Earnings Call: H2 2024

Jun 19, 2024

Summary

FY24 growth lifted FUM to £17.6bn, with £18.6bn reached after strong early FY25 flows. Management targets £30bn by FY29, supported by organic growth, while guiding to £150m–£200m monthly net flows and 10%–15% annual cost growth.

You have joined the meeting as an attendee and will be muted throughout the meeting. Joining us today, we are going to hear from Tatton Asset Management who reported their full year results yesterday. If you have not seen it already, there is an up-to-date research note on our website, which you can find at Equity Development. For today, we are going to hear from the management team who will take us through the presentation, then an opportunity for Q&A at the end. Please feel free to submit questions as we go through or at the end. Without further ado, I will hand over to Paul Hogarth. Thank you, Hannah, and good afternoon, everyone. Great to be here with you today. If I could just go to slide 8 please, Hannah, then we will go straight into the key financial and operational highlights. Obviously, it has been a stellar year. Really, really pleased with this year's performance, particularly in the latter half. Our key metric as always is the funds under management. At the end of the year, we were GBP 17.6 billion, which obviously was a healthy increase. As I say, some good flows coming in the final quarter in particular, and that has continued, I am happy to say. Once we are now into Q1 of 2024, year to date, heading to 2025, we have had a tremendous April, May, and June so far, so we can add another GBP 900 million of flows and a little bit from the markets as well. Excuse me, now up to GBP 18.6 billion in total FUM and FUI, so very pleased with that number. We are kind of guiding the market to say that those flows have been really strong, as we have mentioned. Because it is over such a short period of time, it is very difficult for us to suggest that we should do that number consistently month in, month out. So we are guiding the flows, the net flows to being something between GBP 150 million and GBP 200 million per month. Also, yesterday, we gave our next target milestone to the city. I will come back to that shortly, but we are giving you our target for what we would like to achieve for funds under management over the next five years. Couple of other stats just to pull out of that one-pager is really the number of IFA firms, and a lovely healthy increase of 12.2% there. So just short of 1,000 firms now actually giving business to Tatton Investment Management on a weekly basis. It is lovely to see. A quick little bit of arithmetic I think is worthy of a little highlight is the number of client accounts that we have divided by the AUM, and you get the average holder of each account having around about GBP 140,000 with us per account. Which is definitely where we would like it to be. It takes us into the sweet spot of the IFA community into the mass affluent market where they play in particular, and I think it really has held us in good stead that we allow each one of the IFAs to decide what they would like to put into the Tatton portfolios for their clients. We have no prescribed minimum, but GBP 140,000 coming out as the average. The other bit really is the 15 basis points. So GBP 140,000, 15 basis points, it means that each client or each end client is actually getting the full discretionary service for GBP 200 per annum. Which definitely ticks lots of boxes, in particular the Consumer Duty box, which I will come back to later. So all in all, very happy. The other divisions, Paradigm Consulting and Paradigm Mortgages, did their bit as well. We will come back on later on to go through how that split looks and what we think is likely to happen over the next 12 months. But I think that will do on that one, Hannah. I think we move on to the next one. Again, just nice CAGR, 18% on revenue, 22% on profitability. My slide before I hand over to Paul to go into the financials is really our bragging slide, which is slide 10. Slide 10, Hannah, which shows you the lovely trend line of assets coming through under our management and under our influence over the period from inception in 2013 right the way through to where we are today. With a few blips in the road, as you can see, but that obviously is the nature of the world that we live in and the markets. But I am particularly proud of that bragging slide as you see it climb. Without further ado, I will pass you over to Paul, and then I will come back later on to talk about strategy. Okay. Thanks, Paul. As Paul said, revenue's really strong growth. A really good performance from both Tatton and Paradigm. We frame Paradigm as a really resilient performance this year based on the back of the mortgage market. Administrative expenses, we haven't highlighted these, but they've increased by just over 14% year-on-year. Really strong year for discretionary variable pay, linked to the flows and the strong flows that we've had. Plus we've had some first-year costs such as compliance or auditing and TCFD for the first time as well. We've maintained our margin at over 50%, I think which is a strong statement. When you look below the margin line, we have some adjusting items. So every year, we've adjusted for share-based payment costs, which year-on-year are comparable. The other adjusting item is the amortization of intangible assets. There's a little bit of detail behind that around fair value of adjustments on intangibles, but also release of contingent consideration. The finance income of GBP 640,000 will be closer to GBP 1 million in the coming year, and that's all related to interest income on our own cash balances, so we're not taking any clip from client income, which you'll see in other organizations, particularly in platform world. Moving below the line, our corporation tax increased in line with the increase in corporation tax rate to 25%. This year we paid a dividend of 16p, which is a 7% increase. That split historically has been one third, two thirds, but this year's the first year where we've split it 50/50, which is likely to continue as we go forward. Just moving on to the next slide, which is the divisional performance for Tatton. Clearly here, we've increased AUM, which is a big driver of the strong growth for GBP 3.7 billion. GBP 1.5 billion, that was strong markets in the second half of the year or investment performance, and GBP 2.3 billion of flows year-on-year. When we split that down to H1, we did GBP 910 million in H1 and GBP 1.4 billion in H2. Actually the H2 then, you can look at that and focus that on Q4, where we did over GBP 850 million in Q4, and actually GBP 440 million in March as well. So really, really strong end to the year. We continued that obviously into the first quarter, which Paul touched on earlier. Adjusted operating profit increased to 19.4. Obviously the margin increased, so you're seeing the operational gearing come through within time, which it has done year-on-year. We'll touch on that later. Moving on to the next slide for Paradigm. Really strong performance, actually. Thanks, Hannah. Really strong performance, with a 9.7% decrease. So you may question why do I consider that a strong performance? Because actually, the mortgage market actually decreased year-on-year by 29%. So effectively, we won more market share by basically increasing the number of mortgage firms that we work with. For the first time on the revenue we've split out, you can see there the GBP 2.4 million to the GBP 1.9 million. So a relatively modest drop. Half a million for the group. Actually is one of the key reasons why the margin has actually been maintained at 50% rather than increase year-on-year. The adjusted operating profit slightly decreased to GBP 1.8 million, and our margin also decreased to 29%, just under 30%, albeit as we look forward, we anticipate recovery in the mortgage market this year. What we're seeing is an increased level of applications, so the first four months of this calendar year, applications are 35% ahead of this time in the prior year. We expect to be back to that sort of 2022, 2023 level. On the next page, we then move to the balance sheet, and we obviously have a very strong balance sheet. Net assets of GBP 43 million. We always frame this as being we're a capital light business with a high return model. As you can see, return on capital employed there at 42%. In terms of year-on-year movements, the only really significant movement would be trade and other receivables, where that reflects a strong finish to the year and one month's accrued income, plus about GBP 800,000 of cash not received from platforms as they held the money back to the beginning of April rather than paying it towards the end of March. Other than that, obviously cash, we can move on to the next slide shortly. On the right-hand side. To capital. Yeah, that's right. Yeah. That's right. On the right-hand side, we have capital resources, GBP 17.1 million against the regulatory capital of GBP 4.3. When you actually deduct the GBP 4.3 from the GBP 17.1, that would be our headroom. We'd always want to have somewhere between 50% and 100% of buffer. Let's just say GBP 2.8 million. That gives you GBP 10 million of essentially free cash. When you actually deduct the interim dividend, which is highly likely that we will pay, you've probably got about GBP 5 million free cash to play with as we look forward to this year. Moving on to the next slide. Cash flow, very simple cash flow. The GBP 16.9 million actually is 91% operating cash conversion. Typically, that would be closer to 100%. When I talk about the increase in debtors, which relates to the strong finish to the year, that sucks up that little bit of working capital there. Obviously, the dividend, the GBP 7.8 dividend is a 16p dividend over the year that we paid, or actually last year's final and this year's interim. Then obviously, we purchased GBP 3.3 million of our own shares, our tax payments and some CapEx gives us GBP 24.8 million. Then finally on this slide, we just wanted to give a brief explanation of the margin and the trend as the business evolves over the medium term. Historically, we've always give a guidance of a 1%-2% per annum. On the left-hand side, you can see the graph with both Tatton, Paradigm and also the group, and how the margin has actually trended over the last seven years since IPO, actually. The reasons for that is clearly the mix, the yield, which is kind of like a price variance, and obviously the increase in cost as well. When you look at the volume, we're guiding at GBP 2 million per annum. You will obviously get some market return on that as well. When we look at the mix, Tatton and Paradigm, our two divisions within the business. Tatton actually is delivering north of 60% margins. Paradigm is delivering north of 30%. Tatton's significantly outgrowing Paradigm, so it's double digit growth as you saw in previous slides, and that mix will change over time to effectively make Tatton even stronger and therefore drive the margin up. From a yield perspective, if you look at the box above the graph, you can see how the revenue yield for Tatton has tracked down over the years. That's simply because MPS is significantly outgrowing the other types of products that we have, so BPS and some of the funds. MPS is at 15 bps, and BPS is clearly somewhere between 30-50 bps, including the funds. The cost guidance we're giving is somewhere between 10%-15% per annum, and ultimately, that will drive the margin as we look forward, 1%-2%. Then just finally on the next slide, we just give some brief guidance on the outlook. The first three months, we've had net flows of GBP 900 million. We have given guidance of that 150 to 200 onto GBP 900 million is a really strong start for the group. There's reasons for that. There's a number of new IFAs where we've had some good market wins. Then in addition, we look at Paradigm. As I said earlier, the mortgage market remains uncertain. However, applications are improving. I think overall, that's about it. Thank you, Paul. If we can move to slide 20 then, please. Slide 20 is our old chart, which we've updated, obviously. You can see that the size and the gray shaded area of the assets that are sitting on U.K. advisory-led platforms is now GBP 722 billion. That GBP 722 billion is expected to go to GBP 1 trillion over the next few years. So we're seeing good growth on platforms. Platforms remain as important as they've always been. So you will see further assets going there. Then obviously in the blue numbers, GBP 131 billion is the size of the DFM MPS world now. So that's had a significant increase from the GBP 103 billion last year to GBP 131 billion. Obviously, if you go back to 2017, it's gone from GBP 25 billion to GBP 131 billion over that period. So the MPS world continues to mature, continues to gather pace. Again, we would expect that to continue, and you will see GBP 200 billion-plus over the next three to four years, I'm sure, sitting in DFM MPS. There is no better place to be than that. So if you look at our top circle number, we're at GBP 17.6 billion or GBP 18.6 billion now. So our market share at GBP 17.6 billion was 13.4%. That's obviously a number that we'd at least like to maintain. If we can even stretch it on a bit, then we'd look to do that. But this is still very much a land grab of getting a hold of as much assets as you can, as quickly as you can, and we are flat out to do that. The next slide is the important one, which is our next market target, if you like. And we are saying that we will do a five-year roadmap to growth rather than a three that we did last time. We did 9 to 15, if you remember, and came in handsomely above that at 17.6 by the year-end in 2024. Now sitting at 18.6, but saying that we would expect to get to GBP 30 billion by FY 2029 as our new five-year target. And we genuinely feel excited about that. We think it is a good number. Can we get rid of that? Just Sorry. Can we get rid of. Yeah, great. Yeah, there you go. So we have got this GBP 30 billion number, which we are very excited about. It is a number that we think we will get to organically. If we did have any M&A activity, that could represent potential upside, as it says on the bullet point there. So, the 15 to 30 we think we can achieve with our normal kind of run rates. We like to, if you like, underpromise and overdeliver. So that is definitely a number that we would look to see by 2029. Moving on to slide 22. Really like this slide because it shows the Tatton AUM by cohort. If we go back to the firms that joined us in 2013 and 2014, you can see that that lightly graded or shaded green still has an uptick on it. So it shows how sticky the assets have been and are. And then obviously a sharper increase when you go to 2023 and 2024. I am really pleased to see that that is actually growing in numbers. The value is coming through even from the early adopters, which is great. Slide 23 basically again shows the split between the direct firms and the Paradigm firms. You can see the Paradigm firms are now 16% and 84% direct. So the flotation and everything that we have done in the public markets has paid great dividends to see the number of non-Paradigm firms continue to thrive and move up the channel and actually take a bigger and bigger percentage of the overall cake. Interesting stat on that as well, you can see that the Paradigm number has dropped, but actually the actual amount of assets has actually increased per Paradigm firm, which again, I think is another strong metric for us. We have got our saturation slide on slide 24. It looks further and deeper into that. We have got around about GBP 40 million from the Paradigm firms now, and from the non-Paradigm firms, the ones that have joined us post-flotation, we have had on average about 12.6. I love a little bit of simple arithmetic. It says if these are cohorts, which we believe they are, and we can get as close to them as we have done with the Paradigm firms over a period of time, we could unlock GBP 22.9 billion of FUM, which would be sensational, obviously. That number is there regardless of us putting any more new firms onto our books, which obviously we will look to continue to do. We will definitely want to drive the number of firms up as we have done over previous years. But if we can get more of the share of the non-Paradigm firms, that would be fantastic. We have a team of individuals who are working away to try and get as much of that as we can as quickly as we can, going back to that land grab point that I mentioned earlier. Slide 25 I think is really a good one as well. I am quite excited about this slide. It basically depicts how we have evolved the offering because not everybody wants just our bundle proposition. Some want a little bit more privatization or personalization. We can start off just by co-branding our literature with the IFA firm, or we can go further and effectively white label and let them have their own named model portfolios that would sit on their platforms of choice. Then at the real top end, if an IFA wants to say to his clients he is involved in the investment committee and the decision-making process, he can join us in that investment committee. Important point to bear here in mind is that we have 15 bps across all three, and we are not sharing any of those 15 bps. That is all effectively going into the center. But I think the very big thing for me is how much growth we put on over the last 12 months in these offerings. So if you take the co-branded, we have gone from 11 to 23 arrangements and have added GBP 300 million of FUM. On the white labeling, we have gone from 8 to 11, and we have added GBP 300 million of AUM, and then on the AIAs, we have gone from 1 to 3, and we have added GBP 200. There is GBP 800 million of flows of that 2.5 that we talk about that has come from these arrangements. We are bearing fruit here, and I am really pleased to see that. It means that the business is even more sticky because those clients, those IFA clients have put their name above the frame, so it is very much harder for them to not be involved in this and take us out of the equation. More importantly, we get the asset very quickly because if an IFA is going down this route, they tend to want to move their existing assets to us in a block or bulk migration kind of way as you can see from those numbers. We incentivize our team to get these arrangements. They effectively get twice the amount of commission or revenue on the back of getting these arrangements, as I say, because we get the assets faster. Obviously, a touch on Consumer Duty. You will not hear a presentation from anybody in financial services without a Consumer Duty piece. Happy to say that we are in a really good place on this. We have had the right proposition with the right price, and we have given good value through the consistent investment returns that we have had from our investment team over the last 11 years. I think we have led with client outcomes. We can tick the box for price and value, and therefore, we can rest easy about Consumer Duty. It has been work, obviously, to get set up for that. It has been work for the IFA sector to get us set up for that, but I do think we are in a great place. We could have a little bit of a tailwind from the potential shift from the classic BPS to MPS as Consumer Duty bites, as it says on the right-hand side. I am pretty relaxed on where we are about Consumer Duty. We are seeing the focus of the regulator being on some very large organizations, as I am sure you are aware, and the same too, obviously, with regard to platforms and other areas. Consumer Duty, I think we can rest easy. My final slide is on Paradigm. Obviously, as Paul said, it becomes a smaller and smaller percentage of our overall income. We still love both those businesses. We think Paradigm Mortgage Services and Paradigm Consulting are vital to the whole group. Paradigm Consulting is obviously the DNA and where we got the Tatton investment idea from, and we certainly would not want to see the Paradigm membership being owned by anybody else in IFA land, so we still get an awful lot of intel from them. On the mortgage side, we have got to look at this 12 months and say, "Yeah, not a great time for the mortgage market, but look how well we have done compared to the drop in the marketplace." The stat that I really love is, if you look at Paradigm, we are now responsible for nearly 6% of total U.K. lending. It does not cause us much angst. It is an easy business for us to manage and administer and as I say, it becomes a smaller and smaller percentage of the overall. Our investment case is on slide 28, which is my final slide before I hand over to Lothar. Just putting some Consumer Duty ticks in the boxes, if you like. Leading market position. It is nice to see that we are still leading the way. We are getting super support from the IFA community. Single channel, which I think is important. We champion the IFA sector at every single potential opportunity that we have. Paul has obviously evidenced the high return on capital and the financial profile on the balance sheet. I will let you make your own mind up about the excellent management at the bottom. I will pass over to Lothar. Thank you very much, Paul. I am just going to give you a few more details on the investment business. In terms of proposition, we just launched a complementary set of funds, multi-manager, multi-asset funds, through our Tatton Tracker range, that came on the back of demand from the IFAs for a wrapped version of our Tatton Tracker MPS. That is really what it is on the back of the forever falling CGT allowance, which is starting to give problems to large clients with not tax-sheltered portfolios. I mean, the bulk or very largest part of our AUM are either in SIPPs or ISA, so it is a smaller part overall. This was very much demand from the marketplace, which we have therefore satisfied, and it now sits very nicely next to our Tatton Blended range, which we launched a couple of years ago for similar purpose. Back then, it was more for smaller clients, sons and daughters in relationships, and for inclusion in legacy products like investment bonds, where MPS portfolios just do not work so well. Early days yet, but there was quite a bit of demand for this, and we have been able to launch it at the same OCF as we run the MPS on platform, so quite excited about that. It does not mean that we are all of a sudden going into fund management. It is just the heart of what we do is MPS, but where fund wrap makes sense, we will do that as we have done here. On the next slide, just a quick follow-up on. Oh, no, we have gone two slides forwards, I think. No, last one. Oh, yeah, that is the update, which was on the Tatton Money Market portfolio. We launched that last year in the summer, spoke about it in the interim update, and it is doing exactly what we said it would do, i.e., it is tracking the U.K. base rate. We have not got quite the 12th month yet. That is why we are at 4.4, but if we track the portfolio back a year, it is producing exactly the U.K. base rate even after the cost that we have got in there. Very happy with that. Otherwise, obviously, it has been a fortuitous market for investors since we launched them. Portfolios are up, not just on this time period, but also obviously on the 12th month and year to date. Moving on then. Just a few charts on our longer term performance. We compare ourselves against the industry peer group, as in the ARC indices. This is the very long term, 10 years. The green dots there, on the right-hand side, show you our risk-adjusted returns, if you like, just showing that we are not in any way cheating, if you like, on just taking higher risks. The slightly more off-the-scale performance of the global equity simply comes from the fact that that portfolio runs with a global cap-weighted asset allocation, i.e., it has got therefore over 60% in the U.S., and we all know what has happened in the U.S. and in that market. The next slide gives you the same picture, but for the five years. Looks similar, except obviously with the whole Mag Seven phenomenon really kicking off over the last five years, even more outperformance there from the global equity proposition. On the next slide, just the last year, which again shows outperformance, although also slight underperformance on our defensive, on our very lowest risk profile, where we have got about 1.7% of our total AUM, where we have stuck a bit more tightly with the 25% equity allocation that we should really be following as a whole peer group, for the risk profilers. But that seems to be changing, so we have negotiated, and we will be raising that to a 30% equity allocation as well, which should put that to history to have that underperformance there for that little portfolio at the lowest risk end. The next slide is our ethical portfolio strategy, and the reason why that has outperformed more is A, because it is a growth-orientated portfolio being focused on things that will only pay off in the future. It is a growth portfolio, so a slightly constrained universe. But it is also this one is following because of how the funds that are available are managed. This is a globally cap-weighted exposure, therefore, again, more exposure to the U.S. And it continues to do very well for us and the clients. On the next slide then, we are seeing the split of our assets across our matrix of portfolio types there, and then across the top are the different risk profiles where you can then also see that 1.7% that I just mentioned that we have in the defensive sector and how this is all distributed across the piece. Two observations here. On the one-hand side, we are seeing a creeping up of the relative weight of the Tatton Tracker and the hybrid, which are now making up about 50% of our total AUM is tracker-based. Same active asset allocation that we do on top for all the portfolios, but then populated with a lower cost tracker exposure. Which, as we know, over the last years and saw from the earlier slides, has performed very similarly to the active managed, as there was just so much money to be made just in the pure momentum trade. The other interesting observation is at the bottom, the 12-month change across the risk profiles, where we can see a relative reduction of the lower risk portfolios and an increase in the higher risk portfolios. Overall, I would see that as a positive in the long-term investment case. Obviously, as we know from the previous slides, produces higher long-term returns. Perhaps a little bit dismayed about observing the typical retail investor behavior again. Looking back rather than forwards, so we've had the bond market correction. We can work with bonds again with the yield that we have in that part of the portfolio. Obviously, people have been burned with a very bad performance that bonds gave them after so many years of being almost up there with equities. Moving on then. Just in terms of our investment backdrop, last year was very much characterized by, A, first, the resilience of the demand, both from businesses and households, despite everything that was thrown at them, from inflation to high yields to the cost of living crisis. Really at the end of the year, the central bank pivot finally, not raising rates anymore, which first led to the revaluation of risk assets and all the way into the Santa rally. That continued into 2024, really, more on the backdrop of then also sentiment shift across the economy, with the exception of China. Where with the prospect of lower yields, generally earnings projections and expectations have gone up and retail investors have really returned to the investment scene. That cash being king was perhaps not quite as true. We saw that on the earlier slide as well. All diversified portfolios outperformed cash over that time period. Therefore, we've seen quite a bit of a shift in retail investor sentiment as well. Where we are at the moment, which is the next slide, is a good balance, if you like, between, on the one-hand side, more positive growth perspective. On the other hand, still fairly high yields with the bond markets really doing the job for the central banks at the moment, keeping money supply relatively tight. Yes, the risk of a recession has gone away. We seem to have that soft landing, but there is still, at the moment, in particular over the summer, a risk that until we actually get any rate cuts, and they may well be less than was perhaps expected and priced in, that we get markets a little bit over the top compared to what we are currently seeing in a relatively slow economic development. Even if that means we're back to mid-cycle and not really with end-of-cycle fears anymore. My last slide is just a quick outlook, on the next one, which is this cycle rewind, which doesn't happen very often. We've gone from very late cycle. We didn't get the recession. We're back in mid-cycle, which is actually quite stable, but the psyche in the markets is still very much characterized by what we've learned during that period, last 15 years, from global financial crisis to the COVID pandemic, constantly expecting the next disaster behind the next corner, which increases volatility. That may be the case when finally it becomes clear that interest rates won't fall as much as perhaps had been anticipated, just because inflation has gone down. The economy is going quite well, and with the jobs market being very tight, there is not really much room for the central banks to lower rates by more than 1%, perhaps 2%, unless we do get a recession, which we are not really seeing on the horizon at the moment. Looking forward, it's probably not reasonable to expect that we get a similar recovery rally in the stock markets as we had over the last 12 months. Nevertheless, it should be a positive 12 months ahead. Maybe less strong than what we had, because so much is already priced in, and therefore, certain portfolio rotation strategies will probably add more to overall performance than pure risk-on, risk-off. Where we are for the time being, quite happy to stay fully invested, but otherwise neutral until we know a little more how the market is going to react to the news that's going to come down from the central banks. Thank you very much. Thank you, Lothar. Our summary slide really just talks about two main things. Obviously, the roadmap to growth, which we've highlighted earlier. Very much an organic growth play, as we've said, and as we have been throughout most of our time. We haven't really touched on M&A activity really, because we haven't got anything of any importance to talk to you about. It's difficult to deploy capital in buying more FUM because of the The value that people believe the MPS sector has got. MPS providers who are in the market have now got Yeah enhanced values or thoughts on pricing. We've always promised the market that if we did do any M&A activity, it would be earnings enhancing. It is difficult to buy. We've been gazumped a couple of times with a couple of opportunities. That's not to say we will continue to have a look and have discussions as and where we see fit, but it's very difficult at the moment to do that. I think people are because there's quite a drop-off and long tail of MPS providers where they've got maybe 500 million or 1 billion or 1.5 billion, trying to get to 2 billion or 3 billion. Their idea is that they'll get up to those 2 billion or 3 billion or 4 billion before they'll start to talk about potentially selling to somebody like us. Very quiet on that side. I think, Hannah, I'll probably at this stage pass back to you to go to questions. Lovely. Thank you. We have a number. Could you please outline the change in AUM at 8AM since acquisition, and how does this contrast versus Verbatim funds, and how might this be explained? Okay. Yeah. Do you want me to answer that? When we acquired 8AM, we anticipated about GBP 800 million of AUM, and I think we actually landed on just over GBP 1 million. A billion. A billion, sorry, yeah. We still have that billion. The team at 8AM have done a good job hanging on to that. They've put a lot of effort into the change from the historic manager, investment manager, which was CleverAdviser. They've also invested in a little bit of cost over the last 18 months as well to help drive future growth. That said, they haven't necessarily reached the target EBITDA that we set them originally, and hence why earlier I talked about the impact in terms of the contingent consideration and also the intangible asset. In terms of Verbatim, the funds themselves performed well. That said, they have seen some outflows over the past 12 months, which is broadly in line with other asset managers actually. So, it's a relatively small part of the business now. But yeah, that's about the summary of the situation there. Okay. Thank you. You alluded yourself that FY 2024 was particularly good in terms of flows. Were there any standout big contributors to that number, which reinforces your view that it might be an outlier? It was a few reasons, I think. One, because of the maturity of the MPS space. Two, I think also there's a little bit more confidence in the markets and IFAs' clients were wanting to get back in. There's a little and we had a couple of really good, decent-sized mandates that we won, which kind of pushed up that level of flows. We just think, if you extrapolate out where we have been over the last few months, you'd be looking at GBP 4 billion of FUM, and that's a huge target. We'd rather guide everybody to the 150 to 200 million per month. Okay. Well, if you did do that, obviously you would hit that new target extremely quickly. We do have a couple of questions on that new target. Okay. In terms of route to market, obviously, IFAs are well established. Is there A, an opportunity to move up in terms of you've got a sweet spot, it would seem, in terms of the size and scale of the IFAs that you're dealing with. Can you move into bigger IFAs? Also, is there an opportunity to go direct to market? Yeah. The difficulty going up to the bigger IFAs is a lot of them, because of their size and scale, would have their own discretionary fund management capability. They might have gone for their own DFM permissions with the regulator and have their own team. We know where our sweet spot is and where we should concentrate our efforts, but there may be a position in time where we could go and help those firms by making, saving them some cost of having their own investment team and utilize us as their intel inside. That's a possibility. But yeah, I think we're very happy fishing in the pool that we're in currently. It seems to make sense to do that. Going direct to consumer, it would be a massive move for us. You would never say never, because that's obviously not a very sensible thing to do or to say. But we love the IFA sector. We champion the sector. I think it's really strong that we are single channel and only get our business from IFAs. It would be a huge decision to move off that. All right. Thank you. Again, obviously, when you outlined that GBP 30 billion, there's no mention of anything outside of the U.K. Is there an opportunity for international expansion? I think at some stage, yes, Hannah. I think you could see us look at that. I mean, we've got so much to do here in the U.K., we'll continue to do that. But we are aware that the growth of MPS is not just a U.K. phenomena, it's worldwide. And the numbers are coming in from all sorts of different territories. I think the number under MPS is expected to grow to Excuse me, $10 trillion over the next few years. That is a huge number. I think we got to keep an eye on that. We've got to have a look at other territories. We've made a few preliminary inquiries into others, but it is, again, preliminary and we're just looking to have a chat about what markets exist, what they look like, whether it's IFA-led or banking-led or whatever. Early days, but I wouldn't rule it out. You clearly have your eyes on the big opportunities, but there are a couple of questions here, I guess, asking for a reminder of exactly what your ownership in the business is. I think particularly for Hogarth. And what your future plans and investment, I guess, and appetite to continue in the business are. Well, that's a very nice question. Yes. Still, obviously the largest shareholder within the business, 16.6%, plus obviously, LTIP as well to add on top of that. I love doing what I do. It's fantastic. I really, really enjoy. I'm super proud of everything that we've achieved. To be in such an exciting business at my ripe old age is incredible. I'm hugely energized, and yeah, I just want to keep driving the business forward. I think as long as everybody's happy for me to be here and I'm doing. I think I'm adding and contributing to it, then yes, I'd love to be here. Thank you. Question here. I note your market share. I'm just wondering what your direct competitor share is, and who are they? Our direct competitors haven't really altered, to be honest. There are a few that we come across regularly. I'd say people like Brewin, Brooks Macdonald, Vestra. Timeline is a newer one that's increased in size. So, we've got four or five. I think when you look at where we are in growth terms, you've got us at the top of the tree, then you've got people like Quilter and Parmenion who I don't think you are comparing like with like. Parmenion is a wrap that has, or a platform that has its own MPS sat around as an investment solution. Quilter's is a fully integrated business, which has platform and MPS and advisors. So I don't think we're really comparing like with like there, if you put us in the same bracket as Quilter and Parmenion. If you take us out of that bracket, then you drop to 4.5 billion GBP of FUM, and then the tail, as I say, extends out from there and drops down to threes and twos and ones. I think there are probably in excess of 100 MPS providers out there now. So there are lots and lots of competition. Okay. A helpful understanding of the scale question. In terms of, again, the move to 30 billion GBP, what OpEx investments are going to be necessary to get you there? So we gave guidance earlier, didn't we? We saw that 10%-15%. And the real drivers for that really are just people. So, if you think back to IPO time when we employed 75 people, we employ about 104 today, so we've added 30 people over seven years. Yet our AUM has increased from 3.9 billion GBP to 17.6 billion GBP over that time. So you can use that stat and get a sort of idea of the scalability of the model that we're running at the moment, and that still is true. So where we will invest in people is typically where we touch the IFA. So as the number of IFAs continue to grow, then customer service and servicing those IFAs is really important. So that's BDMs, that's telephone account managers, investment specialists. in that nature of role within the organization. That is all built into our plans and that is how we will execute the GBP 30 billion target. That is it for the questions today. Thank you for some helpful responses there, some ambitious new targets, and we look forward to updates as and when, next 6 months. Brilliant, Hannah. Thank you. And thank you, everybody, for their time. Thank you. Cheers.