Record (LSE:REC) — Interim Results

0:00 Good morning, and welcome to the RECORD PLC investor presentation. Throughout this quarter presentation, investors will be in listen only mode. Questions are encouraged, and they can be submitted at any time by the q and a tab. Situated in the right corner of your screen, just simply type in your questions and press send. The company may not be in a position to answer every question it received in the meeting itself. Have the company copy all the questions submitted today and publish responses where it's appropriate to do so. Before we begin, I'd like to split the following poll. I'd now like to hand you over to doctor Jan Hendrick Witter, CEO. Good morning, Thank you. Hello, everyone, and thank you for joining us today. I'm Jan Witter, CEO of RECCORD, and with me this morning is Richard Heading, our CFO. We released our half year results last Friday, which will we will take you through. But before I do that, I'd like to start with an overview of RECORD and our strategic progress.

1:00 RECORD is a specialist currency and asset manager focused on delivering best in class solutions for large institutional investors. We have over a $110,000,000,000 in assets under management for clients based around the world with a particular strength in Switzerland and The United States, and we employ over a 100 people, primarily at our new head office in Paddington, but also in Hamburg, Frankfurt, Zurich, and New York. Over the last forty years, we have established ourselves as the leading provider of currency derivative solutions to large institutional investors with a reputation for exceptional client focus and operational excellence. Those qualities remain at the core of our value proposition, and we are building on that robust foundation to expand our offering into new areas where we can add higher margin products and lock in long term recurring revenues that will deliver sustained growth and increased value.

2:06 That transition is well underway. And in the following slides, I'll cover some more detail about the progress we're making and how we intend to capture the full opportunity. Last year, we restructured the business into three distinct pillars, risk management, absolute return, and private markets. The risk management and absolute return pillars deliver the bulk of our revenues and profits today, but it is in private markets where we see the greatest momentum and opportunity in winning new business. This quarter, we completed the first deployment of capital from the RECORD Infrastructure Equity Fund, a $120,000,000 investment in Pattern Energy, the largest privately held clean energy infrastructure company in The US.

2:56 We have also signed terms on a second €150,000,000 investment in a major European electricity transmission system operator. This means we are on track to deploy the €1,100,000,000 of capital commitments within three years of launch. And although the AUM is small compared to the more than a $110,000,000,000 of derivative exposure that we manage, This deployed capital will deliver recurring management fees at a substantially higher rate than we typically earn on our traditional business and is committed for a minimum of fifteen years. In October, we announced the appointment of doctor Ottman Bukrami to the RECORD Currency Management executive team. Ottman is well known to us, having served as a nonexecutive director since July 2024.

3:49 Previously CIO and deputy CEO at the Currency Exchange Fund, TCX, Otman will add considerable strength to our leadership team alongside our recently appointed group CIO, Andreas Dense. Otman is one of the world's leading experts on emerging and frontier market currencies. And under his leadership, we will aim to expand our and grow our offering. While the developed market currencies dominate the world by trade volume, there are over a 100 regularly traded EM and Frontier currencies. RECORD's annual trading volume in the top five developed market currencies is close to $1,000,000,000,000 annually, making up around 0.01% of global trading volume. Within frontier currencies, our market share is around 1% and has been rising rapidly over the last years.

4:45 We can play a major role in it. We continue to progress towards launching the world's first Sharia compliant deep tier supply chain finance fund with an initial target of $1,000,000,000 assets invested. As previously described, we are well advanced with the structuring of the fund and the sourcing of the underlying loans. The financing to support core potash also continues to progress, and we're working on other similar projects in private credit and real estate. It's also private assets that are creating opportunity for our solutions for asset managers business, where I'm especially excited about the progress we're making, and we'll cover that shortly. Our success in delivering new offerings for clients is built on our technical knowledge and operational expertise, developed over forty years in the risk management and absolute return space, which equips us well to expand into new areas where we are confident that we can win.

5:50 It's in our private market products that we are seeing the most momentum. It's here where we are building an impressive track record and where we see a transformational opportunity. As the charts on this page show, AUM in private markets accounts for less than 1% of total AUM, but it already contributes 16% of total revenue before performance fees. If we had solutions for asset managers where underlying assets are almost all private, the proportion of AUM is 17%, but the share of revenue rises to 27, showing the value of the opportunity underpinned by the growth in private markets. In f y twenty two, we launched the emerging market sustainable finance fund, offering investors higher yield, carry, and return opportunities relative to traditional EM debt.

6:43 In addition to financial returns, the fund also seeks to have a positive impact by mobilizing capital for the development of emerging market economies. From inception through to September 2025, the fund achieved a cumulative return of approximately 23%, exceeding benchmark performance by around 17% across both local and hard currency sovereign debt. With the appointment of Otmar Mukrami to the RECORD leadership team, we see good opportunities to expand our emerging market and frontier currency offering. We launched the infrastructure equity fund last year with €1,100,000,000 in commitments. And as I said on the previous slide, deployment of that capital is well underway.

7:31 And we have announced large new projects in supply chain finance and project finance. We are also increasing our revenue from distribution of third party private markets funds, which includes distributions to our existing client base. Each of these projects is a demonstration of our ability structure large scale bespoke solutions, and we have a further pipeline of projects in private credit and real estate, and we will continue to build on this track record. Coming back to our core currency business and our risk management and absolute return products. This is where we have the majority of our AUM today and where we still generate the majority of our revenue. Risk management comprises our long established passive and dynamic hedging products and our newer and fast growing offerings of solutions to asset managers.

8:25 Passive hedging includes two offerings, typically to large corporate and government pension schemes domestic liabilities and overseas assets. Pure passive hedging is a highly cost effective way to eliminate currency exposure from clients' portfolios. Enhanced passive hedging, sometimes also known as tenor management, adds value by taking advantage of structural inefficiencies and behavioral changes in FX market in a structured and risk managed way. Dynamic hedging is an attractive alternative to passive, which seeks to reduce currency risk while generating value by benefiting from foreign currency strength and protecting against currency weakness. AUM increased across all risk management product.

9:14 In passive hedging, that was driven by favorable FX movements with underlying assets remaining broadly stable. In dynamic hedging, underlying assets are more heavily weighted to US dollars, so FX effects are smaller, and the increase in AUM reflects positive net flows and increased underlying asset values. Solutions for asset managers has been developed to meet the specific needs of asset managers in private equity and private credit. Previously, we described this offering as hedging for asset managers, and it began by offering tailored FX hedging strategies to clients which typically have lower liquidity and require a more bespoke hedging solution. However, we are rapidly broadening our offering in response to client demand, and we're now going beyond solely FX hedging to offer complementary services, including interest rate hedging, bank account opening, and fund finance.

10:12 We're seeing rapid growth in this area with AUM up 40% in the period to $17,200,000,000, and we expect this to be the primary driver of growth and risk management in the years ahead. Moving on to look at absolute return. Absolute return products aim to provide clients with attractive returns while maintaining low correlation with traditional asset class. This is our smallest pillar by revenue and can be more volatile than others, being more discretionary from a client perspective and where clients change asset allocations more frequently. As noted when we reported our full year results in June, AUM and FX alpha decreased at the end of last year and in the first quarter of this year as we anticipated, and that has resulted in a corresponding decrease in revenue. However, we saw positive inflows back into FX alpha in the second quarter of this year, and it remains an important part of our offering.

11:14 Custom opportunities comprises a range of bespoke strategies, including our protected equities fund. And with that, I'll hand over to Richard to review the financials. Thanks, Jan. So starting with this, summary of the results, assets under management were 110,300,000,000 at the end of September, the highest number we've ever reported. As the chart shows, that's an impressive and consistent track record of growth over the last five years. The termination of two client mandates last year has impacted revenue, and management fees ended the first half of the year down 8%, which combined with lower performance fees after a very strong first half last year resulted in total revenue down 9%. We're pleased with the progress we've made to manage costs, which were down 4% year on year.

12:02 The net result is that EPS decreased to 1.93p per share, down from 2.58p per share last year. Our balance sheet remains strong. And as Jan has outlined, we're confident in the medium term trajectory for the business, and therefore, we've maintained to the interim dividend at 2.15p per share. Looking at the income statement in a bit more detail, total revenue decreased 9% against the previous half year, a combination of lower management fees and lower performance fees, the detail of which I'll cover shortly. We've continued to maintain tight control of operating costs while maintaining important investments for the future. Salary costs are broadly flat, while bonus costs are lower than last year, reflecting the lower profits. Our cost structure allows us to manage costs in line with revenue generation as our operating costs are down in the period.

12:54 The operating margin was down from 27% driven by that combination of lower man lower management fees and lower performance fees resulting in operating profit for the year down 20%. We incurred a small net finance cost compared to income in the previous period. This is due to the accounting for lease interest expense on our new office, which more than offset the interest on our surplus cash balances. Those surplus cash balances are held to meet regulatory capital and liquidity requirements and to cover bonus and dividend payments and managed by our investment team and held primarily in money market funds. Profit after tax was £3,300,000, down from £4,200,000 last year. Notwithstanding the positive progress and steadily increasing revenue in RECORD Asset Management, our German subsidiary, it remains loss making. And after adding back the share of losses attributable to the other shareholders, profit after tax attributable to RECORD shareholders is £3,700,000, down 25%.

13:55 Earnings per share, 1.93p against the prior year figure of 2.58p. Assets under management ended the period at a 110,300,000,000, having increased 9% in the last six months. As I said before, that's the highest number we've ever reported. The increase is mainly due to movements in FX rates, in particular, the weakening of the US dollar against the Swiss franc, which took place in the first quarter. As a reminder, we present our assets under management in US dollars, but the under underlying assets are denominated in multiple currencies, and we earn management fees in the underlying currency. As shown in the breakdown on this slide of assets under management by underlying currency, the majority of assets denominated in Swiss francs and US dollars. We also saw strong growth in underlying asset evaluations, particularly in the second quarter.

14:43 That asset growth prompted some clients to rebalance overseas exposures back into domestic currency, but that was more than offset by good inflows into solutions for asset managers, where AUM is now up to $17,200,000,000 and into FX alpha in the second quarter, which was good to see after successive periods of outflows. Overall, net flows were positive as a result. Looking at revenue by product. Total management fees decreased by 8%, mostly due to the loss last year of a land of a large mandate, which included schemes across passive, dynamic, and custom opportunities and the wind down of an FX alpha mandate at the end of last year. Management fees and risk management remained broadly flat overall.

15:28 Passive and dynamic hedging both decreased mostly due to that large mandate loss, which which offset by strong growth by solutions for asset managers. Revenue of naught £900,000 from absolute return products was down by almost 50% due in part to that same client loss in addition to the wind down of an FX alpha program towards the end of the previous financial year. Looking at private markets, in EM local debt, we delivered management fees of £2,300,000, slightly down from the prior year. As as Jan described, this period saw the first deployment of capital into the infrastructure equity fund. We own earned a closing fee on that first deployment, and we'll earn ongoing management fees on the deployed capital. We'll also earn a closing fee on each subsequent deployment.

16:15 Performance fees for our risk management product have dropped from a strong first half last year. However, we have seen performance fees from positive returns in our FX alpha product. Other income shows a significant increase for the period. This is from the increasing distribution fees and the first closing fee following that first capital deployment from the infrastructure fund. Moving on to operating costs. Overall operating costs were £14,800,000, down from £15,400,000 last period. Average headcount during the period was up from 99 to a 104 with continued investment to support the transition to private market products. Bonus costs have decreased as a result of the lower operating profit for the period, and that's the main driver of the lower staff costs, which excluding bonus costs are broadly flat.

17:06 Although we're capitalizing some internally developed software, we're doing so prudently, and capitalization is not a significant driver of lower costs. Technology costs represent the cost of third party systems, consultants, and market data. Our tech leadership team has continued to make good progress on rationalizing and reducing those costs with a reduction of 10% following the elimination of some expensive resources since the prior year. Last year, we incurred additional one off professional fees, which includes legal fees on on the setup of new initiatives in the private market space, particularly through our German subsidiaries. With those setup costs largely complete, spending on professional fees this year has reduced accordingly. Occupancy costs remain flat, although we are incurring higher depreciation and amortization relating to the new office.

17:55 With the termination of our Windsor office lease, which is planned for December, occupancy costs are expected to reduce. Turning to the balance sheet. RECORD is a highly a highly cash generative and capital light business. Maintaining a strong balance sheet is an important priority for us, one which is valued by clients and investors alike. Our first priority is to ensure that our regulatory capital and liquidity requirements are met. During the year, the surplus of net assets over our minimum regulatory capital requirement has decreased, but cash remains high and still provides a healthy surplus over our regulatory capital requirement. This strong cash and capital position allows us to continue to pay an attractive ordinary dividend, and we've maintained the interim dividend at 2.15p per share.

18:42 This will equate to a distribution of approximately £4,200,000, following which the business will retain cash and money market instruments on the balance sheet, which sufficiently cover financial resource requirements required for operations and regulatory purposes. The outlook for the current financial year is highly dependent on completing certain projects, but as ramp as as Jan has described, we're in the middle of an important transition that we believe will deliver sustained growth and increased value. The interim dividend of 2.15p per share relative to EPS of 1.93p per share reflects our confidence in that plan as well as the strength of our financial resources. The Board will continue to balance the expectation of the expectations of shareholders for dividends with the needs of the business to maintain a healthy balance sheet and preserve capital for future growth.

19:32 And with that, I'll hand back to Jan to wrap up. Thank you, Richard. As I said in my opening remarks, we are transforming RECORD into a higher margin, higher growth specialist asset manager. The shorter term outlook for the business depends on the timing of delivery of these new projects, but the transformation is gathering momentum, and I'm very excited about the progress that we're making. We have harnessed our technical expertise and client centric approach to develop our emerging market sustainable finance fund and to create the RECORD Infrastructure Equity Fund, which is now deploying capital. And we have an active pipeline of additional private market opportunities.

20:20 We have demonstrated our ability to manage this change and to attract world class hires to complement the exceptionally dedicated and talented teams we already have. When needed, we can flex our cost base to ensure we maintain a robust balance sheet and preserve capital for future growth. And now we're happy to to take questions. That's great. Well, thank you very much for your presentation. What I'll do is I'll just bring your camera up at this point. Ladies and gentlemen, please do continue to submit your questions. You can do so just by using the q and a tab that's situated on the top right corner of your screen. But just while the company take a few moments to read the questions that have been submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboards.

21:06 As you can see, we have received questions throughout today's presentation. What I'll do is I'll hand back to you now to to run through the questions, and I'll pick up from you both at the end. Okay. Thank you. Thanks, Alessandro. So let's do it. We should just get started with the questions. So the first question we got here, what's the timeline for deploying the remaining infrastructure fund commitments, and how should we think about the fee ramp up? Can we talk about it? Yep. So the the the expectation for the infrastructure fund is that the billion the €1,100,000,000 of commitments are deployed over three years. So we've deployed 250,000,000 so far, so we'd expect to deploy the rest within that three year period. Terms of the way the fees work, we have an upfront sort of closing fee on each deployment. We're expecting about 10 deployments. So the deployment is typically around a $100,100,000,000 euros each.

22:02 And you can see in the other income line within revenue that we've got quite an uptick there, which is primarily that first deployment phase. So it's a few €100,000 that we'll get on each deployment, and then we get management fees over over at least fifteen years being the time horizon. We said last in our last results announcement that we don't give precise the management fee numbers, but around fifteen, twenty basis points average per year over the life of that over the life of that fifteen year horizon is is what we would expect. So a little the the high end of what we would earn on our on our on any of our traditional currency products. The next question is, I know your comment about the increase in AE under incurred explained by the devaluation of the US dollar against Swiss franc.

22:54 Why did they have minimum impact on sterling revenues given the Swiss the sterling weakened? Yeah. So I guess the overall FX impact on revenues was was basically neutral. It's true that the Swiss franc strengthened against sterling in the six month period, so that saw some benefit to our sterling revenues. On the flip side, the dollar significantly weakened against sterling. So the the the the net impact of FX on revenue from from changes in the the underlying values of of AUM was was was close to was close to nil. You've said Outlook the next next question says, you've said Outlook is dependent on timing of closing certain product projects in the last two updates. Is this perhaps obvious, and does it come across overly negative in terms of sentiment expectations?

23:47 You talked about it, would you? Yeah. I'm happy to comment on that. I mean, I I I think I think, you know, it's true that just in the in the light of the the transition which we're in, which which we now see taking shape, We've so in the past, commented on the specific projects we're working on. The one project that we talked a lot about was the the EM local debt fund, which then was launched at a size of a billion dollars. And then we we did talk following that a lot about the the work that went into the infrastructure equity fund, which we then launched last year. I think we're we're at this point still, you know, offering good amount of color on the projects we're working on. And then so for that reason, since these are large projects where when we complete them, they they do have a big effect on the business. We feel it's important to highlight that.

24:41 But, at the same time, I agree with the comment that, you know, as we as we complete this this transition of the business into, you know, sort of a fully fledged provider across the pillars, risk management, private markets, and an absolute return, the specific projects that we refer to should move to the background, and all of these things will become part of the business as usual reporting that we do. Yeah. So so it's it's something we do today, but I I agree with the sentiment that it's it's almost obvious by virtue of the the type of projects that we pursue, that that statement is put out that way. So there's a couple of questions here saying AUM are up via fees down.

25:32 But there's a few questions along along that theme, and there's there's a a few I guess, there's a few moving factors factors in that. I think one of the as we said, quite a bit of the increase in AUM, we got quite a big increase in AUM from from FX. So just simply that the currency that they're presented in is US dollars, and a lot of that FX movement was coming from Swiss francs. And notwithstanding, there's some strength strength in the Swiss franc that didn't offset you know, that didn't fully fully offset that change in the dollar presentation of those of those assets because the strengthening against sterling was not anything like as big as the strengthening against US dollar. So so that's that's one factor. I think the other factor to bear in mind is, you know, we we obviously present AUM at points in time. We earn we earn fees continuously on on AUM. So, you know, our AUM consistently has been trending up for a long time now at each at the balance sheet dates when we report, you can see our AUM. But, clearly, during the period, AUM can can can move around a little bit. So but it's primarily the and then there's that that's that's really the the the key reasons for why we see that what looks like a disconnect between AUM and management fees. When you look at total revenue, we obviously also have performance fees in there, and those are down down year on year.

27:00 Last year, particularly the first quarter was was particularly strong. Sorry. Go on. I just I just want to take the the one question on the the timing. So which was vivid there. So so in terms of the timing, the the uncertainty is the time of completion. This is this is not uncertainty around the projects as such, but it's just by virtue of and, again, the infrastructure the infrastructure equity fund is a nice example where we we custom build a product for for institutional investors, in a way where the product is delivered, to them such that they're comfortable in a commingled structure. And it is a product which they were not able to find elsewhere in exactly this form. But in the practicality of delivering that, especially when starting on day one with a high commitment, A lot of the work that in in in in other cases people experience when they launch a small fund and then over the years, they raise it to size. Where we're active here is really, you know, we build something that matches the investor requirements exactly, and then we receive a large commitment, almost immediately. So so a lot of the work that for other asset managers out there happens over time, we have to do before we're able to launch. And, yeah, in in case of the infrastructure equity fund, just imagining the the different service providers at times the

28:30 number of key investors, just just organizing due diligences, legal framework, legal review just creates a workload where if every participant is completely committed, there's still an uncertainty on the timing that we can't control in time. Everything that we can control on these projects always moves as fast as we can make it move. But just the timing the timing in terms of just just by virtue of working with large institutions always presents a bit of a challenge in terms of what we can say when everything will be ready, but there's no indication meant that there's, okay, uncertainty around the projects themselves. Crypto demand. It's an interesting question. Is there crypto demand from from clients?

29:19 As of today, no. Yeah. If anything, that has decreased the interest from from institutional investors to invest in crypto. What we do see a lot of, attention being paid to is the the world or the infrastructure, the market infrastructure that's now being built around stablecoins. And so so there, think it's important to differentiate between, crypto as as an asset class or cryptocurrencies, more specifically, and and the world that is now being created around stablecoins, which is much more, potential future replacement trading infrastructure for the world and and and and ultimately a form of replacement of protocols such as SWIFT. And so we're we're following those developments very closely, and and I would believe that also in that world, there there's a role to be played for, stablecoins in the context of, the different currencies that we manage. But but that that's that's not something which we would align with or which we would call crypto demand from clients. It's it's rather something which we believe will now happen, and people will expect, in a in a number of years to just trade with each other globally in new protocols that are different from today's that are more efficient. And a lot of these new protocols will be blockchain based. And then for that reason, it's important that we are at the forefront of certainly following that. Yeah.

30:55 Interesting one on emerging market currencies, the high you made government backed government backed. So TCX, the reference, which is the the fund Ottman, Burkami's previous employer. And not not to what the question implies in terms of government backed, but certainly on the on the side of frontier currencies. So if we if we if we differentiate between emerging market and frontier currencies, the frontier currency world is one where in our products today, the way we offer them, we have sizable allocations to frontier currencies. But by virtue of our client base, there is always an important requirement for for liquidity that limits the the the amount of frontier currencies that we can hold in a wider portfolio.

31:45 The the the fund that we refer to which Otman built up as as CIO and and deputy CEO, has funding from large development banks, which are sort of very patient and long term capital and which have strong government links. But that means that from an impact perspective, he has been able to to trade currencies that very few people around the world are otherwise able to to trade or certainly where very few other people around the world are able to hold these currencies for for longer periods of time. And that makes him as as an individual, I would say, the the the number one authority in the world when it comes to the pricing, the models that lead to pricing, and the trading of frontier currency.

32:38 So this was Swiss francs, the main the question is Swiss francs, main currency your business. Is that true of your client base? What's your client geographical base? I mean, yes, that's true fundamentally. Right? Yeah. In terms of AUM, that's true. So about so so 5055% of our client base is in terms of AUM, Swiss based, in terms of revenues, it's more diversified. So so in terms of revenues, the the big the big areas of where we have clients are Continental Europe, but but led by Switzerland, The US, and then more and more, Luxembourg and Ireland. Because based on the the legal entities we face, when we service other asset managers, even though we meet these asset managers or engage with them in in many cases in London, the legal entities that we contract with are their private equity, their private credit funds, which tend to be based in Luxembourg and Ireland.

33:28 So so really the key jurisdictions for us in terms of client base when we look at revenue are The US, Switzerland, and then Luxembourg and Ireland today. But, yeah, so the a AUM, as we highlighted earlier, has a slightly And then there's a question here. How are you how long are you prepare how long are you prepared to pay an uncovered dividend? What specifically are the key determining factors financial financial metrics that will guide this decision? I mean, I aim to cover it in the in the presentation, which is that we we're paying an uncovered dividend this half because we're very confident of the of the of the outlook for the business. But the the guiding factors will be, as they always have been, that, you we have a priority around regulatory capital and around the strength of the balance sheet and the expect that our view of the future expectations for the business. We know that there are expectations for share from shareholders around around the dividend, and we'll we'll aim to balance those with ensuring we've got the right financial strength on the balance sheet and the capital for for for future growth.

34:36 Did anyone just come in? Hold on one sec. I'm just going in. There's one on the highest. I think it's the the top one. Yep. Oh. I mean, you take happy Sofia's question. What are the the reasons for the two significant client losses? What did you do to try and retain them? So in these cases, these were as we said in the in the in the in the presentation earlier, these were absolute return mandates. And in in these cases, we were part of a larger portfolio of of FX managers. And in both cases, the whole portfolio has been terminated. Yeah. So did we did we absolutely do do our best to to retain these clients? Yes. But it wasn't it wasn't us as RECORD that that lost the mandate in that case. It was the the asset class that that was that was terminated by these clients. And and so so competitors of ours lost these mandates at the same time. And and so in that sense, there there's a, you know, a small small comfort in there that we were we would say performing as well or better than our competitors, but it affected everyone equally.

35:57 And then a question here around the shareholder base. What's the shareholder base like? Institutional retail staff. So Neil Record, his name's on the door, remains our biggest shareholder. And if you take his shareholding and past employee past and current employees, that gets you to about 50% of the of the shareholding. And then the the remainder is is probably split about fifty fifty between institutional and retail. And I think Perfect. Well, yeah, and Richard, just thank you very much for answering those questions from investors. Of course, the company can review all the questions submitted and we'll publish the responses out on the investor me company platform.

36:43 But just before redirecting investors to provide you with their feedback, because it's particularly important to you both, Jan, can I just ask you for a few closing comments? I'm happy. Yeah. Thanks, Alec Alessandro, for guiding guiding us through the presentation today. But, yeah, thanks everyone for joining. Thanks everyone for the questions. And as we as we said earlier, so we're very excited to now see the the the transformation of the business, which we've been working on for for a number of years now to see that take place. We we we expect to spend the next few years delivering this transformation, but we now see really signs of business or, what we had hoped would develop now now panning out the way we we anticipated that.

37:29 And so in that sense, you know, we'll we'll continue to to talk to the market about what we're doing. We will continue to give updates on sort of where we are with the different things that we're pursuing. But at the end of the day, it's a it's a it's a phenomenally exciting business where we we now use our USP, which we see in being able to solve large complex issues for large investors at large scale, which is something that we've we've learned to to do very much in the risk management space, but which we're now also rolling out to other areas of the of the market. So it's it's really that USP, which we're now deploying in the best possible way with with in an effort to maximize, you know, fees and quality of fees. And so in that sense, we're excited about where they will take the business, and we're we're excited about the potential of the business. Thank you very much.

38:25 That's great. Well, we are. We're just ringing you once again for updating investors today. Can I please ask investors not to close this session? You know, we'll be automatically redirected to provide you with feedback, and all the management team can better understand your views and expectations. Of management team of RECORD PLC, we'd like to thank you for attending today's presentation, and good afternoon to you all.