Earnings Call: H2 2023

Nov 14, 2023

Good afternoon, ladies and gentlemen, and welcome to the PCI Pal results presentation. 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 received today. However, the company will review all questions submitted and publish responses where appropriate. These will be available via your investing company dashboard. Finally, we would like to remind you that this presentation is being recorded. I would now like to hand you over to Chief Executive James Barham and Chief Financial Officer William Good. Gentlemen. Thank you, Tom. Hello, everybody. Good morning. Good afternoon to everyone that's joining. William and I are actually in the same room today, which will be nice, but hopefully doesn't pose any technical issues for us. Yeah, full year FY 2023 feels a long time ago now. We're 4 and a half months into FY 2024 as we stand. Results delayed slightly as many of you will know, as a result of the proximity of the audit to the patent ruling in the U.K., which was obviously good news for us, expected good news. But FY 2023 was an important year for PCI Pal, in terms of building those foundations for important financial milestones in FY 2024. Those milestones being cash generation, full year cash generation in FY 2024, and full year group profitability at adjusted PBT level. Very much we've been on track for that the last few years, so we're expecting to achieve that. I'm very happy with the year that we had. I would say this business has suffered a number of headwinds that have come our way completely outside of our control. It's really thanks to the team that I've got at PCI Pal that we've been able to deliver the year of growth that we have. Got some quick highlights for you, a strategy update, financial review from William, and then a bit more on product and outlook. Please feel free to submit some questions through the chat if you'd like, and we'll try and leave some time at the end to get to some of those. In terms of the highlights, as we said in the RNS, another strong increase in revenue, record new business sales as well in the period. Particularly pleased about that, given my commercial background. Exceptional year for the U.S. business, real breakout year for them, which is really important given the size of the market opportunity in the U.S. All in all, very good revenue up 25%, nearly GBP 15 million year on year. That's all organic growth. All of our growth to date has been organic. Exit ARR run rate up to 12.6%, only 14% increase. There's a couple of reasons for that. There's no underlying issues, just purely that our new business sales were heavily weighted into H2. Collectively, the year was a great year for new business sales, but H2 was much stronger than H1 has been anticipated. That's reflected in the strong uplift of 23% in TACV, which is the Total Annual Recurring Revenue value of all the contracts we have signed to date, which is up to GBP 16.4 million. The other reason why the exit ARR is perhaps not looking a bit higher than that is that, some of you will know that over the last two years we've been transitioning customers off of our first generation privately hosted environment. We have succeeded in that. As a result of that, some of the revenue has been lost, but actually we've retained the vast majority of the margin. That's because we had to offer some commercial incentives to those customers to move across. However, majority of the customers on that legacy platform that we've not really sold on since, well, five years ago now, majority of those were quite small customers, but that in turn had an impact on the exit ARR, which otherwise probably would have been well north of 20%. As I said, excellent year for new business ACV, so that's annual contract value. Our ACV is licenses. This is annual licenses that we have in our contracts, and we're at nearly GBP 4.2 million, which is a 20% increase year-on-year. That's driving the TACV as I mentioned. Exceptional year for the business in terms of new business sales. William Good will talk a bit more about gross margins, but again, we've seen those increase again, up to 88% in the period. We do expect that to probably level out at some way slightly north of 90% in the not too distant future. That's just by nature of the fact that all of our businesses on our AWS platform, vast majority of our revenues are high gross margin. It's only where we're carrying some transaction-based business that maybe will have tighter margins than the sort of 90% that you can see on the screen there. Supporting revenue growth, just on the right-hand side, talk about some of the customer success metrics. In the report you'll see we measure various things that feed up towards how we're managing things like or preventing churn. The flip side to that is growth, gross revenue retention or GRR. Very happy that with that in line with management expectations at 95%, actually the churn related to just half of it related to just two customers, which are actually customers that had to leave for operational purposes, if you like. They're not using a competing solution of some sort. One of them, in fact, we knew that was going to have to happen two years ago. So underlying trend, really strong given we were 3.5% just churned last year. Positive NRR at 103%. Year-on-year, that's a drop from the very strong 118% we had last year, but we did advise investors at the time that we didn't expect to do that again in this year, in this FY 2023. The reason for that is because in FY 2022, we made a number of significant expansionary upsells, i.e., selling more of the same to existing large customers. We didn't expect to do that again in FY 2023. The 103% is pretty much in line with what we expected for the year. I'm going to talk a bit more about new products later, which are really hotting up for us now, and we're expecting in this current year, in H2, to be coming to market with new product enhancements and features. Really, they are going to be driving long-term NRR for us. We're clearly illustrating that we can keep customers, we can build strong relationships with customers, even through partners. We want to be able to expand those relationships through new products and services that we've been working very hard on the last 18 to 24 months. All in all, good performance, very happy with that. Pathway to profit in FY 2024 is visible to us. We've just got to get the deals that we signed in the last year to revenue recognition, and keep selling across this H1 in order for that to feed through into revenue. Going to try and canter through this background. If you want more background information on PCI-PAL, please feel free to look at our previous presentations as well, because we've done a lot more on this. Fast-growing SaaS business at PCI-PAL. Effectively, what we do is facilitate secure payments for organizations across business communications environments. What do we mean by business communications environments? You might hear buzzwords like CCaaS or UCaaS. These are Contact Center as a Service or Unified Communications as a Service. Really, these are the communications platforms and environments that are covering interactions that customers have with businesses through call centers, or what are known as today as contact centers. We secure data and we secure payments across all of those channels. Voice or phone is the most common, but growing very quickly are digital channels such as web chat, social media interactions, email, all those kind of touch points between consumers and businesses go through contact center, business communications platforms. Majority of our customers are using our solutions in call centers, today. However, we are starting to see more customers using our solutions outside the contact center in contact teams such as finance departments and any area of their business where they're taking payments or branch networks, so to speak. The problem that we solve very much relates to a compliance standard called PCI DSS, the Payment Card Industry Data Security Standard, that governs how organizations secure credit and debit card data. As part of that, I draw your attention to the fact that PCI-PAL is a principal participating organization in the PCI Security Standards Council, and we're also the only company in our space with a member of our team on the advisory board for that global body. Really important for us that we're part of that given the market we operate in, and that's our C space as part of that. Key markets today are U.K., where we launched, it's the most mature business. North America, particularly the U.S., where we launched in 2018, 2019, and more recently, ANZ, so in particular, Australia. As you've seen from the updates, we are doing business in New Zealand as well. Core products, Agent Assist, Digital, and IVR. I'm not going to go into the detail of these, but effectively we provide secure payment solutions across live agent interactions through Agent Assist, through digital interactions through the Digital products, and then IVR is fully automated. This is where you speak to an auto attendant rather than speaking to somebody in a contact center. So that's known as IVR. We work primarily through resellers, so we have an extensive partner ecosystem that we've built up since 2016, 2017, when we really started on this journey. We are very much a partner first business, and I'll talk a bit more about the data related to that, but we've geared this business up to be that from very day one. We live and breathe channel, in this business, and that's an example of some of our partners. Many of those are Gartner Magic Quadrant companies, in the unified communications or Contact Center as a Service market, such as Genesys, Amazon Connect, Talkdesk. You may have seen we put out an RNS Reach just yesterday, actually. We've announced a really important strategic partnership with Zoom, a new reseller relationship. Zoom have an extensive business globally and they're going at the contact center market very hard, and they're already a Gartner Magic Quadrant in the unified communication space. We look forward to updating investors on that one in the future. There's just some examples of some of the great brands and organizations that use PCI Pal. In terms of our strategy, very simplistically, three key pillars to our strategic growth. Cloud, to be the leaders in what we do in true cloud solutions in our market. We were the first to market with public cloud offering. We leverage cloud to enable us to access the breadth of the contact center market globally and to be able to deal with any size organization in the contact center market as well. It also allows us, through cloud, to access the market internationally, and to do that in a cost-effective way as a smaller business. We're leveraging a channel-focused sales model in order to drive scale through the business. As I mentioned global a few times, just covering off how we are set up as an organization, both in terms of our people operationally, but also in terms of our platform. We've got various locations globally now, U.K., which primarily we're based out of. We started in Ipswich, actually in Suffolk, but we spend most of our time in London now in the U.K., which is where William and I are today. North America, we have an office in Charlotte in the U.S., and also an office in Toronto in Canada and Australia, Sydney. At year-end, we were 114 people. We're about 120 now. We expect to increase the headcount this year at a similar level as we did last year. A few more than 120 by the end of FY 2024. What you'll notice is that the hiring has slowed, but that was completely as planned from our last fundraise in May 2021. We had an injection of investment into new heads, and now we're slowing that down because we've established the new functions that we needed to, and we're going to start realizing the operational gearing through that. Now, supporting our holistic view to where we have our people is our AWS platform. As you can see from the orange padlocks on screen there, these are the AWS instances that we have available. We can spin these up extremely quickly, within one day, within a matter of hours, we can have a new instance live, pretty much anywhere in the world that AWS has a presence. Primarily today, that is focused across London, Dublin, Frankfurt, and then we have one in the U.S., we have two in the U.S. actually. Now there is a new one needs to be added to that, Toronto and also Sydney as well. Now, in terms of new products, a bit more on that to come later, but on the right-hand side of that slide there at the bottom, you can see that we have launched an enhanced speech recognition offering in the second half of FY 2023. It really is a big step forward. We have had speech recognition capabilities really to deal with exceptions. Customer accessibility issues through our Agent Assist solution, but also to use it in our IVR as well. Actually, we have moved to an offering which we have integrated so well, and using such good technology that the success rates well exceed 90%. We are actually now seeing some customers looking to use speech recognition as the primary data capture mechanism as opposed to keypad entry. That is a really interesting development that we are enjoying talking with customers about because we are giving them that additional choice. One thing I did not mention was on the platform maturity. As I said, we were the first to market in 2017 with our public cloud platform. Five nines uptime reliability, as you can see in the purple, sorry, the pink box there. Pretty much 100% across our H2. Really stable platform from which we can grow from, we can layer on products and services as well. Very happy about that. The green rosettes, by the way, are patents. That is where we have got patents. We tend to just patent things that we think are ultra innovative, and to protect the unique ways that we do things, particularly related to the way we integrate cloud to cloud, particularly how we integrate voice flows cloud to cloud. Our most important patent has been granted across all the territories that we cover and more. We do use that to protect our relationships with our partners, as the leader in cloud solutions in our space. I will move to partners now. In terms of the update on our partners, we break them into three categories. I am not going to get too deep into that on this call, but I have done on prior calls. You can see that on the slide there. Majority of our partner deals come through our integrated partners. These are partners that we generate tight-knit, repeatable integrations with. Once we have integrated with them, they can sell us and repeat sell us, and the operational effort is quite minimal. We typically expect to do somewhere between 75% and 90% of contracts through partners. So really in the year, the sweet spot in the top right there, 85% of contracts through partners was exactly as we would expect it to be. The big trend change, I suppose, which is entirely expected, is that we are seeing more value coming through partners as well. So more ACV value coming through. Which is really a sign of the depth of the relationships that we have with these organizations that we have built over time. I have been telling our institutional investors this week when I have seen them that we have not lost a single global partner relationship. We have only ever retained these relationships and made them deeper. You get the odd road bump along the way, but actually we are very good on a relationship basis with these partners. It is almost no surprise to me to see that the value of contracts coming through partners is increasing up to 77%, and directly that is as a result of those partners trusting us more with their enterprise customers. So we are seeing, historically, we may have done some enterprise deals direct. We tend not to do that anymore. We tend to be able to fulfill them through our partners. And yeah, we are continuing to invest in that side of the business. Okay, and then just to round off before I hand over to William Good for the financials. As some of you will know, we have had an ongoing patent litigation lawsuit going on at PCI Pal. If you would like more background, I would suggest probably the best place to go is to read the last couple of years' financial accounts or the half year accounts as well, because we have given extensive detail. The summary on this call is really strong victory, as expected. So, we have been very confident throughout, and I think that this ruling very much validates the management and the board's position on this. And it validates our view that this has been brought by a competitor to try to disrupt this business. The judge ruled that the patents were invalid for several reasons, not just one. So we won on pretty much all of our counterclaims that we made, but the judge also ruled that even if the patent had been valid, we would not have infringed, and neither would any of the changes that we submitted that we could make in a worst case scenario. So this really was a strong outcome for us. We absolutely will be seeking a maximum cost order when we go to the form of order hearing in the U.K. in front of the judge, mid-December. It is the 18th and 19th of December in London. And I think the view of the board now is really that the downside risk or the downside risk perception should significantly be substantially reduced for investors as a result of this kind of validation that we have seen through the ruling. The U.S. side of the case continues, but the U.S. side is fairly similar and in fact, we have got more that we can go at in the U.S. So we will continue to fight, this position very hard as we continue to drive this business forward. William, I will hand over to you. Good afternoon, everyone. Thank you for attending. It is much appreciated the support we get from our retail shareholders as well as our institutions. Just turning to the FY 2023 results. We have had a strong year. We managed to achieve targets. Revenue continued to grow strongly. ACV is a record period for the period, and EBITDA is decreasing as planned. We have got the patent exchange, as James Barham described. The patent case has been a distraction, and we have also been facing the stronger headwinds of higher inflation, higher interest rates, which has clearly had a slight damping effect on the market, but we have still managed to deliver what we said we would deliver. Just turning to the results. Quickly at the top left-hand graph, this just gives you the history of where we started from actual recorded revenue. Back in 2018, when we launched, it is quite an interesting year, 2018, when we launched the AWS platform, we were a tiny business with 20 people turning over GBP 2 million. Over the next five years, we have managed to deliver strong sales, embed our AWS platform, and we just recorded GBP 14.9 million worth of sales for the year. FY 2024, the current forecast is GBP 19.1 million. You can see the momentum that has been building up. At the same time, we focused on our gross margin. Back in 2018, our platform at the time, the Genone platform, which I will talk about a bit more in a minute, was a revenue share, so 50/50 margin. We own our AWS platform, we develop it all in-house, and as a result, the more and more we sell on it, the stronger and stronger our margins are getting. I am expecting our margins to peak out at around 90%-92%. It depends on the sales mix we have got, clearly, but that is quite roughly where I am expecting it to peak out. On the left-hand side, those graphs up there. There is a commitment from James Barham and myself. We have been growing the business. We have set out on that ambition. We have been supported by our shareholders through three fundraisings and the proceeds of the sale back in 2016. We spent about GBP 20 million developing this business, but it has always been our ambition to build a global business. We have gone from 20 people to 120 people currently. That costs a lot of money. We have spread out into the U.S. and around the rest of the globe. But at the same time, we have got a commitment that not all revenue will be spent on costs and growing the business. Each year, we look to put a report, to put some back to the shareholders at the end. You can see that on the adjusted EBITDA line, and you can see that stepping down. We are expecting to hit roughly EBITDA breakeven in the first half of 2024. We are targeting a full year breakeven small profit in FY 2024 at adjusted PBT level. PBT is just taking out the cost of the exceptional cost of the patent case. We have grown strongly. Our revenues have grown compound rate since 2018 at 48%. The EMEA business recorded GBP 10 million worth of our sales. That is up 18% in the year. North America is growing more strongly. Why is that? The actual contact center market over there is five times the size of the U.K. business. We are selling more and more in that region. ANZ is growing, but we only launched there last year, so it's going to take time to build that momentum. It's a lot smaller market, but it's going to be a footprint we believe is the wider APAC region. All in all, we're well-placed to achieve our FY 2024 targets and hitting profitability. Just looking a bit more in sales. On the top left-hand side, the graph there, you can see our progress in new ACV sales. These are the contracts we sign each year, and it just relates to the recurring revenue that's embedded in those contracts. As you can see, it's stepping forward as we get more and more momentum with our partners and more and more brand recognition within the market. That ACV then feeds into TACV. TACV is the pile of contracts we've got in the building. Not all of them are live. I'll talk about ARR in a minute. There's always a delay between signing and go live. Our typical time to go live is around 5 to 6 months. As at the end of the year, because we have such a strong second half in sales terms, we have quite a lot of contracts in deployment at the end of June. We had GBP 3 million worth of contracts in deployment as opposed to GBP 1 million in the prior year. Those contracts will feed through into the ARR, as James Barham described earlier. So ARR is our measure of the value of the live contracts as at a point in time. So that grows GBP 12.5 million, GBP 12.6 million at the year-end. Now, why are these slightly higher? Well, 2 reasons. Our TM1 platform. It was the original platform, and we decided to shut down the payment element to it during the year. That cost us half a million pounds in revenue. If we kept it going, our growth rate wouldn't have been 25%, it would have been nearer 30%. But in actually shutting it down, we've taken half a million pounds off our recurring revenue and off our TACV. So that lowered the revenue of the TACV down from GBP 17 million down to GBP 16.5 million. Our ARR on the same sort of measure, it would have been around GBP 13 million. However, we kept the margin at the bottom line, so no impact to the business, and it's good housekeeping because we've managed to take out another platform that doesn't meet PCI compliance. The other thing just to note, our TACV, we reset the exchange rate in both the ARR and the TACV at the end of each year. In moving it, at the end of the year, the US dollar rate was 127, having been as low as 112 in the year. That took another 400,000 or 500,000 pounds off our TACV and about 300,000 pounds off our ARR figure at the time. So those numbers you see there give you a reflection of the true position of what we have coming into the market, into the FY 2024. As James Barham already said, customer retention rates remain excellent. There was 4.6% churn, so 95.4% gross retention. As James said, half of that came from two customers, one of which was NHS Test and Trace, which I can name because obviously no longer needed because of the COVID pandemic restrictions being relieved. NRR remains positive. On our current product set, we expect to sell between one and two times what we lose in churn. If our churn is 5% on the ARR, that's GBP 600,000 a year. We would expect to sell between GBP 600,000 and GBP 1.2 million in upsells to our existing clients. We achieved one and a half times, so it's well within our expectations. Just moving on to some other financial highlights. Just a reminder on that top bullet point, people are our biggest cost within the business. We do everything in-house. We don't outsource our developments or anything like that. My cost base of the administration cost base is 28% related to people or people related costs, leaving 22% within the other bit for the rest of the overheads. That 22%, you've got about 7% equates to our running the AWS platform, which we treat as an overhead, not as cost of sales. Why is that? Because that AWS platform includes all our development, staging, and test platform, and the cost for that is pretty stable in the year. Our next biggest expense after that is marketing, and that spend was around 6%-10%, and the rest is covered across normal other bits and pieces of running a business like offices and things like that. Just turning to the patent case. Clearly, it's an unwelcome financial distraction. By the end of June 2023, we have already spent some GBP 2.7 million or received invoices for GBP 2.7 million in defending that case. Jump to today, and I'm at around GBP 3 million. The one thing to note within our numbers, if anyone looks at the results, we received in the year nearly GBP 2 million worth of invoices, but a lot of that was back end loaded in June because the court hearing was in June. I came into the year with about GBP 700,000 or GBP 800,000 worth of unpaid patent related costs. Now, those have all been absorbed in Q1. Nothing to worry about, but that just needed pointing out. We've obviously won the U.K. case, and as James said, there's a formal border hearing in December, and we're pushing to have U.K. costs awarded there and then. Clearly, that's at the judge's discretion. We will take and listen to her observations. We are hoping for a cash refund on our expenses because we've expensed heavily, but all our plans do not include receiving anything upfront currently. What happens to our cash flows? FY 2023 was predicted to be the last year where we've been investing in the business and have negative cash outflows. We spent GBP 3.6 million in the year, of which GBP 1.3 million related to the patent case, GBP 2.4 million was spent running the business. Now, if you look at H2, we actually generated from operations GBP 200,000, excluding the cost of the patent case. That shows our business is growing. It also shows that H2 is slightly stronger than H1. Now, we did receive a fillip from one of our customers who paid three years up front. It's a big American company we have. That generated an extra $1 million. It is circa GBP 800,000 in additional cash coming into the business. However, we had a delay in our R&D tax credit of GBP 550,000, which we were expecting to receive in Q4, but it actually got bumped, and we have now received it in Q1 FY 2024. Those two kind of offset each other. We would have been cash positive even after those adjustments. We finished the year with GBP 1 million worth of cash and an undrawn HSBC facility. With the cost of the patent case, I have spent that cash and we have drawn down, in the first couple of months on the HSBC facility, but I am now back in a position of net cash. As we head towards H1, which is only seven weeks away, believe it or not, we are expecting to be back into a net cash position. Happy to take any questions on the chat as they come through, if you want to ask them. In the meantime, I will hand you back to James. Okay. Thanks, William. I have been keeping a note of the questions coming through, so we will try and get to as many of those as we can at the end. If not, we will submit responses in the portal as well, written responses. Just onto product briefly before we wrap up. In May 2021, which was the last fundraise we did, we raised that for a number of reasons. Primarily was to expand further globally, invest a bit more into the U.S., expand the business into Canada, ANZ. A big part of it was to raise capital to invest further into growing our engineering and product function within the business. We have been doing that. We made a fairly cautious start to it because we think that is what investors wanted following the raise in 2021. We have been moving that forward and getting very close in coming up the end of H1 in FY 2024 to actually releasing some of this stuff to general availability. It is just a bit of a reminder in terms of where we are coming from and going to. The investment in engineering and product was very much timed to align with the successful execution we have had against our strategy. As I indicated earlier, our three key strategic pillars of cloud, access to global market, and channel partners, we have done very well there, in my view. As such, we have got very strong market position in our space globally, and we have got a global cloud platform that is seriously reliable that we can now iterate upon. We can build new products, new services onto that with a view to trying to drive that out into the existing customer base for upselling and cross-selling opportunities, but also to enhance our opportunity both in terms of new business and also longer term, looking to grow our addressable market by entering new areas as well. One area we have talked about a lot is payment. Today we are very focused on security and compliance, but really security and compliance is becoming table stakes with what we do, and we are driving the value proposition more towards customers generating more revenue, controlling their cost becoming much more relevant today. We are bringing a lot of the really interesting digital payment methods that we have seen across e-commerce environments to the sophisticated omnichannel communications environment as it is today. I appreciate this is not the most exciting update on product for investors to see. We are not quite ready to go out to market yet with snapshots of what these things actually look like, though we do have the majority of this in minimum viable product stage, which is MVP stage. We have new customers that have been signed to these, but we are running it through a very proper product management process, which is a business we are now able to do with a strong product function within the business. The sorts of things that are going to be coming to market literally in the coming months, and across FY 2024 are a completely new look and feel to the user interface, both from a consumer perspective, but also in terms of agents as well. Included in that as well, new reporting interface and data analytics as well. We are bringing digital wallets to all of our current offerings that we have today. So not just able to take credit and debit cards, but also incorporating all the digital wallets, the main ones that are out there, Apple Pay, Google Pay, et cetera. We have got embedded integrations with buy now, pay later vendors. Buy now, pay later being the likes of Klarna or Affirm in the U.S. I say embedded because these are really tight-knit repeatable integrations that we have got. We have been able to deliver services for these things for a number of years, but they would require custom projects. What we are looking for is high repeatability of these sorts of services that we are delivering so that in the long term we can scale quickly and we can have these things live and running for customers in a very short period of time, more typical with what you would associate with a true SaaS offering. Then we have also got the new FastStart payment processing option in play for small to medium sized businesses, a partnership that we have put in place with Stripe, and we have signed our first customers to that as well. We are actually getting a piece of the payment as it goes through. One of the aims we have for this year, and certainly it is a personal goal of mine, is that by the end of FY 2024, we will have rolled out and have our top five partners today live with these new product features and this new offering. That is really only 6 and a half months away. Sorry, 7 and a half months away. But we will try and get it done in 6 months if we can. We really will have a very new look and feel to our product in the next 6-9 months time. And that is really exciting to be part of, and our team has done exceptionally well to do that. On the right-hand side of that slide there, you can see as well that we have mentioned, and we did start to talk to investors about this, we are developing our own artificial intelligence capabilities through our roadmap. These are more like come at the back end of FY 2024 through into FY 2025. Everything we build today is really focused on driving more availability of the data so that we can therefore off the back of that, analyze that data and we can do intelligent things with it. So particularly around customer experience and the touch points with payments as that is going through, gaining more insights so that we can in an automated fashion, go back to our customers and give them recommendations on how to increase revenue, reduce costs, reduce handling time within contact centers, and these sorts of things, and be doing that in a completely automated and intelligent fashion. A lot of momentum being built up in the background here. But it is all off the back of the additional investment that we made following the fund raise in May 2021. It is all as planned. Just wrapping up before questions on the outlook. We are expecting to accelerate revenue growth slightly in FY 2024 to 28%-30% revenue growth. We are expecting this year, as we have said, to be our first full year of cash flow positive, to be our first profitable group level. So adjusted PBT level, we might be EBITDA profitable at the half year. We will see. Depends, we have got a few things that fit into that. But yeah, full group profitability the full year is what we are aiming for. I have talked about the top five partners and the new product launches that are going to be coming. And of course, when they do get launched, we will probably be pushing out some financial PR around that as well through perhaps RNS Reach. We have got the U.K. form of order hearing for the patent case, so we are looking forward to that. And we let the U.S. bit just run on, having done a lot of the heavy lifting now, very confident in our position there. In terms of sales highlights, I mentioned earlier about Zoom. So that has happened since the year end. So that is excellent and we are really advanced in that, by the way. So, we are already working pipeline with them and that is expected to be fully live at product stage in just January, so a month and a half's time. So good momentum in the U.S. for new business, and high engagement levels from our partners, particularly around our new products that are coming through. I think that wraps up the main slide deck. We will get to some questions. There is quite a lot of them. There is quite a lot. Some of these were submitted in advance as well, so we will not be able to cover all of these, although we do have a fair amount of time. I am going to try and group some of these together as well. Perhaps we will cover the patent question first, of which there has been a few. I will try and bake these all together. Given the victory in the U.K., do we think there is a material risk from the U.S. side of the case? Also, can we talk a bit about timing of the U.S. side as well, when we expect to get to trial in the U.S.? Answering both of those, yeah, the confidence is high, our approach validated, and the U.S. case is very similar. There is absolutely no reason for that confidence of ours to flow into the U.S. case. We have learned a lot through the U.K. case result. There is more to go at in the U.S. as well. We do intend to invalidate these patents, given where we have got to with this. Not only prove that we do not infringe, but invalidate them as well. As you can imagine, as directors of a publicly listed company, be it a fairly small one, we have been very thorough in preparing for trial. Even though we were confident, we prepared for every potential outcome and had a way forward with any of those. We continue to have those plans if we need them. We do not think we will need to make any changes to our solution. We don't think we'll need to take a license in the U.S., but we are prepared for those things if we absolutely need it. In terms of material risk, we believe it's substantially reduced, and I think it's highly unlikely that anything that happens in the U.S. is going to prevent this business continuing at the momentum that we expect it to. In terms of timing, I think we're expecting the U.S. trials probably not going to be until maybe autumn next year, perhaps the summer, if we're lucky. We do want these things to happen as soon as possible. Another question was, can the other side appeal the U.K.? If so, what's the timeline? My understanding is that the timeline is they have 21 days following the form of order hearing. The form of order hearing is mid-December, so that would be January. Then I believe that an appeal hearing is probably going to be six to nine months from that point. Preempting another question which has come at us from other investors. Yes, when we win the appeal, we would expect to get the majority of our appeal costs back, as well as other costs that we're seeking in the form of order hearing. Couple of individual questions I'll take. I don't think there's many here for you, actually, William. No, no. Okay. Do we invoice our customers directly, or do our partners invoice those customers for us? We invoice direct customers directly, of which there aren't a huge amount these days in terms of new that we sign. The vast majority of our partners are resellers, so they're signing business on their paper. Our partners contract with the customer, and we have a reseller agreement with the partner. In terms of invoicing, the partner also invoices the customer. We give a wholesale rate, which the partner then marks up to their customer. There's a question on profit, which is, you expect to get to full year profitability this year. What are the things that could prevent that from happening? I think we've covered some of this to a degree. The main things we're sensitive to as a business are really timing related. In order for us to get to revenue recognition, which clearly is required for the revenue to move forward and profits come through, we have to get our services to that revenue recognition point once we have sold them, and typically that runs at between four and five months when we have sold. We have got a lot of stuff going through deployment at the moment. We never lose these things. They just sometimes can take longer than expected. Often they can be dealt with quicker as well. That is one aspect. The other aspect is H1 sales. Really we are getting to the point in H1 where new business sales in this year are not going to contribute very much to FY 2024 revenue because the nature of the way that the revenue is released. Is that good enough for a finance executive, William? Yeah. You are not honorary accountant. Yeah. It is just the easiest way, isn't it? Sales cycles, have we seen any What was the wording? Have we seen any impact on our sales cycles given the current climate in the tech market? We are watching it closely. No doubt there is a lot of talk in the tech vendor space that deals are taking longer. I have seen some of our competitors make the same comments as well, and it is more hard work pushing deals through contracting processes certainly, particularly with big companies. Yeah, we are seeing it anecdotally in terms of the data. Our sales velocity in FY 2023 was 120 days, so that is from when the opportunity comes in to when we close. It has tracked up a little bit in this first Q1 that we have just been through. It is a backward-looking metric. So I would say it is going to track up a little bit, maybe 10%-15%. Key is having a strong pipeline, is having pipeline that can move in to replace through backfill any deals that move out. I am pleased to say that our pipeline looks very strong at the moment, and our partners are really working well for us at this point. There was another question sort of related to the patent, which was, "Given the amount of legal fees that you have had to spend out of ordinary cash flow, what impact has that had on the plans you set out to investors in 2021?" We have to be careful what we talk about here. We do have an active court case going on, and so I will be cautious about what I put out there publicly. However, something we have been forthcoming with investors is that part of that fundraise related to our mainland Europe launch. Actually, that was the main thing that we pulled back on to conserve cash to deal with this unwarranted claim against us. Unfortunately, it does require those funds to do that. We are in FY 2024 now, and actually, we should have been in a position of having several sales heads in mainland Europe up to speed for probably at least the last 12 to 18 months. So yeah, that does put some pressure on new business sales momentum, but it is not a permanent thing. You may have noticed in our accounts that we have said that we are actually going for the full launch again in mainland Europe at the back end of FY 2024. So we are doing that, and in the meantime, we have had a kind of interim solution that we put in place. We have got several people in the U.K. business on the sales and PS side who speak multiple languages, so we have been able to leverage that. But we are going to be more proactive in the second half of this financial year, particularly with our partners who have pretty extensive businesses across mainland Europe. That is one we can really look forward to. It has been a frustration, but we are now really looking forward to getting stuck into that. I do not think there is any further questions that we are going to take live on here. There has probably been a couple come in. No. No? Yeah. No, I think we can address the other outstanding questions online, can not we? So yeah. Great. Okay. Well, look, thank you, James. Thank you, William Good. Appreciate updating investors. Could I ask investors not to close this session as you will now be automatically redirected with the opportunity to provide your feedback. If anyone has further questions or would like additional information on PCI Pal, please do get in touch via pcipal@walbrookpr.com. Many thanks for attending today's presentation. Yeah. Thanks everybody. Bye. Thanks, everyone. Bye.