reporting suite around it. So we certainly haven't maxed out, but we're going up the food chain in terms of larger solutions customers that take longer to onboard, not more of you know, because of issues there in sort of plumbing our our platform. And then they'll sort of slowly give you larger wallet size if the if your capabilities perform as they should do.

44:43 So that that's by no means have we tapped out what's available in The UK, but that doesn't mean to say that we shouldn't do more internationally, and we will do so. The the challenge that we set ourselves internally, my another I keep mentioning my chief product officer, but he he and I would both can conceive of the day not too far away, you know, that the solution's revenue is the same size as the rest of the business combined. So that's the sort of order of magnitude you should think of because there's a lot of there's a lot of corporates that could absolutely use the services that we're offering and can't find it elsewhere.

45:29 Hopefully, that answers the question. That's great. Thank you. And I know you certainly touched on on this bit given the the position the company's in. But with the company increasing cash flow positive and being in a net cash position, what should investors in EQUALS expect regarding the allocation of surplus capital? What you should expect is that we put it to use in the best possible way. And that could be you know, if there's nothing to buy and no reason to sit on the balance sheet. Let's be honest. The market doesn't really give you, you know, any credit for the cash that sits on your balance sheet. I don't I don't think we'd be at the same price if we had 30,000,000 on the balance sheet rather than 16. So you either do something with it or you disperse it or you buy back stock.

46:15 And as I say, the it's a good problem to have that we have all those options open to us. You know, my preference is to do some more m and a, but I'm not gonna overpay for things. I think the another shareholder said to me, a few months ago, given the way the business is performing, you we don't have to do a deal. We should only do a deal if it's EPS strongly EPS accretive. Obviously, we wouldn't do it otherwise. I think us now being in that situation also might flush some businesses that may want to look at being bought out of the woodwork because they know that we're back in in the game in terms of potentially potentially doing that. But as we sit here now, it's a really hard question to answer, but that's the best I've got. That's great. Thank you. Well, look. That takes care of the two presubmitted questions we have. Obviously, investors has submitted a number of questions throughout your presentation.

47:15 I think you've touched on some of the subjects. But if I could just hand back to you just to read out the questions and give a response where it's appropriate to do so, and I'll pick up from you at the end. Okay. There's any new products currently under consideration to enhance your offering and keep you ahead of the competition? No. But, yes, we're not I there's no new product per se, but adding more capabilities into the existing platform, if you will, is clearly what we're intending to do. But it won't be like we added solutions that I can't conceive right now of anything like that. There's many things we could do and more capabilities we're gonna add that we'll report as and when we do them. But I think we've reached that point at which, you know, we've got good focus.

48:06 The platform has a wide number of use cases. We don't need to add too much complexity into it. It's all about refining what we have. Next question is ignoring the short medium term oh, no. This right. This one. Short medium term macro picture, what might lead to some which might lead to some short term growth blips. Is there a long term growth runway? Yeah. I mean, we're in I said before solutions, we, you know, we were the business ought to grow at 25% per annum. And it's hard to answer this question because the runway we see for solutions right now, you know, stretches as far as we can see.

48:54 But, you know, whether that still be the case in two years, I don't know. I think we can expect to grow continue to grow strongly for at least the next eighteen months. Whether we then revert because we'll be on much higher numbers anyway. So it's always higher to do the percentage on a bigger number. Sort of 25, 30% probably. You know? I've always felt that if if your business is growing at 30% per annum, everything takes care of itself, and that that would be where I'd be aiming for. The next question, we're getting clear you are clearly getting significant traction from larger corporates. What is the typical time frame converting these opportunities from the existing supplier? Varies massively. But for the ones that are worthwhile, two to three months, something of that order of magnitude, typically, if they're larger, the the compliance is not straightforward. That takes time, and the delay is normally their end because they've got to un un unstitch their systems out of where they are into ours, put the iBAN in, test it out, you know, get people comfortable. And that will be just to get going.

50:08 And then, you know, as I say, they will tend to sort of put a bit through you, make sure they're comfortable with it, and then start to ramp up. I I've been saying today that if we didn't add another solutions customer for the rest of the year, which clearly we will add new ones, our revenues from solutions would still grow because we'll get more wallet share out of the existing customers. Next question is, can I ask whether you prefer to buy a bolt on acquisitions to gain market share or prefer to grow organically? I'm minded you know, if I ask my young daughter, would you like this doll or that doll for your birthday? They will go both. I think that's the right answer to this question.

50:56 I have no prep. Clearly, bolt ons, you have a certain amount. We can do them well. We know how to do them, but you've got to sort of embed the culture. You have to fire some people to, you know, extract the overhead benefit. There's some noise and mess involved in it, which but for the right value, you're gonna do it. So I would say, honestly, both. Similar question, what would you look for in an acquisition complement the existing business? I think the the the difference is now, historically, we bought FX businesses just for their book of business to bolt on. Now we're casting our eye a little bit further around for, you know, maybe some businesses that have a capability that we don't.

51:45 So maybe we'll buy a tech capability, not a revenue stream necessarily. The reason I say that is, you know, with everything that's going on in fintech and tech in general, there's a lot of startups that's you know, we're doing maybe the, you know, series b, thought there would be a massive valuations aren't or can't raise the money at all. You know, we have one gap, if you wanna think of it that way, is, you know, it'd be quite nice if we could be what's called a merchant acquirer for our corporates, I e, be the gateway through which they can take debit and credit card payments as a for instance. So if a merchant acquirer came up that was, you know, sensibly priced, would we consider it? Yes.

52:34 But I think the important thing is we're we're now open to that, whereas before, we weren't, so we can think that way. And similar but different, are you likely to look to make a purchase before the end of this year? And if not, in the future, would you include retail investors for any fundraising exercise? Yeah. I mean, yes, I think is the short answer. We would if we do a larger acquisition, we have to go out and raise money. Yes. Of course. There's a, you know, there's a as I mentioned, we don't really get credit for cash on the balance sheet. So to the extent we can fund it organically, in some ways, that's preferable. But for the right deal at the right price, of course, we would go to market. And for sure, we would involve retail investors in that.

53:21 That's great, Ian. Richard, I think you've addressed every question from investors. So thank you to everybody for their engagement this evening and to you guys for your your response. Ian, I know and Richard, I know investor feedback is important to you both. I'll shortly redirect investors on the call to give you their feedback. But I thought before doing so, if I could just ask you for a few closing comments. Yeah. Well, echoing your thoughts, thank you everybody for taking the time to listen. We make a in fact, we know the RNS that we wrote, which some of you might think was too long for interims, it was even longer because it's very important to Rich and myself to be as transparent and give as much information as possible as we can to current and prospective shareholders.

54:09 And so that's the spirit in which that is done, and and we'll look to give more information as we go forwards on the customer side of what we're doing, especially now I've got my chief commercial officer involved. You You know, I'm very proud of of what we've done and the people that work here, and we we look forward with confidence. And so thank you again for your time. That's great. That's great. Richard, Ian, thank you once again for your time this evening. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order management team can 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, I'd like to thank you for attending this evening's presentation, and may wish you all a very pleasant evening.