Foresight Group Holdings (LSE:FSG) — Investor Presentation

0:00 Good morning, ladies and gentlemen. Welcome to the FORESIGHT GROUP HOLDINGS LIMITED Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Just please simply at any time type in your question and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company can review all questions submitted today, and we'll publish any responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. And if you could give that your kind attention, I'm sure the company will be most grateful. I'd

0:32 now like to hand over to CFO, Gary Fraser. Good morning, sir. Good morning, Mark, and good morning, everyone. I'm delighted to welcome you to FORESIGHT's full year results for the year ended 03/31/2023. As Mark said, I'm Gary Fraser, the Chief Financial Officer of FORESIGHT Group. And today, we'll update you on our strategy, exceptional performance and impressive financial results for the year as well as the first quarter trading in FY twenty twenty four and the outlook for the rest of the year and beyond. I'm pleased to report it's been another year of highly profitable growth for FORESIGHT, and we've delivered an excellent performance ahead of both our own and market expectations. We've extended our track record of achieving against our ambitious growth targets, and that's enabled us to materially increase our shareholder returns with a very significant increase to the dividend.

1:19 I'm popping my camera off now to make the slides bigger for you as we turn to Slide four, but I'll pop back up again at the Q and A at the end of the presentation. So moving on to Slide four. I'd like to start with a reminder of our excellent track record of profitable growth. Over the last five years, AUM has grown annually by 37% compound. And over the last three years, core EBITDA pre share based payments, our core profitability metric, has grown annually by 28% compound. This has accelerated over the last year during which we have delivered AUM growth of 38% and core EBITDA pre SBP growth of 58, leading to a record year of profitability for the group.

2:07 As you can see from the charts, our track record of profitable growth is both consistent and impressive. Moving on to Slide five, where we look in more detail at the acceleration in growth we achieved in FY 'twenty three and tying that back to delivery against our four strategic growth targets. Firstly, growth. We grew AUM by 38% in the year to GBP 12,200,000,000. This was well ahead of our 20% to 25% target. And FUM, which represents our fee earning assets under management, increased by 35% to 9,000,000,000. The notable increase in annual growth can be primarily attributed to the successful execution of our acquisition strategy with Infrastructure Capital and the Technology Ventures division of Downing, both being financially and strategically accretive to the group.

3:01 And as you may recall, we have made a commitment that all acquisitions we make will be earnings accretive. We're not interested in anything that isn't. Additionally, our franchise benefited from organic growth within our higher margin strategies. Our retail fundraising team was successful in creating strong demand for our tax efficient products. And we launched four new regional private equity funds, materially expanding our footprint in this market. Secondly, high quality earnings. Our highly predictable model provides us with excellent visibility on earnings and 87% is comfortably within our target 85% to 90% range. This visibility enables us to match our cost base to revenues and ensures that we continue to grow profitability.

3:52 As we enter FY 2024, our revenue will benefit from a full year of fees from the significant growth in AUM delivered in FY 2023. Thirdly, operating leverage. Our core profit margin increased by 5.1 percentage points to 42.1% in the year as we grew revenue significantly faster than costs, and this positions us well to meet our 43% medium term target, which ends in FY 2024. Our continued progression in this area provides evidence of our scalable platform, facilitating margin expansion whilst allowing investment for future growth. And finally, to shareholder alignment. In line with our dividend policy to pay a total dividend of 60% of profit after tax, we're announcing a final dividend of 15.5 p, an increase of 46% on a full year basis.

4:48 This reflects both our successful performance in the period and the confidence of the Board in the positive outlook for the group. Moving on to Slide six. This outstanding performance in the year once again reflects the strength of our diversified and resilient business model. To recap, our AUM is well spread across both retail and institutional investors, providing us with a consistent stream of gross retail inflows from around 40,000 retail investors. This is driven by our in house sales team, and it complements more sizable long term institutional fundraisers that we have as well. Our business model consisting of infrastructure, private equity and foresight capital management provides resilience against prevailing macro conditions as well as providing synergies by leveraging complementary skill sets within different divisions.

5:46 We're well diversified diversified by fund type as well. Over 60% of our funds are in evergreen or listed vehicles giving us long duration capital and a further 25% in LP structures with an average remaining life of twelve years. This provides us with a very high degree of certainty on future based revenues and allows us to plan accordingly. And we're also diversified by geography. Our expanding geographic footprint across Europe and Australia is demonstrated through our acquisition of infrastructure capital. The US also remains a core target market for us and we've already made into inroads there via our partnership with Cromwell in the sub advisory market for our OICS.

6:32 At the end of the financial year, 43% of our AUM was outside The UK compared with just 23% at IPO. This is a direction of travel that we expect to continue and intensify over time. So we have diversification through our investor base, our investment divisions by vehicle type and by geography. This allows us to respond to opportunities as they are identified, leveraging our broad skill set to deliver consistent and profitable growth. Onto slide eight in terms of key financial metrics. You can immediately see that these metrics reinforce the message that you've already heard and that it's been an outstanding year for the group. AUM and fee earning assets under management were up 3835% respectively, driving a 38% increase in revenue to a 119,000,000.

7:27 This is a significant milestone for the group, being the first year we have generated over GBP 100,000,000 of revenues, demonstrating that our business is growing and fast. It is also worth making the point that this growth does not come at the cost of profitability with EBITDA pre SVP up 58% to over $50,000,000 demonstrating the significant operating leverage in the business. Additionally, we improved core EBITDA margin by 5.1 percentage points in the year to 42.1%, as I said earlier, putting us right on track to deliver our medium term target of 43%. This target is not a ceiling though. We believe that we can continue to grow profitability, adding further operating leverage as our strategies add scale over the longer term.

8:15 This outstanding performance has enabled us to materially increase our shareholder returns and therefore by maintaining our dividend payout at 60%, we've significantly increased the total dividend of the year to 20.1p, 46% increase. Moving on to Slide nine and AUM progression. So looking at these key financial metrics in a bit more detail and starting with AUM. This slide focuses on the significant progression of our AUM growth since FY 2018. As you can clearly see from the chart, we've consistently added to the group's AUM year after year, with each of our three business divisions contributing to deliver an impressive overall increase in AUM of 4.7 times, taking AUM from $2,600,000,000 to $12,200,000,000 over five years.

9:07 Drilling down into the divisional contribution, infrastructure remains the largest division by AUM and increased by 4.4 times over the last five years. Growth delivered through organic and inorganic sources, both. So for example, acquisitions of infrastructure capital in 2023 and the investment mandates of JLEN in 2019 and PIP in 2020. Around 1,000,000,000 through the successful launches of our FEED strategy, the IPO of FORESIGHT Forestry, TAP issuances from the other listed vehicles such as FSFL and JLEN as well. The PE division has doubled AUM since IPO and delivered an increase of 3.4 times over five years with exceptional growth in FY 2023.

9:54 Some highlights from FY 2023 include significant expansion of regional growth strategy with three new funds in The UK and the first fund in Ireland. The acquisition, as I said earlier, of Dining Ventures very much complements existing ventures offering that we have and accelerates growth and presence in this area. FORESIGHT Capital Markets or FCM has grown by 10.6 times despite net outflows in the current year. With our in house specialist retail sales team, we're still seeing demand for these sustainable strategies across The UK IFA and wealth manager networks, and gross inflows remain robust. This division still has high growth potential benefiting from scalable operations, and we're actively pursuing further distribution strategies following our recent expansion into The U. S.

10:46 And our U. S. Sub advisory mandate with Cromwell. Moving on to Slide 10, where we look at the AUM bridge. Post IPO, AUM has grown by 69%, been a mix of both organic growth at 31% and strategic acquisitions at 69%. We expect organic inflows throughout the institutional fundraising market to drive growth over the coming year. Drilling down further into our exceptional growth in FY 2023, acquisition activity drove a step change in AUM to GBP 12,200,000,000, an increase of 38% in the year. The retail fundraising side saw most activity and net outflows in lower margin oil products, which were driven by challenging market conditions as markets experienced a reset in valuations against the backdrop of persistent inflation and central banks increasing the pace of interest rate rises.

11:45 However, this was largely offset by continued strong gross flows into high margin retail products driven by our in house sales team and also our institutional regional private equity vehicles. Additionally, we saw a negative 200,000,000 movement in the year, primarily due to a strengthening of the sterling against the Australian dollar in H2 post the acquisition of Infrastructure Capital. Moving on to Slide 11 now in revenues. 87% of revenues were driven by high quality recurring annual revenues, right in the middle of our target range of 85% to 90%, whilst at the same time continuing to deliver strong growth, up 38% year on year to $119,200,000 $20,000,000 of the $33,100,000 increase was organic, showing the impact of growth in AUM in FY 'twenty two flowing through to the FY 'twenty three P and L.

12:45 And looking ahead to FY 'twenty four, we have a very high level of confidence that we're going to materially grow our revenues year on year. By simply annualizing the recurring revenues we generated in H2 to allow for the acquisitions and rolling forward all other revenues at the same level as FY 'twenty three, our revenue in FY 'twenty four would already be 11% higher than FY 'twenty three. This provides us with an extremely strong base level growth before delivering on any of our incremental fundraising plans for FY 2024. That certainty of revenue generation facilitates business decision making and is a core strength of our recurring revenue model. It's also worth noting that we added diversification to our revenue streams in the year through geographic expansion, more than doubling our non Sterling denominated revenue contribution from $7,500,000 in the prior year to $19,000,000 or 16% of total revenue in the current year.

13:46 Moving on to Slide 12 and costs. Costs grew marginally ahead of our guidance at 12.9 excluding acquisitions, significantly lower than the revenue increase I've just taken you through. And we expect FY 'twenty four costs to grow at a similar rate. We were able to largely deliver on our cost guidance through continued strong cost discipline and continuous steady investment. Clearly, FORESIGHT benefits from recurring and predictable revenue streams, allowing us to plan ahead for multiple years. Finally, on costs, we are now estimating an effective tax rate of 20%, reflecting higher UK corporate tax and an increased presence in Australia. Moving on to Slide 13, an investment in people.

14:37 We will continue to invest in our most important asset, our people, to deliver enhanced returns for investors. At the year end, our FTE had increased to three sixty one from two sixty one in the prior year. This growth was largely driven by the 56 people acquired through acquisitions, including around 25 additional asset management employees in the ICG business. Outside of the acquisitions, we invested in a number of key areas, including, but not limited to, new regional teams to support PE fund expansion and increasing our ratio of investment professionals to 48% from 44% previously. At FORESIGHT, we believe that continued investment in our wider workforce creates a differentiated capability that sets us apart from our peers and enables us to deliver enhanced returns to investors.

15:33 For example, through high quality in house asset and portfolio management, we are able to extend asset lives, negotiate strong performance guarantees, source and evaluate high quality deals in even the toughest markets, leverage expertise across the portfolio, create innovative and motivational deal structures and refinancing packages, and differentiate our offering to LPs and build market leading management teams. These capabilities were integral to the group's outstanding increase in profitability in FY 2023, with, for example, 3,600,000 generated in performance fees from the sale of two solar portfolios.

16:17 Moving on to Slide 14 and profitability. You can see evidence of how these profitable realizations have combined with wider business performance to deliver a 58% jump in core EBITDA to 50,200,000 as revenue growth continues to outpace cost increases with no pressure to feed margins. As a result, we've also made significant progress towards our medium term target set out at IPO of 43% core EBITDA profit margin in FY 2024 by delivering a 5.1 percentage point increase in margin to 42.1% in the current year. This outperformance meant that we saw multiple upgrades to analyst consensus over the course of the year, reflecting the generation of performance fees and success in fundraising and acquisitions.

17:07 We are confident that we will continue to grow our core profitability and profit margins as the business scales and specifically about delivering on our profit expectations for FY 24. On to Slide 15 and shareholder returns. Underlying earnings per share increased during the year to 34.6p in FY23 and this translated into a full year dividend of 20.1 p per share for FY 'twenty three, an increase of 46% over the 13.8 p per share paid in FY 'twenty two. So moving on to Slide 17, significant market opportunity.

17:54 I now want to remind you of the size of the market opportunity that we benefit from in terms of the energy transition in particular, before taking you through our broader fundraising plans and an update on our outlook and trading in Q1 twenty twenty four. FORESIGHT is forty years old next year and one of Europe and Australia's most established real asset investors. We've been investing in the renewable energy transition for over fifteen years.

18:22 These markets are growing rapidly as the demand for cleaner, greener energy continues to increase, driven by a growing demand for energy transition strategies and a recognition of the importance of energy security. In 2022, global investments in energy transition technologies reached a record high of $1,300,000,000,000 and this level needs to quadruple for us to remain on the pathway to a 1.5 degree increase in temperatures worldwide. This would represent a cumulative investment of $44,000,000,000,000 between now and 2030, of which 80% would need to be in energy transition technologies. Add to this a renewed focus on energy security and helpful government policies such as The US's IRA, Inflation Reduction Act, and the scale of the market opportunity where over 50% of our existing AUMs invested becomes very, very material.

19:22 Our infrastructure investment strategies cover the whole spectrum of renewable energy generation and transition as well as wider economic decarbonization, resulting in us being very well positioned to support the broader energy transition by investing capital in the real assets that are driving this change.

19:41 Moving on to Slide 18 and the multiple levers to deliver further profitable growth. This gives this slide gives you an overview of our ambition in this area. As those of you who follow us are probably aware, our focus for FY 2024 is organic growth. We have a strong pipeline of fundraising across asset classes scheduled for this year and beyond. This includes established strategies such as ARRIF in Australia and FEEP in Europe alongside new opportunities such as FORESIGHT CORE European renewables and our expansion into adjacent asset classes such as hydrogen, which we believe will play an increasingly important role in the transition to more sustainable and secure energy provision.

20:31 We benefit from having multiple levers for growth. And in addition to organic fundraising outlined above, we continue to assess the market for accretive M and A opportunities. We have been pleased with the performance of our FY 'twenty three acquisitions to date with RF raising almost AUD 200,000,000 since the acquisition.

20:53 And with a growing track record, building on the previous success of PIP and JLEN, we believe there are attractive partners and continue to see a pipeline of acquisition opportunities. Moving on to current trading on Slide 19.

21:12 We estimate that our AUM at the end of June was marginally lower at GBP 12,000,000,000. We raised new retail money, but this was offset by the lower margin OIC monies that we lost as a result of net outflows and redemptions and a negative FX adjustment as the patent strengthened against the Aussie dollar. We're pleased to see our diversified approach continues to deliver resilience in today's market and look forward to the odds returning to growth when these conditions become more favorable. As we look ahead to FY '24, we can see a high degree of revenue visibility from locked up capital delivering recurring revenues. This visibility facilitates long term decision making and effective cost management.

21:58 And we're confident in our ability to continue to deliver on our growth targets. And we anticipate continued fundraising into high margin

22:06 retail vehicles with additional institutional fundraising in M and A. And timings are on course. Timings are, of course, unpredictable, and we would see institutional fundraising weighted towards H 2 as we move beyond the summer period. Finally, to close our presentation today, I wanted to remind you of who we are. We are a specialist sustainability led international infrastructure and regional private equity investor. We have a diversified and resilient business model with recurring and predictable long term revenue, and we remain ideally positioned to capture the long term structural growth trends in our key markets. Our model is highly scalable so that we can continue to deliver future growth, and we have a demonstrable track record of profitable growth and delivery against our key strategic targets.

22:57 This is underpinned by a strong entrepreneurial culture and the talents of our people, which when combined, enables us to consistently deliver profitable growth and shareholder value as you can see from the stats on this slide. Thank you all for listening this morning, and we'll now take questions. That's great. Gary, thank you very much indeed for updating investors this morning. Gary, I will return your camera up as suggested earlier. 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. So I guarantee if you must review those questions submitted already, I'd like to remind you the recording of this presentation along with a copy of the slides and the published Q and A can be accessed via your Investor Meet company dashboard.

23:40 Liz, if I may, I'll invite you to open the Q and A tab. As you can see, you've had a number of questions from investors throughout today's presentation. So thank you to everybody for your engagement this morning. And if I may, Liz, just hand back to you to read out those questions and give and Gary, if you could, give a response where it's appropriate to do so, and I'll pick up from you at the end. Wonderful. Thanks, Mark. So, yes, so, we've had a number of questions. And if I kick off with a question where where the where the questioner asks starts off by saying it's a great performance. But then the question is, what is the greatest risk to this momentum continuing in the future? I mean, as I talked a little bit at the end there, I think at the moment, we're seeing a you know, worldwide, I think the institutional fundraising market in q one was down 94%.

24:29 So that gives you a flavor about how tough the institutional fundraising market is at the moment. I think where we're different from a lot of the monoline institutional fundraisers is that we've got, you know, a diversity of products that we can offer LPs. And I think that sets us apart and gives us, you know, an ability to offer something unique that other people can't. So as I said, I I expect institutional fundraising to be more weighted towards h two. I'm but I definitely see a willingness from LPs to commit to our strategies. I noted earlier about, you know, one of our Australian funds already having a commitment to to one of its fundraisers of, you know, almost 200,000,000,000 Aussie dollars.

25:14 So there's certainly a willingness in LPs to commit to our strategies. And I think given

25:19 our head start that we have and, you know, the wider decarbonization agenda, I'm confident that despite the headwinds in institutional fundraising more generally, that we can still achieve in those targets. I think it's important to say as well that, you know, in addition to the institutional side of things, we've, you know, we're still performing exceptionally well on the retail side fundraising. And although we've seen, you know, net redemptions on the OIC side, that's more than being offset by, you know, high margin products, into retail investors. And so net net, our revenues and profitability on the retail side is up despite the fact that we see net redemptions on the outside. Thank you, Gary. And there there's a there's a logical follow on from that in a in a follow-up question which talks about what are the key drivers behind that strong retail inflow?

26:13 So I I think we're in terms of the key drivers behind that, I think we're offering something to investors that a lot of people do not have the ability to offer. So, you know, we have, you know, between a 150, or so infrastructure investors, asset managers, portfolio managers, and our ability to to give retail investors access to, you know, a a stable return asset class in real assets. I'm a lot of people aren't able to give retail investors access to that. Normally, it's reserved for only the largest of institutions. And so that proves to be really attractive with both IFAs and wealth managers to be able to offer that to their, you know, their end clients, if you like.

26:59 And because of that, our inflows have remained robust during the period. You know, performance is a, you know, is a second point that I would add. Our performance in these areas has been, you know, exceptionally well both in terms of infrastructure and on the private equity side over the

27:16 last, you know, five years or so. And so we're really delivering in terms of returns for investors as well. And I think that's why it's why FORESIGHT in terms of both its key strategies has remained attractive to investors. Thank you. And then in terms of the retail institutional split, terms of looking at the AUM, is there an ideal split that you envisage between retail and institutional, the overall business? So first thing I would say is I I I love having the diversification of of both at FORESIGHT. I think the current split is roughly seventy thirty and, you know, anywhere in that two thirds, one third between institutional and retail. I've you know, I would certainly like to maintain that for as long as we can because I think you never have you know, the retail comes in on a daily basis. So certainly, I'm very attractive revenues to have. Whereas on the institutional side, it tends to be much lumpier, and you you you know, you raise core funds maybe every two, two and a half to three years. So I'm having that split, think, provides an element of resilience in the business that, you know, people who focus on one or the other don't necessarily have. And I think you can look forward to us, you know, delivering in terms of growth targets as a result of a, you know, having both strategies going forward and continuing to have them.

28:46 Thank you, Gary. So then just drilling down into private equity a little bit more. Are you able to provide a little bit more color on what's gone well and what hasn't within that division? Specifically, how have valuations changed over the past year and particularly with a focus on venture capital investments, if there's any additional color you can share there? Yeah. I mean, I think, you know, most of our regional strategies, certainly, the predominant regional strategies are are very small scale, you know, MBOs or growth capital investments, and they've gone particularly well. So I think, you know, as an example and and please take this in, you know, as it's meant, which is just a straw in the wind, you know, one of our our Northwest first Northwest fund is currently in realization mode. I think it sold six of its 17 investments, and the, you know, the net multiple on this first six investments is about 6.7 times money. So I think the regional strategy in terms of, you know, investing locally for pension funds, and local investors has worked really well. It's generated not only value for, you know, pension funds, but it's also created many, many jobs in in the regions as well. So I think that's gone particularly well.

30:05 I think in terms of challenges and on the, you know, the venture side, I think I'm challenges, you know, retail side, I'm thinking, you know, during the, you know, the squeeze, if you like, cost of living crisis. I think you saw, you know, restaurants that, you know, using as an example, restaurants that were in the middle, so not at the very low end and not at the upper end. I think they got squeezed in terms of, you know, footfall, and I think you saw some attrition in terms of value of, you know, that type of middle market retail investments. I think there's no question that was the case. In terms of, you know, the venture side, I think you'll start to see, you know, at these interest rates, you'll start to see banks drop stocks in terms of, you know, funding some of these things. So I think you're going to see more equity funding being required on a more regular basis until, I think, you see a a more normalized bank environment, you know, and and who knows how long that could be. That could be twelve months

31:06 or eighteen months away. Thank you. And then staying on the topic of valuations, but moving up to the corporate level. Are we seeing any change in terms of acquisition targets in terms of the valuation profiles there? And can you provide some color on that? Yeah. I mean, as I said earlier in the presentation, we we only look at accretive, you know, acquisitions. What makes that quite difficult is, you know, the you know, our own underlying value, if you like. So, you know, when we listed, we were listed at $4.20 and profits were 23,900,000. And here we are at over 50, and we're not much more than, £4 20. So I think our multiples actually have from about 20 to 10 times. So, you know, that makes it quite tricky because I think what you're seeing in the private markets, despite the fact that you've seen, you know, small cap listed stocks, you know, a bit of a retrenchment in terms of the multiples, you haven't necessarily seen that in private asset vendor expectations.

32:09 And so because of that, you're likely to see less larger deals, in my opinion, at least for the foreseeable future. That doesn't mean we can't still do acquisitions, and I'll give you an example. In June, we did a very small acquisition of a PFI contracts business, and we paid 4,800,000 for it, which is just over five x. And, that will add 1,200,000 to revenues and about 900,000 to profits on an annualized basis. So there are still smaller deals to be done out there, but I think, you know, I'd like to see FORESIGHT's rating increase, you know, so that we can do, you know, larger acquisitions like ICG, etcetera, going forward. But I think as investors also, though, FORESIGHT

32:53 is very cash generative. So for a lot of the the smaller deals, we will you know, we'll be able to pay for those in cash and, you know, leverage up our ability, k, not to take on debt or necessarily, as I said earlier, we definitely don't want to be issuing shares where we see the where the deal is not accretive to underlying investors. Thank you, Gary. And then just looking at sort of the average fund life that the company benefits from and equally sort of total asset life. Can you just give a little bit of color in terms of the the duration of some of the assets that we own and also the average length of duration of our funds? Yes. So, I mean, on the LP, you know, we've got a number of evergreen funds.

33:38 I you know, and some of our LPs are evergreen as well. So, you know and a lot of people say, well, how can an LP fund be evergreen? What tends to be the case, normally, LPs are ten years long, and money's returned over the the second half of that ten years. But on the some of the institutions have said, no. What we wanna do is take all the realization money and plow it back in to do future investments. So a number of, you know, there's a number of opportunities to to to extend that trend, if you like, in terms of LPs. But so we've got a high degree of evergreen funds. We've also got a number of, you know, LPs, as I say, that are longer than ten years. And so the average LP life, I think, across our funds is about twelve years.

34:26 And if I were guesstimating, and and this is all it is, if I were guesstimating the average life across all the funds we have within the nine billion of FUM, I'd guesstimate that it was at least the same as our as the multiple that we're trading at. You know, so you're not seeing any premium in terms of valuation compared to the the average fund life in the business. Thanks, Gary. So now just going on to sort of some higher level things. So a question on whether FORESIGHT is flying below the radar of analysts as you can't see any published research. Are we are we taking any steps to address that issue? I mean, we we have a number of we have a number of analysts that cover FORESIGHT.

35:12 I'm you know, I think there's four analysts covering FORESIGHT and, you know, hopefully, there'll be a fifth commencing coverage in the not too distant future. So I think that's a point that I'll take away and speak to the corporate IR team and, you know, potentially follow that up with investors, say, after the call. Yeah. Thanks, Gary. I will put it on my to do list. But, yeah, we are working very hard on that, and and we expect to increase coverage in the near future. So another question, and this one may be off the back of some newspaper articles that we've had recently on on the group. But a question around whether FORESIGHT would benefit from being part of a larger investment entity and what your thoughts are around that.

35:59 So, I mean, the first thing I'd say is, you know, FORESIGHT has been an independent company for nearly forty years. It'd be fortieth anniversary next year. And all our strategies, you know, and plans at the moment, you know, are to continue entirely as an independent company. So that that that is the that is the primary strategy. And we see, you know, that is the key strategy to be able to drive value for investors. But in in terms of, you know, just taking the, you know, the question more generally, I think there's no question what we would benefit from is access to increase, you know you know, global distribution if you like, that perhaps a big bank or a big insurance company could offer FORESIGHT.

36:44 As I said a little earlier, we we developed our capital market strategy a bit further during the year. At the end of January, we linked up with a Cromwell Funds in The US to, you know, to access their distribution for, for our OIC strategy. We're currently working on a further distribution strategy with someone else in Europe as well. So that would would give us broad coverage in in The US and and in Europe. But tend they tend to be product by product as opposed to the whole product suite suite in one go. I think if we could, you know, have a partnership or joint venture, you know, with a, say, a big bank or big insurance company that doesn't necessarily have access to, you know, renewable energy infrastructure that FORESIGHT enables investors to get hold of, then I think that could potentially be very valuable indeed.

37:40 I think a lot of as a for instance, a lot of US investors, you know, their real assets tend tend to be real estate as opposed to renewable energy infrastructure. And so I think such a a tie up could be very complementary. But at the moment, we're we're not looking at being subsumed within, you know, much larger entity. It's certainly not in the plans. And as I say, we're we continue to be and will remain for the foreseeable future an independent entity. Thank you, Gary. So just moving on to one question here. It's relatively tech a little bit longer, so please bear with me as I read this out. But, basically, it's it's around whether they could be virtue in scrapping the current dividend policy and instead retaining earnings and reinvesting cash in FORESIGHT funds.

38:27 Specifically, the suggestion is that this could work if you employed the firm's earnings in a fee free manager class of new FORESIGHT funds and using that as skin in the game to help satisfy new big ticket cornerstone institutional investors, helping long term FUM growth as well as compounding business value. The the opinion is that that is theoretically should help the the firm's share price. Can you give some thoughts on the dividend and the policy that that FORESIGHT applies and and why the thinking behind that? It it is something that we discussed with investors at IPO. I'm you know, and there there were one or two investors that suggested we shouldn't pay a dividend because the returns that, you know, and the growth that the business is generating.

39:14 And we should, you know, use it potentially for, you know, acquisitions was one example, you know, as well as, you know, reinvesting it in FORESIGHT funds, like, you know, for instance, the private equity strategy. I think that the the vast majority of investors were keen to see a, you know, dividend yield. You know? And in the current environment, I think our dividend yield is about 4.8%. So it's it's quite an attractive dividend yield and stock at that level. But I do think it's a very serious thing to consider because I'm I do take the point that there's a potential to, you know, leverage up the returns on that cash. But equally, I suppose we could pay the cash out and we even if we saw potential opportunities, we could always issue new shares at that point in time as well. But I do think it's a very sensible suggestion, and I think that's one we'll take off board and and, you know, consider it further.

40:15 Thanks, Gary. So we're just onto the last two questions now. So moving to the penultimate question. This is a question on the role that Bernard Fairman continues to play in the business. Could you give a little bit of color on that one, please? I mean, Bernard's very much Bernard's the executive chairman. So Bernard very much gets involved in, you know, strategic decisions within within FORESIGHT GROUP. I very much run the business on a on an operational and day to day basis and have done for about ten years. You know, as I say, Bernard very much gets involved. He likes meeting investors. You know, he likes getting involved in in the m and a processes and, you know, and and commenting on, you know, investment decisions and strategies. So, you know, Brian is very active, and I think Brian put it best himself when he said, if he feels he's no longer making a contribution, then he'd be the first to recognize it and step back. But, you know and I would agree with this when he's you know, I think he still makes a very big contribution to FORESIGHT, you know, and I don't see that changing anytime soon.

41:18 Thanks, Gary. So then just turning to the final question that we'll cover today, and that is, what key milestones should investors expect to see from FORESIGHT in the short term? So I think, Kaim, you know, we've commented that, you know, key milestones. So this year, you know, the key milestone, we we hit over 50,000,000 in terms of profitability. I think you can see, you know, the upper end of consensus for next year's profitability, I think, is about 62,000,000. I think that that will be you know, I think we've got a as we sit here today, we've got a very high degree of confidence in achieving, you know, that over 20% increase in terms of profitability. So I think that's one of the key milestones.

42:05 I think other key milestones will be improving our distribution capabilities, which we're working hard to do. And, you know, in h two, looking to have first closes in some of the institutional funds that I mentioned a little bit earlier on. I'm I think, you know, we've got a very good team at FORESIGHT and, you know, a lot of people working very hard to deliver on our, you know, our core metrics for investors. Investors. And, you know, as I say, you know, I'm a long term shareholder in FORESIGHT. I'm you know, I haven't sold any shares since IPO. I think FORESIGHT, in my own part, this is my view, not not necessarily a company view. But I do think there's a long way to go in terms of the share price, you know, that FORESIGHT is currently trading at.

42:51 And if I was a you know, if I was an investor, I'd be very happy, with the potential that the business has to grow going forward and how that will be reflected in the share price and returns more generally. That's great, Liz. Gary, thank you very much for your time, and thank you to all the investors for your engagement this morning. Gary, I know investor feedback will be particularly important to you and to the group as a whole, and I'll shortly redirect those on the call to give you their thoughts and expectations. But I wonder before doing so, if I may, Gary, just ask you for a few closing comments, and then I'll redirect investors for their feedback. Yeah. I mean, I say I I I very much appreciate investors taking the time, you know, to to listen to me ramble on about FORESIGHT today. But I hope that I've given you a flavor of, you know, how excited I am about the potential for FORESIGHT, you know, in the markets that that it's involved with and the potential for those markets to be enormous and for us to have, you know, a really big share of that going forward and how that will translate into, you know, the potential.

43:54 But, you know, shareholders giving us their time to listen to that, I very much appreciate it. If there's any follow-up questions or you ever want to speak to me or email me one to one, more than happy to do that. And, you know, I'd just like to to thank Investor Meat Company as well for hosting us today. That's great, Gary. No problem at all. And Liz, thank you for your time also. 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 the company can better understand your views and expectations? This may take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of FORESIGHT GROUP HOLDINGS LIMITED, we'd like to thank you for attending today's presentation, and good morning to you all.