Team Internet Group (LSE:TIG) — Interim results for the six months ended 30 June 2021

0:01 Good morning, ladies and gentlemen, and welcome to Centrelink Group PLC investor presentation for the interim results for the six months ended 06/30/2020. We do apologize for the late starting this meeting. Throughout this presentation, investors will be in listen only mode. Questions or encourage can be submitted at any time by the q and a tab situated in the right hand corner of your screen. Simply click q and a, scroll to the bottom, type your question, and press send. The company may not be in a position to answer every question received during the meeting itself. We'll have the company review all questions submitted today and publish responses where it's appropriate to do so. These will be available via

0:33 your investor meet company dashboard, and you'll be notified once these are ready for your review. I'd also like to remind you this presentation is being recorded. Before we begin, we'd like to submit the following poll. I'd now like to hand you over to Ben Crawford, CEO, Michael Redahl, FD of Central NIC Group. Good morning. Good morning and thank you. It's great to be here. So let me just kick off with our first slide here. So we're here today to present CentralNet Group and our results for the first six months of this year. And and we're happy to say that we've achieved a record 20% organic growth during this first half. We we report in two segments.

1:20 And, as a quick description of what our company does, we provide the tools to businesses to succeed online in two different ways. Firstly, with online presence tools. So those are things like web addresses, websites, email, and so on. And, as you can see with the bar charts on the left there, we made a small acquisition during the course of the last six months. And so we've we we've adjusted up by putting the the the figures from the first six months of last year before we bought them so we can accurately measure the organic growth. And you can see that that part of the business grew at 11%, year on year.

2:07 And then the second part of our business is online marketing. So that's online customer acquisition and revenue generation for websites. And, and there again, we made actually two acquisitions. So we've topped up our own, h one of last year, revenues with the revenues of the companies we acquired after h one, in order to have an accurate measure of the organic growth of our business. And in this case, it was 28%. And that's brought us to a total of 20% organic growth year on year. In terms of the highlights, back at the beginning of last year, we made the decision to, to invest $9,000,000 in annualized costs in additional staff and systems. We did a whole reorganization with a we built our business through a number of acquisitions.

3:09 We built out our head office functions, back office functions, introduced new systems, replaced senior management, a number of different, business units, and brought on a whole product team, a whole HR team, and so on. And and because we felt that this would allow us by centralizing the control of the back office functions to,

3:36 give our teams the freedom and the tools that they needed to really drive organic growth. As you can see, it's been super successful that 9,000,000 per year, investment has already in the first half produced 29,000,000 of additional revenues. Our growth accelerated during COVID, but it's continued and, fact, accelerated more as COVID's been been waning. So, we're very clear that this isn't a COVID related spike that we're going through now. It does relate absolutely to the changes that we've made to our business. And, and, again, on the privacy side, there's, as as you all know, there's there's a lot of discussion about online privacy, about companies, using private data of of, of people on the Internet, and also of using cookies, which actually place a piece of software on people's computers to monitor their activity.

4:44 Those things are in the process of being banned. They've been banned by Apple. There's legislation coming out, particularly in Europe, to to restrict them, and they're being banned by Google as well. Happily for us, we've never used either of those tools in our online marketing business, and we and and and that probably does account for some of our growth of customers of using other services that use those the the, those measures, looking around for an alternative that's proven, but we absolutely believe that that will support us in a sustained and long term way because we have the clean online marketing tools. I'll just briefly mention some of the other operating highlights.

5:34 We only got into the online marketing business in the last, two years. And with that came an expertise in artificial intelligence, which we didn't traditionally have. And so we've now appointed, the head of of data and AI from one of the companies we acquired across the whole group, and we'll be bringing those new technologies to to our business as a whole. We made some new appointments, to the board of nonexec directs directors. We also, among the customers that we won in the past six months, we won JISC and DOT London. So two UK government contracts that we're proud of as a UK, headquartered company.

6:21 We have a bond, we issued in Norway, and we tapped that bond, in order to make a couple of acquisitions and, were immediately oversubscribed and ended up issuing our bonds at a 104.5% of nominal value, which in effect means for us, we're paying a lower interest rate, which is great news for our future planning. We acquired the two businesses, Safe Brands and Wondo during the first half. We made some deferred consideration payments for some of our earlier acquisitions, and our CFO, Michael, was able to lock in a hedge, which means that we're way less affected by the ebbs and flows of the currencies that we deal with than we were, say, last year.

7:13 With that, I'll hand over to Michael to delve into the details of the important numbers. Thank you, Ben. On the first two slides, we've been very much focused on pro form a top line growth. But the great news is that also on a reported level, all the figures on income statement and the cash flow statement have improved substantially.

7:38 So both gross revenue and net revenue up by 57% to €175,000,000 and €55,000,000 respectively. And also adjusted EBITDA increased by 36% to $20,500,000 in the first half of this year, which just for comparison is already way more than we did in the full year 2019. Also adjusted EPS has increased by 29%, which is more than we actually predicted at the road show that we did in September last year, when we raised 30,000,000 Sterling of capital. Everyone who joined us then has made a decent return. And but more dramatically, our operating profit, so after all the other below EBITDA items is up by 68% to €4,700,000 and the adjusted cash flow is up by a dramatic €128,000,000 128 percent to almost $26,000,000 in the first half of this year.

8:49 Moving on to the income statement itself, as I had already mentioned revenue and gross profit are up by 57% fully in line, which then also implies that the gross margin has been fully stable, which is great. Given that normally or historically the online marketing business has delivered slightly lower gross margins. So the accelerated growth of the online marketing business would have diluted our margin. However, we were able to actually compensate that through improvements in both the online presence business and in the online marketing business to fully offset that product mix effect.

9:36 Looking the items below EBITDA, I would want to highlight the amortization of intangible assets, which is the one item that has gone up the most. Despite this, we've still been able to increase the operating profit by the mentioned 68%. This amortization of intangible assets is an item which only exists under IFRS and which penalizes companies with an acquisition strategy. Given that on each acquisition, you would then need to identify certain part of the purchase price relating to specific assets owned by the company at the time of acquisition and then amortize it over time.

10:22 It is important though to note that other than depreciation on tangible assets, which go through a physical wear and might be might need to be replaced at a certain point in time. This amortization of intangible assets does not imply any future cash outflows.

10:40 Moving on to the balance sheet. We're happy to present the strongest balance sheet the company has shown. Our equity at book value went further up from $117,000,000 to $119,000,000 way more, almost 1.5 times the net debt that we currently bear. And if you look at the constituents of the net debt, you see that the cash amount has increased by almost $11,000,000 and that is despite the fact that we that we just acquired two companies for $11,000,000 plus we also honored a few earn out agreements that we've done on historical acquisitions given the great performance that they've gone through.

11:26 You might now wonder where does all this cash come from. And here on this page, we are showing gap figures. So the gap cash flow of operations has tripled from the first half of two thousand twenty twenty to the first half of two thousand twenty one from $5,500,000 to $16,600,000, which is roughly three quarters of the entire 2020 cash flow for operations. And as we've as we've done for the last few road shows, we are also adjusting this cash flow for specific deal related items, so which are not which are not related to the day to day operations of the businesses that that we own.

12:18 And also with these adjustments, you will see that there is a consistent history of this cash conversion ratio increasing from 180% in 2019 over 115% in 2020 to now even 126% in the first half of twenty twenty one. And those who have been following our road shows for a longer period of time, remember that most of our businesses operate at a negative net working capital or simplified. First, the customers pay us and then we pay the money down the value chain. And which which then implies that actually our growth, it's fine is financing itself. And and here we're actually seeing the final the final proof that actually higher growth rates translate into even better cash conversion than historically.

13:19 To finish up on the on the financial section of this report, we felt it would be it would be important to demonstrate a few below EBITDA items just for for the purpose of better understanding them. So the increase of the operational expenditure from h one two thousand twenty to h one two thousand twenty one is largely, and for the majority of it, owed to the acquisitions that we've undertaken. So just with the acquisition of CodeWise, we acquired 140 new talents in Krakow, Poland, which gives us access to a very interesting talent pool for for tech resources. And and also the the investment into new staff, group functions, sales and marketing, and and tech resources that Ben alluded to is included in this figure already.

14:18 The second item amortization of intangible assets we've also just addressed. So, these are items that will fade out for the old acquisitions at a certain point in time. As we would do more acquisitions, this item might then be replenished. However, all the amount that is shown on the P and L has already been spent as part of the purchase price initially paid and none of this is cash has any cash impact either in this period or any future period. Then the non core expenses. These are then costs which also don't relate to our day to day operations, but to the acquisition and integration of new businesses.

15:05 And given that this has so first of all, the purpose of stripping this out is to give a fair and true view of the operational performance of the businesses already owned. But given that we've now had this item for several periods in a row on our income statement, we also now endeavor to basically insource more of this. And everyone who's ever retained a London City attorney will know that a few hundred hours of these quickly equal the the salary for a qualified in house legal counsel. And that's one action item that we are now looking into in further reducing these costs. Last but not least, Ben has already briefly touched on it, The finance cost for the bond. First of all, the bond was a great tool to allow us to acquire quite a few assets, basically all the 2019 acquisitions and all the 2021 acquisitions without any dilution to the shareholders.

16:12 And the interest that we are paying on this bond is substantially less than the aggregate EBITDA that we acquired with these or through these acquisitions. The good news is, first of all, the capital markets here, I should say, that capital markets has trusted us in 2019, which is great, and we are very we are very we have a lot of gratitude for this. But the latest market TAP or market test through the TAP issue in February has disclosed that the also the debt capital market has become much more comfortable with our specific profile and is now willing to borrow money to us at substantially lower rates than initially.

16:58 So this makes us hopeful that when we finally go out to the market

17:03 to refinance the bond, which will be due anyway somewhere between the second half of next year and the first half of twenty twenty three, that hopefully we would then be rewarded for the hard work of the last few years by lower interest rates than on our than our initial virgin bond when we basically introduced ourselves to the market for the first time.

17:29 With this, I conclude on the financial section and hand back to Ben who will run you through some future thinking about our strategy. Very good. Thank you, Michael. We have built a business through a combination of organic growth and and nonorganic growth, and we continue to have a healthy pipeline of potential acquisitions. This is our approach.

18:03 So we're looking at businesses that are earnings accretive. In other words, we're we're, value biased. We're always looking for targets that match our own profile, meaning that they're recurring revenue businesses and clearly ones that have the same kind of cash conversion that we do. Synergies is something we're looking for, so we're clearly not not planning to go into a completely different type of businesses, but ones where we can, for instance, combine the buying power of the businesses and and potentially do some cross selling between them. We're always looking for entrenched customers.

18:49 The stickiness of our customers is one of the real investable qualities about our business. And then access to growth markets. Now this may mean geographic markets as we do have customers all over the world, or or specific types of buyers as we also have enterprise customers, small business customers, resellers, and so

19:13 When it comes to integration, our first priority is to switch the to group suppliers and back office functions, which which gives us, additional control over the business as well as making sure that it's very efficient in the way it's run and freeing up the leadership to really focus on growth. And and growth is we really where we head immediately. We'd like to grow the businesses pretty much as soon as we we acquire them, and that, often means, potentially resourcing them, cross selling, and using the the the tools that we have in our arsenal to help them grow. Before we buy any company, we do have a a synergy plan in place, and those synergies can, gradually be realized.

20:03 But we feel like stabilization growth is number one. Cheaming synergies then follows through. If we do,

20:12 make staff redundant from a particular company, we actually if they're high quality staff, we'll typically reemploy them in another business, which can use their skills to to to grow as we we really feel like there's a premium on growth in our in our industry.

20:31 Now here's an example of a case study of a a company we bought at the end of December in 2019, TEAM INTERNET. It was a it was a distressed seller, and so it was a special situation, involved a lot of very complex negotiation with the people that the seller owed money to, but we were able to pull it off. And in the end, it acquired the company for under four times trailing EBITDA, which in itself was a coup, but then we're able to grow it by 16% in the first half year that we earned it and then by for the further 14% the next half, and then in the last half by 25%.

21:21 Now we did clearly, invest, additional resources in the business, through staff. We also, made an acquisition

21:34 this year where we by by putting together the, technologies and these teams from this company with the company we acquired, we were able to make some, innovations, which were able to further drive up our growth rate. So everything came together very well, but this was, of course, also against a a background of, new regulation, new restrictions on the kinds of activities that this company does online marketing, which happily did not impact on our business in any way, and we don't expect it to in the future.

22:19 So jumping to the next page, we we, have a long standing, commitment to to ESG. Last year, we did introduce a new program, which was a a tree planting program where we actually plant a tree, for every domain name we have under management, and that is a number in the tens of millions. And so it's clearly a very significant reforestation project. Also, through our SKNET fund, which is a because we operate the country code for slovakia.sk, We set up a fund there, related to the Slovak language and the national interest of Slovakia, where we've, granted over €500,000 over the past few years to initiatives to support education, to support cybersecurity, and accessibility of the Internet. So for instance,

23:28 an application in the Slovak language that it's just people who are blind to operate smartphones as they can't obviously, smartphones don't have buttons that you can fill. And and that's one of dozens of examples of really worthy projects that we have funded in that way. We actually, first announced that we were a carbon neutral company back in 2012, and we were then. But we did proceed to make 14 acquisitions of companies that weren't carbon neutral. And so it's been quite an effort to, to change the ways that they operate, as well as to to offset their carbon their carbon footprints, which we have now done. And so we're, although we've gone from $3,000,000 of revenues to, the number in the market's over 350,000,000, now we're back to being carbon neutral again and and obviously happy about that.

24:31 Our workforce is extremely diverse. We do have offices all over the world, and and, typically, our offices reflect the mix of of of, people that are in those various locations all over the world. We do have a clear policy of considering diversity priorities in all of our hiring and promotions, and, and we are addressing the the relative lack of diversity on the main board. And lastly, though, I I I think in more general, thinking about inclusivity, it's actually very core to our mission. Our mission statement is making the Internet everybody's domain, and and we actually do that. We have customers in almost every country in the world.

25:23 And unlike some of the other large tech companies, we're not simply making them passive recipients of our services, like Facebook accounts or Netflix. We're actually, providing them with the tools to build their own websites, to build their own businesses online, and hopefully to create the Facebooks and Netflix of the future. So I'll just conclude now with a summary of our strategic priorities. Probably the word you've heard most, today is the word growth, and organic growth is absolutely, top priority for us. And this means new customer wins, supporting existing customers, cross selling our services, launching new products, contracting with new suppliers. So there's a whole range of activities around that we're focused on.

26:20 Achieving operating leverage. On the one hand, that comes from cost controls and making savings in future periods through continuing our integrations with the companies we've acquired. But, also, we do expect operational gearing to enhance our margins as the group scales up. And, indeed, if you look at our peers on Nasdaq, they may be significantly larger than us. And and when you have a look at them, you'll see that their margins are significantly higher than ours. And so it's clearly a function of scale because after all, we are platform businesses. In terms of m and a, we're very focused on the characteristics I described earlier.

27:05 We, we look at both, online presence companies and, online marketing targets and always focused on the things I discussed earlier, recurring revenue, high cash generation, stickiness, and so on. And we do have a a attractive pipeline of deals that we're working on at the moment. And lastly, sustainable debt. Our debt currently is is clearly incredibly manageable in that we have four times interest coverage and our net debt to EBITDA ratio is, under 2.5, and it's and it's our policy to retain those those metrics.

27:52 In the meantime, we will be reducing our interest rate. Our our at the time our bonds come to maturity and we're able to do so, then we will be able to refinance them at a lower rate based on the actual experience of, tapping the bonds earlier this year. So with that, that concludes our presentation for today, and, Mark and I would be very happy to, to answer any questions. That's fantastic. Ben, Michael, thank you indeed for the presentation. Ladies and gentlemen, please do continue to submit your questions using the q and a tab situated in the right hand corner of your screen. To click q and a, scroll to the bottom, type your question and press send. Just while the company take a few moments to review those investor questions submitted already, I'd like to remind you the recording of the presentation, along with a copy of the slide and published q and a, can be accessed via investor dashboard on the investor me company platform.

28:45 I'd also like to remind you that your feedback is important to the company. And immediately after the presentation has ended, you'll be redirected for the opportunity to provide your feedback in order that the company can better understand your views and expectations. Ben, Michael, we we've had a number of questions that have come through today. Perhaps if I could hand back to you just to, click on that q and a tab and where appropriate to do so, if I may just ask you to read out the question and give you a response, that'll be fantastic. Thank you. Very good. Thank you. So first question is from Simon c, and it is, what revenues do you think the current cost base can handle, and which areas are you looking to acquire in? So really two two great questions there. It it, I'd say our business is absolutely a platform business, which means that it can be, scaled up and down with very little impact on the fixed cost base. We've actually had a really, concrete example where, one of the one of the, domain names that we are supporting technically.xyzed had the most successful promotion ever in our industry, and they were able to, just them sell a million demand names in a day.

30:08 And and so we were able to to then observe how our cost how what our cost looked like. And I'm happy to say that the cost on the day that they sold a million domain names were the same as the day before and indeed continued the same the day after. So so there is very substantial scalability in our business. It's not entirely flat because, obviously, as we add more customers, that does tend to mean more customer service. And so, hence, more customer service stuff. But, in terms of the core infrastructure of our business, it's enormously scalable.

30:55 And and in principle, we could we could, you know, double the the number of products and services we were selling of the current type without really impacting on our cost base at all with the exception of that customer service. And secondly, what areas are we looking to acquire in? Clearly, we we have been doing and would like to continue to do bolt on acquisitions in the spaces where we already are, to improve market share, to introduce other audiences, to get neat pieces of technology. Also, I guess the really key thing here is that in these recurring revenue businesses, it's very rare for people to switch from one supplier to another.

31:49 So, really, for an older existing customer, the only real way or or the most efficient way to acquire them is to buy their current supplier. In that way, you get that supplier customers. And the happiness that with such a low such a sticky industry is that when you buy that company, you don't run any risk of losing those customers unlike many other industries where where there are human relationships involved. Here, it tends to be computers speaking to computers. But in addition to that, we do feel like whilst we're very strong in the kind of foundations of domain names and, we're very strong in online marketing, there's some others, spaces of online services where we could be stronger, things like hosting and website building, emails, ecommerce, and so on. So those are all areas that we could expand into, if we if we found the right deal that that and the right technology that it would all fit together.

32:56 Very good. Next question from, Nick J. Who is the competition you face in the online marketing space, and what's your sales route and advantage over others? Again, great questions. Thank you. The online marketing space is immense. The the the amount of money spent in 2020 in online marketing is estimated around $400,000,000,000, and the growth rate is north of 20% per year. And so, clearly, we're a we have very, modest market share in in that market. However, we have a a proven and sustainable and profitable strategy, and that is that we're focused on specific niches.

33:51 So we're not going head to head with Google or Facebook here. What we're doing is developing quite specific types of of of advertising, and I guess our main competitive advantage here is what we call performance advertising. And what that means is, unlike in the old days where people, used to say, look. I know only 50% of my advertising works, but I don't know which which which 50% it is. In this case, what we do is we tell our our online marketers trying to acquire customers to their website. Look. Start small. Measure measure carefully when you get the return on investment you need, the cost of what it's meant you to acquire that customer versus the profit that you made from them, then scale up gradually.

34:51 And and we have lots of artificial intelligence tools to help them do that. And then it's like set and forget because they wanna get this continuous stream of customers, and, obviously, we wanna get this continuous stream of revenue. So so that's what our technology does. It brings artificial intelligence, and massive processing power and access to millions and millions of websites to the online marketer in order to enable them to to achieve that, continuous return on investment. In terms of sales routes, we we operate the software that does that, and we have both what's called demand side platforms and supply side platforms, which means that aggregators of different websites that that that have traffic can join our publishers and aggregators of online marketers, like, media buying agencies can obviously join the other platform, and then we connect them up together.

36:00 So it isn't so much a matter of us winning an individual small business. We have relationships with other companies that are winning that business and, and and take a clip of the transaction revenue as well. So I guess our key advantage is our technology is great. It really works, and it's it's, only kind of recently started being discovered by the big brand advertisers, the kind of, household name type of advertisers. So and they're using it. And so that obviously get gives us great encouragement that now this now these companies are part of the bigger group, and we have, you know, offices in London and and Paris and in The US and so on that we will be able to get them in front of of more serious online marketing spenders and, hence, build a business.

37:05 Next question. And, Michael, do you wanna take this one, Richard w? Yes. So to what extent can changes in Google policies or actions damage the company? We've actually on on on page on page 13 of the presentation, we've already shown how resilient the business is to general changes in the marketplace, like, for example, Safari blocking third party cookies or Apple rolling out its ATT ad opt in or tracking opt in functionalities. And all the growth that we've seen over the last eighteen months that we owned the the asset have happened before this background.

37:55 And that's on the advertiser side itself. So I think unless Google would go out of the advertising market, which, of course, they cannot given that it's still 90% of their income, we we don't we don't we don't see much that should happen there. It's a very healthy symbiosis that we have with with Google where we actually help them making making viewers on alternative platforms like Facebook, Instagram, or on competitors like like being they're able to their to the AdSense customer base. So it's a it's a it's a great win also for them. And on the and on the on the subscription Sorry, Michael. Can I sorry? Can I I I was just gonna jump in? So so so because I was actually I'm looking at a different question than you are.

38:50 So I was surprised by that. I know. Should have with you. I was just gonna say, just to be absolutely clear yeah. Just to be absolutely clear, our our online marketing tools are not on Google search. They're not they're not related to what's called search engine optimization at all. And so what that means is that Google can change its search algorithms in a way that impacts the order in which websites appear on the on on on the on the search results. And and I think we all know anecdotally that that has hurt lots of businesses in the past. But what we're actually offering is an alternative to that that is completely unconnected to search engine results.

39:43 And therefore, rather than being a a a, you know, Google algorithm changes being a risk to our business, they're actually any relevancy to our business because we none of that none of the traffic that we deal with is passing through Google search or any other search. Sorry to interrupt, Michael. Back to you. No. No. No worries. And thank you for pointing out that I got the wrong question of Richard w. My my window had already scrolled down a few pages. So the the quest the question is what levels of surplus investment has CNIC made in f y twenty and f y twenty one to drive organic growth. So, if you take a simple math and we take that $9,000,000 annualized expenses that we alluded to in the beginning of the presentation and differentiate that from from our historical cost growth, which was more inflation plus plus a bit, that would probably make that roughly six to seven out of the nine are actual additional investments.

40:52 The rest, we would have probably also experienced just like all companies go through a certain inflation. In order in order to address this, we will be in the future focus our hiring more on markets where we've, first of all, access to, like, for example, Cracow, Poland, and where and where average staff costs are lower in the than in the places where we've been active historically. So we believe that we will be very good in managing, salary inflation, and and and focus more on on really adding specific talents for for new projects that should then be immediately or short term revenue enhancing. Right. Would that the next one too? Or Right.

41:39 Future future guidance on m and a. Also here, we had we had the slide where where Ben showed in detail what our acquisition criteria are, which are it must be accretive, it must be recurring revenue, It it must either add new technological capabilities or provide access to new geographic markets or ideally both. So so that's that's, let's say, the generic factors that we look at for every acquisition and but but then, generally, we have we have a strong position in both online presence and online marketing. So we will then wisely deploy the capital at hands among those two main verticals that we serve.

42:27 And on the and on the on the multiples, historically, we've been very good at buying at great value in the online marketing vertical and in the online presence vertical, whereas whereas probably the, the average prices in online marketing have been even greater than in online presence. But just to quote some, precise figures, so the the three online press acquisition that we did in 2019 had an average multiple of 6.3 times trailing EBITDA, whereas the three online marketing acquisitions, TEAM INTERNET, CODEWISE and and Wando had an average multiple of four and a half times trailing EBITDA.

43:14 So all all highly accretive instantly even without realizing any any of the envisioned synergies. Go ahead. Thanks, Mark. Right. Did you have Yeah. The only point the other point was the target size. So as you see, we we serve everything from from mid single digit millions to mid double digit millions. And most likely, would also depend with where our next few acquisitions would sit with them. Thanks. On the now on the David M's question, what threats to the business have you identified? It that that's a great question. We've got we've got we've got the kind of toughest threats, I think, that that that really any business has. We're up against Amazon and Facebook and the world of apps with Apple and Google.

44:12 And the reality is we always have been. We have been since since before the company listed, and we grow and grow and grow. I think our business is enormously resilient and proven to be again and again and able to grow, even though we're up against such formidable competition. Because, obviously, they you know, Amazon and Facebook don't want companies to have their own websites and emails and just sell sell products themselves. You know, they they want, people to use their platforms, but the open Internet can continues to be hugely resilient and and grow.

44:58 And happily, we do have Google on our side because Google's entire business model is based on on on businesses advertising to acquire customers to their websites. And so so we do have a heavyweight in that corner happily. Michael, probably you want to I'll read it out to you, though. Frederick b, could you speak of your extraordinary costs and how they're divided? Also, is the entire amortization of intangibles post due to acquisitions or is some of it from internal development? Right. So actually, in the current reporting period, so the first half of twenty twenty one, there were three items in there, acquisition related cost secondly, integration and streamlining costs and third, other costs.

45:51 And I will briefly allude to the three. So the acquisition related costs were higher than in the first half of twenty twenty. This is as first of all, we've financed we've actually completed two acquisitions, Safe Brands and Wando. And given that the CodeWise acquisition had just been completed in November 2020, some of the costs related to it then spilled over to 2021. Also, we had a few expenses on basically issuing the bond and preparing all the different due diligence documents around that.

46:37 The second item is then integration streamlining costs, which according to note five of our interim accounts were $2,100,000 It's a simple fact that we are not yet through with the full optimization and integration of some of the twenty nineteen acquisitions. And now we also have had some expenses for the integration of our latest three acquisitions. Over time, this in the absence of of of new of of new acquisitions that was this would then fade out and also go to zero. The acquisition rate, of course, are a bit more volatile. Basically, if there's if their deals, they come back. If there are no deals, they they they would go away almost entirely quite quickly.

47:29 The last the last item, other cost, basically relates to the business review where just as we've just alluded to, we as a board must have an opinion on how to allocate our funds between the different activities that we have and also potentially other other new verticals that's that are directly adjacent to our business model. And you will base you will basically see the outcome of of this in in in the form of future acquisitions and how we allocate the money that's that the group has available on the different verticals. But this will be an item that will fade out, you should not expect that item anymore in in future reporting periods.

48:18 Good. Thanks, Michael. Alright. Reading another one. If your competitors in The US have achieved scale and are enjoying higher margins, then that implies a significant moat that you're on the wrong side of. Well, let's put it this way. Six years ago, I think our revenues were around $3,000,000. Now they're around 350,000,000. So I think we very much have have crossing that moat in our sites, so it's a way way narrower moat than it used to be for us. We're absolutely confident that that that that we can join the the the major players in our industry in a matter of a few years.

49:06 And and and in order to do that, we can do that vastly slowing down the the the speed of growth that we've had so far. I think we're running out of time, so I'll take this quick last one. What are main drivers of accelerated organic growth? It's, our customers buying more products from us, than before. It's, we have some patented technologies and some unique technologies that, enable our customers getting business tools from us to make business on do business online, make more money with us than with our competitors. And it's the overall growth of the Internet, more companies getting online, more online companies needing more customers and having more traffic that they wanna monetize.

50:03 So those are really the underlying drivers of growth for us. I'm afraid we we're we're in an investor roadshow, so we have another call in in about a minute, But I just want to say You've answered all the questions, so thank you very much indeed to both of you. And, Ben, just if I could perhaps just ask for a few final words just to to wrap up on that basis, that'll be great. Absolutely. I'd say that when we when we first IPO ed on AIM, we we focused solely on institutional investors, and I guess we're in that in that habit for a long time. And and and the only way we could explain our company was having a whole hour sitting down with people going through the details. We hope now that we've, we've we've we've come up with the successful way of conveying what a fantastic investment case that we have now. But all of that said, we are very accessible.

50:59 And so if people do have further questions and so on, we're always happy to answer them because there's nothing we enjoy better than talking about what a great company we have. So really appreciate everybody joining the call today. Thanks very much. That's fantastic. Ben, Michael, thank you again for updating investors today. Could I please ask investors not to close the session? It should be automatically redirected for the opportunity to provide your feedback in order that the management can better understand your views and expectations. This will only take a few moments to complete and is greatly valued by the company. On behalf of the management team of Central NIC Group PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Thank you, and good morning. Thanks