Law Debenture (LSE:LWDB) — Annual General Meeting

0:00 Good morning, ladies and gentlemen. Welcome to the one hundred and thirty fifth Annual General Meeting of the Lord of Benton Corporation PLC. I'm delighted to extend a warm welcome to everyone present and delighted to see so many of you here. I'm Robert Hingley, the Chairman of the Board, and here with me today are Dennis Jackson, our chief executive officer, Trish Houston, our chief operating officer, and nonexecutive directors, Parz Poraval, Claire Ascom, and Martin Slenderbrook. Claire Finn, unfortunately, can't be with us today. I'd also like to introduce you formally to Isla Pickering, our chief financial officer, and Alex Ringer, our head of legal risk and compliance. Spencer Knightsbridge, our new chief technology officer, also joined the team this year, but can't, unfortunately, be with us today. We also have with us Nicola Lamborne, representing our corporate secretary, and James Henderson and Laura Fowl, representing our investment manager, Janice Henderson Investors.

0:51 I have been informed by our company secretary that the meeting is chorus. LAW DEBENTURE aims to provide a steadily increasing income for our shareholders while achieving long term capital growth in real terms. In 2024, we continue to make progress with an IPS valuation uplift and an increase in our full year dividend of 4.7%. I'm pleased with the consistent long term outperformance of the share price total return relative to our benchmark. We feel confident in the long term, the combination of a robust and well positioned equity portfolio and continued growth in our IPS business should help us deliver attractive returns for our shareholders. The board takes pride in particular our longer term record and value creation, including 113.4% aggregate increase in the dividend over the last ten years and forty five years of increasing or maintaining dividends to shareholders. 46, I think.

1:48 Furthermore, IPS has now delivered seven consecutive years of growth with a five year net revenue compound annual growth rate of 11% and a 2024 valuation of £194,500,000 up 83.6% since 2019. Before moving to the formal business of the meeting, I'd like to invite LAW DEBENTURE's chief executive officer, Dennis Jackson, our chief financial officer, Eilah Pickering, to provide a short update on the independent professional services business. We'll then ask James, Henderson, and Laura Folt to brief us on the investment portfolio. Following these updates, we'll then take questions from shareholders, proxies or corporate representatives relating to the business of the meeting. Any questions we're unable to answer here today, we'll seek to answer after the meeting. I'll now hand over to Ayla. Thank you.

2:34 I just wanted to take a moment to remind everyone of the unique proposition that LAW DEBENTURE is and what sets us apart from other businesses in our sector. I know many of you will have seen this slide a number of times before. But as a reminder, LAW DEBENTURE has two distinct but complementary parts. On the left hand side of this slide is the portfolio of shares, which comprises 81% of our net asset value. On the right hand side of this slide is the bit that makes us different, IPS, a collection of independent professional services businesses, which comprises 19% of the net asset value, but contributing to around one third of dividends over the last ten years. If we achieve consistent growths in the profits from our IPS businesses, here on the right hand side, this in turn gives our investment managers over here on the left hand side greater flexibility in stock selection that we believe and our history tells us will help us to produce material outperformance over our benchmark over time.

3:36 And looking at the other way, the fact that IPS is part of a one hundred and thirty five year old FTSE two fifty business with £1,200,000,000 of assets that this sets us apart to our clients over here on the right hand side in the IPS. So turning to the IPS first, just like Laura and James run a portfolio of shares, IPS is a portfolio of businesses. IPS' long stated ambition is mid to high single digit annual growth, which you can see here on this slide it has delivered in each of the last seven years. Compound annual growth rate in underlying profit before interest and tax has been 7.3% over the last five years. On this slide we can see how the consistent growth in real cash profits in IPS contributes to our overall outperformance against the FTSE Actuaries All Share Index and to dividend growth.

4:35 Our short per term performance over one to three years is creditable, but it is over longer term, five years and ten years, that our performance is really strong. With share price outperformance of the FTSE Actuary All Share Index over the last five years of 4665% over ten years. On dividends, a record forty six years in a row of increasing or maintaining dividend payments, with this year's dividend 4.7% higher than 2023, and more than double the dividend paid ten years ago. And with that, I'll hand over to Dennis. Thank you. Thank you, Isla. And hopefully without the mic there, everybody can hear me okay.

5:21 Good. Okay. Splendid. And I can walk around, which is marvellous. So let's let's dig a little bit deeper into the professional services businesses, which as Isla and both Robert has mentioned as well, are a collection of businesses.

5:37 So we run a pet. The way that we break this out for you as owners is three major buckets, pensions, corporate trust, and corporate services. But the reality is, and we'll get into this over the course of the next five or ten minutes, is there there are lots of different businesses even within those businesses. So we're running quite a diversified portfolio of businesses here. A lot of numbers on this page, but I think the good news is as we go from the left hand side to the right hand side, pensions has gone from 10,500,000 to 16.6, corporate trust from nine to 14, corporate services from 12 to 22. So they're growing, but it's never linear and it will vary around from time to time. But all of these businesses, as Isla put in her chart, to differing degrees have a a strong degree of repeat revenues and a certain amount of inflation linkage.

6:29 But really interestingly, the world's thrown a lot at us. It's throwing a lot at us at the moment, but the the world has thrown a lot at us between 2019 and 2024. And in all of those years, we've been able to he... Hit our PBIT growth target of between 510%. And as and as Ida said, we've grown that by five, 77.3% compound annual growth rate over the course of, of the last five years. We do have outliers and underlies within that, and I wanted to highlight one particularly for this last year because you you... If you look at the detail, you'd have seen in your annual reports and in the results update, you might have been disappointed to see the pensions number had gone down this year.

7:14 We did try at the AGM last year. We did try when we talked to analysts. We did try in the media to point out that 2023 was an outlier year for that business. Why was it an outlier? There's a pensions governance organization in 2022. Something really exciting happened with assets and liabilities under the short lived trust and, government in in September '22, which meant that there was a massive revaluation of pension scheme assets and liabilities in The UK. That led to a huge call to action because pension schemes in the in The UK on the defined benefit side were largely substantially better off as a result of that. No one's ever written that thank you letter to to Liz. I'm not sure they ever will, but that's what happened. It was a call to action. People then had to say, well, what do we do here? Do we lock in the... This this this windfall?

8:05 Do we take some risk off? That played through. Do we go to buyouts? So that... And and and also, there was a lot of work that had to be done about improving, ability to meet margin calls and and and the operational side of those businesses. So that led to a really, really strong year. When I was standing here a year ago, we said that business grew at 21. It was not a business that fundamentally should grow at 21%, and sure enough, it didn't. It's a great business. Its compound annual growth rate is right in that mid to high single digit rates in terms of revenues, and we're confident that we can grow that business over time. Just wanted to give you context around that. Corporate trust business is a great business, but it too can have outlier years. And for those that have been owners for some time, you remember in 2020, we had a number of cases there, which were long term, bankruptcies that had worked their way through to fruition where we were able to take some outsized gains, didn't make it a bad business in 2021.

9:01 You know, we've done this for a hundred and thirty five years. It's a great business, but you do have outlier years within some of our businesses. But as a portfolio, you know, what what we're looking to... Oops. That's interesting. I have a screen here which shows a slide and I... Let's try again. Brilliant. So what... This is the the valuation that we use for our professional services business. This is a multiple of, earnings before interest, tax, depreciation, and amortization or what's EBITDA, and that has grown over time. A little bit of that is because we've moved multiple up. It was 9.2 times EBITDA here. I think it was nine and a half here.

9:47 It's 10.8 times here, and then 10 and a half, 10 and a half, 10 and a half. So that's not a race evaluation. You know, there's there's a whole science that goes into this. We have PLC, third party firm. We we also have the external auditors look through this, but PLC runs a cash flow model, and this also verifies it versus external peers and so on. But the the main reason for the growth here, certainly in the course of this this period here, is the actual growth in the underlying earnings of the business. So over the course of, of the period here, we've almost... We've increased the size of the business. I think it's 83, 84% from just over 100,000,000 to just under 200,000,000. And like James and Laura, what we're looking to do here is we're looking to grow our capital over time. And if we can grow our capital over time, then that gives us optionality around the dividend.

10:41 So I just wanted to, try and address this question. You should ask James and Laura this question because they're 81% of the net assets, but what we might reasonably expect for 2025. So we run a portfolio of businesses. And what's happened in the course of last week, and I don't know how this plays out, but the world's largest economy, has decided that it wants to change its rules of engagements with the rest of the world. Put, United States and China together, they're about 50,000,000,000,000 of GDP, according to IMF, which is about 43% of the world's GDP. And they're in... Certainly for the last five five or six days, they're in a full on trade war. Right? So that's that's something that's gonna cause a decent amount of uncertainty for some time. So let's sort of look under the hood of our businesses in turn.

11:29 So corporate trust, that business makes money in different ways. One of the ways it makes money is of primary market issuance. So if somebody wants to issue a bond, we will get paid an upfront fee, then we get paid ongoing work to act as the bond trustee. It's reasonable to expect in the short term, there'll be few bonds get issued. Right? So that that business will quieten down for a period. I don't know how long that period will last, but at some point, and we'll be ready when it comes back, it will start to come back through. Because interestingly, if you look at 2020 and 2021 on the back of COVID, markets went very quiet for about three weeks in March from a debt issuance perspective, and then they roared back as central banks made sure that they were gonna throw liquidity at the world. So a lot of people issue debt in twenty twenty twenty twenty and 2021, and a lot of that debt was five year debt. So a lot of that debt comes up to mature in... During the course of this year and next year. So in the very short term, at least, that will get a bit of a bloody nose.

12:31 We also had a good start to the year in our corporate trust business in the m and a space. So lots of mergers and acquisitions where we act as the escrow agent. Reasonable to expect today as the worlds of the... As the rules of world trade have have have changed, very few businesses are gonna be buying other businesses if they don't know what the fundamental economics of those businesses are. So reasonable to expect that the m and a component which supports our escrow business, that too will get a bloody nose. But going the other way, we we get paid through one of our business on repacks every time we issue a structured note on behalf of our clients. And those structured notes allow people to move quickly to get exposures to different asset classes. And what you'll find at times of extreme market volatility, if people want to move fast, the issuance of those structured notes goes up. So that could be a win for us. And also embedded under all of this, and we're not hoping for this scenario, but if things go really bad as a bond trustee, if if there are a lot of bankruptcies and restructurings, and for those of you that know us really well, two thousand nine, ten, eleven, go and look at our results. IPS did really well, and that was on the back of the the bond trustee business because in that situation, we go third into the credit queue behind the, HMRC and the liquidator.

13:51 And our role... We only need to do work if we are indemnified or secured to our satisfaction, and our role there is to maximize the return on on behalf of the bondholders, and that can be a very significant win. So there's a big countercyclical build... Business that's in our corporate trust business that we don't hope for a great outcome for, but if things get really hairy, that... That's a nice hedge for us to have. Let's talk about our pensions business as well. So pensions, the one thing that you can't do if you're a pension trustee this week is you can't do nothing. You can consciously decide to do nothing. That's different from not doing anything. The first thing you have to do is you have to check that all your margin calls are being met because assets and liabilities are moving around significantly. So you have to get on the phone. You have to make sure your operational risk side of your obligations is being satisfactorily discharged.

14:41 You need to talk to the corporate. Make sure that corporate's in a good place. So you're forced... Your dialogue picks up at times like this. We've seen it during COVID. We saw it during the trust administration. So realistically, our pension trustees at a time like this, they become busier. How long that lasts for? I don't know. But realistically, that becomes a a busier business for us. There's more meetings. There's increased dialogue. Certainly, if you look at this week, April is usually a quiet month within the pension season. That's filling up with emergency meetings of audit and risk committees, main boards, and investment committees of pension funds, as it should, as they look to discharge their responsibilities appropriately. Then we'll go into our corporate services businesses. We have our service to process business that is simply where we act as an address in The UK and US for people that want to do business under UK and US law.

15:36 Trade will slow down. M and A will slow down. Capital markets will slow down. We can expect in the short run a slowdown in that business. However, when it bounces back, we can expect to to to hopefully take our fair share of that. In our company secretarial services business, again, part of what we do there, if you're on the board support side, we're arranging the board meeting. We're arranging the audit and risk committee meeting. We're arranging the the the risk, the investment committee meeting. There's more of that work on the back of what's happened. So you would expect more work in the board support area of what we do. Moreover, there's a business in there which is called our global entity management. So we have about 70 multinational clients where our job is to keep them in good order, in good standing with the relevant authorities in all the countries in which they operate.

16:27 What's happening right now is all the cards have been thrown up into the air as to how people should organize their supply chains. So it might be reasonable for us to expect, in the short term, not very much, but over time, people will look to restructure those supply chains. So they might need to open subsidiaries in Indonesia and close their subsidiaries in Singapore. That that is all incremental work for companies like ours. I don't... We don't know what the outcomes will be, but a reasonable expectation might be this time next year for us to say in our global entity management, business, the... What we call additional scope work, which is the the project work, has ticked up as a direct result of the changes in the rules of engagement, with doing trade with The United States. Our structured finance business, that will trade lower because it's hard to price the the...

17:14 Those types of assets at this time. We expect that to to be a little light in terms of new new issuance. And finally, our SafeCall business, which is our whistleblowing business. Well, we'd hope that's reasonably independent of this, but but if... The one thing I would say, we've we've changed that business to go beyond just whistleblowing that now does training and investigations. And if you've got investigations that need to be done, they need to be done. Whatever's going on with tariffs, whatever's going on with the economy. So we we broadened our business lines out. So that was about ten minutes, I think, of explaining that within the professional services businesses, we've got a portfolio within the portfolio, and it's that strength is those... Is is within that diversity of revenue streams that we've got there. So we don't know what the rest of 2025 has has in store for us, but we're very well diversified.

18:06 We also have a geographic diversification to what we do, so we should be confident of our ability to produce those five to 10% increases in profits that we look to produce in order to give James and Laura optionality in portfolio construction. So with that, I'll hand over to Laura. Thanks very much, Dennis. Before I can everyone hear me? Terrific. Thank you. So I thought I would start with the investment approach and what's happened in the past and then leave James the job of covering the outlook. So difficult questions for James, please. The investment objective here is to grow capital and to grow the income. And the really nice thing about running this trust is that we can focus on the former and almost treat the latter as an output. And the reason I say that is that we... James and I can turn up pretty much at the beginning of of any particular year and almost know that we've got a third of the income here in the bag, if that's how you want to think of it, from the IPS business Dennis has covered very well.

19:08 What that allows us to do is invest across the breadth of The UK market. So I think everyone in this room will be familiar with the large income payers in The UK, the GSKs, the HSBCs of the world. We can own those if we think they're a good total return opportunity, and we do own those types of companies. But we don't have to. And that's really benefited the trust performance over time. You'll see that on the next slide. In terms of how we're running it, it's very much bottom up. We're not trying to run this in a thematic way and it is deliberately diverse, exactly as in the same way that Dennis was talking about. We have a 150 stocks here and that is not unusual. There are a couple of ways you could think of it. The first is that in the overall structure, you could almost think of us as having a 20% holding in one position. In other words, IPS, the independent professional services business.

19:58 So James and I, part of our job is to diversify away from that position. So there's a very deliberate reason that we have a longer list of holdings here. And when James shows you the top 15, you can see that the position sizes are relatively modest because we are not trying to take too much individual stock risk. So there's that element to why we're holding 150 stocks. The other element, know, Dennis talked about the uncertain environment. It's the same on the portfolio side. And you want to have stocks that can perform well in different environments. So for example, last year, interest rates stayed higher for longer than people would have thought at the beginning of last year, and that really helped the bank holdings in the portfolio. On the other hand, it hurt some of the more cyclical holdings, particularly The UK domestic names, think the likes of house builders, building materials.

20:45 If we're going the other way, the market seems to think now that interest rates are coming down possibly quicker than people thought. That will do the opposite. You know, it will pressure bank lending margins but at the opposite end it should help our house builders, building materials. That's very deliberate. We want things to be doing well at different points. We are not trying to take big bets either way. We might have a view. Our view at the moment is that The UK economy is possibly more resilient than people think. Consumers don't have debt and in fact on average they're building up savings. Corporates are generally in a good place. So we might have a view, but we'll express it here in a modest way. So James will talk about some of the additions that we've made. There is a bit of a theme there among some more domestic holdings, the kingfishers of the world, but we are not very deliberately not taking too much individual stock risk here.

21:37 The other way that we think you can protect in this type of pretty challenging market is valuation. Yeah. I was I was really surprised when I pulled up the valuation of this portfolio this morning at how low it's become. This this portfolio is now on 11 times historic earnings. And, genuinely, I can't remember a time that I've seen that for this portfolio. You know, the whole UK market is on 12 for context. So The UK market isn't expensive either, but we are lower than that here, and that is on historic earnings. So the nice thing about historic earnings is that's not up for debate. That's already happened. And that looks at a very low multiple versus history, which we think gives you more of a buffer. Yes, The US market has been a bit weaker this year, but you're still probably talking about 20 times earnings roughly for The US market compared to 11 times for this portfolio.

22:23 And then finally, do go overseas if we see particularly compelling opportunities there, or if there's a company that we can't really replicate in The UK market. So we list Toyota here. We don't have any listed auto OEMs within The UK market. The other sector where I think this is particularly relevant is we hold a number of overseas pharmaceutical companies. Our thinking is why restrict ourselves just to the ASTRAS and the GSK's that are listed here in The UK. It's a very global market. Your GSK could just as easily be listed overseas. Roche could just as easily be listed here. We tend to own overseas companies there as well. But at the moment, worth saying, we've only got 5% roughly in The US market at the moment, roughly 5% in Europe. We are overwhelmingly invested in The UK because that's where we think the best opportunity lies.

23:11 Turning to performance, and this is five year relative performance, so we've deliberately given a longer time period. There's a lot of noise in short term numbers at the moment. A couple of things to draw out. The first is that point around diversity. There is really no commonality between most of these holdings. Rolls Royce jet engines, Ceres Power hydrogen fuel cells, Flutter global gaming, gambling, M and S in the midst of what looks to be a successful turnaround, biomaterials, US listed semiconductor CapEx. There there is no commonality between these companies, and that is really encouraging to see that it's not one theme driving the performance. A couple of other things to draw out. So somewhat frustratingly as an income fund manager, I always find this slide ever so slightly sobering that a big chunk of this top 10 are stocks that don't pay a high dividend yield. So it would would have been genuinely challenging to hold these companies in size in a traditional UK income fund structure.

24:11 So the likes of Rolls Royce and M and S, they are now back on the dividend list. You know, they they've gone through a period of restructuring. They're paying a dividend, but it's very low. You both would be sub 1% dividend yield. So if you were running a portfolio that was trying to match the yield of The UK market, is closer to four, it would have been difficult to hold these companies in size. And then the opposite end, opposite side of the same coin, if you want to think of it that way, is that we don't have to hold some of the higher yielding shares in The UK market if we don't want to. So you can see here Diageo, we haven't held it. We don't hold it now. Most people are probably familiar with the company. It's sort of premium spirits. We haven't felt the need to own that. It's still got a relatively high level of debt. It's a big position in The UK market, big big waiting in the FTSE All Share benchmark, but we don't have to own it if we don't think it's a good total return opportunity.

25:02 And then finally, we we have gone overseas, that's helped the performance in the past. The US market historically... The case going forward, you never know. But The US market has outperformed The UK market over time. And you can see that in our top 10, you know, a couple of these holdings, Five Materials, Cummins, and Caterpillar are US listed, and that has benefited the trust performance over time. I'll now hand over to Dace to talk about the future and how we're positioned. Thank you, Laura. Can you hear me? Brilliant, brilliant. Actually, just a bit naughty. Go back to previous slide. Not that Laura hasn't covered it very well anyway, but, Dennis said to me the other day, you never talk about selling.

25:51 You know, you talk about... You you enjoy buying, and you don't talk about selling. Actually, this slide shows that we, you know, we are selling. There is we did sell all the applied materials. We did sell all the Caterpillar and I'm kicking myself. I didn't finish selling the Cummins, but I still got it's a great company, a great the great diesel manufacturer. But it it... We do sell. We have reduced Rolls Royce. And the only reason series can be up here because it's fallen from... Put it as your big contributor over five years is a bit strange given it's gone from 16 to 60 p of that period. It it was because it started at 60 p and went up to 16. We never got anywhere and sold it at 16, but we did sell some at 12, eight, 10, twelve, and then I failed to push the button when I got to 16. But we've sold a lot of it, so that's why over five years, it's a contributor. So selling is less less exciting in some ways.

26:49 And it's always it's always hurt to sell your good performers, But actually, it's it's what keeps you in the game and it allows you to recycle. So, you know, flutter, I still believe the Americans are learning how to how to make gambling more enjoyable than the sort of dark rooms that used to happen in. And flutter are really playing a big part in that. But we we are reducing it even though I think I think the shares go up. We are still reducing it. And we have to we have to take profits. We have to rotate rotate the portfolio and these moments of sell off in the market are exciting. They're really good and it's great seeing this room full because if I went to a wealth manager thing or an institutional thing, it'd be so boring at the moment.

27:36 They... We we would be debating whether inflation was going up half a percent more because of these tariffs. No. Then somebody else's model would say it was going up one. They'll all be wrong, but they'll debate their models at length. We we we we work more simply rather like retail investors. We're focused on companies. Companies' valuations are what matter. The the rest is the rest... You you can't add value with those economic models. You can... If you try and pay attention to companies, there's a chance you can. And where do you start? You start with valuations. UK stocks are in real good value territory. That's a great place to start, a great place to start paying attention to UK stocks, and you... And you'll find you've got things on your side before you start. When when things are really cheap and things get disappointing, they don't they don't fall. When things are on the floor, they don't flew... Fall through the floorboards.

28:32 But when they're floating in the air on hot air and something goes wrong, down they go. So that's why looking at stocks when they're down here and being a net buyer of The UK being a net buyer of The UK this week, is the right thing to do. And it's great seeing retail do that because actually Dennis and the team yesterday issued some shares in an investment trust in LAW DEBENTURE. And I think that's great. It shows that that retail is focusing on the fundamentals rather than what we have to go through when we try and sell to an institution at the moment. So I thought Dennis put his head on the line about what the future held. We're we're gonna put our head on the line about what stocks we're buying and and where it's going. Me and Laura, actually, Laura like meeting companies.

29:18 We like visiting companies, and we can all visit one of our companies this afternoon by going drinking in the West, going drinking in in Chinatown or Carnaby Street, Soho or Covent Garden because the one we added to yesterday was Shaftesbury that is the landlord for that area. It's... It is a wonderful, wonderful estate. And if you go around there, every pub people will be spilling out into the street and enjoying the blue sky. The buzz in that portfolio is very real. There's no recession down there, in fact. And it's borne out by the numbers. It's not just borne out by the amount of beer that's being drunk. The the rents are going up. There are very few vacancies, very few vacancies.

30:05 And in and in the real world, when we stop worrying about discount rates and things, actually, NAVs in reality are going up because those those are iconic buildings. So we've been buying Shaftesbury the... Over the last eight days. We've been buying Kingfisher and AB Foods, very cheap shares. This market has real trouble with with cyclicality at the moment. But things... You know, AB Foods' biggest business, one of its biggest... One is Primark. The other big business in there is British sugar. You know, sugar prices up, down, but actually, this is a company real quality. It's a wonderful market position. It's selling UK sugar beet to us in in in Silver Spoon, And it it it will come through and it'll it will it'll actually have a figure this year, this coming year, sugar prices are going up. But the market only wants to see momentum at the moment. It doesn't like things that go like that. But actually, real businesses do do that in many areas.

31:06 So we can buy that at very low valuations. As Laura said, what we want is diversity. So, you know, we're buying some Shaftesbury and land securities as I've discussed, but we're also buying and this is why I get, there's only two or 3% of the portfolio in ITs, I'm getting quite a lot of stick from people about it. And and I don't quite know why. Some of these alternative, these what they were originally sold as gilt look alikes. And of course, they're not. There aren't there are companies with real assets that they've got to operate. But, UK wind is now on a 30¢ plus discount, it's yielding eight and a bit, Hickles another.

31:53 These these have been kicked out by wealth managers who bought them when they thought they were a bond proxy and now don't want them. It's given us an opportunity, to buy them. Some of these people were paying premiums for them two or three years ago. They're now selling them at discounts. They they are perfectly good assets that some they are... Some of these companies are selling selling parts of their portfolio. They're not very different at around NAVs. So they... There's a genuine robustness to the NAV and the the better ones are these. So it's a relatively small part as Laura said. We've got a 150 stocks. We've... We we will... One of the... We will buy two to 3% of the book... Portfolio will end up in that area.

32:40 Property, four, five, 6% indirect property will end up. UK consumer, we'll build up that a little bit at the moment. Laura is absolutely right. The UK consumer has been paying his debt down for a few years. The number of mortgages, outstanding mortgages in The UK has fallen. People are going into any slowdown in a good place relative. The UK consumer usually surprises the analysts and I think they will again. How are we financing it? Well, I've talked a bit about it. We've we've reduced, to the the better stock, the successful stocks in the portfolio. This is contrarian thinking. You... We we we sell the stronger performers to buy the weaker ones when when the valuations justify it. It's sometimes a bit difficult one to explain why you sell your winners. It is that nothing is forever, and, trees don't grow to the sky. What you need to do is rotate into your less successful things if you genuinely believe the story.

33:55 As Laura said, again, we we we don't... That we show the top 15. It doesn't really doesn't really tell the story of the portfolio. If this portfolio has a good next two or three years, it will be things below this list that come up through it. And actually, Dennis was quite brave. He made predictions about the future. And I've... I think I want to put my head on the line and say that we've got a list of smaller companies around half percent holdings. What we need to really have a good next three to five years, like like the last few years have been, is some of those to come up and end up in here. And I could put pressure under myself. I gotta come up with one company.

34:41 One company that I think isn't... Is further down the list that will be in the top 15 in three years time. So you can all... People can be rude to me. God, you were wrong about that. Because we we don't usually like naming one small company because we are portfolio managers. Some will go right, some will go wrong. It's never symmetrical. If something doubles and something halves, you've made money. You know? But, so we don't usually like to name them, but I I think just to just to sharpen me up and, I'm gonna name one. I think of our smaller company holdings... And Laura's looking bemused. She doesn't know what I'm gonna say. I think of our smaller company holdings, it will come right. I've... I'm gonna say Boku, which is about payments, phone payments.

35:27 It's in... Very international. It's it's a miskin company, and I'm quite pleased I'm saying that it's something like that because people sometimes say, James, you're always old tech. You're always his... You know, you're always about yesterday's businesses. No. Boku, really, really exciting, and please ask me in three years' time how right or wrong I was. I think that will be in our top 15. A prediction for the future. Something like I... Something like senior was a small company when it came in here. It's gone up. It's gone down a bit. But over time, it's gone from a very low price when it was restructured back back in back at the turn of the this century. So I've covered the these. This is what we're gonna do. I just want to get on to my last slide because I can waffle about my last slide for a long time.

36:22 Again, I don't wanna dwell about the past, but it was talking with people over coffee. We'll go, god, this last week's been a long week, you know, how difficult it's been. And is the... That's any different to how things have been in the past. And I... You you just... You start here. Okay. Let's do... Because we're just... This is a twenty five years light. 2,000, we were all thinking the world was... We literally thought our computers were all going to fail on the dot. It was absurd. You know, people were taking out insurance that their computers weren't gonna fail. The millennium bug was going to wipe out everything. The clocks were going to stop at at a minute before midnight.

37:09 The the planes were going to start going around in circles and crash. It was it was... And we... And it was put into valuations. And I'd sit in front of trustees, and they'd go, how are you factoring in the millennium bug into your forecast for Kingfisher next year? And it was nonsense. Of course, you couldn't factor it in. You had to keep a straight face and pretend that you, you know, that it was real. But what what what we... What... We're sitting with a portfolio of managers, a 150, who who will deal with the events that are in front of them. They will deal with these tariffs. They'll find ways of operating to get get round and to move production. They'll find new markets. They'll deal with what's thrown at them, whatever is thrown at them.

37:54 That's that's that's that's how commerce... That's how it works. So that's how why equity investment outperforms fixed interest over time. It's it's it's people's adaptability, the skill of management to make to make value happen. I mean, why I like this chart is it keeps things in perspective. This is this is the... After all the, this is the financial crash when all the banks were going bust. And if we feel the last week's been intense, it was much more intense that week. Those weeks that things like Royal Bank, were teetering, Lance and Leicester went bust. We could go on. I could keep... We could go a long time, but but but, you know, actually, on a twenty five year chart, it's a it's a it's a blip.

38:47 They didn't feel like that at the time. This is this is COVID. What we ought to do is stay stay with good companies. We... Our approach is to stay with a long list to to add when you least feel you want to and take away a bit, but make sure you're not absolutely falling in love with success and rotating it round, trying to learn from your mistakes of the past. You know, we didn't finish selling things. Sometimes we've sometimes not made things count enough, and keep and keep at it. And ultimately, it's not... There's nothing clever. All you're doing is paying attention to what's going on. So as I say, go to Carnaby Street, go to Soho today, and and find and see how strong and good the economy is in parts.

39:39 So thank you very much. That's it. Thank you, James. Incitement to to drink, Tilly. We will now be very happy to take questions from shareholders, proxies, and corporate representatives related to the business of the meeting. I've seen a number of questions that are coming online, but we'll take questions in the room first. There is a microphone. Yeah. Please, could you state your name and if you're a corporate representative, the company you represent before asking your question? Okay, sir. Thank you, sir. Yeah. My name is Marcus Rand, and I'm a private investor through Hargreaves. And my question is around investing in other investment trusts. I just wondered...

40:26 I think you better stay up here, James. Think I think I'm sorry. Because I noticed Herald you invest in and UK Wind and a few others. And I just wondered what the criteria that you apply in terms of which ones you invest in. Is it so the for example, UK wind, is it the fact you're interested in infrastructure or is it because you think UK wind in itself is a is a good proposition? It's a it's a really good question, and I'm I'm investing a bit differently to you. I'm not buying... We're not buying anything that we can do ourselves, but I had... We're very lucky with LAWDEBENTURE. We've got a really strong investment committee and one of the one of the older old chairman said to me, Never be proud in investment.

41:15 If somebody's doing something better than you, go go go buy them. And Katie Potts at Herald does small, tech media, states, UK, you know, much better. Her knowledge is phenomenal on those things. And I think there's real value add in Herald. And we bought Herald on a large discount. I occasionally reduce it when the when the discount gets tight because usually you get another chance when it goes back out. So it's a right. It brings diversity. As Laura was saying, we want genuine diversity in the portfolio and that brings diversity. There's no overlap in stocks between what she does and what we do. And she adds over time, the story is there.

42:04 It adds real value. It's great to infuse about investment trust. We keep being told how sleepy we are, but I I don't mind sleepiness, when when when it produces results like that. We've we've been under attack and she's been under attack from Saba. She... Hopefully, she's seeing them off and the story, the truth will out that these products can add real value. So that that's herald. Something like UK wind, again, there's no overlap in the underlying portfolio because there's 48 wind farms around The UK. But these are these are good assets. They're they're good wind farms. They're well invested in, and you're buying them at a large discount. You're getting you're getting a stream of income from it that's r p I related, and it's starting on an eight and a half percent yield.

42:56 It's a lovely diversifier in the portfolio. Our CAGR over time isn't very different from that. It doesn't need to make huge capital gains, with an eight and a half percent, yield on it. And I think it does make... We do... I think why do I think we do get a bit more than that? I think in time when there's bit of confidence returns, eight and a half percent, there's a bit of yield compression. It goes to seven and a half, six and a half in that. But it's not it's not hugely great. It wasn't gonna make my top 15. It'll take it'll take them. It takes... A company needs to take more risk to get there. And that's the way you have your bokus. But what I'm trying to get across is you have your bokus, which is Miskfin could be, you know, very exciting. You've got UK wind, very dull actually.

43:44 You know, if once they're up and running, you know... The of The share of isn't dull. And then you've got Herald, which is a mixture of both, I suppose. But you're like... You you need you need that diversity, and that's the that's the that's that's the importance of a a portfolio to have genuine diversity. K. Thank you. This question here, sir. We've got one here, sir. Oh, sorry. Roger Mate, you are a private shareholder. I know you don't like making predictions, but this year, something quite strange has happened in markets. If you had said to someone at the end of last year, US tech is going to be a terrible performer and European financials exceptional, a lot of people would have laughed it.

44:34 You... But, actually, knowing stock market history, you know, the nineteen sixties, the nifty fifty performed. And then just with... In a more inflationary environment in the early seventies, they collapsed. Most of them. Some survived like IBM. What I wanted to ask you is, we've all been waiting for it, and rarely does the leading sector or area which is performed for ten or fifteen years lead the next bull market. Niels Torb used to say financials often lead a new bull market. So I wonder whether there's a bit of me which feels that we're seeing a seismic shift that what Trump's caused of capital and the low valuations, you know, Goldman's has Lloyd's Bank out to December 27 on 4.8 times. I mean... And they grew their dividend by 15%.

45:33 Why would you not want to own it? Should we ask Laura that one? If you'd asked us in December last year where the valuation anomaly lied, we probably would have said The US market because we are more valuation focused people. And, you know, at the time, The US was on a cyclically adjusted p in the mid thirties, which would looked historically unusual to us. The UK for context was on a low teens. So I I would agree with that. And I also agree with you about what might lead the next market. And this is something that James and I have been discussing as well that actually it might be, you know, what's one of the most out of out of favor areas at the moment? It would be UK. And beneath that, it would be UK domestic companies, which tend to be smaller companies. Me, if you look at how something like the FTSE two fifty is done versus, say, the top end of the FTSE one hundred over the last couple of years, it is very, very stark how much medium and smaller companies have under the board.

46:30 And those are companies that are perfectly good, often, you know, often perfectly good, well managed businesses, often conservatively run with strong balance sheets, but they are at a big valuation discount. And going back to what both of us said, I think The UK economy is probably best described as, yes, low growth, but also resilient in terms of how businesses are run and how consumers have set up their balance sheets. So that to me, it would seem very strange if you just looked historically, you know, the last three, five years, it definitely wouldn't point you in the direction of the FTSE two fifty and some of those smaller companies, but that doesn't necessarily mean that things can't change. And and, you know, I I hope you're right that this is the the seismic shift that people have been waiting for because the weight of money that has gone towards The US has dried up money going elsewhere.

47:19 Thank you. Okay. I have a real question in the back here, sir. Okay. Nick Styra, private shareholder. Are you hearing me? Yes. Yes. Okay. I've got a couple of questions, if I may. The first one is on your whistleblowing safe call. I've always found whistleblowing of great interest, but I've never seen sort of it set up as it is in the annual report. So it's a question how independent, are the investigations that follow, particularly if it sort of involves, shall we say, senior figures and things like that. And honestly, it's a premium thing.

48:06 So how independent are you, and how does it really operate? That's the sort of first question. So do you have one? Do have one first and then we're fine. So thanks, Nick. So our... The the business that we have, the, we call them call handlers, the people who talk to the folks that are raising the issue. These are, to date, every one of these is a former policeman or woman, okay? These are, if you look at our website, you'll see the Sunderland bit. These are based in the Northeast, so these are highly trained. The minimum that they have at this stage is fifteen years worth of experience, and what these policemen and women are very good at is they're very good at following a process and establishing facts and finding a report. So they're not connected in any way to these terms. If they were, they'd have to immediately step back and declare a conflict. No different than they would do if they were in the police and they were a neighbor of somebody who'd been accused of some malfeasance. So they know where the boundaries lie in terms of taking themselves out of it. And then the way that these things are structured, obviously, a lot of, within a corporate structure, there's a human resources chain where a lot of issues are are raised and helped. But the idea is is this provides an independent channel, and that often reports into... Could be the chairman of the board, could be the senior independent director, could be the general council. We tend... Generally, because if the if the CEO is the the bad guy, you need to have that process to be able to go around. So that's where a huge amount of the value proposition comes from. But these are extremely highly

49:36 trained, extremely well experienced, and even within that business, you know, if you go to our office in Sunderland, there's a... Forget a Chinese wall. There's a big wall down the middle of the building, and you have the people that are dealing with the day to day on on one side, and then you've got the people who are managing around and and selling to new clients, so they're very definitely separated from the rest. K. The second question picks up on on the investment trusts. Because if you're holding Herald to help identify companies, you could widen that to include multinational investment trusts to identify these companies elsewhere in the world, like you have in Japan, that might be worth picking up early stage.

50:27 Exactly. You know? And we we... We've we've got an exposure to early stage UK and other places in the portfolio. We've... The... One of the unquoted, and that's... The board looks at that closely is Oxford Sounds Innovation, whereas early stage Oxford based companies, and there's there's been some successes. A vaccine company, for instance, has has come through well there. We've got a company that's taking a lot of that is international, but it's predominantly UK, but is is IP group. Again, it's full of things that could break through. It needs it needs a winner. And these sort of companies can can work. At the moment, the the the discounts are on would suggest they can't work. But there is one out there from three I, which we have held where I sold it too early, where they kept hold of their biggest investment active, and it has driven huge success for that company.

51:30 So we will have some. And as regards international small companies, the... If if I saw something that I really thought would be right, I I would do it. I think going back to our earlier point, we're trying to pay attention. We're trying to have value in things that we can see, and and understand. So that means we miss things that we don't understand, but I don't worry too much about that. There are enough things that we can find opportunity in. And, you know, I will be going to Oxford Science Innovation later this month. I go to Oxford. I won't understand what all the talks are about, but I will come back energized, because there's a lot of good things happening in The UK. There's a lot of really good science that just needs...

52:22 It needs to be commercialized successfully. And like every company, some of them just need a bit of luck. It's as simple as that luck being in the right place at the right time. And the the... I am hopeful, you know, from IP and... There there will be some real winners will come through. Thank you. Yeah. It's, My name is Robert Jennings, private investor. Sort of extension of the last question about the overseas UK split. I think the the the overall policy allows you to go down to 50% or something in UK equities. And at the moment, I think you're more in The UK than you've been in recent years. I think we all know basically we've got a UK income portfolio here, long term investor very happy with it. On the other hand, we also know that in the last five, ten years, if you've been in American IT, you'd have, blown the lights out.

53:25 Maybe it's a question for the board. Will you sort of carry on in that current sort of slightly of muddling through? Does it ultimately matter? Does it ultimately matter if you take a long term view? If The UK has done as well as as well as the world, I think. James, what was that? The the technical straight ups is, to begin with is that, yes, 85% is UK quoted. But, of that UK quoted stuff, about 60% would be international earnings. So we are international. Think The UK, why are those international companies still... They've done better than the domestic UK companies. They've still done pretty poorly because when I look at you, because you were one of the pension trustees that that they got people to sell their equities and buy guilds, which was the right thing to do, I'm sure.

54:22 But from a... But from my point of view, it wasn't. I think the exiting of The UK saver from The UK market has been the most awful thing I've watched in my professional life, in my professional world. We used to we used to run the dive tube pension fund when Casa didn't, And it used to have a huge equity portfolio that grew and helped UK industry by supporting. That was ended by the liability modelling that Dennis has talked about and everything moving into gilts. This has meant that on our big companies, The UK read... The UK investor has left the register and the big companies, the international investors sort of filled a bit of the gap. For UK companies, smaller and medium sized companies, nothing is...

55:13 It's only the retail investor, the private investor that's sort of stepped up to the mark and helped. But there has been this lack, this vacuum of of of capital coming into UK companies. So that's the problem, but that's that's an opportunity as well because it won't be the case forever. So I'm I'm not apologetic. We've got more in UK earnings than ever before that I've run this portfolio. I I completely agree with that. That is because valuations are lower, but we we mustn't become UK centric. We must keep our eyes to the opportunities elsewhere. We need to be tested by the board. Are you becoming just too UK centric? But this is very odd what we've seen in recent years, this exodus of buy UK savers from The UK market and it will be... Will it will change.

56:03 The Ross... A new Ross Scooby will come along, Robert, and we'll put it right and as a joke between us. And you can have a long boring history lesson from me about who Ross Scooby was after he was ever a drink. So let me just add a couple of things to the board. So, of of course, as Jane says, we we do hold the investment manager account. They have to explain to us what they're up to, but they have discretion to invest within set parameters which are deliberately quite wide. And it is not the Gels Bored to backseat drive. If I started making stock selections, that would be a very bad idea indeed. And I think you you have to give Janice Henderson huge credit for the performance they've achieved and particularly particularly against the other chart that James shared earlier against the derating of UK equity since Brexit. I mean, that that is an astonishing chart that the way that's come down since 2016.

56:52 So I think that that we are very pleased with the long term value creation within portfolio, and we have great faith in what Dallas Janice Henderson Henderson does. Of course, we monitor it, but we set quite wide parameters, that's deliberate. You. Any questions on the side of the app? Jeremy Dobbin, I'm a private investor through the HL platform. First of all, can I thank you chairman and your directors and the investments who have done an excellent job? And as a shareholder, I'm a very happy bunny. Two questions, please. There's been a lot of chat about companies, deregistering from the London market over into The US market. Do you think with what's happened, is that gonna go away, or is that something that will be increased?

57:42 And the second question was that... Well, you have some companies that are delisted on your portfolio. Is that... Was gonna be delisted in the last twelve months, and there's still some value there? There's nothing shown. I'm just interested to know why they're why they're still shown. Thank you. Do you want to I'll do the delisting because there are no mistakes on the whole, not Laura's. Uh-huh. There are companies that have, basically gone wrong for one reason or another, they're of de minimis value. But just because the de minimis, they're still survivors' businesses, and we need to keep managing it. People sometimes criticize long lists because you don't manage it. Honestly, I am still keeping an eye on them. Are a few things.

58:27 On the more interesting quest... No, the more relevant quest, Laura, are lots of companies going to delist from The UK? Shall I use this one that way? Terms of companies that we've seen move from The UK to The US market, mostly it's companies where I think the logic stands up to that. So things like CRH, Flutter, these are companies with very substantial US earnings. So in a way that was quite a logical decision for them to do that. I don't think we'll see an exodus of companies that effectively have no role on The US market moving. So, you know, the kingfishers of the world, it would make absolutely no sense for them to move, and I don't think they'll do that. And actually, The UK market, you know, for all the criticisms about The UK market, The UK market has turned down certain listings that have gone on to be real failures actually on The US market. The The UK market tends to be quite cash flow focused. There's a lot of income funds.

59:26 We've turned down some some high growth cash burning companies that have very quickly gone in... Gone on and failed. So actually, I think I think The UK market, you know, yes, there are definitely criticisms that you can throw at it and that are very fair. But I think it also has a lot going for it still and a lot of depth to the market. So I don't think we'll see a a big exodus unless it makes particular sense for individual companies. You you might also say that what's happened in the last week has increased the risk associated with people into The US. If if I was on a big foot... I mean, a FTSE thirty board, I'm not sure that it will be tougher by list of priorities to be thinking about a US listing just in the moment. And you might argue that even, you know, this in the longer term, depending what happens, it might even be quite good for UK capital markets. So it's a relative stability rule of law, all of which seems to be under some threat in The US at the moment.

1:00:14 Thank you. My name is Phil Clark. I've... I'm a long term shareholder. I've got lots of questions, but I'll but I'll restrict myself to two, and maybe later catch up. So first of all, you haven't mentioned the goodwill impairment, which at £17,000,000 is enough to wipe out the IPS profit for fifteen months or so. I wonder if you just talk about the lessons learned there. And whilst you're thinking about that, one for the investment manager, Shell and BP, you currently have a lot more Shell than BP, and that's been right historically because Shell have outperformed BP. That's their good. However, now that BP have an activist investor who are... Who've bought very heavily into BP and have, in fact, I think, shorted Shell, is now the time to flip flop and leap leap joyfully into BP, or are you just not confident? I was curious.

1:01:15 Let me deal with the first one. So goodwill on on on CSS. So we we we bought this business for £21,000,000 in 2021. 17,000,000 goodwill arose. It is true that when we bought it, that we knew it was a cost in, it needed investment. It is true that it's taken longer than we had originally hoped. However, I would say that in terms of what we are seeking to do for shareholders, there are three numbers that matter to you. So in looking at the capital growth, it's the value of James' portfolio, and it is the the fair value of the IPS businesses, both of which have grown. In terms of paying the dividend, then it's the cash earnings that matter. And so, again, we have been... Our our policy would be over over the cycle to smooth it where necessary, but, basically, to to to to pay a covered dividend across the cycle.

1:02:08 So the noncash the 17,000,000 goodwill write off is a noncash item. It basically affects none of those numbers. So it is an accounting entry, but really it's had no impact on shareholders at all. Do you want to take the other one? Yeah. Thanks, Phil. In terms of Shell BP, I would say the first thing is our holding in the sector should almost be thought of as a partial hedge for the fact that we hold a lot of industrials in this portfolio that are big consumers of energy. So our holding in Shell BP is not necessarily just we think ShellsBP are cheap. There's an element of we will always hold a weighting in the oil and gas sector until things materially change.

1:02:55 Terms of am I tempted to to flip from Shell to BP? The honest answer is is no. There isn't a huge amount of valuation difference between the two companies, and BP do have a different balance sheet... Are in a different balance sheet position to Shell. If we are... And I don't know. But if we are going into a downturn, I would have a preference for being in the one with the stronger balance sheet if there's not too much of a valuation difference between the two. So that is how we're thinking about it at the moment. I think we've also got to be realistic about, are we going to add a huge amount of value switching between Shell and BP in these very, very well covered And I think we're gonna be able to add a lot more value in James Boku than we are in BP slash Shell, just being just being realistic.

1:03:44 So that... Sorry. I'll come to you, sir. Stuart Brown, independent shareholder. First of all, I'd like to thank James for giving the share tip on Boku. I imagine the price is surging even as a piece. Well, I was going to say I'll have a look later to see whether he's managed to move the stock market without using social media. But I didn't think there was any disclaimer that not to give financial advice, but there you go. But the the last few weeks has been uncomfortable enough even for seasoned investors, and to be honest looking around the room, there's a fair number of this that look to be well seasoned in terms of investors.

1:04:31 But James was saying how few

1:04:34 people in The UK actually invest in The UK stock market. And I know there was a move or there's still a touted move in by the chancellor that you know to try and encourage people to invest in The UK stock market, to do something with the ISIS and I just wonder to what extent you think that's that might well be a bit of a dead duck in terms of getting people to invest, which obviously has a long term impact on board debenture and the rest because as we pass on, it's difficult to see where the next load of investors are coming from. But if it's been uncomfortable for us, there must be a risk that you're just going to frighten the horses so much that those people who prefer cash and have preferred cash will say, I don't care if I pay tax on cash.

1:05:22 I just don't want to invest in the stock market. James? Yes. I mean, sometimes I sit in the office and I was sitting at the same desk with a different office, but the same sort of desk at Henderson's in eighty two, three. And then, so people come over and sort of say, granddad, where's your pipe? But also, what's it like investing in a falling market? Is this different to... And '87 was a big one for me. And '87 before on the run up in the summer of eighty seven, people just kept pouring into our office with brown paper bags wanting to buy our units. And we would we would... In those days, there wasn't money laundry. We didn't have to ask any questions.

1:06:07 Actually, thinking about regulation, there was a disclaimer somewhere in this presentation about my bucket. It wasn't a TIF. It was just my portfolio. Imagine that. So so we we would literally have brown paper bags and count the money out and give them units give them units. And 87... The Henderson share price, I still remember, went from £5, £17, £23 during the... This eighteen months before. And then the October crash came, and it it was devastating because we'd sucked all these people in that had bought because of the Sid campaign, if you remember, on British Gas and BT. And they all... And I remember the head of retail going, we've put investors off for a generation. Well, two, three years later, they were back in. You know, if the memories are short and if the story is good enough, people get there. And the story in UK equities or in equities, full stop, is good enough. Yes. There will be problems.

1:07:05 But if... The amazing thing is truth does out. Value does out. And, I I think we will... We've got articulated better. 've got to tell the story of why equity investment is a good home for savings. We've got to argue with trustees of pension funds. We've got to do all these things, but I think another generation of buyers do come along and will buy buy equities in spite of the the, the the current shake. Shake. Little shake. Yeah. You know, little little shake. It's, and and, you know, if if... Just just let's have an advert here. Again, there's a disclaimer. If you'd be a millionaire, you'd be a millionaire if you put your money in and did your ISA and then your pep over that period because I know one person that has this and not me.

1:07:56 And they they kept... And it it is a much... It's a it's a way to save. It's a good way to save, and we just got to get that story across. And and for next generation, I'll give a shout out to Andrew Hay at the back there who's, 18 or 19. He's a first year student at Leeds University, and he was quite rightly, chastising me for losing 8% of his investment in law debenture. Beer during coffee beforehand as he should, but the point is there's always this next generation of buyers who are getting themselves educated and and and immersing themselves in this He was asking me very good questions. Why was I buying Kingfisher and not more AB Foods? So there's a good generation of buyers coming along, I think. We should have just a couple more. Yeah. But, AC chairman, do you wanna take some questions online? We certainly wanna take this to everyone here, we wanna be very patient, and then perhaps a couple online. So just a quick question.

1:08:42 My name is Jimmy Beck here. I am new... Very new shareholder. I bought them this week via Barclays investment platform. And I'm just wondering, one thing you didn't mention, do you actually borrow money to invest more? Because now the market, in my eyes, with mister Trump doing all the shaking, a lot of good shares fall out. If you have the money, are you doing that? Thank you. We do have borrowings. We have long term borrowings in place, and the overall gearing of the portfolio is about 12%, something like that. And that's... We we we monitor that closely. The other Do you have a limit in in... That you can't go beyond, say, 20%?

1:09:27 We would. We don't have a we don't have a a legal limit. I think that the board would be uncomfortable if it was getting up beyond about sort of 15% or so. 20% would be starting to be quite high because clearly it increases or has the potential to increase the volatility of the portfolio. I think that what we have been doing, and this is this is worth... Because we have traded consistently at a premium to net net assets, We have issued something like a £100,000,000 worth of shares, Dennis, in the last few years. Yeah. About a 111. So we we think that that is a virtuous circle. We would only go on we only go on continuing issue shares on the basis that either we can invest it in IPS or that there are good investment opportunities that the Janus Seneca can take to take advantage of.

1:10:13 So we think increasing the the the size of the business and the value of the portfolio that that issuing shares is a good way to do that. We do have long term debt going out to twenty thirty something, long term bonds. And, so we we we we believe we do take advantage of the capital structure, the capital markets to, to have debt as well as as equity. Just one tiny technical point. There is in the memo and art a limit on leverage, which is 50%. But as the chairman said, we would get, and those bleeding, we got close to 20% leverage. Halperations, I think. Should we just take Thank you, Laura. Mr. Chairman, there's a number of questions online. I think a number of the themes have been covered in previous questions, so perhaps So maybe two or three, Nikki. Is succession planning in place for key management?

1:10:58 Succession planning is something we take extremely seriously. So we, have plans in place both for short term emergencies, which we hope don't arise, but in case that they do, and for for the longer term. I think it's also worth saying that a great deal has been done on sort of culture in recent years. And one of the things that we are looking in that sort of context is, career progression for people and when we spot future leaders, having plans in place to to to to to encourage them and develop them in that in that way. But, yes, it's something we take extremely seriously. Okay. And then the second one, we've covered part of it. It's probably one for James and Laura. Does poor liquidity in smaller companies and companies delisting cause you concern? And do you see the trend changing?

1:11:46 Laura pointed me to answer this one because I'm I'm a bit more controversial. I I think the lack of liquidity is an opportunity in the closed end sector. People are paying too big a premium, I think sometimes for liquidity because the people are wanting to trade the whole time. When a closed end structure, we can get something much cheaper just just because you can't sell it tomorrow, is it long term opportunity because we're running long term money? And that's the beauty. The beauty of an investment trust is you don't have to look over your shoulder and, which you do with an open ended fund because you... With an open ended fund, you never know if the... You're gonna have redemptions. People are gonna sell units back to you. Closed end fund, you could focus, and take a long term view and put up with a little bit less liquidity in the underlying shares.

1:12:32 And those less liquid shares are where there is extraordinary... No. I mustn't overblow this. There's a there's a... As you say, there's some, something in there about not over promoting. I think there's a real opportunity to buy in these less liquid shares. I think with that, we'll conclude the q and a for now. Please do call us afterwards. We'll be happy to tell any questions separately. And, Nikki, for those online, that we will respond separately. But, please, we're happy to take any questions afterwards. So we'll now move to the formal with your permission to the formal business of the meeting. Let me just go through the voting procedure. In accordance with the corporation's articles of association, a poll will be taken in respect to the resolutions contained in the notice. The notice was published on the corporation's website and sent to shareholders on the March 19.

1:13:22 I therefore propose to take it as read. For each poll, each ordinary shareholder and each proxy present at the meeting is entitled to one vote for each ordinary share registered in their name or one vote for each ordinary share they represent. Voting on the resolutions is open now, but please note that only shareholders, proxies, or corporate representatives may vote. I'll now take a few moments to explain voting procedure. You have been provided with a poll card by a registrar on ComputaShare on entry on which the resolutions are listed with the options for, against, and withheld next to each. Resolution. Please select one option for each resolution by inserting an x in the relevant boxes. Once you've finished voting, a representative from Computer Share will collect the poll card. You may vote at any time during the proceedings until I declare the voting closed, and I'll close the voting after the resolutions have been considered.

1:14:12 And I propose resolutions one to 18 as set out in the notice of meeting, and we'll wait five minutes for shareholders to vote. The registrars of scrutineers for the poll will be asked to confirm the outcome of today's votes once any votes submitted by proxy ahead of the meeting are updated as necessary to reflect the votes submitted via poll today. The final outcome will be announced via the regulatory news service and on our website as soon as possible. For information purposes ahead of the meeting, proxy votes have been received from shareholders representing, around 22 of the corporation's total voting rights, excluding votes withheld and votes in favor, including discretionary the resolutions range between 9699% of the total votes cast. That concludes the formal meeting, this annual general meeting, and I therefore declare the meeting closed.

1:14:58 Thank you, to all those involved for making it ready for today's meeting. Thank you to Peel Hunt for hosting us today and to shareholders, proxies, corporate representatives, and other guests for attending. And, we're very happy to chat with you afterwards. We'll be around. Thank you very much.