Huddled Group (LSE:HUD) — Interim Results

0:02 Good afternoon, and welcome to the HUDDLED GROUP PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time by the Q and A tab situated in the right 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's 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. Yeah. Good afternoon. So I'd like to just give a a

0:33 sort of short presentation, on the h one results and also talk a little bit about quarter three performance, and where we're up to in terms of the business sort of evolution. So just by way of a bit of sort of, sort of history of who we are and and and to give people any newcomers, some bit of context, We've been doing this a long time. We've we've set up a number of businesses over our business life. We've had numerous startups in total. We've set up a lot of businesses. We've had six that have gone through to IPO, and there's been a lot of sort of exits as well along the way. So we'd like to think that we we have a reasonable level of experience in terms of growing businesses and delivering them through to, whether it be an IPO or an exit.

1:22 HUDDLED, let's just talk a little bit about HUDDLED and and what it is. It's it's a collection of sort of direct to consumer ecommerce businesses. We're really focused on turning surplus stock in into cash, and we see there's a there's a big opportunity there. More and more companies are recognizing their, sort of ESG footprint. And in many ways, we're helping them solve some of those those problems whilst also delivering value to consumers. So our aim really is to reduce surplus stock going to waste. We're in the process of educating manufacturers, and we're doing more and more of that as as we grow. And that's all underpinned by a large audience of savvy shoppers. And we'll talk a little bit as we get into the presentation about how we've grown, not only Discount Dragon, but some of the the acquisitions that we've made along the way.

2:15 So the opportunity, you know, what is it? Well, just to sort of context, put the whole list into some sort of context, 10,000,000 tons of food is wasted each year in The UK, annual cost of about £19,000,000,000. And it's no different in the cosmetics world. You know, there's there's 3,500,000,000 of annual cost of of of stuff that is wasted. And a lot of this is not stuff that, is used by date. And I think it's very important that we differentiate best before date and use by dates. And if you think of best before dates, I think that's things that sort of sit in your cupboard and use by dates or stuff that sits in your fridge. So what Diskan Dragon sells is stuff that sits in your cupboard rather than stuff that sits in your fridge to sort of put it into some, some form of context.

3:02 A lot of this will be tinned goods, so a lot of it will come up close to its best before date. It may have two or three months left on it, but most supermarkets will not accept goods that have only got two or three months of best before date. So what do you do with this these goods? And, historically, a lot of this got thrown away. It got put into landfill. Often, it went out into wholesalers and then ended up on market stalls. There's also an opportunity where stuff becomes mispackaged. So there may be a change in packaging, maybe a redesign, redesign in a a can. And what happens is the marketeers will then decide that anything that is the old packaging should be should be wasted and not used.

3:49 So there's an opportunity there. And I think more and more now, we're seeing manufacturers have less warehousing. They're they're all running a just in time supply chain. So if there is an oversupply or a supermarket decides that it doesn't want something or it has a hot summer where chocolate doesn't sell, there is a lot of surplus stock. And then you've got things like branding changes. So whether it be food, whether it be cosmetics, the amount of surplus stock is huge. It's not going away. It's as as warehousing becomes tighter and people run sort of stricter, sort of supply chains, there is more surplus stock in the market, and that is a massive opportunity for us, in all of these businesses.

4:40 So I'll talk a little bit later about the opportunities and how how it actually impacts each of the businesses, but just sort of going back to sort of the h one performance and where we've come from and where we are today. So we've continued to grow. You know, when we when Discount Dragon started, and it's only less than two years old, it was doing less than sort of £75,000 a month. So, you know, I'm very pleased that we report over 5,000,000 in in sales. A large chunk of that has come from Discount Dragon that's now doing, you know, regularly over £1,000,000 a So, you know, great performance from from that business. Revenues up 61%, in in the year to 4,900,000, for for the the sort of half year period, which is, you know, I think testament to the to the team.

5:33 We acquired Nutricircle earlier this year. And, again, we we've we've started to see really solid growth on that business. H one revenue, 349,000. And as we move into quarter three, September will be the best month that the business has done to date. And already, we can sort of see that this month should do about £225,000. So it it shows the growth trajectory. But I think what's equally as important on NutriCircle is that at the moment, we're having to throttle it back. We literally, you know, can't cope with the demand. We we're having to sort of throttle back the emails that we're sending out because we just can't sort of process all the orders in time. Now in order to solve that problem, what we're going to do is we're going to move that business into our fulfillment center in Lee a little bit earlier than the January we expected. So as of sort of mid October, that will move in its entirety to Lee, and we'll start fulfilling it from that from that center.

6:38 That will allow us to then continue, doing more emails and open the floodgates and start growing that business. So we can really sort of see that that not only have we made continued progress, over the the half year, we continue to make progress as we go into sort of quarter three, and we can now start seeing the synergies that will come out of this as as we go into sort of quarter four and beyond. So the portfolio, you know, we set right at the right at the outset. We said we wanted a a group of ecommerce businesses that could operate, you know, as a group with all the synergies that that that come with that. And we acquired Food Circle supermarket, which we've rebranded NutriCircle, and I'll talk about why we've done that in a in a couple of slides.

7:25 And then recently, we acquired a business or the controlling stake for this called Boot Beauty Limited. And that launched on September 12, only a couple of weeks ago. And already, we're seeing fantastic growth both in terms of visitors to the site and revenue that is being generated from that business.

7:46 So what we're really about is investing for growth, and we've had a sustained period of investment in the business. We we continue to invest. We it is really important that we invest not only for today, but for tomorrow and and and beyond. We've put a lot of money into stock, and you'll see that our stock numbers have actually risen substantially. We're probably at sort of 1,900,000 of stock in the business now, which we think is really important as we go into the the busier sort of quarter four period. We've put a lot of investment in alcohol, which, again, we think is is ripe for the the the Christmas period. But, also, we've been very opportunistic in our buying. We were able to buy a lot of product at the right price, which helps us increase margins.

8:38 We continue to invest in people. We think people are, you know, the the backbone of our business, whether it be marketing operations, fulfillment, whatever it may be, the the the people are what make this business. And as we've talked about before in in the previous statements, we want to invest in the warehouse facility. We need to improve capacity. We've secured an extra sort of 40,000 square feet in the building that we're in. We'll be fully operational in there as of January, February next year. We're we're busy building, racking, and getting all of that sorted out, which will actually help us drive synergies from the business and synergies from the from the group, whether it be marketing, whether it be finance, whether it be operations and fulfillment.

9:23 All of these synergies will start flowing to the bottom line as we as we move forward. So let's talk a little bit about the growth pillars, what makes up HUDDLED, and why do we think it's it's these pillars are are sort of the the foundations of success. So it really starts on the left hand side of the top corner with stock investment. We need good stock. And this thing goes back to surplus stock and and oversupply. Because if we can actually provide a solution to these manufacturers, then we can buy the stock at the right price. And in buying it at the right price, we can actually sell it on, make very good margins, but still offer the consumer a huge discount on the RRP.

10:08 So it becomes a real win win. The the manufacturer isn't throwing it to waste. They're getting some cash back for these goods, but we're able to then offer it to the consumer at significant discount. And in some instances, and we'll talk a little bit about sort of cosmetics business, that will allow people to sample products that may have been outside of their price range. They may have wanted something but not been able to afford it, wanted to sample it. So we can actually give people a way of, sort of, testing those goods and actually rescuing them from from waste. That then then leads on to marketing investment. And the marketing is is as much about sort of educating people about what we're doing and about the value proposition, about the discounts. And often, you'll see things on Facebook, and and I think Facebook is it's a great advertising platform, but for many, things can often look too good to be true. So what we've started to do in our our sort of marketing strategy is we now look at this as as a waterfall, and you'll see and we'll play a little bit later on our our TV advert.

11:12 So what we're trying to do is look at the waterfall and sort of say, if we if we have TV at the top and then radio and then things like Meta, Facebook, and Instagram, and TikTok, and all the rest of it further down. What the TV does is it underpins the the the trust value. And things like Trustpilot are, again, another sort of trust icon that make people feel comfortable in buying from us. And I think all ecommerce sites suffer from suffer from this. They've got to build trust. And the more trust we build, the more repeat customers we get. And and that that is really testament to this business. This is about investing in acquiring new customers, but also building the trust. And part of that trust then comes about through faster delivery. The quicker we get your goods to you, the more you trust us.

11:57 And people like Amazon have said the, you know, the that's the drumbeat by which we must all now march. So, therefore, people expect fast delivery, and and we need to, you know, adhere to those disciplines. So the warehouse investment is absolutely vital. Adding the the additional 40,000 square foot is gonna be mission critical to us. It will give us about eighty, ninety thousand square foot of warehouse space. It will allow us to operate twenty four seven, and it will allow us to process more goods more efficiently and get them out to the consumer in a timely manner. And the quicker we get stuff out, the quicker they buy, especially in things like food circles, supermarket or NutriCircle as it now is. The faster we get those protein bars to people, the quicker they buy, again.

12:45 So this becomes sort of, you know, this virtuous circle where, you know, one leads on to the other. Obviously, we start to get economies of scale, and we're starting to see that now. We'll start to see that more and more as we get into the centralized warehouse and everything operates from from one location. And that will ultimately you know, all of these things, faster we get things, leads to better conversion and retention. And, ultimately, it it the bigger we grow allows us to increase margins. So what are the brands that we've got? Well, we we talked about this right at the right at the the top of the the the slide deck. We now have three brands, Discount Dragon. We've rebranded Food Circle supermarket into NutriCircle, which we think is is much more apt. And, obviously, we've got BOOP Beauty.

13:31 Discount Dragon, the the flagship, the first one that that that we we had. I'm just gonna play a short, video now, which is is our TV advert. It's only thirty seconds long, but for those that haven't seen it, it'll just give you a flavor of what we're investing in and, where we're trying to go with the business. Discount Dragon deliver big brands at amazing prices with new deals added daily, with savings on designer fragrance, sweet treats, snacks and drinks, cupboard essentials, cleaning products, and brand name favorites for all the family. Even him. Plus, with our deal of the day, save even more with extra discounts off your favorite brands. But hurry because when they're gone, they're gone. Save online every day at discountdragon.co.uk.

14:23 So let's just talk about discount dragon, specifically. And, again, let let's just recap on the the opportunity. We talked about surplus stock earlier on. Circular stock is a massive opportunity for us. It gives us an opportunity to buy products at the right price, and we're seeing more and more of that now. We've done a number of deals where, you know, we've we've managed to rescue stuff from waste. People have got ESG policies. They don't want stuff going to waste. This allows us to buy and offer whether it be tin goods, whether it be alcohol, whether even it be perfumes or sunglasses or other items. Our job is to not only stop this going from waste to waste, but to allow the consumer to buy it at the right price.

15:10 And in doing all of this, we need to educate the audience. We need to educate the audience on the value proposition and why we can offer you goods at this price, and we're starting to do more and more of that. And one of the things we recently did is we we looked at consumer feedback, and this is about building the trust. And one of the the the comments that we got was I don't really want to be spending £30. I don't want to be forced to have to spend £30 as a as a minimum threshold. So we actually took a brave decision to remove that back in August of this year. And a lot of people will say that's that's crazy. Why did you do it? The we looked at what was happening on NutriCircle where there wasn't a minimum threshold. We were encouraged by the way the consumers were were interacting with that, so we felt the decision was the right one.

15:57 What's really interesting is since removing it in August, our average order value has actually increased every single month from August to from July. Then on August, we improved again. And in September, we improved again. So September at the moment, we're running circa about 41 pounds of AOV, which is a significant improvement on where we were in in in the first half of the year. So, actually, in doing that, that brave decision, we've actually managed to improve AOV, which which is is a big KPI for us. And, also, what's also happened is we've we've managed to improve basket margin because we're really now focused. Rather than focusing on just a massive daily deal or a loss leader, we're now about value across the entire proposition.

16:44 And that was something that we are altered in in August and then refined in September. And in doing that, we've managed to increase, our basket margins. So all in all, we're moving in the right direction. And I feel that in doing these things, we actually build further trust, and building more trust builds better retention. In August, we had 70 74% to be precise returning customers actually came and bought from us. So that really underpinned our whole acquisition and retention strategy that we have that level of returning customers. And a lot of this is built by again, comes back to trust, speedy delivery direct to your door. We now deliver anywhere in The UK, so we use the Royal Mail, to deliver for us. That allows us to deliver to the Highlands, islands, and any part of all the remote areas of The UK, which a lot of carriers charge extra for. That's all now included.

17:43 So just in doing that, it's allowed us to sort of increase, awareness and stop customers in those remote areas having to pay extra for it. So all in all, we think we're delivering really a sort of sustainable solution for manufacturers, less waste, but also we're building trust with consumers that is driving retention and drive driving repeat purchases from consumers as underpinned by our

18:09 August numbers of 74% returning customers. So all in all, we're going in the right direction. AOV is going up. Margin's going up. We we scaled back advertising in July and August while we refined our website because we wanted to improve the the user experience. And the TV advert that you saw earlier, we've just literally, as of the September 23, been running that on some national TV days as well as some regional TV days. So with the improved user experience, better website, removing the the minimum threshold, We're now starting to see things really tick up, and we're we're we're very encouraged by the the performance over the last week or so. So just talking about the numbers, to date and really, you know, the the the h one numbers. So let's just look at quarter four twenty twenty three, 1,800,000 of revenue.

19:02 And if we then look at quarter two for this year, 2,800,000, an additional million pounds of revenue has been added, if you just compare those two those two quarters. So order numbers, quarter four last year, 48,000. Quarter two this year, 74,000. And then new customer numbers, you'll see, at at sort of 20,000. And the the quarter two numbers, as I said, we did less marketing in July and August where we we refined things, so we didn't acquire as many new customers. But all of that starts driving towards getting more repeat customers and better quality customers. So we'll start to scale that up as we go into quarter three of of this year.

19:47 So NutriCircle. As people are aware, we we we acquired the business Food Circle supermarket. We really wanted to to rebrand the business. When when the guys set up the business, they they they were looking to do a lot a lot broader church in terms of their offering. Due to cash constraints, they focused in on the protein market and really hit on an area that was that was delivering for them and delivering good repeat customers. So we felt that it was only right that we rebranded, the business and made it focus very much on on the the sort of the area that, of protein bars, healthy living that they were focused on. So, again, the opportunities are very similar. Not you know, not much different from, Discount Dragon and underpins the sort of old holes with HUDDLED ethos.

20:41 With the strengthened balance sheet that they now had with, being part of the HUDDLED family, it allowed them to buy more stock. With the rebrand, it allowed them to have a focused business. And I think with their loyal customer base, excellent retention, it it really allowed us to sort of hone in on that.

21:00 As we touched on earlier, at the moment, they are sort of overtrading, if you will. Their the demand is greater than they they can fulfill. So how do we fix that? Well, we're gonna move the their fulfillment center to to Lee, in the Northwest Of England. That will be done by the second week of October. That will then allow them to open the floodgates and continue the marketing. We've seen revenues grow steadily. When we bought the business, it was doing just over £100,000 a month. This month, it will do circa £225,000. So you can see the the the move, in terms of revenue growth, and we can see that just continuing to tick up. We we've we've got the marketing sorted out. We know what we're doing. The customers are very loyal, so we're very confident, in in our ability to be able to grow this business.

21:55 The move to Lee into one centralized fulfillment center will allow us to put all of the the fulfillment through the Royal Mail. At the moment, they're using multiple carriers, which means that all the customers in remote areas are having to pay, you know, up to £89, additional post for packaging, to get it delivered. That will all disappear once we move to the Royal Mail. So we'll be able to deliver it anywhere in The UK. And when we did that on Discount Dragon, we saw a few percentage points overall increase in in in revenues. So we're we're expecting the same in NutriCircle. And, again, you know, the more goods we we stop going to waste for them, the more we offer a sustainable solution for manufacturers. And the more we're able to buy, the more we're able to buy at the right price.

22:42 You know, in this business, we've moved up. We've gone from buying from wholesalers to actually buying from manufacturers, and that's allowed us to take a a few sort of percentage points out out of the the the costs, which ultimately flow straight to the bottom line. So good margins, good AOV in this business, and an amazing repeat customer base. We now just need to get the synergies from the centralized operations going, and then we can really open the floodgates on this. So let's just talk about the numbers. Revenues in h £1,349,000. Quarter three, you can already you know, we will be sort of five fifty. We're expected to exceed $5.50 k. AOV is good. You know, we're around sort of £36.

23:28 So we're not expecting that to grow materially, but what we are expecting is just that sort of repeat customers. So what we want to increase is the the returning customer levels, which already is good at at sort of

23:42 52%, but we think we can get that up even even further. And it's at 52% because we've we've had a a a sort of relatively aggressive acquisition strategy of new customers. And new customers spend slightly less for their first purchase because, again, it gets back to that whole trust element. So we know new customers are spending slightly less than repeat customers. So, you know, the more ultimately, the more that percentage of repeat customers goes up, then, actually, your AOV as a blend will will go up accordingly. So the business moved into operational profitability in September, and we we said in the last statement that we wanted all the businesses to be operationally profitable by the end of this year. So this is the first one that that's done that, and we we see that continuing. We see with the continued growth and the synergies that that that is very achievable. And now it's about doing that across other parts of the business.

24:38 So Boop Beauty, we we acquired, Boop earlier this year. We set about not only improving the website and investing a lot of time, money, and effort in improving the website, but also improving the stock. And this gets back to the the pillars of success that we that we we talk about. You've gotta have great stock in order to be able to market. Without the stock, it's it's a waste of time. So we've invested heavily in stock in this business,

25:08 and we've managed to get some really, really good, products, that are instantly recognizable. And I think this all boils down to what the original founder, Yasmin, did, and she identified that there was a huge opportunity in the the beauty industry. Over £3,000,000,000 worth of beauty products go to waste each year, nearly all of which are fit for use. So that alone just is is an incredible number, and it also feels fundamentally wrong that you've got all of this stuff going to waste. You can understand it for a lot of, big brands, that they don't want to sell things cheaply because they feel it under undermines their their value proposition.

25:53 What we've set about is educating manufacturers that, actually, it's not about them wasting these products. It's about us rescuing these products. It's about users having the opportunity to be able to buy these in a limited, quantity. So what with beauty's been able to do

26:12 is educate manufacturers, tell them this is limited quantities. The consumer then can get goods up to 80% off the retail price. So not all goods will be there at 80%. Some goods will be up to that. Some goods will be thirty, forty, 50% saving, but it will be a significant saving for the consumer. And, again, this gets back to sort of the education and and how we do that. So when we launched on September 12, we started to do some, meta ads, Facebook ads, and we started to see sales. We were very encouraged by the the level of traffic that we were getting to the site. That that actually shocked us, in terms of what we were getting and volume of of eyeballs. What we then needed to do was start building awareness and trust in the brand because we as I touched on earlier, it it's very easy for people when they see stuff on Facebook to assume that if it's 80% off, then it could be a scam, and then they're gonna enter into something enter into something where they may not get their goods.

27:15 What we're now starting to do is work with people like Trustpilot, and we're starting to build that reputation.

27:21 And that will take a few months, maybe even, you know, maybe even less than that. We're already starting to see the benefit of that. And the interesting with Boot Beauty is the the viral aspect of this is actually, off scale much, much more than anything else. Obviously, we get a little bit of it with with Discount Dragon, but nobody's going to brag about saving money on a bottle of tomato ketchup. Whereas what we're finding is people are really talking about saving money on cosmetics. And we're we've started to see a real upsurge in not only traffic volume, but also revenue. So in the few days that we've we've really been going, we're we're very, very pleased with this. We will see revenues definitely over sort of £20,000 this month. But more encouragingly, we've seen revenues increase sharply in the last few days.

28:17 Traffic levels are very, very encouraging. And we think as we start to educate the user about the product and more people get the product and are happy with the delivery, then that will this business will only continue to grow. And we're actually offering a sustainable solution for the for the beauty industry. And I think, again, the more we educate the beauty industry about not wasting goods, the more this this business will increase. So I think a great business. We've we as you see on on the list there, you've got some great brands. Some of you will recognize those. Some of you may not. But, trust me. If if there's a female in your house, then they will recognize those brands.

29:03 We won the Marie Claire sustainable business award in '2 in only a few weeks ago. So that again underpins confidence for manufacturers that we're doing the right thing and also for consumers that they can buy with confidence. So all in all, early revenue is really, really encouraging. Site traffic is is really encouraging. So we've got great hopes for this business, great team, working on it, and I think, you know, great things can happen happen here. So sort of a little bit of an outlier, against what what we've just been discussing. Let's explore. We we agreed to hand over day to day operations some months ago to Wicked Vision. They've done a great job. QVC orders for 2024 will be about 25,000 units of the VODIAC headset, so that that that's a good number.

29:57 And let's explore let's explore ocean, space, and wildlife. We've got about 12,000 units left of that product, which we expect to sell through via Amazon and direct to consumer in the final quarter of this year. And that's actually started now, so we're we're fairly confident that the majority, if not all of those, will will sell through. That in turn will allow, this business to repay debt of about £400,000, which will inflow back into the business. So nice cash coming back into into HUDDLED, which will sort of underpin our our our cash position and underpin, what we're doing as we as we move forward. And when they do that, that will it will then move to a sort of fifty fifty ownership.

30:44 So it's a very much hands off approach in terms of our day to day management, but a a welcome sort of inflow of cash certainly early next year, adding that sort of £4,500,000 will be will be will be welcomed and, you know, just to underpin our balance sheet even further. So what's the focus as we as we move forward into quarter four and and and beyond? Well, we you know, back to these sort of investment pillars, stock is really, really important to us. And in being able to be able to buy more stock, we've been able to buy that at the right price. So it really is underpinning, that foundation stone in the getting good stock, getting it at the right price, getting it at the right price improves margin.

31:29 Increasing, awareness and and trust. The more we build trust, the more we get returning customers. So whether it be TV, radio, Meta, Google, affiliates, we're right across the piece. So the more people see us, the more people recognize us, the more people will trust us. Move everything into a centralized warehouse, get your goods there quicker, then that again underpins trust. But more importantly or as importantly, it helps drive synergies. So it helps drive whether it be the raw mail, whether it be packaging, processing, it all helps in terms of driving bottom line efficiencies. Improve UX functionality, so user experience functionality. It's important when you go on a website that the navigation is really good. The checkout is really good.

32:15 It's seamless. So we're spending a lot of time and money investing and improving the UX functionality. And why do we do this? Well, improving the UX functionality will actually improve the conversion rate. And if you improve the conversion rate by only a few fractions of a percent, it actually improves the profitability of the business by many percentages points. So to give you an example, if we have, you know, 10,000 visitors to our to a website in a day and we get 1% conversion, If we can get 2% conversion from the same ad spend, then we've actually doubled we've actually reduced our cost to acquire a customer by half, and we've doubled our revenue and traffic for no additional spend. So it is very, very important part of the business. All of these things combined will help us move all of the businesses into operational profitability.

33:12 And you can already see that with NutriCircle, what we've done there. It's not running at full speed by any any stretch of the imagination. We move it to the centralized warehouse. That will start to turbocharge. We're already starting to see with Discount Dragon the impact that we've had, not only in reducing or removing the the minimum spend, £30 spend, but in improving the user experience, the UX functionality, and in improving our awareness in TV and radio and getting goods out quicker. So we're just starting to sort of see that tick up. And we've already we've had great growth. You know? Let's remember. We, you know, we've we've gone from when this business first started, £75,000 a month to over £1,000,000 a month in under two years. So we've already seen great growth from this business, and now it's about really just eking out further growth and and more profitability.

34:10 So why would you invest in this business if if you were if you were just looking at it? Well, we firmly believe that we are innovating for for success. The ESG challenge is not gonna go away. We've we've got to solve the waste problem. More and more manufacturers are running just in time facilities. The the the problem is huge. So turning waste into opportunity, and into into cash is is, I think, a good thing. And it's a good thing for consumers. They can buy stuff cheaper. It's a good thing for manufacturers. And, ultimately, it's gonna be a good thing for us because if if we can bridge that gap, then we will have a profitable and sustainable business. Building the strong brands, the more recognizable that the brands become, the more you trust them, the more we deliver on time. And I keep going on about this, but it is really, really important because that helps build retention.

35:03 And the the longer a customer stays with us, then the more we can afford to pay to acquire that customer. So there's two things that that matter really in in my world. One's a cost to acquire a customer, the the CPA, the cost per acquisition, and the other is a lifetime value. And then in the middle of that, you've got average revenue per user, so you've got ARPU in the middle. But if we've got good lifetime values, then it means we've got a very sustainable business that is highly scalable. Moving everything into a centralized warehouse gives us strong operational gearing, finance, centralized marketing, centralized UX improvements. All of these things can be shared across the the whole group. So what we learn on one website, we can then transfer to a to the other.

35:49 And I'd like to think we've got a solid management team. Certainly, you know, the teams that we've got in each of these businesses are amazing. The the their their energy and their drive to succeed is off the scale. So I'm, you know, absolutely proud to to be part of that team. And I think we've we've got a proven track record. We know how to bring, these these guys together. We know how to to really, get the synergies driving from these businesses. And I think all in all, that combination will lead to a a very successful business in the months and years ahead. So thank you very much for, sort of listening to the presentation. That concludes the presentation, and, obviously, we'll take questions in a few minutes. Awesome. Thanks very much for your presentation. What I'll do is I'll just bring your camera up for the q and a, if that's alright. Ladies and gentlemen, please do continue to submit your questions. You can do that just by using the q and a tab situated on the top right hand corner of your screen. We have received questions throughout today's presentation, and I'll start off with the first one here, which reads as follows.

36:53 You've talked about investing in the period for growth. What have you used the cash to invest in? And how much cash have you invested in stock? Okay. Well, we did actually sort of touch a little bit about this on the on the presentation. But just to just to reaffirm that there are three building blocks for us. First of all, stock, and, you know, we now sit with 1,400 SKUs in Discount Dragon, multiple SKUs in in NutriCircle and and Boop. We've got approaching £2,000,000 of of of cash invested in stock. So, yes, we've invested a lot a lot of money in that. We've also invested in the warehouse, and we've invested in marketing. So we produce the TV advert. Not cheap, but we we can see that that's certainly bringing in, the numbers and and yielding success. And I think more importantly, you know, we've made that investment now. So now it's about reaping the rewards of those investments, including the warehouse, including all of the goods in staff, the goods out staff that we've invested in, the whole marketing teams. We've really reinforced this to start leveraging the operational gearing of that investment as we move forward into sort of quarter four and beyond.

38:01 Thank you very much, Martin. Turning to the next question. Do you expect the level of investment to continue into the next period? No. Definitely not. Look. We've we've, you know, we said, this was about the building blocks. We've invested in the stock. We've now got a large level of stock. We've got all the people in place. Yes. There will be additional pickers and packers, but these are these are small numbers in in terms of the investment, sort of thesis. So, no, this is now about growing the business and delivering it delivering the profitability that we spoke about. Thank you very much. You've mentioned Nutri Circle is profitable on a monthly basis, and Boot Beauty has only just launched. When do you expect Discount Dragon to move into profitability? Well, Discount Dragon, has has grown rapidly.

38:46 We've had two weeks of of profitability in the business, in September. So the last two weeks, we've we've been there. Are we gonna achieve that every week, week in, week out? We'd like to think so. We've certainly seen great improvements from the the the UX changes that we made. We've seen great improvements in reducing or removing the minimum spend threshold. AOVs up, margins are up. That's allowed us to buy deeper with with some sort of manufacturers, which has improved margin. So look. We're we're reason we're, you know, very happy with where we're going and the direction the business is heading. Perfect. Thanks very much. Next question here. What is the cash run of the company, and when do you expect to need to raise funds again?

39:32 I'll let Dan, the finance director, answer that one, if I may. Yeah. No problem. Yes. So, the short answer is we we don't expect to need to raise any further cash for the business. As Martin's alluded to, we've we've invested a lot in in things such as stock. We've got a lot of stock now we're holding, in particular, in the recent months following the Nutrisercial acquisition. We've sort of added a lot of stock to to grow that business. We've we've bought a lot of stock to support the boob relaunch. So cash has been tied up in that. And then also as as we've touched on the the the sort of losses monthly are narrowing. So, you know, all in all, we feel we've got enough cash to be going. We've we've also we're also expecting a cash return from our Let's Explore business in the coming months following the sort of quarter four sales of the Let's Explore and VODIAP products. So there's no no plans to raise any cash.

40:36 That's great. Thank you, Dan. The next question is around customer retention and ask how do you plan to improve customer retention rates across the brands in the group? Well, I think a lot of this builds goes back to trust. We've already seen the levels in Discount Dragon improve where, you know, August was 74.4% customer retention, I. Customers coming back that had bought from us previously. In NutriCircle, that was at 52%, but that was because we we'd spent a lot of money acquiring new customers. So, obviously, it's gonna be sort of slightly slightly lower as a percentage of the whole piece. But you you can clearly see that revenues are increasing. When we started Discount Dragon, £75,000 a month. Now we're at a million pounds a month. We've purposefully not spent that much money on marketing in August and the first half of September as we made the UX changes, made the changes to the sort of threshold spend. We wanted to really analyze what was going on. We've we've seen that. We've now started gearing up again. We've talked about the profitability as we as we move into the end of September.

41:43 So this is about for me, it's about the trust that we're building in this business. The more the better the stock, I. 1,400 SKUs, the more likely you are to come back. The more the quicker we deliver, the quicker we enforce the sort of the brand values in terms of wider advertising and marketing, it all leads to better retention and ultimately better margins. Thank you, Martin. Next question here. Revenue growth and new customer numbers appeared to have slowed in q three. Can you explain why this is? And do you expect this to be a one off? Yes. Look, as I touched on before, this was by design, not by default. We tested marketing in the first week of August in on terms of TV marketing. We took the learnings from that and reacted quickly.

42:30 So we wanted to see what was happening with, you know, the customer the spend thresholds where we're getting feedback that people wanted that removing. We removed it. We broadened the the base, so we've got 1,400 SKUs all offering great value now. And as a consequence, we've been able to start scaling that up. So, yes, we see it as a one off. Yes. We see that as a right thing to be doing. But let's remember, you know, even in the holiday periods, we still delivered growth. You know, July and August were still there. We slowed advertising down, but we still delivered growth quarter on quarter. That's great. Thank you, Martin. And moving from q three to q four, the next question is, what's your hopes for q four? Do you expect record numbers? Well, I can't get into forecasting, but, the quick answer to that is, yes, we expect further growth, and, yes, we're looking forward to improved numbers.

43:21 Thanks very much. And the final question, we've got into at the minute is is there a risk that the large brands who supply you become concerned about the competition and loss of business? No. I think you've got to go back to the opportunity here. 19,000,000,000 pounds of food is wasted each year. Three and a half billion pounds of cosmetics are wasted each year. So, you know, that's twenty twenty two, 23,000,000,000 pounds of of stuff goes to waste. So, yes, we'd like to make a dent, but I think that you know, are we gonna know, are they gonna lose all that business? No. We're not gonna do £23,000,000,000 of revenue next year. So I think the problem is still gonna be there, and we're we're gonna be there to solve that problem. And the ESG issues are not gonna go away. We just gotta keep solving it and keep working with those manufacturers to deliver a solution.

44:12 That's great. Martin, Dan, thank you very much for answering those questions from investors. Of course, the company can review all the questions submitted today, and we will publish those responses out on the investor me company platform. But just before redirecting investors to provide you with their feedback, which I is particularly important to you both, Martin, could I just ask you for a few closing comments? Look. First of all, thanks everybody for, you know, spending time to to listen to us for the best part of of an hour, talking about the business. Obviously, we're very passionate about this business, so it's very easy for us to talk about it. But I I appreciate that you giving up giving up your time, so thanks very much. And, you know, if you do decide to invest, we welcome you. And, you know, we we really want you as part of the HUDDLED family. That's great. And thank you once again for updating investors today. Could I please ask investors not to close this session as you now be redirected to provide your feedback in order the management team can better understand your views and expectations?

45:06 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 HUDDLED GROUP PLC, we'd like to thank you for attending today's presentation. Good evening to you all.