Earnings Call: H1 2022

Mar 3, 2022

Good afternoon, ladies and gentlemen, and welcome to the PCI Pal results presentation. To begin with, if we could cover a couple of housekeeping items. Before we begin, we would like to submit the following poll, which you will see on your screens. Throughout this presentation, investors will be in listen-only mode. However, questions are encouraged and can be submitted at any time via the Q&A tab situated on the right-hand corner of your screen, or if anyone has dialed in via pcipal@walbrookpr.com. The company may not be in a position to answer every question it receives during the meeting itself. However, the company will review all questions submitted today and publish responses where appropriate. These will be available via your Investor Meet Company dashboard. Finally, we would like to remind you that this presentation is being recorded. Now I'd like to hand you over to Chief Executive, James Barham, and Chief Financial Officer, William Good. Thank you, Tom. Welcome, everyone, to our half year update for FY 22. It's been another really strong period of progress here at PCI Pal, and certainly looking forward to taking you through these half year results today. Thanks for joining us as well on the IMC platform. For those that know us, you know that we use this platform to make ourselves more accessible to a wider investor audience. We've built up a pretty good backlog of IMC presentations on here to help investors get a good grasp of our story, our messaging, and our long-term plans for the business. So please, if you do want more background, do check out some of our earlier presentations as well. To kick us off today, I'll be giving an overview of our strategy, and then I'll move into the half year update and financial review from William. Before I do move on, I did want to say a few words on the patent dispute that we first reported to the market in September. I know that for many of you, this is going to be front of mind, so I wanted to deal with it at the front end of the presentation to allow us to spend more time focused on the financial and operational updates, which frankly are very strong. So it might also be quite difficult for us to answer some questions at the end on this, so unless it's something fairly straightforward, we may not be able to answer the question because obviously we've got a legal case underway at the moment. As a reminder, this case relates to alleged infringement of IP rights concerning one element of one of our products. The overriding feel from me really is one of frustration, particularly as we were the first in our space to do what we do in the cloud with our own IP. We've been a disruptor in our market, and those of you that have followed us since the beginning will know that story very well. We've really transformed the way that companies could access secure payment systems in business communications environments. The situation is fairly frustrating from a business standpoint, but the bottom line right now is positive. We're very confident in our position. We have been since day one, and there's reasons for that. Our position is multifaceted in terms of the ways we're able to defend ourselves on non-infringement specifically, but additionally, the counterclaims we're making on validity as well are very strong. It's important to note, as we've stated before, we have always taken legal opinions as we've evolved our product set to ensure we do not infringe any third party's IP rights. Those things wrap together. We have a very strong defense. We have high levels of confidence around this situation. Frankly, with the strong performance of the business, we're very well-resourced to see this process out if we need to. I think I should say, as an executive team, as a board, as with anything we do at PCI-PAL, we always consider all the options available to us, and we'll continue to do that as we proceed down this path. But certainly, whatever we do is working towards the best outcome for the company and therefore our shareholders. Okay. Now, I'd like to try and get on with the good stuff now, the business progress, which has been very strong and William and I are really excited about what we're doing in the business today and what we've got coming down the track. A little bit of background for those new to the story. PCI-PAL is a fast-growing SaaS business. We facilitate secure payments for organizations that use our solutions, use our services. We do this securing of payments across all business communications environments. By business communications environments, we particularly mean contact centers and the omni-channel mix that goes into that sphere. Voice or phone and the more common today or certainly growing Digital channels such as chat, web chat, social media, email, all of these that go into the contact center or call center mix. Basically, if a payment interaction is occurring anywhere outside of a website or in a store, we get involved. Not only do we secure data, but we enable compliance with relevant data security standards as well, and particularly the global standard that governs the protection of card data, payment card data, which is known as PCI compliance, Payment Card Industry compliance. By using our services, our customers make their journey to compliance with that standard much, much easier, and it can also support their compliance to other guidelines that are out there or regulatory standards such as GDPR, for instance. We're cloud only, true SaaS product set. We can deliver as a result anywhere in the world. Our focus to date has been, we talk about our EMEA region, but the focus within EMEA has very much been the U.K. and our North America region, which our focus has very much been the U.S. But we are very much expanding as well. I am going to talk to you a bit about that today. In terms of our products, we are very simple. Three core products, Agent Assist, Digital, and IVR. Agent Assist is involved in securing payment data in live agent phone calls with customers. Digital is a live agent digital interaction with a customer, so that would be web chat or social media like I mentioned just now. Or IVR, which is the industry term for auto attendant or automated services, which can also be used with speech recognition too. We are a primarily channel-led business, so majority of our business comes through resellers, and that is some of them shown on the slide there, and I will take you through that later and give you an update on that. Also, just an example of some of our awards, which you can feel free to dig into afterwards. The highlight on there being some of the people awards that we have been winning this year, which is kind of testament to our focus in our people, which has been particularly important given the competitive hiring market right now. Getting into a snapshot of the year. Strong increase in revenue year on year, 72% up. Ahead of our management expectations, not significantly, but it was ahead of management expectation. I will let William talk a bit more about revenue growth in detail. We are continuing to drive new business sales through our key future indicator of recurring revenue news, which is TACV. That stands for Total Annual Contract Value, and that is the total annual contract value of all contracts that we have, whether they are live or not, i.e., whether they are revenue recognition or not. That today is at GBP 11.4 million. You can see that is not too far away from what we are anticipating doing in our market forecast for the full year. Another two key metrics for us that I look at particularly, that we introduced at the end of the last financial year, NRR, Net Revenue Retention, and churn, and our management of churn and minimalizing that. I think we are proving with that kind of performance at 120% NRR and our churn rate is less than 5%, that not only are we winning business, we are keeping it and we are growing it too. That is kind of the utopia that we want to get to. This has been something I have been particularly keen on as we have brought further focus on this, because we have got more opportunity here as we evolve our product set, adding features and more opportunity to do more with the customers that we win, because we work very hard to win those customers in the first place. Other highlights here for the half year. Partner ecosystem is critical to us. I have a bit more of a deep dive on that, but we do have the strongest partner ecosystem in our market by some margin. We've been completely committed to channel since day one of this journey. We're very targeted about the businesses that we try to align ourselves with, and we've won a number of new, really interesting regional and global partners in the first half. We've also got a very strong pipeline of new global partnerships as we look out into H2 as well. Just for a moment, I will talk about people, which is not new for us. We've always talked about people. Majority of our cost base is people, and that's what drives this business forward. But that's been brought into sharp focus in the last 6 months with the war for talent that's been going on and sort of hit us 2 or 3 months into the financial year. But I'm pleased to say whilst that's been a headwind and been a challenge, I think we've kind of won that wrestling match. So we've adapted the way we're working with recruiters, adapted how we were hiring, and not put too much pressure either on our budgeted pay scales either. So we've been quite creative there. Really worked on our employer brand and also pleased to say with that, we've been able to maintain employee retention high, which is tracking pretty much today about 90%, 90% plus. So, yeah, very happy with that, and I think that's a testament to the sort of culture that we've built here at PCI-PAL. In terms of the strategy, very simply, three key pillars to our strategic growth. They are to be the leader for cloud solutions in our space, for our solutions to be available to customers anywhere in the world, and to leverage a sales model that by majority sells through channel partners. We think we're being very successful in developing and progressing along those strategic avenues. Oh. Got a slight delay on the slides. Excuse me. In terms of our global presence, we split this into two places, so cloud and the global establishment strategy. So focusing on cloud for a moment. So key competitive differentiator for us, as I say, first to launch cloud in our market by some margin, and we have the most mature cloud platform in that market as a result of that. It's also one of the key reasons we've been successful with other aspects of our strategy. So in particular, success in working with partners. Many of our resellers are cloud companies themselves, global cloud companies, many of them very large U.S. headquartered organizations, and so we set out our stall to be the go-to cloud vendor for these cloud companies to want to work with. It's also a reason why we're able to serve the small to mid-size end of the contact center market very efficiently. Coming into this space, that was always critical for us because the vast majority of the contact center market globally, 90% or more is less than 100 agent seats. So the vast majority is small to mid-size. Cloud gives us the ability to be able to do that. Our cloud is hosted in Amazon Web Services, so AWS, fully virtualized. As you can see from the six padlocks on the slide there, we've got six regional instances of that platform that we can scale very quickly and at significant pace. In terms of the geographic point, in April last year, we went through a fundraise, and that was to support an expanded development plan for us to grow our addressable market by up to 40% over the next 18 months. We've made good progress against that. The initial plans were that we would launch in Canada, and we have achieved that in the first half or the back end of the first half. We've also, since the end of H1, launched in Australia too. So we actually have people on the ground in those territories now being able to work with our existing partners who have offices there. Yeah, really looking forward to seeing the pipeline starting to come together in those territories as well. Now, we've also been investing as part of that fundraise in product, so product development, product marketing, and that's been progressing well too, but we're going to see the majority of those benefits starting to come through in the second half. In terms of the ecosystem and giving you a bit of an update, as I said, we're channel led. 81% of our contracts come through partners. We're a channel first business, so that means we still do business direct as well. Majority of our direct customers tend to be more enterprise in nature. We do have some of the largest contact centers in the U.K., for example, who use us through direct agreements with us. That tends to typically be where we sell direct. We are a pure-play organization, so that means we're only focused on secure payments, and that makes us much more attractive to many of these partners. So there's no perception that we might compete with them trying to cross-sell products that might potentially tread on their toes, which we know has been a challenge for other competitors of ours. We're completely committed to channel with the people we have, the processes we have, the technology that we've built, and all of those things underpin how we've been able to be successful in building a strong partner ecosystem. Now, on the left-hand side of that slide, you'll see that we split our partners into four groups. I'm not going to spend a long time talking through those because I have done it on some of our much earlier presentations, so please feel free to go back to those if you'd like to listen through. But the short point is we have a very joined up and focused and tactical approach to how we treat partners once they're onboarded, enabled, and then we're getting them into business as usual and producing for us. In terms of partner highlights, in the period, Amazon probably one to choose from that. So the Amazon deal that we announced in H1, so Amazon customers can now procure PCI-PAL services through AWS Marketplace, which is the Amazon technology marketplace. We're the first vendor in our space to achieve this globally, and we have a fully approved integration there. We're going through partner enablement with Amazon at the moment, and that's Amazon Connect customers, which is Amazon's cloud contact center platform, in particular that we're focused on there. As you imagine, Amazon's a very large organization, so enablement, onboarding, and getting that moving will take a little bit of time. We've signed other various global companies in the period, all of them on our target list at the start of the year, and I'll talk a little more about those at the regional breakdown. Then finally, I would say that we've really upped our game in terms of our relationships with existing partners coming into the year. We've seen the emergence of marketplaces, for instance, which may make it a bit easier for competitors to get into those environments. We've actually been taking it up a notch with many of these organizations where we've built up a lot of trust, we've built up strong customer bases. So actually, we're becoming the solution of choice for many of these resellers, and I'd highlight a company like Genesys, for instance, where we're an AppFoundry premium partner, which is a fairly exclusive group. We got that off the back of our hard work and focus getting to that point. That's enough on the background. I'm going to hand over to you now, William, for the financial update. Thank you, James. As James indicated, we're very happy with the numbers that are flowing through into the business. They're continuing the trend, the strong growth that we've set out over the last 5 years and have re-set out in April to drive the business further forward. I'm pleased to say that from my point of view, all the key metrics we have are in the green, if you use a traffic light system, which we do. Some of them are right at the top end of the performance criteria we're looking for. So, you'll recognize the format of the presentation. I try and keep things consistent for you so you can see the comparisons and the performance going forward. These are just some of the key financial highlights. As I say, we're making significant progress against all the key metrics. The top left-hand box there is the revenue. It's up 72%, as James said, year-on-year for period to period. We did GBP 5.47 million in the first half of the year. You can see that I've kind of outlined the forecast that's in the city at GBP 10.9 million. Actually, it's just been increased by our brokers to GBP 11.1 million, and we're well on track for achieving that. If you take that into context, we're on target for doing GBP 11 million. You go back 4 years, we did GBP 2 million revenue. So we've increased revenue five and a half times in that 4-year period. As we set out in April 2021, we're looking at driving that for 10 times in a 6-year period. So we're achieving that. More importantly, on the right-hand side, the gross margin continues to improve. Not only are we driving revenue, we are keeping more of it to pay our bills. Revenue improved by 8.4% half on half. That has allowed us to increase our adjusted EBITDA. The adjustments I take out are exchange movements. I take out the cost of the patent, which I will talk about later, and also share options. The adjusted EBITDA for the half year was just a shade under GBP 600,000. The statutory loss on the basis was GBP 1.1 million when you put everything back in. That adjusted EBITDA was a 57% improvement. The other key metrics or some of the key metrics we look at are our annual contract value, the value of contracts that we sign as new contracts in the year, we call it ACV. That is performing well. That is up 6% period to period at GBP 1.76 million. Please bear in mind that the comparison was quite strong as we were coming out of the first impact of the pandemic coming through in the comparator. Also bear in mind that this delivery is on roughly the same level of salespeople we had the previous year. We have taken on new headcounts. We have expanded it, as James said, into Canada, into Australia. We have added people in the U.S. But typically it takes four to six months before those people actually sign their first deals, and then it takes another time before it actually starts filtering through to revenue. We are looking forward to that growth continuing. We are targeting GBP 3.7 million, there or thereabouts, in the full year. The new ACV is one of the key drivers that drives our TACV number that James mentioned, and that is up 37% half on half at GBP 11.34 million. For those that have been following us for a little while, when we did the presentation in September, I outlined that we are looking to achieve TACV in FY 2022 of about GBP 13.1 million by the time we get to June 2022. We are well on track for doing that. I will talk a little bit more about that later. More importantly, recurring revenues continue to grow. 90% of our revenue is now recurring. That is on the basis of our deliberate plan to make sure that we do not charge up front. We work with our clients, and so we have recurring revenues. Finally, the other highlight is cash balances. We finished the period with GBP 5.5 million. That is substantially ahead of where we were expecting to do coming into the year because of the strong performance of the business. Again, I will talk a bit more about that in the next few slides. Looking at TACV in a bit more detail. Some of you will recognize this graph. I keep it going. You can see the half on half growth coming through. It has grown 19% since June 2021. The little white box at the top, the 1.8 box at the top is the amount we have got to do to take it up to the GBP 13.1 million forecast I put in the market in September. Why is it growing? Well, it is growing because we are signing new customers, but also we are not losing that many customers. James talked about churn. It is a focus for us. It always has been. There's no point signing customers and then have them switch off after 12, 24 or 36 months. We measure that, and we started publishing those stats to you in September. As at December, our churn is down at 3.5%, which is right at the top end, the lower end of our target. Anywhere between 3% and 8% is seen good for a SaaS company, and we're at 3.5%. Clearly we're focusing on that. Net retention, as James mentioned, is another key metric. Not only are we successfully signing in new logos and bringing them in, but a good proportion of our sales are now coming from upsells to existing clients, be that new licenses or be that being introduced to other parts of these global businesses we've signed. We've been very successful in rolling that out over the period and expect to continue that into the second half of the business. Just looking at TACV a bit more. This is the split by region. The charcoal bar in the graph on the left-hand side represents EMEA, which again is growing strongly and continuing to grow strongly. The orange bar is North America, and as I remind people, eventually the North American bar will overtake the EMEA because it's a bigger market, but it just takes time to get that momentum building. The table on the right-hand side is very important to us as a business. That's the split of the TACV. TACV is the measure of all the contracts we have signed and still valid. If a contract is canceled, it's taken out of TACV. The split is important because obviously we can only recognize revenue under the accounting rules once they go live. Our ARR, which is the deployed contracts, has grown from GBP 5.89 million to GBP 8.96 million. A GBP 3 million pound jump in the last 12 months. That leads to the regular monthly recurring income dropping through. At the end of December, we had a further GBP 1.89 million in active deployment. Our TTGL, which some of you will remember is our metric we use to how quickly we get a contract from signature through to revenue recognition. In the period, we achieved 22 weeks. Typically it's 22, 24, 26, somewhere in that region. We are on track for that, just at the top end of it. That GBP 1.89, all things being equal, will get deployed and will drop into the ARR, boosting the ARR up towards the GBP 11 million as we come into FY 2023. You'll also see there's an element of on-hold contracts. These contracts we declare because they relate to either where customers need to put extra resource in to get going, or they're part of a bigger expansion, a rollout of changes in that customer, or they've come through a channel partner, and that channel partner is selling new to the end customer, and so they have to put their processes in first before we can get switched on. Those contracts, they do roll over. Eventually, they come into deployment and then go through, but they typically take a longer time to go live. Just looking at the revenue. Again, revenue is growing strongly. The graph on the left-hand side, the 5.0, that represents our recurring revenue, and the little orange blob on the top represents our professional services release under the rules of IFRS 15. We do charge upfront fees. They are worth GBP 1.2 million-GBP 1.5 million to us every year. Those then get held and start getting amortized once the contract goes live in line with the normal IFRS 15 accounting process. Within our revenue, we have had some strong tailwinds boosting us, which is why we have achieved 72% year-on-year, which is ahead of our own expectations. Firstly, where we upsell and where we upsell with new licenses, the time to go live on those are a lot shorter than obviously a new contract coming through, so we can switch them on and start recognizing revenue. That is probably added GBP 100,000-GBP 150,000 to the revenue this year, and then will flow through into the second half and onwards. In addition, we do use telephony minutes to help connect our services to contact centers, and those minutes are related to calls coming in, and if we are receiving more calls, we get more revenue. One of our customers has been substantially busier than we expected and has generated an extra GBP 250,000 worth of minutes in the period. Those are not as high margin as licenses, as you would expect, but it is still an important revenue earner and gross margin earner for us. That strength in growth of revenue has allowed us to increase our forecast revenue in the period. If you remember, we came into the year with a forecast of GBP 10.4 million. We raised it when we did the trading update to GBP 10.9 million, and we just raised it again to GBP 11.1 million, driven by those factors. Again, the gross margin is 81%, so more and more of that is dropping to the bottom line. I do expect the gross margin to continue to improve because the AWS platform, which we sell on primarily, is our own. That will head up, as I have said in previous presentations, to north of 85%, maybe even 90%. Just looking at the income statement in more detail. Clearly, I have talked about the revenues and the cost of sales and the gross margin, so I am not going to talk any more about that. I will highlight the staff cost there, which has grown by 36%. That is because we are taking on more staff because of the April 2021 fund raise, which we set out our stall to continue to expand this business and grab additional TAM, so addressable market. Our head count in the period has gone from 71 as at the end of June 2021, to 86 as at the end of December, and we are now just in the low 90s, as we speak in the end of February. That is all part of the plan. We have not held back on the plan because we have been funded for it, even though the patent has come into the equation as well. You will see the operating loss for the business has improved from 2.1 to 1.1. That is a statutory operating loss, so it includes all the exchange gains, losses, and other sort of adjustable items. Below that, you will see I have taken it out. The biggest movement is the exchange gains and losses. In the prior period to December 2020, we actually had an exchange loss of GBP 366,000 because the US dollar went from 1.35 up to 1.4. Conversely, in this period, it has dropped back from 1.5 back down to 1.4 back to 1.35. It has reversed itself again. That is why I strip it out. All that exchange loss relates to the revaluation of the sterling loans that the PLC has made to the U.S. It has no cash implication at all. You will see the exceptional cost line in there. The patent case that James mentioned in the beginning, we have spent GBP 285,000 to the end of December with legal fees. I have treated that as an exceptional cost, and clearly those costs are expected to continue. If you look at the finnCap forecast, we are expecting a cost of up to GBP 650,000 in the full year to June 2022. Then there are the expenses from share options. Taking those out, the adjusted operating loss has improved by 39%, so it is GBP 1.037 million against GBP 1.7 million. A very strong performance and above our expectations. Just looking at cash. Cash, we have used GBP 2 million worth of cash in the business, which is actually less than we were expecting to when we went into the year because of the expansions we have been pressing in head count. You will see that is up remarkably from the prior period. Why is that? Just as a reminder, in the prior period, we did receive from our largest U.S. customer an advance payment for year 2 and year 3 licenses, which total $1.13 million. That is recognized in the deferred income line. Deferred income actually grows because of advanced billing. The other side is cash. That is the primary difference between the two businesses. We finished the period with GBP 5.5 million in cash, having started with GBP 7.5 million. But we also have no borrowing facilities, which were repaid in June 2021. So we are in good shape cash-wise and ahead of our expectations. Finally, balance sheet. I am not going to talk much about this. The only thing that is probably highlighted is the trade debtors in line 2, which has jumped GBP 1 million. That is not because we are not collecting our debts. That is because that is a mixture of strong contract sales where we are billing in advance, plus the growth in the business. We are up 72% in revenue terms. Just to our debtor days, our collection periods, we actually collect on a 65- to 70-day period, our debts. That is not bad considering a number of our channel partners take 60 days credit from us, and we have minimal debt over 90 days, same as we had reported in the full year to June 2021. Again, no bank borrowing in there. That is it from me on the finance side. I will now hand back to James to take you through the rest. Thanks, William. Shall we get to my slide? Yep. Okay. All right. Sales and revenue growth. Okay. Just focusing you in on split of ACV, so our new sales bookings in the period. EMEA at GBP 1 million was ahead of our expectations within the business for the half year. Very pleased with that. That is partly due to strong upsells in EMEA as well. This is the direct result of the strong performance of NRR. The EMEA business is more mature, so we have more opportunities to upsell to those customers. The North America number, which is all U.S.-based business, was in line with management expectations of just under GBP 0.8 million. The vast majority of that is net new logo business, so that is all new business. We will expect to see upsells coming in the U.S. as the years progress and those relationships get a little bit more mature. We are on track moving into H2 with the U.S. to expect that to uplift in the second half. We are starting to talk more about our ARR now as well, now that we previously talked about TACV being what ARR is likely to look like. But now that we are getting a slightly larger organization, we are starting to focus a little more on ARR, which is up 52% to GBP 9 million. Very pleased with that result. There are some underlying operational metrics which are performing very well and help really drive that. Those that know us well will know that we have talked about one of our delivery metrics of TTGL, time to go live, which is the period of time it takes us to get from signing a contract to when it goes live and is therefore revenue recognition. Well, we're inside of our management expectations for the half year against that metric at 22 weeks. And we've got very strong or high NPS scores across both implementations and our service desk areas as well. These are net promoter scores. This is a very strong indicator of customer satisfaction with us. Critical that those two metrics are working well for us if we're going to be able to keep customers and we're going to be able to do more with customers, which ultimately is what's driving those NRR and minimal churn rates. In terms of average deal sizes, slightly higher than the year-on-year average, but still, we're very much within the 20,000-30,000 ACV mark, which that's perfectly good for us because it's targeting that small to mid-size end of the market. But we do have numerous enterprise deals that we are still doing. We haven't had necessarily any of the one-off really big ones that we had a handful of in the previous two years, but we've got a steady flow of 100,000-150,000 ACV value individual deals being done. And in fact, I'll highlight one of those on the next slide in the U.S., which has great expansion opportunities. In the top right of the slide there, it's an enterprise deal that we won with a very well-known U.S. headquartered pharmaceutical firm with truly global operations. We're going through a delivery process with them at the moment, but that is not across their entire business. The EMEA business has been successful in expanding into existing accounts, and we would now expect to start seeing that happen in the U.S. as well. ACV sales in North America are up 14% year on year. As I said, they're slightly ahead of management expectations, so we're happy with that. That's off the back of the same resources we had in the prior year. It's only since the further investment that we've started to escalate that growth. And you may remember that, those of you that I spoke to before, I explained there's a timing intricacy with the U.S. We cannot just pile money into the U.S. and expect a return because their maturity around payment security and payment technology is a little behind some of the other markets that we're operating in. So there's a timed increase being built up there, but we do anticipate an uplift in the second half as part of that. And of course, as I mentioned earlier, we did launch our Canadian operation too. The North American business won't just be U.S., it will be Canada as well. And actually, that team has already started building out pipeline, which is great to see. In terms of EMEA, I don't want to repeat things we've already been through, but naturally, as the more mature part of the business, we'll see revenue being able to increase more significantly. We'll see that starting to come through in North America across the remainder of this year. But it was great to see the EMEA business EBITDA profitable. When we did the fundraise in April last year, we pushed back our cash generation points and our break-even points by 12-18 months, we told investors, and really, this is the first line in the sand of that new timeline that we have hit. We are looking 12 months out now to get to those first months of cash generative and break even. It does not actually feel that long ago that I was talking about that previously. I am very pleased that we are on track to and in line to get to those break-even points as well. As I said, upsell opportunities have been very strong in EMEA. Some great new partners that we have won too, and I said I would highlight one or two of those. We have won two new major BPO partners in Europe. These are big global organizations. One of them has actually got more than 200,000 call center agents across its whole group. It is one of the largest in the world. We have sold customers to both these BPOs that we signed in the same period. It shows how quickly actually the BPOs get working. The BPOs are big outsourcers, big outsourced contact centers. Because that is mainland Europe, that is a really good indicator of our capability longer term to be able to use the U.K. to expand into mainland Europe to grow that addressable market opportunity for the EMEA business. Then just finally, the majority of our engineering and product core is based in the U.K. Some of you will be aware that I hired a new CTO in May last year who is also our CPO, so Chief Product Officer as well, and I have been working with him hiring new product professionals into the business. I could not be more pleased with how that is going, and I know that the management team feel exactly the same about that. I often say this, we are obsessed about hiring and we do not let people in unless we are 110% about them and I think we have got that one right. We are very pleased with the direction that that is taking. In terms of an outlook, we do have real confidence looking out, not just for the second half, but we are very excited about the rolling five-year plan that we are constantly evolving. H2 has started very well. We are two months in now, totally in line with management expectations as we expect it to be. New business tracking very well. We have had a strong couple of months there. New hiring as well. The new hires that we have been making as a result of the additional investment, they do not have an impact immediately. It takes people time to be onboarded, some more than others, some longer than others, depending on their role. In H2, we will start seeing some of the benefits of those hires, whether that be sales, whether that be product, whether that be operational. It is going to be great to report on that progress with you. As I mentioned earlier, Australia is now active and open so we have got a team of three out in Australia headed up by a VP of sales with some very specific experience of our industry. We are hopeful of him hitting the ground running. Then, as I said, I am very positive about the product situation at PCI-PAL and we have got some great product initiatives that we are working on. We are driving more pace through our development teams and I should be in a position to provide updates on how those initiatives are going throughout H2. That is the end of the presentation, but very happy to take some questions. Great. Tom. Okay. Super. Well, thank you, James. Thank you, William. Now, if we could turn to the questions, and we have a number of questions that were submitted ahead of the presentation. However, please continue to submit your questions using the Q&A tab situated on the top right-hand corner of your screen. I would like to remind you that a recording of this presentation along with a copy of the slides and the published Q&A can be accessed via your investor dashboard on the Investor Meet Company platform. Additionally, your feedback is important to the company, so immediately after the presentation has ended, you will be redirected for the opportunity to provide feedback. While you are submitting questions, let us first have a look at those submitted ahead of the event and you will be unsurprised to hear there have been a couple in relation to the intellectual property issue which I know James may touch on again in a second. We have a couple that were covered in the presentation itself, but one very relevant that I might put to you, James, if I might. Do you have any I think we have all lost Tom. There were two questions that I know were going to come. One of them was related and actually we have had a number of questions through the chat as well on this topic so I will cover it, which relates to the timeline with the patent dispute that we are dealing with and what does that patent timeline look like if we are not to achieve. The question was if we are not to achieve any kind of settlement or it finish any sooner, what would the timeline look like? Well, the timeline in the U.K. will be court trial date is set for June next year, so 2023. The U.S. is unknown at this point, but we are being told to anticipate probably a year after that. So you are talking mid-2024. Neither of those dates include appeal processes, by the way, which could add another 12 months plus to that. So yeah, it is not a fast process, but it is one that we are in and we are going through right now. In terms of the second question that was submitted before on the assumption that Tom has not managed to reconnect, and I have had one or two questions like this so we will cover it, which was a question about whether we have any major customers either in Russia or Belarus or any of our customers at all, do we think the conflict in the Ukraine could cause us any issues? Bottom line is we do not believe that the conflict in Ukraine would cause PCI-PAL any issues. It's pretty early days for us looking at customers that we may have that are Russian by nature, but obviously any considerations around that we need to take very carefully. But it is something that we're looking at, and we're very mindful of what our people think of this situation, working in the business. That's not just U.K., but that's U.S. too. That's probably almost the main focus point we will have, is making sure that our people are feeling okay about it, because there's a lot of anxiety flying around this situation right now. But from a business standpoint, I don't have any major concerns. Jumping to the questions. There's a number of questions on here which probably require slightly more complex answers, so we're going to take some of those afterwards and we'll respond to them in the portal. We have a question here from Morgan, which is: how do you plan to manage your bottom line loss going forward? Top line growth is good, but bottom line growth with a path to profitability is even better. Okay, so I would say that we do have the latter. We have top line growth, and we do have a path to profitability. We moved that profitability point out when we did the fundraise in April. Why did we do that? We did that because we were expanding our addressable market, so we needed to invest more to keep the growth rates going. For us, what we said to investors at the time was that was to enable us to keep the 30%-40% minimum revenue growth going, not just for the next two years, but three years onwards, is what we're looking at. That's why we did that. As I said in the presentation, we're tracking very well to get to our first months of cash generation, followed by profit in the business in the second half of FY 2023. I'm just quickly assessing the other questions. Uh- No, I think that's it for the questions now, actually. That's great. James, thank you very much indeed, and thank you for stepping in. We did lose Tom momentarily. I know investor feedback is going to be important to you guys, and I will shortly redirect investors to provide you with their thoughts and expectations. And of course, we'll make all these questions, should any more come through, available to you as well post the call. But if I may, James, just hand back to you for a few closing comments and then, as I say, I'll redirect investors to provide you with their thoughts and expectations. Okay, great. Well, I hope that today's been useful. As always, we're really trying to be as transparent as we are. We appreciate the feedback, and we hope the metrics are helping you figure out where you think we're going to get to and whether you agree with what the forecasts are saying. But we'll keep our heads down and we'll keep delivering as best we can, and we look forward to updating you in the second half. That's great. James, William, thank you very much indeed once again for updating investors this afternoon. Can I please ask investors not to close this session as we'll now automatically redirect you for the opportunity to provide your feedback in order that the company can better understand your views and expectations. This will only take a few moments to complete, but I'm sure will be greatly valued by the company. On behalf of the management team of PCI Pal PLC, we'd like to thank you for attending today's presentation. That now concludes today's session. Good afternoon to you all. Thank you very much. Thanks, Mark. Thanks all.