Public Policy Holding (LSE:PPHC) — Interim Results

0:01 Good afternoon, and welcome to the PUBLIC POLICY HOLDING COMPANY, INC. Interim Results Investor Presentation. Type your question and press send. The company may not be in a position to answer every question received during the meeting itself. I'll come review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Stuart Hall, CEO. Good afternoon, sir. Good afternoon. Thank you, Paul, for the introduction.

0:33 We're glad to be back here. I think this may be our third time that we visited. So for all of you that are returning today from previous calls, we appreciate your continued interest. For anyone new, we hope we can teach you some things today about the company and understand why we're you you'll be as enthusiastic as we are about our current performance and our prospects in the future. Just by way of introduction from those of you who weren't here previously, my name is Stuart Hall. I'm the CEO of PPHC. My background is that I came out of government service in the early nineties, then became a US registered contract lobbyist and started a firm, which we sold in the mid two thousands to WPP.

1:21 And then I started a second project, which eventually came became PPHC, far more ambitious and, frankly, far more comprehensive than what we did before. My colleague joining me today is Raul Smits, who's our CFO. Raul was actually at WPP for eighteen years, and spent spent the last better part of the last part of that as the CFO of Cantor for the Americas. And Roel joined us about a year and a half ago and was recently formally elevated to CFO a few months ago and is now a a fellow board member of mine. So with that, we'll just hop right into it. I think, you know, it's always important to, you know, set up what, you know, really, makes PPHC's marketplace, possible.

2:09 And I think you can take this context, which is US related, and you can also apply it very, very well to The UK or any other developed western democracy. While the the systems of policymaking are not the same, the trends remain unbroken over the last three decades, which is governments spend more than ever and that governments regulate business more than ever. As such, that is what creates our market opportunity. You can see by this simple graph in front of you, you have a fivefold spending increase from George Bush, elder, in 1990 to Joe Biden today. That creates a lot of economic opportunity for companies, which they pursue as government contractors or people that, you know, carry out very forms of government support.

2:54 So there is opportunity there, but there's also substantial risk. And that risk is generated by, in The United States, parlance increasingly, what I should say, I wouldn't say invasive, but really more more to the fact the fact that the government is certainly more aggressive in a regulatory fashion, especially intervening in the private economy. So you can see along that same axis, if you look at this presentation later, you can see a number of significant events going from accountancy standards all the way to COVID response and everything in between that have created, really what is a permanent steady state need for business in The United States and, frankly, worldwide to maintain constant engagement in government. If you, you know, look at, again, you know, validation of what those trends have meant, you know, for for businesses, you can see, you know, a fivefold increase in economically significant regulations passed at the federal level of The United States, you know, over over again, that similar thirty year plus period.

3:58 You can also see that in that top, arrow, those four arrows there, the one on the right, I I find very personally significant, which is is that the number of public companies in The United States has increased significantly the number that are reporting in their risk. Your when they disclose their risk in their public filings here in order, The number of public policy risk mentions as a key business risk has increased significantly over the last decade, which means, of course, a comprehensive amount of spending is going on in concert with that increased risk to mitigate that risk, which is, again, what provides the opportunity for PPHC. What is PPHC? PPHC is a comprehensive set of solution providing, companies ranging from the traditional US registered direct to policymaker advocacy, which is the world I came out of originally, to, again, the communication support that is really critical and necessary in a digital world to convince policymakers to take action for or not to act adversely to a client's interest.

5:04 So in owing to The US federal system, we have assets, that can be deployed in all 50 US states. We actually have freestanding independent public affairs and lobbying firms in Sacramento, California and Boston, Massachusetts, two of the largest state markets. So, again, in the communications and lobbying space, you know, we have a significant presence in The United States. What really has you know, we think PPHC is transforming and is virtually corporate necessity is that, you know, our clients face challenges in multiple jurisdictions, not just in Washington, but in US state capitals, And then finally frankly, overseas as well. You know, problems are no longer regionalized. They all hit strike simultaneously in multiple jurisdictions from Brussels to London to Washington to Sacramento and and into the Far East. So, again, providing that scope and reach is critically important for our clients and also to provide organized comprehensive solutions to addressing their challenges.

6:06 We are a holding company. We are structured in such a way that we did learn from WPP that to mitigate conflicts and to also, I think, frankly, companies the greatest amount of growth space and ability. We maintain ourselves as a holding company, meaning that our brands stand out as opposed to the PPHC instrument. So, that is why, you know, we are structured the way we are. As such, we're able to handle, we are able to handle as of today 1,200 clients, of which 40% are in the Fortune 100. And then, you know, frankly, you know, I think that, if you look again, you know, at our marketplace, you see that, you know, this is what we think is our addressable market. We don't actually know for sure, but this is what we can verify from publicly available information.

6:58 And, again, you'll see on every one of these upcoming slides, PPHC handles the spectrum, again, from everything from the communication side, which can mean everything from digital advocacy to data creation and data analysis, constituency mobilization, to the left hand side, which is, again, the person to policymaker and regular, which you would call, again, retail traditional lobbying in The United States. The disclosed level of lobbying, that's actually under regulation and is disclosed in The United States is almost $6,000,000,000. And, again, some of this is, you know, an art, not a science, but at least in terms of the actual federal registry and what we can tell from the states, we have a minimal $6,000,000,000 direct advocacy opportunity.

7:45 And then in the on the other side of the equation, we know that at least 11,000,000,000 a year in The United States is being spent on public affairs spending. And, again, important to note because of the differences between The UK terminology and The US. When we refer to public affairs, we're not talking about traditional, quote, lobbying in The US sense, which, again, is person to policymaker. We're talking about public affairs, meaning, you know, the relations aspect of aiding, the people in terms of trying to get out, again, a company's message or, again, mobilize their constituency and create strategies around those communications assets. If you look quickly at the construction of the company, again, you see on the left side, pure lobbying firms. On the right side, you see pure public affairs firms, and then you see combined hybrid and multi in multidisciplinary service firms, all of which, again, allow us to provide end to end coverage for our clients in a coordinated and and cohesive fashion.

8:44 Just a quick look at our client base. Again, I mentioned earlier, 40% of the Fortune 100. We have five of the Fortune 10, in of our active clients. Some pay us, again, to do just public affairs work. Some pay us to do lobbying work. And then, again, really where PPHC is headed is into the integrated services work. We're trying to run, comprehensive, you know, policy issue campaigns for our clients, using, you know, all both sides of the spectrum of our assets.

9:17 Just very quickly, again, you know, to talk about our lobbying core, our lobbying base at PPHC. If you looked at the at the federal space alone, if you combine through PPHC has three of the top 20, lobbying firms out of 2,000 registered firms in Washington, DC. Those combinations, and and put them together, they actually make us the largest single lobbying entity in this city. And I'm sitting in Washington, so I say this city. I guess the fake background would probably give that away.

9:49 Nonetheless, you know, who are our peer competitors? They are what you would call kinda global strategic communications firms, and you can see some of those on the right. But at the end of the day, you know, we are the largest in The US provider, again, of lobbying and public affairs, advocacy combined. And then, you know, ultimately, obviously, as we'll talk about our m and a strategy a little bit later, you'll see that, you know, that we our aspiration is to become a global network to again provide global reach for our clients. Quickly, I'm gonna let Raul just talk a little bit about the function of the holding company platform as it relates to, the rest of our companies. Good, Raul. Yes. Thank you, and good afternoon, everybody. So my name is Raul Smith. Yes. Why the PPHC platform?

10:36 Well, we're, in any case, trying to keep it as small as possible and only sort of provide what we think are vital tasks to our underlying member companies. Because in member companies, that's where the magic happens. Yes. I we allow actually, of course, for what Stuart really calls that's a conflict mitigation by keeping the various companies separate, and they're truly separate in terms of management, IT infrastructure, client handling. We want them to be separate, but we also want them to collaborate, and we facilitate the collaboration as well. In our case, it's not just a lot of talk. There's actually a lot of action on that front as well, and we have a financial incentive that really incentivizes our groups to yeah. If they have any business that they can't service themselves to basically hand it off to assist the company rather than go outside our group.

11:33 Now other than that, PPHC, a holding company, does provide of all the the core back office services that you would expect, like finance, HR, benefits, payroll. And, actually, all of the entrepreneurs that, you know, have entered our group over time, they're very relieved. They don't need to take care of that part anymore. So they can really focus on their business. Finally, of course, our public company status, you know, we went public in at the end of twenty twenty one with the idea to really create a long term sustainable business where over time, share ownership can get transitioned from one generation of management to other generation of management. And right now, 75% of our shares is in the hands actually of employees, And that should be very, comforting to you all because that means that we have a lot of people. In fact, there's about 120 individuals who have a vested interest in making sure that this business stays on course and that we pay out the dividend each year.

12:34 Let's go to the financial results. And here are just a couple of the headline numbers. We were very pleased with the progress in h one. You know, as you can see here, revenues were up to 7%, which was a mix of, on the one hand, 4% organic growth, and the rest was coming from two recent acquisitions that we did, KP and Multistate. Profit wise, we delivered on expectation. You know, our EBITDA underlying EBITDA, I should say. I'll explain later what the difference is between underlying and reported profits. Underlying EBITDA was $60,900,000, was up 17%. And, you know, as a percentage of revenues, by the way, that reflects almost at 26%, which is really we're spot on in our usual band of 25 to 30% profitability.

13:27 Now underlying income, net income was up 18%. EPS was up 12%, so all very much in line. And then, you know, we also just declared our interim dividend of 4.6 US dollar cents per share. Now last year, we paid 14¢ dollar cents per share, and the interim dividend is typically one third of what we expect to pay for the full year. You know? If you calculate it out, basically, it means that at current share price, our full year dividend yield is between 89%, which is actually quite extraordinary. You know, on a full year basis, we would pay out about 15 to $60,000,000 in interim, but now the interim payment is therefore $5,000,000.

14:14 So let's go to a couple of nonfinancial items.

14:23 Oh, sorry for that. This is not nonfinancial yet, but it is relevant. Oh, we can we can we can we can go ahead and move to this one, Raul, if you want. That's okay. Good. Yeah. Just a little bit about our client profile because we're very proud of that, and it's extremely solid. So a couple of KPIs are mentioned here. You know, we're now at about 1,200 clients. That has come up quite significantly from last year.

14:46 At that time, we were in the 800 range, and that was also because of the acquisition we did in the spring this year from multistate that that brought another 350 in the door. But, overall, as we wrote in our RNS, you know, our clients are not small companies. So typically, you know, Fortune 500 clients, and these Sue already mentioned that we're currently representing 40% of the Fortune hundreds. Other clients can also be found in trade associations and and NGOs. We do like to measure, you know, how many of our clients spend more than 100 k a year with us. Last year, we had three eighty four. Of course, we can only measure this KPI on a full year basis, but I can let you know we're on track to beat the number for 2023.

15:39 Very importantly, our we have a very low degree of client concentration. You know, our largest client represents 1.4. The top 10 is about 8%, and that makes us very you know, low concentrations are not very sensitive to one potential client for that. We look at retention, obviously.

16:02 85% on average is what we retain from one year on the other measured in dollars. Now that 85% is weighted average between, on one hand, our lobbying business where the retention rate even is higher, typically north of 90%. And on the other hand, you've got the public affairs business where it's a little bit lower, more in a 70% range. And that's also because that's often more project based work that basically has a beginning and an end. Whereas in lobbying, the work goes on. The employee base, about 322 employees by the end of June, and 75% of our total shareholder base is indeed well, those shares is in the end of employees, which gives it sort of very, you know, solid foundation, I would say, for our company.

16:57 You know, we're flattered that we've been, you know, nominated and awarded in multiple places for, you know, things, initiatives like employee fellowships, hybrid working items. And those are, you know, very important in professional services business that we are. Just a couple of things I'd like to add to what role said. When you look at, again, the left hand side here, it talks about, again, client retention rates. I think, you know, that that really illustrates a couple of things. One, that that that really we have a deep personal relationship that's built up as a trusted adviser over a number of years with our clients. It goes to the steadiness of our business. We're a retainer based business largely with project work on top. As a result, again, you know, we we really have a very steady state in terms of, you know, our client base and our revenue year to year. Unlike a lot of PR firms, which exist out there that do commercial PR, we don't and I we were owned by one at one time. My old company was.

17:57 And, you know, we don't start our year with 50% unidentified revenue. We start our year with about, you know, again, 80% of our revenue from our prior year already retained, setting us up for good growth every year. And and, also, I think, importantly, it's also to understand, you know, we're in a business that is innately addressed to government and political, but addressing the political does not mean instability in our business so that we are not cyclical to election cycles. Our firms are thoroughly bipartisan. We are, again, trusted professional advisers with people that have relationships and knowledge and insight in all institutions at both parties, access as well. So, you know, when an election takes place, actually, it's good for us because whenever a new body is put in place, legislative or a governor or or a president, that that sets off a level of activity based on the new agenda.

18:53 So, you know, again, it really goes to the core stability of our business, and that's built on, again, the stability and and, quite frankly, growth of government.

19:03 Mhmm. Continue. Yeah. And that stability is also reflected in our growth charts, yeah, over the longer term. We see very steady progress. You know, on the left, you see the revenue picture, which really shows that every year there's growth. There's always driven by a mix of, on the one hand, m and a, which is depicted here in gray, and organic, which is depicted in red. Sometimes the m and a component is a bit higher. Sometimes organic growth component is a bit higher. But in that case, the growth has been there throughout indeed election cycles and changes of power in DC. If we're looking at this half year, you know, we see that we had important contributions in the gray sphere, so from m and a, that's in this case, from KP public affairs and multistate.

19:50 But next year, that might be different again. And we always say that our average organic growth, you know, the sweet spot is between 510%, and that's also what we expect for next year. Now on the right, there you see our profits underlying profits. The long term margin has been fluctuating between 2530%. And where exactly we are in that band is a function of, you know, which sort of segments we experience most growth, either whether it's in lobbying, which is very high margin, or public affairs, which is slightly lower margin. And then, you know, in the meantime, also, since our IPO, we have, of course, you know, taken onboard some public company costs, and we've made investments really to further bolster our platform for so that we're able to realize the ambitions that we have. But, nonetheless, we're very comfortable with current margin levels, we're convinced and we have a lot of confidence that next year will be, again, in the 25 to 30% bandwidth.

20:58 I promised oh, sorry. First, the outlook, and then I'll get to the point about our difference between underlying profits and reported profit. I saw there was a question about it as well. But first, the outlook. So for this year, we expect that h two is gonna be pretty much a mirror image of h one, same type of organic growth, same type of margins. And for next year, yeah, we rotate the the the outlook that we've actually been handling since our IPO. So organic growth, we expect to be between 510% that might get supplemented by some further growth from m and a, and then, you know, an EBITDA margin which sits between twenty five and thirty percent.

21:48 Now here we are at this p and l, and you see in the beginning, in the middle of the p and l, a lot of subtotals. You know, it's the word underlying. That's our underlying EBITDA and underlying profits. And, frankly, that is what we consider our real profits. That's also what the tax man is charging us on, and that's also what generates the cash. So when we do our dividend calculations, we base it on how much has our underlying net income been. However, the reported profit is indeed quite a bit lower. All the various charts that you see there at the bottom, you know, are driven by certain US GAAP reporting guidelines. And the most important one that you see here, which for the half year is almost $15,000,000, are share based accounting charges, and that really has to do with at the time that we ed.

22:45 We made all of these shares subject to a five year vesting scheme, and they essentially, the holding of it is dependent on people's continued employment. Okay. Under US GAAP, we basically have to take the full value of these shares through our p and l over the course of the vesting period over five years. So therefore, we have an almost $30,000,000 charge each year for five years. Now that's all noncash. And, actually, each and every one of those line items that you see there at the bottom, they're all noncash. And that's why, you know, when Stuart and I are reviewing performance of our underlying companies, obviously, we focus on what we say our underlying net income or EBIT.

23:29 Perhaps this is a good moment to go to the m and a. Yes. Thank you. Stuart, do wanna take this one? Sure. I'll start, Raul, and then I'll let you fill in on deal structure and our philosophy of m and a. But, essentially, you know, again, as I mentioned earlier a couple of times, you know, our our clients face a geographical challenge. It's now worldwide. In The United States federal system, again, states have enormous reserve powers, you know, ranging from taxation and economic regulation of what goes on in their borders. So, you know, you ask, like, when we did our first acquisition post IPO, we bought one of the largest lobbying in a public public relations firms in Sacramento, California. That's the fifth largest economy in the world. It's a place where things that happen there end up not just in Washington DC, but they ultimately end up in in London and Brussels.

24:20 So it's almost like being in, you know, a capital of a very large economic enterprise with its own reserve powers. So those geographic challenges are significant. So we continue to look to expand our network, based upon geographic opportunity to serve our clients in multiple jurisdictions. Ultimately, that will include the EU. It will include The UK and, ultimately, probably parts of Asia, frankly, well to create an entirely true worldwide network. It's something our clients are asking for. It's something they need because, again, a problem in Brussels is instantly a problem in Washington, and they're almost simultaneously coordinated oftentimes, frankly, pushed by a lot of nongovernmental organizations that are working in multiple jurisdictions throughout the world. So we look at geography. The second factor we like to look at is capability.

25:10 That can mean anything in the strategic communication space. That can mean data modeling, media management, again, media spend, media production, the ability to deliver, you know, digitally. We have some very aggressive and very high quality digital media buying operations, that help us deploy the plans that we put together for clients. So we're constantly looking at at capability expansion. Again, anything that can assist us in, you know, again, providing end to end solutions for our clients. And probably most importantly, allow us to capture more and more of that client spend that's being spent to manage the space. The more that we can bring cohesion to it and provide one place the client can handle these problems, the better for the client and, obviously, the better for for our company. In terms of just looking at markets, you know, future markets, you can see, you know, our estimated, US spend, you know, again, total spend in terms of our market sizing and opportunity here.

26:12 But, again, some of this is dependent on, the level of, again, registration and disclosure. Again, The United States with the federal state level, it is very, very rigid and, very, very comprehensive. So we really have a lot of up to date data here, what goes on in this market. The EU has recently, con continued to tighten their disclosure rules. So

26:33 we have a pretty good feel for what's going on in the continent. You know? So, again, you know, you can see, again, the the addressable market there is at least, you know, 7,000,000,000 US a year, probably more actually, again, when you get you know, to figure out what the real close regime is there. So, again, we're looking there. Great Britain has a lot of opportunities for us as well, not just being a UK listed company, but, you know, we continue to to to explore opportunities there. As Raul mentioned earlier, we've got a very, very robust pipeline, and, you know, we're gonna continue to be do m and a. We're just gonna be very, very judicious about it. And I think I'd I'd ask Raul to just add a little bit of flavor to our basic deal approach, you know, so you can get a flavor of of why we're not just looking to buy things for the sake of buying.

27:23 Raul, you wanna finish? No. Absolutely. I'll I'll just spend one minute on this. So,

27:31 you know, Stuart already mentioned, we've taken the good things that we learned at WPP and have improved on the bad things. Now one of the good things was actually the earn out type structure. That's really a proven model for acquiring professional services firms because you're talking about a series of payments over five years, which almost leads automatically to a gradual transition of ownership. Now, however, we improved it on one important aspect, and that is that we're always paying in a mix of cash and shares, so not only cash. Because we want, at the end of the deal, the recipients to have a very solid shareholding in PPHC, which then in turn will be subject to vesting measurements. So, really, when people enter into a deal with us, they're essentially, almost say, on the hook for, you know, eight, nine years.

28:31 And that's the type of, you know, length that we like because, really, we're building a very sustainable long term business here. Now one final thing about these earn out deals, you know, we make a company payments on day one at the time to close, and, basically, that is to reward them for the how far they've brought the business to date.

28:56 If we then make further payments later in the future, that will only be their contingent on the company growing from the moment that we've acquired it. So only if the company continues to grow, we'll owe the sellers a further payment. And that sort of derisks our, you know, our acquisitions strategy quite dramatically. Exactly. I mean, a lot of fix a lot of times, if you're on this call, if you see us announce a deal, people oftentimes focus in the deal cap, which is the total potential payments, but the client has to reach that potential over a period of four to five year. I mean, the acquisition has to reach that over a period of four to five years. And, I always like to say to people, if they hit the deal cap, that's gonna be a good problem for all of the investors and and and shareholders in the company to have because that will have put an enormous amount of profit and growth under our company. So we believe in that model, and we're we're we're very disciplined about it, and, we're gonna stick to that.

29:56 I think only in conclusion, I'd just say a couple of things. Again, if you look at this slide, really, you know, in the right is POLICCO Europe, And it's it's was a whole publication they ran about the rise of policy communications and its primacy, you know, within within The UK and Europe. And, I think, really, it goes to show you that, again, the growth of government and the aggressiveness nature of government in terms of, again, of regulating private enterprise, is is really, you know, growing on both sides of The Atlantic. So it's a worldwide addressable problem. And, again, you know, in terms of, you know, both our business operations and plans here in The United States and, again, our international plans, you know, of, you know, paramount importance that we understand.

30:42 And finally, just quickly conclusion, I always go through these. You know, we are a professional services firm, professional business services firm. We have high client retention. We have very, very low client churn. And, you know, we are a stable part of all corporate budgets and a growing part of that. You know, financially, we throw off very, very good margins, as you can see by our ongoing results through the last three reporting periods, higher than probably a lot of our industry peers. And, frankly, you know, we are a very cash generative business that obviously, you know, allows for us to be a lot more aggressive in terms of what we can do, again, on the m and a front and in terms of reinvestments

31:23 in the company. We're a high dividend payer that aligns, you know, our key employee shareholders, which are quite significant, also in in their financial interest, also along with our external shareholders. So we're gonna continue to pursue a progressive dividend at a very, very high yield, you know, as we as we proceed to the future. And then finally, again, our growth prospects are tremendous. We have a fragmented industry that we're looking at out there and that we're trying to bring more and more cohesion to, and we have an ample number of targets as we go forward. And and also human targets, frankly, as well. I mean, they're in our business, people have clients. They can bring clients to the table if they join you and they're incentivized properly, and they can have as much outsized impact as good acquisition. So, you know, people, companies, and and performance, you know, all key to us. We had a great h one. I think we're gonna put another solid h two, and we think there's no reason to believe that we're not gonna continue to perform going forward.

32:26 So thank you for your time today. We'll open it up, I guess, to questions now. We got quite a few on the screen. That's fantastic. Stuart, thank you very much indeed for your presentation. As Stuart just said, ladies and gentlemen, do please continue to submit your questions using the Q and A tab situated on the right hand corner of your screen. Stuart, as you said, we have received a number of questions throughout today's presentation, and thank you to all the investors for submitting those. If I may, ask you to read out, just click on the q and a tab, start at the top, read out the questions where appropriate to do so and give you a response, and I'll pick up from you at So the so Jonathan has Jonathan has up the elephant in the room in US politics these days. He's asked about the impact of a potential US government shutdown.

33:18 Jonathan, I would tell you that both as a senate staffer and now as a lobbyist, I believe I've been through probably about 11 or 12 of these. And I I I and I don't wanna sound dismissive. It really has no impact on our business. There's a dirty little secret that what they the government continues to run, and they there's a designation that the president makes, quote, essential services. And funny how almost all of the government is considered an essential service. So nothing really shuts down per se. Eventually, they have to solve the mess and then give the federal workers back pay and whatnot. But, you know, it it really doesn't see it doesn't really have an effect on the machinery of government because almost every agency is effectively designated essential.

34:07 So things go on. And, frankly, sometimes we see upticks during this period because clients get nervous about the outcome, the fiscal outcome, and how it finally gets resolved, and they feel the need to kinda be more engaged. So is our is it good government, good for society? Maybe not. Good for our business, not does not really impact us with I think, you know, we I got a quest another question here that was talking about, you know, the share based accounting charges. It's as well said, it's gonna take us a full five years to roll those off, but those are just GAAP entries. They they have absolutely no meaning whatsoever for how we operate our business. I mean, I guess it's good for investors to be able to see that. But, again, you know, this is the, you know, price we paid for making sure that our employees were thoroughly locked down and investing in restriction periods at the IPO, and we feel that trade off for shareholder value was far more valuable than than going another direction, which wouldn't have resulted in in charge.

35:11 Another question from Steven. It says your business is based around individuals and and relationships, and how do you manage this and grow this as a group? One of the reasons we went public was, and Noel mentioned this in our m and a section too, is that, you know, we believe that the use of of equity and meaningful equity that that has a real translatable value and a potential growth value to our clients will allow us, to maintain those key individuals who are client facing over a much longer term than one could normally expect if, again, purchase business nature or, frankly, in terms of, you know, incentivizing the next generation. You know, succession is very important if you're gonna build a stable platform.

35:57 So one of the things we are looking at is really making sure our next generation of key leaders is really invested in a company and will be here for a long time and make a career. So, we have a 125, employees out of 325 right now that have some form of equity instrument, either actual share ownership or options or other long term incentives. So, we think that is the glue that binds us together, that differentiates us from a lot of other companies that rely only on cash compensation. So and and so far, good. We suffered very, very low attrition since the IPO, virtually nothing at the top level. So, we think, you know, what we're doing is working, and the employees are really are really buying into it. I'll let Raul take this one. Ben, g s. Raul, do you have plans to expand in the international markets, or is the focus on The US for now? I we just I see. I'll take all the water.

36:54 Roland is from The Netherlands too, he's very good at the internationals. Well, I don't know how that's a benefit. No. But, absolutely, we are looking at international markets, and I think we explained that we're primarily looking right now at The UK and The EU. Because our clients drive us there, they have the same issues in The EU that they face in The US and in California. And that's why it's almost, you know, mandatory for us that we we make the jump across the Atlantic. However, we wanna be very disciplined about it. You know? We don't want to buy something that eventually will be not accretive to our EPS.

37:42 So we're looking at a company of the right size. It needs to have sufficient infrastructure at the right valuation, which meets the right, you know, strategic objectives and has the right reputation. And, you know, by applying all these filters, you get down to a sort of more manageable number of targets, and we're having quite a few conversations going on right now. We'll see, how many of those will lead to something. You know, obviously, as as many of you know, it's very undesirable for us as a purchaser to end up in an auction. So, we're trying to basically have as many as possible exclusive conversations with potential targets, but that sometimes also mean that it goes a bit slower. We're we're patient. We'll we'll find the right partner for us.

38:31 So another question on here. It says as part of the rationale for the high employee ownership, the differential tax rates between wages and dividends, and can you pay employees more efficiently with dividends? Technically, we can't pay employees with dividends, but certainly, it does help. Frankly, again, I mentioned earlier the alignment between our employee ownership interest, and outside holders on dividends. So it it certainly helps, in terms of compensation. And the tax differential is important. The dividend yield is important. But, again, that was the the sole calculus, again, in in our in our public offering. It was also, you know, the long term ownership aspect and share price appreciation that the employees could get. But, certainly, again, that that dividend payment does help, and the tax advantage rate, you know, does does help, you know, make up for, I guess, what one would say was a traditional partnership where everything was taken home after expenses every year and now converted to a profit bearing company.

39:32 I've got trying to see here. Let's see what else. Should I take the next one? Go ahead, Roel. I'm trying my screen, mate. Yeah. No. I think Johnson says, hey. I know the company is working hard to improve the liquidity of the shares. Are there any further brokers likely to provide access to shares beyond the platforms that are already offering, like Interactive Investor and AG Bell? There's definitely a, you know, improvement action to be expected on that front. The board has actually just decided, and we've also announced it, that the REG STEC is gonna be removed from our shares. Now that's a very technical term, but, essentially, it means that the there's an important restriction that have come out of come away from our shares that was there, yeah, to for the protection of, shareholders in The US, but that's come off now.

40:33 And, therefore, we will now be tradable on multiple platforms, not only in The UK, but also in The US, and it will do, hopefully, a good a lot of good for the visibility of our stock. Yes. There are several there are several UK based larger trading platforms that will not trade in US regulation as restricted shares will not allow trading in them. And we have again, the board took action as role said. We're in process of basically filing paperwork with EuroClear, and that will be in very, very shortly, probably by weeks in. And then we, as soon as we they they're satisfied that we've complied with everything, we'll be able to take those off, and you'll see our shares on a lot more platforms over there. So we're very excited about that, and that'll provide a lot more access to potential retail investors there in The UK.

41:23 I think, you know, there's a question here from David about, you know, how we charge clients and and and how we price our work. Again, we don't we don't do billable hours. We do project work, but, again, it's price based project work, you know, based upon the cost of the project versus, you know, our actual, you know, fee takeout on the project. Otherwise, everything else is pretty much a steady retainer basis. They're typically one year contracts, one year engagements payable in 12 monthly and equal monthly installments. Our lobbying firms are, you know, all retainer. Our our public affairs assets typically, operate on a retainer plus basis, retainer plus project. So, again, their clients pay them a certain base amount to be with them as an adviser year after year.

42:15 Administratively, it's a lovely thing. What it really does produce, I think, in terms of of business results, it allows us to, again, you know, have very low DSO, to have very, very good, you know, cash flow and cash predictability. And it makes the business, frankly, relatively simple to run at least from a standpoint of billing and collections. So, we really like that system. We appreciate it. You know, there's no magic for how we price our clients. You know, again, you can see by our profit margins, we we we price things, we think, pretty appropriately for the services we provide. But there's no, again, you know, magic to it. We have some clients that are very comprehensive, were consuming a lot of services from us, that are paying us, you know, a very significant amount of money every month, plus project top up. And there are others that are just steady state. They're looking for intelligence, you know, and or just continued guidance, you know, who, pay us, you know, kind of at the lower end of the scale.

43:16 So but they're almost all retainer based. So I don't see any other questions. I think you've actually covered them all off, Stuart. Thank you very much indeed. Of course, any further questions do come through, the team will be able to review those, and we'll be able to publish responses on the investor me company platform. Stuart, perhaps just before redirecting investors to provide you with their feedback, which I know is particularly important to you and the team, can just ask you for a few closing comments, please? Yes. Thank you. So, again, you know, again, if everyone, you know, has one takeaway from that is that, you know, we have a tremendous growth opportunity in addressable market. And that, again, the company, you know, when we converted it to a public company a few years ago, and and, you know, we predicted results, the interesting thing has been our pro formas for the previous four years, before we went public, ended up being reflected now and what are now three reporting or periods worth of results. So, again, we had a fantastic h one.

44:13 We're looking forward to a great h two and, again, another another strong year next year as well. And, you know, we're extremely bullish on the future. Again, I think the fact that, you know, our company is over 70% employee owned and employees don't part with a lot of shares. It shows you there's a lot of belief internally here, and we're really proud of what we've put together. And we'd be happy to have any of you invest and and be a part of our story. So thank you. That's fantastic. Thank you very much indeed for updating investors today. Can I please ask investors not to close the session? It should be automatically redirected to provide your feedback, nor the team can better understand your views and expectations. This will only take a few moments to complete and those greatly valued by the company. On behalf of the management team of PUBLIC POLICY HOLDING COMPANY, INC, we'd like to thank you for attending today's presentation, and good afternoon to you all. Thank you all.

45:05 Thank you.