Zinc Media Group (LSE:ZIN) — Interim Results

0:00 Good afternoon, and welcome to the ZINC Media Group PLC interim results investor presentation. Throughout this recorded presentation, investors will be in listen only mode. Questions are encouraged and can be submitted at any time via the Q and A tab situated on the right hand corner of your screen. 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 publish responses where it is appropriate to do so. Before we begin, I'd like to submit the following poll. I'd now like to hand you over to CEO, Mark Browning. Good afternoon,

0:31 sir. Afternoon. Thank you, Lily. Afternoon, everybody. Thanks for joining. Welcome to you all, especially if you're new to our story. It's good to have you here. So we have a short presentation for this afternoon. It's gonna pull out the main highlights from our January to June results. K? All the images that you see on the screen in front of you are from programs produced from around our group of companies. This one in front of you is for a new BBC series. It features Rob Rinder and Rylan Clark. It's called the grand tour, recreating the original sixteenth century travelogue, but very much in the twenty first century fashion. So do look out for that. That has been publicly announced, but the broadcaster hasn't yet said when we will be able to watch that on our screens.

1:23 So that is on its way. Right. To the key headlines. All of our key performance metrics are green. They're all up, and this is the best h one set of results for a very, very long time. So we booked just over 18,000,000 in the first six months of the year. That is an increase of 68% year on year. So first half of last year, for those who remember, was around 10,800,000. So here we are on 18.1 in the first six months. We're reporting adjusted EBITDA profits just of around £200,000, naught 200,000. Again, good to see the number getting positive. Good to see the direction of travel for a first half set of results. That's the first time for a long time. So compare this to an adjusted EBITDA profit of just $100 for the whole of the financial year last year, and you can see the acceleration of this group.

2:24 It also compares to a £600,000 loss in h one twenty twenty two. So, again, the direction of travel is very, very encouraging. Gross margins in the period were significantly up 41% compared to 33% for the first half of last year, and the edge, as we said at the point of acquisition, is driving a lot of that, but not all of it. Organic growth. We're really obsessed by good, strong organic growth even in difficult times. This is all our businesses excluding the edge, and that has increased 12% year on year, and that will rise further. The organic growth trajectory will rise further as we look at full year results. So a good strong customer base driving this, providing those ongoing net revenue retentions that we all want to see. And cash at 5.8 as at as at the end of June is 2,200,000 higher than it was at the end of the year.

3:24 So we're pleased with a very strong set of interim results. Let's look a little bit towards the future just to bring this to a sort of summary section. We're very strong position for the rest of the year. Currently looking good for next year too. So revenue now secured for this year sits on 35,000,000. That is 8,000,000 ahead of the same point last year in 2022.

3:51 The pipeline for this year is still very good. We don't give you the full pipeline because there's lots and lots of big numbers in there. We give you the number that is at the tipping point to quote a TV show, and there is £7,000,000 that we believe is highly advanced for the rest of this year. So we could finish north of 40,000,000. That depends on how quickly we get into production on the pipeline that's highly advanced. The Edge is performing really well ahead of our acquisition expectations. They're on for another big year similar to last year, so it a '22. Integration is going really well. They are now colocated here in our London, ZINC HQ with all of our other businesses and labels that operate out of London.

4:40 So we're increasingly confident of meeting the expectations that are in the market that the brokers have put in the market for the full year. Looking ahead to next year. 11,000,000 already secured for 2024. That is 5,000,000 ahead of where we were at this time last year looking ahead to this year. So all indices, all KPIs are green and all are up. We'll put a bit more color on it in the next two slides to go a little bit into a little bit more detail, and Will will take us through those. Alright. So this just gives a bit more of the detail as to those key financial metrics. So all moving forward positively. Revenue, see, 18,000,000, up 7,000,000 year on year.

5:29 The gross margins of 41%, up eight percentage points year on year, and that is attributable mainly to the Edge joining the group. So in the group for the first half this year, weren't in the group for the first half last year, And the Edge produced content at higher gross margins than traditionally achieved on the television side. That was one of the big attractions in acquiring the Edge. EBITDA profit wise, we are at 200,000 for the first six months of the year, $800 up year on year. And that is particularly pleasing for us as we've continued to invest in anticipation of future growth. So, for example, in our ZINC communicate business that makes content for brands and businesses.

6:20 And, for example, on our TV side, we have invested in a new label that we launched at the beginning of the year that's based in Bristol. It's called Atomic. And for a business like that, we are carrying cost in the first half of the year, but no revenue.

6:41 The improved profitability is anticipated across the group in the second half of the year as TV production is traditionally weighted towards the second half. And then finally, balance sheet wise, we're fairly robust with cash of 5,800,000, and that's 5,800,000 as at the end of June, and it's around 5,800,000 as at today as well. That's up on year on year or since year end. And the main reason for that is working capital inflows and really good working capital management. From a revenue point of view, two things to pull out here are that revenue has grown both on the TV side and also on the content production side. That's content production for brands and businesses, which is our ZINC communicate and our edge businesses.

7:38 And then from an organic point of view, we're growing by 12% year on year. We expect that to be even higher for the full year, which is a really, really important metric for us. If we just then look at TV in isolation, CTV has gone up 20% year on year, and that's driven by strong performance from our Redsource, our SuperCollider, and Rex labels, and they've only actually been launched in the last few years. And we've had a really strong first half from Tern. We've been in the group for for five years now, and they continue to superserve the nation's content quota, particularly with the BBC. As I said, new hires in Atomic are not yet delivering any revenues in h one, but they will in h two.

8:29 So Atomic won its first commission, and that'll start delivering in the second half of the year and then going through to next year, and that's a contract worth over £1,000,000 with National Geographic. And I'll also note that that is international revenue that really helps to diversify our revenue base. And then finally, from a revenue point of view, our content for brands and businesses has gone up a huge amount, maybe not surprisingly as it's driven by the edge being part of the group in the first half of this year where whereas they weren't last year. And the Edge are performing well ahead of acquisition expectations, and the integration is also progressing really well. We've got cross divisional business development opportunities that are identified, and we've also colocated the edge with ZINC's other London based businesses, and that's gonna help enable cost savings as well as further synergies going forwards.

9:32 And then ZINC communicate is a smaller part of this content, the brands and businesses revenue, but it's growing, albeit from a low base, and profitability will come as it scales. And it also helps to bring in revenues to other parts of the group where it brings in brands to help fund content that's made on TV budgets such as the big in America commission that we're gonna come on to in a little bit. Okay. Thank you. Right. So let's give you a flavor of what's driving the numbers. This is another one of our programs that you'll see on your screen produced in the first half of year. Lenny's Laughter Class from Red Source channel four, another new series with the potential to return.

10:21 In the first six months, we won the award for production company of the year. This was back in January. This is really important. It's important for our people. It's important for our clients. It's important in our sector. These meetings naturally focus on the pure numbers, but it is our productions. It's our creativity. It's our people who drive those numbers. And this is an international award. It's where the biggest and the best global players vie for that top award as production company of the year. So that includes the BBC, that includes ITD companies, Al Jazeera, other international companies, big US companies, and so forth. So you win this award by winning lots of other awards, by producing the best work. And while our financial performance is really strong, it's our creative performance that ultimately drives all of that and is the kite mark of quality that we trade from.

11:16 Talking about the programs, we've now, over the last few years, developed a really clear, unique selling point and a unique proposition. If you came to the Capital Markets Day, you would have heard me elaborate on our USPs, these unique selling points. So why ZINC in effect? What is it about ZINC that differentiates us from our competitors and that we need to believe it? And if you didn't attend the Capital Markets Day, you can see the highlights on the investor section of our website. So we are trusted to deliver for our clients their biggest shows at the highest quality. For some of our clients, that may mean that we're trusted to deliver the biggest reputational programs. Putin versus the West, Balbaby, gender wars for BBCs, Channel Fours, and others. These are the reputationally defining shows for those big channels.

12:13 For some of our clients, they will trust us to deliver really big volume for them. Bargain Loving Bricks on your screen is one of those for channel five. Hundreds of hours of television that needs big scale producers to be able to make that. Any one time, it could be between a hundred and fifty and three hundred people working on a program like that. It is big volume. Some of our clients, they need to trust us to manage and to bring in big name presenters, and I put Idris Elba and the paid back in full program in front of you for an evidence of that. And others, it would be to deliver new breakout shows like the program. So trust, trusted partner, trusted to deliver the wrapper of high quality is what we are famous for, and there's plenty of illustrations in front of you.

13:04 And then we think about how we are talked about. Look here at how ZINC is getting talked about for all the right reasons now in all the right places. Look at this brand exposure. We're in The Guardian. We're in The Mail on Sunday. We're in The Daily Mail. We're in The Times. We're in The Evening Standard. We're in The Telegraph. This is the first six months of the year. In The US, Hollywood Reporter, Variety Magazine, all featuring ZINC and ZINC companies. So brand exposure is at the absolute best it's been for many, many years arguably ever. You can follow the news. All of this is available to you if you want to visit the website, the zincmedia.com website, or follow us on the Twitter account or the LinkedIn pages. We're getting increasingly quite good at telling our story, not just to investors, but to all sorts of stakeholders, including our staff and clients.

13:56 So do follow there. Now I wanna give you one illustration of a real unique selling point that this group has. Big in America with Alex Folizzi. She, if you watch TV, is the presenter of the Hotel Inspector. This was commissioned by the Department of Business and Trade. It's a great illustration, I think, of the power of the group of companies that we have in this portfolio. It was pitched and won through the ZINC communicate business and then produced by Turn TV. Neither of those businesses could win that on their own. They have to be in a group with the other capabilities that run alongside it. Each episode tells a story of one UK business looking to break into America to make it big in America. It's the it's it's our it's ZINC's biggest digital content commission ever. It's a TV scale budget, nearly £400,000 for something that will never hit a television, but is made by a group of companies and a group that is anchored in TV.

15:00 That's the TV revenue. But this will sit and does sit on LinkedIn. So it's a great illustration of where one part of the group can empower another part of the group, neither of which could do it if they weren't part of ZINC MEDIA GROUP. And it's an illustration, like, of where content creation is headed. Linear television is our staple, but we're now making content for brands and businesses at television levels for lots and lots of different partners. When you were if you were here before, you'd have seen me talk about one we did for Red Bull, and the year before that, you've heard me talk about something we did for Sky with Adobe, all driven by brands, but at TV budgets. So I'm gonna play you a very short clip.

15:54 I'm Alex Polizzi, and I'm on a mission to help five UK companies break America. We're super excited about the opportunity. With products from plantable books You've got the book in the ground, it grows the main character. To flying boats. We're developing a high speed ferry. And with guidance from me, the department for business and trade, and industry experts There isn't a second meter if you don't get this right. Do they have what it takes to make it big in America?

16:24 Or is it the second meeting you don't get this right? It's like investors talking to us, isn't it? So there it is. That's how you make it big in America. You can watch that on LinkedIn. Right the Outlook. So we're in a very good shape for this year. Very good place indeed. The market forecast from the brokers of 36,000,000 revenue with 35 secured. 7,000,000 more is possible. That 7,000,000 is highly advanced. It needs to get into production. Sooner it gets into production, sooner more it hits this year, if it doesn't hit this year, will hit next year. Of that 35,000,000 secured, around 20 to 25% is now international.

17:09 We're getting back to the level of international business that we had pre COVID, and that critical diversification is part of our strategy. We've diversified around television. We've diversified into businesses content for brands and businesses, keeping a watchful eye on The UK market and the international market. So it's really good. It helps diversify any risks that may materialize in The UK. For context, that was around eighteen percent internationally last year. And so for the full year, that could well be higher than the mid twenties because it'll depend partly on how much of that 7,000,000, which is quite weighted to international falls into this year.

17:52 Looking ahead to next year, there's a market expectation of 39,000,000 of revenue for next year. We booked 11 for next year as of now at this time in this year. So, again, for context, that is 5,000,000 more than this time last year we had for coming into this year. So, again, those are our key metrics. All of them are positive. So a little update on the strategy. And for those that are perhaps new here, the investment case. ZINC is a group of businesses, 12 businesses in total. Eight of these are new since 2020.

18:39 That is how much reinvigoration, how much transformation has gone on in this group. It's it's unrecognizable from five years ago. We're talking about our sort of content range, the sort of range, the continuum of content. I've given you illustrations there. So if you see on your screen, you've got documentaries and specialist factual TV,

18:56 things like gender wars, things like Putin versus the West, things like Boul Bay. They're produced by our labels, including bootlapping and the new one out of Bristol, Atomic. Then you come along into factual factual entertainment where we've made good investments in the last few years. This is the most lucrative part in commercial terms, whereas the specialist end tends to be reputational. We want both. So definitely more lucrative in the fashion entertainment and the entertainment end television. New labels like Rex, like Red Source are helping to drive our proposition in that market. Then you move through towards branded entertainment where the brand is the client. I've just played you big in America where the government is the client, but that might have been pinball or Red Bull not long ago or Adobe when we were doing stuff with Sky. So that's where the brands themselves want to be the commissioning body through to corporate film, where the edge sits and some of our ZINC communicate businesses sit, and then we have audio, and we have podcasting, and we have Bumblebee post production, which is our tech and post production facility.

20:10 All of that is anchored in the quality storytelling. All of that is about being a trusted partner. And we've been building over the last few years this central core proposition, the platform of excellence. Everything that ZINC does, all ZINC companies, whether organic companies that we're launching or companies we acquire, on this core platform. Everything we do, everything we make is now supported by this common set of tools. And over the last few years, we've invested each year ahead of our growth, which is there now, creating that to support everything we do. So in 2020, we invested heavily in post production. That means having a full cloud based solution, something we've been able to roll out across all our businesses. It's much less costly than having lots and lots of edit suites.

20:58 You can have a small number of actual physical boxes. We have 15 to 20 around the group, but we're running between fifty and sixty actual edits from that same real estate and that same structure because everything is connected via the cloud to mean that we can be much more efficient in how we spend that part of our budget. That infrastructure is now common across Glasgow, across London, across Manchester. When we launched Bristol, we put Bristol onto the same platform. In '21, we put a new finance system in place, meaning people can now be hired across The UK, working on the same system where you get consistency and efficiencies where the labor force may be cheaper in one part of the country than another.

21:44 In 2022, because of the scale of productions we were operating in, we bought more of our own kit so that we're we're doing hundreds of productions a year, not hiring kit from kit companies all the time. We're using our own kit and recycling it, reusing it across multiple productions. Is often couriered overnight from one part of our business to another, increasing those efficiencies, multiplying them over and over again around the group. And now as we look to '24, marketing, communications,

22:13 our people, our culture, all starting to get the benefit from being part of a larger group so that we can sell it as a proposition when people think about joining our group, and we can drive increased efficiencies. And as we organically launch new businesses or acquire new companies, we can bring them in bring them in on this in this column platform, help drive leverage and future profits down the year. And it helps to, again, explain the proposition. What is ZINC? Why the ZINC USP?

22:42 That is one reason. Little illustration of that is this. You will have come across the Russell brand for Aurora caused by the documentary that channel four aired through dispatches a week or two ago. This was made by an external production company, a company called Hard Cash Productions for channel four, but it was post produced by ZINC's post production company, Bumblebee, which is part of that central platform we've just been talking about that serves all our businesses, but it also can serve third parties. We've positioned Bumblebee as a as a climate conscious, losing the name, the climate conscious cloud based work anywhere post production hub with centers around The UK.

23:30 So why come to Bumblebee for post production if you're another production company? Because it has best in class technology. It already supports all of ZINC's businesses. It's scalable. It gives you remote facilities. And in case of this production, which was, as you will now know, highly contentious and highly controversial, This is what ZINC does. Just look at the programs that we made that I showed you. The Putin program, the gender awards program, the program we're making now with Idris Elba. These are high risk, high reputation, highly contentious projects often with big name presenters. This was a two year investigation,

24:07 a six month post production piece of work in Bumblebee, and nobody knew because our systems, our security, and our people are trusted. So we are now able to commercialize elements of that central platform that we've been building in the last few years. Now this next slide talks about the shape of the business, and I think it's right that I we'll lead on this one. Okay. So this helps to understand the makeup of the group. Some of you will have seen this before. I think it's really important to to understand. So we are around 60% TV from a revenue point of view, TV production and distribution, and then content production for brands and businesses makes up around 40%, and that comprises the Edge and ZINC communicate.

24:57 So prior to the Edge, we were largely weighted towards TV. TV is absolutely still growing as we've demonstrated in the first half of the year, it's still very important. But it's the acquisition of the edge has helped to diversify revenues outside of TV as well and make the group nicely balanced. From a repeat customer's point of view, so the middle column here, this really speaks to revenue quality. We have a considerable amount of repeat customers. In the edge and in TV, over 80% of revenues from repeat customers. And both in the edge, it's from blue chip companies, and it's the same in TV. It's from all the major broadcasters, BBC, ITV, channel four, channel five.

25:45 It's really good revenue. So when we look at how much we have booked, for example, going into next year, that is one metric, but we also are very confident with these customers coming back to us for new projects or for repeat commissions. Much of ZINC MUNICATE is new, and so you can see that in terms of repeat customers, that's relatively low, but that's just to be expected given how new it is, and that will increase as it grows organically. Then finally, we've got gross margins on the right hand side. So we've got a mixture of gross margins in different parts of the group, and a lot is over 50%. The considerable amount of TV production is over 30%, and we've got some TV that's under 30%. So we've worked really hard at increasing gross margins in recent years, and that's partly been helped with the acquisition of the Edge. We make over 50% gross margins on a a lot of their content.

26:45 And then within TV, we've invested in edit suites and people over the last few years to increase margins on a lot of that content from under 25% to well over 30%. And then we've also decided to scale the business even further by investing in winning some high volume, lower margin contracts to gain a foothold in new television markets, which are at slightly lower margins, but give us that scale. So we've got a huge bargain loving Bricks commission with channel five, and we make Sunday morning live, a live program on the BBC, which takes us into a new space. Okay. Happy to answer any questions on that if you have them.

27:32 Let's just conclude this part of our talk. Just in terms of these new businesses, it's really important to understand the investment that's gone into these. We have now got this reputation for spotting and launching new businesses. Eight of them out of the 12, as I say, new in the last three years. They account for about 40% of the revenue booked so far this year, but they take years to really start to contribute to the bottom line. The growth in our EBITDA this year is driven by those businesses that we launched in 2020 and 2021. Five of those are now driving this year's performance, but some of them are not yet. They're all incrementally profitable. They will cover them their costs.

28:21 As they mature, they'll start to drive profit through the EBITDA line, and as profit grows in our EBITDA line, which is evidently now doing, both in a half yearly way and if you look at the forecast in an annual way and for next year, as that reaches million, 2,000,000, so operating profit and profit before tax starts to materialize. So just on the journey of ZINC to where we are in our ten year horizon, we're talking now about ZINC having reached initial scale. We're defining that as a plus £30,000,000 inflection point.

29:07 Over the past ten years or so, ZINC has been subscale. And loss making, that is the pink section on this chart. It last made healthy profits when it was in the green section at 60,000,000 sort of turnover. So these are indicative of the scale needed for a public company to be able to really drive bottom line profit performance. Things are going really well here. We're in that box on the right hand side, the dotted red box, where we've now got that initial scale. We're on track for an excellent year. We're seeing proper growth in the EBITDA, and we know that that can continue because of the businesses we've launched in the last couple of years, which will drive us forward next year and beyond. So to the potential outlook for the future, this is a a visual of our television businesses and the business we're in in brands for brands and other companies.

30:05 So we have very strong presence. Towards the top of this round all is factual TV where we have a strong presence. We have a strong presence in corporate film and brand films. Then we have no presence in many parts of the market where the opportunity for organic and acquisitive growth may be. Look at drama, children's TV, entertainment, comedy, or sport. All areas we could organically invest in or we could acquire into. Same in content for brands and businesses. We could move into events. We could move into animation organically or acquisitively. There's lots of things on our list that we could be doing, but we're keeping a very close eye on not getting ahead of ourselves, delivering to what we say we're gonna do, really driving that organic growth, and allowing these investments to push through to EBITDA and beyond to operating profit.

30:59 So our final chart, we'll adopt some questions. Revenue for next year, looking good. Revenue for this year, looking good. That growth of revenue, that quality of revenue, and that visibility. We've got the quality that we talked about from repeat business. We've got the growth we've talked about, up 68 half year on half year. We've got the visibility we talked about. The pipeline for this year is still very good. Pipeline for next year, good, and very good business already booked at 11,000,000 for next year. 5,000,000 ahead of where we were this time last year. So all metrics are really positive. We're confident in meeting those market expectations. We've got the initial scale now to drive a strong EBITDA profit level, and that starts to feed into operating profit, and we're getting close to that kind of scale now.

31:45 So considerable further headroom is possible in a company like this, both organically and through acquisition in time. Let's stop there, and I will flip my screen and find questions. Well, thank you very much for your presentation this afternoon. Ladies and gentlemen, please do continue to submit your questions just by using the q and a tab situated on the top right hand corner of your screen. Just while the company take a few moments to review those questions submitted today, I'd like to remind you that recording of this presentation along with a copy of the slides and the published q and a can be accessed via investor dashboard. As you can see, we have received a number of questions throughout today's presentation. Mark, could I please just ask you to read out the questions and give responses where appropriate to do so, and I'll pick up from you at the end.

32:34 Thank you. Lots here. If you join me before, you know, I I like to answer every question if we can, so we will rattle through these. We're just gonna take them anywhere where they come. Not filter them at all. Ask a question, I will answer it. Matthew, are you happy with your current brokers? How often do you review their performance? The reason I ask, there's no public broker note available. Your company is flying under the radar in investment circles. There's a lack of liquidity in your stock. Market maker only purchases in low volume despite there being shares available. Share price dropped despite the great results in the EBITDA we've seen. So fair question. We review them as a board. The board review the brokers at least annually, and we have an open dialogue with our brokers and with other brokers, actually, and with our investors.

33:27 And ZINC is our brokers at the moment, one of our market makers, although there are others. There is you have to find it, and we're not allowed to share with you any broker note because it's their note, not ours. But if you go on to Bloomberg, if you, you know, have to to some part of it, you'll find all the information you need there, or you can subscribe to something called research tree, again, where brokers put notes out for people to read. That's the way it works, I'm afraid. My hands are somewhat tied there or speak to singers or any other one. They will they will help you out there. It is an issue for ZINC, the profile, the story, the opportunity. It's a crowded market, so we review it regularly. We're in conversations with them and others all the time to make the best decision on behalf of all of our shareholders.

34:17 Obviously, the vast majority of our shareholder base is the large institution of shareholders as well as high net worth and retail who are equally important. So happy to help you, and maybe I can pick that up with you one to one if that would help further. Next question. Are you planning further acquisitions, or is your priority organic growth? I think I've made that. Hopefully, I've answered it. Organic growth is the absolute priority. That's where our growth is coming from. And if a proposition arrives, then our investors are very keen, but we also look at acquisition. It has to be the right thing at the right time at the right price, so organic growth is definitely dominating our thinking. Can you share with us any feedback on your institutional investors?

35:05 We are we've done a large number of meetings in the last twenty four hours. Our investors are really pleased with this performance. All our metrics are good. They believe in the power of this group to become a vehicle of considerable scale in the public market. It's unique in The UK public market. So all signs continue to the road ahead. They want to support us. They want to go on the journey. They want to scale the group, and they want to see the profitability that is now coming through and will push through the bottom line continue. So we're in a good place in keeping alignment. What's the state of The UK television market? Can you reveal how much of your revenue is UK? How much is international? The UK television market is fine, particularly because it's under the same. We've written a lot by the BBC who are have a different commercial model. Commercial television in The UK is where the the weaker elements are because of advertising advertising market being very, very, very sluggish.

36:14 So ITV channel four, channel five. But we, you know, we we and then as the international market, so we do very well in the international market too. I think the key thing for a company like ZINC is actually because of our small market share, as we have evidenced with the growth we're doing with television growing at 20%, a company like this can still grow very well even in a sluggish UK TV market or a sluggish TV market or a sluggish global economy because our share is small, our headroom is very big, and we're winning share of other people. So while the macro issues are clear for everyone, I think a company like this presents opportunity to be countercyclical in an in a cycle of downturn. So we and we're showing that. So we're very, very positive about the future.

37:00 What have we got on the list? So when will your strong EBITDA growth flow through to operating profit? Will, do want I've I've said a bit on that. Do you take that? Yeah. I mean, the short answer is next year, we expect that to be an inflection point for operating profit and then really through to 2025. Actually, I'm just seeing the next question is partially related. When do you expect all your investments to come good? Well, we expect, I think as we're saying earlier, a lot more of them to be generating the sort of profits that we expect to see next year, therefore, and a lot of that profit to start to come through in the group's bottom line. Again, even more so in 2025.

37:47 And, of course, we're balancing that with other investments that we can make, which as Mark explained, you're on a scale of some, you know, potentially bigger than others. Some are at the at the end of hiring one or two people. But certainly, terms of the ones that we've made, they're all incrementally profitable or or or covering their costs, but we expect them to start to generate and contribute proper profits next year and then even more so in 2025. There's a couple of questions in here on AI. One from Barry. How do you view the sort of new scramble for AI? What is AI in your market? Is it positive, negative?

38:33 There's another one. How do you see generative AI playing a part in growth? So we have a AI working group within the group, both from creative business winners and of technology people from the platform that we've built. We are using some AI at the moment for production techniques and for some preproduction development. Our CTO is looking at use of AI in areas of compliance where you have to, for example, match up individuals who appear in your TV show, particularly this access documentary. You have you have lots of people have to give permission to be in the program. That's quite a labor intensive part of the workflow. Is there a way of of using AI and face risk recognition to, in effect, marry up that workflow and make it quicker? So we see opportunity for cost reduction in time, and we see opportunity for business development in time, and the working group will keep reporting to me every six months on where they see things develop.

39:38 How this is one from David. How is pricing determined for your services? How price sensitive are they on the services? So pricing for television, you can actually find a lot of this yourselves if you go into many of the PSPs, BBC IT channel four, channel five. They publish their tariffs for types of television for certain times of the day at certain genres. So if you wanna know if you wanna produce a drama program, you can pretty much find out what a drama on a Friday night, ITV, 8PM might be. So the tariffs are largely set by the broadcasters. The job of the production company is to pitch ideas to a need within the tariff. There's always a negotiation to be had, but they're broadly in a range, and then to be able to make margin on those, good margin on those. And that's down to having the kit, the people, the techniques, the post production, the management, the cameras to make your own margin on those television programs. That's slightly different outside of television where it's much more done on a case by case basis. It's much more of a commercial negotiation, which presents good opportunity as well as some risk if you don't negotiate right.

40:47 But margins in the brands and business side of our company, that 40% that we was talking about, are typically higher than in television because of the way it's much more negotiation. It doesn't be price sensitive to you know, that's that's part of building in. If inflation is if hotel and travel accommodation is more this year than last year in Europe, that goes in the budget, and the client has to accept that. So I hope that's explained a bit about how pricing is determined. It's different across the types of revenue we're talking about. Is the tougher trading environment alluded to in your release or by other companies creating acquisition opportunities as smaller companies in these seek to be seek protection from being part of a larger group.

41:36 If someone wanted protecting, I would be nervous, but I get the point. We would only buy successful high performing, high potential companies. I think the market there are some we've had some conversations where where people have found some headwinds, and therefore, it's probably accelerated their thinking about scale. So I guess there is it it may well throw up opportunities is the answer to that question, but we want to be as cautious and as diligent as we were when we acquired the edge on any company we're thinking of bringing into the group. How significant is the resolution of the Hollywood's writer's strike? Again, the the advantage here as factual is that factual is often referred to as unscripted, so it doesn't have writers.

42:23 And there is one US client actually who is highly advanced in conversations with us around a piece of unscripted television partly in response to the fact that their scripted pipeline has obviously been much slower. So I see opportunity in that, and that is good to know it's come to an end anyway for the sake of the sector, if nothing else. And I think there's another one here. Have market dynamics led to changes in the balance of demand between content genres? How much has the breadth of your genre and client base helped to insulate ZINC? I I believe really firmly that our diversification strategy of 2019 to 2022 is one of the reasons why we are doing well now.

43:10 We've diversified our TV genres. We've diversified our geographic locations, both in The UK and internationally. A lot of TV buying has to be bought outside London, partly why we're now in Bristol, why we've accelerated in Glasgow and Belfast and Manchester. So that diversification of geographic location, diversification of genre from factual into factual entertainment, diversification into brand funded content, the likes of Big in America, diversification into content for brands and businesses, and podcasting. That is one of the reasons why we are seeing very good numbers in an otherwise quite tricky market. Right. Have I missed it? Yeah. Just one other.

43:56 Yeah. How do you prioritize and allocate funds and resources across different projects? Return? Yeah. So quite a lot of TV and content production is resourced by freelancers. But it's absolutely critical that we have the right level of resource and cost base internally, and that is where we can make you know, we have synergies, economies of scale by having in house resource and whether that is camera kit, editing suites, production management teams, editors. We're constantly constantly looking at the resourcing plan for them, looking out the next three to six months. What content are we due to make? What might we win?

44:51 How does that then fit in? How do we make sure that we maximize that utilization and maximize that resource and have that quality of team that can deliver those projects supplemented by freelancers. So it it it really is via systems and having quality management across post production and kits and production management that facilitate that. We've answered all of them, we think. Do do contact us directly. If you wanna ask more, we'll pick this up further. Mark, well, thank you. And I think you've addressed all those questions you can from investors. And, of course, the company can review all questions submitted today, and we'll publish those responses on the Investor Meet company platform.

45:38 Before redirecting investors to provide provide you with their feedback, which I know is particularly important to yourself and the company, Mark, can I please just ask you for a few closing comments? Sure. Yes. Please give us your feedback. We really want the conversation to be two way. So let's let's consider the key takeaways. Revenue quality. That's about how much repeat business this company can do. We've given you the metrics on that. About 80% of it can return year on year. Revenue growth, organic and acquisitive going well. Organic, particularly positive for this year. Revenue visibility, pipeline for this year of 7,000,000, already secured 11,000,000 for next year. So good visibility, good revenue quality, good revenue growth. We're going to meet the market expectations, confident of that. We've got the initial scale now, and we're starting to see proper EBITDA profitability come through.

46:32 That will in turn start to drive operating profit profit before tax in the year ahead next year. Edge, doing really well. Good acquisition for them. Good acquisition for ZINC's investors performing ahead of those expectations and plenty of headroom, significant headroom, both organic and acquisitive in the years ahead because we have small market share even in a difficult economic climate. This is a company that can be countercyclical and will continue to grow. Mark, Will, thank you for updating investors today. Can I please ask investors not to close this session as you'll now be automatically redirected to provide your feedback in order that the management team can better understand your views and expectations? This will only take a few moments to complete, and I'm sure will be greatly valued by the company. On behalf of the management team of ZINC Media Group PLC, we'd like to thank you for attending today's presentation. Good afternoon to you all. Thank you all.