Elixirr International plc (ELIX) Earnings Call Transcript & Summary

Good afternoon, and welcome to the Elixirr International plc Interim Results Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand you over to Stephen Newton CEO. Good afternoon, sir.

Good afternoon, and thanks to everyone that's on the presentation, who's taking the interest in our half 1 results, which we are very, very pleased with, as we'll take you through the rest of this presentation. Each of my team will introduce themselves as they pick up from me in various series of the presentation. So once again, thanks for joining us. And hopefully, this is an interesting conversation. And please feel free to submit your questions, so we'll answer as many of those as we can, throughout the conversation, if we see them or probably at the end. So -- but anyway, thanks for attending. Let me first tell you what we're going to do. I'll give you a bit of an introduction. I think, Nick will then look at financial performance, Graham is going to have a look at the business review, and he's going to talk through some of our client situation, and then I will be looking at the summary and outlook. So that's pretty much what we are going through. In terms of the introduction, let me give you a few points. There's a quote here, but really, I want to pull out two important points here is -- many, many investors at the time of IPO were concerned that once pre-IPO options have vested, we would have a potential for senior leadership to lead the firm or want to leave the firm or to cash out and that kind of thing. But it's interesting for investors to note that we had a whole bunch of pre-IPO options based -- a couple of months ago. And I think it's any -- sorry, it's 97%, 98% of all of those shares are still held by the people who have those shares vested, they either converted them into the equity in order to receive a dividend, or they keep -- continued to hold the options. And the one that we also did with those options vesting is we actually funded that not out of issuing paper, because we actually bought shares and we use those purchase shares to satisfy those option -- those option vestings, which means we have no dilution. So it's just a classic example of how we as investors ourselves in this company trying to make sure that we continue to ensure that we have our investor interest at [indiscernible] as we are, and it also shows you the strength of the belief of my team that are all pre-IPO investors in this company in the future of this business. So that's why I wanted to highlight that point in particular. And then the second point that you might say why am I making a big thing about an award, but we've got plenty of awards. But this one is an interesting one, why? And I wanted to highlight it for you. This is an award by Forbes, where they put us on the World's Best Management Consulting list for the first time. And the reason this is so important is that it's not something you apply for. And it's something that they, through their access to the market or talking to the market, other sort of clients, et cetera, people say, those [indiscernible] bets consultant out there. They do their own research, and they came up with this. And the interesting thing about this for investors too, is that since IPO, we've been on a distinctive part of diversification in the business to -- in order to make the business as resilient as possible. And you'll see in our results how that has been manifesting itself. But the important thing is that Forbes have recognized this by saying that we are recognizing 13 different industries, which is fantastic, because the more industries we're in, the more resilient our business is. And -- for example, if banking is going bad, it could be that consumer business doing well, for example. And likewise, the 14 functional areas of consulting that we recognized in, does exactly the same thing. So it's not technology that's doing well, it could be business change that's doing well. It's cost reduction that's doing. It could be a market entry strategy could be doing well. So the good thing about this is -- these are the two points, I wanted to highlight at a sort of macro level is that we've got a very, very committed leadership team, and our business is very, very strongly diversified and is starting to be recognized by the market. And it's not something that we are -- we have a plan for [indiscernible]. The market is genuinely realizing it. So just some points there -- some highlights for the half 1 of '24, fantastic revenue growth, 28% revenue growth, underlying organic 14%. I always say that organic growth should be between 10% and 25% for us on a sustainable basis. The reason is if we go any faster than that, I think you start dropping quality. And then, obviously, Graham will talk a little bit about this that we're obviously complementing our organic growth strategy with inorganic growth. And you can see that manifesting itself in these results as well. Full record revenue months. I always feel that's a good strategy because if you are growing business, every month should be a record month in some respects, but there is -- and actually, all 6 months are a record month when you compare them to say, January to January, February to February of the previous year, March to March, but there were 4 record months continuously or 4 record months in the period as well. So this suggests that business is growing. So this is a good thing for us. And of course, our EBITDA is falling in line with that. So Nick and Clare, who is our COO, have been doing a fantastic job of making sure that costs stay in line with revenue growth so that we actually continue to deliver fantastic EBITDA. Mentioned the development of the brand, the most prestigious award there. Obviously, FT is a good one, but it's something that you kind of apply for, whereas the fourth one is completely, as I mentioned earlier on the previous conversation, a function of them doing their own market research to the clients and that kind of thing. So -- and with regards to clients, you can see, we've got 30 brand new clients in the group this quarter -- sorry, first quarter this half. And that's fantastic. And this -- and we'll take you through some detailed analysis of our client work and our client portfolio, which I think will be very interesting to you. And this obviously organic growth point, the thing that's -- if you've been an investor with us for some time that one of the important things about our business that I think, Graham will talk about a little bit later is, this ability for us to complement our organic growth, inorganic growth. But what also importantly, that we can take the client relationships we have in both of those pools, our existing clients and our acquired companies. We can cross-sell to one another's clients, different services. And you can see here that GBP 8 million of cross-sell in this half, which is fantastic. It's an 82% growth over half 1 '23. So we're really starting to maximize this opportunity of cross-selling, which is really fueling our growth, which is fantastic and perhaps why -- when you see the industry is suffering. You see a lot press statements out there about companies retrenching, consulting companies retrenching. We're actually capturing market share, and we're doing that through these various mechanisms. And one of the underlying points here is the quality of our business. So that's fantastic. And then that's the point I want to make here about sharing the value with the employees. I mentioned this -- I said 98, I think on the previous slide, actually 97 of those options stayed in the hands of the people who have the vest. What's really important about the equity participation in the firm is everyone feels like an owner. And what that means is that we take everything really personally with regards to our clients, and we know that the value comes from serving our clients properly. And I think our clients see this, and this is why we are actually generating a capture of market share, where other consultancies are suffering a little bit more than what we are, in fact, not suffering. So this is the highlights of the half, and I think we're very pleased with that. If I then just give you a sense of something else, we know we throw this thing around called the challenger consultancy. That's what we like to be. But some people may see why? And the first point I've touched on is the firm of entrepreneurs. I mean it really is true that my partners can go to KPMG, for example, and earn, if you look on company size, you can look at KPMG's average partner earnings, so they can get GBP 1 million a year on average, whereas my partners can get maximum -- GBP 1 million a year, which means GBP 5 million over 5 years, right? Whereas my partners can get GBP 200,000 base salary -- GBP 200,000 base salary GBP 200,000 bonus that over the same 5-year period is GBP 2 million. So that's GBP 3 million short of what the opportunity cost is to, say, working in KPMG, which I think all of my partners at the very least to get that job. They are other professional services firms there that actually pay more. But I use that because at a base level, every one of my partners take one of those roles in my view. And so they're giving up GBP 3 million. What do we give them? We give them equity. They participate in options, and they participate in buying equity, too. So when they buy equity, they've got the downside risk as well as the upside risk. And all of this means that they are fully vested in the company. Their remuneration comes from the growth of this company and the equity and share price growth. And when some people may say, well, what happens when the share price is doing badly? Well, actually, they're 5-year investors by definition. They're coming in with a 5-year vesting period on the equity. They're coming in with -- with that whole structure in place. And so they are making a long-term investment decision in the company. And every single day, they're working in the company and they can see how the investment is doing. They have all this insider information every single day when they sit down and sit as a partner group. And there's a real sense of ownership there. And it's very, very different to what I've seen in other consultancies because I've worked in 3 of the best brands out there myself in my career. So this is a distinctive feature that makes us a challenger. We -- this is not what other consulting firms do. And this actually drives the behavior with our clients that is truly distinctive and differentiated and why we perform so well in the marketplace when the marketplace is on the face of it suffer. The other thing, we have big firm expertise. We have all the skills and capability of what the big firms can provide and, in some cases, far better skills actually, but we're unencumbered by the bureaucracy of those large firms. We're actually very proud of where we are, and people say forecasting GBP 104 million to GBP 110 million turnover this year. But we're tiny in the scheme of things. This is a massive market. I mean the companies like KPMG, McKinsey, BCG, these companies are so much, so much larger than us. So we can be as nimble as anything, creative, disruptive. Our clients love the way we work. We're far more responsive and it just makes a real difference with our clients, and that's why we continue to capture market. The other thing we do is we focus on the technologies that are going to disrupt and -- well, do disrupt and will continue to disrupt our clients' businesses going forward. And a great example of this is AI when we bought artificial intelligence business last year. And the reason we do this is because it's -- I'd like to use an example of the Internet. It's almost 30 years ago that the Internet became mainstream as a business change tool, if you like, or business -- a tool that businesses could use. And I remember the dot-com bubble, those of you who are around where everyone thought that the high street was dead, something the whole world is going to change, the high street is dead. There's going to be no shopping out there, what's going to buy everything online. That's not true, okay? But -- and bubble burst. But we're still 30 years later, helping customers work out how best to use the Internet, through digital strategies, change journeys, all that kind of thing. So it's almost like the gift that keeps on giving to consultancies. AI is exactly the same thing. It's not a one-and-done thing. AI is a technology that will be deployed in multiple different ways in varying different rises over the next 30, 40, 50 years. And we're continuously changing. And if we're at the forefront of the expertise in that area, it puts you in a very, very good place to be able to consult over the years to come in this area of expertise. And that's a fairly unique thing that we're doing, and we can do this because we're so nimble and relatively small compared to all the behemoths in this industry, okay? Then the other thing that we invested in back end of last year was Insigniam, but this is truly a distinctive feature that Insigniam, when they -- they were the first pioneers in sort of breakthrough transformation, and what we mean by this is there's often transformation plans built by many, many consultancies, but they tend to be the nuts and bolts, execution, road maps, all that kind of good stuff. But the one thing that often causes these journeys to fail is that the leadership are not aligned behind the vision. And so they're all pulling slightly in different directions, and this causes a lot of these transformations to fail. So a good example is Insigniam had a client, where they were serving a big motor manufacturer that was losing GBP 100 million a year, and they've been losing GBP 100 million a year for the past 5 years. And they had 2 or 3 CEOs during that period. Leadership had changed a few times. They had -- they spent fortunes with consulting firms to be able to write them transformation plans, drive out costs, all the things you need to do to try to turn the business around. And they kept failing. And the reason was that leadership were never aligned around exactly what needed to be done. And what Insigniam has particular expertise in, and we've already seen this come to fruition in some of our clients [indiscernible] in some of our cross-sell opportunity is that they have this ability to be able to -- well, this technique to be able to get all leadership aligned behind the journey of transformation that needs to resolve that business problem of GBP 100 million loss, for example. And literally in that instance, within 12 months, that company is making a loss. They had to get the leadership aligned before you start writing the project and program plans. And this is another distinctive feature we bring to our change journeys for our clients now with the acquisition of Insigniam. So I think that's what I would like to say on the introduction. And hopefully, those are the salient points that really resonate with you as investors with regards to, a, how we are challenger; and b, some of the key features of our performance this year that I wanted to point out, and I'll hand over to Nick, who will take us through the financial performance.

Thanks, Stephen. Nick Willott, Finance Director and Company Secretary. So I'll run through the performance for half 1 '24. As Stephen said, we're very pleased with the financial results for the period. Revenue is GBP 53 million, so up 28% on the prior year period, of which 14% is organic. Gross profit up 21%, adjusted EBITDA of GBP 15.1 million, up 23% and our adjusted EBITDA margin at 29%, marginally below the 30% in the prior period, including the impact of Insigniam, which we acquired with an EBITDA margin of 17% when we acquired that in December '23. Profit before tax, GBP 12 million is up 20%, in line with the increase in EBITDA and adjusted diluted EPS is up 16% to 21.5p for the half year period. That increase proportionately is below the profit before tax increase not because we had any increase in dilution, but because of the increase in our effective tax rate, given the increase in U.K. corporation tax rates to 25% in the previous year. We closed the half with net cash of GBP 22.1 million. So still a very strong balance sheet position and generated free cash flow of GBP 7 million in the half in the 6-month period. That's more than doubled on the same period in the prior year. And just -- I just wanted to put those financial results into some context. If you look at the graph on the right-hand side of the slide, you'll see how we've done in the years since IPO in a couple of years before that. And you see that actually, the delivery of results in this half is really, for us, just a continuation of that track record of delivery that we've had in every year. We sometimes joke internally when we're looking at acquisitions, we see a lot of business plans like this. We don't see many companies actually with this track record of actual delivery. And then I think the other thing worth putting out on the graph there is if you look at our half 1 '24 results, they're actually very similar to our full year FY '21 results. So revenue, EBITDA, profit before tax is all very similar to full year '21. So we've doubled in that time. Now we're providing the same transparency in terms of the components of our revenue growth as we've done in previous reporting periods. So this chart here shows you the components of our progression of revenue from GBP 41.6 million in half 1 '23 to GBP 53 million in half 1 '24. And just going across the graph from left to right, I mean we always have some end-of-life clients, which is just a typical part of our business. And obviously, our focus is always on more than replacing projects and clients that come to a natural end with growth in our existing client base and with new clients. We grew our existing clients on a net basis by GBP 4.1 million compared to the previous 6-month period. And we're very pleased with our new client growth was GBP 6.4 million. So that was up significantly from the GBP 4.3 million in the same period in the first half of '23. And then adding the acquisitions of GBP 5.7 million that we -- primarily the revenue that we purchased with Insigniam takes us to 53. But from an organic perspective, we're very happy that out of that total 28% growth, 14% was organic. Now providing you the same progression of revenue, but from a partner perspective, as we've talked about before, we absolutely have a focus on performance throughout the organization, but particularly at our partner level. And we make sure we actively manage the partner team. We're actively growing it through our 4-pillar growth strategy, hiring, promoting and acquiring and stretching our existing partners, but also managing those few people within our partner team who underperform. And so if you look at the graph from left to right, you'll see the negative bar for the exited partners. Now those exited partners were averaging GBP 0.8 million for the half. So significant -- those partners are performing at a level below that, which we expect. Our established partners added GBP 1 million of revenue net, but we're very happy that the established partners average revenue per partner for the half year period increased by 18% to GBP 2.56 million, so approximately GBP 5 million on an annualized basis. Our promoted partners added an extra GBP 4.6 million of revenue, an average GBP 1.54 million of revenue per partner. Our promoted partners always perform strongly and come into the role with some revenue from their existing clients. And then we -- the hired partners in the period added GBP 1.9 million of revenue, an average of GBP 1.26 million revenue per partner. And then the acquisitions, Insigniam and Responsum in the period this year added GBP 6.6 million. So overall, we -- those are the small increase in revenue per partner for the half from GBP 2.06 million to GBP 2.09 million, but we managed that progression in revenue per partner at the same time as significantly growing the client-facing partner team from about 20 to 25 in the period, and absorbing the lower revenue per partner given the nature of the work they do that came with the acquisition of Insigniam. From a cash perspective, I mean, this continues to be by far the most cash-generative business that I've worked in my career. Our cash over the 6-month period increased from GBP 18.1 million to GBP 22.1 million. Operating cash flow of GBP 7.6 million, was up GBP 3.8 million from the prior comparable period, and that's despite GBP 400,000 additional cash tax for the reason I mentioned earlier. Our financing activities, there weren't any large M&A payments in the period. So the majority of that GBP 3.4 million is the interim dividend of GBP 2.5 million that we paid back in February. But we continue to have a strong cash position, which funds M&A dividends and buying shares into our EBT to offset dilution, as Steve mentioned before. From a balance sheet perspective, I mean, the balance sheet is very strong. Our debt collection continues to be good. We have no concerns with debtors given the blue-chip nature of our client base. Perhaps one thing just to point out on here, if you're trying to reconcile the numbers, the increase in net assets in the 6-month period is only about GBP 3 million, so less than the increase in profit after tax. And that's because the 6-month period has both dividends in it, the interim dividend that we declared in January and paid in February, and then the final dividend that we -- although we paid it after the period end in August, that was accrued at the AGM in June, so it's accrued in these numbers. Now I'll hand over to Graham for the business review.

Thanks, Nick. Hello, everyone. Graham Busby, CFO, and I also drive our inorganic activities, so I'll talk you through that shortly. Just to remind you how we think about the business in terms of growth. There are 4 ways to grow a consulting company, 3 of them organic, 1 of them inorganic. And just to step you through them. So the first is stretching our existing partners. That's essentially giving them more things to go talk to their clients about that they can then off the back of it, sell more and increase revenue per partner. We can hire new partners and get their black books as they join and obviously look to convert those into clients. We can promote partners from within and -- from a principal level up into the partner level and often they're set on a big account, and they're doing really well, hence the promotion, and we can help them do better and grow more. And then we can buy businesses. So just to step you through some of the details on each. So stretching our partners. So we had a half earlier this year where the established partners generated GBP 2.56 million per partner. That was up 18% on the half 1 from '23. That was partly reflected by increasing their revenue targets, but also by strengthening the client relationships that they had. And we're very proud that the increase in our clients generating over GBP 1 million, what we call gold clients increased from 18 to 22 versus the same period last year. So that is a lever that's going well. From hiring partners, we hired one partner in the period, and they came in to actually help turbocharge our BD function. And it was actually introduced over 50 new opportunities across the partner team already, probably 60 by now. So she's doing a fantastic job and working with the partners to convert those. We've also hired 2 more partners since the end of the period, one to build out our cybersecurity practice and the other to help build our financial services expertise, particularly in capital markets, risk and regulation. So we're excited of what they're going to do and the impact they're going to have. Promotions, it was fantastic. We actually effected the first partner promotion from within one of our acquisitions. Nick started on the 1st of January as a partner. And hopefully, that will be the first of many from our acquisitions. And actually, it's good to know that of our current team of partners, which is -- 30-plus, 10 of them have been promoted. So we're very keen on growing our own timber as we call it internally because they generally -- they understand the culture, they know the infrastructure of the business. They have great client relationships, and they generally make fantastic partners. So the more we can do in that space, the better. And acquisitions, I'll come to this in a bit more detail later about what -- where we're looking, but just to let you know one step, we screened over 700 targets in H1 this year, but I'll step through some of the strategy of that in a second, so I'm not repeating [indiscernible]. Before doing that, I just wanted to show an illustrative model here to highlight the relationship between our growth and dilution. We did this a couple of years ago, and I think investors found it very useful to understand the relationship, if you like, between that. Some investors have questioned whether or not if we have a unicorn and $1 billion -- GBP 1 billion market cap ambition in the next 3 to 5 years, is that going to mean they get overly diluted because of our equity model and the options and staff. And I think this model will hopefully allay those fears and to show you actually how it will play out using the -- assumptions that are based on averages of the past 3 or 4 years and extrapolating them forward. So just a bit of context, we have, since IPO, diluted less than 5%, but actually nearly tripled the equity value, 2.9x in that period. Now that dilution could have been more than 12% from acquisitions and the vesting of options if we hadn't managed that dilution through using cash and shares in the EBT. So that is something that we will continue to do. And this model actually shows that we can triple equity value again for around a 21% dilution using fairly conservative assumptions, which I'll come to in a second. And I think it would hopefully be interesting to know that if we use the cash generated in that period instead of printing paper, we could actually reduce that dilution down to 2%. So there's a range there between 2% and 21% depending on how much cash we deploy to this. But for tripling equity value, personally, having a sizable shareholding in this business, I would take that investment any day. And just to show you the main assumptions that are in there, is an equity assumption and dilution assumptions. From an equity point of view, the model assumes a 20% organic growth rate. So we haven't actually put acquisitions in here. That will obviously speed things up. There's a 28% EBITDA average margin. We have been between 28% and 30%, even over 30% since IPO. 70% of EBITDA going into free cash flow in the model. And we also haven't assumed a multiple increase. This model is done at GBP 6.25 share price, which is a 9.2 EBT to EBITDA multiplier. We've kept that consistent. Now we would expect and hope that there will be a market correction in our share price, and that will actually increase back to previous levels. And if that happens, all these numbers shift to the left. From a dilution perspective, we've assumed that the existing employees and partners that these shares they have -- the options they have actually have a dilutive impact at the end of the year at the share price for the end of that year in the model. We've assumed 4 to 10 new partners depending on the year to achieve the growth. We've assumed that employees grow at the same rate as the organic growth rate, a 20% increase. We've assumed average participation into our employee share purchase plan for both existing and future employees. And I think importantly, again, a question that we've had is how do you incentivize the partner team once the current options package runs out. What we've done in this model is we've extended for those partners the same options package again going forward with the same kind of assumptions in there to keep them hungry, if you like, to keep growing with us. And actually, we've assumed that from an average perspective, people roll into our option scheme, people perform in the same way and they leave our business in the same way as they have in the last 3 or 4 years. So all of those numbers and those averages have been applied to this model, and shows how we will achieve GBP 1 billion whilst controlling dilution for our investor community. This is a representation of some of the acquisitions we've made and to show how we think about transforming our service offerings. So the way that we look at acquisitions is will add to our capability, giving -- and then we will talk in a second about having more capability to talk to clients about, will it add and either increase our presence in a geography or open up a new geography? And will it again open up a new or increase what we have in terms of industry, so capability, geography and industry. Starting on the left, we actually added digital innovation to a large degree with our Den and Coast acquisitions. We then went in '21 with Retearn who added additional supply chain procurement costs. And this gave us a really nice kind of countercyclical capability, if you like, when markets are good, there's a lot of focus on revenue growth innovation. When markets are less good, clients tend to focus on operational efficiencies and costs, and we can do both. So we can pivot that diversification allows us in different markets to change what we talk to our clients about, what we deliver to our clients, or we can package them up in any mark -- in any type of market condition and doing together. iOLAP and Responsum came in 2022 and 2023. That gave us fantastic data and technology as well as artificial intelligence. Just to give you an example of artificial intelligence of a project. So we had a U.S. telecom leader, they wanted to create a company-wide AI capability, and they asked us to help them do that. And they actually wanted to use generative AI to decrease the time it took a sales rep to identify a prospect all the way through to qualification and then outreaching that prospect. So we connected a 360-degree view of the customer. We use generative AI. We built a ChatBot. We did a lot of data engineering. And actually, the results were pretty amazing actually. So very quickly, 93% increase in sales prospecting productivity, a 90% reduction in the time to first contact for the sales team, and we increased the revenue for these AI-enabled representatives by 83% in the following quarter. So the AI solution we put in had a demonstrable impact. And that is one example of many that we're doing with our clients, so. And Insigniam, Steve mentioned, they came in December last year, and that really gave us that breakthrough kind of cultural transformation capability. It also gave us an industry angle because they are very strong in biotech, health care and pharmaceutical. And we are actively and have won projects in this space from a consulting point of view and a data point of view into this marketplace. I saw someone asked the question around what industries are we looking at. That is one we are definitely looking to leverage with Insigniam help and network. All of this culminated in the numbers that Steve said. So to date, GBP 30 million plus of cross-sell. So if you think about the business, we have an organic business that grows. If we buy revenue, we buy that revenue, but then we can create new revenue together. So we've created over GBP 30 million of new revenue that none of us would have by ourselves, and actually GBP 8 million of that came in H1 this year versus H1 last year. Something else we've been doing is looking at how we can give back to our communities. And in particular, South Africa has been part of Elixirr's heritage since very, very early days. We started working with South African clients in January '21. Well, actually 2011, actually from our first clients -- that's true. I started in January. And it's been a very important market since then. It's contributed around 10% of our revenue in total since IPO. So we've been thinking and how can we get back into that community. And actually, the purchase of iOLAP gave us a fantastic platform to do that. So iOLAP, if you remember or if you do not know, we have over 200 data engineers and data scientists in Croatia, which is a data and AI now center of excellence for us. And we wanted to replicate that in South Africa by using the brilliant skills we have there, but we also have an academy in Croatia with some of the local universities. So we created a couple of months ago, a free 8-week IT program in Cape Town for university graduates to bring and we had a lot of people coming from Croatia and around the world actually, but to focus on data analytics and to upskill promising South African talent. Why did we do it? There was -- giving back to the community was a big factor, but also there was a commercial reason, bringing that talent into South Africa or helping develop that talent in South Africa. They have a fantastic time zone. They have the language, and they have a brilliant graduate community coming out of the university and it's exactly what we're looking for our youngsters. And also with Croatia joining the EU, there has been some cost pressure and as part of that, and this allows us to hedge against that to keep delivering the services to our clients. We had over 60 applicants to this first academy. We're hoping that will increase significantly in the next one. And we actually offered -- I think we had 20 of those applicants get joined -- join the actual 8-week course, and we gave 60% to that -- 12 of them a job offer last week. So that was a really nice [indiscernible] all accepted. So that was a fantastic thing for the whole team actually. And just final from me is just to give you an overview of inorganic growth. As I said, that is something that I'm focusing on. I've got a dedicated team working with me on that. We look at it programmatically. So we're looking at 1 or 2 deals a year and looking at kind of 10% to 20% of equity value to increase, that is a proven M&A strategy that creates more shareholder value than do lots of small ones or one massive one. So this is something that you should be looking out for in the future. We've done it for the last 5 years, and we'll continue to. I've mentioned this gets us into new geography. Well, U.S., the last 3 acquisitions have been in U.S. for every $4 spent on consulting in the U.S., $2 spent in Europe, $1 in Asia. So it is the world's biggest market. There's no coincidence that the last 3 acquisitions we've done have been in the U.S., and we have a healthy pipeline in that space. But also looking into Europe, maybe it's the DAC region, maybe is the Nordics, we will, at some point, be looking to buy into those geographies. And looking at boardroom issues. So adding those capabilities that the partner team can use. Cyber is the one that we're looking at, at the moment. We've inorganically -- sorry, we've organically brought in a partner to run that and build that. We can supercharge that with the right acquisition underneath. And there are other things it could be market research competitor intelligence, things that we do bid on today, but it needs to do more, and our clients are asking us for that. Industry additive, I mentioned. Can I just make a point on the cyber point. The partner we hired is an ex-McKinsey partner who build their cybersecurity business. So the interesting thing about why I bring that up we're starting to attract talent of ex-McKinsey caliber, if you like into our business and they like our equity participation model as a way of the full medium of the consulting industry, if you like. So it's an interesting angle there. And the industry angle I mentioned how [indiscernible] was that the great kind of stepping stone for us into their industries. Other industries that we're looking at energy, oil and gas. We have a few clients in those spaces. We don't -- they are huge industries for some of the bigger consultancies. So we are looking to buy into those spaces. But everything has to be high quality. We're not going to lower the quality bar. So one of the reasons on the right-hand side, as you look at the numbers from due diligence to deals, you can see that we pull out of nearly half of the companies that we actually get into DD with. So that means we've signed heads of terms and essentially just need to close the deal, but that's when we do our proper DD. And oftentimes, we'll find that the quality just isn't where it needs to be and rather than reduce high quality going forward, we'd rather pass on that deal. And just finally, from a deal structure point of view, it's dependent on the leaders in the cap table and what's going to happen outside versus their side, but we want to align the leaders coming in with a significant portion of equity in Elixirr because then yes, they'll take cash off the table. But if there's a chunk of equity that aligns into our partner team and that aligns to wanting to be successful, successful integration and a successful future. So that is the way that we do structure a lot of our deals. So with that, I will hand over to Em to take you theough some of our clients.

Thanks, Graham. Afternoon, everybody. My name is Em Caerlewy-Smith. I'm one of the client-facing consulting partners at Elixirr. As we've grown, we've been intentionally increasing our resilience by diversifying our client base. And as you can see on the left-hand side of this slide, in the last 12 months to June '24, our top 10 clients actually stand across 8 different industries. So our top 10 clients all being gold clients of over GBP 1 million, and actually, all of these were over GBP 2 million. And at the same time, as diversifying our client base across different industries, we've always diversified our client concentration. So in 2020, we had 52% of our clients concentrated in the top 5. That's reduced to 33% as of the last 12 months to June '24. In 2020, we had 80% of our clients concentrated across our top 10, and that's reduced to 49% in the last 12 months to June '24. And at the same time, we've increased the number of gold clients. So it was 9 gold clients in 2020 and 22 gold clients as of June '24. And the number of our clients we serve across the business has also grown with our growth. So we've gone from approximately 50 clients to now well over 230. And as we've been diversifying our client base and deepening our client relationships, we've also been building our challenger consultancy brand. So back at the IPO, we had some feedback from the market that we needed to improve our marketing and our business development effort, and that's exactly what we did. We set about hiring the best marketing team to help us grow the revenue that was being created through what we call cold marketing leads. So as you can see here on the graph, the darker purple area is the revenue that we are starting to generate from those cold leads, those outreaches that we're getting compliance coming to us through our website. And some of those impressive logos are at the bottom right of the slide. So in the year-to-date to August, we had contracted for the whole of the year, GBP 4.3 million of cold lead revenue. At the same time, increasing our marketing efforts with our challenger brands, we also hired a business development team, so Nicola and Bob are now heading up that team very successfully, having brought in GBP 1.3 million of contracted revenue for the year as of August. Obviously, that will have gone up by now for their efforts in business development, networking amongst the existing networks, new networks and attending events on behalf of the partner teams to bring those new leads into us and work with us to convert them. Some of the statistics on the bottom of the screen here, just a couple to call out. Obviously, our following on LinkedIn has increased. Our website and -- direct website traffic has increased. But most notably, our revenue from marketing leads in H1 2024 is 133% above what it was in H1 2023. And finally, test study about one of our trusted clients that we have become trusted advisers to. So with that client, which was a large financial services business, and there was an individual within that clients who love the way that we worked with her. And between 2012 and 2021, we generated GBP 17 million from this specific client relationship within this financial services organization. And we developed a really deep relationship with this stakeholder. And at the time of IPO, when surveyed for her views, she told us that she felt that Elixirr was willing to do whatever it took to make clients satisfied. And the likelihood to recommend was 10 out of 10. That client, that individual actually then decided to go into consultancy herself. So she took on a senior leadership role at an established consultancy. The financial services organization continues to be a client, albeit this individual left and moved into the world of consultancy. But immediately that she got there, she realized that not all consultancies are built equal. And she wasn't really believing and buying into the culture and the approach of the firm that she had joined. She felt surrounded by bureaucracy. She felt there was a lack of entrepreneurial approach that she's become used to receiving as a recipient of consulting services from Elixirr. And she also felt the quality bar that was being delivered at that consultancy was weaker than what she had become accustomed to receiving from Elixirr. And so her few years in consultancy soon translated into have move back to industry where she immediately decided to reengage us. And we're incredibly proud with the quote at the bottom right of this slide, where this client has told us that she knew that we stood head and shoulders above the competition and that our diverse range of services is fantastic. And that diverse range of services exactly speaks to what Graham was talking about in terms of the acquisitions we've made in growing the capabilities that we as client consulting partners have to bring to our clients and grow those relationships into those gold accounts. I'll now hand back to Steven, who is going to summarize and talk you through our outlook.

Thank you. Yes. So thank you for listening so far to us. Just to summarize, there are other main points I'd like to highlight. I mean we haven't mentioned this number specifically in this conversation, but we have had a 37% revenue CAGR since 2019, which is the year before our IPO, and that's a combination of the acquisition and organic strategy working hand in hand. That's a very, very a fantastic growth CAGR over that period. We brought our forecast, we're using 20% to 25% to get to that $1 billion number. We hope to get in this range, but we also want to be realistic, and we're forecasting in the range of 20% to 25%. EBITDA, we still think we're going to maintain our EBITDA, and we have done 29% to 32% EBITDA since IPO, which is fantastic. The other thing I mentioned is that we're such an entrepreneurial firm. Em spoke about our client here. She was ready to went into one of those big firms that we all talk about the top 10 and really did not see that same thing that she saw within us. This comes from our partner team owning 55% of the share capital and I'm very, very motivated like I described around the way to value this firm for them is through equity growth, which for you all listening on this call should give you a lot of comfort that if these partners are still here and if they're still investing and they're not selling their shares and they're staying in the company, they all believe in the growth of this business, that is massively undervalued and that we see a big upside, not only rerating in the share price because those of you who follow the market would have seen that Alpha FMC got bought by a private equity firm at 14.5 EV/EBITDA, whereas I think Graham mentioned, we're a 9.6 at the moment EV/EBITDA. So there's a rerating to come, plus the growth that we expect in this business going forward with all of the models we have in place, the diversification, et cetera. And you can see the revenue per partner increase there over the period from 2019 to 2023. We're organizing our business as we mature to be very client led. So I'm a great believer of being in three different businesses that all organize themselves differently. But the best by far that I've seen and -- what we've seen play out in our business is that we have an industry orientation where the client comes first not the capability. We have lots of capabilities. But we focus ourselves around the clients' business problems and then we use our capabilities to solve those problems. So we go into market in a way and one big differentiator I will say the brands like the top, the big 4 is that being a company with a single P&L means that we can move talent to the problem no matter where it is in the world, whereas you're finding those big consultancies, they actually franchise models, and they're actually national franchise models. And there's a massive transfer pricing costs between those businesses, and it is a friction point of delivering the talent to the right situation for the right client in the right location. I've experienced that first time, we have undertaken our business, which is fantastic. You can see the increase in number of gold clients there 22% and mentioned that 6 acquisitions Graham has done since we've -- well, actually done 5 since IPO and 1 pre-IPO, so you've got 6 acquisitions. This half, GBP 8 million on cross-sell revenue. I think the number was 82% up on last year last half, fantastic. And the brand is growing, as Em spoke about, 32% of our client rates is better than McKinsey, Boston and Bain, which are arguably the pinnacle of the industry in terms of the comparison to us. 100% applicants -- 100 applicants per role. So when people say, how are you ensuring your quality bar is high, it's really important to understand we had 1,000 applicants -- 4,000 applicants last year from the university. The university graduates love our brand. They love our positioning. It's not stayed, it's not traditional. It's modern, it's disruptive, it's challenger, different remuneration model, far more entrepreneurial. The 4,000 applicants, we take 20. So we get the pick of the bunch. And these applicants are coming from -- they're coming from the best universities, Oxford, Cambridge, Berkeley, Stanford, MIT, you name it. We get the fantastic applicants, and that's a really positive thing that fuels the bottom of our engine because this is that kind of business where if we're putting talent in at the bottom, we see performance at the top. So speaking of -- matter of fact, Graham. Speaking of that, the outlook, we have a proven track record. We've never missed a number. We've actually upgraded 8x. We have a global team that's invested in our business. We diversified since IPO, multiple industries, multiple capabilities. We're maturing our acquisition strategy. It is mature. It's continued to keep us fuel on that front and give us new markets, new industries and geographies. We've got ourselves fairly recession-proof in the sense that the consulting industry itself has grown. So I think it's a 9% CAGR for the last 20 years. for the last 20 years. And that's phenomenal. That's gone through 2 recessions. The reason, I think, is -- because the business is becoming more complicated, not less. We found all those technologies and people can be experts in everything. So they look to consultancies to help them into good and bad market. Right? In bad markets, they may be looking for cost reduction. In good markets, that may be looking for growth or acquisitions, et cetera. So as long as you build yourself a sufficiently diversified portfolio of capabilities and a sufficiently diversified portfolio of industries, you can be fairly resilient to market conditions in this industry. One of the best kept secrets is the consulting industry. So why you find very few listed consulting companies because partners tend to keep all of that themselves, but we're using a different model of trying to incentivize around equity growth and include the investor participation in this. Em mentioned our brand is starting to be built, and we're starting to become very respected. and starting to become expected, pointing to the Forbes recognition as a fantastic example. Obviously, clients out there talking about us to third parties, which is great. In terms of outlook, we're expecting 28% revenue. Well, we had 28% revenue growth in half 1 for record revenue months. But on an outlook basis, we're expecting GBP 104 million to GBP 104 million, and we are expecting in our EBITDA range. We can see this starting to benefit itself in months that we've had since June half year. So we have a strong outlook for the year, and we are very confident that the business is going to continue to perform as we have. But the comment Nick made about we often see business trends like our performance because we expect to continue to deliver performance like our actual performance going forward. So thank you for your time. And for those of you who are investors, thank you for investing in us and believing in us, and for those of you who aren't investors, hopefully, this presentation helps you understand our business a bit better. And you would consider taking investment and standing alongside us with my whole partner team who are trying to grow this business as best they can. So thank you for your time. And I think we hand back.

[Operator Instructions] Nick, perhaps I could come to you and if I may just ask you to read out the question where appropriate to do so directly to the team, and I'll pick up from you at the end.

Yes. Okay. So thank you. If I -- start with the first question. How are end markets looking at the moment compared to the last couple of years, better or worse?

Should I answer that? Yes. So I did make a comment on the consulting industry per se. I presume you're talking about our client markets in this case. I think a lot of clients are facing difficulty and they are often asking us to help them through those difficulties, whether it's to reduce cost or perhaps focusing on the areas of critical importance. I would say, how does that translate into the consulting industry. I think if you're a high-quality output, you will sustain or grow your position in these markets, right? Because it's like anything, when McKinsey announcing that they are cutting 200 heads or 2,000 heads or whatever they're doing, it's never worth a good crisis. What they're doing there is they're getting rid of people that are perhaps at the bottom half of the pyramid. And that's not too bad for consulting firms. Actually, at times, you need to do that kind of pruning and they use sentiments in the market to deliver on that. And it's the same with consultancies themselves as clients buy them. They will always buy consultancies, no matter what the market conditions, they will always buy. It's a question of what's your quality bar. Are you in the top half of the pyramid or the bottom half of the pyramid. If you're in top half of the pyramid, you are safe and you probably will grow your position, because there is more work to do and they probably overcut. So the question is not really what's the market doing, but how is our business tailored to address that market? And I believe that the quality is the key and how do you make sure you deliver on that quality is you have people who are fully vested in the performance of the business at a fundamental level, which is ultimately the equity performance. And that's why I believe we are performing so well in the context of difficult conditions for our customers.

Next question is about staff churn, what's that like? I mean our staff churn is very much historically been. In total, it averages a number like 17%. But of course, our aggressive attrition is much less than that. Our equity model means that the strong performance of our business very much have long tenure and are incentivized to part of the growth of the firm. So we make no apologies for the fact we are a high-performance culture. And of course, that does mean that we have some people who self-select out of it. But from our point of view, I think our staff churn is somewhere we're quite happy with where it is. We've got a couple of clients or selling questions. How do you identify and manage cross-selling opportunities and maximize that? And then in relation to, obviously, all firms lose clients each year. What's our strategy regarding sort of blend of acquiring new customers versus retaining customers?

Do you want to take the first one?

Yes, I can do it, yes, and then maybe you'll take the second. So on the cross-sell question, it's so relevant to one of my clients. So for the last 2 years, I've been building what is now the firm's largest clients. And that has been through capitalizing on the opportunity that those cross-sell capabilities have bought us. So as a partner team, we meet on a quarterly basis. We discussed our clients very transparently. We discuss the position that we're all in, in terms of building our revenue profile for the year. And that inspires conversations and discussions and ideas about ways we can deepen our client relationships across different capabilities. So I am very able and willing to pick up the phone to my partners of other capabilities to bring in those capabilities to solve my clients' problems whilst building on the relationships that we may start with data and end up in a point of digital marketing, for example. So the cross-sell opportunity has definitely increased our ability as individual partners to grow our own accounts while bringing in those capabilities of our subject matter expert partners that have been acquired.

Perfect. And then the next question was all companies lose clients this year. What's our strategy regarding customer acquisition versus retention? So yes, look, all companies do lose clients each year. Often that will be because although they haven't done a good job or because a project comes to an end, it could be a long-term project that they've just completed. Happy to say that we do not get asked to leave for the former, but sometimes the project does come to us. And Nick took you through the revenue bridge where in the half, nearly, it was GBP 4.8 million of projects did come to an end, called end of life as he referred to it. And actually, what is our strategy to counter that? It's the bars that were increases in that chart. So how can we get existing clients buying more things from us, Em just describe how we do that. How do we get new clients? We've been investing heavily into our BD function with Bob and Nicola as an example. That is a good way of bringing in new clients, hiring new partners with new black books that is a way of getting new clients. So we are completely focusing on that all the time. And then acquisitions, that is a good way, again, to add clients into the mix and to literally acquire new clients within an acquisition. So all those, they align really nicely to our 4-pillar growth strategy, and it's something that we talk about, if not every day, then every other day.

Okay. The next question is from Keith, your gross margin percent is lower than many other professional services businesses. Why is this? And can you increase it? Well, I mean I think -- I mean our gross margin, I mean, I think we probably put more costs into cost of sales and that have a low gross margin and perhaps other companies do. So for example, all of our people cost goes into cost of sales. I mean -- and I guess -- our focus is very much on the EBITDA margin. The allocation of costs between cost of sales and then operating expenses, I mean, it's really interesting, but it's actually not the important factor for us. It's the adjusted EBITDA margin after all of those costs. And I think it's fair to say, I mean, we're very proud of that sort of average 30% EBITDA margin we achieve. And we look -- I mean, as Graham has said, he's looked at literally hundreds and thousands of acquisition targets. And very, very few of those achieve that same level of profitability that we do. So we think that's a strong position that we're in at the moment, and we expect to sustain it going forward.

Okay. I think of the 640 companies, you looked at Graham, is it 5?

Yes, a handful have had the better EBITDA margin than this. So if you engage 640, yes, we're in the top 5 in terms of how we run our business.

[indiscernible] and clear.

So I think we've got two more questions. So how many other consultants do your top 10 clients use?

How long is a piece of string? I mean some of them smaller businesses might only use a handful of consultants, whereas, pick a Tier 1 bank, they'll use 50 different consultants across digital data and strategy. So it really does depend on the scale of the business. But that is why if we can keep differentiating ourselves, making ourselves stand out, investing in those areas of emerging tech and making it relevant to the business. That's where we see our differentiator in the way that we make a difference.

And then the last question we have is with the strategy to grow to the unicorn, how much future revenue can you see at any point in time?

Yes. So it's probably worth describing how we manage the business in that context. So you get two types of business. If you take an Accenture type business, it's got long tail in. They do a lot of outsourcing and they do a lot of systems integration, and that's the lion's share of their revenue stream. And that's got long contract visibility. So outsourcing deals 3 to 5 to 10 years of systems integration projects can run at like 1 year to 3 years type of thing. So they kind of -- you can see this long future order book of revenue. In strategy firms, you don't get that. So the contracts are much short contact, duration contracts and more discrete packages of work. But they're higher value. So you look at Accenture's margin, EBITDA margin, for example, I think, Nick, we looked at it the other day, 17%, somewhere around there. We have a strategy platform more higher-value consulting, but the downside to that is higher EBITDA. We're in the 30% range. The downside is that you don't have the long tail revenue visibility. So the way we counter that is two ways, really. It's the diversification that we spoke about and I spoke about at length in our previous investor presentation, but we touched on today. The multiple industries, multiple capabilities in the multiple geographies, and we've done an exceptional job of doing that since IPO that makes the business resilient and robust because you've many different angles at protecting the business against headwinds. The other thing that is crucially important is how we operate as a team and the capability all of us have to the performance, the individual performance at a revenue and at an EBITDA level. So every week, we get the partner group together, and they go through the pipeline and they go through their forecast pipeline for a rolling 3-month view, okay? And that's updated every week. And then once a quarter, we do a rolling 12 months. So -- and that's a physical in the room conversation. So we get them together one quarter and we do that for a 12-month view and then we do it every week for a 3-month view. And that gives us pretty robust views over time, we can understand how good our forecasting is, we understand how much we can rely on the forecasting. We can see where clearly, the puts and takes in everyone's forecast. We never get them quite right. But overall across the 30 client-facing partners, we get pretty close. So hence, we've been able to be as reliable with our numbers that we present to you guys, we spend a lot of time managing what we see going forward and how we address those things. We see weaknesses. We take action immediately, because we're seeing it every week, right? So it's not something that -- it's literally the way we run the business. So hopefully, that gives you a good understanding of that.

That's all the questions.

Thank you very much indeed for taking all the questions. Of course, any further questions that come through. The company will be able to review those, and published responses where appropriate to do so on the Investor Meet company platform. Just before redirecting investors to provide you with their feedback, that's particularly important to you, Stephen, if I could ask you just for a few closing comments, please.

Yes. So I think I said it at the end of the presentation. But thank you for those of you who are our investors. Thank you for supporting us and for those of you who are thinking of investing, hopefully, in this presentation is giving you a good sense of who we are and what we're trying to achieve. I think just to leave you with -- the most important thing, I think, for financial investors is that every single one of my partners are significant financial investors in this business. And we live this business every day, and we continue to invest in it every day. And that should give you a lot of faith in the future view of this business because my partners wouldn't be here if they didn't see the future view. And you might say that people walk out the door, but they're long-term investors. They come to this business with a 5-year view. Since IPO, I think we've only lost one partner who left for their dream jobbing industry, which was -- this is an individual that had been with us for years. We made her a partner from principal. It was a regretted loss, obviously. But interestingly that job has ended and she has come back and is an associate with us, because she believes in this business and wants to help this business grow. So I hope I can leave you with that as a closing statement. We are all investors alongside you and we believe in this business. It's got a lot of future ahead of it and some really interesting things that could even go way beyond the billions.

Perfect. Steven, thank you and the team for updating investors today. Could I please ask investors not to close the session to now automatically be redirected to provide your feedback in order the team can better understand your views and expectations. This will only take a moment to complete and that's greatly valued by the company. On behalf of the management team of Elixirr International Plc, I would like to thank you for attending today's presentation. That concludes today's session, and good afternoon to you all.