Elixirr International plc (ELIX) Earnings Call Transcript & Summary

Okay, that looks like we have everyone online. So I'll just introduce you to Stephen Newton, CEO of Elixirr and Graham Busby is the CFO of Elixirr, and they are here today to talk through their financial results for the first half of the year 2023. So I shall pass over to you, Stephen.

Thank you very much, and thank you for all of you who are attending this call. I know there are a couple of new potential investors and obviously, for those of you who have been supporting us so far, thanks very much for that. And hopefully, after you've seen our results, you've been very pleased with how the business is performing, you didn't mention Nick, who's our FD, he's also here. So Nick will be part of this presentation, too. So this slide trade-in and I presume we're going to try to take questions at the end. But if there's something that people would like to ask during the flow, please or free to attempt interrupt us and we can answer it there and then. So we can do both. So please feel free to do that. So yes, so 2023 growth began fantastically, and it's been going very well this year. We're very happy with the momentum in the marketplace. And I think the one thing that we are particularly satisfied with is the strategy that we've been building on since we IPO-ed and had the capital raise to be able to buy businesses, et cetera, and diversify into different industries and geographies is really starting to pay off. I think we've seen that some of our competitors are commenting about the market being very difficult. And to us, we just carry on as normal. I mean, the diversification strategy is working perfectly for us because we have industry diversification and because we are geography diversification because we have capability diversification, all of that's really leading to a robust and resilient business, and we're very happy about that, and we will continue to do that. If you look at the next slide, I've put a bit of a concept chart together to give everyone a bit of a sense as to what our actual strategy is. So we first start, if you look at the middle of that circle diagram there, there's a full words the innovation, data, digital, artificial intelligence. Now innovation was our first capability. We invested in heavily prior to IPO. And we use that as sort of the tip of the arrow to get into a client and help them become more creative and to create new revenue streams and even in some cases, cost reduction opportunities. But we use that as a tip of the arrow to sell all our other services, which you can see the design thinking, change management, digital, all the [industries] in the dark completely next effect. Our largest financial services client came this way. They asked us to do some innovation work with them. And in the end, we provide all our services to them around that you see on that wheel. And we believe this to be a very differentiated strategy, and this is why we invested in digital with our acquisitions of Den and Coast, and that's working equally as well as our innovation story. And likewise, last year, we invested in iOLAP for data and technology, which is the one you see on the bottom. Now today, we obviously announced the acquisition of a company called Responsum, and Graham will go into the detail of this, but it's a natural language, artificial intelligence system and the power of that is absolutely unbelievable. I think for those of you who've been in business for quite some time, we remember the emergence of the Internet, we today don't even believe that we could have existed without the Internet. But -- to me, our official intelligence is going to have as big an impact on business as the Internet does today. We don't know a business who doesn't do digital and use the Internet in some way to differentiate their business or to even compete because candidly, if you're not in the market using the Internet knowledge, you're not in the market. So this is going to be the same with artificial intelligence, and this is why we invested in this technology because we want to be able to just like our other technologies, capabilities, digital data and our innovation capability. We want to use that as a tip of the arrow to be able to help our clients understand what they can get from artificial intelligence and how they can deploy to make a material difference, both to their revenue and operational efficiency. And Graham is going to give you some very specific examples of how we've done that. For those of you who don't know, we did announce the partnership with Responsum sometime back now and maybe it was 2 or 3 months ago. We've seen about 40 brand-new opportunities coming into our pipeline and Graham will talk to you a little bit more about that because clients are clamoring to kind of get an understanding of how they can use artificial intelligence and what difference is it going to make to their business. The only other point I'd point out on this chart that I think I'd like to highlight, [indiscernible] I will [ beat in] in a remuneration model. I've spoken to quite a few people in the industry now. And everyone is actually pretty envious of our remuneration model, particularly for our partner team and the way we can buy our employees into this as well. And it's definitely market-leading and definitely unique. Even other listed companies don't deploy this kind of remuneration model, and you will see later we're getting continued improved performance from our partner team. And I suspect a lot of this has got to do with the fact that they're super motivated and are 100% aligned with investors in this room. So I don't see any other model that could be more like and it is starting to really pay off to in the organic part of our business. So [ for me ] just pointed to the opportunity, we're not stopping here. There's other very, very big technologies that are out there that are just as a [ placing ] point probably, you can just see there the research is showing that AI Machine Learning marketplace is about $1.8 trillion by 2030. So we want to get in on the ground floor and really be a key player in helping clients embrace this technology in the same way as they have had to embrace digital and Internet, if you like. The early, Big Data, we made that investment, as I say, last year. And the one other that we're looking at actively is looking at things like Cybersecurity, for example. And obviously, if we find any further machine learning opportunities, we'll be investing in those too. What is nice about this concept is you can see that there's also capabilities that we could also invest in. So M&A type thing, competitive intelligence, cultural transformation, just to name a few opportunities that we would be looking for companies or even organic growth into those skill areas. And likewise, you can see the orange boxes, the orange bubbles, you can see around the outside. Those are the industries we're in today, but health care, energy, telco provide fantastic consulting opportunities, very, very big markets. And this sort of tip of the Arrow strategy that we're adopting around these core technologies to get us into all of the consulting and the change that happens as a consequence, we believe will work equally as well in these three industries. So we're looking for both organic and acquisition targets in these areas. And clearly, the final sort of link to the diversification strategy that we're on is the DACH and Asia regions are obviously very, very big markets for consulting, not themselves. So we'd also look to diversifying into that. And actually, in a way, we might be a U.K. listed company, but we're actually not a U.K. company so that's quite interesting. So while we might be listed on the AM Stock Exchange, we're actually more than half of our business now comes out of the U.S. And if you add in our European and South African business is almost 60%, 70%. So -- and that trend will continue to grow. So it's an interesting investment proposition for U.K. investors because we are actually a global business. And the behavior of our business is affected by global markets more than it's actually affected by U.K. market. So that's actually quite an interesting perspective for investors. I think I'll hand over to Graham to -- sorry, this is me still -- this is -- I missed one this year. This is still me. Yes, so a little bit about our performance, obviously, because that's kind of what you want to get about. We're very happy with our revenue growth for the half, 23% up on last year, 14% underlying, and Nick will show you how that is complemented. Clearly, our acquisition of Responsum is a very key initiative for us and very strategic. Those of you who remember our IPO presentations, will remember how we were rated below MBB on sort of our marketing. And I hope all of you have noticed how much we've been investing in our marketing capabilities. And I think we've been doing a great job and very much punching above our weight there, and you can see some of the awards that are coming. And you can see some of the awards that we've achieved as a result. What's even more important is that our clients are clearly loving the proposition and being very sticky with their relationship with us. So [ Louise ], maybe if we did do some work for you, you never get rid of us, so -- and that's a good thing, by the way. Because what you can see there is we've got a 25% increase in our gold clients, which are -- clients which are greater than GBP 1 million. And obviously, also as important is that in this half, we've got 20-plus new clients. Revenue per partner is up, and again, there's two main drivers for this, I think. Firstly, to the remuneration model. We've actually increased all the partners' targets for them to earn their options and their equity. So as inflation hits and we put our prices up, we obviously put our targets up for our partners, so that's helping but also clearly, they've got more services to sell. So if you have a relationship with and you have the partner looking after 2 or 3 of our big accounts. If you add a whole set of services in like artificial intelligence or data as we've done over the last 1.5 years, that's slightly more you can bring your clients, and that leads to an opportunity to expand the revenue per partner. So we will continue with that strategy. And obviously, we'll look to add other skills and capabilities, as I described in the wheel. We're very optimistic for the rest of the year. Our guidance was 85% to 90%. Graham will talk to you a little bit about the confidence we have in that but we're feeling very confident about that. And again, we'll deliver within the range on EBITDA as we are remaining very profitable. One thing I would like to point out on EBITDA, you can see that our actual EBITDA for this half is around 30%, graham will do that. But the important thing to note there is even with the integration of our acquisitions who are generally lower EBITDA when we buy them, we are able to get our group EBITDA up to 30%, no problem by actually doing the cross-selling and improving the service we deliver to our clients. So I think I'll hand over to Graham and let him cover the results in a little bit more detail.

Very briefly before we do -- sorry, I'm new to the story so this is possibly something that [ Louise ] knows very well already. So in terms of the cross-selling services, how do you manage different partners' interest and that remuneration? So if they're selling a service that isn't necessarily their own. How do you manage that internally? Is there a conflict?

There's absolutely 0 contract because everyone -- 70% of all partner remuneration is in the share price. So they maximized to -- so they're incentivized to sell anything at the firm serves -- sorry, delivers to its clients because to their clients because that maximizes our share price. The more we can grow the business, assuming we can keep the costs the same and the price earnings ratio stays the same, then that equals share price growth and share price growth is how they get remunerated. So that's super important to them.

Okay. Hello, Graham Busby, Founder and CFO. So nice to either meet you or see you again, depending where you are. Just to take you through the financial highlights of the 6 months starting with revenue. So like it's a record half year for us. Revenue is up 23% from GBP 33.4 million to GBP 41.1 million. Our partners are performing very well within this. Steve mentioned that and partner per -- sorry, revenue per client-facing partner is up 24%, and underlying organic revenue has increased by 14%. We had 3 record months in the half and August just gone was another record. So we're very pleased with kind of momentum in the business.

But just if I might add on that Graham, August is normally a quiet month because of European holidays. And for it to be a record month, it's actually a good indication of the strength of the business, right?

Yes. So September, October, November usually are our better performing months -- very happy with August. And actually, we're still in Q3, and we've contracted more than last year's full revenue. So seeing the time line in our normal contracting levels from now to the end of the year, that gives us the confidence to keep our guidance in the revenue and the EBITDA that Steve just confirmed. Going to gross profit, so we delivered GBP 14.3 million, which is 26% up from the year before. As ever, we continue to keep close control over pricing and management of projects, specifically utilization. So that flows through to those healthy numbers. and adjusted EBITDA, we delivered GBP 12.3 million for the half at a 30% margin. So at the upper end of the 28% to 30% for the half, this was a 19% increase from the year before. You can see or if you look through them yet, but you can see from the interims that there were around GBP 2.2 million of adjustments from adjusted EBITDA to operating profit. Just to step through those, so roughly GBP 600,000 is depreciation of which most of the real cash cost of the capitalized offices, roughly GBP 900,000 is amortization of intangible assets. This is a slight decrease from last year and it's a combination of trademarks, customer relationships and customer order book, which is noncash and will decrease over time. A small amount of M&A-related items, roughly GBP 50,000, which is pretty immaterial, but that was due to no acquisition in H1 this year. And then roughly GBP 700,000 of share-based payments, which relate to the internal partner employee options. But clearly, this is noncash and there's a similar level to last year. Looking at profit before tax, the impact all the above means that PBT rose 17% from 8.4% -- sorry, GBP 8.4 million to GBP 9.9 million. But if you exclude the impact of the M&A-related net credit of GBP 0.5 million in H1 last year, which was the reversal of the contingent consideration for return, actually means that PBT represented an increase of 25%. EPS, adjusted diluted EPS of 18.5p for the half year, which is an increase of 23% to last year's figure. This reflects 11% effective dilution for the impact of unvested options in the SPP and the iOLAP deferred consideration. Effective dilution is actually down 1% to the same time last year, and that's due to the assessment of iOLAP FY '22 contingent consideration being satisfied through a cash payment, which was about $7.4 million with a commitment to buy shares from EBT, and that was to minimize dilution for all shareholders.

Just to reemphasize that where we can, we will constantly seek to use our cash rather than to dilute shareholders. So even though we've bought companies on a roughly third, third third, model where a third is cash, a third is equity and a third is earning. Even the earning, if we can, we'd rather give -- if they do earn it, by the way, that's a good thing that they earn because it means they're meeting all their targets. We will use cash to settle that earning, but then expect we do back to back contract where they have to buy shares from our EBT.

Very good point. And the net cash impact to that is we've increased by GBP 8.4 million over last year's like-for-like. So we've risen from GBP 11.1 million to GBP 19.5 million. And Nick is going to step you through the ins and outs of how that actually played out. So moving to financial performance. So just looking at a little bit of our track record, you can see from the graph there, we've shown consistent growth, not just from FY '18, actually, but since 2009 when we started. And actually, if you look at the growth revenue growth from H1 '20 to H1 '23, and that's a 45% revenue CAGR, which we're very proud of. So that's essentially from when we IPO-ed through to now and that's versus an 8% consulting market CAGR. So just again proves that we are gaining market share and not just each year, but each half. And that's primarily around the 4 pillars of growth that we have spoken to you about before, and Nick will go through in detail. But just to remind you, there's three organic pillars, and there's one inorganic pillar. The 3 organic pillars are stretching our existing partners to sell more and by giving them more capabilities through acquisitions to sell, that is a big driver in helping achieve that. One is to hire new partners as you will have seen and we'll talk through in a second that we have been hiring from the market. And obviously, these partners come with black books and new expertise and ability to talk to new capabilities. So that helps us grow organically. And then promotion, we have found that promotion and, well, growing our own timber as we kind of [indiscernible] has been an extremely successful way of having ready-to-go partners, if you like, because they've grown up through the firm. They understand the quality [ by ], they understand the culture, they understand how things work, where to get things quickly, how to leverage the teams. And we found that, that has been a very lucrative space for us to get high-performing partners, and that will continue to be used. And then acquisition is the inorganic pillar, and I will talk to that in detail in just a bit. But before I do, I will hand over to Nick to take you through some of the revenue bridges and then the balance sheet.

Thanks, Graham. Nick Willott, Finance Director and Company Secretary. So I want us to give you the same level of transparency on our revenue development as we did at the full year. So this chart shows you the overall revenue bridge, so the increase the 23% increase from GBP 33.4 million in half 1 last year to GBP 41.1 million in half 1 of this year. If you look at the middle 3 blocks on the chart to end of life existing clients and new clients, that's our underlying organic growth of 14%. So GBP 5.3 million of increasing revenue from our existing clients, GBP 4.3 million from new clients and Graham on one of the later slides will show you some of the logos of the new clients we won in the half. Less GBP 4.8 million for end-of-life client so there's clients where we didn't deliver -- we had in previous years that we didn't deliver revenue this year. In the half, although at least one of those large clients within that has come back in half 2.

Which tends to happen.

Which tends to happen because we might have a break and the client starts to change program and then they come back. And then the other 2 blocks on this chart, a small GBP 1.5 million, we've been negative for revenues of subsidiaries that we want to take out the business, typically low-margin revenue and GBP 4.4 million positive, which is the pre-acquisition comparative period for iOLAP for the 3 months that we didn't own it in the previous year. You then move on to the next slide, which is our sort of partner view on this and the 4 pillars come to play with that progression of revenue in the half. So the negative GBP 6.5 million, which is partners that left the business in these parts left in 2022. We didn't have any partners leave in the first half of '23. But those parts were averaging less than GBP 1 million each for the half year, so less than we would want on parts of the business. Our established partners achieved an average of GBP 2.2 million of revenue in the half year. That's up from over GBP 2 million in the half in the same half last year. So very pleased with our development in revenue per partner from our established partners for the reasons Steve spoke about before and having high targets and having more capabilities to sell. Our promoted partners contributed GBP 3.5 million positive to revenues of two commercial partners performing very strongly at GBP 1.8 million for the half in the first year as partners. And then GBP 2.2 million incremental revenue from hired partners, those partners are new in the business, and over time, that performance, as we already see in half 2, that performance is improving and moving towards the level we want from our partners on average. And then the GBP 4.4 million block as for the previous slide from the pre-acquisition period of iOLAP. But overall revenue per partner increased from GBP 1.65 million in the half last year to over GBP 2 million for the half this year. So we're very pleased with that 24% increase in revenue per partner. Moving on to cash. We continue to be a very cash-generative business and our EBITDA less corporation tax, virtually all turns to cash. So over the 6-month period, we opened with GBP 20.4 million of cash, closed with GBP 19.5 million of cash, so marginally down, but only might be down because we settled the first half of the iOLAP deferred consideration all with cash. So just stepping across the chart here, operating cash inflow in the 6 months of GBP 3.9 million. For those of you who are new to our business, we have quite strong seasonality in outbreaking cash flow because our annual bonuses are paid in half 1. That's a good performance of operating cash flow. We have very good controls over working capital and EBITDA less tax turns to cash. The negative block, GBP 6.5 million outlook for acquisitions. This was the settlement of $7.4 million principally of the first half of the iOLAP deferred consideration. As Steven and Graham mentioned earlier, we settled, although we have the option to settle that to issuing shares, we settled it through the payment of cash with those sellers buying shares, existing shares and our EBT to avoid any dilution of our shareholders. GBP 2.5 million positive inflow for EBT and shareholder loan transactions, principally, that was selling shares out of the EBT that we bought in the previous year for that highlight deferred consideration. So we closed the 6-month period with GBP 19.5 million of cash so putting us in a strong position to fund both future acquisitions and obviously the GBP 5 million dividend that we paid in August. From a balance sheet perspective, the balance sheet continues to be very strong just over the 6-month period, an increase in net assets from approximately GBP 96 million to approximately GBP 102 million. If I just -- the balance sheet is very similar for the previous December, but if I just mentioned the major major changes as GBP 2.4 million decrease in tangible assets, that's amortization and the FX movements on the value of the iOLAP goodwill. Debtors increased by GBP 2.6 million. That's in line with growth in the business, and June is always a higher revenue month than December, but at the end of the day continue to be in line with expectations, we have no issues with our blue-chip client base in terms of recoverability of our debtors. And our liability has decreased by GBP 4.6 million, and that's principally due to settling the deferred consideration that we just spoke about. I'll now hand over to Graham. Graham will take us through the business review.

Thank you, Nick. Just to give you an overview of the clients from the 6 months. Yes, very happy with more than 25% increase in our gold clients. That's 1 million-plus accounts. And at the bottom there, you can see some of the new brands that we bought in just in that 6-month period. So over 20 new clients and really pleased to see that a lot of global brands in there. And through that whole diversification and starting with the tip of the arrow that Steve was talking about, we would hope to grow these into kind of trusted adviser status by working with them through their biggest problems. And you can see in the middle, we have been recognized again over that period with various industry awards and the team continues to do a fantastic job in helping us to achieve that. Looking at the clients themselves. The table on the right, obviously, anonymized, but gives you an idea of the spread of different clients in our top 10 by revenue. Our top 10 clients have used an average of 3 or more capabilities, again, because they have, we have more things that we can talk to them about. And from a diversification point of view, you can see that there are actually 7 different industries there, which really helps us with the ebbs and flows of certain industries and what may or may not happen. It helps us kind of balance that risk by having a very nice spread. And likewise, location is a similar story, a spread between U.K., Europe, United States. We're still doing a lot of work in South Africa, albeit we haven't got a top 10 client in the 6-month period, but we still have plenty of other big clients, many of them in South Africa. And then the length of relationship, again, this is a really pleasing step for 2 reasons. One is to see that we have long relationships with a lot of our top 10 and that they continue to trusts for us to work together, but also seeing a couple of ones in the i.e. new clients who have been with us for one year or less, who have come in and have quite quickly become a big client of ours and is a big kind of partner of this. So this is something that, as a partner team, we look at every week. We focus prestigiously on sales and making sure that we are making the most out of what we have in terms of what our clients are looking for, which is a good lead in, I guess, to the news this morning of Responsum, we're really excited to announce that acquisition. Responsum is a large language model and generative AI firm and really looking at that $1.8 trillion opportunity in 2030 that Steve highlighted shows that there isn't a company in the world, in my opinion, in our opinion, that shouldn't be thinking about AI in some way, shape or form. And having this as something that can facilitate the services that we provide to our clients and also give us deep technical expertise in that area over and above what iOLAP have in the data and tech space is really exciting. And Responsum is able to operate with platforms like ChatGPT, but importantly, within enterprise. So it can be trained on company data systems, applications, things like documents, PDF, Mails, XLs, research, et cetera. And what that allows is that our clients' teams to do insight and analysis of use cases around contextual and confidential data. So we've all seen in the news about the worry of using other tools with kind of looking at the web and what the web has within it. Obviously, a lot of good stuff, but a lot of misleading things as well. What we and the reason we're really excited about Responsum to them is it is around an enterprise's data set. It can look outwards to websites, et cetera, but primarily, it is looking at the data set. And put simply, it helps teams to be more productive, help improve sales performance, and it can help teams just get work done through insights and analysis. And they've actually been developing over the last few years in [indiscernible] we've formed a partnership with them, and we really want to take them to market with us to, again, facilitate the services that we can work with our clients on. And Steve mentioned, we've had a partnership for a few weeks and the fact that we've had over 40 opportunities already that we are talking to, many of which very close to project data. So I mean we have 8 in there where if you just took the revenue from those 8 projects, it's kind of multiples of the annual cost base of responsive coming in. And we really do see the opportunity to work with Responsum and work with our partners. And to give you an example of one of the clients that we've been working with. We've partnered with one of the world's largest investment management firms. So hopefully, you should resonate with -- I think people on this call. And they wanted to look with an ESG focus at whether or not their portfolio companies were essentially greenwashing. So were they saying they were going to do XYZ and then actually reporting either that they haven't or they're doing different things. And the investment team wanted to then work out how they could use AI to understand that, but then use it to inform them of how they should be voting at AGMs and how they should be talking to management teams, et cetera. So they look to over 50 different solution providers and chose Responsum. We've carried out a proof of concept with them or several, working with 100 analysts and actually just got to the end of that proof of concept, and we've reduce the manual effort of those 100 analysts in this space by 95%. And now we're rolling that out to 2,000 analysts. Another example, we are working with a different client. We're working with their enterprise sales team, and we've actually put Responsum into their Slack and Microsoft Teams environment. And that's resulted in more than 70% improvement in CRM accuracy. And has saved each member of that sales team a day a week of effort, which means they can spend a day a week for speaking to clients and selling whatever it is services that they're selling.

And this is exactly the sort of power of having this deep tech is the change that that drives is obviously extensive, and we can obviously help our clients. That's where we plan and help our clients. We design operating models, management change journey, whatever happens as a consequence of these proof of concepts, which will be rolled out into the business, they need that change manage, and that's a real opportunity for us. And just to get back to the question that was answered. This is another good example. So Steve is this Founder and CEO of this company. He comes in with about 60% to 70% of his purchase price of Responsum, he's now earned in Elixirr shares. So he actually has 100% motivation, not just sell to Responsum but to sell Elixirr suite of services and vice versa. So that's sort of a good example of it. And there's 40 examples, there's 40 opportunities that is mentioned there. That has come from all of my partner teams just seeing what this can do and say, I can find opportunities in my client base. And there's really 40 different opportunities with 18 late-stage pipeline. So really excited by this.

Yes. And just to kind of make, I guess, us as a management team take our own medicine, we've actually started using it internally as well. Just to give you a couple of examples, I've used it with my M&A team. So we put our M&A pipeline in there. And it allows us now to kind of search, compare, evaluate different companies with natural language. I can even get it to kind of automate drafting e-mails in my tone voice to various founders, et cetera, and it's saved us a lot of time in doing that. And we've also put it...

Graham's tone of voice is a bit tedious, that's why. I'm kidding [indiscernible] but machine-like.

And then we've got -- we put it in our sales kind of environment. We've put our proposals into Responsum, we've uploaded them. And what it allows us as a management team to do is actually kind of analyze how many data proposals have we submitted, give me the two that are most comparable to XYZ. And really -- things that would take minutes, hours, sometimes days to kind of compare and contrast, it can do with literally the touch of a button. So we see this as adding tons of value. I mean it already has internally for us. It already is with the 8 to 40 opportunities we've discussed. And clearly, as a partner team and as new clients that we haven't even spoken to, we see a whole host of opportunity there and really excited about it. Just to remind you, this is the fifth acquisition we've done, our fourth since IPO. So Den was done pre-IPO and then Coast, which is digital marketing return which, in a bear market, is always really nice to have for kind of procurement, supply chain cost services. Clearly, iOLAP last year from a data and tech point of view and then, yes, as of this morning, Responsum, which gives us that generative and large language model AI consultancy skills. Always looking across these, it's around finding complementary capabilities. It's about filling in that wheel, if you like, that Steve went through earlier. Typically and quite deliberately as said ordering issues that we're not looking at kind of real tactical, kind of lower down -- things to look at is ordering issues. And it's a market play, it's not about cost. So you can see GBP 19 million at the top there. That's through the cross-sell between the brands and between Elixirr. And that's revenue that none of us would have by ourselves, which is obviously additive to shareholders. That said, EBITDA, we are very good at improving. You can see the year one numbers there in kind of the middle road. And Steve mentioned as a group we're at 30%, so you can obviously extrapolate past year one to see what's happened with the EBITDAs of those businesses. And this is something that we are putting on repeat and we'll do with Responsum. And having aligned leadership team, Steve mentioned -- Steve Steinberg, [ thus ] Steve having a huge equity incentive, and that creates that kind of alignment with our broader partner team. And you can see here on the left -- and again, I've been through this previously, so I'll do it quickly, but actually, the last point there, aligned deal structure, that gives us the founders and the leaders coming in with that equity participation story. But we're also, me and my team, looking at kind of a programmatic approach. So 1 or 2 deals a year that's looking to increase market cap by 20% to 30%. We see the opportunity of Responsum, given the partnership, for it to be doing that with us over the next 12 months and beyond. And I've mentioned ordering issues, that is key for us, but -- as importantly as the quality of the services. We could buy low-quality -- look, not just quality of the work, but quality of the earnings. There are lots and lots and lots of businesses out there that we could be buying on a weekly to monthly basis. But the fact that we're doing 1 or 2 a year is a deliberate strategy of ours and geographically additive. Again, we don't really organically push ourselves into new geographies, but -- unless we get pulled there by a client, which has happened. South Africa, the U.S. are good examples several years ago. But a way to get into -- Steve mentioned DAC and Asia, obviously, the kind of -- the quicker way, if you like, and probably the most value-adding for shareholders is to do a strategic acquisition in those geographies. So I have my team -- full-time team looking at all of these things. And you can see some of the figures since IPO there. We're pretty busy, we've engaged 400 businesses over the 3 years and ultimately boiled down to the 5 deals, 4 since the IPO. Currently, if you broke into the pipeline that we have right now, I can put my hand on my heart and say it's the best it has been. So we're excited at where things are. And yes, just watch the space.

Graham, hi It's Poly on sales at Investec. Just before we move off talking about the acquisition, on Responsum, and on the previous slide when you talked about the GBP 19 million from cross-selling synergies, I mean, do you have a number? Or perhaps Steve, like what you think that number could be as a result of the Responsum acquisition that you'd be happy to share with us?

No. I don't know what I don't know. I just know that of the pipeline that we see now, of those 40 opportunities, about 80% to 90% of the opportunity is services-related opportunity. But for the downstream opportunity is just unbelievably big. I mean just take one of those examples that Graham spoke about, right? He's doing the -- what we did for the large asset manager. We did a pilot with 200 people, and it's now rolling out to 2,000 people. This is a company that has, how many people? 300,000 people, right? So it's going to roll out this kind of technology into all of the hands of those people, which is what will happen with AI because it's like the Internet. It's that powerful, it's getting into unstructured data that allows you to query unstructured data. If you think about our proposals to clients, if anyone's seen our consulting proposals, they're almost always PDF or PowerPoint format. And if you can now use natural language queries over the top of all of your PowerPoints produced, I mean, I think we've probably done almost 100,000 PowerPoint presentations that are proposals to clients to put out the best examples of, say, pick a topic that we want to talk to a client about. We can get access to that information at scale just a click of a finger. And it could be presented as ever you want it. So the impact of that change in almost every business is so significant that the services opportunities around that are just almost infinite. Think how big is the digital opportunity? Massive. This is why the number like 1.8 trillion is huge. But the cross-sell is definitely there. I mean we just got to get good at doing it. And I think our remuneration model is what's actually unique about that. I've been in KPMG, IBM, Accenture. And every single one of them have a different set of fiefdom structures and different set of P&Ls with its geography, capability, industry, whatever it is. And as a partner in those businesses, you look after your world. You don't really care about the overall world because you're not motivated for the overall world. But my team, my part of the team are 100% motivated for the overall world. And that means you get a set of collaboration and a set of teamwork that you just don't see in other consulting firms, you just don't see it. So that's the real opportunity. The combination of these 2 things will be incredibly powerful. Okay. So I think I'm probably done -- that's almost my closing speech. Okay. So just in summary, we think we've got a market-leading proposition both organic and inorganic, complementing each other and that cross-sell story I was just talking to Polly about, that's exactly at the heart of what we're trying to do here. Clearly, I mentioned at the start, we're looking at -- for those things that are disrupting markets, and we're investing in the technologies that are doing that. And we've done those investments. We've got 4 of them in place already, and we're looking for 2 or 3 more. And the ones that are actually currently in the marketplace. And we want -- we do that so that our clients look to us as genuine experts in the field. The -- take that asset manager, they look at 50 other technology to do their proof of concept with and the company we just bought was the one they chose. And that's why we want to have these deep tech skills so we can actually then help them understand and roll out the change into a more broader business impact, which is actually the ultimate value is -- the reduction in 95% of effort is actually a value creation and a cost reduction opportunity for clients, and that's very big for the markets that we're in right now. Again, I've mentioned this repeatedly through this conversation, but it's actually at the cornerstone of our whole DNA is that I'm 100% aligned with every single one of you who put a pound into this business. As is Graham, as is Nick, as is every partner out there, in actual fact as is my receptionist. Everyone wants to see the share price grow. Everyone's doing their very best to do that, and I've never seen such an alignment of interest. It doesn't happen in other consulting firms because they're not all aligned. It's a very dog eat dog culture in almost every one you find because it's -- if I can get ahead at the behest of someone else, whereas in our firm, it doesn't work like that because of the way we structured the model. And again, we have the quality of an MVB. And actually, the reason that it's becoming easier and easier. Graham didn't touch on this, but he did touch on the -- how excited we are about our acquisition pipeline. But why it's really exciting is, over the last 3 years, we've proven to ourselves, the market and everyone who looks at us that this model works. And people, when we approach them now to acquire their businesses, it's not like a private equity firm. It's not like another trade sale because we're giving them opportunities that they just can't get to. They can see for themselves having started a company and being fairly successful at it, how this model can really help accelerate them. So we've generally created a platform for other entrepreneurs to bring their skills and capabilities to the table and multiply value for one another. And it's a really exciting proposition and we're starting to see it really work, and that makes us very, very distinct and unique. There's no other proposition out there like it. So I'm really excited by this. And yes, we're very bullish for the future.

A quick question. If you had a second. Can you hear me on the audio working?

Yes. Go ahead. Yes.

Just I mean, pretty detailed FT article there, talking about the disruption in the global consulting arena, your opportunity, right?

Right. Correct.

I mean it's sort of whether it's AI, whether it's workplace disruption, the bigger firms and quality of life, that's nudging talent in your direction and you can monetize that, yes?

Yes. That's what this proposition is about. I mean, I said we get 4,000 applicants from the best universities in the world. We've got 500 people employed. We only employ sort of like 20 to 40 people a year, but we've got a dearth of talent. They look at our brand, they look at what we're doing and they look at our positioning. And all the young kids who are traditionally going to the McKinseys, the Bains, they're all trying to get into our firm. When we bring people in, they all go -- they talk to their friends and go, how did you get into Elixirr because not a lot of people get in when they apply. And that's building a nice kind of, what's the word? You always want something you can't get. It's a -- prestige, yes, so it's building a nice bit of prestige. So yes, it's absolutely the opportunity. When the world changes is when opportunity exists and the consulting industry has been so, what's the word? Stagnant for so long and no one's really embracing the change. And to be honest, I don't think the big firms can. So if McKinsey decided to go and list itself tomorrow, they'd have a huge structural problem to make that happen. They've got too many stakeholders vested in the current model for them to make that move. So this is why we started this company is to try and make a statement about the remuneration of the industry and alignment with customers and shareholders and make all them participant shareholders, so that actually, what we have here is a complete alignment of interest. And I don't think the industry can do that very easily. It's going to be hard for them to do it. So we're coming at it from sort of a clean sheet. We're not encumbered by our history where they are. Any other questions?

Jacob Armstrong here from Stifel. Just two quick questions from me. Firstly, can you just highlight the revenue and PBT of Responsum today if you've got those numbers and kind of how and where you hope that to get over the medium term? And then secondly, we're seeing a bit of retrenchment at the big 4. Are you seeing a lot of hiring opportunities there?

I'll answer the second one first, and I'll let Graham answer the first one. We don't hire people who other firms retrench because they don't retrench their best people. So even though they are retrenching, it doesn't present an opportunity to us. We don't want what other people discard. We want the best people.

And yes, Jacob, with regards to revenue PBT, so like I said, they've been in stealth mode developing this for the past kind of 3 or 4 years. So they do have revenue, but it's not going to impact day one from their client base. Our revenue is more about the future potential that we see. From a cost perspective, it's less than GBP 1 million a year. And like I said, probably just the pipeline that we see already, we're seeing multiples of that.

It's Colin from Investec. Just obviously, you've made an acquisition this morning, but you still got a significant amount of cash on the balance sheet, and you've used shares as well. I'm just thinking, going forward, I know you're open to doing more deals. But I mean, what specifically -- is there any areas you're looking at, geographies? I mean what -- has anything changed at all? Are you seeing -- and also are you seeing more or less opportunities, I guess?

Yes. So this is the -- these are the areas, Colin, that -- all the sort of green areas or the areas where we're looking to add either capability or, in some cases, industry capability, in some cases, generic skills, in other cases, technology skills. So those are all the areas that we are actively pursuing. And as we said, I don't think we've had a better acquisition pipeline than we have right now. We're very excited about our acquisitions prospects. That's all I'm prepared to say at this point.

Got it. Very clear. It's Julian here from Cavendish. On the acquisition point, I mean, in terms of valuation aspirations for vendors, are they being sensible or how is that working at the moment in the market?

As in the targets we're looking at and the conversations I'm having and the multiples that they're thinking?

Yes. Are they wanting top dollar or are they being -- are they realizing that actually being part of your group is going to be far better for them, so they don't hold out for ridiculous prices? Just realistic views essentially.

Exactly. I mean, they see the marketplace and kind of private equity multiples being paid and IPOs, although there aren't that many of them, but the multiples and IPO. So the kind of starting multiple, if you like, that we speak about is -- I have seen is lower than probably 3 years ago about or definitely 3 years ago. And 100% they see opportunity. So not just in being able to kind of scale within and kind of diversify their risk, if you like, because if you think about it, the firms that we're talking to, they might have 2, 3, 4, 5 kind of founders or partners or leaders or shareholders at the top table. On day one with us, they've got 25 other senior sales people around the globe who are incentivized to push their service or whatever it is that they do and combine that with what we do as a group. And they see the opportunity not just of that, but also riding hopefully, our share price increase over the next few years, which we've been very public about wanting to be $1 billion business in 3 to 5 years. And being part of that versus what if I just wait and do it another couple of years myself and maybe I'll be worth more. It's actually delving into the numbers and showing the scenarios that you would have to do incredibly exceptionally well to be able to achieve the same wealth as kind of -- with a firm with 500 other people that have got their back if that makes sense.

If I may just add to that, there's -- let's say, we're a GBP 70 million last year firm. Let's say they're a GBP 20 million firm today. If they get shares in top co, they get the growth of the GBP 70 million, not just the GBP 20 million. And they're motivated to help us sell that GBP 70 million and make that GBP 70 million GBP 90 million, GBP 100 million, GBP 200 million, whatever the number becomes, right? So there's that opportunity. What's also there, and I think it was Michael or Guy, one of the two in their broker note recently just yesterday -- or the one that came out this morning, mentioned that as a trading multiple, we're half Accenture. That presents a massive opportunity for anyone who understands this industry. If they're sitting there on our GBP 20 million firm with a 20% EBITDA and they can participate in a firm that's -- has aspirations, this year, we're targeting 85% to 90% and next year, we'll be targeting even more than that. If they can sit in that firm and see the growth on that firm organically and inorganically plus when the market understands what we've got here and rates us appropriately to the competition, then that's also an opportunity. And maybe that's a question of time as we become bigger and become less risky because, of course, all these things play a role in the valuation of the share price. But people see this opportunity and it's very real and very present. And if you look at it in the year's -- with a year's lens, you're looking at it in the wrong way because actually, all my partners are looking at in 5-year lenses because they actually -- and that's actually the beautiful thing about this is that we are getting people to sign up to the journey, genuinely the journey and not the Indian cash remuneration model that the other big firms all deploy. If you're a partnership, it's an in-year remuneration firm. You don't think about the next year until the next year happens. Whereas our partners are thinking about 5 years because that's how they earn their income.

Yes. No, that's great. I mean half the rating and twice the growth. So four times the upside, everyday comes across really really clearly, but it comes off really clearly from you guys. The energy and the alignment, that's really impressive.

Any other questions?

Michael here from [ Singer ]. Just following on what -- from what -- actually Cavendish -- apologies -- getting used to it. But just following what -- from what Julian said, just in terms of acquisitions -- and well done, your revenue per customer on that growth is great, but the sustainability factor and leading into acquisitions, if someone like [ Essentia ] obviously has a suite of technology products. Would you say that -- and I'm going on this slide here, when you're talking about the global emerging technology markets, you've seen that as the greatest growth opportunity. Would that be the largest weighting because a number of institutions we spoke to this morning was -- were focusing on that sustainability factor of growth and where technology would play in that?

Yes. I mean it's -- if you think back to the dot com babble, still to this day, there is hundreds of millions of dollars spent on digital and digital transformation, which is exactly using what -- the technologies existed back in 2000. This isn't -- AI is not going anywhere, it's going to be there for a long, long time. There's going to be so many different applications of using artificial intelligence as an example, or data. This is -- these problems are just expanding. They're not contracting. And so that presents more and more opportunity to consult around those technologies to help businesses embrace the change that they need to embrace and the value opportunities that exist for them. So we think that this is such an expanding market that -- and as I said, I think we're unencumbered by our history. We don't have to reinvent ourselves to be able to embrace this. Whereas I think other firms have to do a lot of root and branch surgery to be able to be as nimble and as flexible as we can around leading up with these technologies and selling our consulting services around them.

Well, thanks very much, everyone. If anyone's got any follow-up questions, and they want to get in touch then just drop me a line, and I'll be sure to pass them on to the company. But thanks very much for your time, everyone.

Thank you. Thanks for supporting us everyone.