Finseta (LSE:FIN) — Full Year Results

0:01 Good afternoon, ladies and gentlemen, and welcome to the Cornerstone FS PLC Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab And it's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where it

0:31 is appropriate to do so, and these will be available via your investor meet company dashboard. Before we begin, if I may, I would like to submit the following poll. And if you could give that your kind attention, I'm sure the company would be most grateful. And I'd now like to hand you over to CEO, James Hickman. Good afternoon, sir. Good afternoon, and thank you. So over this presentation, we plan to give a little bit of a history of the business for those who who don't know Cornerstone and really update on our 2022 numbers and some trajectory for the future and some of the strategic plans that we have. So without further ado, our mission to help businesses trade internationally. Now that's quite broad, but but, really, what do we do? We are a payments and currency services business to help businesses trading internationally actually individuals as well, which we'll come on to. We serve our customers both online, over the phone, and actually in person for those that come to the office.

1:35 And we have a team of expert account managers and currency exchange specialists that that help companies manage their currency exposure. So the business has actually been going since 2010 in various guises. The original name FX Press Payment Services in the original business was developed on the premise of providing a technical service for other FX brokers. So as a as a technical service provider and and regulated entity, we would allow other FX brokers to white label our services and ultimately resell it to their customers. On that journey, a fantastic platform was built.

2:23 That was the obvious requirement for that business and and that strategy. And and plenty of money, time, and effort was was put into developing that. Over more recent times, there's since IPO, the the strategy has changed. I've been on board since September 2022, so it's about nine months. And, really, the business has has moved away from servicing the white label market predominantly to two reasons. Firstly, the the revenue opportunity With a white label model, a lot of the revenue was taken by the white label partner, and, really, we got the minority share of that.

3:14 And, also, the operational cost, it's very expensive to run a payments business. And, obviously, if you're not having the correct margins, then it doesn't really work out commercially. So we've we've we've really pivoted that that strategy, and now we're trading directly. Directly. And so some of the key things that, you know, particularly over 2022, which is where we are focused on at the moment, we acquired two businesses, Pangea FX and Capital Currencies. We really acquired those businesses twofold. Firstly, obviously, increase our our turnover revenue and customer base. But secondly, and and slightly more importantly for me, actually, was really to start building out our sales capability.

4:04 Now whilst we have a a business with a fantastic technology and platform, what we didn't have is a sales capability because, ultimately, we relied on other people to sell that sell that platform. So in order to go for a direct sales approach, we need people. And those acquisitions really started and seeded that that sales effort. And I'm pleased to say we've grown that, and and the team is now growing. The the founder of of Pangea has come in and and actually heads up our sales desk here, and and that is actually growing outwards. And you can see from the numbers, and we'll come on to those later on, that that's really working. I guess the the other couple of notable things in in 2021, '22, the establishment of a a Dubai office and also an Asia team as well. So we'll come on to the specialism of the business later within the presentation, but they are significant because it it differentiates us to other and FX businesses.

5:15 And finally, although not in 2022, we did agree the sale of one of our eMoney licenses, Avila House, to to a company called Aspire Commerce. We also and more importantly, actually, I think, which was a real endorsement for our platform, we've done a software licensing agreement with them. Now they're building out a different business model to us. But, obviously, after a lot of due diligence, they selected our platform because it fitted and it and was flexible enough to to do what they want. So so we we were very, very, very pleased with that.

6:03 Just a little bit of background on the on the leadership team. Myself, as I say, joined nine months ago. My background very much is is around payments and FX. I've been with a number of similar type of businesses previously. And payments actually is quite a complicated industry or complicated business. There are many different moving parts in it. And, ultimately, to have a successful payments business, you really do need the expertise. Similarly with Rob O'Brien, our chief he's actually chief commercial officer. He's based in Dubai. Again, many years of experience.

6:49 Judy Judy, sitting next to me here, a very experienced CFO. Obviously, the the financial side of things, very, very important. Bill's our CTO and CIO. I'm actually one of the founders of FXpress, so he knows the platform inside out absolutely integral in terms of, you know, building out our capability. And we'll come on to some of our partnerships and counterparty arrangements in a in a little bit. One of the things that that certainly, when I arrived from a board perspective, it was plain that we needed to to strengthen the experience on the board with with a couple of hires, both Simon and John. John John Burns is ex FCA.

7:36 From a compliance point of view and and a regulatory point point of view, there is nothing he doesn't know. He is very, very well regarded within the industry, and we're extremely pleased to have him on board. And and compliance and regulation is probably the most important thing within a business like this, and you absolutely must need you absolutely have to get it right. Simon, serial CFO with multiple PLCs, so so a great mentor and and guide. And and finally, Gareth, who's who's been with the business some time, sort of from a guiding light point of view, absolutely invaluable. And from a governance point of view, really, really excellent.

8:24 So we have a very, very strong board, which sets us in in good stead. Just sort of running over the 2022 highlights.

8:36 I'll let Judy talk about the numbers and the and the revenue, but an increase from 4.8 of four point to 4.8, apologies, to from 2.3 in 2021. Transactive payments volumes are up significantly as well, up 61%. I've mentioned the capital currencies and PangiraFX acquisitions and the sale of Avila. Revenue diversification. Now what that means within this business and with within payments businesses is that it's currency pairing diversification, basically. Traditionally, UK brokers will have the majority of their revenue sterling to another currency.

9:22 So in the main, you're quite reliant on the strength of sterling or for whichever currency you're you you have a reliance on. We've we've actively tried to diversify away from that to make sure that we've got multiple currency pairings from multiple directions. So what that means is that we're not impacted significantly when a sterling or a particular currency is weak or strong, And it gives us a much clearer revenue profile. That is very much part of our Dubai and Asia drive. And, again, gives us a real USP in in terms of delivering service to customers around the world.

10:13 As I touched on this, the the the business has had a real sales focus, particularly over the last sort of nine months, and really trying to commercialize and and sweat the asset, the technological asset that we built. You know, the numbers, I think, speak for themselves in terms of that that drive, and we fully expect that to continue.

10:39 One of the things, again, a business like ours, and we're not we're we're certainly not unique in this, is is we rely and need counterparties and partners to expand our our our payment network. And one of the things that we're very much focused on over the next twelve months is expanding out our relationships in local in local geographical areas. So so, ultimately, rather than going out ourselves, which is very expensive and very time consuming, setting up all these arrangements locally, We're utilizing multiple counterparties. So we're we're selecting best of breed effectively to ensure that our customers get the fastest, best value settlement in country that that we possibly can and driven by a our API led technology that enables from a customer point of view, they they can select wherever they want currency to go to or or be collected.

11:45 And it means that it's predominantly a local collection. And that sort of flexibility and availability will will continue to grow out. And for the final bit, I'd like to sort of touch on is the investment in people. We've got a fantastic team here, very highly skilled individuals, very experienced, And, ultimately, to give our customers the very, very best possible service, those those people need continual development. And specific areas that that we have invested in, and I'll come on to compliance regulation in a minute, but that is one area that we've specifically highlighted. The the other area is is on the customer services and the currency sort of specialism.

12:34 So to make sure that we can actually give give the very, very best possible service to our business and to our consumer customers as well. And across the business, actually, there's a real desire. I guess this is maybe a little bit introverted, but there's a real desire to grow knowledge and improve, which is really, really good to see. So that's something, again, we're very much focused on. In terms of our growth strategy, so I've touched on most of these, but I would like to to to pull out a couple of them. And development and enhancement of products and services is really, really important. So what what we don't have is sort of we're we're not having a couple of boffins in a room thinking about things to do and then developing it. What we're we're listening to our customers and and hearing what their pain points are and then thinking about solutions and and products that that could help that.

13:40 One of the one of the biggest ones actually is is lending. And a lot of our business customers particularly are saying, you know, we love your service. We think, you know, everything else, but we we one of our pain points is lending. So we very recently launched a lending platform which effectively matches the appropriate lender to the customer. So it means that they don't have to fill in hundreds of forms with hundreds of different lending providers only to be told no by most of them. It's one form, and it's it's effectively dating, a lending dating site. We partnered with a company called Swoop, so we're we're not lending the money ourselves.

14:26 That is the marketplace. And it's white label cornerstone, and it gives a nice seamless journey to our customers. It in terms of our platform, the way we're developing it in terms of a overall financial services product, lending is very critical to that. We We are growing our pro our payment capability, as I say, adding more counterparties, more currencies in more jurisdictions. And our ultimate goal is to have where we can do, where it's not restricted to have the entire globe covered by the end of twenty twenty four. We're we're we're we're doing strategic partnerships with local local providers for instance settlement.

15:17 And we're also adding or going to be adding other products and services or other payment rails, particularly on the card side. My background is very much on the cards. So looking to add card payments to the to the product portfolio as well. And there's there's many, many innovative solutions and and new products coming online, particularly within the payments world that allow things like card to account, account to card. And we want to give our customers as broader choice as possible in the way they want to make payments and receive payments. So we'll be continuing to continually adding over the over the coming eighteen, twenty four months.

16:05 The the the other key bit of the strategy is obviously growing our customer base. And how we're doing that is through a number of of of different strategies, is a referring partner network. So by by referring partner, I mean things like property companies who have a client who wants to buy property overseas. They refer them to us accountancy practices with businesses. So these are force multipliers that ultimately will generate a steady stream of introduce introduced business because they know their customer is being looked after with with a high level of service.

16:55 We're we're also improving our processes and procedures to to allow allow us to onboard more more customers from different sectors and jurisdictions. We're investing quite heavily in our compliance and regulatory capability. We very recently we are in the process of putting in a new onboarding platform that will effectively allow us to straight through onboard customers in a in a compliant fashion. And this will give us increased bandwidth and also more protection and more oversight.

17:35 We are looking at adding additional regulatory licenses, specifically Dubai, as you can imagine. We we have people already on the ground there, and and we are scoping that at the moment. And, ultimately, in order to give this level of service across the across the globe, you know, over time and in, again, in a in a cost efficient manner. And, again, I must stress over time, we we would like to add other people in other jurisdictions. So our target customers, I thought it's worth putting this slide in just to to clarify exactly who who our customers are. So we are talking to and service internationally trading businesses, and they their turnover tends to be in excess of 5,000,000.

18:28 And they have exchange or currency exchange requirements of over 100,000 per annum. We have a large book of high net worth individuals. And finally, as I mentioned before, introducers or we classify them as affiliates, and those are those are people who are introducing those types of clients, so internationally trading businesses and and individuals. So a mix of those. And, ultimately, our sales team and partnership team are

19:01 actively growing those segments of the of that target customer base. And and finally, from from my bit, I think it I thought it was good to visualize the the platform as is and as it will be. Most of this, I feel now we've we've, particularly over the past sort of six months, accelerated quite significantly. The currency exchange, obviously, bit and international payments we cover, but we are expanding that capability. The automated back office and the API connectivity, we we now built. So by API connectivity, what I mean is we can actually or or as a business who wants to connect to us and receive notifications, for example, of transactions, can do that already. Or if they want to embed their their the the payments capability within there, they they potentially could do.

20:00 The lending and borrowing facility with our partnership with Swoop, the intelligent compliance. Again, as I can't reiterate this enough, the the investment within our within our compliance team and our systems. The open banking, we're we're actively looking at at the moment. And the the cards is is very much as well on the on the horizon. And we're we're we're sort of targeting q one twenty twenty four for for a launch of a card program, which, again, this isn't replacing our current bank to bank. This is very much a an additional rail with which pay with with which customers can pay.

20:47 So I'm gonna hand you over to Judy now who gonna run you through the numbers. Thanks, James. For those that I haven't met before, my name is Julie Hamper. I'm the CFO. I've actually been with Cornerstone for two and a half years, so I've lived some of this journey that I'm I'm about to talk about, and I can particularly talk to the kind of change in ethos that that we've seen over over the last nine months since James has has been on board. But I wanted to start with kind of outlining the fact that, you know, our our

21:20 financials really reflect that that we're on a an ongoing journey to profitability and cash generation through the execution of of of, I'd say, three leavers. So the first being continued revenue growth. As you've already heard, we did 4,800,000 revenue in in 2022. That's a growth of a 110%. The second lever being gross margin accretion, which has now been largely realized. So that's been driven by transitioning our customer base away from those kind of traded through white labels to the the amount that to those traded directly by us. That's resulted in a nine percentage point improvement in our gross margin year over year to 61%.

22:06 And the last lever is is around is around strong cost control. So that's been evident really in in in our

22:16 gross profit growth really, really outpacing our our strong our our cost control. So, sorry, our our adjusted costs. So in h two twenty twenty two, we our cost increased by 21% compared to a 5051% increase in gross profit. And I expect that to continue into the future with our our revenue and gross profit growth outpacing our our cost growth, meaning we have a very clear line of sight to both profitability and cash breakeven. Indeed, you you will maybe recall that, we recently, released a q one trading update, and I'm pleased to say that we had it, had our first quarter of EBITDA positivity, and we have a a a commitment that we will achieve cash breakeven during h two twenty twenty three, which for all of the reasons you've heard in this presentation, we look well on track for.

23:14 Just to go a little bit more into detail on the revenue side, I've already mentioned 4,800,000, a 110% year over year growth. That was really due in a large part to the continuing success of the Asia focused sales team, which is really a a USP for us, I I would say. They came over to us in h two twenty twenty one. And you can see on on the graph in in the bottom left hand side here, really, that that start started to kick up, the the kind of sequential growth. And then,

23:45 you've already heard in 2022, we also added the tuck in acquisitions of of capital currencies in February and Pangaea Pangaea FX in September. Even, organically, we've demonstrated really, really good growth. So 89% was our our growth rate without the the 2022 acquisitions.

24:07 And you again, you can see in the graph a demonstration of that organic growth, h two twenty twenty two, a 54% increase on h one twenty twenty two. We we've really sustained that growth, into 2023, and I've got in the kind of a shaded bar here, q one revenue of 1,950,000, which again is over a 100% growth versus the prior year.

24:37 To talk about the the gross margin, as I say, really, we've been on a journey transitioning our our customer base over the last eighteen months, and you can really clearly see that in in in the graph here on the bottom left. So at the start of 2020, we had just 12 of our revenue coming from directly trading clients. In the last half, that is now up to 81%. And you can see the dramatic transformation of of our gross margin as a result. Really, as I say, we we started, and James has mentioned already, the business started by proving out, the white, the technology through white label partners. Probably no surprise that our that our gross margin back then was was around 30% because we would typically pay away 70 to 75% to to our white label introducers.

25:30 As I say, with the transition to mostly direct, we see we've seen a dramatic transition in our gross margin up to 61% for 2022. I'd say our our level of direct business now is is roughly stabilized. You can see that in the in the last three halves. However, we do have a little bit more to go in in the gross margin, particularly as as you might have seen in February. We announced a renegotiation of of our deal with Robert O'Brien who heads up the Asia team and the Dubai desk. He's now, taking a a different commission structure, which means we've got probably got an another couple of percentage points, to come in in the coming year. That in addition to the fact that we've also rationalized a kind of a long tail of our white label partners, our legacy white label partners, those that didn't make reach a profitability standard that we're going to adopt going forward with our white labels.

26:28 They they've also been transitioned out. So as I say, largely realized I'd call this theme, but with a couple of points still to go.

26:38 The last thing I wanted to talk about is around our cost base. It and and, really, the the company previously invested in in scaling up the management team, diversifying our our counterparties, and also the incremental cost base of of of being a public company. I probably should also add investing in our technology, but that's largely capitalized. Over the last nine months, I can certainly testify that we've been really focused on driving out the value the inherent value of the platform that we've already built and taken a really critical view on all our costs, which has resulted in in some rationalizations being made, certainly within the board costs and corporate marketing and some other consulting fees. That's in addition to driving out the synergistic benefits of of the companies that we've acquired.

27:28 So rationalizing their technology and partner and compliance costs with our own, which has allowed us to make some of those targeted investments as as James has mentioned, you know, into the into the sales sales team, into Smarter onboarding technology so that we've been able to minimize the overall cost increase. As I've already mentioned, and and you can see here on on on the bottom left, our our our adjusted cost increases has fallen way behind the the gross profit and revenue increase. So I've already mentioned 54% increase in revenue in the second half of of h two of twenty twenty two compared to 2021 compared to a 21% increase in costs.

28:17 And just to give a little bit more detail on on where those costs cost increase increases came from in in 2022, it was largely driven by acquisitions. So 900,000 coming from staff costs. That's really the full year the full year cost of of the Asia team as well as the the the capital currencies and Pangaea acquisitions. 200,000 increase in rent rent and IT, Largely, I would say, driven by the rent free periods we enjoyed in 2021 because of COVID and a small increase in legal and professional. So as I say, you know, notwithstanding the the tremendous growth on the top line, we've been really, really focused on keeping the the costs within the, you know, our target levels.

29:06 One thing I did wanna mention kind of the low adjusted EBITDA because it's it's a big number and and an exceptional one. During 2022, we incurred a 4,300,000 share based compensation charge, which makes our look makes our loss for the year look kind of horrible. So 900,000 adjusted EBITDA transitioning to a 5,600,000 loss loss for the year. That 4,300,000, I'm afraid to say and don't shoot me any any fellow accounting professionals out there, but, really, it's it's a it's a an accounting adjustment doesn't necessarily reflect the true costs. So with with the acquihire of of Rob O'Brien and his team and the Asia team, we set in place a share incentivization arrangement in August 2021.

30:00 In August 2022, we renegotiated that deal such that we cap the settlement at 3,150,000, comprising 2,000,000 of of a loan note and 1,150,000 of shares at 10p per share. Because of the settlement, we had to accelerate and recognize cumulatively all of the costs of the original estimate of of the the share based incentivization. There is a reserve transfer in in the reserve notes that will transfer that back between the share based payment reserve and retained earnings. So I hope I kept everyone with me there, but as I say, I wanted to to really just highlight our our loss for the year is really has has really been ex exasperated by this noncash share based payment charge.

30:53 And then lastly, wanted to mention a few selected, balance sheet items, which emphasize, I guess, that that, you know, since James has has come on board, we've really focused on on putting the business in in in the best possible footing, both both from a commercial perspective that James has highlighted and from some of those kind of legacy agreements and legacy assets, really. So we had cash at at the end of twenty twenty twenty twenty two, sorry, 682,000. That's been improved year after the year end with the realization of the sale of Aviva House. So the small EMI license completed just a couple of weeks ago, giving us an additional £300,000.

31:42 And for those that have been watching us for a while, you know, you will be aware that this time last year, we had a a material uncertainty as to going concern. That's obviously reflected by the cash balance that we had then. Very pleased to say that, you know, with the continued efforts and support of our shareholder base, obviously, as well, we we are we have no such qualification this year. And with the other efforts, you'll see that we are you know, we should be in a good position to stand on our own two feet with with our existing cash resources. And so those other efforts are around the loan notes. So at the year end, we had 2,250,000 in in loan notes, one of which has been converted post year end following the approval of Mark Horrocks becoming over a 10% shareholder by the FCA.

32:38 2,000,000 of that related to Robert Brian, which has, post year end, again, as we announced in February, been pushed out a further of years. So now we're payable at the end of July twenty twenty six. So really giving us a a really good runway, to to build up our cash reserves to to make that payment. And then the last one, the deferred consideration reserve that relates to the earn outs on capital currencies, due for payment or settlement effectively in March 2024 and March 2025. Now we agreed to push that out by one year and also gave the company the option to settle in cash. So previously, that was a mix of equity and convertible logos. So, again, a further action to really mitigate any future shareholder dilution.

33:28 And with that, I'll hand back to James. So I guess in summary, and we'll go through the questions in a minute. As a business, we're on solid footing. So we have revenue growth, costs are under control. We have an experienced team, which is absolutely vital in in payments in a regulated entity. We are fully regulated, which actually by now is is no mean feat nowadays. So, you know, eMoney eMoney regulation from the FCA is is very hard to come by. And as we've seen with our Avila House disposal, there is significant value there. We've got a very, very strong technology platform. The cost there is sunk. It's developed.

34:15 Yes. There are enhancements, but, ultimately, it's now maintaining that technology and building and putting on partnerships alongside it. We're expanding our product set, which will ultimately drive more revenue as well. And finally, being EBITDA positive in q one and very optimistic for the full year, I think we've got a very, very bright future. So thank you, and we'll do questions, I think. James, Julie, that's great. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the Q and A tab that's situated on the top right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation, along with a copy of the slides and the published q and a can be accessed via your investor dashboard.

35:10 Judy, James, as you can see in the q and a tab, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions. But, James, Judy, if I may just hand back to you just to respond to those questions where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Great. Do you do you want to take the third one, Judy? The first one is is the question reads revenue of 4,000,000 operating expenses of 8,000,000 resulting in 5,005,000,000 loss. What's the strategy and timelines to a profitable enterprise? So I think we've we've covered that in the in the presentation. As I say, a lot of that operating expenses or the vast majority of that operating expense is actually, related to the noncash share based payment, expense, and and the underlying adjusted EBITDA loss was 900,000.

36:03 We've we've already, you know, updated the market that we achieved EBITDA profitability in q one and are on track to deliver cash cash breakeven during h two twenty twenty three. So next question. Upcoming year is going to be very challenging. Majority retail and real estate will be impacted in in a negative way. Existing banking system starts to crumble. How is Cornerstone going to grow under such circumstances? In some ways, it's a it's a an opportunity for us. You know, the banking crisis back in 2007 and the the multiple, there's always seems to be a banking crisis.

36:49 Ultimately, we're we're not reliant on the banks. And in fact, in some ways, the customers, you know, when there is a banking crisis, do turn to alternative alternative providers, and we are one of those alternative payment providers. In terms of sort of the real estate market, yes, absolutely. You know, certain areas of of the world are impacted. But in terms of our diversification, that really is the point of the strategy is we are diversifying. Globally, yes, there might be a downturn, but certain areas are more impacted than others. And and that absolutely is why we diversify, you know, rather than having revenue just coming from one area of of of the globe. So for me, I think we're in a in a in a very, very good place to to ride if there is a catastrophe, obviously.

37:40 No one could no one can predict that. But in terms of looking forward to the future, I'm I'm very, very optimistic that we can that we can, you know, thrive in in an economic downturn. What's this? I I know expander. So the next question, I know expanding the client offering has been keen in delivering increase in revenues. Do you have plans to enhance the customer offering further or enter into new verticals? Well, I think we sort of discussed a little bit about the product enhancement. So, yeah, absolutely, we do. And in terms of new verticals, you could argue that potentially the card vertical is is new for us. The lending certainly is.

38:34 In terms of geographical regions, yes. But, again, I would stress that this is gonna be very much done done on a almost bootstrap basis. When we can afford, we will. We're not going out and, you know, spending everything on on and gambling on one thing. It's very much by by trial, see what works, what doesn't work, and we do it on a very controlled manner, ultimately utilizing everyone within the business' experience, which ultimately helps and and defer or or I'm hoping that we'll we'll with experience, you know, you we utilize people's learnings. So, certainly, from my side on the card, sort of know what works, what doesn't work, who to work with, and that that will set us in very good stead in terms of future product offerings and enhancements.

39:31 Okay. I'll I'll read the next one, James, because it's actually for you again then. James, since joining the business, has the progress to date met your expectations? What KPIs you use to measure progress? Good question. In an in a nutshell, yes. My KPI when I came into the business was very much, and I'm sure Judy will will will reiterate this, was very much around getting this business to cash positive and EBITDA positive. Without that, you know, ultimately, you don't really have a business and you don't really have a business model. Now there are a lot of things we can do to create that, but in very simple terms, more sales, less costs. Very much what I focused on in in my first nine months here.

40:18 Now now we're at that stage. We're now looking at other other levers that we can pull to to really take us to the next level and the next sort sort of of step up, if you like. And that is product enhancement. That is increasing our our our sales capability and our our geographic. So in terms of the KPIs now, it'll be very much on maintenance of margin and and increasing where we can margin. Very much, as I mentioned, you know, I really have this vision for 2023, '24 of ensuring that we can operate or deliver and receive across the globe in any currency. And I think that's gonna be absolutely vital, and it's really making sure that we're constantly increasing the number of currencies and the number of localities that that we can service. So those really two key things for me.

41:22 Please, can you break down how much of the 2022 revenue of 4,800,000 relates to capital currencies and how how much relates to Pangaea FX. We have not disclosed by by by company or acquired customer base. However, I did mention that the year over year growth excluding those acquisitions was 89% on a revenue basis. The next question, the payment dates for the two tranches of deferred consideration for capital currencies are now March 24 and March 2025. Please confirm if you expect to be able to fully settle both charges in cash. Obviously, I I can't make forward looking statements, but I can kind of refer you to our external analyst notes around our cash projections, and they would certainly indicate that we're able to to settle both tranches in cash.

42:16 And we we're fairly happy with with with how those notes were positioned. The next question, please, can you talk about key man risk, specifically the impact if either James or Rob were to leave the company? Good question. And and key man risk is something we, you know, we we we constantly think about. And it's not myself, just myself and Rob. There are there are a number of key people within the business. As I mentioned, you know, we've got a lot of really, really good people in the business. For myself, personally, obviously, it's about incentivization, making sure that, you know, if if this business is working well, everyone's incentivized that it's doing well, then that's all you can do really to protect.

43:02 Rob, obviously, is a very large shareholder, and he's very much in his interest for this business to to be successful. So I would say in terms of risk of him him leaving, it is limited. But, again, you know, this business has gotta succeed. People have gotta be incentivized, and and that's not just myself and Rob, but but throughout the business. And we and we try and mitigate as much as we can do. What impact will the introduction of the consumer duty regulation have on Cornerstone? That that is an excellent question. Consumer duty. Now this is this is a a big piece of regulation coming down at the end of or implementation at the end of June from the FCA that basically protects consumers and actually micro businesses that to to ensure that every transaction and every touch point is a good outcome for them.

44:05 Now good outcome is unspecified currently. But in their guidance, what the what the FCA are looking to see is very much about service levels and value. Now what they're not saying is, oh, you need to be the cheapest and you need to be, you know, the give absolutely the best service. What they expect to see is value for service. Now I think Cornerstone particularly is very well geared up for this because we're not app only or web only like many companies. You know, we have a a a multi service offering. So we do speak to and and a lot of customers over the telephone and, in fact, some in person that come to the office as well as our platform.

44:51 In terms of, you know, meeting our obligations, I think we're we're very well set up to that. We've done a huge amount of work internally on the consumer duty piece. So I I feel very, very confident as a business, we're very well prepared for for for this new regulation coming in in due in due. Yeah. I'll take this one. If if only a small uplift from the Pangaea sales team, why why have so many shares been issued issued on this acquisition? It it's just wanted to clarify that there were no shares issued in respect to the acquisition. Share options were given to the two principal two principles of Pangaea that came across. So 550,000 each at a 10p strike price, which was above where above the market then and and continues to be now. So they're really participating in the upside of their journey with Cornerstone.

45:47 You know, as James has already mentioned that they're both heading up sales in in respectively Dubai and and The UK. So they're incentivized for the long term, actually more based on their performance within Cornerstone than the acquired book. So the the the the acquired book is part of the 100 is part of the loan notes figure, 175 k roughly within the loan notes figure. Blockchain technology, will it be in Cornerstone's pipeline? Again, good question. We have looked at blockchain to and constantly look at it actually and specifically around trade settlement because there's definitely you know, in terms of the technology itself and and validating transactions, it it is really, really exciting.

46:41 In order trans to transition to that type of technology, there is a big sea change in in terms of our platform. So, obviously, that comes with costs, with time, etcetera, etcetera. To be to be perfectly frank, the business is not in a situation where it can suddenly drop its technology or its current technology and move over to something else. You know, I'd much rather focus on the sales and the revenue side of things And and whilst keeping an eye on it for sure and possibly utilizing third parties, our own internal technology certainly in the in the very short term will not move over or be developed with any blockchain technology behind it.

47:28 I'll take the next one. Will h two be stronger than h one and by what percentage? Well, that's a nice attempt to translate me up, but, but I I, again, I I can't answer that specifically. I I would just draw your attention to the earlier revenue slide I I I presented and, you know, mentioned all of the initiatives that that James has has given air to over the presentation. I think it's natural to to expect on the on the growth trajectory, h two to be stronger. You you, again, referring to the analyst coverage that that's out there. They've got 6,500,000 for the year in terms of an expectation on our revenue performance. So I think that kinda speaks for itself. Do you want to hear this? Yep. How do you see the growth over the next five years?

48:18 How large could revenue become in that time? Wow. I mean, really, in terms of the revenue profile of the business, obviously, we've got our our margin payments margin, but, ultimately, it will be very much dependent on other products and services that we have. So for example, on a scheme, we would not only benefit from FX, we would benefit from interchange. So actually, in my mind, and particularly with the global settlement network, revenue, certainly, when we look back at five years from now, it will be a completely different business. I can't put a number on it. But, ultimately, it will be a totally different business in my in my opinion.

49:03 I think we I think we've gotten that one enough. I mean, what what are your priorities for 2023? My main priority continues to be making sure that the the the business trades EBITDA positive. And secondly is to ensure that our products and capabilities, particularly around the the the international settlement or payment settlement, that we fulfill our ambitions there. So those are the two key things that that I'll be focused on. Fiat currency pair convert to stablecoin, CBDC at Cornerstone FS in future.

49:58 If we if we look if if that refers to stablecoin conversion to fiat and and vice versa, yes, I have looked at that actually. The the difficulty with with that is stablecoin like like other cryptocurrencies does still, a from a regulatory point of view and from a from a counterparty relationship point of view, prove a problem. So particularly with our banking partners, you know, as soon as we put our head above the parapet and say cryptocurrency, people will run a mile. So whilst it's it's an interesting space, our certainly, our current client base, it's not something they're screaming about or demanding. It's something that we will keep an eye on. No doubt about that. And as as it grows, and I do genuinely believe it will do, as well as other other cryptocurrencies, not not just stablecoins.

50:57 We're certainly keeping an eye on it, but for for the the immediate future, and that's really what we're talking about here, you know, it it's sort of a a watch and see brief. James, Julie, if I may just jump back in there. Thank you very much indeed for addressing all of those questions that came in from investors this afternoon. And of course, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. And we'll publish all those responses out on the investor meet company platform. But, James, perhaps before just redirecting those on the call to provide you with their feedback, which I know is particularly important to yourself and the company, if I could please just ask you for a few closing comments to wrap up with, that'd be great.

51:44 Certainly. Thank you. I'm hoping today that we've we've shared sort of an insight into the business, how how excited we are about the future of this business, some of the things that are coming down for for 2023 as well as what's been achieved in 2022. As I mentioned, we're we're very, very excited about the the prospects and the future of this business. I think from a from a a valuation point of view, in my opinion, as I would say this, obviously, I I think the the business is massively undervalued. I think, you know, simply from a regulatory and license and a a technology point of view, that there there's huge value here, let alone the people, the current revenue, etcetera. So I think, you know, hopefully, you you can get as excited as we are about the the the the prospects and the journey, and and, hopefully, you'll continue to follow.

52:39 James, Julie, that's great. And thank you once again for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order that the 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 Cornerstone FSPRC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all.