Huddled Group (LSE:HUD) — Final Results

0:01 Good afternoon, and welcome to the HUDDLED GROUP PLC final results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the q and a tab. Sit to the right hand corner of your screen. Just simply type in your questions 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 the questions submitted today and publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Martin Higginson. Good afternoon to you, sir.

0:30 Yeah. Good afternoon. Thanks for allowing us to present today. So really just wanted to get into it. First of all, HUDDLED, it's been a transformational year as people have seen in the results earlier this morning. Just a little bit of background on who we are. We've had about forty years of experience in sort of not only starting businesses, but exiting them and listing them. We've listed six businesses in total, one of them getting to an AIM top 50. So I'd like to think we've we've got a reasonable understanding of of sort of business and and how to make it and turn them into a success. What we're doing here really is about bringing together a number of ecommerce business predominantly focused in the discount sector.

1:18 You'll see with the addition of our Food Circle acquisition, that's another string to the to the to join Discount Dragon. And our ambition really is to to grow this into a sizable business. We we can see all the benefits of, one, the strong balance sheet allowing businesses to buy more stock. We've seen a lot of the benefits in Discount Dragon and some of the early sort of benefits in in through Circle, and we'll get into that a little bit later. That combined with, I think, years and years of marketing skills and organization really pulling all these things into one central warehouse investment into fulfillment, I think, really sets us on the right course for building a very strong group of ecommerce businesses.

2:06 So just looking at the evolution, obviously, last year, 2023, was, as we said earlier on, transformational year. We sold both Emotion and Uvisan. We sold those for $25,000,000, £20,400,000. That resulted in a sort of 13,000,000 post tax profit for the year, which was great, allowed us to return 12,700,000 to to shareholders. So I think some big ticks in the box, but most importantly, it left enough money in the tin for us to refocus the business and reenergize it in terms of what we were going to do next. And as we touched on earlier, this is about investment now into building that ecommerce sort of group that we talked about.

2:53 We acquired Discount Dragon back in sort of late twenty twenty three. And ever since acquiring it, we've seen, you know, really solid growth, and we'll get into some of the KPIs a little bit a little bit later on. We also acquired Food Circle supermarket. And as you'll see as we get into the slides, we've we've taken the decision to rename that business NutriCircle. And the reason for renaming it is so that it can really focus in on on its sort of key area of expertise. And then we've entered into a partnership on Let's Explore with our distributor, Wicked Vision, which will really sort of see the margins that they were enjoying as wholesalers coming back into the group. So I think a big tick in the box for that business. And it also allows us not only for them to go in and help us manage the business, but frees up more time for us to not only grow Discount Dragon, NutriCircle, but also look for other potential acquisitions on the horizon.

3:54 So just looking at HUDDLED GROUP PLC, where does it sit today? Well, we've got Discount Dragon. We talked about NutriCircle. Obviously, was Food Circle supermarket, and we'll get into some of the details of what we're doing with that business a little bit later. And then on the right hand side, we've got Let's Explore and Vodiak. So just talking about Discount Dragon. As we said, we acquired this business late in 2023. If we look at the market here, and I think it's really important to to understand the market, understand the size of the market, and the potential that that we believe we see in this business. Everybody loves a bargain, you know, never more so than than today, but I think it's always been something that's been, you know, at the heart of of every shopper.

4:40 This is really backed up with a a movement to online shopping. And I think if your house is anything like ours, you'll have more more parcels coming through the door than ever before. And a lot of this is driven by Amazon, but also it has a sort of halo effect into other businesses. And then I think if you look at sort of things like groceries, which Discount Dragon sits in, then why wouldn't you want your groceries delivered to your house? So I think the combination here of of really, really great savings, a movement to online shopping, and the rise in sort of online supermarket shopping for, you know, trays of beer, large items. You know, nobody really was to carry these around, get them delivered to your house, and get them delivered quickly. You know, we think these are are big ticks in the box, and I think the numbers underpin our beliefs.

5:27 So, really, what is it what is discount drag? What is it famous for? Well, at the heart of our business, it really is famous for surplus stock. And when we talk about surplus stock, we can mean anything from items that are coming close to their best before date, and best before date should not be confused with use by date. Discount Dragon sells dry goods, stuff that goes in your cupboard. It doesn't sell stuff that goes in your fridge. So, really, this is about best before date. Something that is within two or three months of its best before date is perfectly safe to eat. And, you know, you we've all got tins of beans in our cupboard that some of them, I guarantee, will be past their best before date. They're perfectly safe to eat, and all of this is published on the government websites.

6:13 What this allows us to do in terms of buying best before date, a lot of supermarkets won't stock items that have got three to six months of best before date time on them. So what happens to this stock? And it's exactly the same with mispackaged stock. You know, on the the photograph there is a sample of the Budweiser beers. They were produced for the Qatar World Cup, and that was it's been well documented. The Qataris then decided that they weren't going to sell alcohol at the World Cup. So all of that beer effectively went into the surplus stock market. Same with the body shop items. That was liquidated stock, perfectly good body butter, liquidated stock that we were able to pick up. Other examples are things like chocolate where you've got timely events, Christmas, Easter, Halloween.

7:01 All of these events are important. Once Christmas passes or Easter passes, which is a great example, the supermarkets will return chocolate that is perfectly good to eat back to the manufacturer or the wholesalers. And all of this is surplus stock. So there's tons and tons of this about. But the problem that we're actually solving is unless people like us take this surplus stock, it's gonna go into landfill. And it's really you know, there's nothing wrong with it. Perfectly good to eat. So we've gotta try and fix this problem. So I think not only can we can we start helping to solve that problem, we can also help consumers in delivering product at a much reduced price. So there's some stats there, you know, about what surplus stock is, 9,500,000 tons of surplus food waste in in, you know, each year in the in The UK alone, you can see what it does to sort of greenhouse gases.

7:53 So there's a there's a big problem here. And one of the things that people asked us is, is there enough stock? There is plenty of stock. A good example of this, we've just finalized literally yesterday a deal with a major airline. We we've bought all of their duty free stock that that goes on their airlines for probably an eighth of the retail price. And this will allow us to sell that, making an excellent margin and still sell it at at sort of 60% below retail. So the customer gets a great deal, stops it going to landfill, and we make decent margins on the uplift. So looking at the growth pillars, this year is really one of the investment, not only in Discount Dragon, but also in HUDDLED GROUP across the piece. And a lot of the investment is gonna go into the warehouse, into fulfillment. We've identified a warehouse, and we're at advanced stages in concluding the lease on that. So, hopefully, within the next few weeks or months, we will be able to sort of move into the new warehouse and and really start scaling the business.

9:01 Linked to that is stock investment. We've invested in stock right from the get go with Discount Dragon, and we've also done exactly the same with NutriCircle. And that stock investment is is now reaping the rewards. And we touched on what we've just done with the the airline company. There's a lot of stock out there, so we we need more cash in order to invest in stock. Broader range equals better average order values. And, And, obviously, as we start scaling the business, we need the depth of stock so that we make sure that we're always replenishing the the goods that are in there, especially the sort of fast moving items. And all of that is this is then linked to marketing investment. Yeah. This is about acquisition and retention, and we look at this very, very closely on an hour by hour basis, even a minute by minute basis.

9:46 We are obsessed with the data that that that runs around our marketing, and all of these are sort of interlinked. The the the better stock we've got, then the easier it is to market to customers. The the better the warehouse or within the new warehouse, the quicker we can get goods out to the customers, and therefore, we give them a better experience. And all of these interlink ultimately to drive increased margins. But this isn't gonna happen overnight. This is about investment. This really is about investment this year in order to put the the growth pillars in place so that we can really start turbocharging this business into the the sort of golden quarter quarter four this year, and then into 2025 and beyond. So we talked a little bit about data and how important data is to us. Data is really at the epicenter of our business. Everything that we do do is driven by data. We've we've built a sort of business intelligence platform, which allows us to see in a real time environment how many customers we've got, what conversion we're getting, what the average order value is, what are the key items that are selling, what's the day's cover on these items, what are we running low on stock on, everything.

10:59 And this has taken probably six or seven months to build, but this is this is now at the heart of of what we do because everything should and and is now driven by data. You know, we call it sort of mathematical marketing where you're making decisions based on little tweaks. And this is a series of this is gonna be a sort of loads and loads of sort of 1% increments. And each time we improve, each time we get better, and each time the data then backs up those decision processes. So let's just look at the numbers, where are we, and and, you know, what does that mean for us in terms of, you know, where has the business grown, you know, what is it doing. When we bought the business, I think if you go back to when discount revenue first started, it was it was a tiny business. It was bought privately. It was doing about £75,000 a month.

11:45 You know? Now we're up to sort of you know, quarter three was £1,300,000. Quarter one this year, we're at £2,100,000. So a 60 odd percent increase from quarter three to to quarter one of this year. And you can start sort of seeing the number of orders that we're processing, but I think more importantly, the number of customers that we're adding. We talked about investment in marketing, and you can really start seeing that we started to scale that in quarter one of this year, 20,000 new customers in quarter one, and we'll continue that investment as we as we move forward. And we'll start doing more. We've tested a number of different marketing initiatives. We've just signed an agreement with Shop on TV, and some people will have seen us on late night TV on ITV one, and that's performing very, very well for us. So we're we're we're on every week now, up to three hours sort of late at night, but but that's generating great awareness for the for the business and a lot of new customers. So it's a big tick in the box, and we'll look at layering more and more marketing onto that. We do a lot of social activity, but then it's about adding other sort of areas, whether that be radio, whether it be TV, onto that so that we create this halo effect, and we really start to build the brand and build sort of longer lifetime values through through better retention.

13:11 So NutriCircle, Food Circle supermarket. We acquired this business literally a few weeks ago. So it's it's very, very early stages, but, to say we're thrilled is probably an understatement. We rebranded it or we're about to rebrand it NutriCircle. And the reason for doing that is really Food Circle supermarkets doesn't quite do what it says on the tin. And when the business was originally set up by the two founders, they were they were effectively trying to replicate what we've done with Discount Dragon. The reality is they had to focus on a sector due to sort of lack of cash and and and and sort of a small balance sheet. So they focused in on the sort of nutrition on the protein bar market, and they tapped into something that that was, one, very lucrative and, two, had a lot of intent from customers.

14:03 So they managed to bootstrap this business and and grow it to 1,400,000 of turnover, but it still was strapped of cash. So we've been in talks with them for the last few months about, them joining us, what the business could look like with them working as part of of HUDDLED GROUP. And I'm really pleased to say that we've managed to quickly, you know, allow them to invest in more stock. This has resulted in in increased sales without a shadow of a doubt. And we've just since started to do some marketing for them. So we started to, you know, implore employ our sort of marketing skills into their business.

14:48 So the business is is focused predominantly was focused on nutritional bars, sort of protein bars. It was doing a little bit of whey powders and vitamins. We're gonna extend the range. So we what we want to do is anybody anybody who's into healthy eating, go to the gym, etcetera, etcetera, we want to be the go to place for discounted products in this sector, and this is a big, big market. You know, as you'll see on the right hand slide there, this is The UK market is growing faster than The US market and predicted to be sort of over 100,000,000 of of revenues in the in the sort of coming years. So big, big market, great demand, huge intent from the customers, better range, better not only depth, but breadth, and I think we can really start growing this business.

15:36 And this is starting to be seen in some of the numbers. As I said, it's really, really early days, so we've got to be sort of slightly careful that that, you know, we don't sort of start cracking open the champagne, but we are very, very encouraged. Total sales last year, 1,400,000. You can see the average daily daily orders as as we are now. Since the April 12, it's grown a 125. And I looked this morning at the the first sort of seven days, eight days of May, and I can see that's up to over a 190. So we're seeing huge growth in this. And when I talk to the marketing teams, when I talk to the the the guys on the floor about stock and and the breadth of new products they're adding, they can see this is gonna be a sizable business.

16:22 And we've given them a target to achieve sort of 2,000,000 of of profitable

16:27 revenue this year, and I think they're very much on for that target. So, you know, a big tick in the box. And as I touched on earlier, what we're especially encouraged with in this business is the intent of customers. The repeat customer rate in April was 74%, which I think is a massive sort of, you know, tick in the box really for for the guys, what they've done, and how they've managed to to really increase retention and build lifetime value. So we talked about let's explore and and the partnership on that. What we've done is we've partnered up with our wholesaler, Wicked Vision. Just to give you some background, what we were doing historically is we were selling VODIAC into Wicked Vision. They, in turn, were then selling that on to people like QVC and other teleshop teleshopping channels around the world.

17:24 We've now decided to bring that margin within the business and have this much more as a sort of joint venture type type business with Wicked Vision. So I think this is the right thing. It also allows us to bring in the Let's Explore range into their into their sort of wholesale or sort of b to b environment. They've got great relationships with the trade, great relationships with Telia's shopping channels on a global basis. So I think that just really allows us to expand the range, expand the opportunities here. You know, we sold 30,000 VODIAC last year. We believe we can sell more. And with significantly increased margins, the business will be a lot more profitable. Let's explore was really last year was about launching the new products, seeing what customers thought of the new range. We had Let's Explore Oceans, Space, and Wildlife. We sold 8,000 units. We were a little late due to some marketing challenges with Facebook in quarter four. But what we are encouraged by is the feedback from customers.

18:27 We're rated excellent on Trustpilot. We've now started early conversations or Wicked Vision started early conversations with a number of trade buyers, and we're getting really, really good feedback

18:37 for this product. It's highly educational, highly immersive, and I think ticks a lot of boxes not only for the consumer, but for trade, or retail buy buyers, retail shops, and also teleshopping channels. So we can see this business growing as as we move forward. And with Wicked Vision, now helping us to run the business, it frees us more time to focus on not only Discount Dragon, but NutriCircle and potentially looking at other suitable acquisitions for us. So where are we, what does the year ahead look like? Well, as as we touched on earlier as I touched on earlier, this is about driving growth, and this is about investment into those pillars, investment in not only stock, marketing, and fulfillment.

19:23 We've got the new warehouse on the horizon. We're we're in advanced stages in in getting that lease signed. So we'll be in a new warehouse this year, and that will then allow us to move NutriCircle into that warehouse and fulfill everything from those operations.

19:40 In our existing warehouse, we we do have some challenges, and I think this gets back to sort of showing, you know, where are we in terms of Discount Dragon and and and the growth potential. You know, just to sort of give people some idea, in April, we wanted to stress test what was what was the size of the market, how big was this market. So we scaled marketing on on that day. We got 3,000 customers through the door, all ordering. We did over a £100,000 in revenue in in a single day. So what we proved to ourselves is there is a sizable market here. Now what people shouldn't do is start extrapolating that and timesing it by 30 and coming up with what we should do because the reality is our current warehouse is constrained.

20:27 What it did prove to us, and it gave us the confidence to sign the lease on a new warehouse. We knew that there was customer demand for the product, and we can also see that customer demand in Nutricircle as we start scaling the marketing.

20:40 As we move to the new warehouse, we'll be able to operate seven days a week, twenty four hours a day. So our ability to scale in a controlled environment is is huge. The market's there. We know we can get the stock. So all of the things are pointing in the right direction. We've got a solid balance sheet, so we are able to execute our plans. And using that balance sheet also allows us to do things like, you know, taking opportunities of buying stock at the right price. We talked about the the airline stock that we've recently bought. And just to sort of give people some idea, that retails at about £2,000,000. We bought that for £250,000. So you can see the opportunity to mark that up but still deliver significant savings. So, really, why should you invest and why should you consider investing in this business? And I I always think this is a is a good question to ask and probably even more if we answer it.

21:38 We are, in my view and and the board's view, innovating for success. This is a hard business. You know, we we've gone into a sector that is is crowded, is is full of challenges, but we've managed to build a nice sort of blue ocean for ourselves in terms of what we're doing. Discount Dragon

21:57 is famous for surplus stock, and NutriCircle is also now building its its notoriety around being famous for sort of healthy eating, whether it be whey powders or protein shakes or protein bars, it will build that, and people want the discount. We know people want the discount. And by joining all of those dots together, we we firmly believe that we're on the right trajectory for success. Building strong brands is is at the the the epicenter of what we do. We want people to recognize our brands. Obviously, the Discount Dragon on ITV starts helping us do that. We will you know, the the more we advertise and the more we're in front of people's faces, the more we can build that brand recognition. And the more we build brand recognition, the greater the lifetime value. And this is one of the reasons for changing the name of Food Circle to to NutriCircle.

22:48 It allows us to build that brand and build brand recognition in a in a sector. You know, we

22:53 want with NutraCircle, we want people to to feel proud and and, you know, almost sort of yeah. I can imagine people having that on their T shirts in the gym. Is this business scalable? Well, I think as we've identified earlier on, this is a highly, highly scalable business. 3,000 orders in a day, over a £100,000. We tick that box in terms of proving to ourselves, is there a market here? There's definitely a market, and the market's big. Can we get stock? Yes. We can get stock, and there's a lot of stock about. Not only best before date stock, repackaged stock, but also, as we've proven liquidation stock with things like Body Shop and surplus stock with things like airlines and so on and so forth. So highly, highly scalable. But all of that requires the investment in in the warehouse, and it requires us to have that infrastructure in place that we can operate twenty four seven.

23:44 And then we can spread the marketing skills across all of those businesses.

23:50 What's the financial upside? Well, as I said, this year is a one of investment. It really is about building those foundations, but we can see the financial upside with scale really just come profits, but you've gotta get that scale. Is there scale there? Yes. We've we've demonstrated that with what we did earlier. So I think there's a big financial upside.

24:14 We talked about the the market opportunities. I think there's the market opportunities here are huge, and we we personally get very excited about what we can do, what we can achieve in these markets. You know, the discount food sector is is massive. The just that sector alone on protein bars, over a £100,000,000. We've seen what people like the HUDDLED GROUP have done with My Protein. So big opportunities here that we need to seize on. And with the the right infrastructure, we can do those. And we certainly got the ambition. You know, we've got a lot of ambition. We've got an amazing team from, you know, great sort of warehouse colleagues to unbelievable marketeers that are looking at data to people that are building sort of fantastic brands for us.

25:01 So we've got an amazing team, lots of ambition, and I think we're really sort of striving for success. We're we're all the whole team from everybody up to just downwards is very excited about this this business and what we can achieve.

25:16 So, look, thanks very much for for for listening. I appreciate it. I'll sign off on the presentation and and welcome questions. Perfect. Martin, thank you very much for your presentation. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab, which is situated on the top right hand corner of your screen. We have had some pre submitted questions, I want to start off the q and a session with these. The first one reads as follows. Is the growth discount Dragon constrained until you move into the new warehouse?

25:45 Thanks. I think it's an excellent question. As we alluded to before, we are now hitting the ceiling of what we can do in our current warehouse. We we stress tested it, and we didn't stress test it to the max, but we certainly put the put the guys under some pressure with what they could do in a single day. At the moment, we're probably capped out around sort of 30 to 35,000 parcels a month. The new warehouse will allow us to,

26:15 increase that substantially. We don't quite know, by what, multiple, but it it is significant. Just to put that into context, we've got 54,000 square feet of warehouse compared to probably about 25, 30,000 square foot of usable space. We've got much greater height, probably double the the height. So in essence, in terms of cubic space, it's probably more like a 100,000 square feet. And we've got

26:47 access for goods in and goods out exclusively for us. At the moment, we are in a shared facility. So we've got shared, goods in and shares good out goods out, access. So it is challenging where we are. But we do know that, as I said, moving into the new warehouse will give us a a big multiple of that. So, yes, slightly constrained at the moment, but the that's all being solved within the next we're hoping ten to twelve weeks, we'll be in the new place and and ready to scale.

27:17 Perfect. Thanks very much, Martin. The next question here. Will you need to raise capital in order to drive growth, invest in stock, and accelerate market spending?

27:26 We don't think we're gonna need to raise capital in the in the sort of short to medium term. We've we've got enough capital. We've identified what we want to do. We're investing in stock. We've invested a lot already in stock in Discount Dragon. We're probably knocking on the door of a million pounds worth of stock, which we're we're turning on a regular basis. There's a small amount of capital needs to go into NutriCircle to help grow that business, but it's it's probably a £100,000 ish. We've got some cash that's gonna go into the the new warehouse. But, again, barring rent deposits and things, it's probably a few hundreds of thousands of pounds. So we've we've got enough cash to do what we need to do. Obviously, there are, you know, rules on the lookout for acquisitions, but they will be very strategic, and things more like on the line of of the NutriCircle acquisition where we can add, our skills to a small acquisition and then grow it organically, having whatever acquisition target we we'd look at, having them done all of the hard lifting and proving that there's a market in that sector.

28:28 Perfect. The next question here. What's the competitive landscape in The UK after Matata's leaving the market?

28:36 Obviously, Mutato's were in there. We we we gave them a good run for their money. And I think using their words, we were doing it better than they were doing it. So I think we're you know, we've we've got good marketing skills. We've obviously seen pound land come into the market fairly aggressively. We we see them you know, we we don't just sit on our laurels. We see we've got a part game, which I think we're doing. We're doing with greater marketing, greater focus on marketing. So, yeah, I think we're in a good place, but we're we're never complacent.

29:09 Perfect. Another question here. Why did the Wicket Vision r and s go out so late on Friday?

29:14 So I'd say this one. Yeah. Yeah. So we we we concluded that deal probably about ten minutes before the r and s went out, and it you know, normally, we wouldn't put an r and s out at that time on a Friday. Hopefully, it doesn't look like we're trying to conceal anything. And, I mean, as you have seen in the presentation, Martin has just given in our results presentation. We go into all the details, so we're certainly not trying to hide anything. We we took the view that we we we had people, obviously, who were expecting the results statement this morning. We didn't want to,

29:48 you know, sort of dilute that by having a second RNS come out at the same time. So we thought on balance, it was best just to put that out and and update the market, you know, in real time as I just just after the deal the deal was signed. So as I say, not trying to hide anything. It's all in the results statement in the presentation.

30:09 Perfect. Thank you very much. That actually concludes the pre submitted questions. So, Dan, at this point, if I can maybe just hand over to you just to read out the questions and then give responses, and I'll pick up from you both at the end. Yes. Okay. So the first one we've got is so do we have a backup plan for deliveries if there's any problems with Royal Mail such as strikes?

30:28 Well, we we still have live accounts with DPD. So in the event that there was a strike by Royal Mail, we'd just immediately switch to DPD. So the simple answer is yes.

30:40 Okay. Yeah. I've got a question here from John. Would you be making any more acquisitions this year? Where do you see the group in three to five years from now, especially in relation to profit and market cap? Okay. So dealing with the the sort of three elements of that question. At the moment, our main priority is to get NutraCircle bedded down, get into the new warehouse. So I think in the immediate short term, no. We don't see any further acquisitions, but that we never say never in case something was amazing and came across our our desks, but not you know, there's nothing on the on the horizon at the moment. The next three to five years, this is a a huge market with a huge market potential. So we definitely see massive growth. We are tooling up for growth both in terms of, you know, the three pillars that we touched on stock, fulfillment, moving to the new warehouse will really allow us to do that, and our continued marketing strategy will allow us to acquire customers and continue to build.

31:41 So, you know, in three to five years, yes, we see the you know, we will be tipped into profitability by then, and we see the market cap reflecting, you know, the efforts that we've put in.

31:55 Okay. Great. We've got a question from Christopher here about the disposals. Could you discuss the valuation process for the Emotion and Ubisan disposals?

32:05 How do these disposals fit into the broader strategic realignment of the company? I think when we when we own both Emotion and Ubisan, Ubisan was was you know, came out as a as a byproduct of COVID and was it was a tiny business. Emotion, on the location based entertainment division, we we used a lot of the cash that we had on the balance sheet to to get us through COVID. We survived COVID,

32:33 which I think was the our number one priority. We came out. We built the business. We built it back up to about, from memory, about 1,200,000 of operating profit. So good solid profit. We were aware that the capital markets were tightening at that moment in time. We were also very much aware that we the location based business was very capital intensive business. We funded the the installation of operations, and therefore, in order to grow the business, we would need more cash in the business to continue the growth. We were offered $25,000,000, so roundabout sort of 20 times trailing operating profit. And we felt that was the right decision for the business.

33:20 And I think looking at it now, the capital market's pretty much closed in 2023. So our ability to actually raise cash in 2023 would have been very, very challenging. And I think at best, we would have we would have flatlined the business. So we stand by. It was the right decision. We returned cash to shareholders, which was welcomed by the majority of the shareholders and gave us enough cash to realign the business and and give it a new a new life. Okay. Great. And then we've got a question here from Jens. Regarding Discount Dragon, the cost of sales was about 1,500,000. Could you break down the fixed and variable costs?

34:01 Additionally, could you detail portions of cost of goods sold, fulfillment, warehouse, payroll and marketing? And I'm happy to take this one if you have any more. Yes, we we didn't get too much into this in in the statement, but there's so the the only fixed element really in the cost of sales is the warehouse payroll. That was a little under 200 k in the period. There wasn't we marketing sort of cost was relatively limited because we were we we sort of haven't fully got up to to speed with marketing. We you know, that really came in quarter one. So there was there was a bit of marketing spend in there and sort of just under 200,000 on on what I would say fixed cost of sales. The rest was was sort of variable. And that's the thing we say in the statement. I think as we grow, you know, as you'd expect, as we scale, we'd expect other than marketing, these costs to sort of fall as a as a proportion of revenue.

34:57 Thanks, Dan. Right. No problem. And we've got a a question from Charles. Is the new warehouse for all parts of the business, I. E, NutraCircle and Let's Explore and VODIAC as well as Discount Dragon? Okay. So the new warehouse will be definitely for Discount Dragon and definitely for NutriCircle. Let's explore Invodiak. The main direct to consumer market is in The US, and that's fulfilled by a third party US logistics company. Any local sort of direct to consumer fulfillment, we would happily do in the new warehouse. But the majority of sales for that business will now come from teleshopping channels whom fill they they fulfill it themselves, the

35:41 likes of QVC and and similar channels in Australia and Canada. And, obviously, business to business where we're actually selling bulk orders into the likes of Hamwiz or FAO Schwarz or TK Maxx or and the likes. Okay. Great. Rob has asked, it would be great to have forecasts on revenue and profit figures for this year and for next year. Yeah. No. I mean, we agree with you. I think the the challenge that that we have, and I'm not trying to dodge the the the question, is as but with any forecasts, you've gotta give a level of of certainty. We're moving into the new warehouse. And as I touched on earlier, we're not a 100% certain of how many parcels we can get out in a twenty four hour period. We'll go from operating one and a half shifts to operating three shifts to operating at the moment, we do five full days and two half days. We'll go to seven days. So we'll go to seven days, twenty four hours a day. We think it's gonna be a lot, lot more, but, obviously, that has an impact as to how quickly we can scale the marketing. So what we'd like to do is get in the new warehouse, get a degree of certainty, and then release some figures. And I think, you know, as investors, there's nothing worse than us push publishing a set of numbers that we don't miss because we've been overoptimistic.

37:02 And what we want to do is is publish a set of numbers that we know we can not only hit, but, hopefully, we can beat. Yeah. Agreed. Okay. So then we've got Martin asks, to what extent can you afford to automate order fulfillment? I think there's a certain level of automation that you can bring in. What, you know, what's important to remember here is we've got about a thousand to 1,200 SKUs. We are famous for surplus stock, so our SKUs aren't always the same. So it could be Rice Krispies on one day and maybe cornflakes on another day. So automation's great when you're having the same product being delivered, on an ongoing basis. When you have variable SKUs, you've gotta be slightly careful with automation.

37:52 I mean, that's smart to put in automation in their Swedish warehouse. It's cost them £16,000,000. So what we don't want to do at this stage is go raise 16,000,000 to put in automation where we can actually prove what we can do with a with a sophisticated warehouse management system. And that's what we've got at the moment. Got a very sophisticated warehouse management system. We run a barcode and gun system. So we've got guns that check on the barcodes that make sure that the the picker puts the right item in the basket. It can't put multiple items. It can't pick the or he or she cannot pick the the wrong items. And we we've got things like conveyor belts, and we've got, sealing machines. So we try and automate as much as possible, but we also try and be realistic as to the return on capital versus just automation for automation's sake.

38:47 Okay. That's great. And I think there are a couple of other questions, but we've we've covered them with some of the other answers. So I I think that is as many as we've we've got. I think we've we've answered everything here. Perfect. Martin, Dan, thank you very much for answering this question from investors. And, of course, the company can review all the questions submitted today. We'll publish those responses out on the investor.me company platform. But just before redirect investors provide you their feedback, which you know is particularly important to the company, Martin, could I just ask you for a few closing comments? You know, mean, first of all, thanks everybody for joining. It really is appreciated. It's sort of half past five on a Monday. I'm sure everybody's got far better things to do, but we we genuinely appreciate, people sort of tuning in. You know, we're we're very excited about this business. We're we're really excited as to the future. We've we've stress tested this only a tiny bit, and been thrilled by the results.

39:40 The new acquisition is great, bedded in really, really well. So I think, you know, we're on for a a very exciting journey. We're now starting to put those building blocks in place. The new warehouse will be fundamental, in our next stage of it of the growth trajectory. So, hopefully, exciting times, and we look forward to presenting again in a few months' time. Perfect. Martin, Dan, thank you once again for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected, provide your feedback in order that management team can better understand your views and expectations? This will then take a few moments to complete, but some should be greatly valued by the company. On behalf of the management team of HUDDLED GROUP PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.