REACT Group PLC (REAT) Earnings Call Transcript & Summary

Good afternoon, and welcome to the REACT Group Plc interim results investor presentation. [Operator Instructions] Company may not be in a position to answer every question received during the meeting itself. However the company will review all questions submitted today and publish responses where it's appropriate to do so. Before we begin, we'd like to submit the following poll. I'd now like to hand over to Mark Braund, Chairman; Shaun Doak, CEO; and Andrea Pankhurst, CFO. Good afternoon.

Thank you, Paul, and welcome to everyone who's joined us today. Welcome back to those people who've seen us before, and welcome to those people who haven't seen us. So yes, Paul, if we can just dive straight and see the first slide, please, just give an introduction. So my name is Shaun Doak, I'm the Chief Executive Officer of the group. I joined the business back in March 2019, as Managing Director of REACT Specialist Cleaning and then 11 months later, I was appointed CEO through to the Plc. I've got a track record of growing businesses in the specialist cleaning with facilities management and the HVAC service sectors and my background is business management. Over to you, Andrea?

Thanks, Shaun. Yes. I'm Andrea Pankhurst, I'm a chartered accountant. For most of my career I've worked with in the SME sector. And I particularly specialized in improving processes and controls, making systems work more effectively and hopefully getting some meaningful reporting out for those companies. Over to you, Mark.

Thank you. I'm Mark Braund, I'm the Chairman. I got involved with the business back at the very end of 2018 when it was a completely different looking business to what it is right now. It was very much having a number of problems. Fantastic service offering at the core. Customers loved what we did, but the business was unable to make that profitable and its customer relationship management was poor. So we hired Shaun and Andrea to basically rebuild the business from the inside out, which they did remarkably well and remarkably quickly. And by the end of the first year, we appointed them to the Board as CEO and CFO, respectively. They have done a fantastic job. What you're about to hear now is sort of 3 years in and the next stage. So back to you, Shaun to begin the story.

Thanks, Mark. okay. So I'll start off by giving a little overview of the REACT Group. We carry out specialist contract cleaning across U.K. When I say U.K. not Mainland U.K. because [indiscernible] proposition, we're now going to Northern Ireland and Ireland, we operate 365 days a year, 24/7. And we operate both cleaning and hygiene maintenance and specialist call-out work. If you see the message before, the very -- our strategy is very much aligned to our previous message, and that is to build out the long-term contracted business, both through organic growth and also some carefully selected M&A. Clearly, the recurring nature of this work will lead to a more predictable business moving forwards and take away that reliance on the reactive work, which sometimes can ebb and flow. . On the backdrop of COVID, cleanliness and hygiene is clearly ranked much higher in social conscience and our clients are now are looking for a more consistent and reliable solution company, capable of delivering anywhere in the U.K. So in summary, we believe there's still significant scope for continued expansion in what is a sizable and fragmented specialist cleaning market. Looking at our customers. We've got a number of blue chip Tier 1 customers, some large facilities management companies as well. So that's not changed. We still operate across a diverse range of market sectors, and these range from education and rail, all the way through to health care and industry. Typically, the markets or the sectors that we operate within are very resilient and they have requirement for our nondiscretionary services. You'll see a number of logos there. Just gives you an idea and a little bit of flavor of some of the customers that we now work with. Move on, please, Paul. And I'll pass you over to Andrea now, she'll give you an overview of the performance highlights from H1 and post periods.

Thanks, Shaun. So you can see from the figures that the REACT has made significant progress since last -- since FY '21 first half. We've more than doubled the revenue. And that is -- that change is obviously due to the impact of Fidelis now being included in these figures, and it wasn't last year because of the timing of the acquisition. But there has been organic growth in both companies during the FY '22. The margins are now showing the impact of the much higher proportion of Contract Maintenance work that Fidelis brings to the group. That's one of the reasons why Fidelis was an attractive target company for us because of its high level of recurring revenue. So typically, the contracts that Fidelis holds are 3 to 5 years, and the margins they attract on that work are generally in -- well, they are in double figures. And this actually compares really favorably to other large companies in this industry who will often work at low single-digit rates. We've had contract wins during the first half, which Shaun will mention in a little while. And our reactive work, which was a bit soft at the beginning of H1, we are now seeing signs of that returning. A lot of that work is in the police and judiciary sectors, and a lot of their customers, client work is -- has moved to online, but we are seeing a return to that sort of reactive call-out work. During H1 in FY '22, we've had some mobilization costs, which relate to some contracts that are going to come online in H2 of this year. And we've also taken on to senior sales and marketing staff. Again, Shaun will give a little bit more detail on those individuals shortly. Post period end, so since H1, obviously, we've had the acquisition of LaddersFree. We raised GBP 5.5 million in a fund raise to assist with the acquisition of that business. And we've also had a new debt facility in place. So this facility is there to help support our organic growth in H2 and beyond, as well as navigating the cash flow fluctuations of normal business in the expanded group. Can we move on to the next slide, please, if that's okay. Thank you. So I'll just run through what our reporting segments are. We have covered these before, and they're the same as they have been before. So firstly, our Contract Maintenance segment, as you can see, significant growth there, as I've mentioned, because of Fidelis being included in these figures. In that segment, we work in health care industry, education and the rail sector. So a lot of this work is nondiscretionary in nature. Our contracts are often 4 to 5 years in length, and we employ our workforce who staff those projects. So the margin is very much now the blended margin between REACT and Fidelis. And in there -- again, within that margin are some mobilization costs that relate to the new contracts that are coming online in H2. Secondly, our Contract Reactive segment. This is where we have framework agreements with our customers. Again, a lot of these customers we've worked with for quite a few years. We have a defined set of services we provide for them at define prices. They call us out as and when they need us. So typically, for the police, also the rail sector, we might be clearing -- cleaning a prison van or cleaning up a fatality on a rail, an incident that trains being involved in. So this work, although it's unpredictable, it does recur. The customers do keep calling us out and we've been working with these customers for quite a few years. In general, we employ our workforce, who is staff. But occasionally, we use our network of subcontractors to help support us where there's excess demand. And then finally, Ad hoc, so these Ad hoc jobs are truly one-off jobs. They come from either our existing customer base who may be used this for Contract Maintenance or Contract Reactive work already or it could be brand-new customers who contact us, and ask us to carry out some work for them. So this time last year, we had a lot of COVID work that was going on during 2021. We knew that, that wasn't going to carry on long term, and it hasn't -- so we have managed to replace that work partly with some Ad hoc work that Fidelis does and partly with going back to the traditional types of Ad hoc work that we've always done within REACT, clearing fly tips and anything that our customers may come up with at any time that they need sorting out. So this is our highest margin segment because of the unusual and one-off nature of the work. Again, where we can use our own workforce, but we're often using our subcontractor network to help us fulfill this work. I'll hand back to you, Shaun, please.

Yes. Thanks, Andrea. Okay. Just before I move on to talk about the contract wins. It's probably a good play to now just to pause and just remember that the group is very different now than what it was last time we presented. So we've got REACT Specialist Cleaning, which predominantly look up to the emergency and decontamination work, as Andrea just alluded to, back many things from a [ train totality cleaner ] all the way through to a dirty protest in a cell, it's particularly reactive by nature. On the Fidelis side, we've got more of the hygiene and maintenance works as recurring revenue streams. So typically it's a 3, 5 or 7-year commitment from the customer that gives us recurrent revenue and line of sight moving into the future. And they're very strong in the education, the health care and the industry sectors. And then more recently through the recent acquisition of LaddersFree, they are one of the largest or lead in window clean and uncladding and cleaning companies here in the U.K. And again, recurring revenue, typically, these cleans can be done daily, weekly, monthly or at worst case quarterly, but they're part of a bigger contract, so they have line of sight of revenue in the future. So, [indiscernible] since we completed the Fidelis acquisition early last year and more recently, the LaddersFree acquisition this year, we have a much more credible proposition as a group. It led to a number of wins in H1. We've got some multiyear deals there, which have predominantly delivered through the Fidelis model. I'm not going to bore you all and go through every single one of them individually. And then we've got some specialists contracts, which are typically delivered through the REACT model. Post period we've got 2. We've got 2 to mention, 1 is a 3-year commitment in the education sector of a spend just shy of GBP 0.25 million per annum. That's through the Fidelis model. And then we've got a number of smaller wins, which are typically 3-year commitments and they range from health care, education and commercial sectors and they delivered across the Fidelis and the REACT model. So in summary, what I'm saying is we've continued to take advantage of our growing size, it's allowed us to tender and secure some more material opportunities. And it's allowed us to cross-sell constantly across the group, which has been great for the growth. Moving on, please, Paul. Thanks very much. So looking at our strategic progress, those who have seen this presentation before, it's very much our ambition to continue to scale in through double-digit organic growth to become GBP 800 gorilla, the leading specialist in what is a fragmented space. Through our M&A strategy, which Mark is focused on and he built out a pipeline of opportunities using a company called BDO, who have helped us about, we've proven that we've got it right with Fidelis earlier last year. I'm sure we've got the exact same mix with LaddersFree. So I am going to just leave that there for now. Mark can talk about that with any questions later on. But focusing on the organic piece. We've got a strong record in growing out the business organically. We've built up some good momentum in long-term contract wins, and we've got a constantly growing pipeline. We've just appointed 5, 6 months ago, 2 key senior sales and marketing experts. They've joined the business with a wealth of knowledge in this space. First of all, you've got Sam Haywards, who is our Group Head of Business Development, more recently before joining the REACT Group, he was with [ MG ]. So has a wealth of contract and knowledge within the space, particularly in building out that Contract Maintenance space, with a little bit of REACT in the mix as well. So he's already added to the wins, which has been brilliant and he's really taken hold of the sales team. You have to remember before Sam joined the business, any material deal was really -- it was me out there seeing customers. So Sam's helped that. He's also brought, Chris Ryan into the business who now heads up the Fidelis business as sales manager, again, wealth of experience in the space. He more recently has been with BICS, which is the British Institute of Cleaning Science, has a very consultative approach to the way that he approaches opportunity with clients. And again, he's materially added to the pipeline and some opportunities that we've announced there in H1. So I guess, in summary, what we're going to do, we're going to apply our successful marketing model to the LaddersFree business. We'll constantly cross and upsell across all 3 elements of the business. And we've demonstrated continued progress putting in some key components to help deliver growth strategy. Moving on, please, Paul. Thank you very much. So just looking at the acquisitions, a brief recap. This business was founded 20 years ago. It's one of the leading cladding and cleaning business here in the U.K. And as I said earlier, they do operate in Ireland, too. They are very unique and they've built up a highly profitable recurring revenue with low working capital. It's highly cash generative. And they've built out a very competitive nationwide ecosystem of over 300 local specialist service providers. And when I say specialist providers, they're not clad in new shirt, they are in professional outfits and they are trained, audited, certified in exactly the same way as they would be if they were employed in other elements of the group. Customers are very sticky, attracted by quality performance, low cost, they're able to deliver multi-location to nationwide customers. And if we compare the LaddersFree model for someone like perhaps nationwide or Mitie. often with Mitie or nationwide that gets, they'll secure a piece of work, it gets subcontracted and then if not subcontracted, we will subcontract it again and so on and so on. But LaddersFree that doesn't happen. We provide a nationwide service, like I said, on a multi-location regional model, and that leads to what we believe very sticky customers. If we look at the national customers there, we've got 21 customers, typically added a customer every single year. It equates to 53% of the LaddersFree revenue and more powerfully, I believe they've got 0% churn. I don't believe any competitor in this space could sit here and say that they've got 0% churn from national. And I believe that's a credit to the work that Jason and Justin, the founders and the team have done more the last 20 years, and the way that we deliver our local service nationwide. That is we've grown the business from modest marketing, I don't think the founders might be saying that. And we're looking now to apply the sales and marketing strategy that we've utilized in the rest of the group to help drive strong organic growth in what we believe is a unique, high-value, high-margin and cash-generative business. Moving on, please, Paul? Okay. So looking at the outlook. So H2 started well, particularly in the Contract Maintenance business. That's continuing to report record trading months. The long-term contracts that won and mobilized during H1 and now beginning to deliver revenue in H2 just as expected. We've seen an increase in reactive work, certainly at the start of H2 and following the increase in the sales and marketing activity that I've just mentioned, our opportunity pipeline is steadily growing. And actually, right now, the pipeline is healthier now than it's ever been in the whole time that Mark, Andrea and myself have been involved in the business. With regard to LaddersFree, we expect it to continue making a material contribution to the Group's performance in H2 and well beyond. Integration has gone particularly well. The founders Jason and Justin really good guys, their ethics and their entrepreneurial mindset is very similar to Andrea and Mark and myself. The culture within that team is fantastic. We've got people in that business who have been there for 11, 13 years. And I think the -- other than the recent recruit, I think the shortest tenure is 6 years. So they are very very much aligned to what we want to do with the business and with the help of the team, I'm sure we'll do that. With regard to revenues in May and June, we've been exceptionally strong, and in summary, we're trending in line with management expectations. And as we stand right now, we've got a solid outlook for the remainder of the year and beyond. Moving on, please, Paul. Thank you. So in summary, as we said before, it's very much our aim to become the leading specialist in what is a valuable and highly fragmented market. Our strategy is focused on building out that long-term recurring revenue stream in nondiscretionary specialist markets. We're going to track record of delivering double-digit organic growth alongside some strategically important acquisitions. And we believe the recent acquisition of LaddersFree will not just be transformational, but it will be earning the pence and it will allow us to build scale in both market cap and earnings. Over to you, Paul.

Fantastic, Shaun. Thank you very much indeed. And to Andrea and Mark as well. [Operator Instructions] I'd like to remind you the recording the presentation along with the copy of the slides in the published Q&A can be accessed via your invested dashboard. Before we go on to the live Q&A mark, if I may, we did have 1 presubmitted question, which reads as follows. Do REACT also provide security services as part of their FM offering?

I'll take that one. No, we don't. We know about some of our competitors do, but it's not an area that we wish to focus on just yet. We want to concentrate on what we believe we've got right. Our focus is very much inch wide, mile deep. So we don't want to be going up into areas that we don't want to focus on this yet.

That's great. Shaun, Thank you. And Mark, if I may just ask you just a click on the Q&A tab and where appropriate to just read out the question and either take it or pass it to one of the team, that would be great. And I'll pick up from you at the end.

Thank you. Thank you. Okay. So we have several questions actually. So let me get started. William, William W. has asked the first 3 questions. The first one is, in May 2022, the company forecast an adjusted EBITDA for the year ending [ 09/30/2022 ] of approximately GBP 1.3 million. Does that view still hold? Well, I'm going to take that one and ask the guys if they want to add anything to it. It wasn't our forecast. It was, of course Singer's, our house broker. I know that's being pedantic, but that is the way in which we have to present, it is their forecast. And if anything changes, obviously, we operate within a rule set where we have to make that announcement. But as you heard from Shaun and Andrea, but Shaun in particular, he said that we are currently well on track for the expectations that the management team has set. So I think we're in good shape. If anyone want to add anything to that?

No, nothing for me. I think I covered it in the slide anyway.

Yes, I think I agree, covered there. I think.

Okay. All right. Well, William, hopefully that answers that question. The next question from you says, can you please. This is very well put questions actually. It's nice to get them not quite as planned as sometimes they are. So William has said, "Can you please convince me that a maximum total purchase price of GBP 8.5 million for LaddersFree is good value." That's, I think, going to come back to me to answer as well, although Shaun and Andrea, I'm sure can comment further. As you've seen during the presentation, what you have here is a high-quality business. It's got a unique offering. It's got to -- that offering is actually compelling. The financials are hugely attractive, you hopefully would have seen the detail on that. I'm not going to try to repeat them, but you've got a business that over 20 years has grown pretty consistently and has not lost customers; there is one customer and kept them and it is a compelling proposition, as I've just said. And the financials generate a very solid margin and a very solid EBITDA also requires very little working capital, and it generates cash. And at about 5.7x earnings, we think it represents good value, very, very good value to the shareholders. I'd like to add that through our presentations leading up to the acquisition, we had to talk in a little bit of code around the company, we weren't able to declare who it was, but very much the business model we believe is akin to a very similar model that you see current operating at Pimlico Plumbers. And for those of you that followed the Pimlico Plumbers story, you'll understand just how valuable that business was when the owner exited a couple of years ago. So from our point of view, we think that the money we've paid is great value. And I should also add, I think that the 2 previous owners, Justin and Jason also believe in the value of bringing the company together so much so that they have rolled a significant part of their stake back into the enlarged group. So yes, I think we all believe it's good value. Andrea, Shaun, anything to add to that?

No, I think you have answered it well.

Yes, I think you have answered well Mark, it's been very thorough.

Final question at the moment from William is for the Contract Maintenance work, what gross margin percentage are you aiming at? Andrea? or Shaun?

Okay. I'll take that. Yes, Yes, I think it depends on the business mix, but certainly between 20% and 30%. I think our current goal is between 25% and 30% unless you tell me otherwise, Andrea.

No. The only thing I would add is LaddersFree work is Contract Maintenance. So the next time we report, LaddersFree will also be in the mix. They have got -- they work at a high margin. So that margin is going to change again, that blend is going to change again. So it's a difficult one to keep splitting out in lots of ways. But yes, that's going to evolve that one.

I think it's important for us to repeat the message we've been saying all along on net is that we offer a valuable service, quite a unique proposition and that we do sell on value, we don't sell on price. Sometimes, we have to compromise where we're looking at very long contracts and very large deals, but that is something that's more of the exception than the rule. We very much sell on value. And I think it's also important to mention Shaun has done a great job in terms of making sure the sales team are aligned that way. They don't get paid commission on revenue, they get paid commission on the margin value. So they too are driven on selling the value and us as a company receiving that value by way of a margin. So hopefully, that answers the question for you, William. I'm moving on now to Paul. Paul El, who I think is one of our regular contributors here and one of our investors. How do you make contract Contract Reactive. So this is where we have a contract where we're one of one responding to emergency call outs. How do we make the operating margin positive? And he's asking beyond that? And do we scale it or do the cost rise concurrent, and is this an area of business to restructure or close down? And I think the key here is that we see this as a part of our business as the sharp end of the sphere. It's the business that really does cause customers paying and it gets us an intro and an engagement that puts us well above the rest. We punch well above our weight in terms of the kind of companies we work with and at what level we do. But do we have an answer, how do we actually get it to being a positive operating margin rather than just almost -- there's not a loss leader actually because we have made profit on this before. But would you have a view, either view on Paul's question?

I would just add, we're constantly trying to make sure we work in the most efficient way possible with that team using our own staff always monitoring where in the country we need those staff. So trying to reduce the travel element. We've also just -- we haven't actually put our prices up for that work in a little while. So we've been implementing some price increases with the customers and all the customers are accepting those price increases. So that's probably been a little bit overdue and that will definitely help the profitability as well. Anything else to add on that, Shaun?

Yes. Just actually, this has been a little area of focus for this new sales team as well. Just to reengage with these clients to see what cross-selling opportunities there are there and what we may perhaps have missed. Because obviously, when we all came into the business, we had lots of things to fix, as Mark said earlier on in the presentation. So we have had some opportunities that have come out of this contract we anticipated well.

Okay. Well, thank you both for adding to that. The next question is from Matthew R. Now this is more than 1 question, and we could probably spend a good 5 or 10 minutes getting very precise answer to this. But so hopefully we'll give you a summary that will give a flavor to what the answers are. So Matthew, you said, can you expand on the margin target between the different business groups and the sales process to scale these further, what is the target recurring revenue percentage of sales? So for that last sentence, I think, deserves a separate answer. What if we start there? I think strategically, and again, my 2 colleagues can comment here, but strategically, we are pushing towards trying to make as much of our business as recurring as possible. And you can see that through the organic growth strategy that we've been deploying and obviously through the acquisition strategy. Now we do think that the project related and the contract based reactive business is important for us to break ground with new customers. But the reality is the financial model needs to revolve around a transparent and predictable financial model, and that's what we get with the recurring revenue. So recurring revenue objectives, we start off with it being greater than 80% and I think it very much comes down to how the business evolves and blends going forward as to whether it gets to 90% or 95% or stays at about 80%. But we certainly want to be in a position where more than 80% of our business can be relied on year on year-on-year. In terms of that particular part of the question, that's the strategy we're setting. Do you want to add anything to that, Shaun and Andrea?

Just on the sales process. I mean, part of the question is the sales process to scale these further. So I mentioned it earlier, we've got some [ interest ] in the business now, of very well connected and well versed in [indiscernible]. You need to remember that if you look at this before, we're not looking to compete with an OCS, Mitie or an [ IFS ] where we might be looking at single -- low single-digit margins. That's not where we are. So we are very deliberate in the opportunities that we go after, generally where the specification is higher and it's more specialists. And although there will be an element there of traditional tender where we have to follow that process. We aim to really turn that sales and marketing activities into our consultant approach so we get opportunities. So actually, we may just be pricing it. We might just be the only person pricing. We might be -- they might put out a mini tender that's [ better for us ] than putting it out to 20, 25 people on a traditional tender where we know it's the rest of the bottom and the margins that are going to be single digit. Just not an area we want to focus on. It's just going to be waste of time. So I hope that answers your question, Matthew.

Thanks, Shaun. Excellent. Okay. So then there was the first part of the question, which is where I think we could get lost into a lot of detail, but hopefully, we can be a bit more high-level summary. Can you expand on the market on the main -- sorry, on the margin target between the different business groups and the sales process is just to scale this further? I think you answered this, the sales process a bit. But margin targets, Andrea, we talked about Contract Maintenance already, somewhere between 20 and 30 with our ideal area being 25 to 30% that contrast with a lot of Contract Maintenance business out there from the likes of those big companies who will be operating in single digits. So hopefully, Shaun's qualified that. In terms of Contract Reactive and the Ad hoc project work, what are your comments, both of you, on where our targets are. And I'm very well aware because I see the business operating every day, it will fluctuate depending on business mix. But comments?

I would just -- Sorry, Shaun, I would just say we've reported above 30% on Contract Reactive for the last 2 half years. And I would say between 30% and 40% is definitely where we're aiming in that segment. In terms of the Ad hoc, last year we had a lot of specific COVID-19-related work, which we said at the time was high margin. And we commented at the time that, that sort of high margin wasn't really sustainable. So I think for that sort of work, high 30s, low 40s are our general targets for those segments.

Yes, start on.

Yes. I mean the only other thing I'd reiterate is just to say that we have got several customers, several significant customers that we have worked across all 3 segments. So we're providing that full service for them. So we're providing some work, Contract Maintenance at a lower margin. And then when that is helping out with some Ad hoc work we haven't got anyone else to turn to, we're there and we're able to secure higher margins. So it really makes sense for us to be able to provide that entire service to our customers.

And I think there is one other factor that can play in each period, and that is the extent to which we use subcontractors to contract some of that project work, and frankly, we've been so busy that maybe we've had to use subcontractors a little bit more than we otherwise would in certain periods and sometimes we don't. So I think that can have an impact on period-on-period. Okay. So hopefully that answers your questions, Matthew. Moving on to Alan C. The question is, while the LaddersFree acquisition looks a great purchase, the share price has undeniably suffered as a consequence. How would you be able to make any further acquisitions, given the current [ bombed-out ] valuation of your own shares? That's your comment, not mine, but I have a tendency to agree with you. Look, I -- the share price is a factor of a number of different things. And it's not for me to speculate what they are. I think the acquisition has been a brilliant acquisition, and it creates huge amounts of shareholder value, and you will see that in the months and years to come. So I don't think -- we obviously set the mark because of the rate at which we did fund raise. But I don't think that our share price is where it is primarily because of that. You've got to recognize that we brought on a number of -- or we've added to a number of institutional shareholders. A company of our size has got an enviable list of institutional shareholders that support us, which is great. And our share price is affected by a small number of trades by private investors. And that will always be the case. So we are where we are. Our view of it doesn't really matter because our view of it says, actually, we believe it should be at a higher level. But that doesn't matter it's what the market does. But to go on to the final part of your question there, which is how would we be able to make any further acquisitions, given the current share price? Well, right now, whilst we have a pipeline, and there are some interesting things in that pipeline, we know like we did with Fidelis, we've got to demonstrate to everybody that we can actually execute on our plan with having acquired LaddersFree, and we've got off to a great start -- is a great acquisition, and I believe, and so does the team, that we'll be able to do that. And with the performance will come the share price. I've absolutely no doubt. And we shouldn't forget the fact that there are external factors. Everything in the market at the moment is suffering and we're suffering alongside some of that as well. So it's all about timing. It's all about us executing on the business we've got in front of us, which I think is a tremendous opportunity to add value to the shareholders. And that then being recognized by the share price in due course. And when that happens, then and only then I think we'll be looking at what's next in front of us in terms of [indiscernible] acquisition. Either of you got anything to add to that answer?

No, no, nothing for me.

No.

So Mark J. question, shareholders have seen their investment decimated with the placing. What are you going to do to try and improve the current share price? Well, I think I have kind of started to answer that hopefully answered that with my last comments, Mark. The share price was at 1.675p, touching 1.7p at the point that we did the fund raise. We did the fund raise at 1.2p, and we have been on record explaining the circumstances and how that came about. But we believe that we did absolutely the right thing for shareholders and for the company by going ahead both of the fund raise and the acquisition at that point in time. And I believe that the plans we've set before you today and the conversations we've had in actions, will do exactly what you're asking us, which is what are we going to do to improve the current share price. We're going to perform. And we've got a great business with great recurring revenue. We've got solid track record of organic growth year-on-year over the last 3 years, and we'll continue with that. And we've now been solidly improving the financial model of the business such that it's going to look quite different than it did a year ago or 2 years ago when we had the share price above 3p. And -- and I firmly believe that we will be creating solid value going forward. And the share price is a byproduct of current market conditions and people's view of where we are today. But hopefully, that will change by the work we're going to do over the next few months and the next few years. So again, I don't know whether anyone could add to that, but hopefully, Mark, you feel that's a fairly full answer to your question? The final question here. I don't know if there's another 1 popped in. But anyway, let me see if we can get through the next 2 questions and maybe take any final ones because you want to drag this out for everybody too long. Paul again, Paul El, talk about how and where underlying operating leverage should develop and then how any growing internally generated funds can be deployed to aid organic growth. I think the course to the answer to this question is the organic growth, and where we have operating leverage is very much in and around the Contract Maintenance business. We don't have to add very much as we've shown in the past. We don't have to add very much to our operating infrastructure in order to grow and generate significant profits. You only have to look at the last few periods of results to see that with a relatively modest 20%, 22% growth in revenue, we see 28% growth in contribution and sort of 80% growth in EBITDA. I think that was the last organic statement in the last period. So I think you'll find that we will see huge leverage from the acquisitions that we've made. You've already begun to see it with Fidelis. We -- but you'll see that accelerate, I think, now with the acquisition of LaddersFree. Again, I'm answering this because very much these are sort of the overall strategic questions. I don't know if there's Shaun around you, you've got anything to add to that.

Nothing for me. And -- Andrea?

You answered it very thoroughly, Mark.

Yes. I think the only thing I maybe missed on that question was about how do we use the funds. We have got cash generative businesses, and we will be using the funds that generate to support that organic growth. Andrew N, final question. With regards to the share price, what do you think the value inflection points will be? I don't want to -- I've got to be honest to you, Andrew. I don't think that's something that we can fairly answer at this point we can time now. And that's one that I might want to take away and just think about how we best answer that to you, for you. But what I would say to you is what's going to drive the value is continuing organic growth, showing that we can drive organic growth from LaddersFree in the same way as we have done for Fidelis. And to continue to show the growth in recurring revenues and the operating margins that we generate from the combined group. Those are the things that I think are going to be critical to answering that question, but that's the one we'll come back on. If you're okay, we'll make sure that answer, that question gets a proper answer when we put it on our website.

I was going to say. But as always, you've been fantastic. Thank you to the team for covering off all the questions that we've had today. Of course, if there are any further questions come back, Mark Braund and team can respond to those on the Investor Meet Company platform. And we published those back out to you. And Shaun, perhaps if I may, just before redirecting investors to provide you with their feedback, which I know is important to you and the team, if you could just add a few closing comments, please.

Yes. Thank you, Braund. I just want to say thank you to everyone that's joined the platform today and taking the time out on the afternoon. I just want to close by saying that the business continues to go from strength to strength, following our investment in the sales and marketing team. We're very excited about the growth opportunities that lay ahead with LaddersFree and the cross-selling opportunities across the group. So yes, thanks for joining us and back to you, Paul. .

That's great, Shaun, Andrea and Mark, thanks indeed for updating attendees today. Can I please ask investors not to close this session as we automatically redirect you to provide your feedback in order the team can better understand your views and expectations. This will only take a few moments to complete and is greatly valued by the company. On behalf of the management team of a REACT Group PLC, we'd like to thank you for attending today's presentation. That concludes today's session. Thank you, and good afternoon to you all.