The Pebble Group plc (PEBB.L) Earnings Call Transcript & Summary

Hi, everybody. Thanks for joining us. We're going to run you through the half year results for Pebble Group for 2025. We'll follow a normal sort of course that we do. We'll give you a little overview of the market we're operating in, some highlights, and then I will take you through the numbers, and I will take through Facilisgroup, one of our divisions and Claire, Brand Addition, and it would be great to answer any questions that you have at the end. So this is us, in terms of-- CEO, CFO. We've both been with the business for a long time. I think I'm 25 years now and you must be kind of 18, 20 something. So that -- what does that mean? We're really very emotionally invested in the story and the business and the people and -- but also financially invested as well, so very much aligned with our shareholders. In terms of the market that we're operating in, it is the promotional products world. So I'm here with my Pebble Group pen and pad in every office, in every home, in every car, promotional products, that are used by consumers and businesses and stakeholders and business is using them to engage with those stakeholders to make sure there's a lasting impression and a memory and an emotional connection created with people and in a particular brand. So even as our digital world gets more and more complicated and crowded and use of AI is coming up now, promotional products really cut through all that noise and really make a lasting and emotional connection with an individual to a brand, and that's why they're so popular. In terms of the size of the market, annually, $50 billion is spent, we estimate on promotional products. So what that says to you is all companies, all sizes and geographies are using promotional products to engage with their stakeholders. And we have quite a good lens into that market through our two businesses. So Pebble Group being the holding company and the ownership company. But within there, we see $1.6 billion of the $50 billion through our two businesses. Facilisgroup, a technology platform, but then also with a market network and a great community attached to that. So technology is at our heart, but the business is much more than that as well, and that's why we have such kind of great retention rates. That business helps medium-sized promotional products companies run their business really efficiently, and we get to see about $1.5 billion of their sales annually going through our system. So a tremendous amount of data and understanding of what's going on in the market. And then our products business, Brand Addition, a really great business. That's where both Claire and I come from and our heritage is and that business sells promotion products and related services to many of the best companies in the world. So under contract on an international basis, selling about $140 million worth of products on an annual basis, some of the best businesses across the world. So Facilisgroup and Brand Addition are really great lens and both market-leading businesses in the promotional product sector. In terms of why we think we're a great business and why we're really proud to be associated both with the brands that we work with in terms of our operations, but the people that work there and also the customers and the suppliers that we work with. I do think we're about long-term relationships. So clients is Brand Addition and partner is Facilis, and we're really focused on not just selling something once, but developing a long-term relationship with our clients and our partners. And that builds a great trust you get through strange things going in the world, but we kind of work on long-term relationships in order to make sure we're building for the long term for our team, our employees, our partners and our shareholders. Both brands, I think, have great reputations in the market and then market-leading positions, both from technology into North America through Facilisgroup and also providing products on a global basis to the large brands and through Brand Addition. And although we have that $1.6 billion view into the market, that still means there's a lot to go at as well. So a really fragmented market. We do believe that both businesses have room for organic and even acquisitive growth looking forward. And technology business, products business with related services, we have been around. We're very established. We make profits, we generate cash. We plow some of that back into the business, and we've also been giving some of that back to shareholders. So we are really able to create value through sustainable profits and cash flows. And then in terms of what's been happening in 2025. So part of what we have to do to you through this presentation, which is on our website and talking to investors is paint the story of what has happened in the past, but also the vision and lay the breadcrumbs for the future as well and the place in which we're going. So talking about the past, there's no doubt in the last few months, and it seems to be listed really, it's been an unusual market, whether it's been COVID or Brexit or tariffs. It's been quite hard to sort of plow through. But equally, we sort of have to deal with that market and what we're doing in. And I do think our performance, both at Brand Addition and Facilisgroup has been pretty robust in not really unhelpful, but equally not a really helpful market in a pretty kind of tepid market situation. What we've been doing to proactively manage our businesses in that is recognize that if we can grow Facilisgroup as a technology, a market network and a community business, that really has a special opportunity beyond the valuation of the group right now. And we put more investment into trying to grow that business, and there's some early signs, encouraging signs that, that's coming through very well. And Brand Addition, quite hard in terms of those really large corporates being careful in what they spend, but a really robust performance through bringing new clients through as well as holding on to existing ones and again, being cash generative. And so on the right-hand side, you'll see both the Brand Addition and Facilis, we have great retention levels. That's the point of growth, and that comes from those NPS scores that really come through and real highlights for us at Facilis. I've spent a lot of time over there in the last two years. I've learned a huge amount. I've been supported by some great people, and we're really kind of building something special there that I'm really proud of. And I say that because I feel it myself, but it's also what I'm hearing from the team, what I'm hearing from our partners and our suppliers, too. And so I really hope we're on the cusp of something interesting there. And Brand Addition, client retention remains really strong. We keep doing that. And the business in the face of difficult circumstances, managing its gross margins and managing it's costs really well. And so we have a very profitable cash-generative business in what isn't easy times, and I do believe we've got a great platform to keep moving forward. And Claire is going to run you through the numbers.

Thank you. So summarizing here, the KPIs that kind of set out the story of the first half. So revenue, what we think has been a really robust performance and what is a difficult market. And so what we're doing while we're navigating through that is controlling the things that we can control and working really hard on our gross margins as they move forward in the first half, and that was on the back of a significant improvement that came through last year as well. We -- our EBITDA is showing that we have invested a little bit into our Facilisgroup business. And as we get through the presentation, you'll see that is starting to show some positive signs of growth, and we'll kind of give you a bit more detail on that as we move through. But also alongside that, we have improved our operating cash conversion. So cash is moving forward. And year-to-date, we've returned GBP 11.7 million to shareholders. So we're focusing on growing our top line, controlling what we can control, but keeping that great level of cash generation going as well. Yes. So before we get into a little bit more detail, this is just helping you to try and set out with two different business models that sit within our group. So over on the left-hand side is the revenue coming into the group. And you can see there's kind of a big difference between Brand Addition, the products business, that's about 85% of our revenue and Facilisgroup, where we're getting those SaaS tech subscriptions, which is the balance of 15%. So a much smaller share. But as we kind of move through the P&L and over to the right-hand side, what that translates into is pretty much a 50-50 split between Facilis and Brand Addition in terms of their contribution to group EBITDA. P&L. So I think I've used the word robust in terms of revenue. So slightly down and that kind of is coming through in brand addition and really in the behavior of our existing customers where some of them are in a pretty difficult time, and that translates into the level of spend with those. It's not across the board. So some businesses are ahead, some are down, but we've kind of held on to all of those customers. So they've got a great retention stats there. And what is helping us as we move through, one of the difficult market is the new business wins and the successful implementation of those that are offsetting some of that pressure that we're feeling. I've touched on it a couple of times now already. We control what we can. So margins are in a really good place, and they've been moving forward through the half year. And then we have invested into Facilisgroup, and that's starting to come through in terms of organic growth. But outside of that, really disciplined cost management that means that we're kind of holding on to the great EBITDA margins that both of these businesses generate. Balance sheet. So when you kind of look at the group balance sheet, we really think Brand Addition. So the products business, Facilisgroup, SaaS, really the working capital light and so it has very little working capital that's on the balance sheet. What you see there is Brand Addition, working under contract with some of the largest brands in the world. So we've got really high-quality assets that turn really efficiently to cash and then kind of drawing your attention there again to the GBP 11.7 million that we've returned to shareholders this year through our cash conversion. And cash flow, I kind of -- I feel like those of you who have been on this call a couple of times, a bit of a stuck record, but it's really -- it's nice to say it's really clean and straightforward. So underneath EBITDA, we've got some investment in working capital, and that's a really well-trodden path in terms of the outflow for the first half. That's been the cycle for the 20 years that I've been in this business, and we see that coming back as we move through the second half. CapEx has come down in the half year, which that was something we committed to at the beginning of the year, and that is starting to come through. And then the rest of it is pretty vanilla, but you can see that there's incremental returns through the dividends that we've paid out and the purchase of our own shares. So what do we do with that cash? And so this is our considerations around capital allocation. And so back in March, we said that we were investing some of our cash to accelerate organic growth and then specifically Facilisgroup, and Chris is going to kind of talk you through what we've done there and how that's coming through. But we are seeing some success there. And I think there's a question for us around do we continue to do that or do we increase that level of investment if we think that that's going to drive further the top line. Dividends, we've consistently increased that since the point at which we announced the dividend back in '23. Capital return. So we've been through a share buyback program and then a tender offer that we just completed in August, and that kind of takes us then to what else do -- so we -- our cash conversion is increasing. We've got two highly cash-generative businesses, and that provides us with some options around what we can -- what else we can do? Is there anything else that we can look at that can help support that organic growth story.

Thanks, Claire. And so we talked about group there. Now we'll go into each of the divisions, Facilisgroup and Brand division. I'll talk through Facilisgroup and then Claire, Brand Addition, then we'll take you home and answer any questions that we can. So in terms of Facilisgroup, it's a really amazing business, I think, in the promotional product sector really specializing in that. And what we deliver into the market are three things at the heart is some technology that helps medium-sized promotional products distributors and some larger ones as well, bring efficiencies in growth at our own organization and visibility of as well. So a piece of technology very much supporting the promotion products sector. And then what we build around that is a market network that helps those promotion products and businesses engage in a very high level with some of the best suppliers in the industry and then bring those suppliers and those partners and distributors together in a community that helps each other to grow to really win as a distributor, win as a supplier and then win as Facilisgroup. And the unique combination of those things, and we're working hard on how we project ourselves because we are different. We're not just technology, we're technology plus and how do we really communicate that to the degree that the benefits that we can offer people and coming up with that brace, some super product marketing people that we have at Facilisgroup is that 360-degree Promo Platform. That's what we're providing, which helps our businesses and the suppliers that we work with to bring the best together for the benefit of all. And it's a really special organization. And some really nice stats on here. And I think if we concentrate on the ones at the bottom, we're talking about our customer or partner numbers, and they're those businesses, 248 as of the end of last week, and they average around about just over $6 million in terms of sales or GMV that goes through, and that's translating across to the right-hand side. And then what we want to try and do for the benefit of our suppliers under great terms for our partners and our distributors is bring the suppliers, the best suppliers in the industry and our partners, the best partners, we believe, together and working together for the benefit of everybody. And I say when we get this really working well, our preferred suppliers win, our partners win and Facilisgroup grows as well. And then that translates to the financials on the top -- so go from right to left, some strong EBITDA margins. We've signaled that around about -- of that 44%, around about 20% is going to capital and continuing to evolve our technology platform. The underlying retention rate is excellent. And I say we've really worked hard at ensuring the first part of growth is listening to your existing customer base, understanding them and actually sort of supporting them. And we've been working very hard on that, a super team, developing the technology, developing the relationships have done a great job there. And where that translates, I suppose, what we want to do bet is that sort of one in the top right-hand corner, I think really understanding what we're trying to achieve, who we're supporting, what problem we're trying to solve in the market and what we want to do now is really grab some market share and move that revenue forward. So if I look at this and look at my own performance, I think the thing that I want to do better at is that top left-hand side, the great work that's going on in the organization and the great solutions that we have. I think my job is to help that top line grow and make sure we do that. And I think if we do on good margins, good cash conversions, we've got a really special business. And in order to drive that growth, we talked about -- we invested a lot in technology, 2023 and '24, particularly, and that number has come down. And so our cash conversion is getting better. But part of that, we haven't taken all the way into cash. We've actually reinvested back into operating profit. And that has been over a couple of years, so bringing in leadership in terms of technology, reorganizing ourselves in that function, but also bringing now new leadership in terms of attracting new partners into the organization. And that is from a sales leader, a sales team and thinking about it differently from the offering that we're giving to the market. And what that's doing is having a direct and tangible effect on what's been happening. So at the half year, we've kind of grown by 50% the number of partners that we're attracting. That's continued through into September, and we want that momentum as we are getting better ourselves, really kind of building the encouragement from the investment that we put in, we want that to keep moving forward. And I say sort of a very tangible calculation can be done. The return on investment that we have placed into OpEx is coming out in some forward-looking metrics, and that's really important for us. So I know there's a huge amount of work going in Facilis over the last couple of years, and I've enjoyed being part of that journey. And now we kind of want to turn that into some momentum looking forward in revenue growth. And we put three points of focus for us in terms of the beginning of the year, engagement technology and leading the market and how we're getting on in those things and say the most important thing, I think, is are we delivering for our existing customer base. If we're doing that, it will attract more. And I-- if we see that from the improvement in the NPS score, but I also hear that and feel that from the feedback from our teams and the feedback I hear directly from our customers. So taking nothing for granted, but very pleased that we see that moving in the right direction, but we keep moving forward. Again, our team, our partners, giving us feedback in terms of where is the technology going. New Head of Product joined us, Matthew Cromar, 18 months ago, doing a great job in putting a seasonal release program together and actually communicating really well on an external basis, the road maps that we have. And underneath they're working with a great team that's moving that forward for the benefit of our partners. And we get it right for them, we get it right for people like them and grow market share. And I spent some time in that business a lot. I've enjoyed that. I kind of feel as though there's a great leadership team there now that is supported by an organization and pushing those 85, 90 people all in the same direction. I think there's something very powerful there. And through the technology, the team and the market network and community, I think there's a really special business. And my job now is to work with that team, move revenue forward, and I think this can change valuation of what our business has. And Claire is going to talk through Brand Addition.

Yes. So Brand Addition is very specifically taken up the space of working with huge global organizations on an international basis. And what does it sells product to those businesses that enables them to make a meaningful connection with all of their stakeholders, be that employees, customers, suppliers. And how does it do that? It does that through not only providing amazing creative product that creates that emotional connection, but it also enables those large organizations to stand behind the messages that they have around ESG and sustainability supports that, does that in an efficient way through technology-enabled solutions, and it does that internationally through both international client management and also international logistics. And so again, these are some of the metrics that sit around Brand Addition, and we touched on revenue and what we believe is a robust performance. I'll give you a little bit more detail around that as we move through the slides. But it's got an amazing roster of clients, all international businesses that everybody on this call would have heard of, and it had those relationships for a very long time. So we're not only able to demonstrate that we've got great retention around those clients, but we've also been kind of growing our market share through accelerating our new client acquisition. And so it might be kind of a challenging environment that we're working in now, but we are holding on to every single one of those customers and looking after them for the long term and then growing that market share by adding new logos onto there. And we've got a great split by client sector and a great split by geography or destination. And so that's a kind of fairly standard split and it's been the same over a number of years. So Brand Addition has got a really nice balance to its business model. This is telling the story of the first half. So kind of our overall -- if you look at June '25 compared to June '24, then sales are down by a couple of million. But bridging that and hopefully helping you understand a little bit of the nuance below that is that we've got some of our existing customers down. I am so upset. I kind of -- we've had great client retention in there. So we haven't lost any businesses, but there are in that movement, there are some kind of customers that are down, some of that are up. There's not any real pattern that we can share with you in terms of how those customers are behaving. It is very much business specific. And so what we're seeing kind of you look at those businesses that we're working with, if they're having a difficult time and their spend with us reflects that. But what we are able to do is offset some of that through the new client wins that we've converted, and we have seen an acceleration in the number of those. And so they've been implemented in the first half, and we're expecting those to grow as we move through the next 12, 18 months. And then the question that we always get on Brand Addition is how does the half year performance translate into the full year and kind of trying to share with you here how we see that panning out. So we're bridging from the GBP 50 million that we had at June to the GBP 82 million that we had at the beginning of this week. So GBP 82 million is the invoices raised or orders received in respect to GBP 25 million. And what we're signaling is that we expect our revenue for the full year to be broadly in line with where we were last year, which would mean that we've got a GBP 25 million to find between now and the end of the year. And how do we see that kind of panning out? So that number is a pretty consistent number with what we received last year, that we need a little bit more this year. It's exactly in line with what we had the year before. And looking at the order intake patterns of our existing customers and what we see happening on new business, the combination of those leads us to the conclusion like sitting here today that we'll get to a number that's broadly in line with where we were last year. So what's been our focus or our three points of focus for this year and how we're performing against that. So retention, Brand Addition, and the whole business works on long-term relationships, well invested and making sure that we're not doing something just for today, we're doing something for the long term. And the excellent client retention that Brand Addition has is testament to that. And that retention has continued. So winning new on top of that is obviously improving our market share. And what we are experiencing as well as an improving level of new contract wins. So that's kicking off, we believe, points 1 and 2 on there. And then back to what I said right at the beginning, in an uncertain environment where we are working really hard on revenues, then controlling what we can control, doing the right thing with our margins and controlling our costs, so that we can have a really robust performance, not only revenue, but EBITDA is what we've been focused on.

Thanks, Claire. We're going to talk a little bit about ESG as well. And ESG seems to become a little less fashionable in the last sort of 12 or 18 months, but we're not trying to follow fashion. We're trying to do what we think is right. Under the banner of ESG, there's a lot -- it's about treating your team right, your suppliers right, doing the right thing for the community and the environment. They're all good things to be doing at any time, and they happen to come under a banner of ESG. So in our own tone of voice, we're going about it. We listen to our team, our investors, our suppliers and partners and customers and from there, triangulate what we think are the most important things. And so we put those together under 4 cornerstones and then produce a annual ESG report that's on our website. It's done properly. It's done with depth and substance. It's not just kind of there to sort of tick a box. And so we will continue to do what we believe and put in the right amount of work into what comes under ESG banner because we believe it's the right way to run a business and for the long term and those long-term relationships that we talk about. And so the easiest thing to do, go on to our website, pebblegroup.com, and you'll be able to kind of see the depth of thought and work we put into there. But we haven't done that on the side of running the business. That is part of what we do in order to manage our business, and we'll continue to do that. And then taking us really kind of home and then we'll answer some questions is how do we sort of see the outlook. And we'll stand behind our half year results for this year. It doesn't mean it's perfect, and it doesn't mean things couldn't be better. We definitely believe on Facilisgroup, we've got some encouraging signs, and we kind of want to now prove that not only in the forward indicators, but actually in the actual results that come through. That's really important for us and then keep Brand Addition moving in terms of existing relationships and clients going forward, and we really do want to take advantage of the great people and services that we provide and can we attract more businesses into it. And that's really where we finish. We'll get our heads down for the year-end and then kind of beyond there, really trying to gain that market share and two businesses we're really proud of, and we hope they can continue to evolve and get better and grow. And that's everything. So thanks very much for listening, and happy to take questions.

How have your thoughts developed recently on capital allocation?

Yes. So I think our -- well, the slide that we share is similar or is the same as the one that we shared back in March. So the decision -- the shift in March was that we would invest into accelerating organic growth for Facilisgroup, which we've done and hopefully kind of got across the message that we are starting to see some results from that investment. And so kind of I referenced, we will continue to think about that and the level of investment, and we are getting some amazing returns on the investment that we've made. So that begs the question, do we increase that and accelerate that investment? I think that's a question that we need to consider as a Board and debate. We have committed to making a progressive dividend payment and that we haven't changed on that one. While over the last 18 months, we've been returning cash through the share buyback and then like more lately the tender offer. I think we're at the end of that now, and there isn't any plans to immediately do anything there. We'll let our cash build back up. But very deliberately on that slide, in point 4, we did kind of make reference to other options that we've got available to us. So our first and our absolute focus is on organic growth. We believe there's a great opportunity to grow organically for both of our businesses. But we would never say never to any kind of any M&A if the right opportunity came along and we felt that, that was a good fit that would help us move the businesses forward.

This is relating to Facilisgroup. Do you now have all the team in place that you need?

I think we've got a great leadership team in place and some really good people. And so I do believe there is a great team there that can take this business forward. Yes. Now does that mean we finished in recruitment in terms of continuing to add the right level of quality and understanding into the business. And I think that will continue. But we've got a super leadership of 5 people who are supported by, again, kind of an operational leadership team and then supported by people underneath there as well. So I do think -- and again, I see it with my own eyes, whether we're at an event or we're in the offices or we're kind of on a teams call that there's a group of people moving in the same direction and for the greater good of the business and our partners and our suppliers. And so I do believe there is a high-quality team in there now that can take this business back to growth because I believe it's well managed, it's well looked after. The real trick in breaking valuation cycle will be revenue growth. And I think we've got a super platform from which to do that from and the right team.

Both Facilis and Brand Addition have shown flat revenue and slight pressure on margins. How would you see revenue growth potential in the next few years for both businesses?

Yes. So taking each one. So on the Brand Addition side, I think Claire explained very good retention. Some of those businesses are spending a bit less in the shorter term, but they're some of the best-known organizations in the world and keeping those relationships, they come through over time. So it's an uncomplicated strategy on Brand Addition, if not a complicated thing to do, retain those amazing businesses over the long term, they might go up and down slightly individually, but as a cohort, they will move forward. And add to those new logos, which do have a sustainable high level of volume on a year-on-year basis, and that will lead to growth. And if you stretch out our track record of Brand Addition, we do have a growth rate of around about 5% on steady margins and steady profit margin and gross margins and profit margins. So I do think over the medium term, that business does grow in that profile, and we'll continue to do that. And it could be augmented with acquisition at some point. In terms of Facilisgroup, that business has more than doubled since we listed and since we bought the business or since we bought the business certainly in -- beginning of '19 -- end of '18. And so that business has more than doubled. So it has proved growth. But I think I got things wrong a couple of years ago and have got much closely -- more closely involved in terms of going back to our core and looking at our existing customer relationships and making sure they were as solid as they should be. I now think we've made the changes and got the team to ensure that platform is extremely strong. And by platform, I mean, the wider business, not just the technology. And I think we're now in a position to go and grab some market share and be really proud of who we are and go after that sort of more aggressively. So I acknowledge fully that, I suppose our valuation reflects the flat sales line, I think if we're able to prove some revenue growth on good profitability and good cash conversion, I do think there's 2 great businesses in here, which have exciting futures for their customers, for their teams and for investors.

Next question is on the Brand Addition side. Have you still got a good pipeline for further new contract wins?

So we invested 18 months ago into a lady called Harrier Greenwood joined us in terms of kind of really rethinking our marketing and our pipeline strategy. And I test them hard on this, and I give them kind of put them under some pressure in terms of how that's coming in. And I do think new processes, use of technology is helping that pipeline get better. And it's a great question in terms of if we get through the pipeline and we get to a tender process, we kind of show a client list to a prospects and people will be drawn into that organization. So the big thing for us on Brand Addition is making sure we're on those global tenders or those European or U.S. tenders. If we can get on there, with these large organizations, we've got a very good track record of converting them. And so the pipeline is growing. We've had better conversion of that pipeline in -- last 6 months of 2025, first 6 months of 2024, first 6 months of 2025. But it is an important thing to help us get through sort of headwinds of -- with existing customers, adding to the logos with the right size and repeatability of their spend is a very important thing for us. So it is growing, but it is a big part of our success going forward will be making sure that pipeline is as full as possible.

This one is on Facilisgroup. Given the level of data you must see across your customer base, are you looking to use AI or other technologies to analyze trends and help your partners?

Yes. So I think there's GBP 1.5 billion of sales we see on an annual basis. And so if you try and even kind of move around from that, so how many proposals must go into those GBP 1.5 billion of invoice sales, how many orders, what ZIP code they're being delivered to, what brand they have on from which salesperson in which region and from which supplier, it's an incredible amount of data. And then take that back 10 years. And that is amazing information that even now we do use to our advantage, to advantage to our suppliers and our partners. But I do -- we have a great project going on called Project Looking Glass, which we've employed data AI specialists to come and help us take that from raw data that's all locked away and take you through. And again, I'm learning all the time, the number of stages and pieces of software that you have to take that through to come out with something reportable and valuable. There's probably 4 stages we have to go through. But that project is ongoing. I'm really excited about what that tells us about the industry, how that can help our preferred suppliers and how that can help our partners. But it's absolutely -- it took me 2 years to recognize that we need to do this, but we're absolutely right in the middle of it and very much hopeful for as we get through 2026, we're able to use that data to really support our partners, our suppliers and ourselves in growing all of our businesses.

What kind of acquisition opportunities might there be for either of the businesses? I think asking for a bit of detail really?

Yes. And on Brand Addition, we have grown that business successfully by acquisition. Our footprint in the U.S. was via an acquisition 2015, I want to say. And so that has been a very successful piece of work, again, more than doubled in size and since we acquired that. And if you think about Brand Addition, we will stick to what we do really well, which is look after the corporates on a global basis who want complex services around their promotional products. And if you see, I suppose, at the beginning, we showed the chart of the $50 billion industry and $25 billion in North America, well, if you look at Brand Addition, we are -- if you did the pie chart for Brand Addition, isn't North America 50%, the rest of the world 50%. We just have around about 25% of our sales in North America. So is there potential with this amazing rest of world footprint to do a little bit more in North America. And that, I think, is something interesting, although we won't be announcing anything imminently, but it's an option. And around Facilisgroup, we're absolutely investing in what we do well, but also there are things we can plug into our own systems and things from -- that deliver great practice that we could never build into our own. We're integrating those. And is there any businesses like that, that we can add value to our existing partners by buying something that plugs into our core system, Syncore as well. And that's an opportunity for us. So we have definitely returned a lot of money to shareholders. I think we're probably finishing what we're doing in now in 2025 and cash will build as we get to the year-end and that capital allocation piece. I think we have no debt, very cash generative. If we choose, there are options on inorganic growth. But I want to do that on the back of real proof points of organic growth.

You just talked about the U.S. market opportunity. You've got a question on tariffs. We are seeing reports of tariff-related uncertainty easing. What are your clients saying? And has there been any shift in sentiment?

So whether we -- it's been COVID or Brexit or exchange rates, supply chain, inflation, there's a lot goes on in the world, and we get asked a lot of that. So how does it affect you? And I think the best thing to always do is go back to thinking about marketers are the ones that are ultimately spending the dollars that make this business work and our industry work. So how are marketers at corporate, do they have a budget and are they confident spending it? And that's how whether it's tariffs or COVID or anything, think of the answer is what's that question. And I think tariff was something very, very large and big in people's minds 6 months ago. There's been a stop-start nature to it, and it definitely has taken a back seat. Supplier's in our industry have done an amazing job. They often -- they are the ones that are buying direct out of countries that have been affected by tariffs. And they've invested into inventory. They've thought creatively about where else they can build -- make and decorate product. And through their hard work, the partner or distributor being more nimble and being able to pass some of the cost on to the end user. I do think that's really smoothed out in a way that operationally, we've been able to work. So although tariffs is a big thing 6 months ago, people were worried, I -- it's tariffs and the global economy, what does the global economy do as opposed to tariffs in itself that will affect demand in our industry.

What, in your view, are the key risks to meeting full year guidance?

And it goes back to, I think you can Claire...

Yes. So I think the unknown for us is that GBP 25 million on Brand Addition sales that we kind of talked through on that slide. So what we're trying to say there is what we need to do is something that we have done before, but we've obviously got -- we need to receive those orders and get them invoiced. But that expectation is built on us understanding what our existing clients are doing right now and how -- what their behavior patterns have been over the last few months and then what our expectation is of our new clients. So that is our -- that's our unanswered question, if you like. And our view today is taken on our understanding and the history and the 20 years history we've got of understanding how these patterns play out. And so that's the challenge. And what we're also trying to say in sharing that slide is we're not going to miss that number by a huge amount. So we're not going to be GBP 5 million under or GBP 5 million over so we will be there and thereabouts. We're in a public environment, and we know that our obligation is to hit that number, and we wouldn't be saying that we felt that we could if we didn't. So that's our expectation, and we're very much managing to that. And again, I'm like a broken record, but controlling what we can, get the most out of our margins and control our costs and work really hard at moving that sales line forward.

There's sort of 2 that go together on Facilisgroup. First part is, how can you build on the partner wins in Facilisgroup? And do you expect that momentum to continue into the second half? And then I think it's probably related. You talked about investment into partner growth at Facilisgroup. Could you describe what that cash and capital is going into? And any idea of a sensible maximum quantum or level of that investment?

Yes. And so that investments, I think it's GBP 400,000, we're GBP 400,000 greater in OpEx this year in '25 half year than it was in '24. So I think that will probably be more than -- so if we've got GBP 400,000, we're probably talking into GBP 1 million, slightly GBP 1 million plus will be the full year run rate of that. And so that's what we've done. That's gone pretty much into sales in terms of people, quality of leadership and the quality of people. And also, I really hope paying out more in terms of success in terms of we win more, in terms of new partners and therefore, we're kind of paying the sales team more, which will be absolutely fantastic for us to do. So it's gone into people, better quality, and we mentioned -- so JC Capote has joined as our Chief Revenue Officer. He's done an amazing job. He's kind of building the team now and really helps us get our product marketing messages right. And organize the sales team in a very professional and thoughtful way that we expect the pipeline to be much stronger going forward. So it's been into people, and we're getting a really good return on that GBP 1 million at the moment. And I think I won't hesitate to keep going on that and invest more if we believe we can get -- there's a phrase of lifetime value to cost of acquisition of our customers. And that ratio, I think, is very powerful for us today. And I think it's -- that ratio pops out. And with that information, what it says to us put more in and grow further. So we're putting the investment in and then we'll put the pressure on the team in order to deliver that. And by the team, I definitely mean the sales team, but that goes on to our team in product management and partner success and in terms of engineering and pushing our technology forward as well. So our business is geared to -- go into growth mode from here and the sales team are a big part of that, and that's why we're investing into it.

Can we expect to see further improvement in margins at Brand Addition in the second half?

I think -- so the Brand Addition margin has improved. The guys have done an amazing job of moving that forward over the last couple of years. There was a step change last year when we moved up to 35 points. And I think where we are now is probably the right number for everybody to think about. It would be wrong of me to say that, that will keep moving forward. I think it's a sensible place, and I would expect it to stay around about that number.

I think that brings us to the end. Yes, there are no further questions. So I'll hand back to Chris for any final closing remarks.

Well, thank you very much for spending time and listening to us today. I think we're in a sensible position, but more than that, there are some two great businesses here that's my job, Claire's job and all of the team is now to take Facilisgroup and Brand Addition into growth. And if I do that, I think there is a wonderful business to be part of and to invest in. But this business isn't about me or it's about Claire, it's about a much bigger team. And whether it's putting the materials together that we share with you or it's getting over the line for the year-end at Brand Addition or it's putting growth into Facilisgroup. There's an amazing team behind us that's doing all this. I definitely don't say sort of thank you well enough, I tend to sort of kind of concentrate on the next thing. But it's a big thanks to everybody, Brand Addition, Facilisgroup and Pebble Group for giving us the opportunity to share the messages. I hope we do that team justice. And thank you very much for listening.