Staffline Group (LSE:STAF) — Final Results

0:02 Good afternoon, ladies and gentlemen, welcome to the STAFFLINE GROUP Final Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and could be submitted at any time using the Q and A tab situated on the right hand corner of your screen. Please just simply type in your question at any time 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's appropriate to do so. Before we begin, we would like to submit the following poll. And as usual, I'm sure the company would join me in thanking you for your participation.

0:35 And I'd now like to hand over to CEO, Albert Ellis. Good afternoon. Good afternoon, everybody, and welcome to the STAFFLINE GROUP PLC's full year results. The first presentation and full year results we're providing after our equity raise and refinancing in the summer of last year. I've got with me my CFO, very capable Daniel Quint, and we our objective is to give you as much information this afternoon. It's as short as possible. We know your time is precious, and we really appreciate you giving us this time. We we our objective for 2022 as related as it relates to investors is to really try and engage with our retail investors, the investors that actually have good strong opinions about what we're doing, what we should be doing, and we wanna engage with you as much as possible. So with without further ado, we're gonna kick straight off.

1:27 The first slide is just a reminder. If you are an investor and you do know STAFFLINE well, which I which, you know, I I can imagine there are many of you, you'll know that we're the market leader in blue collar recruitment. And the one thing about uncertainty is that our customers recognize and they tell us that that scale and quality and reach is what they're looking for in times of uncertainty, particularly at the moment with when you got the cost of living crisis, you have all the uncertainty, the news is such a depressing

1:58 place at the moment. Our own customers are telling us that they want to work with solid large organizations. So this slide is just to remind you, we're the largest in the in in The UK and Ireland in terms of blue collar recruitment, and we're very much growing our white collar footprint as well. The next slide is just a summary, and I'm not going to go through the highlights. If you're a follower, you would have read them yesterday at any rate. But, you know, it's not often as CEO, and I've been in public markets for twenty years now. It's not often that you can say that there's really no wrinkles in a set of results. And in this one, there certainly isn't any wrinkles. Every KPI, every financial result is going in the right direction. And the most important result for me this year, the biggest achievement was really our organic growth. I mean, we haven't built this growth and these these profits through acquisitions.

2:52 We we've done it organically, and the business has delivered organic growth, which as you know is some of the best value growth. All three divisions growing profitability and gross profit, major achievement right across the board. So consistency there. We'll talk about our new contracts and our strategy later on in the presentation. Over to you, Daniel. Thanks, Albert. Good afternoon, everyone. Really great to be able to present to all of you again. I'm just gonna run through the highlights of the full year results for 2021. So as you would have seen, revenue is up 1.6%, and and that was also after us exiting one of our largest clients at the beginning of twenty twenty one. So although revenue is up 1.6%, actually, when you strip it out and we look at it on a a normalized like for like in inverted commas basis, it would be closer to 6%. So we're really pleased with that achievement, especially during COVID.

3:48 Really strong results on gross profit, which Albert and I really pride ourselves in driving forward, up 11% year over year, which allowed the margin to move up from 8% to 8.8%, a really strong performance in '21. And finally, something that we're really proud of and and gives us a really good platform for 2022, more than doubling of underlying operating profit by a 114,115%, not just driven by the improvement in gross margin, but driven by the gross profit conversion improvement that went up from 6.4% to 12.1%. And that is our ability to convert from gross profit into operating profit, and, yes, there is a good signal about how we're controlling overhead costs. So something that we're we're really pleased to have have performed on in '21.

4:35 As a result of both the deferred VAT that we held for much of last year, but also the equity raise that we did finance costs have reduced by 41 and a half percent to £2,400,000, so excellent from an interest perspective there. And then our first profit after tax since 2017 after a very, you know, difficult early first year for us in 2020 when we really started working on the business, Albert and myself, and we turned into into £1,600,000 profit after tax. Again, a really good delivery for 2021. And finally, cash. The balance sheet has seen a real turnaround, from we had 8,800,000 of net debt at the end of twenty twenty and now £6,900,000 at the end of 2021. So gone are the the years of 2019 and even 2020 when we had high £10,000,000 worth of of of net debt.

5:27 Really, again, consolidating the platform that we have to work with going into '22. The key deliverable the key drivers of that, the equity raise, of course, but very importantly,

5:37 the important the improved trading cash flow, strong cash collections. There was circa 10,000,000 of timings. But even after all that, we have paid the majority of our deferred VAT off, and we have paid the final installment of £5,800,000 on the 01/31/2022, leaving the business free of any deferred VAT liability or any other COVID loans whatsoever. So moving on to gross profit, and this just gives you an indication of where those margin increases have come across the group by division moving from the left. So Recruitment GB, significantly driven by the exit from, low margin contracts. One top five client that we exited at the beginning of 2021, but a few other smaller ones have contributed to that improvement. In recruitment Ireland, a significant push in the direction of permanent recruitment, which has really enabled the the margin to move up very healthily from 8.7 to 10.1%.

6:33 And finally, in People Plus, an increase of 1.1% to 25% driven by our our focus on delivering the operations of the People Club business in a really efficient manner gross profit level. So that all aggregating to that eighty eighty bps improvement from 8.0 to 8.8% in gross profit margin, a really healthy outturn for last year. Now on to net debt. You'll see the improvement of £15,700,000 in pre IFRS 16 net debt from 8,800,000,000 debt to 6,900,000 net cash. The key drivers of that, and I would point you to the left hand side of that waterfall graph, £15,200,000 of e underlying EBITDA. Again, a really excellent, deliverable there, some CapEx and the lower interest numbers, taking us to the right hand side. But an other another really key feature, £13,700,000 of receivables inflow. That's showing the strong collection performance, the cash collection performance of last year.

7:31 And and credit to my group finance team as well who enabled a 5,800,000 reclaim from HBC in corporation tax from previous years. And the other key elements to that, we brought on £17,800,000 of of formerly off balance sheet item onto the balance sheet, and then we repaid our our VAT. But, of course, on the far right hand side, the equity raise really delivering for us a really successful equity raise, again, allowing a really good platform for 2022. And finally, from me, just looking at the the finance facilities that we have in our in our we had on our group at the end of December, which, of course, we still currently have. This is a journey, as you'll see from the left hand side during 2018, where the group had fixed term debt quite unwieldy, and we've moved it all the way to the right hand side where we have a fully receivables facility which moves in line with trading in our business. And I suppose the key key headline here at the end of twenty twenty one is that we had banking headroom of £78,400,000, which is a blend of £48,600,000 of unutilized elements on our receivables facility and then £29,800,000 worth of cash.

8:38 And you'll see on the right hand side a re you know, attributes of our banking facility, which is a 90,000,000 facility over 4.5, and allowing us now to take advantage of a low margin rate of 2% plus Sonia. So really allowing us to to move into '22 with a solid platform, and I'll hand back to Albert now to go through the operations. Thank you, Daniel. And just a reminder, you know, Daniel and I believe that cash is king. You know, it's easy to forget that when when times are good, but it's when times are starting to look a little bit more uncertain that suddenly you look at your portfolio and companies with cash stand out and they they can take advantage of market opportunities. So on onto the operational review, and I'm going to be quite brief because I think you've seen some of the group numbers and they've been very impressive. But I'm just going to bring out one or two points on each division starting with the recruitment business.

9:36 As Daniel said, we actually grew underlying revenue if you exclude the the the the low the low margin contract. And Daniel's talked about the gross margin, but I wanna just focus on the labor shortage for a minute. And we've developed a really strong strategy, which I will go into in a little while, about how we are facing into that labor shortage and taking advantage. Essentially, this business had a great year. Of course, last year wasn't too bad either because the group recruitment business enjoyed a competitive advantage with its scale in the food, distribution, logistics, and essential sectors. So now we're looking forward to times when travel and automotive and manufacturing start motoring. So really good year building on last year's strengths. And as you can see, operating profit as a conversion ratio from gross profit really now into mid teens, double digits from 9% last year. And if you if you're acquainted with the sector, you'll see whether whether it's Page, Hayes, or Walters, 14 to 18% is is very respectable.

10:42 But obviously, we would wanna push forward. We we think there's more to go there. Onto Ireland, the smaller business, and the first thing that'll hit you is that revenue went backwards slightly. This is on purpose. Ireland is not a large blue collar market. It's more white collar, more public sector, and, of course, the South. In the South, you've got the that's the the Eurozone, for example, and there's lots of tech and pharmaceuticals and banking. So much more white collar, very attractive market. And so we focused on gross profit, and as Daniel said, and he pointed out in his in his gross profit gross margin slide, it's the first time we've hit double digits certainly since we've been associated with company. So a full gross margin, that's a full fat margin of 10% and gross profit up. So ignore the revenue for a moment, and then look at the profit and the conversion ratio.

11:31 This was all about cost control, strong pivot to permanent recruitment, white collar recruitment, and so that that that lifted profit by over 56%. And that is there's an interesting stat here, and that's the gross profit per fee, and then you'll see it's only fractionally up at 2%. Productivity in Ireland right now is maxed out, and you can tell that by the conversion ratio of 22%. You saw 14% in GB, long way to go. You're already at 22% here, well over the market. So what the the signal here is we need to fill up the tank. We need to put more fear in us on the frontline and grow the business, is exactly what we're going to do. And finally, People Plus. For those of you that have a long memory, you will hear that People Plus is a rather checkered history, some ups and downs. Well, I mean, these are some stunning results. If we were giving Oscars, People Plus would certainly get an Oscar for this performance. Every single measure is up in double digits and up operating profit coming albeit coming from a lower base, up a 156%.

12:36 And it's a full turnaround, so our strategy has changed. We're focusing on multiple contracts. You know, we don't wanna be reliant on a single contract or a single department or a single commissioner. And our management's totally changed. The managing director is a freight new managing director, new new new FDs, and the whole organization has been streamlined and and the organizational design element being maximized to get maximum productivity. We we took a radical approach to costs, and in the last twelve months and indeed before that, we have continued to rationalize and align our cost base with revenue. One of the things that we have looked at is incentivization. And for the first time, the People Plus management have been incentivized to be efficient to deliver and to to deliver results both for for their customers, but also for the group. So we've had some headwinds, and I won't be shy about telling you about skills. Our skill centers or training centers have actually been light on volumes.

13:36 That's been, you know, offset more than offset by the employability and the jobs part of the business. But you've got to think of this as a yin and yang.

13:45 If the jobs market is strong, yeah, people don't present themselves for training. They go and get jobs. And if the jobs market is weak and there's higher unemployment, of course, you get a lot more referrals for training. So you you there's a yin and yang. Nevertheless, we're focusing on transforming that skills division so that it's equally pulling its weight. And I'll talk about restart in a minute, but you can see finally, you know, the acid test of any good consulting business is productivity, and that's an 18 uplift from the prior prior year. Now I think we're actually on track here. I'm just checking. We're on slide 14, and we've had fifteen minutes. So we're on track for a minute of slide. So I'm going to just cancel through the market trends, and I, you know, I find this the most fascinating part of the conversation. Look, it's these are the office for national statistics.

14:33 That's the most reliable in terms of of of statistics. And I start off with a favorite slide, which is our payroll employees in The UK is at a record 29,700,000. That's the size of our market. Our average pay in The UK is about £27,000 per annum, and there's 30,000,000 people employed in that market. And when people move, you've heard of the great resignation, you've heard of the jobs crisis in terms of there's no there there no there's no labor to fill the jobs. That's a good market for us. So, you know, these stats are all pointing in the right direction.

15:09 Now I I promise you I'd just, for a moment, talk about the labor shortage in the blue collar market. There is not an unlimited amount of labor coming across the borders from the European Union any longer. In fact, COVID has actually changed the market for all countries in that migration and borders now have changed in terms of the flows and in terms of the ease of which labor can be employed from different countries and deployed into different areas. So what we've gotta do is focus on what we call good work. And what does a worker want? Because in a shortage, the work is king. They want good paying conditions. They want a steady income. They want a good, safe, warm environment in which to work, and they want cheap travel to work. They want to be close to work.

15:55 Now what is the what is the right employer look like? Well, this is a respected, well known brand with a positive culture, purpose, and further opportunities. So we we would then naturally wanna partner with good good employers, give flexible solutions. We want to be paid

16:10 fairly, and that's what we're looking at right now, our commercials. We want the compliance and the respect for the worker to be paramount with with our relationship with our customers. So the full cultural alignment, and this is what we call good work. Now if you're offering good work, you can attract workers. And if you're not, obviously, workers have a choice. Just a little step that shows you how far up the value chain we've gone in two years. In the bottom right hand corner there, you'll see our average pay rate has risen by 17%. That's average in two years. That's how that's how far up the value chain the entire super tank group of STAFFLINE GB has moved up the value chain.

16:55 Now you've heard a lot about ESG. I'm sure, you know, you like me, you're getting lots of Internet newsletters from various journals touting themselves as experts. I want you to think of ESG, environmental, social, and governance, as a competitive advantage with People Plus and our you know, look at our hallmark statistics there, 15,000 learners into jobs. We're training prisoners. We're providing good work to 38,000 temps on a daily basis. 60% of our labor force temp labor force are Europeans with settled status. We really are providing good work to those parts of the community that can sometimes be left behind. So this is our USP, and it's a competitive advantage because with the supply chain dynamics at the moment, our customers, which are FTSE one hundreds, have all got lots of regulation coming down the pipeline in terms of their environmental impact, their social, and their governance attributes, and they're passing that straight to us. And we're front of the queue in terms of our social good.

18:01 Now strategy is all very fine, but what is what about the action behind it, and how is it translated? Now I'll just remind you, we have four key pillars to our strategy. Capitalizing on our lead our market leadership in our contingent workforce, recruitment, broadening our portfolio into white collar and permanent, focusing on driving people plus growth, and finally, as I said, we've got too few fear in a great market called Ireland we need to bulk up and invest. First of all, we announced and, Dave, if you look at the right hand side of the slide there, a fantastic customer, which is the epitome of good work. BMW pay well. They treat their risk their their employees extremely well, and, actually, it is a environment which people want to work. We're we're providing and we're we're managing the labor force in Cowley in many in in the many operations and also in Goodwood in Rolls Royce. So that is our flagship win. It's demonstrated that STAFFLINE's back, and it's demonstrated that STAFFLINE is is is able to win very large contracts really at the top of the market.

19:08 In in 2021, we already told you about HelloFresh and Addo and Finnebrogue and, of course, Restart. But I just wanna tell you there's more to come from those. We didn't get a full annualized benefit in '21. So in '22, I've estimated, and this is not my CFO. This is my estimate. It's a it's a 120,000,000 of new business now. Daniel will come back in a year's time and tell you whether that number was right or not, but that's my calculation of the annualized new business benefit of the contract wins. All of this has been enabled by the contribution from the equity raise and the refinance. So I just want to deal with two little smaller points, restart. As you remember, we've actually won that in our people plus business, £90,000,000 worth of of potential revenues over four years in three contract areas.

19:56 Actually, we haven't recognized a penny of profit

19:58 yet even though we've been invoicing and receiving cash. We're very conservative, and we're only going to recognize profit as and when we're certain. So that's restart. It's a really secured opportunity that is now ready for the next twelve to eighteen months for us to generate returns. And then VINCI, a company that I wasn't a faint acquainted with in my past life, one of the world's largest construction firms, we've actually got a five year extension. And one of the reasons they said we were top of the list for that

20:30 extension was because we'd recapitalized, strengthened our balance sheet during tough times. We've put ourselves in a very good position because of our strong cash position to be able to be a good strong partner for them. And, of course, you'll know they're doing the Southampton to London pipeline, the SO pipeline, and we're going to be helping and providing management and recruitment outsourcing services for them. So terrific capitalizing on our core market. Onto expanding into white collar and moving up the value chain. Here, you'll just see, and you can read it for yourself. We we, you know, got a number of companies, Web Help, Hermes, and others, where we're starting to recruit call center operatives. Now if you're in the blue collar sector and you're in a warehouse or, you know, you're you're in a laboring position,

21:17 going into a call center is more money. It's it's more desk based. It's more white collar in that sense. It is more highly skilled. So this is this is a greater opportunities. And what we found was because of the million people that we have on our database, we're able to ramp up this very, very quickly. So with Hermes, they asked us to find some call center people for them, I think, in Leeds over December, and we found a 100 people and placed them within a few weeks, a matter of weeks from our database. So we we have a we we have a have a jewel there that we can move slightly left and right of our core market. It's even surprised us at how at how how successful this new initiative has been.

22:01 And then finally, focusing on permanent. If if you if you're a guru in the staffing sector, you'll know permanent's the holy grail of cash, higher margins, and and and strong relationships with your customers because customers love hiring people onto their permanent staff. It's a much more strategic sell, and it embeds you with the customer. And this is just an example with a card, and I'll leave you to read the detail. You know, we pitched a strategic relationship with them. They're a good customer of ours. It wasn't the right time for them, but they did say to us they've got literally hundreds of vacancies permanent vacancies. We put in a team, a dedicated team, and we placed a 184 people at Ocado just in the final quarter of last year. So, you know, we're not only are we the market leader in temps, but we're able now quickly to turn the tap on in permanent hire. And there's a yin and yang between permanent and temp as well.

22:58 And with that, I'll let Daniel conclude. Thank you. Thanks, Albert. Just before we conclude and take some q and a, just a reminder of the investment summary. We're a market leader. We've got an experienced management team now. Turnaround completed. Attractive portfolio of services, and Albert's expressed that through the variety and the broadening of those of that portfolio. Digital technologies, I've seen a question on that, and we'll come to that in the in the q and a.

23:25 Strong growth sectors, logistics, and Albert's just touched on a new one for us, contact centers, which, of course, is part of that new remote reality that a lot of us have got used to over the last couple of years. Resilience in terms of lower cyclicality, very important, and finally, a cash generative model. And just to finally cover the outlook as as we see it going forward, momentum from '21 coming into 2022, we will hopefully get the tailwinds of The UK and Ireland's economic recovery, which we're all seeing, and we're in the city today. And we can see that business around the city, which is excellent to see. Strong pipeline.

24:00 BMW, the latest manifestation of that. So really exciting new win to announce there, but not the derailing of any organic growth, and we've shown you that, how we've how we've we've grown the business organically. And we as directors are confident that that we've really got a good sustain sustainable growth in the future, and, you know, we're currently trading in line with expectations.

24:22 And that concludes our presentation now, and we're happy to take some questions. That's great. Daniel, Albert, if may, I'll just bring up your cameras. Thank you very much indeed, guys, for the presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions. Using the Q and A tab situated on the right hand corner of your screen. Just please simply type in your questions and just press end. But just while Albert and Daniel take a few moments to review the questions submitted already, I'd like to remind you that the recording of this presentation along with a copy of the slides and the published Q

24:53 and A can be accessed via your Investor Meet company dashboard. And once the Q and A has been transcribed and reviewed, we'll send that link to you for your review. Daniel, Albert, as you can see, investors have submitted a number questions throughout your presentation. I wondered if I may, if I could hand back to you to read out the questions and then give a response where it's appropriate to do so, and I'll pick up from you at the end. Yes. Thank you, Mark. And, you know, really pleased that you're engaging and please ask lots of questions. We don't shy away from questions. We you might not like the answers, but we'll always give you one. You a great a great question from Mark there. Congrats on results. And, yes, we have referenced the BMW contract. It is strategically important. That's why we flagged it. What what what we find really important about this is, first of all, success follows success.

25:42 So once you've actually secured a material contract, 50,000,000 plus in revenues, significant contracts in in in The UK with a top employer. Other employers and other tenders become slightly easier. And, of course, it's in the auto manufacturing sector where we've already got a strong footprint with Jaguar Land Rover. So there's a good crossover there. So that's why it's strategically important. We we can we can cross fertilize our expertise and our and our workforce in in that sector and bring sort of a sector expertise to it. And then the other thing, is less light less visible, but very, very we're very keen to capitalize on, is once you have a lead into, you know, a BMW or or Jaguar Land Rover, you have you can then have referrals into the supply chain.

26:34 So your expertise in the auto sector then goes straight up the vertical supply chain, and that's where we expect to to to to expand our market share. So it's it's it's why we're so excited about this win. It also validates the equity raise refinancing. It shows that our balance sheet can cope with a contract of this size and scale, and indeed, you know, we've run all the numbers and and and we can actually swallow it. And in times of uncertainty, a a top employer like BMW will not want to place their valuable employees in the hands of a company that wasn't as transparent and as well run as as STAFFLINE. So that's why it's so important. I'll spend a bit of time on that, so hope you don't mind. Next one is the digital transformation. I'm gonna hand that one to to Daniel, and and Michael's asking how the digital transfer transformation is progressing, and are we continuing to see cost savings and operational benefits? Yeah. Thanks, Albert. And so

27:31 it is progressing. We've decided to approach digital transformation, automation as we call it, actually, as well in a in a progressive incremental fashion rather than the big bang. And I've got one to illustrate the answer to the question, are we seeing cost savings and operational benefits? To which the answer is yes, but one stat to illustrate this. In 2020, one of the key benefits we see is automated booking of interviews. So not human beings booking interviews, but automated booking of interviews through our our Flynn chatbot. And in 2020, we saw single digit thousands of interviews booked. And in 2021, we are seeing tens of thousands of interviews booked. Fantastic. And I I looked into this last week, I knew this question will be monitor it carefully. I wanted to get the latest statistics.

28:17 But that for me is one of the biggest examples of how we're delivering on our automation and digital strategy, and we'll continue to drive that at the same time as not prejudicing the operations of the business, but actually enhancing them as we go forward. So, hopefully, that gives you some some confidence there. And and if I can just add a sort of a slightly, you know, interesting perspective to this question, which is because we're one of the most prolific brands on the job sites, total jobs, Indeed, etcetera. And because we've got this technology that autumn that is automating the harvesting of candidates who are looking at the job sites for for opportunities, we we we have a unique scale and reach in the Internet area in the virtual world where STAFFLINE is a major force. And therefore, we can outcompete in terms of our spend, in terms of our quality, in terms of our the number of jobs, and the digital transformation helps us manage that volume.

29:16 Simon, great you you said great to see significant organic growth. What's your view on future m and a? I think I've answered this question before. In the short term or certainly, if you if you look at the next two years, and I think two years at the moment is a long enough window, We've got so much organic growth opportunities, and we've got much more to go on the transformation. I mentioned the skills area and people plus. That's the 22, you know, organic story where we will transform skills, and we will it will actually increase its margins, and we believe increases revenues. We've also got a ton of organic growth coming from existing customers. You know, Samworth Brothers is a good example. They're growing. They they provide so much of the sort of essential foodstuffs in the supermarkets supermarkets and in the stores and shelves and the food to go in the country. And food to go has really been affected by COVID.

30:04 With the opening now, we're seeing lots more food to go, and companies like Samworths are at the forefront of that. So we we just feel there's a lot more to go organically. If you look at travel, we're starting to see ground services where we've traditionally been strong. So, you know, if you look at the aircraft and you look at the sort of catering that has to go into that, the clearing of those aircraft and refreshing and turnaround, we're providing labor in that area in a lot of the airports in The UK. So we're starting to see activity there. So loads of organic growth to go for. M and a never never far from, you know, from our strategy, but for the short to medium short to twenty four month window that we'll be focusing on organic, which as you know, if you've read anything about investing, is one of the best ways to to drive shareholder value.

30:51 Now someone's asked me whether a 120,000,000 is is is is is a further 10% uplift in turnover. I just wanted to caution. Maybe I'm being a bit too CEO and and and and bullish about this. Remember, we do have customers that aren't you know, that whose trading isn't going well, you know, sectors that have been more affected by COVID and sectors and and just individual companies where maybe their volumes are not growing at the same pace as Tesco, Sainsbury's, Ocado. So, you know, you get those because so we do have negative organic growth or or declines. So it's it's it's the winning of new business. The 120,000,000 is annualized new business and organic growth, but, of course, we have a churn factor as well. And there's there are customers that we've exited, and we continue to exit customers where we feel they're not either being properly commercial.

31:44 They don't understand the good work strategy or they found someone else, and that happens, obviously. Paul, congratulations. The results, what impact is this situation in Ukraine? I'll I'll just quickly talk about this. Look. Ukraine isn't in the European Union, so Ukrainians need to and this is a very it's a very, very topical and a very, very painful subject to even to even think about the pain and the and the suffering that's going on so close to our own borders here. But they're essentially refugees, and we've seen with the Afghanistan refugees, it's quite challenging in terms of work visas and the whole process. So what we've done is we've linked with the job centers, and we've linked with all the government infrastructure and the partners. Like, there's a company called Mighty who who's a which is a public company. They manage the the asylum system, the refugee system on behalf of the government, and we've got partners like Mighty. We've got strong relationships. We've bid with them in certain contracts.

32:45 So we're working with our partners, and we're working with the job centers to to help. And and, of course, with the jobs with the with the candidate shortage, people who are skilled and people who want to work are are are welcome, and that's what we're doing. Paul's asked what what what about then what about dividends? And this is a perennial question. And, obviously, we were we we refinanced last year, and we we we did an equity raise. So you wouldn't expect immediately for us to be looking at dividends because we were using the capital to gain advantages and to shore up our balance sheet and to reinvent ourselves. So in about three to six months, you know, we're starting to be free of those restrictions on dividends, which would have been, you know, part of the the refinancing.

33:33 But at the moment, we really feel we've got a lot of the organic opportunities that we can put the funds to good use. And so we are not looking at dividends for the next eighteen months minimum. We would rather give you returns, and we we know that we canvassed a lot of our shareholders, and many of them are involved are interested in the capital returns, and so that is our view. We we also feel that in times of uncertainty, as we've just gone through fundraising, we should we should keep our conserve our cash, be cautious, keep our balance sheet strong, and underpin the share price. So, you know, lots more to answer on that on on that on that subject, but certainly for the next twelve months, you know, we we're not we're not declaring a dividend.

34:21 Michael has asked what KPIs are key to measure your performance, Daniel. Yeah. No. Thanks, Albert. So key KPIs would be gross profit. Revenue is an indicator of volume and scale, but gross gross profit is the best indicator of the fees that we are earning and how well we're doing and getting fees out of our customers in an appropriate fashion. The next, KPI I would say is how successful we are in converting that from gross profit to operating profit. Really important. And then a couple of other stats as well. We've we've, commented in the presentation on gross profit per fee. So, that's in the recruitment businesses. That's the two recruiting businesses, and that shows how effective our fee owners are being. And on the People Plus side, that is at a revenue level because it's a consultancy contract business, and, therefore, the best indicator of performance there is on revenue per employee and and how successful we are winning contracts. So for me, those are the key measures. Of course, other important measures are net debt, net cash in our instance at at this year end, and and, you know, very, very you know, we we obviously monitor that daily, weekly, and monthly.

35:28 And those for me are the key measures that I would look at when I was seeing how successful the business was. Thank you, Daniel. Quick question on investing in shares. Yes. Daniel and I both made substantial private and personal investments in the company in the last twelve months. The the when the share price fell recently as a result of the announcement of war in Eastern Europe and all share prices fell dramatically, particularly those on the AIM market, We we were constrained because we had the BMW contract in progress. We were in a closed period, in a price sensitive period, and we were constrained from trading. So, you know, it is a difficult one when you see a share price that's well below we believe its value is, but we were constrained. So you I'm sure you can understand if you've got a material contract, you're not able to do that. But I don't know if you've seen today that one of our directors who stepped down after three years, he's done his turn, that's Richard Thompson, has actually acquired some more shares on the way out of in in the as he retires from the board, which is one of our larger shareholders said is quite something. He's never seen a non exec buy shares on retirement. So there there's a real confidence confidence signal for you. And, you know, we we Daniel and I will be, you know, acquiring shares shortly because just as part of our a part of our routine share save scheme, you've mentioned share save. We we we're all we're we're

37:00 all involved in the share save. Yeah. If I could just one comment, the specific question, how is the employee share scheme going? So that was launched in October, November last year. That or last year's cycle of it, and we actually had the biggest take up since 2017. So very well received by the wider employee base in the group. Good. And then finally, we we always get this question. We we always love I love to give a good answer about our strategy to defend the takeover. But, yes, of course, every public company and every CEO and every board of a public company has an obligation to protect value for their shareholders. Of course, bids fail, bids succeed, bids can come. We're we're we're I keep on reminding people we're actually a capitalist economy. So that means people can buy and sell assets in in a free in a way that's free. And so, you know, these things can come, and we're prepared for them.

37:54 If if if it's in shareholders' interest, we will consider them. We will we will do our duty, but we will not sell cheap. We have two major shareholders, Spain and HRNET, who you know between them own more than 30% of the company, and they clearly were not in the business of investing and losing money. So there's some comfort and protection there that that that that, you know, the company will never be sold cheap. But that's that's the best answer I can give is we're fully we're fully aware of these possibilities and we'll always ensure that we act in our shareholders' interest. Paul has asked the share price is struggling to reflect the true value. What are we doing to to address this? I think that today is a typical example. We've we've been on investor meet now only for a few months. We love the platform. We want to engage with more of you.

38:47 Listen. Please register on our website so that you can get regular communication registered with InvestoMeet. We'll use InvestoMeet as a platform to put out all kinds of new information. We're starting to get used to it. We did a trading statement last month, sort of a couple of months ago, and we did an investor meet on the trading statement. We we will use investor meet more and more as we get to grips with it. And, you know, if we can use this platform, which is very interactive and gives high visibility, then I think that that's that's part of it. Daniel? Yeah. Just one thing to add to Albert's comments there. We engaged a a new research company, Zeus, in late twenty one, early twenty two, and their research is available on our investor website. You can just access it through Research Tree, but you can access it through the analyst notes section on our investor page, which takes you through to Research Tree. So you can read notes on that, and that's a direct answer to the question in that we are broadening and widening the amplification of the information and the news on on the company, and and therefore more people are exposed to what we're doing and hopefully how successful we're able to to drive the business forward.

39:55 Yes. We're retail investors, Daniel and I. You know, we want information. So we think that you should have as much information as possible, at least as much information as everybody else gets. So please look at the the Zeus notes. It's very comprehensive. We spent a lot of time with Zeus, and you've got the forecast, and you've got the numbers in the notes and the detail. Yeah. Just one just one comment, I think the the same person that was asking about the share price just commented in terms of social media and Twitter. That is on our radar now in the last couple of months. Where we reliving, shall I say, those channels to the the outside world. And so, yeah, very, very mindful of that, and we'll be taking that forward. Good good good comment. Good suggestion. Then we've got one about does the CEO believe the turnaround actions which have been taken are in full force and effect of is that now? I I will say this. The turnaround feels to me to be complete in its in in in broad terms, you know, you've got doubling of profit to double digits, you've got revenue growth, you've got new contract wins, you've got reduced serious reduction in cost base, and you've got cash on the balance sheet. And that to me is classic turnaround with management that we've we've we've brought in fresh management and we've had a strengthening of the governance.

41:14 But I still believe that companies in these uncertain times should be, you know, they should be running the the business tight, you know, with full attention to costs and make sure that they do the you know, they tweak the business or they trim the sales constantly and not treat any job as done. But constantly, you know, make sure that the housekeeping is done and the tweaking and the trimming of the sales is done properly so that we don't get into the situation that STAFFLINE found itself before. That's one point. The second point is I believe we're in phase two now of, you know, emerging from a turnaround and emerging into the sunlight as it were. And actually, those sunny uplands of growth are now very visible to us. We mentioned two large contracts, BMW and Restart, which we've yet to get any benefit from as a company, and they are secured. They're in the bank.

42:07 So that that that is the growth that we're looking at. That's the sort of thing that we need to do. Yeah. Just a final question. Are you doing any city presentations like this to fund managers? The answer is yes. We are, of course, meeting current investors, fund managers, and new and prospective ones as well, and that includes not just fund management, but I suppose more mid tier wealth managers as well as your normal larger fund managers as well. Yeah. And by the way, the it's the same it's the same presentation that gets delivered. Daniel's a stickler for the rules and a stickler for the culture and the and the substance of information, freedom of in of the information and equity in the information, and he has made sure you get the same presentation as the fund managers. And indeed, we're thinking and trying to plan for next time that we might do the investor meet presentation on the same day as our results.

43:01 For whatever reason, the schedules fell in a different way this this this time. But, yeah, ideally, we would wanna do it on the first day of our results so that everybody gets the same information on the same day. That's great. Daniel, Albert, as you can see, you've answered every single question as usual. Thank you so much for being generous with your time, and thank you to all the investors for their engagement this afternoon. I'll shortly redirect investors to provide you with their thoughts and their expectations and their feedback, which I know is important to you both. But before doing so, I wondered if I may, Albert, just ask you for a few closing comments. Thank you. And so just thank you to all of our loyal investors. I mean, I see you guys, some of you probably on the on the on the message boards. You make me smile and but but you're very smart, and we we want to have a strong and close relationship with investors, particularly retail investors. It's been a growing market as we've seen right across the world. We feel that the company has been a bit distant in the past.

43:59 We want to make sure we engage. And so the the the business is in a really good place. Of course, no company, because it's because it's a capitalist market, you know, can perfectly predict the future, but we're doing everything we can to make sure that we get the most out of STAFFLINE and its divisions and extract all the value that's there to be mined and to be delivered to the market. So thank you so much for for attending. We know your time is precious, and we really appreciate you engaging with us this afternoon. Thank you. That's great. Albert, Daniel, thank you once again for updating investors this afternoon. Could I please ask investors not to close the session as we'll now automatically redirect you for the opportunity to provide feedback in order that the management team can better understand your views and expectations. This will only take a few moments to complete, and as usual, I'm sure we'll be greatly valued by the company.

44:47 Behalf of the management team of STAFFLINE GROUP PLC, we'd like to thank you for attending today's presentation. That now concludes this afternoon session. So once again, thank you again, and good afternoon to you.