Zigup (LSE:ZIG) — Interim Results for the 6 months ended 31 October

0:01 Good afternoon, ladies and gentlemen, and welcome to the Red A Northgate PLC Interim Results Investor Presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged. They can be submitted at any time via the Q and A tab that's just situated on the right hand corner of your screen. Please just simply type in your questions and press send. The company may not be in a position to answer every question it receives during the meeting itself. However, the company can review all questions submitted today, and we'll publish those responses where it's appropriate to do so on the Investor Meet company platform. Before we begin, I would like to submit

0:33 the following poll, and I would now like to hand you over to the head of investor relations, Ross Hawley. Ross, good afternoon, sir. Hi. Good afternoon, and and thank you, and and welcome, everybody. This session is part of our interim results roadshow program and is the second online session we've undertaken, the first being at our full year results in the summer. Do please have a look at the early one if you want a little bit more detailed introduction to the business on that, but this is gonna focus really on our

1:03 results. But I have with me Martin Wall, chief executive of the company, and Vincent, CFO. I was gonna first ask Martin to just do a short recap of of business, but really just highlights in terms of our interim results. And then we'll go into some themes and and questions. And, obviously, Philip will also talk at some points about the financial performance and cash flows of the business. So, do please put, questions into the the chat, and we will, manage those as we go through. But I really wanted, with that, to then hand over to Martin, to, talk through the the highlights of of the results. So, Martin. Okay. Thanks, Ross, and good afternoon, everybody. Just to sort of recap what we do so that we understand what the business is about.

1:48 I think our purpose, best described as keeping customers mobile. You know, from our perspective, we have an integrated services platform, which deals with the life cycle of events that can happen when customers are either running a fleet or have some form of claim or service that they need to deal with under their insurance. I think we can best describe the provisions as services like vehicle replacement, vehicle rental, repair, where we own our own body shops, salvage vehicle disposal. We have our own brand, VanMonster and La Casion in Spain, which sells used vehicles. A VanMonster brand is the is the biggest seller of used vehicles, used vans in The UK.

2:34 So we have some very good sort of data points on what's happening in the market. And as I say, it's about a plethora of services across our platform in the life cycle. So just imagine any event that happens, whether that's roadside recovery following an accident,

2:49 replacement vehicle, taking a vehicle to a a repair body shop to have that repaired, courtesy vehicles, legal services recovery, salvage, and disposals. So as I say, quite a range of across our platform, and that's been expanded if I sort of quickly move into our interim sort of results. You know, the strategy that we set out in 2020

3:16 of putting our services together to create this platform has been delivering. You know, through this period for these results, we've seen demonstrable growth, in the underlying business. And what I describe as the underlying businesses, if we excuse disposal profits out of our results, the underlying business grew 9%, predominantly through the claims and services business, which, which has been a growing market for us. So overall, we have seen double digit growth across all of our p and l metrics. We've seen, quite a bit of revenue growth, so up nearly 17%, and PBT now nearing 100,000,000 for the for the period. More importantly, we've seen, good returns on our capital invested as well.

4:06 Our ROCE is up to nearly 15%, and our cash collection has been very strong, which is supporting our dividend position. We'd be able to declare a 10% increase in our dividend for for the interim period.

4:21 So overall, we're seeing growth in our sectors that we serve. The momentum from the business, contract wins that we previously announced, this is the 300,000,000 of lifetime revenue, from some large brand names that we have publicly made available. Those contracts are reaching their run rate and maturing, and they've given us strong growth, better growth than we'd anticipated. And also in the period, we were successful in winning new business as well, converting from our strong pipeline. So we took on, motability repairs for a

4:54 special for that specialist company where we're undertaking a large volume of repairs, which went live about two months ago. And if we look at that momentum, it's continued to be strong. So the pipeline, as I say, is is is very good. We expect to see further progress through our claims and services business. So overall, as we stand back and look at the results, these have been these have been really, really good results, and we expect that momentum to continue.

5:23 Fantastic. And shall we, just sort of think about some of the, when we've been going around on on roadshow, we're into our second week. But I think what some of the things which have come out from that, and I think what we've talked about in particular is actually to say the theme of the strength of the platform, which got brought together through the work over the past couple of years.

5:47 Do you want to just talk a little bit about how you how that's actually coming through and what you're seeing and and how our customers are actually seeing and finding that that that strength and what they are looking for? No. Indeed. I mean, you know, we talk about, know, we've seen this sort of structural trend to to outsource. You know, we we announced in the last period, we announced the win with, for example. So that was a fully outsourced contract to deal with the with the fleet that that's under that brand.

6:15 So what's particularly appealing to to the prospects and the customers that we have signed up is this integrated, position of providing services that are more joined up. And when I look at the sort of the market and the structures that are happening, you know, there are companies that can provide services in the verticals, and you can get best of class, best of breed in those verticals. But what's more important in a more sustainable future is about providing that integration so that the end customer journey is a better experience. You don't have all the handoffs. If you did with something like an incident, let's say, like roadside, accident recovery, for example.

6:55 You know, previously, you would have a firm that would come and make that recovery, take a vehicle to a to a storage yard, engineer would have to go out and look at the vehicle, authorize it to be repaired, take it to a body shop. Somebody then would have to provide provide a courtesy car replacement vehicle. So you have all those events happening. What we have done is combined that into a single single proposition.

7:18 So, therefore, you'll have that sort of strong customer relationship where you're dealing with all the events through that life cycle. And we've seen that polarization from customers in the market who want that service. So that's the sort of momentum that has driven the growth that we've seen in this period, and there's more to come.

7:38 And and as you talk about that momentum in the period, I I think, you know, what was being clear is that it's not just about new wins. Is it it's actually people who come onto the platform, seeing the kind of services we've got, and then actually looking to add more both in terms of volume and also in terms of other other products and services alongside because they see the benefit. Indeed. I mean, with existing customers, we saw and we did announce some new contract wins with existing customers where they are developing that integrated approach. I mean, what I would say is day one, sometimes you you win a customer, and it might be on a vertical. It might just be a repair contract that you're undertaking. But what tends to happen and what tends to follow is they want the integrated services with the courtesy car, the replacement vehicle, the like for like, vehicle, and so forth, and the other services that flow from that. So as those contracts become available to us through the supply chains, we're having those conversations. We're making good conversions on that and then joining up the service.

8:35 And what's more important as well is these are not single touch points. You know, these are services which are being delivered on a a digitized basis as well. So we're on that journey of creating that digital platform where everything that we take on in the business today comes through a digital platform. So we invest the time, and we make that investment in our systems both from the customer's perspective and our and our perspective so we get tied up, joined the position so that we can take a lot of the manual effort out of of that service position. So this is very attractive to customers. You know, this is a strong market for outsourcing. As I said, that structural trend to outsourcing is there. There's plenty of market growth to go for. You know, if I gave an example, you know, we're we're undertaking just shy of 200,000 repairs in the business, today.

9:29 You know, the size of The UK market alone is 4,200,000 repairs. So there are plenty of opportunities to grow that space into that space, and there's plenty of opportunity to join that more of the services with our existing customers. So in many ways, what you're describing is that there's a push from the market in terms of this structural trend to outsourcing. But, also, we're pulling them in because we're actually offering them services almost they didn't know they they they wanted in the first instance, but actually seeing them the benefit of having them all joined up in one place. Yeah. I I would say they know the the services exist. We're not reinventing the wheel in terms of the services. What we have reinvented is, as you say, joining them up and making them available in one place. And that's the unique feature that Ready Northgate is offering into the into the market is that integrated mobility

10:16 platform. You know, when we first came together back in 2020, you know, we had to describe what mobility meant because people had this vision of mobility in The UK and it was something else. What you've seen now is you've seen a number of international brands, you know, come out and rebrand under the mobility banner because it's important about providing that service that enables that mobility. So, yeah, this is this is this has been a sort of a growing position. Yeah. So it's very much it's a differentiated offering from people. Indeed.

10:47 And with that strength, in in some ways comes, I think, what we've talked about in terms of quality of earnings or visibility of earnings, some of the statistics which we talk about in terms of contract visibility, which we have out more more than 12. Is that something Yeah. No. I mean I mean, that's a key point for us, Ross, to to be to be honest. You know, the quality of the earnings, I look I look at the contracts. I mean, we made a point in the interim results to say that 80% of our claims and services business, was underwritten for the next twelve months plus. So these are these are contracts with large, you know, insurance companies and blue chips that are multiyear, and they tend to renew in terms. So they we have a long term relationship with these customers, and the new ones we'd hope to be the same.

11:35 You're digitizing. You're putting the IT, hooks in to be able to to to transact this business. As I say, they're multiyear. So these are quality earnings. I mean, the market,

11:46 I feel, you know, looks at disposal profits and says, okay. Well, maybe there isn't a quality earning to that. But I say, look at the underlying earnings of the business and look at the journey that we've been on from when we merged to where we are on an underlying basis, and you can see good levels of growth, which we would expect to continue from the momentum that we have. And I think that quality, of earnings, I think, is is is undermarked. Yeah. Fantastic. I I sort of think with with that as a good backdrop on that, it's probably worth handing over to to Philip now. Maybe you just talk through some of the highlights.

12:21 And you obviously, we talk about the underlying growth within the business. Philip, do you want to just give some highlights and some thoughts on that, please? Sure. Yes. Thanks, Ross. So I'll just give an overview on three slides. I think we'll start off with our key KPIs for the H1. And we had a really good strong set of results across all of our KPIs for H1. We saw good growth on including our PBT, which grew 18.3%, and our EPS grew 18.9% in line with that growth in PBT. And EBITDA has increased 10.7%, and that strong cash flow that we've generated in the half year, we invested across our business. So we invested in fleet. We invested in working capital to take on new contracts. We invested in acquisitions such as as Fridge Express at the beginning of h one. And also, we've been continuing to make returns to

13:11 shareholders, not only in our dividend, but also in the terms of our share buyback program, which we continue to run. And we've done all of that investment and that spend whilst maintaining our leverage at 1.6 times, which is in line with the leverage we had in h one last year as well. We're comfortably within our range of one to two times. Our return on capital employed has continued to improve, 14.8%. That's up 1.3 percentage points on the prior year. And our dividend for the half year of 8.3 p is in line with our policy of paying

13:42 paying 50% of the prior year full dividend. Now if we go on, we can have a look at our revenue, and this chart effectively bridges our revenue from H1 last year to H1 this year. As Martin mentioned, we had just under 19% of growth in our revenues, demonstrating that we're continuing to demonstrate the performance of our platform to our customers. U. UK and I had a positive movement in vehicle supply in H1. We started to get a bit more visibility, and we were able to grow our revenues

14:13 4.4% without growing our vehicles on hire. And we did that through careful pricing actions through our acquisitions, but also through growing our ancillary revenues such as telematics across the business. Now Spain has had much better access to vehicles in h one, and they were able to grow their vehicles on hire, which alongside with careful pricing grew rental revenues 10.2% year on year. In claims and services revenue, that increased 25.7% or 86,000,000. And within that increase, 66,000,000 of that increase came from the contract wins, which we won in the last eighteen months.

14:52 And the platform is attracting more customers, and it's all we also got a very strong pipeline of new potential contract wins as well. So new opportunities continue to exist. Then we have vehicle sales, which increased a 108,800,000. And within that, UK and I vehicles vehicle sales increased 82,000,000. And we've extended the capability of our disposals platform in The UK VanMonster to sell cars as they're depleted from the ready fleet and now passed on to VanMonster. And over that increase, 82,000,000 relates sorry, 70 2,000,000 relates to the cars and other non fleet vehicles. Spain has also increased their vehicle sales year on year, and that's because they're getting better access to new LCVs. They're able to start cycling through the through the fleet and defleet more vehicles.

15:43 And in The UK and I, we're seeing strong residual values. They're still way above pre COVID levels. And similarly in Spain, despite the increase in supply coming through, we're still seeing very strong residual values. And in Spain, the PPEs have actually increased 200 year on year. Now if we move on to our profit, again, we have a similar waterfall here that bridges our profit from one half to the second half.

16:08 So profits grew over 18%. And our underlying business, as Martin mentioned, if we take out the disposal profits, the operating profits from all of those business units has grown over 9%. And we've grown that underlying business every year since the merger. So we've got that strong underlying growth, which is currently being supplemented by strong disposal profits as well.

16:30 So we've seen strong demand for the rental services, a supported growth in our in our total vehicles on hire across all of the rental businesses in Spain and The UK, and that increased profits by 3,900,000. And then improvements in rental margin delivered a further 1,900,000. So in The UK and Ireland, we had a rental margin of 16.3%. That's up 0.7 percentage points year on year, and Spain's margin increased 0.4 percentage points to 20.8%.

16:59 Now we expect UK and I's full year margin to be in line with our midterm guidance of 15%, but Spain is likely to be higher than that for longer now. And then we got disposal profits delivering an additional 10,000,000. So in The UK, a decreased 600,000, strong residual values and still above pre COVID levels. And in Spain, disposal profits increased 10,600,000 aided by the increased vehicle supply. And then Regis volumes continue to grow, and the business delivered an additional 5,900,000 of profits. That's an increase of 28.7%.

17:36 And then interest costs increased 6,500,000 due to a higher interest rate and a higher level of debt, which we use to support growth across the business. So all in all, Ross, a very good first half. Fantastic. Thank thank you, Graham, and thank you. I'll I'll come to some questions and try and week them in, so do please keep on answering those questions. But and, Philip, I think we'll talk about cash flows, which I think some questions are a little bit later on. But, Martin, just coming back to you. A lot of focus, as ever, has been on vehicle supply. And I think it'd be good to get your thoughts on how you see this developing. Clearly, there's been some easing in Spain. And, actually, I think you've talked about The UK as well having a little bit more visibility and more conversations with the OEMs. Do want to sort of take both markets and and get some thoughts on that? Yeah. Okay, Russ.

18:24 I mean, look, I'll start with Spain because I think that's probably the easiest conversation. You know, supply of van and sort of car has has not been problematic at all. So what we've seen is is that we've been able to take on, new fleet, meet the

18:38 demand, that we have from the customer base and new customers in Spain. And we've seen VOH, and we've seen the sort of overall position in Spain growing as a result of that. Equally, that's allowed us to rotate the fleet in Spain. So when we look at the sort of the stock that we have, you know, the Spain is now coming down in terms of age of fleet, as a result of that sort of rotation. And despite that

19:03 strong supply, you know, residual values have stayed relatively strong compared to historical position. So, you know, that sort of supply demand curve hasn't quite worked in the in in in in normal sense. So we're still seeing very strong position there. And there is some good underlying growth, that we're getting in Spain as a result of that, such that we will be expanding the network to take on that growth as well.

19:29 And then if we turn to The UK and I where, you know, I'd say, first of all, is, you know, getting hold of cars is not a problem. There seems to be plentiful supply of cars from a a wide variety of manufacturers. However, on on van, you know, 2023 has been a challenge in that scarcity. You know, the estimates from the society, motor manufacturers, and traders still shows that new registrations for vans will undershoot the long term average. So from our perspective, we see another twelve

20:01 to eighteen months where we're still playing catch up on registrations. And because vans are a workhorse for many, many businesses, it's not something that you can go without. So, you know, we've seen strong demand despite not having vehicles available. And sometimes, we've seen that strong demand coming into the business, for vehicles. So even though we've taken the fleet down and rotated some of the fleet out in The UK and I, we still achieved higher revenues and higher profitability by working the assets even harder from what we've got. But as we look forward, what we can see with orders with from OEMs on the progressive position is is that more supply will come into the market for vans in 2024. We've agreed terms with the majority of manufacturers, and there is a sort of, you know, an underscore there in terms of what type of productivity, we will see from new supply.

20:53 So I'm more confident in terms of what's coming through the pipe. As I say, it's still gonna fall short of what long term average looks like, but nonetheless, supply will pick up. Fantastic. I see a question from Steve here about the electric vehicle dynamics

21:08 in terms of how do we actually handle them on the fleet. Do we publish statistics? Which which the answer is we do. And actually, the website, you'll see some pie charts with with those. But how do you see the the EV market developing, and what are customers saying to us about what they're interested in? So so on the on the car fleet, I mean, the first thing I'll say is both on the car fleet and the van fleet, we run ahead of just ahead of The UK in terms of what's on our fleet compared to The UK car park.

21:36 For cars, I think, you know, people are sort of starting to normalize. You know, more people are getting electric cars. Therefore, a lot more will come through our business, whether we're replacing them, repairing them, or or or whatever through through The UK. On vans, I would say that, you know, the market is still playing catch up. There isn't hasn't been what I would call a proper workhorse van that can replace a combustion engine van at the moment. However, it is getting better. We've been running open days at a number of our branches where

22:08 we've had all the product lineup for manufacturers across the EV van, and we've invited customers and new prospects to come and have a look up close so they can sort of test drive and evaluate what the capabilities are of the product. And we've seen some good take up. You know, we had our first big 100 plus order from a large energy company, which which was which was good news. And we've seen that interest in terms of customers placing some orders for, EV vans, as as they come on board. But clearly, you know, the government has pushed back that day, Ross, in terms of, that transition from 2030 to 2035.

22:45 We're keeping up our momentum because we see this as a as a as a good way of transitioning with our customers. We're keeping the momentum with our open days and that evaluation, and I think we will continue to see an uptick. But but we're not gonna speculate. We will get product that customers want, and, you know, we will stay ahead of The UK car park on the basis as as things evolve. Fantastic.

23:07 You mean you said the the the word customers there a number of times, and and Ross n, not me, was asking a question just in terms about customer service and and how you track those and how you take into account sort of customer interest and and focus. Obviously, it's been a core focus for the business, always is. But just in terms of how customer service is managed and how you look at those, is is there anything you'd like to talk about? Well, look. I mean, most business is only good as a sort of customer service. And, you know, with our platform, as I said, it's been unique and something very different in the market. It's important that

23:38 we get that sort of customer journey through all of our sort of touch points right. We have a number of measurements that we look at in terms of sort of feedback. We do our own questionnaires. We get sort of public, you know, things like Trustpilot and so forth. So we get feedback from customers. As I say, we also do one to one as well just to make sure that what we have and what we're going to have as terms of products and so forth are the right things for the customer. But we take feedback all the time. Good or bad, we take feedback. You know, our teams are absolutely primed to provide really good customer service, and we, you know, we take pride from that. And if we do get it wrong, we take that feedback, put it right, and we move on. But we have a very strong proposition, good indicators, as I say, for that feedback. And as I say, we try to make sure that we we're ahead of the game in terms of what we're delivering for customers.

24:24 Yeah. Fantastic. Philip, I I wonder if now is a good time for you to just talk a little bit through the the cash flow elements. I've been talking about vehicle supply, which obviously is is a key dynamic within that, and and maybe run through how you've sort of talked about our capital allocation and and and the cash flow profile. Yeah. Sure. So we'll pull up the slide on cash flow, which we shared in our interims deck last week. Let's let Jamie pull that up. So the business continues to produce a good level of cash, and we we apply that cash following our capital allocation priorities, which are in the middle of this chart here, showing one to four there.

25:17 And we apply those allocations whilst maintaining our leverage within the range of one to two times. And in doing so, we invest in our fleet, and that's principally we fund that through our borrowings, and that's nearly doubled year on year as supply improves. And in doing so, we started to reduce the fleet age in Spain now. And in UK and Ireland, that that fleet average fleet age has now peaked, and we haven't seen it increasing in the last few months. At the same time, we've also been continuing to invest both in acquisitions and also through our share buybacks. And we've done all of that whilst maintaining our leverage at 1.6 times. Now if you look on the right hand side, you can see the actual numbers. What does that look like for h one? So overall, we use 122,000,000 of cash, and we use that to fund our working capital as new parts of the business took on new contract wins. We build up working capital.

26:13 We used it to pay our tax, fund our interest, and also to fund our dividends. And on top of that, we spend around a 150,000,000 invested in fleet, m and a, and share buyback. And we fund and we par fund those through our debt, and that's our private placement money, our RCF facilities, and also our contract hire. And our debt overall increased 94,000,000, representing that investment. Now in h one also, we spend probably around about 25,000,000 of that net replacement CapEx actually reducing our fleet age, and we'll continue to invest in our fleet as that age reduces. Now the market is operating a much older age than it used to, so we're not trying to get that down to our pre COVID age levels for our fleet.

27:02 We're gonna maintain our average age of a fleet in line with what the market requires. We're not gonna get ahead of it, and we're not gonna lag behind of it. So we're not gonna see a sudden outflow of cash as we start to invest to bring down the age of fleet. It's gonna be gradual, and it will be entirely in our control, and it'll be a different rate in Spain as it is in The UK as well. And when we look at how much we're spending on our CapEx, we're looking at that again through our leverage lens, making sure within that one to two times. So at the same time, when we've got 755,000,000 of net debt on our balance sheet, that's backed by the investment in our vehicles. And we've got over 1,200,000,000 net book value of vehicles on our balance sheet at the half year. And it's that disciplined model which we apply every time we're acquiring vehicles directly from the OEMs We're then servicing and maintaining them, and we're deciding when we dispose of them through our disposal channels, in The U. K. And in Spain.

27:58 And you can see we're generating good returns from those. You can see all of our metrics are moving in the right direction. We've got strong margins, above that which we expected them to be at this point, and we've got growing return on capital employed. And all and that's also above our our WAC for our business. So that's how we apply our cash, strong cash generation, apply our capital allocation priorities, and managing our net debt in line with our leverage overall, which is asset backed. And then the other thing I just would also point out, Ross, just making sure we don't forget is that over 56% of our borrowings over half year were fixed. And all of that fixed, they're paying an average of 1.3%, which is fixed down for ten years. So we're actually got a good lot of insulation from interest rates as well, which hopefully, don't know that yet. And our average cost of borrowing is three and a half percent across all of our debt. Fantastic.

28:54 Just to carry on, Philip, the well, to to ID really. William was asking a question just about the difference between cars and LCVs in terms of the residual values and sort of thinking about the LCV, which is obviously the bulk of our fleet. I don't know which one of you would like to take it, but just in terms of we've always said that that's sort of a gentle curve coming down. Is that still our view? And what's the drivers behind that? Yeah. I'm happy to take that one, Ross. So look, I mean, you know, just over three years ago, we were saying when sort of the market committed COVID in terms of what RVs may or may not do, what we were able to say is is that the undersupply was creating a sort of stronger in the market both for car and vans. What's happened? So that's we roll on. I I said earlier that I think sort of with vans, that's gonna last another twelve to eighteen months.

29:45 So we're seeing car depreciation residual values come off more sharply in the last sort of two months, and you might say that's expected with that oversupply or not oversupply, but more supply coming into the market. Vans are a bit different. So I think, you know, because businesses need the vans as their workhorse, we've seen that be a little bit more gradual. So van vans residual values have not come off as sharply. We've always said they'll come off and will continue to come off because they're against very historic highs, but not as sharp as as as cars. And our belief is that's probably, as I say, another twelve to eighteen months of strong position because of that undersupply. K. Thank you. There've been a number of questions, think. Ian, I'm just going to use this to to summarize a lot just in terms of sort of the the growth opportunities which you see within the business.

30:36 Philip, you've kind of run through that capital allocation. But, Marcin, in terms of sort of the the organic and the inorganic opportunities and and how you think about those. Maybe you'd like to just sort of run through the thoughts. Yeah. So, I mean, I I look back over the last sort of three years. We've done six acquisitions where we've added in to our capabilities. Philip mentioned sort of French Express, which does temperature controlled vehicles. We saw that they had vans, temperature controlled vans. So that is a an addition to the capability in The UK and I in terms of what we could offer into the market. So we got new market sectors like pharmaceutical and food distribution. And we've seen already our capability in cross selling from our sort of, our platform of services into the customer base as well. And Blakedale was an even better example. It's got a longer term to run, so that's over twelve months now. But Blakedale is traffic management specialist, so providing vehicles from 18 ton workforce protection units on the motorways through to your three and a half ton drop side vehicles that provide that sort of everyday utility on on key infrastructure products and welfare units as well. We've almost doubled the size of the fleet in that business since our ownership.

31:44 We've seen very large customers, taking on more vehicles using the strength of the platform that we have to be able to develop with us. So that's capabilities. And then I look at the market more generally with other opportunities that we see crossing our our desk. And, you know, there are a lot of small and midsized businesses that have made themselves available, whether we that's creating a bit more scale or a bit more of the services that we have or indeed some further capability. So, you know, we're an ambitious management team. We've got a very strong balance sheet. We've, I would say, got a track record of proving successfully the sort of the acquisitions that we make and integrate them into the business and creating value. And I and I think that our balance sheet gives us the opportunity to do further things if we see value being created from that.

32:35 Yeah. And then on the organic side of things, Ross, just to answer that bit of question as well. Thank you. Yeah. I mean, I said this very strong momentum. I mean, I underline the strength of the pipeline. You know, we've got good conversion rates. We've seen some, you know, good contract wins that we've announced. We put names to those contracts as well. These are you know, they can be quite lumpy, big contracts that come out of there that we put a lot of time and investment into to secure. They go through a long process of, due diligence, etcetera. But, you know, I'm very confident that with that strong pipeline, that we will see more organic growth coming from that pipeline converting, not only, you know, into the full year and beyond. And that plays the quality the earnings, as I say, in these sort of multiyear contracts. And and to just carry on on that, because Martin was asking a question just about, you know, to try and say who who are our biggest competitors or who do we come up against, particularly in that sort of that repair, credit repair, accident claim side. Is it always the same person or actually other very few competitors who can do what we do? And so it's really back to that silo Yeah. Conversation.

33:39 I mean, look, you'll always have you'll you'll have competitors in in the verticals for sure in that sort of nonintegrated space. You know? And we see some of the big names. I won't mention them in a public broadcast, but you see some of the big names there that come up against rental. But there are as I said, there's there are there are there's nobody else that is providing that sort of full life cycle of services in the same way that we do. So the way that we see competition is is it it's a choice between those procuring the services as to whether they want that integrated platform or they want to remain in the verticals and try and do something themselves. We say there's better value, a better customer journey is created when you go across the platform. And you don't have to have everything end to end. I mean, you can choose three or four things from the platform, and that could work very nicely for what you do. But I wouldn't say that there's a one single competitor that we're up in a tender one to one, and it's, you know, it's the same sort of position. So as I say, it's really between integrated or nonintegrated in terms of the services we provide.

34:39 K. Good. So when I when I look at the questions, we're coming to sort of the the end of the questions, but there are a couple which I'm I'm gonna ask towards the end. But I think maybe we came out with an outlook statement, which was very positive. Clearly, we gave a a positive view in terms of market expectations, etcetera. Do you want to I think we may well have this have this slide. That would be helpful. And just kind of talk about how you're seeing business from here, the second half, and I mean, why we came up with that comment. Okay. Yeah. I mean, look. As I said, I look at the quality of your earnings. I look at the underlying position. I look at that momentum. And these contracts, I say, they are they are multiyear repeating. So we can look through on that, and we can have every confidence of delivering on on our sort of at least our full year. We put a modest upgrade in, you know, and, you know, I think we would say, as some analysts have said, there's risk to the upside.

35:32 That momentum is very strong. You know, I can't speak confidently enough about where we are positioned in the business. You know, and that's the claims and services business. The vehicle, the rental side of things, you know, Spain has had a very, very good period and will continue to do so. You know, there's nothing that sort of on the on the horizon that stops that momentum from continuing to grow. UK supply, as I said, is getting better. So I'm confident that that supply will start to come through in '24 and continue to support the business. So so, really, I think, you know, I would expect that we'd get some further conversion out of the pipeline. I don't know if it'd be the lumpy ones or smaller ones or midsized ones, but I would expect that momentum to continue from where we are. Hence, as I say, a very confident sort of position in terms of our outlook, and that's why the board, you know, is is, you know, is representing a very strong position. Yeah. And and and, Philip, maybe I should ask this other way up. But in terms of the analyst community, I think they they're quite receptive to an upgrade, etcetera. Sometimes they have they're cautious in terms of their outlook. I think we've always had a cautiously optimistic stance on that. But I think, you know, when we've talked to analysts together, they've always sort of said there's an aspiration and expectation to go.

36:45 Yeah. I mean, as as Martin so is that if you look at h one and h two as well, I mean, we're not entirely symmetrical as a business, h one to h two. As Martin said, there's as a number of the analysts have said, there is risk to the upside rather than the downside, probably is moving to H2. I guess the the hardest bit for us to forecast is what happened to residual values in the second half. We can see strong growth still in Spain, access to vehicles, growing rental profitability. We can see vehicle supply starting to improve in The UK, and we've got our new wins coming through on the Ready platform moving up to full run rate. The hardest bit is to know exactly what would that vehicle supply look like. So exactly what does that mean in terms of disposal numbers, what that particularly in The UK, but also in Spain. So there is some ability for a number to vary slightly in h two, and that's why I think the analysts are probably taking a view which doesn't necessarily mirror h one to h two. Yeah. Okay. Thank you.

37:42 So I hope that's that's addressed as many of the questions as as we've had coming through. I don't know if you can just sort of see this as a I wanted to sort of leave I wanted to to with you talking all about the outlook, etcetera. But, also, Matthew, you're just asking in terms about easing of vehicle supply and sort of the the dynamics between residual values and and and how that interplay. Yeah. I mean, I think to put it into context, you know, when the cost of acquisition of vehicles has gone up during this sort of period, and what we're doing is we back to back those the cost of that rental. So if we have a batch of vehicles come in as a customer, takes out on rent, then, obviously, we price that over the holding costs of the vehicle and apply our margin, and that's what you have. If vehicles come in, you know, supply eases and prices go down, you can reflect that in your holding costs. And, again, you can have that sort of back to back with your customers.

38:37 You know, and where we look at sort of where we've seen inflationary pressures that we've moved to cover, that's in our operational costs. So, you know, I've said earlier, Ross, in Spain, you know, we saw vehicle supply come back, but we didn't see a corresponding drop in RV. So what whatever the position will be, RVs is a market factor where price stake is in terms of where the market is. But we price whatever vehicles we got coming through with the view that we sort of maintain the margin that we sort of guided to on the sort of medium term basis. Okay. Fantastic. So I think we will view that as being a a supplementary because I don't want to ask you to to repeat the outlook. But other than sort of, I think, summarizing, I think I wanna say just it's a very positive outlook. We're looking forward to the second half. Yeah.

39:23 I mean, you know me. I'm not I'm not the the most energetic, enthusiastic person when it comes to talking about outlooks, but I think this is the strongest position that I've seen this business in. And I'm very confident as is the board with what's coming through on that underlying basis. If we'd sat here three years ago and said we'd be producing these levels of profit, absent disposal, then the market would be very, very pleased with that sort of progress. I'm pleased with the work that our team has delivered in those underlying results, and that's the key thing. So as I say, we are very confident on that on that sort of future on the future prospects. Okay. Fantastic. I think that's an excellent way to to finish this this conversation. So thank you very much. I hope we've answered to as many of the questions as well. I obviously would like to say that it's very nice to have Steve saying thank you on the website, which is informative. That is a good cue to say. Do please go and look there. There's a lot of information there.

40:19 There's some fact sheets, and you'll also see that coming up in January, we're going to do a bit more of a spotlight session on the ready business, which has been requested by investors. So we'll be providing a, you know, a lot more context, etcetera. So I think with that, if I can hand back to the team at the Investor Meet company to to close this event. Perfect. Ross, Philip, Martin, thank you very much indeed for updating investors this afternoon. Could I please ask investors not to close this session as you'll now be automatically redirected for the opportunity to provide your feedback in order management team can really better understand your views and expectations? This will only take a few moments to complete, but I'm sure it'll be greatly valued by the company. On behalf of the management team of Ready Northgate PLC, we would like to thank you for attending today's presentation. And that now concludes today's session. So good afternoon to you all.