Pci-Pal (LSE:PCIP) — Review of 2022 Results and Prospects

0:04 Good afternoon, ladies and gentlemen, and welcome to the PCI PAL results presentation. To start with, if we could cover a couple of housekeeping items. Before we begin, we would like to submit the following poll, which you'll see on your screens. Throughout this presentation, investors will be in listen only mode. However, questions are encouraged and can be submitted at any time via the q and a tab situated on the right hand corner of your screen or if anyone has dialed in via PCIPAL at Warbrook p r dot com. We will endeavor to answer all questions today. However, failing

0:36 that, the company will review all questions submitted today and publish responses where appropriate. These will be available via the investor me company dashboard. Finally, we would like to remind you that this presentation is being recorded. I would now like to now like to hand you over to Chivy's executive, James Byram chief financial officer, William Good. Lovely. Thanks, Tom. Welcome everyone to our full year results presentation for f y twenty two. We finished in June. It's been another strong year of growth here at PCIPOW. It's been a very busy year delivering that growth, driving new strategic initiatives following the fundraise that we made in April last year. So we've got plenty to update you on today, so we're gonna get on with that in a moment.

1:23 As always, thank you for joining on the IMC platform. It's a great way for us to access a wider audience and and a way for us to keep many of our our retail investors updated with the business in one go. So, yeah, appreciate you joining us on this. As I usually say, we we have now built up a fairly good back catalog of updates on the IMC portal as well, so videos, collateral, and stuff that you can look at. And some of these things go into much more in-depth view of the the background of the business too and the full background story. But, you know, for today, we need to focus on f y twenty two and the look ahead because there's a lot to cover. But if you do need to, please refer back to to that portal. And, And, of course, please submit some questions as well because we will try to leave time at the end for questions. So to kick us off, I'm gonna start with an overview of our strategy, and then we're gonna dive into numbers and and results. So for that don't know us, PCIPOW is a fast growing, true SaaS business, highly recurring revenue SaaS subscription model.

2:27 And what we do is we secure payments. We facilitate payments, in fact, a lot of the time, but securing payments for organizations across business communications environments. What I mean by business communications environments are the typical mix that you find within call centers or contact centers. So voice or phone, chats, web chat, chatbots, social, email, SMS, that whole mix that goes into a contact center. So, effectively, if it's not on a website and it's not in a store and it's a payment, then we're generally interested to get involved in that. Now not only do we we secure the data, but we also enable compliance as well. And in particular, that's compliance with a global standard for securing consumer credit and debit card data, which is known as PCI compliance, payment card industry compliance.

3:19 PCI is a is a set of rules that govern how companies handle and protect cardholder data, and any merchants or companies handling consumer data should adhere to these rules. And it typically acts as quite a strong foundation to achieving other data security standards as well. So regulatory standards such as GDPR, other regional data protection regulations in in regions that we operate in such as The US where there's state level regulation, Australia, Canada, etcetera. And and we do all of this from our cloud only product suite, which means we can deliver our products and services to customers anywhere in the world. We've got three core products today, though I'm gonna talk to you about the evolving product product vision that we've got, today, but fairly simplistic as we are right now, in terms of the product suite to understand.

4:15 So we've got agent assist, which effectively covers live call center interactions between a customer and a call center agent where there's a phone call. So these are payments handled via phone through our agent assist solution. We then have digital, which is, again, live agents interacting with customers, but they're doing that across, digital methods such as web chats, social media, email, SMS, all these things that go into the contact center mix. And we can secure payments in that environment too. And then also across IVR, which is the industry standard term for for automated telephony. So where you phone into a system and there's no person on the other end of the line, just an auto attendant. So press 1 for this, press 2 for that. And we actually have speech recognition capabilities for IVR and also speech recognition capabilities for agent assist as well should we need those. And across those three solutions, we generally have pretty tight integrations to many of the world's leading business communications vendors such as some of these examples shown on the slide here.

5:20 So our go to market model is very much partner first. So we're a channel led business selling primarily through resellers. 85% of our business in FY twenty two came through reseller channels. We live and breathe channels. It's been a key, strategic pillar of ours, in our first five year plan that we've we've completed recently. And as a result of that, we've we've really built a market leading ecosystem in our space. And, there's some examples of our partners on on screen there. Majority of those are in the business communications or CCaaS contact center as a service and, and BPO. So big big contact center outsources. Bunch of rewards. We're trying to build a quality business here, and I'll only point out on there the the people awards that we've won. We're highly highly focused on our people, which which we'll talk a bit more about shortly in the summary.

6:15 So off that background, it has been an excellent year here for for results for this business. Strong increase in revenue, 62% up to 11,900,000 year on year. That was ahead of market expectations, which we upgraded a number of times through the year. Particularly pleasing for me to see the strong revenue visibility coming through at the end of FY twenty two. So it's quite easy to track where our revenue is going to get to in the next twelve months. TACV, which is our total annual contract value, total annual recurring contract value of every contract we have signed today, whether it's recognizing revenue or not, that's a key indicator of future recurring revenues, and that's up 40% to 13,400,000.

7:01 So so we really know what we need to do to hit the 14,500,000 forecast number for for f y twenty three. Contributing to that strong revenue and sales performance were upsells in the year as well, which has driven our net revenue retention, NRR, up to a 118%, which is just, you know, just fantastic. And supporting that as well is very low customer churn rates. So we ended the year with with an average of 3% customer churn. So, you know, exceptional service contributed to by things like strong NPS scores. So, you you know, know, all in all, very happy with the operational performance and and health of this business. So, you know, we we have a great foundation to to capitalize further with this business, and and we really do intend to do that.

7:53 To that extent this year, we've we've we've had really strong execution against the new strategic initiatives that we put in place following the fundraise that we did in April last year in April 21. And they were first of those was to expand our geographic reach and expand our addressable market by establishing businesses in Canada and in Australia, and we've achieved both of those things. Majority of those new hires coming in the second half of the year. So we now have small teams of people in Canada and Australia. We've got pipelines building there now and most of the benefit we'll see coming through from them in the in this next this next twelve month period. But so, yeah, new regional partnerships being signed. We announced one of those in the current trading.

8:38 Also engaging with our existing global partners teams that are in those countries. So we're certainly starting to benefit from this more perceived global capability that we have with our with our partners. As well as investment into new regions, that fundraise back in April, we also stated that we were going to invest further into engineering and product to really future proof the business and take another big step forward in a new sort of three to five year plan that we had ahead of us in terms of products and evolving product vision and also some investment into customer success. And by majority, that that involved hiring new headcount. So we took our headcount up 45%, which whilst we're a small business finishing the year with a 103 people, we've added a few more since then as well. That that was a big effort, a huge effort from from the the hiring managers within the business.

9:30 But we've been we've been successful and brought some fantastic people into the business. I will sort of reassure existing investors that as per the plan, hiring is now slowing. The hiring rate is slowing. So we we only expect to bring in about a quarter of that over the next the next financial year. But, you know, that's critical to operational gearing within the business as we're we're driving in this new f y twenty three towards first cash cash flow breakeven in h two and then followed by our first months of group group profitability in that in that same period of trading.

10:04 And then I I touched on employee retention. But, you know, during this really busy period for us, we also maintain employee retention at at 94%, which is just fantastic. I I've talked about the importance of culture within any fast growing business since day one. I took over as CEO here, and we have a fantastic culture at PCIPOW. We really do prioritize our people. We prioritize their development for their careers, not just their time with us, and we we really obsess about when we hire hire new people as well. So all of those things really contribute to strong strong retention producing a, you know, strong culture across the business, which is critical. It's our largest investment. People are our biggest investment that this business makes. So all in all, I think it's a year that that my team can be very proud of.

10:52 But, you know, especially we've we we have delivered on our plans, but we've been been ahead of that. And, yeah, we're very pleased with the year that we've that we've delivered. Just a bit more on the background strategy. So we we talk about three key strategic pillars of growth within this business, those that we laid out some years ago now, but they they were cloud, global, and channel. So want to lead our market in cloud. We want to use cloud technology to open up a global market opportunity for us. It's a fairly specialist space that we're in, so we wanna maximize that opportunity on a global basis. And we wanna leverage partners to enable us to really scale our customer base internationally. And I think we've executed very well against those those three pillars. More on that to come.

11:44 And the global presence is really key for us now. It's it's key today, and it will be key in the future. So, you know, like many of our partners, in terms of our platform that we run and our our cloud services, we host within Amazon Web Services, so AWS, still the world's leading virtualized hosting provider. And we're completely agnostic to who and where we integrate as well. We were the first in our market to launch globally available cloud offerings in our market by quite some way. We're much with pioneers in cloud to cloud integrations with third party cloud companies, many of whom are now very close partners of ours in our ecosystem. And it is a key reason why we've been able to work with those organizations. And in fact, today, the majority of the Gartner Magic Quadrant for CCaaS, contact center as a service, work with PCI PAL in some way, shape, or form, but two thirds of them actually resell PCI PAL.

12:41 So it's a great great place for us to got to have got to. Cloud's also why we can cost effectively serve our the entire breadth of our market. So it's not just about serving the market globally. It's also about serving every size contact center in the market. The vast vast majority of contact centers across the world are small to midsize contact centers, so less than 250 seats. For for example, in The US, over 90% of contact centers are less than 250 seats. And cloud cloud gives us that capability to have a light touch cost effective approach through our partner models to be able to service that very, very sort of lucrative end of the market between the small to midsize end and really look to scale and take advantage of the the opportunity. So today, in terms of our platform, we've got the most mature cloud offering in our market.

13:30 We've built a very strong foundation for this business, and we intend fully to evolve our product offering as a result of that foundation. And off the back of that, we're also able to support what what we've called in the accounts, our globally hungry partners. You know, a lot of our partners are a lot bigger than us, and they are truly global organizations. So just a bit on our partners now. Now channel is key to this business growth as I've as I've already highlighted. We're purposely a pure play business in the eyes of our partners, and that's to ensure that we we don't tread on their toes product wise. That was an important part of our strategy. And and, you know, how how did we do with channel partners this year? So strong performance with our partners.

14:17 85% of our contracts coming through our partners, as I said earlier. That represents 62% of the new business ACV that we signed. Both of those have increased year on year. I would anticipate in the years to come that the percentage of contracts would probably remain about the same, but we would expect the value to continue to uptick. And that's as we start to see and get visibility of more larger deals coming through partners as our our ecosystem becomes stronger and our relationships become deeper with some of those partners who operate operate in the enterprise space. We've got a very targeted approach to partners and signing new partners, and we've made very good progress against plans that that we set ourselves going into the year in bringing on new partnerships. Those have included Amazon Connect, which is Amazon's contact center cloud contact center platform.

15:09 We issued an RS reach for that in the second half of the year actually where we were we were fairly cautious actually as we offered out with these large partners because they are massive organizations and, you know, we it takes time to get to get really into those, but actually we've some great traction with Amazon Connect. We've seen a variety of deals coming through the procurement vehicle in AWS marketplace that we've set up with them. And we're the only company today with a truly global integration with that Amazon Connect platform in our space. So we've we've also been signing relationships with more CCaaS vendors. We signed Odigo, which is a very strong CCaaS vendor across Europe, French headquartered but strong business in The UK and also an early stage relationship with Five nine in in in The US.

15:59 And also further progress in our BPO initiative. So we started talking to investors a couple of years ago that we were really targeting the the big contact center outsource market. I think, again, we've been very successful with that that initiative that we put in place two years ago. Some of the highlights that came through, we signed Teleperformance, one of the largest in the world. We signed them in a reseller arrangement in in the second half of the year. And actually where we sit today is around one third of the top 20 BPOs in the world are now engaged with PCI-PAL. So takes time to get working with those big organizations, but the the the strategy is working well. On the right hand side, really, this is for those that that are not as familiar with our business, but we do we do break out our partners into into categories.

16:44 If you want more info on this, please look at one of our previous some of our earlier presentations. But top two categories are integrated and solution providers, and these are effectively our resellers. So this is where the 85% of our contracts have come from. The third the third partner type is referral, and we tend to treat referral more as a a stepping stone to to reseller deals effectively. So we don't do a huge amount of referral business. Mainly, it's coming through our reseller partners. So, yeah, please please look back at previous presentations if you'd like a bit more information on that. So I'm gonna hand over to William now for the financial review and then coming back to me for a bit more of a look ahead before we get to questions. So over to you, William. I'll control the slides. Thank you, James. Good afternoon, everybody.

17:33 Summary, f y twenty two has been a very strong year for PCIPAL. We finished the year well ahead of original expectations going into it on the back of strong trading, and that has allowed us to continue to invest in the business, as James has outlined, but has also allowed us to deal with the unwarranted costs and of the patent case that are coming through, and it's put us in a good position to finance that through into the future. I'll talk more about that in a minute. Just some highlights here. We set out on this journey effectively in 2018 when we launched our AWS platform. I joined the business previously in, in mid two thousand and seventeen. At that time, we had a Gen one platform, which was a revenue share UK only business.

18:22 The Amazon platform was launched in 2018, and you can see on the top left hand graph there how the revenue has grown. It's increased virtually sixfold in the in the following four years and finished this year at £11,940,000. That's 62% up year on year. More importantly to us, we've also worked on the gross margin. That's doubled. Why has that doubled? Well, actually, we own the AWS platform, and we we don't sell the old platform, the the old gen one platform. And so we get to keep the vast majority of the revenue that that has come through. And I see there's a question already coming on that margin. The gross margins have increased to 84%. They are higher in The US because they've got a slightly different sales mix and different connectivity, but I do expect the margins to continue to improve.

19:11 And we should get between eighty five and eighty nine to 90% margins across the group over the next few years as we continue to do to develop the the product range. Finally, on the bottom left hand side, although we've been growing fast, we've, we've mainly we've been a loss making business deliberately so as we've expanded from, you know, twelve p 12 people in the beginning, which is including myself, to the 103 James talked about. But we've always had a, eye on the future, and at some point, we want to hit hit profitability. So f y twenty three, we're expecting to hit cash breakeven in the second half, and we're expecting to hit profitability shortly thereafter on a monthly basis. So f y twenty three, we will be still reporting an overall EBITDA loss, but much reduced.

20:04 And then in f y twenty four, we're expecting to turn into that full profitability. That's that's in line with what we laid out in April 21 when we did the last fundraise. And we said, you know, we wanted to go and grab more markets, develop our products more, but as a result, we're gonna push out our breakeven by eighteen months to two years, and we're still on track to deliver, that target. So why is our business growing? Well, we we focus purely on ACV, annual contract value. That's the recurring value of every of every contract we sign. So we go out. We wanna win customers. We wanna upsell customers. We sign those. Those are then, you know, deployed, which normally takes around five months.

20:50 And then after that, we can start recognizing revenue. So we have two metrics we follow. New ACV, which is the annual amount we've done, and that's up 11%. And then TACV, which James as James said said earlier, earlier, is the cumulative value of all the contracts we've got, either live or in deployment. And I talk a bit more about that in coming slides, but that's up a strong 41%. And more importantly, it shows, gives a good indication of of what we can achieve in f y twenty three revenue terms. The other key thing for us on the the bottom left hand side is that our our revenue is primarily recurring. We deliberately set out on that on that path right back in 2018 when we licensed.

21:35 We want to license our contracts over the long term, so we don't charge much up up upfront in professional services. We charge £1,500,000, by the way, in total because we're, you know, we're quite a big organization. But in scale of things, that's small. And that's as we go through deployments, that means we have high recurring revenue, high recurring visibility. And then one final thing on the cash balances. We finished the year at $4.84900000 pounds. That was significantly ahead of where we were expecting coming into the year. And why have we achieved that? Well, we've had the strong trading. We've had the the the higher revenues. We've also managed to sign more contracts with, who pay annually in advance, which is our standard process.

22:23 That's slightly up year on year. And as a result, our cash balances are, you know, significantly ahead of where we expected to be. That has then helped us to allow to allow us to continue our expansion plans as we laid out, but also to finance the the the patent case cost, which I'll talk about in a little while. TACV. This is just a story of the the of the the year on year growth in the contracts we are signing. So back from 2018, all of those 2,200,000 was on a gen one platform. Now come to the end of f y twenty two, we've got £13,400,000 worth of contracts in the building, as we say. So yeah. And that, you know, that then allows us to give good confidence to hit next year you know, this year's f y twenty three's revenue target. Now FinCap currently have got £14,500,000 penciled in for our for our sales and revenue in f y twenty three.

23:21 And out of interest, I also I I always lay out what I think the TACV will finish at for f y twenty three against our sales plans, which will then help underpin the f y twenty four number that FinCap have penciled in of £20,000,000

23:35 revenue. So why is that why is that growing so strongly? Well, we're successfully selling, as James has pointed out, but we're also very good at keeping those customers. Our churn is actually down at 3%, which is where you know, right in the in in the top quartile performance for SaaS companies. And we've been successful in selling not only to new logos. We bought in a 100 a 150 plus new logos this year, But we, you know, but we've also upsold through a number of of our existing clients, and that's an important metric for us. Just moving on. The left hand side of this graph just actually splits the growth by between the regions. So the charcoal bar there is is EMEA, which is growing strongly. It's growing strongly on the sale of new, pardon me, new ACV growth, but also from a strong performance in our transactional revenues in in this market. EMEA is

24:34 the the more mature of our businesses. It's been around the longest since the original business, and that's very pleasing. The orange bar at the top represents the growth we've come from North America, and that was from a standing start in February 18 when we launched. And that's beginning to pick up momentum, and, eventually, that orange bar will overtake the charcoal bar because The US market is six times bigger than than the than The UK and Europe. And then right at the top, you can't really see on that graph, there's a little sliver for ANZ. Now we're expecting that to start growing and picking up. Now we've got feet on the ground in that in that region. On the right hand side, I just break down the TACV, into the important numbers. So of that 13,400,000, just over 11,000,000 pounds are live and fully deployed. So my MRR is running at just over 900,000 per month. That's so that that will continue through the year. We'll then add new contracts.

25:31 We'll add in RPS, and you can see how we can step up to our 14,500,000 target. That growth in ARR is up 44% and is a very pleasing number. The other two numbers, we obviously have contracts constantly in deployment going through our processes. And as I said, it normally takes about five months to deploy. And then we have what we call internally on hold. Those in on hold is probably a slightly incorrect definition. The it's actually partner delayed deployments. Because we use our partners as a as a primary selling tool, they often have to sell their systems in first, and we are sold in parallel with them. But we can't deploy our services until they're fully up and functioning in the contact center they've sold to or the customer they've sold to. So we get, you know, we get sales through, which come through, but they we can't start deploying for six, nine, twelve months sometimes as they get their, you know, as they get their first phases through. And so we just keep those on hold.

26:32 Otherwise, everything is going well. Just over the pages, we talk about recognized revenue. The charcoal bar there represents the amount of revenue that's been released from our recurring contracts in the year. We can only recognize revenues once they've gone live, and then we can only recognize it on a monthly basis under IFRS 15. The orange bar at the top represents our professional services release. So we sell professional services. As I said, we sold about £1,500,000 this year. That's a useful cash benefit to us. We charge that on signature and get and collect that money. But I'm not allowed to release it to the p and l, immediately. I have to release it over the length of the the economic length of the contract, which is, on average, four years, and that can only start when the contract's gone live.

27:22 So that £1,000,000 is the element we released in this year. Next year, there will be a 1.2, 1.3 release, under my expectations. Just a reminder, we started the year with a forecast of four of £10,400,000. We finished the year with 11.9 and did three three increases in our forecast during the year. So that 11.9 was a very strong performance driven by the, you know, the early deployment of ACVs plus also our growth in transactional revenues, which were exceptionally strong this year, going exceptionally strong this year. And then just a reminder at the bottom is that we have retained more of it, and our gross margin is 84%.

28:16 Moving on. Just the income statement. I've already I've already talked about revenue. I've already talked about gross profit. The key thing to point out there is the sixth line down, the staff costs. So staff costs have gone up 51% on the back of our increased head count from, you know, 71 people to a 103 people. Staff costs also include our travel, and travel got you know, it was really low in f y twenty one. It's back to, yeah, an increased level in f y twenty two, but definitely not as high as it was pre pandemic. Those staff costs represent the biggest investment in the business, as James said. 75% of my costs come are are are staff. The run rate people have asked me previously for going into the year is about a million pound a month. So our underlying cost for f y twenty three and staff costs before any new joiners started the year at about a million pounds, and that's been taken account into account in our in our forecasts.

29:16 Those numbers you're seeing there, though, are from the statutory accounts. And now three items that are kind of exceptional or unusual that don't bear any relationship to the to the actual running of the business. The first one is the exchange gains and losses. So that in f y twenty one, the dollar yeah. We the dollar moved against us by from $1.20 to $1.35, and so we had to revalue the intercompany loans, which are in sterling from PLC to the to The US, and lost £550,000. Conversely, this year, it's gone back from one thirty five and finished about one twenty for the year, and it's lower than that now. And so that that released a gain of

29:59 £832,000. It's nothing to do with the running the business. And, there's a in the balance sheet, there's an equal and opposite movement in the in the reserves. So for comparison purposes, we split that out from our from our internal reporting. The exceptional costs in there of £797,000 relate to the patent, the claim against us by Securian. We've spent that in legal fees in The UK and US. Clearly, that's an exceptional cost to us, but

30:31 it's clearly a cash cost to us. So I'll talk a bit more about that in a minute. And then we have the expenses arising from share options. So if you split the you know, if you adjust the operate the losses the statutory operating losses, we have an adjusted operating loss of 2,800,000 in the year against 3.3 the previous year. Now coming into the financial year, it was actually expected to go the other way. We were expected to report an increase in adjusted operating loss, and so we are very pleased with that performance.

31:03 Cash. Cash is obviously a single point of focus for myself because we are a loss making business. But we have a very strong business model. We are funded by advanced invoices, so our deferred income. We are funded by our cash reserves, and we are funded by any debt and equity raises that we that we that we make. We've made three in the past. I'll make that, And the last one was April 21. So looking at looking at the numbers, right in the middle there, cash used in business before finance was £2,600,000. So we we used £2,600,000 worth of cash in the business during the year. But that 2.6 included the £800,000 on the patent case. So the underlying cash used in the business was £1,700,000.

31:57 Yes. That's a million pounds up on the previous year from from 700,000. But remember, this year was a year of investment following the fundraise. Going forward into f y twenty three, as I've as I've already said, we are expecting to reach cash breakeven in the second half of this financial year and then, you know, and then monthly breakeven a few months following that. So I'm expecting our cash burn in the business from the underlying business to to drop considerably. So we finished the year with 4.9. If we halve our underlying cost, for instance, we will leave us with £4,000,000. That £4,000,000 is more than enough to cover any expenses we've got coming through on the patent case. And then in f y twenty three, I'm expecting to turn it to to cash positive, and so I'm not expecting to have to raise any more money or raise any bank borrowing facilities even though that is an option to us.

32:53 Finally, just on the balance sheet, we have a very simple balance sheet. The fixed assets there are the, you know, primarily the capitalization of the platform development we've done over the last five years, £2,600,000 worth of it. That, I see, is a very good investment against the, you know, now ARR of £11,000,000 and growing. Other receivables reflects the the capitalization of costs and primarily commission costs, which we're expected to do in under IFRS 15. And so those will continue to grow. But conversely, so will our deferred revenue because of our business model, billing up front and not being able to release it all immediately. So we have a simple business model, no bank borrowing, and a very strong performance this year.

33:41 So I'll take questions later, but I'll hand back to James now. Thanks, William. So I'm gonna focus in on some of the key operating highlights just in just in summary. So regionally, excellent performance from what we call our EMEA business, though that's primarily our UK based team. But we do make sales into Mainland Europe, and we do intend to do that in the in the long term future. But right now, the majority of that business in The UK is the more mature business that we have having, you know, being headquartered here, having launched here as well, but strong performance across new business and also upselling to to key accounts. So as a result of that, they delivered 58% of the group's new ACV, so new license business in the in the period. But actually, when we look at The US, the the highlight in The US having not been in The US as long is that for the first year, The US has signed more net new logo business than than the team in The UK. So that's great to see. It's something that we predicted this year.

34:42 It was only marginal, but they have now now got ahead. So very pleased to see that outcome. The US continues to be a strong performer in terms of new partner activity. The vast majority of our global partners in this business across all the partner types that we have are US headquartered organizations. So, actually, as I've to said investors time and time again, the effort we put in in The US signing new partners is not just about US ACV sales. It's not just about US revenues. It's about the sort of global health of the business and driving pipeline everywhere across the group, everywhere benefits, particularly The UK this year. So we've also started to see good traction in The US for strategic deals building in our pipeline. So whilst the very, very large ones of these deals that some of you have seen us sign before, the sort of 300,400 k ACV type deals are few and far between frankly.

35:38 We classify strategic deals a £100,000 ACV or more and and we're seeing really good traction in The US, and we've signed a good number of those deals in f y twenty two, which which is great, a great sign for the future because they're the sorts of deals that we customers that we have a good track record of of upselling and cross selling to. So whilst to date, we've very much talked regionally, we've talked about our efforts in The UK and in The US and rightly so, given the money we've raised to launch in in The US over the years. We we have also tried to balance that very much with with a global view of things. And as I said earlier, we're trying to very much capitalize on the global market that that that we have in front of us in terms of contact centers. So we're very much looking at that wider global opportunity now.

36:28 William and I are starting to take a more holistic global view of the business as well. So and balancing that timing of investment into different territories versus the global view was a point that I covered at the last fundraise, you know, when we when we opted not to spend more in The US but to actually expand the business into other territories because, actually, that's that's showing a greater support to those global partners that we're signing. It also puts us in a a stronger position against our competitors as well. So we feel that that that we've got that decision right so far. It's also another reason why from a a product perspective, we're really looking at new product developments that have international appeal. So less so developing products that are relevant regionally and more so looking at products that we can sell across our business on a on a global basis.

37:17 From a from an operational perspective to the bullet points on the right hand side there, very strong performance in professional services and engineering functions within the business. We talked about NRR and churn looking good. But underneath that, we've got some very solid operating metrics. We referenced in the accounts that our NPS scores were a 175% of global benchmarks on delivery. We're getting even more pointed in our ability to assess the data related to our performance in these operating areas as well. So we've just started measuring CSAT scores, for instance, so customer satisfaction scores across different areas of the business. So looking forward to updating investors on some of that more granular detail as we build trends around that over the next sort of twelve, twenty four months as well.

38:03 But off the back of that, it's not really surprising that we are performing well with the partnerships that we've built because we're delivering well for them and we we continue to drive scale in this business through accessing the small to mid sized business end of the contact center space. So, you know, I've mentioned that we are encouraged to see some of these enterprise deals coming through, but it's very much this run rate quarter to quarter volume that comes through the small to mid sized space that is is a real strength of this business. Finally, on this slide, it's important that I mention the patent case myself. William's already covered some of this, but I will I will direct you in general to the RNS because we provided more detail on it in there. And as William has covered, we've also provided a deeper dive into the budgets around the cost aspects of the case.

38:53 So for those that are new to the story, this relates to claims brought to us against us by a competitor in September last year. So we've been dealing with this for a year now. The claim relates to one part of our agent assist product. It's not relevant to any other products that we have nor is it relevant to any of our our new standalone products that are coming through our pipelines as well. In terms of our current position today, and we've had a couple of questions on this through the chat, so this will probably answer some of those. The position today is very much a two way street. So firstly, we have their claim on our infringement of their patent. As we have been from very early on, we're very confident that we do not infringe those patents. We always have been. We were cognizant of them before the case was brought and have been for a number of years.

39:41 As we've stated publicly, it's our belief that this case has been brought as a tactic to disrupt this business, and that's been ineffective as our results show. Secondly, the second second part of this track is that we're making counterclaims against the validity of, Securio's patents. So counterclaims include prior art that we've identified and a number of other claims which we believe mean the patents are invalid. So bottom line, the onus is very much on them to prove infringement they also have to defend against our counterclaims. We only have to win on on one of those. And we're prepared to see this through, though as we have publicly stated, we're being very mindful about this and and we're open to to any sensible solutions going through this process.

40:32 But we are prepared to take this to where it needs to go through the court process. I will just add to this that as you'll have seen in the accounts, we do have our own IP for the innovative ways that we operate our agent assist offering. Our own patents provide protection to our own business model and specifically the agent assist solution. You know, we invested a lot of time and effort in getting to that point. It's part of the reason we've built ecosystem that we have. And I can tell you that we're ensuring that our customers and partners are fully aware of our own IP so that we protect protect what we've built to date. So we'll move on to a bit of a product update for you. So some good stuff to talk about now. So as you've seen, we're beginning to really drive more innovation into products in this business as we evolve our product road map. We've been dropping out breadcrumbs to investors over the last sort of eighteen months to two years.

41:31 The product vision has been evolving for some time, so this may not be a surprise to some of you. But, you yeah, our messaging, we're expecting to ramp that across this year. So in our efforts to date, we've very much focused on these key strategic pillars that I've talked about. So be leaders in cloud, leverage cloud technology to access that global market, and build a strong partner ecosystem. And we've done all those very well. So it's now the right timing for us to look to expand what we're doing from a product perspective. We're looking to expand the value proposition within our solutions, which will allow us long term to grow our addressable market further. Further. And we're gonna leverage the technology and the ecosystem that we've built today, in particular, leveraging our digital product capabilities that we have, broadening what we do, driving more interest in our products and services.

42:24 And, ultimately, what it's gonna do is drive us more towards payments. So, you know, that shouldn't be a surprise in the latest accounts. That's something we've been talking about about for a while. We we touch payments all day every day, so we're just looking at getting further involved in in the payment process. So we're gonna be updating you across f y twenty three, but we're gonna be talking to our customers this year, we already are, about not just about compliance and security, what we've done today, but how we can drive more revenue in their business, how we can help them reduce costs in their business, how we can add more control for them over payment fraud, and effectively looking to bring some of the more ecommerce and website capabilities to to business communications environments. And we'll be doing that whilst we keep an appropriate focus on our core business today.

43:13 So this is very much about evolving. It's evolution, not not revolution. It's one of our themes this year within the business is is to evolve. So we think it's a sensible but ambitious next step for the business and we're looking long term at unlocking wider, fintech opportunities that would be available, in this in the payment space as we as we move this forward. So bottom line, really looking forward to updating you on it more in the year. Later this month, we've got our first product coming to market, I suppose, under this evolved vision, which is our open banking product, which is being launched in just a week or two from now, actually. So you can catch up with that on our website. Now just to finish up, in terms of outlook, important year ahead.

44:03 More strong growth required and expected from us. We you know, cash generative in the second half of the year followed by our first months of group profitability. There's a there's a question that's coming about whether we plan to bring that forward given the changes in investor sentiment around growth and profitability, and we we don't intend to do that provided that our performance across h one continues as we expect it to be, because we wanna keep the growth momentum going and then cash generation won't won't be far behind in h two and and then we get to our first months of, profit, and we're showing good signs of of doing that. We've made a good start in the year. We've signed some excellent brands actually, really well known brands. So it's it's it's always exciting to see those come through. Signed a great new partner in Canada, a regional carrier with more than a 100,000 business customers. So that would be excellent for the Canadian team to to get stuck into.

44:57 Quite keen to get some questions and, actually, we've ended with some decent amount of time so we can get to some of those. So I'll wrap up the presentation now and move to questions. Great. Super. Okay. Well, thank you, James. Thank you, William. If we could turn to the questions, we've had a number of questions submitted in advance. And in fact, you've touched on on a number during the course of the presentation. So if I could just remind all viewers that are recording this presentation along with a copy of the slides and published q and a will be access accessible via the investment company dashboard. Also, your feedback is important to the company. So immediately after the presentation has ended, you'll be directed for the opportunity to provide your feedback. While you're submitting further questions, let's first look at a couple of these others. One, you have touched on slightly, James, but if we can just revisit it maybe. But your employee numbers have grown a lot. How have you attracted the newcomers, and how have you retained them all in this market?

45:54 Okay. So the market did go pretty bananas between about October and March time. So the the war for talent, as it was called, particularly impacted the tech market, and it was very obvious to see there was a there was definitely a shortage of good candidates in the market at that time. So there were way more jobs than there were candidates, so money was getting a little bit silly too. So, yeah, we did have to we did have to react. We we stepped up our hiring strategy or we changed it up. So we went into the year with a a more of a focus on a small group of dedicated recruiters that we were using. We actually expanded that at the time because we needed more more more quantity out there, really, in terms of our our job descriptions getting out and job ads getting out into the market. So we did that to try to try to get more candidates coming through because recruiters were coming to us with one or two candidates, whereas they'd typically be coming with sort of 10 or 15 for each role.

46:48 So we really stepped that up. So it did take us a little longer than planned on a few of those hires, but we generally got to where we wanted to be. And we managed where where where money was under pressure, we managed to work within the realms of the sensitivities of the budget. William was watching over that one pretty closely. And the other part of that question was about retention. I think I I answered most of this earlier, but, yeah, prioritizing our people. It's we run an OKR system objectives and key results within this business. I have a company wide OKR linked to people as well. Obsessing about hiring, that was particularly relevant when it was hard to find people. Even if we're sort of 85% about someone, we don't go with it. We wait until we find someone that we're really excited about. And we're very passionate about developing people's careers here as well. So, you know, it's and, actually, funny enough, if you help people to work towards developing their career, then we generally find they stay longer.

47:42 So so, yeah, all all of those things come together. Hopefully, that's a decent decent response to that one. Yep. Super. Thank you. Do you think your competitors are trying to follow your channel go to market strategy? Some, not all, I would say. Some of our competitors have more of a focus, we believe, on enterprise. So the very large contact centers or very large companies that tends to suit competitors of ours that have products outside of our core product suites. So outside of just securing payments, so we see that. So I'm I'm not sure that the channel model works as well for those companies given that they sell products that compete with the sorts of companies we we partner with.

48:30 But, certainly, we have we have seen it with some others, but we've got significant first mover advantage or, certainly, first mover advantage in really committing to channel, and we've we've done that over the last five years. We've got the most mature channel program. We've got the most extensive partner ecosystem. I think we're selling more through the channel than anyone else. And we've got great relationships, and we've gotta keep investing in that, keep working at that. And, you know, partly, the product road map is to do with that as well, to keep adding more value to those partners. So, yeah, we're not generally afraid of that. We're quite comfortable that that we can do a good enough job that if others start, know, talking to our partners that that that we can come out in a in a strong position. Super. Okay. We've got a couple of questions around new product vision and and new product time scales. But do you have what you need to deliver your new product vision in the medium term?

49:24 Yeah. We do. So the fundraise in April last year, part of that was investment into engineering and product, and that was engineering and product to to drive long term, you know, future proofing for the business from a a product perspective. We, you know, we we are investing in our core products today, so we've got new new user interface coming out soon, upgrades in our reporting platform, and stuff like that. So it's not all just about new bright coming through in product. We are improving what we have today, but it's really just to grow our resources on the product and engineering side. So we can move these things through our sprints quicker, and we can get products to to launch much quicker as well. So right now, no. We don't we're not we we've already done that fundraise effectively. Great. Okay. And and in terms of time scale, is there anything else you might have in terms of when when one might expect meaningful meaningful contribution from those new products?

50:18 So we're looking more meaningful contribution from those new products based on just sort of a sort of general sort of run rate assumptions, more material looking at what revenues are gonna look like in f y twenty four. It's more sort of back end of f y twenty four onwards if you think about how long it takes to ramp. But we always have the propensity to sign one or two larger deals. So, clearly, we'll be looking at trying to do that with any new products we bring to market. So we'll build up the gentle scale through the small to midsize end of our market, which will give us long term scale with the customer base, but we'll also be looking at some of our larger customers and looking at some one off large deals, which could well drive a more meaningful and sort of material numbers sooner than the back end of FY twenty four.

51:03 Yeah. Great. Okay. Should I should I take a couple from the from the chat, Tom? Indeed. Yeah. That would be good. Yeah. Yeah. So get to so Canada and Australia, there was a question on that. So now that your offices are open in Canada and Australia, how does PCIP view the prospects of these territories compared to when the plans were announced in April 21? So So just to be clear, there's been no delay on that as such. So when we did the fundraise, the plan was always to open those territories in h two of this year. So we had other things to put in place first, and most of our a lot of our investors were mindful that they didn't want us to rush out and spend all that investment immediately. So most of that investment's coming in h two. But everything's pretty much gone to plan in terms of the timing, so nothing has really changed from our plans as such. So it's all kinda going as expected.

51:55 I would say if I was being totally, open about it, that Australia's probably making a a slightly quicker start to things, but we did anticipate that because we've, funny enough, actually got a sort of slightly larger customer base in Australia even though it's further away just by nature of some of our partners pulling us in that direction before we launch. We got a question from Thierry l, which another question similar to this. So I'll go to this one. In light of the massive change of view of the equity markets from high growth, at any cost to profitable growth? Do you have a plan to become profitable earlier than what you said? I think we both, William and I, sort of touched on this. And and, no, we don't have plans to bring this forward. I've always got plans to try to overachieve.

52:40 So so so if we overachieve, then we would get to those points sooner. So that's that's part of the plan. But if that's not the case, then, no, we would be expecting based on the current assumptions. We're not planning to move that. You know, we've spent a long time building up this business to the momentum that it's got. We've got enough cash to get us to where we need to be. We don't have any debt. We're performing well in the market. We've got extremely low customer churn. So I don't see any reason to pull it forward and would be concerned if we did that it might hamper, you know, slow down some of the future prospects, which I don't think most of our investors would want us to do necessarily. Looking through these. I think we're probably there's there there are other questions, but some of these, we don't have time for right now, but we will get to questions afterwards.

53:31 William, did you there's a question about foreign foreign currencies. So can you explain the £1,000,000 foreign currency currency charge in the cash flow statement? Oh, yes. I did touch about that in the in my presentation, but it's it's to do with the intercompany revaluation of sterling lines between The UK and The and US Inc. If you remember, we've done two fundraisers for The US totaling about £10,000,000. When you revalue it, the cost goes through the p and l, but conversely, in the balance sheet, there's an equal and opposite offset. Just one's more visible than the other. And then I think just one perhaps one final one. There's one here from MP, which is are your contracts with customers for fixed amounts, or do they vary based on a number of transactions? Our contracts with customers in general are based on fixed license amounts. So, typically, minimum annual annual rolling contract, but sometimes longer contracts than that, and we often back to back with our partners' terms. But, typically, they have fixed amounts. Some contracts do have variable amounts often on top of the fixed amount if they do, but most of our contracts don't have that variable amount. And that variable amount would either be transactions if there's an arrangement where we're charging them per transaction, which is less common, or it might be minutes if we're having to deploy carrying call traffic. So we often but with you know, sometimes we bundle that, but sometimes it's it's it's separate to that as well.

54:59 I think that's probably Great. Okay. Well, the the the the other questions we can review and and and answer after the presentation in in the q and a portal. So great. Okay. Thank you, James. Thank you, William. Could ask investors not to close this session as you will now be automatically redirected for the opportunity to provide feedback. And if you access this meeting from your website, feedback page will appear. If you access from a link sent to you by email, we will ask you'll ask to log in and submit your feedback. If anyone has any further questions or would like additional information on PCIPAL, please get in contact via PCIPAL at walbrook p l dot com. Thank you for attending, and we look forward to updating you again soon. Thank you, everyone. Thank you, everyone.