Robert Walters plc (RBW.F) Earnings Call Transcript & Summary

Good morning, everyone. Thanks for joining us for our 2025 half year results presentation. I'm Toby Fowlston, Chief Executive at Robert Walters and joining me is David Bower, Chief Financial Officer. By the end of this morning's presentation, I'd like to take you away 3 key messages. Firstly, whilst the external environment our business operates in remained challenging during the first half, we focused on decisive actions to drive efficiency and improve our performance with around 70% of the fee income impact offset through lower costs and growth in overall fee earner productivity. Secondly, clients' needs are changing, and we are adapting our business to support them. Talent landscape continues to evolve rapidly, and so organizations need talent partners with a full suite of solutions. This is a key factor behind our service line diversification, and we continue to develop interim management, workforce consultancy and talent advisory as future growth engines for our business. And thirdly, whilst the trading headwinds across the sector have been longer in duration than perhaps anyone expected, we are further positioning the business for long-term growth with continued conviction in our strategic plan. Over the first half, we continue to see early traction in our initiatives, and that further adds to our confidence. In terms of our agenda today, I will briefly run through our first half trading before David presents the financial review as well as an update on how we view capital allocation moving forward. I will then return to update you on the progress we've made on developing our growth drivers. And as usual, we'll leave time at the end for questions. So let's take a closer look at trading and firstly, the market backdrop. Macroeconomic uncertainty constrained client and candidate confidence levels during the first half. Clients continue to seek more visibility on the external environment, meaning still soft hiring demand, as you can see from the charts. Furthermore, this impulse to wait and see slowed the pace of decision-making and generally increased time to hire. Within our largest service line of specialist professional recruitment, this was seen in lower permanent placement volumes, which were partially offset by a slightly higher average perm fee with stable fee rates and beneficial salary mix effects. Turning to look at our regional segments in Specialist Professional recruitment and firstly, Asia Pacific. Net fee income here was down by 9%. There was a resilient performance in our largest market of Japan, which grew temp fees. Australia and New Zealand were down 10% and 32%, respectively. However, we saw the beginnings of recovery in temp volumes over the first 6 months, particularly in New Zealand. Greater China declined by 5% with growth in Mainland China and Taiwan, partially offsetting continuing tough conditions in Hong Kong. Southeast Asia was down 12% year-on-year, but we saw good growth in Singapore and Indonesia. Given Asia Pacific has a higher perm fee mix than the business overall, we remain highly focused on driving improvement in volume productivity, namely perm placements per fee earner per month, and we're pleased to see an uplift in ANZ and Greater China. Turning to Europe. Conditions here remain the toughest of our 4 regions. Net fee income was down 22%, within which temp was slightly more resilient than perm. France remained tough, but sequentially stable, whilst Belgium, the Netherlands and Germany weakened. Spain is partway through a turnaround being spearheaded by new leadership, and we saw the first instance of quarter-on-quarter fee growth since the fourth quarter of 2023. Our interim management offering in Europe is one of our service line diversification focus areas, and it continued to demonstrate its relevance even against the tough trading backdrop for temp volumes more widely. And as you can see from the chart, our interim volumes have held up significantly better than contracted volumes over the last 18 months. Turning to the U.K. Net fee income was down 5%, with growth in London offset by a decline in the regions, partially reflecting the impact of regional office closures last year. As shown on the slide, London has seen an improvement in its performance trajectory relative to the regions with notable strength in financial services contract roles. Turning to the Rest of the World. Net fee income was down 20% with a resilient performance in the largest market of the Middle East and growth in South Africa, offset by weakness in the Americas. In Recruitment Outsourcing, net fee income was down 11%, an improved performance versus recent history, which was led by good growth in volume hiring in our Rest of the World segment. And across recruitment outsourcing globally, we have simplified our product lineup and are serving this to a core base of engaged clients with a narrow client base, enabling us to reduce costs and make targeted investment to drive future growth. We have seen an uplift in the value of our deal pipeline as a result. And after the period end, it was great to agree the expansion of a significant contract with an existing client. Workforce Consultancy, where Robert Walters maintains a permanently employed cohort of highly skilled consultants, which it deploys on behalf of clients, continued to perform well with fee income up by 51%, driven by a higher average number of deployed consultants and mix shift towards more experienced consultants commanding higher average fees. And finally, turning to Talent Advisory. Now in its second full year of trading, though we annualized a modest prior year comparative, net fee income more than doubled year-on-year in H1 as operational momentum continues to build. And as you can see from the chart, this is a service that clients across the globe are demanding as shown in the balanced mix of our fee income across our regional segments. So in summary then, whilst we saw some pockets of growth and improved trends, market conditions remain challenging overall, particularly in Europe. And with that said, I'll hand over to David now to present the financial review.

Thanks, Toby, and good morning, everyone. Let's turn first to the group financial summary. As you've heard already from Toby, trading continues to be impacted by the challenging market conditions with group net fees down 14% year-on-year in constant currency terms. As you'll see in more detail in a few moments, our action on costs meant we were able to offset almost 70% of the fee income impact. However, we did see a loss before tax for the period. While some pockets of our portfolio were back in growth in the second quarter, the Board's planning assumption remains that a material improvement in hiring markets is unlikely in the near term. At this time, therefore, we are most focused on the foundation of our capital allocation policy, which is to maintain balance sheet strength. And therefore, the Board has declared its intention not to pay an interim dividend at this time, which I'll speak more on in a few moments. So let's firstly turn to look at our progress in managing down our cost base in more detail. Group operating costs fell by GBP 18 million year-on-year, with a reduction in people-related costs, the major driver. Average total headcount was down by 15% year-on-year, which drove a GBP 13 million reduction in fixed staff costs. Much of this reflects remaining highly selective in replacing fee earner natural attrition. However, it partly also reflects structural cost savings. For example, you'll recall, we moved our HR function to a new operating model last year, and we are realizing the benefits from doing so and remain on track for a GBP 1.5 million saving for the full year. Meanwhile, there was a GBP 2 million reduction in variable compensation, reflecting the reduced trading result. And nonpeople costs have also been tightly managed across the business with a combined GBP 4 million reduction in direct operating costs and other overheads. As noted in this morning's release, we closed the period with a monthly operating cost rate -- run rate of GBP 24.5 million, and we anticipate further progress on the cost base during the second half of the year. Turning now to look at cash. Despite the first half operating loss, we saw a lower free cash outflow during the first half than in the prior year, principally driven by slightly lower CapEx and reduced cash tax as well as a small working capital inflow. We closed the period with net cash of GBP 30 million, slightly higher than expected due to the timing on both receivables and payables. And then half of the GBP 22 million reduction on the opening position was driven by the payment of the final dividend in respect of 2024. So let's turn now to consider capital allocation in greater detail. The key elements of our capital allocation framework remain unchanged. The overarching principle is our net cash target, whereby we ordinarily seek to be at a minimum level of GBP 50 million at the year-end. Given the nature of our end markets, the Board continues to view this as a prudent and appropriate for the group. In particular, maintaining a positive cash balance enables the management of intra-month working capital swings on the temp books that sit across a number of our markets, each of which require a cash holding. It also provides a buffer in periods where hiring markets are more challenging, just as those seen over the last couple of years. Part of our actions to drive greater efficiency in our cost base gave rise to a cash restructuring cost of GBP 1.6 million during the first half, and we anticipate further restructuring activity during the second half, such that at the year-end, we would expect net cash to be below the first half closing position of GBP 30 million. These restructuring actions will enable a strong platform for profitable growth over the medium term. And in that sense, we view them as having the same priority as our organic investment in the business. Therefore, in its discussions on capital allocation, the Board has been very mindful of the forecast net cash position over the near term, including the interim month requirement as well as our unchanged outlook and the desire to retain cash in the business as we continue to execute our strategy. Taken together, these are the core considerations in the Board's decision not to declare an interim dividend at this time. However, as our strategic initiatives gain further traction alongside improvements in end markets, we will closely monitor our cash position and would envisage a timely resumption to making capital returns to our shareholders, and we will review this again at the time of our full year results next March. Finally, in line with our third priority, we continue to see the fundamental capacity of models like ours, which exhibit high operational gearing to return excess capital to holders. And that continues to be our commitment where net cash is above the GBP 50 million target and expected to remain so over the medium term. I'd like to now take a few moments to touch on the progress we've seen in our margin improvement program. You'll recall that we are focused on 5 building blocks, which combined with slightly more supportive end markets, give us conviction on being able to deliver conversion rate in the range of 16% to 19%. We made further progress during the first half. Our specialist professional recruitment service line drives 83% of our fee income, of which 65% is from perm placements. Hence, our focus on driving perm placements per perm fee earners per month, and this is therefore the most material of our 5 building blocks. During the first half, we strengthened focus on sales funnel metrics to ensure that all of our perm fee earners are clear on the level of business development activity that is required to maximize volume productivity. Toby and I review this funnel country by country with our regional CEOs on a monthly basis, helping to reinforce timely intervention to drive this key measure. We've continued to develop our technology to underpin our volume productivity. We completed the global deployment of our Zenith CRM during the first half, whilst implementing further system enhancements to embed best practice across a wider range of recruitment tasks. Meanwhile, our application of AI continues to help our fee earners to be quicker to market as well as freeing up their time to invest in building relationships with clients and candidates. A great example of this is our open AI platform, which we showed in action at our Capital Markets event last year, which we have continued to develop. Think of it as an AI hiring assistant. The latest iteration of this has a library of ready-made prompts to our consultants for everyday tasks such as CV summarization, which helps them be far more efficient. And across our wider technology estate, we're using third-party AI components to improve productivity and processes. Reflecting our strategic choice to maintain strong fee earner average tenure and hence not reduce fee earners wholly proportionately with volumes, volume productivity reduced by 7% year-on-year during the first half. However, we saw improved productivity in 7 of our 30 markets. Furthermore, a 3% increase in overall productivity measured in net fee income per fee earner demonstrates our stable fee rates and retaining good market share in roles with higher average salaries. Our back-office optimization initiatives are delivering benefits for us today. As I mentioned earlier, we are on track to deliver the targeted savings in the current year from our HR function. Meanwhile, in our finance function, we have begun to transfer activities and roles out of markets into our global business services hub in Manila. We have largely completed the work we envisaged in our front office optimization. The ratio of support staff to fee earners in the front office is now back in line with that seen before the post-COVID hiring surge. And as we set out at our full year results in March, we realized a GBP 1 million structural saving in 2024 as a result. Turning more briefly to our office network. We are proactively managing our leases, engaging in renegotiations or indeed exiting where we do not see a path to the required returns in a given location. And here, we consolidated our U.S.A. footprint during the half and exited Brazil. So as a reminder of what our actions on costs and our margin improvement program could deliver, we set out the following illustrative scenarios. On the left-hand side, you can see that 13% conversion rate we delivered in 2018 and 2019 was done with net fee income that roughly averaged GBP 400 million. Moving over to the right-hand side, you can see that at the GBP 24.5 million monthly cost base run rate at which we exited the first half, we'll be able to get back to this 13% margin level with 15% lower fees than the 2018 and 2019 average. And with a cost base of GBP 23 million, we can deliver a 13% conversion rate on lower net fee income than we saw last year. And with our product -- volume productivity in specialist recruitment still around 10% to 15% below the long-run historical average, such level of fees is deliverable on our current fee earner headcount. And so from where we are today, the operational gearing capacity in our models remains firmly intact. So before handing back to Toby, I would draw your attention to this slide where we have summarized our guidance. This remains unchanged from our second quarter trading update earlier this month. Our planning assumption remains for there to be no material near-term improvement in hiring markets. Whilst we saw sequential improvement in some of our Asia Pacific markets from Q1 into Q2, we assume that any further improvement here is offset by continued softness in Europe. In this context, we anticipate further progress in reducing our cost base. The GBP 24.5 million monthly cost run rate at which we exited the first half is on an underlying basis, excluding restructuring costs, and we would expect further progress during the second half. So with that, I'll hand you back over to Toby.

Thanks, David. So consistent with the challenging end markets, we're controlling our cost base appropriately, and we thought carefully about how our capital allocation policy needs to be applied presently to ensure balance sheet strength. We do, however, remain excited about the long-term growth opportunities that are open to us, and this is underpinned by the high proportion of organizations that are still contending with largely demographically driven skill shortages and the increasing complexity of the talent landscape. As you can see from a recent U.K. CEO survey referenced on the right-hand side of the slide, organizational change is the norm and talent is needed to drive that. And what's perhaps different to when I first entered this sector 25 years ago is that whilst organizations before might have instinctively made a permanent appointment to secure the talent they need, now they are often unsure the precise answer to their talent challenges and hence, the value of a partner that can bring a full suite of solutions to bear. We believe that our growth strategy is positioning us well to capture these opportunities. So I want to spend the next few minutes updating you on the progress that we've made over the first half with our 2 key organic growth levers of geographic penetration and service line diversification. At our Capital Markets event last year, we set out our belief that the growth algorithm of the 2010s based on expanding into new -- more new markets and adding headcount to drive fee growth is not appropriate for today. Rather than geographic expansion, we seek to drive growth in our specialist professional recruitment portfolio through geographic penetration. Simply put, we want a higher proportion of our portfolio to comprise markets where we are a top 3 competitor. As shown on the left-hand side of the slide, we view the natural end state of our specialist recruitment footprint as built around the 8 countries that account for 60% of group fee income, alongside positions in our other hiring markets that excite us due to their structural drivers and where we can win. To get us there, we are operating our specialist recruitment portfolio against a disciplined framework, our 4-box model, which is detailed on the right-hand side of the slide. Now whilst we know a return to growing end markets will show our portfolio improvements more clearly, we've been taking actions to position us strongly. And let's look at some specific examples of this in practice. In the bottom right of the grid, we have Singapore. We changed the leadership there to drive an improvement in our internal controllables and have seen key sale funnel metrics such as client meetings per fee earner increase year-on-year. Singapore was 1 of the 5 markets in growth during the first half, which is a good platform as we seek to take share, consistent with our objective for those markets in this category of our portfolio. Moving up to the top right, a great example of our actions here is in Taiwan. Leadership has set clear expectations on the requirement for managers and directors to increase their billing efforts. And thus, whilst average headcount was down year-on-year, in line with the group as a whole, we've seen a 26% increase in volume productivity in Taiwan, driving 7% fee income growth in the first half. More widely, across specialist recruitment, we have reinforced the requirement for our leaders to bill. And as a result, we have seen a reduction in the number of low billing directors. Moving across the top left, we have Spain. As I mentioned earlier, we welcomed a new leader in that business late last year as we seek to drive a turnaround there. Additionally, in our -- in industrial and technology verticals, we have moved fee earners from previously loss-making teams into more profitable areas, actions which are being replicated across our portfolio with over 40 loss-making teams closed, merged or rightsized during the first half. There's still much to do to attain the returns we believe are capable of there, but we referenced an initial proof point earlier of how the changes are beginning to take effect with Spain registering quarter-on-quarter growth in quarter 2 for the first time since the end of 2023. The final element of our 4-box model in the bottom left is where we challenge ourselves and whether a path to a more competitive position exists. And during the first half, this saw us remove management layers in markets in Europe and the Americas. It also drove our decision to close our operations in Brazil as we seek to allocate capital to areas where we can drive better returns. So in summary then, we have a clear direction of travel for our specialist recruitment geographic portfolio, and we are seeing early proof points of the benefits our program is driving. Let's now turn to service line diversification. Our service line diversification strategy reflects the conviction we have in future engines of growth for our business. These are our interim management offering within specialist recruitment, our workforce consultancy offering, which has up until now been operated as a part of recruitment outsourcing and our newest service line of talent advisory. Now as you can see from the slide, the 3 are at very different stages of development in terms of their current contribution to group fee income. However, we believe they will each continue to outperform the wider group in terms of top line growth over the medium term as well as delivering a conversion rate in excess of the upper teens target range we have set for the group as a whole. We gained increased conviction on this from the progress we saw during the first half. So let's look at that now in a bit more detail. In interim management, the appeal of this solution to employers continue to be seen in the relative resilience of volumes and fees compared with the wider temp market. Across France, Belgium and Germany, average interim volumes were down just 4%, whilst interim volumes were more impacted in the Netherlands due to heightened legislation enforcement on self-employment, this outperformed the reduction in contractor volumes. As we help clients to work through the near-term headwinds in the Netherlands, we are confident the solution will remain a valued way to access senior level talent in a cost-effective manner as demonstrated by the Dutch interim offering, continuing to deliver the highest conversion rate of our 4 markets. In Workforce Consultancy, where we deploy skilled talent on behalf of organizations seeking flexible resource, we have validated the demand for the solution by penetrating our existing U.K.-based recruitment outsourcing client base. As I touched on earlier, this drove strong growth in the first half with fee income up 51% year-on-year. At our Capital Markets event last year, we outlined the further growth opportunities we see in workforce consultancy, and we completed targeted investment to begin to unlock those during the first half. Firstly, we've increased our commercial capability with sales and account management personnel who are targeting a client base beyond our existing recruitment outsourcing customers. And we are seeing good early results from this with this team having delivered new client wins during the half. Secondly, we launched our offering for statement of work, thereby opening up this significant addressable market for our workforce consultancy offering. And having gone live externally with the service offering in the first quarter, we have won and onboarded our first clients and anticipate statement of work making a good contribution to total workforce consultancy fee income this year. And finally, turning to Talent Advisory. In the first half, we focused on continuing to build client awareness of our offering, both through internal referrals from our 2 largest service lines and also through direct engagement. The referral opportunity we are seeking to convert is good evidence for the wider suite of talent solutions we know organizations require, which was a key factor in the decision to unify our business behind a single brand last year. In the first half, almost 50% of our successful proposals were sourced via an internal referral with this helping to drive our conversion of proposals to wins in excess of 40%, ahead of the industry average. Meanwhile, we bought out our capability to convert more of the opportunities we receive across our footprint with advisory engagement leads now in place in most of our regions. And this aligns with the client appetite we see globally for this service line, brought out in our Market Intelligence product being delivered in 29 countries during the first half. So in conclusion then, whilst the market backdrop remained challenging during the first half, we took decisive actions to drive efficiency and improve our performance. Our action on the cost base enabled us to offset around 70% of the fee income impact, and we saw further progress on overall fee earner productivity. Meanwhile, we have further positioned the business for long-term growth and have continued conviction in our strategic plan. We are strengthening our specialist recruitment geographic portfolio and developing those service lines that will be future growth engines for our business. So with that said, we're happy to open up for any questions you might have.

[Operator Instructions] Your first question comes from Tom Callan from Investec.

I've got 3 questions, please. Firstly, clearly a difficult macro, but which markets view the most confidence of a possible inflection, be that in the near term? Second is if you could give us an update on the sort of structural cost savings that you've made those you think structural, that would be really helpful. And then thirdly, just on AI, in your view, to what extent do you believe the prolonged downturn that we're seeing is attributable to the rise in AI adoption insofar as possible attrition of the sorts of roles you might typically recruit for? Just keen to get your take on that as well.

Thanks, Tom. I'll take question 1 and 3, and David, he'll cover off the structural cost question. So markets that give confidence of possible inflection I mean, look, firstly, we'd probably like another quarter or 2 of some sequential improvement before calling it inflection. But I think as I called out in the presentation, ANZ temp volumes, they're showing some good early signs of recovery. Taiwan, Singapore and Indonesia all grew in the first half. Japan's June performance was encouraging. It was actually their best monthly performance in the last 18 months. So overall, I'd say -- and sorry, London as well actually grew in the first half as well. But overall, I'd say Asia Pacific probably gives the most reason for optimism. In terms of the AI, look, there's obviously lots of column inches devoted to the impact of AI at the moment, particularly on that sort of entry-level white collar space. The reality, speaking to clients and seeing here is that there are a few factors in play. Evidence doesn't really strongly point to AI as a sole cause. As you know, historically, and we are very much a mid- to senior level sort of white-collar recruiter. So the importance of emotional intelligence, leadership, soft skills, they're the big difference with the technical ability taken as read. So AI can't do that. So it's not surprising that we're not really hearing clients talking about replacing roles with AI at this point. David, over to the structural question.

Yes, Tom, so yes, so as we talked about at the year-end, we're still targeting around about GBP 10 million of structural cost savings in 2027. And we're about halfway -- getting on for halfway there in March. If you remember, we talked about savings in the front office, admin, we talked about procurement savings, property savings and the HR saving. What we've seen so far this year, we've made some further property savings. As I mentioned a few moments ago in my remarks, we've started now moving finance activity over, and there's more things in the pipeline during the course of the balance of this year. So we're getting on towards halfway towards that GBP 10 million saving and we're expecting to deliver that GBP 10 million saving in 2027 with some of those being -- a big chunk of that being delivered through 2026 on route.

[Operator Instructions] Your next question comes from Sanjay Vidyarthi from Panmure Liberum.

Just one for me. It was useful to see some of the initiatives you're taking in markets like Singapore. Could you outline some of things you're doing in the U.K., please?

Sanjay, yes, I mean, U.K., we've sort of got 2 divergent markets. We've obviously got London and the regions. London is tracking well, as I mentioned, particularly in financial services and across that temporary flexible market. I think what's -- one of the things that we are seeing across the U.K. is when we look at our sort of less mature markets and I'll cite some of the Indonesia type markets, they are very traditional permanent-driven recruitment markets. What we're seeing in places like the U.K., places like Australia, very mature markets. Obviously, with what's going on at the moment, we're seeing a lot of clients challenged with the solutions that they need. You've got obviously cost of hiring, you've got offshoring, you've got AI and technology. And one of the areas that I believe that we are winning well in, particularly in London, is that partnership with our outsourcing and advisory function. We've won some really good business where we've gone to a client as a total talent solutions partner. And the client may well have some very specific hiring needs, which suits obviously our specialist professional recruitment services. But often they're looking for more flexible needs, which plays very nicely into the workforce consultancy offering. They may well be looking at an outsourcing type solution. So we've had a number of significant wins where partnering across those servicing lines and going in and really understand the challenges that we have in those more mature markets is, I think, the point of difference that we're making, particularly in the U.K. space.

Okay. Understood. And actually, can I ask the same question for France as well, please?

Yes, France, we've got a high-performing interim business in France, and that is well established. I think there is work still for us to do on our permanent recruitment offering in France. We've recently hired a very senior individual to come in, who's got more than 25 years' experience in that French market. So I believe that there is still opportunity to improve and do better in our traditional temporary, so non-interim, but temporary business and especially on our permanent business as well. That market has been a challenging market for the reasons that you know. So I would say I'm very happy with the performance we have in our interim business, but more to do in our temporary and permanent businesses in France.

[Operator Instructions] Your next question comes from Steve Woolf from Deutsche Bank.

Just a couple from me. Just again, just to touch back on that full service offering and what you need sort of investment-wise, I presume a lot of that is headcount that would need to go back into the business at some point as you build out that offering. So any thoughts there? Those pockets of growth you mentioned in Asia, whether you're seeing any sort of specific drivers behind that levels of optimism in the markets and where that's coming from? And then finally, the RPO business, you mentioned you've simplified the offering. Just a sort of clarification on what that means essentially.

Sure. Okay. Steve, so I'll try and work through each of those. So full service offering and investment. Yes, we have. We've invested into workforce consultancy. You're right, mainly around sales capability. And I think the reality is I cited that survey, it was a PwC survey saying that 98% of -- and it's about 5,000 CEOs in the U.K. Obviously, as I mentioned, they are going through significant organizational change. And what we're finding now with all of the challenges that businesses are faced with and where we are really winning well in the areas that we're investing in is that the solutions that clients require now are more complicated. They are more complex. So -- and obviously, we're seeing that play through to the results in Workforce Consultancy, hence, why, obviously, we've continued that investment there. In terms of pockets of growth in Asia, I would say, I mean, Japan, it's -- I'm sure you've seen some of the recent results coming through with some of the Japanese banks. So that's encouraging. Obviously, there is an FX up and down in Japan, as you well know. But certainly, we are seeing the benefit of some of those better results coming through in some of those big Japanese banks. That still remains, as you know, a demographically very short market, and we are certainly well within that top 3 in Japan. So that plays well to where we're at. I think beyond that, it's some change of leadership in certain markets. Singapore, I've touched on, where we've actually reduced headcount and got far better productivity. So we'll continue to do that. And we are in a good position in terms of some very good tenured leadership in Asia Pacific. And then in RPO, simplified offering, we were basically trying to do too much. We had 17 different products 2 years ago. We've really stepped back and made certain we're spending much more time listening to the clients and understanding the challenges that they're confronted with. And I think we are getting far better and more disciplined about closing down products that we just don't see a way through in terms of opportunity, and we're going to continue to do that.

Perfect. And then just a final quick one, just on the dividend and the targets to be sustained minimum GBP 50 million net cash. As the dividend relates specifically to that, how do you think about the 2 in terms of we won't pay one unless we've got good visibility on the GBP 50 million or beyond? Or is the GBP 50 million itself just a -- look, we'd like a trading buffer there of GBP 50 million, but we're still confident we can pay a dividend within that. I mean I'm mindful that the dividend, I think, cost about GBP 15 million, GBP 16 million in totality. So just where the dividend fits in with reference to the GBP 50 million?

Yes, Steve, it's David here. Look, I think the GBP 50 million cash target is effectively our -- that's our medium-term, long-term view of that's the volume of cash we would like to retain in the business in normal times. As I've said, we're happy for it to be lower than that through tough times, and that's one of the reasons why we want GBP 50 million to give us that buffer when times are more challenged. There is that intra-month volatility piece that we need to manage. And that's why where we are today, our view is that we need to retain the cash in the business to give ourselves that strength. But if we -- when we can see ourselves with a stable cash position and potentially growing, then we can obviously then relook at the dividend. I don't think we will need to wait until we get back to the GBP 50 million before we think about shareholders. That's the go-to capital sort of allocation policy. This is about retaining the right level of cash in the business to manage that volatility and gives, again, some further buffer against what we think or planning for is that near-term remaining challenging markets.

This concludes our question-and-answer session. I would now like to turn the conference back over for any closing remarks.

No, that's it. Thank you very much, everybody, and no doubt, see you all soon.

Thank you.