Personal Group Holdings (LSE:PGH) — Full Year Results

0:02 Good afternoon, and welcome to the PERSONAL GROUP HOLDINGS PLC Full Year Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Simply type in your questions and press send. The company may not be in a position to answer every question received during the meeting itself. However, the company will review all questions submitted today and publish responses where it is appropriate to do so. Before we begin,

0:32 I would like to submit the following poll. And I would now like to hand you over to CEO, Deborah Frost. Good afternoon to you. Hello, everybody, and good afternoon. Thank you for coming to our preliminary holdings and stress sorry, preliminary results and, and strategy update. As we normally do, I'm going to take you through a very brief overview of the year, and then I'm going to hand over to Sarah Mace, our chief financial officer, who will take you through the numbers in more detail before handing back to me, and I'll go through some of the more operational and strategic focus of the business. And we're, obviously, as Alex has just mentioned, we're ready for questions at the end. So anything that you'd like to ask, please go ahead. Right. So I'm just gonna kick off a little bit of an introduction to the business. So I appreciate we have a number of investors who are very familiar with the company, but for those who are new or perhaps need a refresh just to remind you, we're an employee benefits company. We work with all sorts of companies across The UK marketplace from very large enterprise companies through to the smallest small medium enterprises through our partnership with Sage.

1:37 We have a platform which contains benefits that companies, particularly larger companies, can bespoke as they wish. Some of those benefits we own ourselves, particularly our employee paid insurances. Those cover, death, death benefit, and we also cover people if they are unfortunate enough to go into hospital. And and we sell those primarily to organizations who aren't able to offer things that other companies might take for granted, like death in service or or sick pay. We also own a benefit, a technology salary sacrifice benefit, which allows employees to buy technology through their business. They are able to get savings on National Insurance contributions, and it's also quite a saving against buying it against the high street because, you're not asked you're not asked to pay for any credit terms, which obviously these days are much more expensive than they were before.

2:32 You know, Kerry's credit card is is now running at something like 25% interest rate, so quite substantial. And, again, the people that would buy, technology through salary sacrifice, it might be mobile phones, laptops, that type of thing, they're often not in a position to just buy something outright. They tend to to need to buy it over a period of time. We we also have a rewards consultancy division, which we added to through the year, and I'll talk a little bit about about that. Sorry. I'm getting my word words muddled up. I'll talk a bit more about that later on. But our reward consultancy division helps businesses thinking about how much they should be paying people, whether there should be a bonus in place, and the things like gender pay that are required by statute. So we have quite a range of offering across the business, and you can see in that doughnut that where previously the business was primarily focused on making EBITDA through our insurance products, Over the last few years, we've really developed EBITDA streams in other sectors.

3:32 And I'm just gonna show you the the the the range and breadth of clients that we work with. So we have a lot of clients in our enterprise, our sort of core areas, so people like DHL, Wincanton, traditional clients of the group. But over the last few years, we've added significant other clients, for reward consultancy, the platform itself, and Let's Connect our technology salary sacrifice business. So a whole range of organizations work with us, and about 30% roughly take more than one line of business. We have a partnership with Sage. We're one year into a five year agreement with Sage to provide a Sage employee benefits platform for them, and we sell that to small and medium enterprises. And, again, I'll talk a bit more about that as the as the presentation progresses.

4:18 In terms of my view of the highlights of the year, we exceeded expectations, I suppose, in terms of where we were at the half year. I know there was some doubt from some investors around whether we might set them hit the numbers that we set ourselves, and we did deliver those numbers. So we met expectations in total for the year, and that was underpinned. And I'm particularly pleased about how well we did with insurance sales. So annualized insurance premium sales through the year of 9,500,000, which is up. In fact, it's the best year that we've had since 2018, so quite significant growth in the insurance business. We added a 101 new clients across the whole group in comparison with 86 last year. So, you know, pleased with that. And continued growth with the partnership with Sage, adding 1,200 small and medium companies over the over the twelve month period. And all of those have continued into the, the start of 2023.

5:13 So we're continuing to see that momentum that we built in the second half really continue to develop. I'm not gonna go through these numbers in a lot of detail, but I think what they do show is that we have the right offering. You know, you'll be aware of how tight the employment market is. Unemployment is at historically low levels, and wage inflation has been very expensive for businesses. So they're looking for something to enhance their value propositions for employees, which doesn't just require more money on wages. And that's where a voluntary benefits platform such as we offer can come come in very helpfully.

5:48 We offer discounts. We offer as we've talked about some of the benefits we offer, we offer third party benefits as well, employee counseling, online GPs, all sorts of things really. And that leads us to believe that there's a very large growth opportunity for us over the coming years. We're in a strong financial position as a business. We have 8,700,000 cash in in the bank. We also have an equity investment, which brings in total our our reserves to about £20,000,000. We have no debt, and we pay a dividend. And we own our own software, and as you can see that bottom number there, 5,600,000 annual recurring revenue across all our platforms, significant increase on the 2021 number of 3,600,000.

6:34 So it feels like we're going in the right direction, and, certainly, we're seeing underlying double digit growth across all areas apart from Let's Connect. I'm gonna hand you over to Sarah now, and she can take you through the numbers in a bit more detail. So over to you, Sarah. Great. Thank you, Deborah. So I'm gonna start off with the the overall summary results. Deborah's already mentioned we delivered a strong second half performance, which meant that our EBITDA was in line with market expectations for the full year, so 4,500,000 in the second half versus 1.5 in the first. We saw group revenue rise to just under 87,000,000. A substantial element of that was from what's called voucher resale. And for any of us any of you that have been on our presentations before, you'll you'll know this is essentially pass through revenue, through people spending and getting discounted shopping vouchers and the like through our benefits platform.

7:26 It does only have a minimal impact on EBITDA, but it is still massively important to us because it it reinforces the value, of our benefits platform both to our clients, so the employers using the platform, and also the the end employees who are able to benefit from using the discounts. And we really saw a sort of upsurge in that in terms of, you know, the cost of living crisis and people making taking more advantage of those those discounted offers. But outside of that, we saw growth in revenue across all areas of the business other than Let's Connect. And we ended the year with EBITDA broadly in line with 2021 at 6 point naught million. In terms of we'll come on to each of the individual areas in a second. But in terms of the key contributors to that result, we were expecting a reduced contribution from our insurance business, which I'll come on to explain in bit more detail later.

8:13 Essentially, we were at sort of low point in terms of the size of the insurance book and the the high level of acquisition costs that we we were investing in the business. We have to put our field sales team back out on the road, and that was offset by contributions from other areas of the business. I'm gonna talk about the impairment of Let's Connect goodwill on a separate slide, if that's okay. And then you'll see on the right hand table, we've stated the sort of PBT and EPS numbers both including and excluding that impairment amount, simply because it is a, you know, it's a noncash item. It's not impacting our underlying profitability. In terms of dividend, we've announced a final dividend of 5.3p alongside these results, taking us to a total of 10.6p for the full year, which has been maintained in line with 2021.

9:00 This has meant a high payout ratio for the year, essentially around 100% of post tax profits, excluding the impact of the the Let's Connect goodwill impairment. And that's because, you know, we're very cognizant that a lot of our investors hold us as an income stock. And also as a board, we've considered it in the context of the underlying growth that we've seen in the business during the year and also our continued confidence in the in our forecast for 2023. And as Deborah has already mentioned, you know, we are a very strong financial position, cash generative, cash and deposits of 18,700,000 alongside a a 1,300,000 equity investment. No debts, and that obviously keeps us well positioned for future growth. So just before I move on to the more detailed results, I've just got a slide here again for any of any of you who haven't been to one of our presentations before. We report our results under the four core segments that Deborah spoke about at the beginning, so pay and reward, benefits platform, insurance, and other benefits.

9:55 And on the right hand side of that table, you can see the different income streams, that come in from each of those areas. So for pay and reward, predominantly consultancy income, also some survey income, but also some SaaS income in terms of the digital platforms that they have for for job evaluation and and pay benchmarking. The benefits platform, majority of that is digital platform subscriptions again, but we do also get some commissions from some of the third party benefits which sit on the platform. Insurance, obviously, income, and then other own benefits, which is the salary sacrifice benefit that Deborah spoke about. For us, it's essentially a retail sale. So we we make the sale of the equipment to the employer who then separately goes ahead and and does a salary sacrifice agreement with their own employees.

10:44 So just looking at the results in a little bit more detail, you can just see the breakdown there of the various contributions from each of the areas of the business. I'll probably focus on the sort of red box there in terms of, demonstrating the underlying growth that we've seen during the year. So in terms of insurance, we saw our APIs of annualized premium income, the size of the insurance book, increase from just under 24,500,000 to 28,000,000. And in terms of SaaS subscriptions across benefits platform and pay and reward, up from 3,600,000 last year to, just over 5.5, in 2020 at the end of twenty twenty two. And what that does is it obviously gives us increased visibility in terms of our future revenue streams as we move into 2023 and obviously fairly clearly demonstrates that our underlying growth, has continued as we move through 2022.

11:35 Now I'm just gonna talk a little bit about each of the areas. So pay and reward, we did we have two companies under pay and rewards, Inecto and and QCG. QCG, acquired on the first of July this year. So, obviously, the the first half results are Inecto only. The second half include QCG. Enektar itself saw strong organic growth. So you can see their consultancy income up over a third, and their SaaS income from their digital products up just under 20%. And they've got annualized recurring revenue of around 550,000 at the end of December twenty twenty two. And then you can also see that the contribution from QCG in the second half of the year, which was in line with the acquisition targets that we set on acquisition. So moving on to benefits platform. So this is where the expansion into the SME market is really coming into play and and being the biggest driver of growth here.

12:27 Collectively, across both platforms, so the HAPI enterprise platform and the SME, platform via Sage, we saw external revenue up 46% year on year. But it yeah. We continue to see a substantial increase in the contribution from the SME element via Sage employee benefits. ARR up to 3,000,000 at the end of December versus 1.6 a year before, and happy platform up to 2,000,000 versus 1.5 at the end of December twenty twenty one. Moving on to insurance. So in 2022, we really saw the rebuilding of the insurance book, sort of continue with full flow. Obviously, at the half year, actually, if anybody attended one of our presentations, we're actually behind in terms of premium income year on year, but the growth of the book has accelerated that through to to growth overall for the year by the end of December.

13:18 New insurance sales, Deborah spoke about at the beginning, you know, really strong in terms of of new business, nine and a half million, with majority from face to face activity. 2021, 3,700,000. And for context in 2019, which was the last year's pre pandemic when we had the field sales team, outselling insurance was around 9,000,000. And there's a there's a graph at the bottom left hand corner of this slide where you can see since the second half of twenty twenty one where we've been back out in the field, able to sell our insurance products and and sort of building back up that sales team, you can see how that new business sales has started to accelerate. Alongside that, for existing policyholders, we've continued to see strong retention rates. So that's both first first year retention and year on year retention rates.

14:05 We saw those increase during the pandemic, probably not surprisingly given the nature of our products, but those those rates seem to have continued as we've moved, into second half of twenty twenty one and 2022. So our year on year retention remains, you know, above 80%, 81% at the end of the year. And a combination of those new insurance sales and and good retention rates is is what's driven the book up to the 28,000,000 that we can see at the end of December. And for those of you that don't know, our policies are not annual policies that renew every year. They are in the main weekly or monthly contracts that just just roll. And we collect the pre the majority of the premiums through payroll deduction as well, which sort of keeps that recurring revenue coming through. Little bit about claims. So the loss ratio, historically, that loss ratio has been very steady around the sort of 25 mark.

14:54 During COVID, we saw that drop off slightly, particularly around the hospital plan, simply because the the NHS was focusing on COVID and and, you know, not not doing the kind of outpatient appointment levels that we've seen historically. We're expecting that to to increase as we came into 2022 and the NHS started to address their waiting list. But equally on the death benefit side, we have started to see the loss ratio there start to to, move back down again, not to the levels that we saw pre pandemic, but certainly back down towards them. And then in terms of overall profit contribution, there's a sort of bridge bridge under the table there that hopefully helps to sort of explain why we have that reduced contribution. We're expecting to see that reduced contribution in 2022. So we saw an increase in our premiums, which obviously increased the contribution there. We saw a slightly bigger offset in terms of claims because the loss ratio across the whole book was increasing as we expected it to. But, really, the biggest chunk, I guess, in terms of reduced contribution was where we were building the the field sales team back up to full strength.

15:58 So you can see that the acquisition costs for the year were 5,100,000 in comparison to 3,500,000 in 2021. And the nature of our policies is weekly and monthly rolling nature of them means we have take all of those acquisition costs upfront, but we'll obviously see the benefit of that premium income over the next well, an average policy life is around five years. And then finally, moving on to Let's Connect. So Let's Connect's major client is Royal Mail Group. And, obviously, that that business was impacted by industrial action at the end of the year and in particular what's normally Let's Connect's peak period. That did mean that revenue was down on the previous year, you know, clinically impacted by that sort of reduced activity that we were unable to do. At Royal Mail's request, we would normally do marketing for employees that we weren't able to do as normal.

16:48 But we did make some of that sort of shortfall back up in terms of margin where we managed to increase the 13.7, combination of products mix and pricing meant the EBITDA contribution was broadly maintained. It's still a very popular benefit. Order numbers are up slightly on 2021 despite that lower revenue. But the average order value that we saw people putting in was below historic levels. Combination of restricted availability still around some of the high value products and large TVs, and the like, but also potentially people sort spending power, in terms of how much they wanted to commit to to sort of paying each month. And then just in terms of the impairment, so we acquired Let's Connect in 2014. The last few years, we've obviously had sort of supply chain issues through COVID, which haven't completely gone away as we've moved into 2023, although significantly better than they were. However, with the ongoing issues at at Royal Mail, and they've basically they're they're no longer able to run a salary sacrifice scheme with their employees in the short term.

17:51 We've taken the prudent decision to fully impair the the goodwill that arose on that acquisition. And just before I hand back to Deborah, I guess the key messages from from my point of view is, you know, we're definitely able to see that underlying growth coming through across the business. So whether it's premium income, size of the insurance book, or SaaS revenues, clearly seeing good growth there, which provides good visibility of future revenue streams. We've now passed the low point in terms of EBITDA contribution from the insurance book. And as we roll into 2023, we should should start to see the increased underwriting profit starting to come through. And as we sort of you know, Deborah spoke about at the beginning, you know, we remain in a really strong financial position and well positioned for growth. So I'll hand back to Deborah to go through the strategy update.

18:40 Thank you very much, Sarah. So just a a view from me in terms of how we've been doing in our progress, particularly against the strategy that we set ourselves at the start of last year. So

18:54 just to really remind you of why we believe there is a significant growth opportunity in The UK market. You'll be aware that, obviously, employment is very tight, and there are real issues for employers around how they engage with staff, how they promote well-being. Some of the things that started to creep in in COVID have become much more established. So, for example, things like being able to see a GP online is is much more common practice now in, benefit platforms, and we're able to offer a full range of those facilities. And we for our larger clients, we bespoke it to their individual needs. We also have a native mobile app, which has always been important to us because a lot of our clients traditionally don't have people that work behind desks. So we work in food manufacture or care or lorry drivers, all of whom need mobile access. But actually, in these days of hybrid working and also, frankly, most of us using our mobiles for everything, it's probably just as important for everybody to be able to access things through their mobile rather than just relying on a desk on a desktop site.

19:58 So I think the combination of that plus the reward consultancy that we started at the beginning talked about at the beginning, where employers can get help on pay benchmarking, they can get help with how to do a pay review, look at bonuses and things, it does make our offer unique in the mid market. And I think some of the progression numbers I showed you earlier in terms of the number of client growth and so on really does support the view that we are in the right place doing the right thing with clients. We've expanded our offer significant significantly over the last couple of years, to work not just with large enterprise clients, but across the whole of The UK economy. So we have clients now in the public sector in what we call talent driven. So that would be those organizations that are probably less concerned about salaries in that, you know, they they they need to attract and retain scarce talent, and the benefits platform can support them in doing that. And then, obviously, the significant growth that we've seen over the last two years in the SME sector of the economy.

20:56 So just looking at that in a bit more detail, we set ourselves goals at the start of last year around unlocking EBITDA growth for the business as we came out of COVID. And we articulated that in a number of different ways, particularly around increasing the number of employees that we served. So last year, at the close of 2021, we served about one and a quarter million employees in The UK. That's now at 1.4. So getting quite close to our goal of one and a half million, UK employees. And we've also seen quite significant progress across the across the three pillars that we identified as really crucial to growth. So those three pillars are about driving insurance, transforming our reward and benefits offer, and finally, how do we accelerate our offer originally with Sage, but, but increasingly, how are we going to accelerate that more widely?

21:46 So I'll go through those in more detail and just give you some particular examples of how we're starting to see real tangible progress against those goals. So the first thing that we've talked about a bit is significant progress in driving insurance. So we managed to move the employment of number of field sales teams from 27 people to 47 over the year, and that is obviously a very significant investment, as Sarah said, in that sales team. Typically, in historical times, we've always had around the 45 sort of number. This year, we're aiming to keep that number between forty five and fifty field sales teams. We feel that we've got the clients who want us to go and sell insurance and talk to their employees about the benefits platform. We feel that we've got enough to justify that number of employees and keep them busy. And, certainly, we had a number of very strong performances last year. So we had our best ever month in insurance sales in November.

22:37 We had our best ever December in December, and we had our best ever performance by a single sales colleague, through 2022. So really high performing year. And we've also focused very strongly on looking at all parts of the policyholder journey and improving retention at all stages. So our retention year on year, I after you've done twelve months, has always been very strong. It used to be around high seventies. It's now low eighties. So that means in terms of percentages, we keep, you know, four out of five or slightly better than that policies year on year. But we've really focused on the retention in the first year right from improving our early cancellation rates all the way through to keeping people after six months. So we've done a mixture of different things

23:19 to really pull apart that journey and improve every stage of it. It's it's sort of a bit like British cycling, I suppose. You know, there there's probably a lot that we can gain through small incremental changes, which in themselves aren't massive, but overall make a real difference in performance. And those are some of the things that we're focusing on in 2023 to continue to look at some of those elements. But I just wanted to really emphasize that this isn't you know, it's it's easy sometimes with sales teams to just push them really hard and you get a real bit of delivery, but it but it it's not sustainable. And I think what we've done, we've got a new lead in the in the insurance, part of the business, and he has really focused on building bridges across the whole business. So right from account management, so the account management team actually refer reporting to Karen Thorneley, who's our chief commercial officer, and they're the ones that tend to deal with head office, HR directors, you know, reward and benefit managers, but right through to our site visit team and the sales team themselves and making sure they're working together for the benefit of our clients in the most effective way they can. And this was just a really nice quote that I got from the staff staff survey. It's anonymous quote, but a quote that was in the, staff survey that we did, towards the end of last year, which I think is really valuable to understand how people are feeling about the business. So we're very pleased with insurance, and, certainly, we've started 2023 very strongly.

24:40 We were a little bit worried at the end of '22. We'd written so much business towards the end of the year and really seeing momentum. You know, would we come back after Christmas to find that people were worried about cost of living and they were perhaps canceling policies, but we haven't seen that. We've kept a real eagle eye on on cancellations, and we haven't seen the spike. And in fact, we've continued to see sales through the first quarter of twenty three. So that momentum seems to be continuing, which is really good news. Let's talk a bit about the reward and benefits platform pillar. So we made a small acquisition in the second half of last year. It wasn't significant in terms of adding a lot of profit, but it does add a wider range of clients. QCG have a practice in the rail sector in construction. They work with a lot of government organizations, and they also have quite a big footprint in the museums and leisure sectors, all different to the sectors that we work in with Inecto. So they're very complementary to the Inecto offer.

25:36 We've seen some nice growth there as well. So we've seen platform sales, 22 new clients joining us with the platform, up a annual recurring revenue. So at the end of the year, annualized recurring revenue then up 29%. Netto digital growth, which is the, digital platforms also up. And we're continuing to cross sell across the group in order to, introduce different clients, different lines of business. We've got a big launch coming up with the redevelopment of the HAPI platform. So we originally devised the HAPI platform back in 2016, and, obviously, that's quite some time ago. And although we have been developing over time, it makes sense for us to take another look at it. Expectations have changed probably from HR directors. They want to see more management information and elements like cybersecurity and making sure that it's easy for third party products to click into or plug and play into the platform is also really important.

26:30 And we will we will be making some savings around the way that we're platforming the Sage and Happy platforms currently, and that will reduce development time. Caravan Club is a really nice organization to give you as an example of how that's working. So they first started working with Inecto. The Caravan Club and just to be clear, this isn't the Caravan Club members. It's the Caravan Club, employees. They have a lot of sites around the country for campers and caravaners, and each site has a site manager, often a couple, who who run that site. And they've been really pleased with the way that they've been able to implement the Happy app, and and that has enabled them to communicate directly with people and also to introduce a new recognition program, which is going live later in the year. And a really nice quote here from Kerry, who's our client at the Caravan Club. The happy app is like a magic toolbox that brings all the pieces together on a daily basis. So a real ringing endorsement there from a client who, as I said, has been a long term Inexo client, and now it's great that they're working with other parts of the group.

27:30 And then just turning finally to our growth in, the Sage relationship, but also talk a little bit about our plans for SME clients more generally. So we started 2021 with about 30 clients on the platform that we share with Sage, 700 paid for employees. And at the end of twenty twenty two, we had annual recurring revenue of about 3,000,000 and employees numbering over 50,000. So really a very significant growth over that couple of years. And the partnership is working really well. As I said a moment ago, it's a five year partnership with a year or or, you know, already gone on the contract, so four four years remaining. But very positive relationship with Sage And a number of different ideas about how we might develop that relationship with Sage in 2023, but also to build new partnerships outside of the one with Sage where we can work with other providers of services to the SME sector to build more relationships, more clients, and and so on, and to build another platform, which we would then sell probably branded like we do with Sage employee benefits for the use of different organizations.

28:35 So there's a lot of work going on in that space, and I think it's entirely warranted by the by the growth we've seen. There's clearly a lot of demand there for, the platform in the small and medium enterprise sector. Just an example here of actually a larger client. So although, Sage in theory is under 250 employees, this is towards the top end of that or even a little bit over. NRG Riverside are a larger client working with us with Sage. They are they are specialist fleet services, so they they pick up broken lorries. They fix lorries. So they're very much recruiting lorry drivers and technicians, which is a, you know, very, very demanding area in terms of trying to find people and keep them. And Jenny, who's the HR director, set some goals around the platform use, what she wanted to see. And she's confident that, actually introducing the platform has helped reduce their staff turnover by about 12%, which is really positive for them.

29:26 And, again, you know, a lovely quote from her in terms of the way that they're using on demand GP. Again, you can imagine if people aren't at home, they're out driving in a lorry, being able to see a doctor online is is very helpful and being able to offer counseling. As a small business, you probably don't have trained counselors on-site, but being able to provide professional services in that space is really useful. And and, obviously, she's delighted with the way the partnership has transformed their business, and and we're delighted for her too. So in terms of just turning for a moment to our ESG achievements and and what we're doing in that space, you'll notice immediately that we've suddenly got four columns. So instead of ESG, we've got ESSG. And the reason why we've introduced that fourth column, society, is really around the fact that we do not only support our own employees and the community that we work in, particularly in Milton Keynes, but also, we support clients to meet their needs for their employees and and community. So the low cost employment, sorry, employee paid insurances are meeting the needs of a group which is really underserved by financial services. They're very simple products. They're quite low value. So, you know, you may you may have life cover, which is significantly more than 10 or 20,000.

30:39 But for our audience, that works really well. They're very simple products, and people can pay for them through payroll. We also offer discounts. We offer mental health support, as I've mentioned, online GPs, all of which helps companies deliver their, social goals. So we help them meet their own objectives for their own staff. And then finally, just the last slide, which, you know, I always like to remind you really. So at the end of the presentation, and we're looking forward to, you know, going on some questions, but what are the key takeaways? And I say the key takeaways for me this year are really strong insurance revenues, gained momentum towards the end of the year, which have continued into '23 and have given us a lot of confidence for the year to come. We expect the replatforming and redevelopment of the platform that I mentioned to make a big difference in 2023.

31:27 Initial clients will be going live in May, with a view that Sage will transfer across towards the end of June, and then our enterprise clients gradually moving over over the summer and into the early autumn. And that will improve a number of facilities within the platform and also make it easier for us to work with third party providers. So it feels to me there's lot of evidence that we're seeing, myself and the board, that we really have got the right client offering. We're able to deliver things that clients are looking for. We've got very high retention of client numbers and also on our insurance side, which makes me feel that we are definitely have the right offering for today's world, and it gives us confidence about long term growth into the future. So that concludes the presentation. I'm now open for any questions that, that might come. There are a couple up there already, one of which I'm going to let Sarah answer.

32:17 That's great, Deborah and Sarah. Thank you very much indeed for your presentation this afternoon. Ladies and gentlemen, please continue to submit your questions using the q and a tab situated on the top right corner of your screen. While the company take a few moments to review those questions submitted today, 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 our investor dashboard. Deborah, Sarah, if I may just hand over to you and ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end. Thank you. Okay. Thank you very much. There's there's quite a few questions there, so we'll go through them. And and and, you know, if there's any that we don't get to, we can answer separately. So there was actually a question that came in, a couple of questions on on the same topic that came in, and also our institutional investors asked us, which was about our chief operating officer, Liam McGrath, who joined us, I think, in January I can't remember who joined us, in May, and left a year the following August. So he was with us for just over twelve months. Questions about what happened. And to be honest, Liam went to a different job.

33:21 There there wasn't any sort of push from us. We was doing a good job. We were happy with him, but he was offered something with a private equity backed business that he was really interested in, and and he went. So, yes, we were a bit disappointed, but he he brought with him a guy called Steve Bush, who is now running insurance and is doing a fantastic job. So although Liam's gone, we've got some very able in his place, and I appointed Steve to my senior leadership team at the end of the year. So we're very confident in what we're doing there. Sarah, there's a couple of our corporation tax. Do you want to answer those? Yep. I'll I'll do that. It's a couple. So so the first one, how how will the increase in UK corporation tax to 25% impact profits, particularly EPS and dividends? So, obviously, we, you know, we we are a business that's directly impacted by that change in corporation tax. So next year, we will pay that blended average of of 23 and a half percent.

34:12 It does have a direct impact on our EPS and in turn dividend. But I think in terms of our dividend policy, that that remains unchanged. And I think for for those of you who held our shares, when we changed our policy from a sort of quarterly and advanced dividend to a half year in arrears dividend, we we did state at that time that we would aim to pay around 85% of our post tax profits as dividend. So that policy remains unchanged, but it will be impacted by the higher corporation tax rates. And the next one is, how is high inflation affecting hospital plan pricing? Are you automatically increasing premiums and benefits for rolling customers or only new ones and by and by how much? I think probably just to be clear on our policies, we're like private medical policies. So our hospital plan pays out a fixed amount for a hospital trip. So the average level of cover people hold is around the £50 mark. So if they go to an outpatient appointment or they spend a night in hospital, they will get a fixed benefit of of £50.

35:14 So inflation we're not affected by inflation in terms of the amount that we're paying out. We also only increase our premiums for new sales. So because of the price that put somebody signs up to today is the price they pay for the whole life that they hold hold that policy, we don't go back and increase our prices for for the back book if you like. And I guess in terms of new customers, you know, one of the key differentiators of our insurance products is we have the face to face sales team that's able to go and talk to, you know, what's basically is a underserved population in terms of insurance. So, obviously, we we do sort of increase our prices in line with, you know, the wage inflation, if you like, that we're seeing in terms of the field sales team. Okay. That's great. Thank you. Thank you for that, Sarah.

36:02 I've got, I think, a couple of questions which are slightly connected around Royal Mail. So just to be clear, there's a there's a question here that says Royal Mail is up for renewal this year. Is there any indication they might not renew? So there's a couple of elements to our relationship with Royal Mail. One is that we support them. We don't have a benefits platform with them. They use a different provider for their benefits platform. We do have a a major relationship with them through Let's Connect, which Sarah's already talked about, and I'll go on to talk a little bit more about. But we also support Royal Mail by going into the, posting offices, depots, and so on. And we sit down with their employees, and we talk about the benefits platform. So we show them the the benefits that Royal Mail have. It's called it's called MyBundle. That's the name of their benefits platform, and we support the Royal Mail by going in and explaining to people what's on MyBundle. And at the same time, we talk about insurance. So that's one of the parts of our contract. And as as you rightly say, that is up for renewal in September.

36:59 No indication that that isn't going to happen. You know, we have regular conversations with Royal Mail, particularly at the moment, and and we're expecting to go into renewal conversations. We have been starting renewal conversations. But as you can imagine, they have got quite a lot on their plates at the moment. The second part of the relationship with Royal Mail is around Let's Connect. And you you mentioned you you know already that we've we've written down, the value of Let's Connect, and that is partly because or primarily because of relationship with Royal Mail changing. So Royal Mail were the major customer of Let's Connect, and they've now indicated to us that they won't be continuing with the salary sacrifice scheme for for Let's Connect in the future. Now that is that is as as we know at the moment. And as you can imagine, there's an awful lot of changes going on, but that's what they've informed us. And we will be providing them with other services, but not the Let's Connect. Not sorry. Not the salary sacrifice scheme. So we may well put in a net scheme, which is where people buy the the the items out of gross pay, so it's not quite as attractive.

37:59 And we're also looking at some other options for them to bring in later in the year. But we do recognize that the raw mail element of the Let's Connect portfolio will be diminished. Having said that, we have a 164 other clients with Let's Connect, so it's not insubstantial. And it is also a bit of a defense play for us in that we provide that service ourselves, And, obviously, it stops the clients looking elsewhere for a salary sacrifice technology provider. So there's a mixture of both. It's valuable to us in terms of profits even at a diminished level, but also it does keep clients working with us because we've, you know, we sort of got all of the services available to them. There's another question here about assurances that the share price would improve this time last year. It has nearly halved what you know, We we all don't know the answers, or we do know the answers to those questions.

38:46 I mean, clearly, we're probably above where AIM has fallen generally. It's not it's not something that we're dissimilar to most of AIM. The AIM index has fallen very, very badly over the year, and that's primarily as an impact of people being concerned about cost of living, you know, the war, all of those different sorts of things. And I think, obviously, we have to look at the impact on the whole index in in terms of the macroeconomic and global economies rather than just the impact of ourselves. We remain extremely confident in the business. You know, we're all shareholders. We we believe very strongly in the future of the business, and we can only hope that the market recognizes that progression that we've made and continues to support us. Certainly, our institutional investors are very loyal, and we we continue to meet with them and talk to them on a regular basis about what they're doing.

39:32 Oh, there was another question there about Rumelle, which seems to have disappeared. Didn't know if we can Thank you, Sarah. Yes. So thank you for that, Deborah and Sarah, and I believe you have addressed all the questions that you can from investors today. And of course, the company will review all questions submitted today, and we will publish those responses on the Investor Meet company platform. But perhaps before we direct investors to provide you with a feedback, which I know is particularly important to you and the company, Deborah, could I please ask you for a few closing comments? Yes. Thanks very much. So I suppose my comments would be that we feel that we're in a a strong position. I mean, since I've been exec, we've gone through a period of time with COVID. We've gone through a period of time with certainly, last year with a lot of uncertainty in The UK, cost of living increases. But I think through that period, we've proven that the business model is robust, that we have growth potential, and certainly, we are starting to see extremely tangible results now on the three pillars of growth that we set ourselves last year. And I've been really delighted by how we're making progress and and seeing the impact of investment that we've made in sales teams, in our marketing team, and we will continue to see within the technology development that we're doing. So it feels to me that we're in a good place, and the proof points that we're seeing around the number of client new clients we're winning, the the contracts that we're writing, all of those things being extended is really good news.

40:54 Thank you very much. Deborah, Sarah, thank you once again for updating investors today. Could I please ask investors not to close this session as you will now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of PERSONAL GROUP HOLDINGS PLC, we would like to thank you for attending today's presentation. That concludes today's meeting. Good afternoon to you. Thank you. Bye.