Zigup Plc (ZIG.L) Earnings Call Transcript & Summary

Okay. I think we're good to go. So I'd just like to say welcome to those in the room and to also those on the webcast. We're pleased to have the opportunity to deliver a focused session on the Redde business, what I'd like to call getting ready. And to introduce 3 of the management team who will be present in the majority of the slides today. As noted in the RNS this morning, today is intended to put a spotlight on the various markets, business activities and financial characteristics of the group of businesses, which handle Incident management and claims. It does not contain any sensitive price information, and we're not making any comments about future performance or financial guidance in the presentation. If I move to the slide, the presenting team -- I'll carry on talking well so go into the presenting team who got Richard Clay on the end is our U.K. and IFD, is here today to talk through the financials. From the Redde business is Harvey Stead, who is Managing Director of the Collective Claims and Incident Management businesses; and Claire Owens, who is Managing Director of FMG & FMG RS. We have a substantial slide deck today, which will help as a takeaway, but also to frame some of the detail. This reflects the feedback we have had in terms of helping to understand the Redde business in much more detail. I am limiting myself to a couple of slides at the start before handing over to Harvey and Claire, they can give the insights into the business, and Richard will then finish off with some financial commentary before handing back to me for the final remarks, and then we'll open Q&A. We plan for the formal presentation to be about an hour, and we aim to be wrapped up and have you on your way by about 2:30. Slide 5 should be a very familiar slide to you all, and it continues to work well in representing how on a wider group basis, we have touch points at all stages in the life cycle of a customer and their vehicle. We have shaded out the Northgate activities to focus on those offered by the various businesses that collectively make up Redde, and which together report revenues under our claims and incident management segment. And all of these services combined represent a unique set of complementary capabilities, which have mobility and the customer at its heart. On the next slide, so at the time of the merger in 2020, we set out our strategic rationale, which brought about scale of infrastructure and operational leverage to address market opportunities. We also indicated that the financial strength of the combined group would bring benefits to each, particularly around fleet source in the management as well as the resilience that financial scale brought to areas such as cash flow management. And you've heard from me over the past 3 years has to have this scale has helped us gain revenue synergies particularly for Redde in the form of the integrated platform and the multi-service contracts we have won, which have delivered benefits to our customers. And I know Harvey and Claire will bring these to life today. So before handing over, I want to finish with some comments on the trends in our markets, one of which is the continued move to outsourcing more of the services surrounding mobility. Mobility services is not a core competency for our partners in terms of offering vehicle replacement, vehicle repair or legal claims processing, but it is a core competency for us and what they need, and ensure they work with a provider who can provide it. I highlighted in the H1 results that the consolidation of supply chains into an integrated service was the way forward, which leads to better customer outcomes from a service perspective. And we are seeing a continued trend of outsourcing of noncore services, which we should expect to structurally benefit from. Technology is also a key component within the next generation of vehicles, which are becoming increasingly complex to repair and investment in training in a highly skilled workforce with the latest repair techniques is a valuable asset to own. And given our skills, experience and use of technology, we are well placed to meet these opportunities in the market. The claims and services business represents a great opportunity for further growth and we expect to continue the strong momentum we have seen since scaling up the business. Okay. On that note, I'm going to hand you over to Harvey. And hopefully, the slides will work when you got catch up to date.

Thank you, Martin. Good afternoon. I really want to talk a little bit about the market, about where our business is stick within the market, the services that we provide. And with this slide, we're trying to give you a sense of the scale of the markets in which we operate. The last 5 to 10 years has been real significant growth in the U.K. car park, growth really quite remarkable. There's nearly 40 million vehicles as we sit on the road today. And that does include HGV, it includes cars, vans, a degree of agricultural use, but still higher than it's ever been previously. Now clearly, that growth results in more traffic on the road and invariably more traffic on the road will result in more incidents. And you'll see through the presentations today, the common theme of what all of the Redde businesses do is around incident management and managing claims and repairs. No, I need that. Okay, fine. Thank you. The Redde businesses are operating in key segments where we're a substantial provider and there's still significant opportunity for us to grow. We really have no direct like-for-like competitor that can provide integrated and industry-leading solutions in the way that we do. There's lots of recognized providers and names that you would recognize in some of the separate sectors that we work in, but not one single provision that would give a joined-up solution in the way that Redde is able to. As Martin said, Claire is going to give a deep dive into our FMG repair services business. But to offer you some context, the whole body shop world is very diverse and is a multiplayer industry. There are a large -- sorry, there are a few large consolidated players, which make up a significant proportion of what I would probably call corporate capacity. There are still thousands of [indiscernible] man band under the arches. But to give you an idea, they're probably completing and processing 2 to 3 repairs a week. On average, within our Redde FMG RS sites, we're probably finishing 25 to 30 repairs a week and some of the bigger sites much more than that. We work in a market that is really insurer focused. And because of that, it is more complex repairs by the very nature of the processing ensure work, significant damage, higher value and longer time lines. However, the large independence that we are competing with also represent a significant part of our supply chain. So when we go to the market, we go with a blended solution, which includes the capacity that we own through class business but also working with that independent network. This market is continuing to consolidate both in terms of M&A but also for insurance companies looking to drive out efficiencies and lower OpEx costs reducing the number of suppliers that they're engaging with. We have a significant presence and a long track record across all of our market segments, and our brands are really well known as a B2B provider. Our differentiated strength comes from the combination of the services that we can offer across the product set and also our ability to be able to grow with our customers. We have a comprehensive menu of services that our customers can choose from. And by owning all of these businesses, we offer a bespoke solution where there are no real service gaps. We're consistently award-winning through all of the businesses within the group, and we actively value our customer feedback. That includes exceptional trust pilot scores where we're able to demonstrate unwavering commitment to being customer-centric and delivering on our purpose of keeping our customers mobile. The merger in 2020 has given benefits, including greater nationwide coverage but also enabled us to improve our speed of response to incidents. It's given us scale both in terms of fleet purchasing and financial capacity. The business has matured significantly since the start of 2020 with significant new customer growth. We've also seen a substantial growth in our capabilities, both the size of our fleet and our overall branch network. And the group has also expanded through acquisitions such as that of the nationwide repair business, which is now trading as FMG Repair Services. This means around half of our repairs are undertaken internally with, as I said, a second ago, the remain to working through the independent network. We work in 2 primary key market sectors, and that's the insurance world and vehicle leasing. And within vehicle leasing, I combine that with large corporates, but insurance is our largest sector by far. However, we also have a significant presence in public sector. Primarily, this is Blue Light, so emergency services, or potentially automotive or transport-related public sector. And most of that business is carried out through our roadside recovery operation in Huddersfield. We interact with the end user consumer through each of our business channels. This could be the policyholder as a private individual or a company car driver or possibly a company van driver. Across all of our businesses, we have a real significant focus on customer care. It's vital that the customer, the consumer is engaged throughout the process. Generally, our interaction is through an unplanned experience and an unplanned experience that often was not their fault. We are a major player within these markets, but there's also plenty of opportunities for us to still work through, both within the segments that we work within, with our existing customers and with new opportunities. A couple of examples here of long-term sustainable relationships that we've developed over many, many years. About 40% of our revenues are from relationships that today are over 10 years old. And then we've got about another 30% plus where we've been working with the partner for over 5 years. It's clear that this demonstrates strong and trusting relationships. I would always say that winning the account in the first place is the easy bit, and actually, that's never easy, but making sure you are still the first choice provider at first renewal and second renewal and beyond. That's where the hard work starts through the service and operational delivery. With both of the organizations that we're showing here, we've highlighted we become an integrated and embedded partner. We're still looking to build and expand our overall services and the remit to drive added value to reduce friction and to improve their customers' own experience. We started working with DLG, DirectLine Group in 2016. We provide credit where we provided credit hire solutions. Within the presentation, I've got a slide that will differentiate between credit hire and direct hire just to cover that. We expanded that to include direct hire in 2021, and the merger between the businesses gave us buying power to compete in this sector for the first time. And then with the acquisition of F&G repair services, we secured a significant amount of direct lines, repair volume. And today, we are now their largest repair partner. With national highways, what was Highways England until about 18 months ago. We were actually their first outsource provider. They went through a public sector tender process in 2008. And today, we remain their partner of choice. This is a commercial model based on statutory fees. It's a centralized roadside recovery program. We've got a 90-minute clearance KPI deadline. But we also look after major incident support. So this could be multiple vehicle collisions on the motorway network, vehicle fire or very complex heavy goods vehicle incidents. We have technology that supports traffic officer in driving efficiency. So they know when the recovery vehicle is going to be on site, the type of vehicle to drive the capabilities. And within this business unit, all of our colleagues that operate are police checked to a minimum level 1 and they work from a secure unit that's based within our site in Huddersfield. I promised myself I come up with a different word in the secure unit. That doesn't quite sound as I meant it to. From a fleet perspective, we have a very diverse Auxillis fleet. This includes vehicles produced by over 40 different manufacturers and really is representative of the U.K. car park, and the demand of our Auxillis partners. Demand is seasonal, as you would expect, in line with the U.K.'s road traffic conditions. And clearly, the winter months are our peak period. We flex our fleet during the year in line with demand, and we have rotations specifically set up to take this into account. It's also important, however, that we maintain the correct mix as well as the age and condition of the vehicles on hire and our target is a holding period of 2 years. Vehicles are secured through our own phones, what we would call our own risk or on contract hire schemes. The purchasing route is dictated by price and expected residual values on planned disposal date. In terms of demand reducing during the pandemic, where national and regional government imposed lockdowns, significantly impacted on road traffic volumes will then clearly, our demand was significantly curtailed. And what we have seen since then is investment, which was required to rebuild the fleet as volumes returned as well as additional units that are required for the new business that we've won. The increased branch network post-merger as well as combining vehicle purchasing power alongside Northgate has allowed the Redde businesses to be competitive in the daily rental sector and win market share from insurance partners which, again, for these partners as increase the share of our wallet. So a little bit about Credit Services and direct hire. Credit services are provided to a customer who have incurred a loss as a result of road traffic accident, which was not their fault. We use the example of sitting around about. If you're set at around about and somebody runs into the back of you, that is the most clear cut nonfaulting incident that you could possibly imagine. If you are the individual that runs into the back of somebody who sat at around about, that is as clear cut fault as can possibly be. So following the referral from the Auxillis partner, and that could be one of a number of large insurers in the U.K., we're going to take a rigorous assessment of the liability and the need that the customer has, and that's carried out before our services are deployed. I've just given you a very, very simplistic fault on fault provision. There are lots that are far more complex than that. So before we deploy our services, we have to be comfortable that the third party was at fault. The customer incurs a charge for the higher vehicle and the repair, which, upon completion, Auxillis effectively are seeking redress from the guilty third-party insurance company. We're supported by the liability and need assessment that we carried out before the services were deployed, and about 70% of the claims we manage work through what's called a protocol agreement. This effectively expediates the payment process with both parties benefiting from lower cost of recovery. To date, Auxillis have now managed to secure the majority of its claims under protocol through demonstrating to the insurer that the service provided to the customer is entitled under common law. And as far as possible, the customer has looked to mitigate their own losses. The claims that are not settled under protocol are initially sought through negotiation and Auxillis have to be able to demonstrate the practices employed as outlined by the GTA agreement where reasonable costs are settled for higher, which factor in the additional services provided by Auxillis. So vehicle recovery at the same of the incident would be an example of that. And then ultimately, and this is happening less and less, if no agreement is able to be reached and as an absolute last resort, Auxillis will issue legal proceedings to cover their losses through the core process. In terms of how these claims arrive with us, well, efficient and comprehensive incident notification from the policyholder from the driver is absolutely crucial. And this breaks down into 2 different areas within our businesses. In our service businesses and predominantly within FMG, we are nearly always interacting directly with the policyholder outside of the road. And this will be 24 hours a day through either Renova branded telephone line or increasingly through e-portals that the driver is able to use to access us. With this interaction, engagement, understanding and empathy is absolutely key. We call this a distressed purchase. When the driver left his home this morning, he did not expect that he was going to be involved in an accident. Regardless of his fault or not, and so every part of this was not factored into his day and has become a problem. And it's our responsibility to make sure that, that process works as smoothly as it possibly can. Within Auxillis, what we would probably describe as our claims businesses, generally, we accept the data from the insurer in real time as the incident is reported to them, and this is where our interaction would commence with the insurer. Now be mindful, these notifications can be really serious incidents, concertina accident, 6 or 7 vehicles involved, sometimes involving emergency services, more often than not in the vehicle be undrivable to having to arrange recovery of that vehicle. But for every one of those, we also deal with 3 or 4 where somebody script the gateposts has left the house that morning. and significantly damaged 3 panels, which is still an insurance claim. And the teams within our contact centers have to be trained to work with all different types of incidents. And we are generally the only representation and interaction that the customer or driver will have with their insurer. So in theory, you could be insured for years with no claim either against you or as your fault. You could pay your renewal each year, and you could have absolutely no interaction with your insurer whatsoever. So you judge your insurer invariably on how well they manage the claim. And really, that's about how well we manage the claim, and how well we manage that claim throughout the life cycle. So repairing the vehicle, arranging the mobility, getting you back on the road, recovering those costs, if that's applicable. This is why a chosen partner within the insurance sector has to be able to understand and mirror the insurers brand values and their personality. We're a partnership business. We're obtaining work by winning and developing partnerships with leading insurers and large intermediaries through our scale, through our reputation and increasingly through our range of services. And we work closely and collaboratively with our partners to optimize the capture of claims and reduce leakage. Leakage effectively where somebody will go and have the repair, manage themselves, they'll range their own vehicle. And invariably, the costs are increased if the insurer is not able to control it. The Redde businesses have vertically integrated the entire motor insurance supply chain within the group. Our primary focus is repair and replacement vehicle hire, and there's various forms of that. Additional services generate income independently but are complementary and designed to drive growth in repair and hire. Supplying all claims-related services gives Redde credibility, it add value -- it adds value to our total proposition, and it enables us to win and retain work. We demonstrate value to the customer, to the driver in an easier, more streamlined customer journey. We demonstrate value to our partners in outstanding customer satisfaction and NPS scores as well as claims cost control. And then as a group of businesses, we demonstrate value to our parent by maximizing cost efficiencies and optimizing the conversion into income-generating services. This slide looks at the business models that exist within our various businesses and how revenue and cost profiles look for the different services. It shows a close differing relationship with partners for say credit hire as composed to direct hire. This reflects the different risk profiles and contractual relationships between the two. For credit, this is the claim philosophies with the work provider with the insurer, receiving income through commission and it removes the risk of recovery. So effectively, you are maximizing their revenue but mitigating their risk. With Direct Hire, you're generating an invoiced income, and this is one of its core purposes for an insurer is to limit their underwriting expense by achieving the lowest costable solution they can. So you're, again, mitigating their cost exposure. Within our incident management businesses, we predominantly have a transaction fee-based model for the core services that we provide. What's consistent across all our model is the potential for cost benefits accruing to both us and our partner, where scale and efficiencies are achieved. The search for efficiency means we're also seeing a greater number of insurance partners coming into our protocol relationships where the vast majority of our claims are resolved and paid within 30 days, and this is done on a pre-agreed automatic basis. That helps from a customer's perspective in terms of -- from an insurer's perspective, it shows trust. The benefit it gives in terms of the counterparties is to avoid the buildup of litigation and claims provisions and that impacts on the insurers on regulatory reserves. As we bring together multiple services for a partner, we can also extract more value and consistently a greater share of what we would call the incident wallet. Across all of our businesses, we are seeing consolidation in supply chains, we are a clear beneficiary from this move and the benefits we offer are very much aligned with the needs of the insurers and our corporate partners. Our supply chains have reviewed the attraction of a partner who can support multiple service lines, has the ability to grow with the partner's demands and to increase digital interaction to ensure we are first pick when an insurer is potentially reviewing a preferred partner shortlist. This is a trend that we do not see reversing at any time in the foreseeable future. The recent like [auto] lease win was a clear example of this where they valued our ability to take their business as a whole, integrate their team, consolidate their supply chain and reduce overhead and required spend on IT and CapEx. The pandemic created a protracted disruption across the insurance and vehicle repair industry, and we're still seeing degrees of that fallout now. The short-term reduction in vehicle usage and miles driven clearly reduced incident rates and volumes for that period. Vehicle manufacturers slowed to near 0 for around 18 months. That created supply chain issues for vehicle manufacturers, but also hugely importantly for us, the replacement parts that are required to repair vehicles that are on the road. The market dislocation through COVID and thereafter, the dislocation across supply changes, the supply chain challenges we see with recruitment, both within our own organizations and within the insurers on claims teams has caused issues but also presented us with huge opportunity. It's prompted, undoubtedly increased an increased move to outsourcing to key suppliers such as FMG and Auxillis. The customer response now is to consolidate with a trusted supplier, and we're seeing more and more the continuation of a move to identify areas of their own operation that are now deemed to be noncore services to them. I'll now hand you across to my colleague, Claire, and Claire will provide a detailed review of FMG Repair Services.

Thank you, Harvey. I'm with the technology. Good afternoon, everybody. My name is Claire Owens, I'm the Managing Director of FMG and FMG Repair Services. So back in August 2022, I took up the role as Managing Director of FMG Repair Services. So the clear mandate really to transform the business and realize the value of the opportunity we had post acquisition. So many of you will be aware, we bought the business out of administration. So there is a lot still to do on that journey. So today, I'm going to talk to you about that and talk to you about how the business has come a long way in the last 12 to 18 months over my leadership. We've brought in a new operational team to reset the new direction of travel, and we've also introduced new ways of working to drive productivity and efficiencies. During this presentation, you'll see and hear both how the market and the business is changing. And FMG Repair Services has evolved to cement our position as one of the leading groups in the repair market. On to fair slides, when you can see really a good overview of the marketplace and how we're operating is probably a good start and point for us. So I think it's useful to give you just a quick look of what the opportunity is. So we're an industry really worth around GBP 6.5 billion. We do 4 million repairs within our GBP 2 million of which is in the insurance market that we play in. So if you look at what we're doing as a business, our penetration rate is in single digits. So plenty of scope and opportunity for us to work through. The bodyshop market, Harvey has alluded to is highly competitive. It's fragmented and it's diverse. If you look at the slides, you'll see the chart on there gives you a couple of illustrations of the types of businesses that are playing in this space. So from independent groups to dealerships to insurance owned sites. So we, in the last 5 to 10 years as an industry is seeing consolidation, and we see that move to consolidation continue through to today. Over the last 10 years, around 26% of our body shops, which is the table on the slides, you can see, have reduced, and you can see that the market certainly consolidates within that place. Consolidation will continue. It's my prediction. It's the market prediction as well. You'll see consolidation continue in the marketplace quite some because the levels of investment required within those sites from bodyshops to service the vehicle park of the future. EVs require new technology and a different level of investment. And with that, a lot of the threads and sheds that Harvey referred to the start to demise really and can't keep up with that level of investment. So larger groups like ourselves, we're well positioned to navigate these challenges and seize on the opportunities. When we talk about other challenges in the market, you'll often hear post-Brexit, the migrating workforce that was often seen in the U.K. has started to reduce, which has created a skill shortage in the industry. So I'll touch on that today and talk about what we're doing about it and how we're leading the march in that space. Another unique dimension of the market as a body shop market is our presence of repair and network. So you can see the table on the right-hand side of your graph, if it's right. It's an illustration of what those repair networks do. This is where another part of my business does FMG come into play. It's complex, it's time consuming, it's costly to go to market and direct saw from each independent body shop particularly when you've got [indiscernible] in play. So often partners and protective partners use networks and use management teams that deliver those networks and to FMG to secure capacity. So within FMG and FMG Repair Services, we're operating in both spaces to give the blends and the advantage to our customer base. The combined size and scale of the 2 businesses means we have a competitive advantage. We've secured access and we control access to repair capacity that nobody else has got in the market. So this opens up the dialogue for prospective partners, not just to operate in repair services, but to then open up into the wide and mobility services platform and bring our other brands into play. Sorry, I was talking for you then, [indiscernible]. And we've touched really on the marketplace, but what does this mean from acquisitions. So sometimes, it's useful to jump back in time before we jump forwards. Back when we acquired FMG for Repair Services or it was previously known as nationwide. We bought 77 bodyshops out of administration. We have 2,300 colleagues. And on review of the data, we expect to bring in out of administration, the sites or severe lack of investments. Help me to -- there's really a lack in investment. Where investment was deemed disproportionate to retain and there was a low payback, those sets are subsequently closed down. So I'm not talking about investments in sites that are invested in kits -- someone's calling, someone wants to dial in. We're not talking about investments in Kits. But we are talking about is investments in the fabric of the building. So large-scale investment like roofs and leaker roofs, we don't want to be using [umbrella] inside. We then we've got electrics and power tools at play. So we made a rationalization decision and say, look, let's rebase what we've acquired and then we can build for growth. So in summary, year 1 post acquisition about rationalizing the state and making it safe. Year 2 springboard for growth, and we've reset those foundations and that's really been our focus for the last 12 to 18 months. So what do we do? We're a one-stop shop, not everybody in the marketplace can deliver what we are doing. We offer mobile repair services, which is quite unique. We're offering them a glass fit and service as well as operating in fixed bodyshops. We've got a range of solutions, but more importantly, it's across the U.K. and then gives us wider access into our mobility platform. We're working through investment plans. We'll update in aged equipment, as you'd expect when you brought the business out of administration, and we're rightsizing our equipment for future needs. So what do I mean by that? When we see ramps breaking and work drops, we don't replace on a like-for-like basis. When you look at the vehicle park in the future, we're looking at heavier vehicles, batteries and electric vehicles. So they were going out on 2.5 ton ramps or 3.5. We have to invest and new ramps, which can keep a higher load for the vehicles that are coming through. We're also evolving our service proposition, not just in ticket that we look at, but also to deal with the complexity of repair. So whether it's sealant with batteries, materials of new vehicles, new brands, new models or new technology. So many of the repairs come through will require a reset or calibration, particularly for ADAS or hand to invest in our sites, but there's a payback in quite a lucrative payback in that respect. So in summary, the last 12 months have seen us invest heavily in the site and in the kit, but also in our technicians, we have to bring our technicians into the future. And I'm pleased to say all of our technicians within FMG Repair Services in every one of our sites. We've got the capability and the skill set that they can access now to fix electric vehicles and alternative fewer vehicles for the future. So that's right. Across our 64 sites, if you bring in vehicle in, that's gotten an alternative fuel, you will be able to get it fixed and repaired in one of our sites. So we're building up capacity and capability. It has taken some time, but we're doing it to ensure we've got a measurable ROI that we've got sustainable growth within the business. We're doing it with great potential. Our sites are geographically, really well placed, and we're open at what we can do to expand further out. But more importantly, repair capacity is becoming the globe for our integrated mobility services platform that we sell to the wider customer base. Why is it the globe? Well, often, in this marketplace, how prospects are coming to us to access repair capacity, we know that demand is outstripping supply. When they're coming to access repair capacity, we can show the breadth and depth of our services in order to reduce their cost and make sure we maximize value for them and for ourselves. So what's different to FMG Repair Services? What's our differentiator in the marketplace? So we've touched on demand, up ship and supply, but why come to us? Size and scale is a key determinant really of why a lot of our prospects come and onboard on our business and how we're secure in our business. Size and scale gives us 2 advantages. The first one, better management and control of the way it flow coming through. So when you've got a spread across the U.K., you can control the work flow to ensure you're driving productivity gains within your business. But more importantly, that size and scale means we can leverage the benefits of strong supply chain relationships, which then results in improved margins coming through the business. Technical confidence is, okay, we've got 650 technicians and all of our technicians are experts in their area and become a key USP. Customer service and quality, I won't touch on all these, but it goes without saying, if you haven't got your customer focus and you haven't got your quality, then you're not going to get repeat business. So we put customers at the heart of everything we do. And within that mantra, we then back ourselves in doing that, and we offer a lifetime guarantee in the repair. And we can do that because of our size, scale, breadth and depth and that becomes really attractive to some of our insurer partners. An integrated group offering I've touched on. Harvey's referenced that we've got the blender best of both we service internal customers and external customers. And by doing that, we can make sure we've got the advantage to control the way it flow, but also maximize the benefits of the clients. And then ESG, which I'll touch on a couple of slides later on. Sustainable solutions are really increasing importance because of our customer base. And that's at the heart of our strategy going forward and being part of Plc. You'll also see the benefits the Plc brings to a business like repair services when they drive that carbon initiative. So we've got a high penetration in the insurance sector. We believe in forging strong mutually beneficial relationships with clients. These long-term commitments are scalable, but to provide stable and predictable revenues for the future. And second to that, these customers also understand the importance of obligations and payments and financial obligations, particularly when you're looking at some of your reserves and reserves management. So it allows us to maintain healthy cash flows to reinvest back into the business and unlock shareholder well. So people -- I've touched on people a couple of times in the last 5, 10 minutes. Bodyshop businesses are people-driven enterprises. I talk about how it's our people at the heart of what we do and make the difference to both the customer and the bottom line. And why are people so important in a bodyshop business and a repair business, labors the commodity, it's labor that we build. So we've become quite obsessive operationally about labor, labor productivity and labor efficiency. [Scan], skills, manual labor to be precise, so quite unique, and it's a growing workforce. As we grow our workforce, we'll grow our profits. When we look at the vehicle car part as it's evolving, you see more complex repairs to more complex requests, require more parts and more labor to fit the parts. So again, you end up with a win-win. We set ourselves apart as being an employer of choice through the unrivaled benefits we offer, and we can access these benefits through being part of a Plc. Many of our benefits have become really attractive because of our ownership and group structure and our facilities and work in environment become increasingly important when you've got a challenge and a skill shortage within the market. So who doesn't want to go out to bed and work in an environment that is clean, organized and high tech rather than dilapidated and [leaking roofs], and we're extremely conscious of that as we push out to the market and really drive our ambition to be the employer of choice. We're working towards an environment where colleagues can develop and grow. We're leading the industry really with over 50% of our colleagues in more than 5 years length of service. And it's no surprise as length of service increases, productivity and efficiency increases. So it becomes a key focus of ours for the next 12 to 18 months in really driving that retention rate through. I'm ambitious, our group's ambitious and our business is ambitious, and our ambition is to be the U.K.'s largest IMI employer of technicians in the country. IMI,for those that don't know is the institute of motor insurance. And we're the only business in the U.K. that's got an accredited IMI train and center. So again, you can see our commitment to the industry and the future skill shortage. Training, it doesn't just stop with training your existing employees. We have to do more to bring more into the industry and by bringing more into the industry, we'll be able to increase the throughput and grow volume subsequently gross profit. I referenced at the start, one of the biggest industry challenges, is addressing the skill shortage in the market and that intensifies competition. We're at the forefront of driving that, and we see it's an opportunity to really look at our apprenticeship program. We've got an industry-leading apprenticeship program that not only recruit apprentices on mass, which nobody else is doing, but we also recruited apprentice mentor. So apprentice mentors is about passing your skill set on to the next generation. We're building up an apprentice with a mentor, which increases the retention rates of both the apprentices and friends men. So again, we can address the skill gap and knowledge gap and ensure we're growing homegrown talents rather than having to constantly recruit externally in the marketplace. I was thrilled to say our apprentice program nominated in the ABP Award for Apprentice Program of the Year. We were shortlisted. But more importantly, it's about our people have represent this one apprentice of the year award. So we don't just put the glossy picks up there. We actually follow through with what we're seeing and really demonstrate our commitment to that next generation, but also to grow in our business for the future. And when I talk about mine and broad and mining deep within the business areas, and we do that very much in our recruitment and HR teams. We don't just mine deep to refer apprentice and skills and technicians. We have to go broad and we're now diversifying our labor market. So we've got around 10% of our workforce that are now females on the apprenticeship scheme, and we expect that to continue as technology and new ways of work and increases becomes a more attractive industry to work in. So low-carbon initiatives an increasing value for our partners. As you'd expect, when our partners are large corporates or insurers, this tends to be at the top of the list and Harvey and I see it time and time again when we've tendered and prospecting for new business. It's a fundamental part of our ESG strategy as we align our goals to our customer basic goals, but also aligned to the overall Redde Northgate Group. When we look at what we're doing specifically, we take the impact on our environment extremely this area. So having invested in several low-carbon initiative schemes couple of [indiscernible] on this talk through. But the key is how do we transition to low-carbon practices and embed it into our ways of work we're on that journey today, and we'll successfully making changes. So our new paint scheme, which you can see up on the slide is a really good example to draw that out. As we all know, we spray a car and it is to dry how we dry becomes the key determinants. So all of our workshops have got paint booths in, paint booths emits carbon by Putting a car in a paint booth for a lower bake time reduces the carbon emission. But we can go 1 step further. We can change the paint product. So it becomes an air dry product. So again, air-dry product, doesn't switch on the paint booth to staff still keeps the quality of finish. And actually, it creates a new skill for the paint set where we've got to do something other than finish just in a paint [indiscernible] . So quite a different and unique skill set for a paint set to use a different product, but also benefits the business and the wider environment. And second to that, you've got on the screen on how we're reusing rather than replacing. This is truly where we change our ways of working in the bodyshop. So we've always talked about repair over replace, repair versus replace relies on technology, not all bodyshops can invest in the technology to deliver that. A good example, Plastic welds. And so there's that remember a bit like me. Old welds used to be metal. Now we weld with plastic in order to weld with plastic, you have to have a new tool to do it. When we're pulling panels, we can use glue pulled repairs and panel repairs, which all require new technology and new investments in kits. While we've got that investment in kits, we can increase the throughput through adopting it. So again, not only does it benefit the environment. It reduces our carbon emissions. It reduces our impact on waste because we're no longer disposing of the bumpers and plastics. What it also does is increase the vehicle off-road throughput. We can get the vehicles back on the car quicker because you're not waiting for a part to be shipped to cross, which as we all know, nobody as we do in that in a minute. You can then start to get the vehicle back on the road because it's gone through the workshop a lot quicker. So a real win-win for us all. And then lastly, or second to last, I'm going to share with you not just my ways, but really give you some insight into our operations. So i always think it's important [indiscernible] you don't just hear from me. You hear from my team, you see and believe what we can do. So unfortunately, we can't take you all around the bodyshop, but we've got technology at our fingertip. So when you look at the technology advances, our environmental considerations and our increasing customer expectations, and we have to adapt to all 3 to evolve and to thrive. You're pleased to know last slide for me. So what does the future hold? Well, there'd be no surprise if we're not expanding. We're building new sites. You can see Martin. I think in the interims give you a snapshot to of the new sites that will pop up and we've got further growth to go in the next couple of years. So we're building software, expanding our capacity and more so we're kitting out our existing sites technology that is future proof in our demand and supply fulfillment. But the picture you're seeing already give you an idea of just a type of where up to build a clean, organized, which become attractive and compelling proposition to the labor market that we can bring into our business. I said at the start of this, that demand is outstripping supply, and that's a great space for me personally to operate there was an opportunity for the group, and that's what gets us excited in the morning. We've got a healthy pipeline of prospects that are coming through. But more importantly for me, not just prospects and FMG Repair Services, we may hook them through, but then the field out into the wider mobility platform and look at alternative services right across the group. So we've got a fantastic opportunity in the next couple of years ahead of us, but more so you can start to see our growth plans come alive. So like I said, last one for me. Thank you for your attention. I hope you found it insightful and happy to feel any questions at the end when we do Q&A. But for now, I'll hand back to Harvey. So thank you.

Thank you, Claire. I think what the video actually shows. We live in a very process-driven world. And actually, what we're expecting is that vehicle 2 weeks after you've had your accident to come back to you in exactly the same conditions as it was, panel fit, bonnet, boot, doors, metallic paint invariably and no difference to when it left you. But bear in mind that when you bought that vehicle new, it was probably built in a factory where it was virtually untouched by human hands. So there's a huge amount of skill. I think it's not adapted almost craft involved in repairing vehicles. And that's why the process in terms of the colleagues we bring through and are so keen to retain, but particularly the apprentice program is so vital to what we do because it is still very much a people-driven business. And the second part of my presentation is going to focus on how we win and how we manage our contracts and primarily the opportunities that lie ahead. The motor insurance industry continues to be a really demanding sector where loss ratios are invariably close to or more than 100%. Major insurers are increasingly looking at how they can remove friction and how they can remove costs. And one way to do that is through an integrated supply chain with fewer touch points and fewer handovers with one supplier taking financial responsibility for the customer journey and the commercial model, and that gives the insurer certainty and accountability. But to achieve this, you have to demonstrate core focus. None of the Redde businesses are involved in any other areas of mobility other than insurance. So we're not involved in the retail sector or travel or leisure, all of our replacement vehicles are around ensuring related and insurance claims. We're not involved in any other area of claims. So we don't manage household claims. We're not involved in travel insurance. We don't manage pet claims. Across our businesses, motor is our sector, and we are widely recognized as experts within that sector. And a great example of this would be QBE. So QBE Insurance, we've worked with for over 10 years. And over that period of time, our remit has continued to increase. We provide first notification of loss services, so we're answering their calls from their drivers. We provide repair management, third-party claims. So dealing with the driver that they insured run into. We manage loss recovery on their behalf, but increasingly also management of data and claims management information. So what detail can we provide them through our services that's helping them with their underwriting process. And to this end, we're increasingly seeing that RFI and tender requirements from the insurers are focused on that next level of integration. The management of the claim, the management of the repair is really a given. But to convert these opportunities, we've got to be able to demonstrate that our systems are integrated, that the capacity and capability we have can demonstrate market expertise. And Claire touched on it, but we're also seeing increasingly the ESG agenda reflected in the insurers' needs. And again, working with an integrated partner across each element of the process ensures a single approach with sole accountability. The initial tender and the award process for any significant contract generally is a 12-month process. With smaller clients or some managed services, it can be done in shorter time lines. And it's worth noting that a huge amount of key stakeholder relationship building, a fact-finding market positioning takes place prior to this. I am a firm believer with all of my teams that you have very little chance of winning an account if your first engagement is when the RFI lands. So we're in constant dialogue with potential partners about tracking their contract time lines, understanding their renewal frameworks and understanding their culture. And these relationships can occasionally actually circumvent a formal tender process. And we've had examples recently where we've actually converted significant accounts just through that ongoing building of relationships. It doesn't happen very often, but it's really great when it does. And then Phase 2 is the implementation. The implementation of the account. Again, generally 6 to 9 months dependent on complexity and engagement. It's really critical to ensure that everything is done right, pre-launch. And we have significant investment through this phase in our people, in our technology and in our fleet. And some of these IT projects can be really complex. It can involve InfoSec, it can involve your applications teams and your developers. And they all play a part in making sure this works well. A successful implementation is critical to developing that long-term relationship with a new partner. We would always say that the first 6 to 12 months of your relationship will be really reflective of the longevity. If we get this right, if we understand the customers' requirements, but also they understand how we're going to build and deliver this, we know that we're on the path to that long-term client relationship that we still strive to create. Contracts can vary from 3 to 5 years across the contract size range. 3 years is a broad average. Our experience has shown that the real benefit to the customer comes in Years 2, 3 and 4 of a relationship. And so the expectation on both sides is of renewal at the first contract cycle. Indeed, it's actually more typical to see volume or additional products and service extensions available at this point rather than necessarily going into a formal retendering process. In each business, we've got significant contract management teams who are supporting our customers, monitoring KPIs, ensuring issues are resolved quickly, but also looking at where opportunity may be. Gaining positive feedback from the policyholder on their engagement, on their service experience at a time of what's a high-stress incident for them is key for the insurer and how the insurer can judge renewal opportunities. But clearly, it's equally important for us. The win last year with Tesco is a really good example where we had a relatively limited relationship with them through a JV we had within one of the businesses. But actually, because of the work that we've done in advance, we were able to persuade them to increase the scope of their tender because we knew in doing that, we would be able to offer more added value to that solution. So this was a tender that started to look initially at repair management and then the scope of that was broadened. As an integrated platform helps maximize benefits to the customer and it simplifies their supplier engagement and for many of our customers now, this is non-core activity. Looking for expert support, but in a flexible and agile format that best suits their needs. As a service provider, we are only as good as the people in our business and the platforms that they work on. And increasingly, these platforms across our businesses are linked and united as the solutions become more and more integrated. So when we talk about an expert, that's where we are looking for a trusted supplier who will be interacting directly with the insurance policyholder who can offer a highly responsive service while also delivering cost efficiency across their platform. And then when we look at being agile, let's say about the ability to integrate a bespoke group of services together, but with minimal friction between the service handoffs. Seamless claims reporting, transparency on costs, greater digital integration for speed and for efficiency. And more and more, we're seeing the requirement and the potential to make this increasingly bespoke, allowing the customer to see benefits as they grow both the volumes and the breadth of support from the platform. This also allows us to demonstrate a managed service handover such as a line in the repair completion with the replacement vehicle return. So that you're not multiple -- you're not having multiple touch points within your business and again, increasing efficiency and reducing costs. You'll all be aware the world never stands still. And we must be able to adapt quickly and invariably where we see change that brings opportunity to our businesses. A recent example would be the changes that we've seen in the insurance world with consumer duty. Now interestingly, this does not directly or formally impact the majority of our services but by perception, we've had to make subtle changes to our processes to accommodate our partners' requirements as they make changes in their world to accommodate the consumer duty laws. We're now working with our insurance partners to digitalize the customer experience, and this is a real opportunity for us to lead these discussions designing future-proof solutions and further embedding ourselves as a chosen long-term partner. These platforms will reduce leakage. They improve the customer journey and they allow us to remain competitive and often share those cost reduction and increase revenue opportunities with our partners. Sometimes these developments can feel gradual and often we can be slowed down by our customers' own digital capabilities. However, the data that we collect through our processes, the data when we're taking the incident from the side of the road, the data around the vehicle damage around cost analysis, fault categorizations, mobility choices, this is critical to help the insurer build a smarter underwriting model and a customer experience perception. We're progressively seeing aging architecture across the market and we're able to position our advancements in tech and data to help drive and accelerate the insurers-owned journey. Platform solutions are increasingly becoming a key differentiator. And for us, completely aligned with our focus on driving increased digitalization through the claims management process. More and more with our existing customers and with new business opportunities, this is the key focus. In terms of how we can ensure that this is joined up, how we can ensure that we're taking friction out of the process and how we can provide that data back to them. You have a couple of screen shots here from both of these award-winning portals. It shows real-time data. It shows how we unlock operational efficiencies. We're providing digital engagement, both with the consumer but also with our customers in terms of dashboards for the partners to be able to effectively delve into our systems and see where the vehicle is, where the claim is in its life style -- in its life cycle. A good example of that digitalized journey is the Auxillis customer portal. This is mobile optimized as all of these things now have to be. It reduces manual intervention, you're taking the paperwork pack away. And this is tailored to the provider and can be linked to the insurers-owned digital platform. It includes a chat function, which is now widely utilized as well. And then the second example within FMG, we're now sharing digitally, imagery of the damaged vehicle. In addition to that, our customer portals have a comprehensive suite of performance-led dashboards, provide data and analytics to support our corporate and insurance partners both in managing the fleet and the cost of the claim. Although our partners number many of the largest insurance players, there's still always plenty of opportunity to go for, and we see these continued opportunities across the product range. The table on the left gives you a sense as to our service provision with a number of our customers, and that's deliberate in no ordering with these partners. What we're illustrating here is that we still have plenty of opportunity to do more with our existing customers. But also that we've grown our partners and our service line significantly since 2020, and those are the areas we've highlighted in green. The lower table, it will stretch the range of discussions or opportunities we see in the near term and most of these are for multiple service lines. With some, we may start small, but with plenty of opportunities to grow over time. And the pie chart on the right shows that within the insurance space, there are a number of large insurers that are still not clients. In very simple terms, business development is threefold. It's account retention holding on to what you've got. It's maximizing the opportunity within these relationships both in terms of solutions and revenue. And then it's the bit that everybody wants the new, new securing relationships through business development and often competitive tendering. And we have seen within Redde in recent years, the impact of these accounts such as Saga, such as Tesco, such as Lex Autolease, the impact that these accounts have had on our business in both scale and performance. And there's some big numbers here. Our opportunities arise when we define the value of an integrated mobility platform, and we can show what this unlocks for a prospective partner. To illustrate the size of the prize, the lifetime revenues for these opportunities can range from GBP 20 million to GBP 250 million. But for a full service, fully integrated opportunity with a large leasing company, with a large insurer that in its own right could reach GBP 1 billion. As a senior team within Redde, we're all hugely excited at the potential growth and the opportunities that we have in play. We have clear focus on building the infrastructure and the team to deliver the capability and scale to capitalize on these opportunities. And we can see the next 12 to 24 months continuing to deliver the momentum that we have seen since our businesses merged in 2020. So in conclusion, I hope that Claire and I have helped provide a useful insight and giving you a better understanding of the businesses and the markets in which we operate as well as the sense as to why we are such an attractive partner to insurers, to leasing companies and to our corporate partners. And there's great confidence within this business and anticipation of the opportunities that we have before us. So I'm finally going to hand you across to Richard, who's going to provide some commentary and context to the financial profile of the Redde businesses.

Thank you, Harvey, and good afternoon, everyone. I'm going to talk you through some of the financial considerations for Redde, including some further detail on margin and ROCE, the investment required when bringing in new contracts and the cash flows generated by the business. So first up, some history. The revenues, the EBIT, the margin of the Redde business. So we completed the merger in February 2020. So the first full year was FY '21, the 12 months to April 2021. This year was heavily impacted by COVID lockdowns, reducing the traffic volumes and road traffic incidents. In FY '22, traffic returned to near normal levels, but the number of incidents was still below normal levels due to changed commuting patterns. And then in FY '23, you started to see the power of the group. We took on 2 new contracts, including direct repair, which significantly increased revenues. And this changing mix of service offered impacted margin. Mix is key. And so I'm going to give you a bit more detail now about mix. As we've explained in previous presentations, the mix of work will impact margins. And in the next slide, I'll show you a little more on how. But just here, as an overview, we may decide to take on lower margin work to build relationships with customers and demonstrate our service provision to win more work in the future. We evaluate contracts based on multiple factors for the longer-term success of the group, including margin, but also ROCE, overall relationship, contract length, et cetera. Another factor relating to mix is where we are providing instant management for a customer. We saw services such as recovery and repair and we source those either externally or internally like through FMG RS. We pay for the services and then invoice the customer, be an insurer, together with a fee or margin for the instant management. This is most common in FMG and where FMG is effectively acting as principal rather than an agent in a contract, IFRS 15 requires us to recognize all the costs and revenues of providing the services to be reflected in the P&L rather than just the margin. This accounting has the effect of reducing the margin, but the overall profit for the contract is the same. And that's another factor that comes into mix. And to complete this chart before I go on to the next slide, then in the first half of FY '24, as disclosed in December at our interim results, we have continued to see growth from those contracts as they reach full run rate. The half-on-half EBIT was up 29%, you'll probably remember. So now a bit more on margin and other factors relating to individual services, providing further background to my point on mix. As you've heard, Redde provides a number of integrated mobility services with differing impacts on the reported financial results. What this slide shows is the relative margin and ROCE and investment related to these services. So first up, Credit Hire. Credit Hire has a higher margin than the Redde average and ROCE is also higher than the Redde average. Credit Hire income is driven by the number of referrals from partners, the hire rate determined by market and agreed rates and the length of hire. So quite a few factors at play. The length of hire was higher post-COVID due to disruption in the part supply chain that meant repair time lines were longer. Credit Hire requires an investment in vehicles to provide the service and net working capital from the legal claims of which Harvey has said already, as about 70% of those are in protocol. Credit Repair is in a similar bucket to Credit Hire. Its income is driven by the number of repairs and the complexity of those repairs. The cost of the repair is claimed from the at fault party's insurance company like Credit Hire. And both margin and ROCE are higher than the Redde average. Direct Hire on the other hand, as a general rule, has both lower margin and lower ROCE than Redde averages. And typically includes fees to deliver, collect and provide a replacement vehicle on behalf of the referral partner. Then Direct Repair, which has a lower margin than average, but ROCE is generally higher than average, although it will be impacted where we invest, for example, in the FMG RS bodyshops where we might need to expand capacity or improving our capability in those bodyshops as Claire has also referenced. And finally, on this slide, Roadside Recovery is higher margin. There's very little investment required and a fee is received for managing the recovery. So I suppose the key point here is that as Harvey has explained from a commercial perspective, if we look at the whole relationship, the growth of the [ incident wallet ] in assessing and evaluating our contracts. We follow a disciplined approach with multiyear business cases covering P&L, cash flow, balance sheet and thus returns, when we're looking at opportunities. So that's a bit on the P&L and the margin. Now we're sort of moving now to the investments in the cash flow. So I want to provide you a bit more understanding of where we need to invest to support Redde services. And this slide breaks it out into 4 core areas of fleet, working capital, systems and people. So fleet, to provide credit and direct hires, we require a fleet of vehicles. The majority of the incidents are referred by insurers dealing with individuals, and therefore, the fleet is mainly cars and reflects the U.K. car parc. We have a fleet in Redde of approximately 15,000 cars, but that fluctuates up and down based on the time of year, number of incidents being managed with [ winter months ] typically requiring a larger fleet. We fund this fleet both through contract hire and using our own loan facilities. We generally hold these vehicles for 24 months and target utilization of around 82%, which is managed across our 33 Auxillis sites. So I've done an example here. So as an example, if we're taking on a new contract to say 10,000 hires per annum with 20 days average hire length expected on that contract. Then that would be 200,000 rental days per annum, and that would require 668 vehicles, which we would then go and decide whether we purchase them or take them on contract hire. That's fleet, then working capital. When we take on credit hire and credit repair, we have to build up -- we have a buildup in working capital dependent on the mix of claims that are in or out of protocol. These are legal claims, not standard invoices. And whilst protocol claims, which represents circa 70% of total claims now are typically paid in 30 days. Non protocol claims can take on average around 200 days to collect. Work for Direct Hire and Direct Repair has performed on agreed rates with customers and settlement is within standard commercial terms. The working capital requirement is lower in those cases. Finally, IT and people. So when onboarding a new contract, you've heard some references to it, but -- we may also need to build on our in-house systems and that development to integrate it with our partners, operating platform will involve some further investment to manage that incident. And then we also need to take in people. So there may be a requirement to onboard, may be a requirement to train people in our call centers to assist customers in an incident as well as claims management specialists. And so those may come in before the contract starts. So with all that investment, it sounds like it might be impacting the cash flow. So my final slide is just what does that mean for the cash flow? So the first part is fleet. So you see this coming through in growth CapEx if we were winning a new contract, we acquire our fleet for our credit and direct hires, either on risk using our own funding coming through growth CapEx or through contract hire with a panel of funders. The mix between owned and contract hire depends on what terms are available at that point with our funders and as you have heard before, 60% at the moment is contract hire. We may also on occasion use cross hire from other rental companies to source particular vehicles for short-term periods of peak demand, whether seasonal or in the specialist vehicle category. You got the fleet investment and you've got also then the big -- other one is the working capital investment coming through on the working capital line in the cash flow. And importantly here, I'm going to labor on the credit hire and credit repair. So Auxillis' credit hire and repair income is not a traditional invoice. It's with a payment date that becomes due. It's a legal claim. We follow a rigorous process to ensure that claim is legally valid. You've heard about that already. And therefore, it is the case of when the claim is paid not if it is paid. But there are different ways that it could be paid. So there are 3 payment routes. So the insurers in protocol arrangements when -- with payment terms of less than 30 days. This now represents circa 70% of the total. Protocol arrangement defines how claims against our insurers will be managed. It includes pricing of both credit hire and credit repair claims, what information is required to be associated with that claim and how quickly they should be settled. The great thing about protocols is that it reduces the admin and the litigation cost on both our side on the insurer side. Where there's no protocol arrangement in place, our recovery specialists engage with insurers to agree settlement for our client losses. On average, we have paid in around 200 days. If claims remain outstanding for a significant amount of time, we will move to litigation through the courts using our own in-house legal firm. Commencing this process in itself will often prompt payment with the majority of claims settled well before reaching court. And finally, if non protocol insurers and the third type of non protocol insurers build up significant levels of debt, for example, post-COVID where staffing levels were a problem, then Redde may enter an agreement with an insurer to settle a large number of claims in one go, and that's often referred to as a bulk settlement. And this can often be followed then by the insurer coming back into a protocol arrangement afterwards. So that's the overview of how the investment impacts the cash flow. So now I'll hand back to Martin to sum up.

Thank you, Richard. And firstly, can I just thank everybody and the team for their presentations today. By the way, very well done. Takes a long time to put these things together, and it can be a distraction, but as I say, very well done. First of all, my 3 informal takeaways -- I know we've gone over time slightly, my 3 informal takeaways. First of all, I think we shared more information in the last hour or so than I have in 30 years. So well done team. The second one is, you all nodded when Claire said, you all know how the current [ paid ] techniques work. I'll be testing that later. And then the third one was on Harvey when he talked about that sort of non-fault -- fault actually that going at the back of roundabout about -- clear non-fault or fault, so 50-50. But when we speak to customers, 95% of them said they were not at fault. So you can do the math there anyway. Anyway, but my 3 series takeaways from today are, I think, hopefully, this has given you a sort of a good insight into the Redde businesses. We're operating in market segments which have benefited from positive trends. The services that we've put together are in demand, and we've seen that from that sort of consolidation in the supply chain and the conversations that we're having. I said at the Half 1 results, we're talking to insurers, we're talking to customers that we've never talked to before because of the service proposition that we have. The second point is the business has developed in many ways over the last 3 years. I think Claire said that we defined a new market segment. There isn't anybody else offering the combination of services that we do today. So that's a go-to place for services, and we expect to continue to grow on that basis. And as Harvey pointed out, there's such a lot of growth to go for. There are -- the markets that we're operating in are very big, they are still further to go. There are insurers that we don't have any relationships with that are in our prospect pipeline. Harvey gave you a time line of some of those. Some of the really big ones actually can take even longer, 2 years, you still have those relationships. You might go into test with something, you might undertake some work to sort of see what the quality looks like, how we work as businesses. But there's some real big opportunities there. So when we look at the sort of the overall group, and the Redde and the claims businesses has a big potential in terms of what we can do. These could be sort of game changing in terms of size. So hopefully, just around our portfolio, you've really got a good sense of what the business does. And hopefully, now that will sort of answer all the questions that you're going to ask me for the next 30 years as well. Okay. We're now going to just move into Q&A.

Yes. So we'll take questions from the floor. Can I just ask you to direct the questions to me in the first instance. And then if I think somebody on the panel is best suited to answer, we'll do that. If you could just give your name before as well because we're online. And then we'll take questions at the end online from people on the webcast. Jamie has the microphone. So we'll go to James first.

James Lowen from J O Hambro. Two questions. One, on the FMG side. You said it's fragmented and it's consolidating. What's your attitude and appetite to consolidate and how easy will it be to create value given the potential [indiscernible] and the prices that might be commanded? And then secondly, on the financial side, you talked about a fleet and making the assumption about the end value. How do you manage the end value risk and mitigate whether there's a risk?

Okay, James. So Richard, you can do the finance one secondly. But Harvey, do you want to have a go at the fragmentation on FMG and consolidation?

Yes. I think we're seeing more and more across the supply chain that insurers just do not simply want to buy repair capacity or vehicle replacement or third-party solutions. But increasingly, they see that joining it is a way of controlling those costs. And I think that whole piece around reflecting how they work and their customer experience. we have one -- I'm not going to name it, but we have an opportunity in play at the moment where we spent half of Friday with this large insurer. And that was actually around what should their solution look like. So not even at that stage yet of once you got to that, we will be your chosen partner. But we also know they're not having those conversations with 3 or 4 other businesses. So being at that point where you're actually helping them scope out what the solutions look like, absolutely doesn't mean that you're 100% guaranteed that you'll end up there. But I think we're finding more and more, we're getting involved earlier and earlier in the process.

So I think in terms of that answer as well, James, I mean there's a lot of opportunity as we sized up on the presentation over GBP 4 million repairs in the market, GBP 2 million from the insurance market. So there is an opportunity to look at that sort of consolidation. But what we want is we want more of the mobility across the piece, as Claire said, repair is the glue. So I don't think we would just do repair for the sake of doing repair. It's the whole mobility into the integrated platform. And I think we'll size the business appropriately as we see that sort of develop. Okay. Richard, do you want to pick up the second question? .

So on fleet. So as I said in the presentation, there's a balance in the fleet between risk and contract hire. So we don't always own that residual value risk. We only hold it on the risk fleet which, in Redde, is just 40% of the fleet with 60% on contract hire. And the fleet then is owned by the whole fleet services team who look at both the LTVs and the cars. So they're very well positioned to look into the market and look at the residual value risk. We're constantly reassessing residual values. And the way the accounting works is we take that into the P&L almost immediately. So we always aiming towards an end value of the vehicle, and we readjust our depreciation rates in order to get to an end value that we believe basically creates a no profit or loss or a small profit.

And I'm just going to add to finish on that point as well, James. I mean, you might have seen sort of the market news. Yesterday, Oakley Capital invested in one of the regional bodyshops, one of the national ones in the Steer Group. The valuation was a good strong valuation of GBP 400 million. So you look at what we do, I think they're doing about 100,000 repairs. Internally, we're doing about 100,000, but combined, we're doing 200,000-plus repairs. So you can see the value that should be ascribed to some of their work activity. And I think it was very clear as well from the presentation, just how much involvement there is in that sort of whole repair process from a skills capability, from a technology, from having the right [ to ] state, to investing in the sort of accredited standards. So we think there is a lot of value there that maybe is a bit unseen in truth. Okay. Rob, you had your hand up? I know you've got to probably going to shoot.

I was going to ask you a question about the capital transaction [indiscernible].

Okay. Good.

Andrew Nussey from Peel Hunt. Couple of questions. If we go back to Slide 19, where you had the differing models. Can you just give us a feel for where you're taking an element of fixed price risk as opposed to sort of cost plus type model. I think you referred to incident management as being sort of cost plus in terms of relationship. But are you committing to your insurer partners, a particular price for a particular type of repair and therefore, that puts the element of delivery risk on to you, is sort of the first question. .

Yes. Okay. I'm just trying to get to Slide 19 now. I wouldn't say -- yes, Richard, do you want to answer that. Probably best placed to you.

So Andrew, I suppose, it's sort of an operational leverage type question and the -- a sort of what is your agreement with the third party. So as you say, sort of there are sort of some contracts that will be more weighted towards a fixed payment and some will be more weighted towards a variable payment. Instant management will tend to be a type of a fee with a cost plus type thought process and probably credit hire and repair will tend to be more fixed, where we're paying a commission to receive a referral. So it would just be more of a fixed element when you're in FMG RS, a large proportion of FMG RS cost base is fixed and with the branches. So it really differs between the different mixes of business that we do. I think it's too difficult to sort of create a general rule around it.

Yes. I think it's fair to say that as we've seen through the results, we're able to pass our inflation on where the costs are fixed. And I think that isn't sort of contested in the market where we need to do that.

And second question, can you expand on what the partner referral commission is? Is that an element of differentiation between you and your peers? Or yes, just to explain what that is, please? .

Yes. So when work is referred to, to us, we pay a commission for the referral of that work, the distribution of that work. Is it a differential? Well, if you are efficient and effective at the front end in terms of creating value when you're doing what you're doing, and clearly, you've got additional values that you can share. So if you're -- you've got to be a very good operator to be able to provide the best competitive terms and it's sort of taken in the market that you've got to operate at that level. Because when you pick up work, yes, as the team said, our partners will look at the quality, they'll look at the sort of the -- all the inputs, the customer service, all the things are important. It is true to say that commercials are becoming a second. Honestly, they are becoming a second. I would never said that before because of that sort of focus on customer outcomes and retention. So it's important as an operator that you are creating the value and you're able to be competitive at the front end.

And just third question, while I've got the mic. In terms of managing what proportion of work you choose to pair yourself as opposed to what goes externally and then equally managing the capacity within your own repair network. How is that all managed? Is it all done digitally? Or is it done by your own repair network, saying, look, this is the capacity we've got. Because to me, that's sort of the margin -- one of the margin opportunities is just getting that perfected for one of a better description.

Indeed. Claire or Harvey?

In a way, we've always been a little bit too successful with FMG Repair Services. So we're not -- we have, I think, envisaged that we would have more of our work going through that. We're at about a 50-50 blend now. Yes, it is done digitally, but there is always a second touch point. So it is around geographically, the capacity in that area. We don't formally guarantee our partners' work per month, but we effectively do because of the amount of value -- sorry, the amount of volume that we're driving through the process. So what we don't want is a process where we're having to look 2 or 3 times to place that job invariably, whether it's going into our own network or going to our partner, we want it to be accepted at first point of placement. But I think it's trying to get a fair mix between the two, isn't it?

Yes. So to answer to your question. It's a complex process. We have a Head of Capacity Management and a capacity team who worked through the optics of both the service requirements, customer outcomes and commercial outcomes for the business. So there will be a number of factors we take into account when we place work, most notably, we put customer requirements. So how close do they need to be to the body shop? Is it within 30-mile radius just the freedom to deploy is a 15-mile radius, et cetera, and then technology. So is it a brand of a product that the closest workshop is manufacturer approved? So is it a JLR, VW and then it will go back to whether the commercial terms with that repair on our network are attractive to us. If not, we will redirect the work and move it in-house. So you're quite right. There's no one size fits all, which is why we have a team and experts in data science that sits behind it, to unlock the value. But is there more to go for? I Have always said to Martin, "There's always more to go for. We need to optimize what we do day in, day out."

And that sort of demonstrates that. It looked like a very simple question there, Andrew, but the sort of complexity or the detail behind it just demonstrates really how much goes into the business. David, you got the microphone.

Thank. This is David Brockton from Deutsche Numis. I've got 3 as well, so I'll do them one at a time. I noticed in the presentation that you didn't sort of explicitly give a market share for the claims management generally. Is that because it's notoriously sort of difficult to estimate? Or can you give a sort of an estimate of your sort of exposure to the U.K. car parc and ultimately how big this business could be?

Okay. So on that one, Harvey, do you want to?

I think it is incredibly difficult. It depends whether you are looking at policyholder account, it depends whether you're looking at fleet size and vehicle mix. Traditionally, we generate our revenue through the number of incidents that we manage. So actually, you could have a smaller policy count that generates high number of vehicles or vice versa. I think as Martin said, probably not fair to say we're scratching the surface because we've got a significant share of the market. And we've got to keep ahead of that market in terms of opportunity, but we've still got a huge amount more to go. I don't know if the -- we're comfortable enough to put a percentage to it.

Yes. I would say because you've got the different segments as well around repair, direct hire, credit hire, credit repair. And each of those will have different attributes and so forth. But we think we're low 30s in the -- 30% in the credit hire. In the credit repair, we have sized that as a GBP 4.2 million volume market. And as I said, we're around about sort of 200,000. So low single digits in a market that's got further penetration and direct hire, well, that's just a feature of how many policies. So yes.

Great. And then the second question, which I suspect is for Harvey as well is just in terms of win rates? And can you maybe just give an insight into how tender lists have changed over the last sort of 5 years, are you still coming up against smaller players? And when you lose work, are you losing it to bigger players or smaller players as well still?

Two different answers to that. So there's retention, and our retention rate is high 90s. So we know when we win an account, as long as we provide the services and manage that relationship in the way that we should do, we've got a very, very high retention rate. We tend to find if we are in a competitive tender, and I talked about not winning it rather than losing because there's a subtle difference. It would be more around that partner staying with their incumbent. So whether that's because they've not got the ability to be able to change, whether it's because processes and system changes would have to be done. But I think we've put in one of the other slides, sometimes, our competitor can depend on the key focus of the requirement. So you could have 3 tenders together and be competing with 3 different types of competitor in each of those. I would say, and certainly on the bigger opportunities that we chase 70%, 75%. So that does not, in any way, mean that we are arrogant when we go into this because we go into it really, really focused on making sure that we secure and we build that on the service solutions that we've got. But particularly -- I talked about the example, we looked at on Friday, particularly if we've been involved in the early part of the process, we should be confident. But if we don't win, it tends to be -- I can't think of since the merger, an account that we've not won that has moved away from the incumbent elsewhere.

And then the final question just relates to sort of part shortages and claims inflation. That's clearly been a benefit to the business over the last few years. As supply improves, is there a risk that, that could sort of slow the rate of growth or reverse some of the elements that have sort of supported growth?

No, no. It's not been a benefit, it's been a challenge.