Microlise Group (LSE:SAAS) — Interim Results

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

0:33 Before we begin, I would like to submit the following poll, and I would now like to hand you over to the executive management team from MICROLISE GROUP PLC, Nadeem. Nick, good afternoon. Good afternoon. Good afternoon. Thank you everyone for joining us today. Just a quick, set of introductions. So my name is Nadeem Raza. I'm the CEO for MICROLISE GROUP. Been with the business for quite a long time and led the management buyout that we did in 2008. I'll hand across to Nick to introduce himself.

1:08 Hi, everyone. My name is Nick Wyman. I'm the the CFO for MICROLISE. I've been with the business since 2012 and and been involved in a number of the kind of most recent milestones within MICROLISE's history, such as the the refinancing and reorganization in 2018, the acquisitions of both Vita and and TrueTac as well as the IPO. And then in April this year, I was promoted CFO, formerly finance director.

1:38 Thanks, Nick. Just a few background slides. We'll try and go through this fairly quickly for those of you that that, already know us, but, for for new people, just trying to cover some background. So, MICROLISE, we're a leading provider of transport management solutions to large enterprise customers. Lots of large enterprise customers, but we also have lots of smaller customers as well. But the enterprise space is where is our sweet spot. And we help solve those complex needs with proprietary software and hardware solutions. We help customers automate their critical processes, and the main benefits that customers get are cost savings, reduction in emissions, and obviously making their business far more efficient and improving the quality of their service that they can provide to their end customers.

2:26 Well, there are high barriers to entry, and we have a very, very sticky customer base with very long term revenue visibility, which we'll talk about in in later slides. And we also have a clear growth strategy involving both organic growth and through m and a. So just some background on numbers for f y twenty two. So these are full year results, last published. So, we had a revenue at the end of FY twenty two of 63,000,000. About 599,000 subscriptions. We're now at 623,000 active subscriptions, about 600 staff, about 400 of those enterprise customers, but, obviously, thousands of of smaller customers as well.

3:16 And we deployed everywhere. In fact, the only places that we're not in is North Korea. You'll even find, some of the assets that we monitor in Antarctica. And, of course, we win lots of awards. We have three queens awards for enterprise, two of those for innovation and one for international exports.

3:37 And these are things that we do to help our customers. So, obviously, through some of our products, we help to reduce the mileage that vehicles are traveling. We help them improve the way that drivers drive vehicles. And, obviously, improving drive performance helps to reduce vehicle use, which again helps to reduce emissions. And that really gives us the the the reason for the green economy mark from the London Stock Exchange. And by driving vehicles better, you reduce vehicle wear and tear and also reduce accidents. And, obviously, reducing accidents also helps you to reduce your insurance premium. But the key thing that we do is help help our customers improve the fleet efficiency and utilization, thereby enabling them to do more with the same numbers of vehicles and same number of drivers.

4:27 And, of course, everything is real time, so we get rid of a lot of the paperwork and allows our customers to deliver an enhanced customer experience to their end customers.

4:41 We are we do deploy globally, but we have four offices around the world. We have two in The UK, Nottingham and Coventry. So, really, our headquarters are are in Nottingham. And then we have three international offices, one in France, one in India, and one in Australia.

5:01 Some of our highlights for h one twenty twenty three versus h one twenty twenty two. So I'm gonna hand across to Nick to just to cover these numbers. Yeah. So we'll we'll come onto the onto the revenue in a bit more detail, but at a high level, we've we've increased revenue overall revenues by 10 and a half percent. Nonrecurring sorry. Recurring revenues have gone up by by some in some in a percentage to 21.9%. Adjusted EBITDA, so that's after profits after amortization, depreciation, and share based payments has increased by by 4%. And our ARR, our annual recurring revenue, has increased by 11.5% to $44,800,000 Subscriptions have increased to $626,000 Churn remains very, very low, although it has gone up from from the end of the year, but, you know, by 0.1 of a percent.

5:57 So that still remains sort of very, very low reflecting the, you know, the stickiness of the solution within the customer base. And, obviously, we we see multi renewals with with customers on an ongoing basis. Cash is as expected at 14,100,000 after, you know, various investments that we've made in the first half. Okay. Talking about our product set for a minute. So we have seven sort of product groupings within our portfolio. It used to be six, and then we've added transport management systems recently through the acquisition of Vita, which we did in in in March. So just to cover these in in a bit more detail. So starting from the right hand side, fleet safety covers things like

6:51 health and safety through cameras, using cameras for accident investigations, doing driver fatigue cameras to monitor and make sure drivers are driving vehicles correctly and they're not on their phones, they're wearing their seat belts, they're not eating, etcetera, and paying attention to the road, low bridge strike avoidance applications, and so on. So that's our fleet safety portfolio. Fleet compliance is to do with making sure that you follow all the regulations regarding running trucks. If you have one truck or whether you have a thousand trucks, you still have to maintain them in the same way and adhere to all of the same regulations. And you are audited by the DVSA on a regular basis to ensure that you are complying to to those rules about maintaining trucks and ensuring your drivers are are carrying out their scheduled checks and also covering the the necessary driving hours regulations that they're supposed to as well, which are quite complex.

7:56 So that's our fleet compliance solution. This was brought on board through our acquisition of TrueTac in in 2020. Fleet performance is is often more easily described as tracking and telematics. So we do tracking telematics, and I'm sure you're familiar with lots of other companies that do tracking telematics. It forms a small part of our portfolio, and we're often confused as being a tracking telematics company, which is not what we are. We are actually a software business that provides a lot of other transport solutions to the industry. Obviously, to be able to manage for what the the work that the vehicle is doing, you have to be able to communicate with drivers. So we have a driver connected mobility suite that manages everything that the driver does from the point at which he starts his shift in the morning to when he ends his shift. So all his workload, all his health and safety assessments, all his all his risk assessments for going on to particular sites, etcetera, and and really controls everything that the driver does throughout his day.

9:01 We have, our journey management solution. And in fact, what I'm gonna do is I'm gonna go to transport management first because it flows better to explain it from that side. So transport management is is really the onboarding of work initially. So it deals with everything from quoting an end customer about the work that they want you to carry out in terms of moving goods from a to b, deciding on whether that's something that you want to carry out yourself or, in fact, sometimes subcontract it to another subcontractor to to do the work for you if you haven't got trucks that are able to to carry out that work, looking at all the c o two emissions that that might cause, and then quoting the customer for that work, and then doing the work, and then dealing with all the invoicing and follow on for that.

9:48 Once you have some workload, we then go into our planning and optimization product, which can plan and schedule all that work. So deciding on what the best vehicle to put that work on, working out what the best route for that vehicle to take, and what the best driver is to assign to it, being very conscious of the the driving hours availability that you might have as well. And really there to try and minimize the number of vehicles, number of drivers that you're utilizing, and reducing the amount of road distance traveled, thereby also reducing the amount of emissions being produced. Once you've done that and you have a plan, the next bit is to execute it. And this is where our journey management solution comes into play. So our journey management solution then deals with all of the issues that you get on a typical day.

10:39 You know, vehicles being stuck in traffic, therefore, you're gonna arrive late at a destination. Customers not being there when you go to deliver something or collect something. Customers rejecting goods, maybe they've got damaged in transit or maybe it's the wrong item or something like that. So dealing with all of those things in a very automated way so that you don't employ hundreds of of customer support staff to deal with those queries and issues. As you can see, we've added some typical market pricing range at the top of each of these segments. So this gives you a view that a lot of our older products like fleet performance and and fleet safety and fleet compliance, you know, there there is a lot of competition out there, and these are becoming slowly more and more commoditized.

11:30 Still commanding good per vehicle per month pricing, which is what that is at the top. But in the products that we've invested in either homegrown, like planning on optimization or that we've acquired,

11:43 like transport management systems, we've focused on higher value, higher margin products. So we can command, you know, three, four, five times the number for per vehicle per month price for some of those products compared to some of our older products. And that's where we are investing in to grow our revenues and grow our margins in the future.

12:11 So this is just a small very small snapshot of some of our customers. The important link is at the bottom. If you like to understand more about our customers and how they use our products and some of the benefits that we deliver, there are lots and lots of video case studies available on our website. So please have a look at that to understand more about what we do and, how we help our customers. So some of the highlights from the last half year, we acquired VIT software, which helped bring in that TMS solution. That was acquired in in March. In the first first three months, we also were able to cross that cross sell that into two existing customer contracts. So pleased that we've managed to have a really good flying start to cross selling that solution into our existing customer base.

13:07 We're also pretty pleased to have been ranked in the top 100 great places to work for 2023. And not only were we ranked in that, but we were also ranked for best places to work for women, best places to work for tech, and best places to work for well-being as well. So pretty pleased that we were in the top 100 large companies for for all four of those different categories. We continue to have very long term visibility of future revenue through our long term contracts. As mentioned earlier, most of our contracts are five years long. And we during the first six months of this year, we also managed to renew quite a few of those enterprise customer contracts and grow them. So Bid Food, Palex, and Tesco were all renewed. Obviously, we renew lots and lots of contracts, but Key wants to point out because they're on our enterprise space.

14:12 We also did an r and s reach couple of weeks ago explaining some of the great wins that we've had in Australia and New Zealand, really in the retail and food distribution sectors. And Australia this year will show growth of over a 100%. So we're doing really, really well in Australia through through that market segment. And a couple of other ones to point out, we are also still growing in France and, of course, The UK and Ireland. And we won a couple of new business businesses here, LFE, McCullough, and STL. Importantly, two of those actually wanted to sign up for six year contracts. So, again, highlighting our long term relationships and stickiness with our customer base.

15:04 Few other product investments that we've been working on over the last six months. So security doesn't get talked about a lot, but it's something that we're putting a lot of money and effort into. We've seen some of our competitors for victim to being to having ransomware attacks. In fact, one of them, you may have seen the news recently, ORBCOMM in The US. Their services were down for three weeks in September, mainly down to a ransomware attack. Clearly, if you're supplying 24 by seven services, that mission critical for your customers being down for three weeks is gonna be pretty damaging to you as a business. So, you know, we continue to invest heavily in our security and providing those assurances to our customers and keeping, you know, their their data secure.

16:03 As we acquire new businesses and develop new products, integration is key, making sure our products and data from one flow into another one with ease so that customers can easily switch on additional modules whenever they need. Localizations, again, Australia and France, we keep an eye on legislation changes in each of those, and so we have to invest in making sure that our products are still fit for for each of those geographies. Standardization and scalability. A question we're often asked is, you know, how much bespoke bespoking of products are is there, and and are you actually producing a product that is fairly standard and scalable? I'm pleased to say, in fact, I can only think of two of our implementations that are bespoke bespoke.

16:53 One of them for the the military and one one for other government and NGO use, and and the rest of our customer base are running standard products throughout. The other area that we're investing in heavily is, again, as we as we buy other businesses and integrate them is to reduce that implementation time and costs with some of our recent products like p and o and transport management solutions. They take a lot of handholding with customers to take them from the point at which they order through to going live, invoicing, and cash, etcetera. We wanna try and reduce that time so that we can increase the throughput and sales of those. And so we're spending a lot of time automating and and improving the way that the customer can onboard those products and implement them.

17:44 And lastly, of course, since take us take our our eye away from innovation. So there's lots of innovative products coming along. We will be introducing and announcing more of those at our conference next year in in March. I'm gonna hand across to to Nick to cover some of the more detailed financial news. Thanks, Nadim. So this is a summary of our of our revenues. We are a software company, and we do see ourselves as a software company, but the there are other elements to our to our revenue streams, which I'll I'll go into now. The the bar graph on the right hand side and the three colors represent the three main categories of of revenue. The the yellow one at the bottom is essentially the the the subscription revenue that we that we generate from our software services.

18:37 The the next bar of the yellow one is the hardware, which is effectively mainly our own designed hardware, but there will be an element of third party hardware in there. And finally, the last element is the is the services. And the services really is is split into three main areas. We have engineering installation. So that's really applicable to our direct customer base where we retrofit our hardware solution in into the customer's vehicles, which is then the enabler for the for the software services.

19:08 There's also project management, again, which is applicable to both actually OEM customers and our direct customers in terms of implementation services. And finally, there's customization and, you know, an element of a smaller element of the spoken services that we have with with our customers, but that is becoming less and less as time goes on as as, you know, the the vast majority of the customer base takes a standard solution. So please say that across all of those revenue streams we've seen, we've seen increases. So overall, total revenues increased 10.5% to just shy of $34,000,000 Recurring revenues have grown 10.3% to $21,900,000 And our annual recurring revenue has increased 11,500,000 to 44,800,000 Hardware has increased by 7.9% to 9,500,000 But I think it's right to point out that we continue to see record levels of OEM hardware demand and for our software services. So we've kind of seen a disproportionate increase in revenue terms because effectively the pricing for the OEM hardware solution is lower than that of our direct customers.

20:19 Will come on to a little bit more detail moving throughout the presentation. There has been challenges with vehicle availability with our direct customers, which has meant that our ability to deploy the orders that we've got on hand has been hampered somewhat in the first half, but we're beginning to see that ease now. A result of that, coupled with increased contract wins has resulted in a significant order book, which has effectively increased at the half year '23 by 100% versus the comparative period last year. So we do have an awful lot of on hand orders to deploy. It's so there's no shortage of business. It's just getting out there and installed into the customers' vehicles.

21:06 Finally, services revenue has increased by 22%. And that really is a a reflection of the the easing of the of the vehicle availability where we've managed to deploy new customer contracts. And I think the the main ones that we've really seen in in the first half of of twenty three is into our Australian customer base, which is obviously great news as well as we've also managed to cross sell additional software services into the Australian customer base as well. So just on to the next slide, please, Nadine. So in terms of the profit and loss account, as I said, we've seen 10.5% increase in overall revenues.

21:51 Gross margins have increased 11.8% year on year, of which the subscription recurring revenue has increased 15.4% year on year, which takes percentage of gross margin up to 78.4% versus 75% last year, which is a reflection of, obviously, increased increased volumes through new customer acquisition, but also cross sell within the existing customer base with with additional products and services. But there's also an element of efficiency that we've driven out of the cost base in terms of more efficient and effective utilization of third party software solutions that we use within the product.

22:36 Non recurring margins have been reduced across the comparative period and that it really is a result of what I mentioned before, we've got a mix issue with increased OEM demand. And there has been element an element of where we have had to pay premiums for components that are scarce and key within within the product suite. That has eased significantly over the last twelve months, but there has been a few issues where we have had component shortages, and we've needed to invest in this stock and bring longer you know, have a have a much bigger sort of minimum stock holding to make sure that we can that we can supply the the big order book that we've got. Overall, gross margins have increased from 60% to 61%.

23:26 Operating expenses have increased in line with our plan from 15% to $16,600,000 which is really a reflection of our strategy to continually invest into our global sales force. So in all territories, France, Australia, and The UK, we've added more resource in in direct sales, account management, and marketing. So that includes lead generation. And we've also invested in our employment engagement strategy, which is really to make sure that our staff are paid fairly and in line with with market requirements in addition to our commitment to ongoing training and employment engagement events that we that we have with our with our employees, which is, you know, reflected in our in our excuse me.

24:24 Which has been reflected in the fact that we've run a number of awards through the period, which which Nadim will cover in a little bit more detail. Adjusted EBITDA has increased 4% to 4,500,000, which again was was in line with our our plans. But obviously, is as a result of the increased investment in operation expenses, particularly within the employment base. There is also investment both that's gone through OpEx as well as CapEx in terms of the security investment that Nadim mentioned previously. And obviously, the increased investment in plant, property and equipment, which obviously goes back to the infrastructure and internal IT systems, we've seen an increased charge in depreciation and amortization.

25:15 Just to cover off a little bit more margin enhancement, so as well as the value add that we've managed to drive out the supply chain in terms of the software solutions. We are integrating with third party hardware solutions, which we've done quite successfully within Australia with the new Lytics AI camera. So there's there's a number of initiatives that we've got internally in both in terms of increased high value software sales, which is through homegrown products as well as acquired products such as Vita. And finally, the the other piece is around the is around the platinum optimization, which is which is obviously the product that we we launched a number of years ago, which we're we're starting to see real good traction now.

26:09 Okay. Next slide. So cash flow. So I think the first thing to point out is that cash flow from generated from operations was lower across the comparative period. And the main driver for that is the fact that we had a number of large receipts around £3,000,000 that that should have arrived and and were forecast to arrive in June, actually arrived in the first couple of days of July. So cash conversion was at a reduced rate of 80% of adjusted EBITDA, but adding that 2,800,000 back in would have taken us to a 142%, which is slightly ahead of where we were last year. As I previously mentioned, CapEx investment in in predominantly security, both in the data centers and the MICROLISE head office network capability has increased year on year.

27:03 And that is partly because of component shortages in the hardware IT sector as well last year that we're now making sure that we would make the necessary upgrades that we plan to do. Furthermore, obviously, we've invested in acquisitions. So the Vita acquisition cost us 1,800,000 out of MICROLISE funds on a cash free, debt free basis. And then we also made the final £1,000,000 deferred consideration payment to the previous shareholders of TrueTac. And finally, obviously, the cash balance is sitting at £14,100,000 We do also have access to a committed RCF facility of 20,000,000, which gives us access to a total of 34,000,000 funds.

27:51 The the RCF is currently being renegotiated as that that's due for renewal in in July 2024. K. So just talking a little bit about our market. So firstly, on our customers' market and what what we're hearing from customers is there's still you know, they're in a very competitive space. A lot of our smaller haulage customers operate on one or 2% margins. It's very, very tight. Particular sectors like parcels and post are under higher pressures. We've also got some net zero pressures coming in line. Obviously, depending on what the government how the government changed the rules, but currently, you know, people are still focused on reducing those net zero pressures.

28:42 One, we're seeing more clean air zones appearing, which will have an impact on what vehicles and what types of vehicles were allowed into different cities. We're also seeing scope three reporting coming in next year, which again will have an impact on customers. So that's where we're spending a lot of time and dialogue having dialogues with customers in terms of how we're gonna deal with those those issues. Health and safety and compliance, we're seeing, again, some change new direct vision standard when we spoke six months ago was in consultation. It has now come out.

29:19 There are a number of changes that will be coming into play next year, particularly to do with identifying vulnerable road users. And the other area in in this sector that we're seeing a lot of demand for is that driver fatigue management. So those sorts of inward facing camera solutions that that look at whether the driver is wearing their seat belt, whether they're being tight, you know, whether they're tired, whether they're on their mobile phone, and so on. So just making sure that people are driving vehicles in a in a very safe way. And then lastly, the other discussions that we're having and is about, zero emission vehicles and the uncertainty around what to do given that you're buying hundreds of vehicles and you're on a three, five year cycle for for replacing vehicles. And in some cases, like trailers, trailers often have a lifetime of ten years.

30:13 So you can have trailers with engines on board. Then again, you have to think very carefully about the type of technology that you're going to invest in given that you're gonna run that for ten years. The important thing to say is irrespective of whatever customers decide to do, we already have solutions that cater for all these. So we already support hydrogen powered vehicles. We already support gas powered vehicles. We already support electric vehicles. We already have solutions for direct vision standard and driver fatigue management, and we already support a number of the clear and air zones that are out there. So whatever customers decide or or have issues on, we're already in a good position because we're ahead of the curve in our product development to be able to support them across all of these issues.

31:03 The operational environment as far as market size is concerned, we have been saying for about eighteen months that component shortages and supply chain issues and chip shortages are expected to continue easing and that we expected that second half of twenty twenty three would be when we'd get back to pretty much normal levels, pre pandemic levels. And we are seeing that. So those have tracked in line with our with our projections. And we've also said that new vehicle availability will lag about three to six months behind that. And, again, we're seeing the same thing happening there as we projected, in terms of vehicle lead times improving. They are continuing to improve, and our forecast is that that really by the time that we get to the beginning of twenty twenty four, vehicle lead times for for new types of vehicles, unless you're talking some very weird and wonderful vehicles like dual fuel hydrogen powered vehicles, etcetera. You know, those lead times will will be back to normal by the beginning of twenty twenty four.

32:08 We're not seeing any shortage of demand. As Nick pointed out, our order book on orders on hand at the end of h one twenty three was double what we had at the end of h one twenty two. So lots of orders on hand that are really just waiting on vehicles to be able to for us to be able to deliver them. And inflationary pressures are coming in from suppliers, not as many as as we had feared, but we are able to pass some of those on. And in John generally, they are netting out. In terms of our growth strategy, so we have three pillars for our growth strategy. One, growing existing customer, revenue, and that's really through, creating new products and upselling those into our existing, customer base. In fact, we have a dedicated team of account managers that whose only job it is to go and sell new products into existing customers.

33:14 And we've continued that not just through our direct customers, but through our OEMs. So we're seeing growth in our OEMs in The Middle East And North Africa. So going into new geographies with some of our existing OEMs and also adding our products onto additional models. So for JCB, there are 30 new vehicle models in 2024 that will have have our tech on onboard.

33:41 And that's really helping to drive those higher volumes coming through from OEMs. In fact, record volumes for for OEMs this year, and the forecast for next year is is continuing to be higher as well. We're selling lots of new products into existing customers. So, again, an example of that was we acquired Vita in March. We sold it into two existing contracts in h '1. So within the first three months, a great flying start to that, and we've sold it into more in h two. And we're often asked if we sold everything to everybody, what would that mean? So the calculation for that is that, you know, today with our existing customer customers and our existing product set, if we sold everything to everyone, we would grow our recurring revenue by 70,000,000.

34:30 So really taking it from that sort of 43,000,000 to over a 115,000,000 in in total. And, of course, we continue to renew our contracts and and gain incremental revenue through those renewals. And, again, just some of our enterprise renewals that that happened in the first half of the year. And, again, typically, 10 customers tend to renew for another five years. So we have this rolling five year contracts with with a lot of customers. Our second pillar, which is how do we acquire new customers. So we've had a lot of new wins in The UK and Ireland with people like Europa and McCullough. Interesting to point out that two of those contracts, the customer wanted six year contracts.

35:18 So, again, highlighting how long term future revenues we have visibility of and how sticky we are with customers. And then internationally, you've noticed may have noticed the r and s that we put out two weeks ago about our retail wins in Australia. So Australia is a a great great growth in retail segment and in the food distribution segment. That's where we're seeing the majority of our growth in in Australia and New Zealand. And as as mentioned earlier, Australia is expected to double in terms of revenue this year. And then in The UK, we're focusing a lot of time on the the mid tier fleet size, so the 100 to 500 vehicle segment. And within that space, we've we've added another 250 new customer wins, so we're pretty pleased about that.

36:12 And then to that's organic growth. And then inorganic growth, we are still active in m and a. Obviously, we're being very careful and cautious about the types of deals that we're doing. We acquired Vita in March. We are continuing and bolstering our m and a team. We've recently recruited a strategy and m and a director who comes to us with a vast amount of industry experience, having worked for large corporates for the last fifteen years. And he's gonna be there to strengthen our team and and really be 100% dedicated to strategy and and evolving our m and a pipeline. So more news on the m and a front in the near future, we hope.

37:05 And just to sync just to highlight the the investment case. So, typically, we have five plus year contracts with most of our customers. So we have this really long term visibility of contracted revenue. Combine that with that very low churn rate of of sub 1%, you know, gives us a lot of future visibility and stable visibility of of future income. We continue to have dedicated account managers selling multiple products into existing customers. And, obviously, the more products that we sell into an existing customer, the more sticky we are with that with that customer. And, again, that feeds into those long term contracts and those that very low churn rate. We're working on margin enhancements with our new products. And as you saw earlier, our recent investments, whether homegrown or m and a, focused on products that command a higher value and a higher margin on that per vehicle per month rate.

38:08 And we continue to have significant market opportunities both in international growth and selling new products into our existing customer base. And that translates to a track record. So the graph on the right here shows how we've grown our recurring revenue consistently over the last five years even through the COVID years. And, obviously, that trend, will continue in '23. And, obviously, you know, our aim is that that would trend will continue on forwards into into coming years as well. On the ESG front, we do a lot of work with various charities. We are doing a lot of work in terms of decarbonizing our fleet. We've installed our solar panels on our headquarters, and we do a lot of work with engagement with our staff, hence, the various best places to work awards that we've we've achieved this year.

39:05 And just in terms of outlook, yeah, we're we're very positive. We've see we've got a great order book. We have great forecast from our OEMs. So we are confident of hitting our 2023 market expectations, and we are obviously working on our 2024 forecast at the moment. So those will be released soon as well for more details. Number of questions that we're often asked are are you planning on declaring any dividends? As you have seen from the r and s, we aren't at this point in time. However, our stated intent is that we do intend to become a dividend paying stock in the future. So that is still where we're planning on going. But right now, we're focusing on growing through acquisitions, and there is more to come on that before we start paying out dividends.

40:05 And lastly, if you one date for your diary for next year. If you if you came to our conference, hopefully, you enjoyed it this year. But next year, our conference is on the March 19, again, in Coventry. It's Europe's largest transport conference of its type. Lots of industry speakers. So not only will you have the opportunity to learn more about the industry and how what's going on in the logistics space from lots of interesting industry speakers. But there's an opportunity to talk to our customers, get greater detail through demos of our products, look at our new innovations, and also meet other investors as well. There will be sessions for both analysts and and investors at the event. So please mark that date down in your diary.

40:57 And, obviously, the I think the website is live, very shortly, you'll also be able to register your your attendance as well. And I think that's it. So we'd like to hand over for questions. Nadim, Nick, that's great. And thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab that's situated on the right hand corner of your screen. But just while the team take a few moments to review those questions that were submitted already, I would like to remind you that a recording of this presentation along with a copy of the slides and the published q and a can be accessed via your investor dashboard. Nick, Nadim, as you can see, we have received a number of questions throughout your presentation this afternoon. And thank you to all of those on the call for taking the time to submit their questions.

41:45 But if I may just hand back to you just to make your way through those questions and just give your responses where it's appropriate to do so, and then I'll pick up from you at the end. Thank you. Okay. So the first question we had is from Matthew, which is would we expand into additional countries? Yes. We are looking at expanding into additional countries. In Europe, that's that can be organic growth into other countries. We already sell into a number of other countries via our UK office and our French office. We're often asked about North America, and our view there has been always been that for North America, you have to put a lot of investment in very quickly to get to a a scale that's sustainable. And it's unlikely that we would do that directly from an organic perspective. It's much, much more likely that we would end up having an office and a presence in North America through an acquisition.

42:43 So, yes, international growth is definitely one of our pillars for growth and both through organic and inorganic means depending on the geography type. The next question, what trends have driven the customer acquisition by adding more solutions to the platform? Will you be able to increase sales into existing customers? So the first part, the the trends have all been all been about efficiency, cost saving, helping to improve the quality of service to the end customer. Different products are lead ins for customers in different ways. So in some areas, we're seeing planning and optimization in TMS being the the product that customers initially buy because they already have may already have a fleet compliance or a camera solution.

43:32 But, obviously, once we're in there, we're then able to upsell our other products when their existing contracts come up for renewal because they are much more highly integrated into our into the rest of our portfolio than a than a third party product is. But that's that's how we go in is is normally through a variety of products. And, obviously, the greater the portfolio we have, the more opportunity there is to sell one or two of those products from our portfolio into an into an existing existing customer or, sorry, into a new customer as a foothold. And then the second part is about, you know, how do we add more solutions to the platform, whether that will increase sales to this because yes. That is, again, part of our strategy.

44:18 And we as I mentioned, we have a dedicated team of account managers whose only job it is to sell new products into existing customers, and we've been very successful with that. And, again, we continue to invest in that sales team as well. Could you comment on AI? Has any form of AI been implemented as part of your growth strategy, and what impact is this having on the group? So, yeah, we have a we have a data sciences team which consists of people who are well, they're all professors for starters. So it consists of people who are operation doing operational research. So actually looking at the data we collect and looking at different ways we can monetize that. And secondly, also people that have great experience in developing algorithms and AI machine learning tools, etcetera.

45:10 So we've been using AI machine learning in our products for about two years. So our first product that came out with some of that was our trailer brake performance management system, which monitors the brakes every single time that you brake both on the trailer and on the tractor unit, particularly in articulated lorries, and it starts to give you early warnings of any kind of brake degradation. So we introduced that quite a while ago. And as I said, that has AI and machine learning capabilities at the heart of that to be able to perform that function. We're also we also have some AI machine learning in our journey management solution, it can detect when vehicles are gonna be late for deliveries.

46:01 It can do automatic checking of of when they where they where they arrive and what the best place for them to park and stop is. So, again, there's AI machine learning in that. And, of course, we have a planning and optimization solution, which also has some machine learning capabilities in there in the product as well. I think that's the end of those questions. Absolutely. Nadim, Nick, thank you very much indeed for addressing those questions that came in from investors this afternoon. And, of course, as usual, if there are any further questions that do come through, we'll make these available to you immediately after the presentation has ended just for you to review to then add any additional responses, of course, where it's appropriate to do so. We'll publish all those responses out on the investor meet company platform. But, Nadim, perhaps before really just looking to redirect those on the call to provide you their feedback, which I know is particularly important to yourself and the company.

46:53 If I could please just ask you for a few closing comments just to wrap up with, that'd be great. Firstly, thank you all for your time today. I hope you you've enjoyed the presentation. I will refer you to a couple of other things. One, that the link that's there to the case studies on our website if you wanna learn more about the business and and how we operate and what we do for customers. And secondly, that date in your diary for March 19 next year for our annual conference. Again, there'll be lots of content there for for investors as well. So look forward to seeing you there. Thank you very much for your time. Nadine, that's great. And Nick as well, thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order the management team can better understand your views and expectations.

47:45 This won't 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 MICROLISE GROUP PLC, we would like to thank you for attending today's presentation. That now concludes today's session. So good afternoon to you all. Thank you. Thank you.