Trading Update

Jul 15, 2021

Earnings release

Hello and welcome to the Hays Q4 Conference Call. My name is Molly, and I'll be recording a search for today's event. Please note that this call is being recorded. And for the duration of the call, your lines will be on listen only. However, you will have the opportunity to ask I will now hand you over to David Phillips to begin today's conference. Thank you. Thanks, Molly, and good morning, everyone. Welcome to Hay's quarterly update call for the 3 months ended 30th June 2021, the Q4 of our 2021 financial year. I'm David Phillips, Head of Investor Relations, and I'm here with Paul Venables, Group Finance Director. Before we begin, Please be aware that this call is being recorded with the recording accessible using the number and code provided in the release. Please also be aware that our discussions may contain forward looking statements that are based on current expectations or beliefs as well as assumptions on future events. There are risk factors which could cause actual results to differ materially from those expressed in or implied by such statements. Heath disclaims any intention or obligation to revise or update any forward looking statements that have been made during this call, Regardless of whether these statements are affected as a result of new information, future events or otherwise, I'll now hand you over to Paul. Thank you, David. Good morning, everybody, and thanks for joining us. I'll present highlights for today's update, cover key themes and discuss regional performances before taking any questions. As usual, all net fee growth percentages are on a like for like basis versus prior year unless stated otherwise. Performance overview. Net fees were up 39% with all regions delivering a sharp rebound in fees, particularly in palm, up 67%. There were no working day adjustments in the period. The currency translation had a negative impact, decreasing headline net fees by 3%. I'd highlight the following key features. 1, trading in all regions improved through the quarter, and we saw good sequential fee growth. And encouragingly, June delivered our highest period of fees since the start of the pandemic. 2, perm and temp fees increased by 7% and 24%, respectively. In perm, which represents 42% of fees, activity continued to rebound strongly. In temp, as observed in Q3, in addition to volume growth, we've seen lengthening at average durations of assignments An increase in the average hours worked per temp. This is in part due to historically low temp vacation and sickness levels. 3. Our largest market of Germany performed strongly, driven by contracting, where we now have record contracting numbers for this time of year. The U. K. Saw continued sequential growth, especially in perm. And in ANZ, momentum accelerated through the quarter, particularly in permanent recruitment. Rest of the world improved across all subregions, including 9 all time record quarterly performances, including the strategically important markets China and the U. S. 4, comparing Q4 FY 'twenty one with Q4 FY 'nineteen, Fees in the quarter were 8% lower, and average consultants headcount was 10% below Q4 FY twenty nineteen. So our consultant productivity continued at record levels. And given our confidence in the sustainability of the recovery, we increased our headcount by 4 20 people or 6% in the quarter to drive further fee growth in FY 'twenty two and beyond, and more on that later. 6, our cost base increased over the quarter to £71,000,000 per period, primarily driven by increase in consultant headcount, Higher consultant commissions in line with net fees and our strategic growth investments. 7, as a result of the improved net fee performance And continued good cost control. Group operating profit for FY 'twenty one is now expected to be GBP 95,000,000 Which is ahead of current market expectations. And 8's cash performance was again excellent, and we ended the quarter with net cash of £410,000,000 And I will now comment on the performance of each division in more detail. ANZ. Our ANZ division, which is 18% of group net fees, increased by 28%, with momentum accelerating through the quarter. Fees are down 7% versus Q4 FY 'nineteen. Perm, which is 35% at ANZ fees, was up an excellent 114%. And our temp business, which faced a tough growth comparator a year ago, which included some one off contract wins at the start of the pandemic, increased by 5%. The private sector, which represents 65% of fees, increased by 39%, whilst public sector grew by 10%. Australia increased by 23%. In New South Wales and Victoria, together 53% of our Australian business. Net fees increased by 26% 27%, respectively. South Australia was better still at 37%, With Queensland at 28%, Western Australia 24% and ACT 7%. At the specialism level, Construction Property, our largest business in Australia, grew by 22%. IT, our 2nd largest specialty in HTS, Both of which were resilient a year ago, increased by 14% and 11%, respectively. And looking at the larger specialisms that were fixed hard a year ago, We saw a very strong rebound with accounts in finance and office support at 54% and HR an excellent 62%. And finally, our smaller specialisms, which represents about 21% of the business, were collectively up 10%. New Zealand, which is 7% of ANZ fees, increased by an excellent 123% with improving momentum through the quarter. And consultant headcount in ANZ increased by 8% in the quarter and by 17% year on year. Germany. Germany, our largest business at 26% of group fees, reported good sequential fee growth through the quarter With net fees up 38%. Business confidence continued to improve with increased client investments, especially in contracting, And fees are down 9% versus Q4 FY 'nineteen. Our largest specialism of IT grew by 17%, Wass Engineering, our 2nd largest and which was hit very hard the initial lockdown in 2020, was up 74%. Accounting Finance and Construction Property increased by 26% 29%, respectively, whilst Life Sciences performed even stronger, up 63%. Our contracting business, which represents 54% of German fees and was relatively robust in Q4 FY 'twenty, improved through the quarter And fees increased by 6%. And it's pleasing to note that in June, we now have record levels of contractors for this time of year. Tech net fees, which were severely hit by the lockdown in Q4 FY 2020, continued to improve and increased by 2 30%. Excluding the significant underutilization and severance cost of temps a year ago, underlying temp fees increased by 20%. Our beach tent volumes continue to gradually improve, and we saw very high levels of tent utilization and record hours per tent worked, Helped by low vacation and sickness levels, some of which will clearly reverse in the coming months. And despite the rebound, temp Fees remained significantly lower than Q4 FY 2019 due primarily to the historic high exposure to the automotive sector. Perm, which is 17% of fees, increased by 33%. Our German Public Sector business, which is 14% of German fees, was 28%. And Consult headcount increased by 1% in the quarter and 4% year on year. UK and Ireland. The UK and Ireland, 22% of group net fees grew by 48%, led by Strong perm performance, up 94%. Temp, which is 60% of the business, increased by 27%. Fees are down 15% versus Q4 FY 'nineteen. Fees in the private sector grew by 58% with the public sector up 31%. Most regions traded broadly in line with the overall business, except the Northwest, East of England and the Midlands, Which grew by 101%, 70% and 63%, respectively. Our largest UK region of London grew by 38%, And Ireland increased by 56%. At the specialism level, we saw excellent growth in IT, up 66% And a continued strong rebound in specialisms, which was heavily impacted by the pandemic a year ago, with HR and Education, which grew the fastest of 111% 82%, respectively, and also Accounting Finance and Construction Property, up 71% 63%. Our large corporate accounts business grew by 3%, and Life Sciences declined by 9% against tough growth comparators, Resulting with one off contract wins in Q4 FY 'twenty. If you remember, a year ago, Life Science business grew by 25% in this quarter. Consult headcount increased by 7% in the quarter, but declined by 4% year on year. Rest of the world, comprising 28 countries and 34% of group net fees, grew by 41%. Perm, which represents 66 percent of rest of the world fees, increased by 56% with 10% up 19%. And fees are down 2% versus Q4 FY 'nineteen. In Europe ex Germany, Fees increased by 41%, and our largest rest of the world country, France, was up 55%, while Spain and Italy increased by 83 And 74%, respectively. Belgium increased by 35%, Poland by 32% and Switzerland by 11%, A record performance against a resilient quarter in the prior year. The Americas grew by 56%, including the U. S, Our 2nd largest rest of the world country, which is up by 55% and produced a record quarter. Momentum in Canada improved with fees at 49%, and LatAm grew by 78%, including Brazil up an excellent 126%. In Asia, our fees increased by 25%. And China, our 3rd largest Rest of the World country, grew by 33%, With Mainland China producing a record quarter and again significantly outperforming Hong Kong. Malaysia and Singapore were also strong 56% 38%, respectively. Although Japan had a tough quarter, down 3%. And CONSORT headcount was up 8% in the quarter And 7% year on year. Cash flow and balance sheet. Cash collection We continue to be excellent, and we delivered a strong cash performance in the quarter with net cash at 30th June of £410,000,000 And as a reminder, all short term tax deferrals have been paid in full by the end of Q3 FY 'twenty one. Current trading and guidance. I'd make the following points. 1, We enter FY 'twenty two with positive trading momentum and have significantly invested in consultant headcount in Q4 To further capitalize on strong end markets and rising business confidence. 2, our strategic growth investment program, formerly known As we turn to growth, it's performing well. We invested GBP 15,000,000 in FY 2021, including GBP 11,000,000 in half two And anticipate GBP 20,000,000 further net investment in SGI projects in FY 'twenty 2. Alastair will cover these in detail at the prelims, and we are very confident that these investments will accelerate our growth in the medium term. 3. Having reported historically high consultant productivity levels in Q3, productivity remained very strong in Q4, driven by Strong increase in fees and further material growth in FY 'twenty two and beyond will increasingly be driven by additional consultant headcount. In addition to the 4 20 consultants or 6% we added in Q4, we expect to increase consultant headcount by a similar number in Q1 FY 'twenty two Across our key specialisms and strategic growth investment projects. 4, our exit periodic cost base is GBP 71,000,000, Which, looking forward, will increase in line with headcount and other areas of investments and with increasing commissions proportionately in line with fees. And finally, non payroll costs will modestly increase as business fully reopened and some limited travel restarts. Hi. Exchange rate movements remain a material sensitivity for the group's reported results. The strengthening of sterling versus the euro, OG dollar, U. S. And Japan is likely to act as a headwinds to operating profit in FY 'twenty two. If we retranslate to FY 'twenty one operating profit guidance €95,000,000 At today's exchange rates, we'd see a €4,000,000 decrease in FY 'twenty one group operating profit. And clearly, with this, we'll have a much larger impact on FY 'twenty two as group operating profit increases. So in conclusion, the improvements in trading and our financial strength put us in a strong position to deliver substantial profit growth in FY 'twenty two and beyond, We're significantly investing in for the future, and we set out some of those investments today. We will also look forward to resuming dividend payments shareholders in August, as we outlined at the interims, and we're clearly in a very strong financial position. There are many opportunities to build much bigger businesses, And we're firmly focused on positioning Hayes as a clear market leader in the most attractive long term sectors and geographies. I'll now hand you back to the administrator, And we're happy to take your questions. Thank you. The first The first question today comes from the line of Matthew Lloyd calling from HSBC. Please go ahead. Good morning. A couple of questions from me. 1, I was interested in what the sort of relative growth rate SME customers were versus larger ones. The last cycle, some of the data suggests SMEs were Materially lower amount of hiring in the market generally than they have been in previous cycles, and I've heard that, that might be changing. And the second question, Given Zoom interviews, hiring from broader geographies, all of the sort of things that are going on in some of the markets, Do you think that the business can be more efficient? There's a new normal efficiency, which might be higher. Good questions, and I think the first one is quite opportunity in these results and not just in our results, but I think across the whole of the industry. I think if we went back 2 quarters ago, if we go back to the end of 2020, there's no doubt, first of all, in the pandemic It was the SME sector that was hit the hardest, and you could see that in our results very clearly. Then in the first phase, the recovery, and if we call that the quarter to September, we certainly Going into Christmas. Most of the initial rebound was in larger corporates because at that point, they knew what financial position they were in. They knew whether they could invest. And larger corporates tended to get back on the front foot and invest early. What is very different over the last two quarters, and I think really March March was quite a seminal month, but I think March across April, May June. I think your point is correct. Actually, the largest investment has been in the SME sector. And why I think that's interesting and why, of course, this recovery period is very different versus previous ones, I think if we think through back to 2,000 An 8 or 9 if we're prepared to be that kind of frightened and go back to that point when there was a banking crash. I think you had Most SMEs are still very concerned. You don't have austerity in a number of countries, including the UK, whereas this time, I think we're in a very different set of circumstances. And across the board, if you look at our business, actually, it is the Markets such as London, where we've had strong growth, it wasn't hit as hard a year ago. We've had very strong growth. But actually, growth has been greater outside of London. And if I look actually within the regions and look at the individual cities and towns, the growth has been larger in the smaller towns. And of course, that is much more driven by SME. So if I use the UK as an example, if the UK growth was 48%, I actually think, Matthew, that the SME growth was definitely 60% or greater. So I think what we are seeing is clearly there are certain sectors which are still in very difficult circumstances. But actually, for most recruitment companies, certainly in the professional space, we're not we didn't do much in those areas to start with, and we're not doing much now. So I think the more broader economy is in a much stronger position. And I think if you look at our business, things like IT And life sciences, we're already back above 2019 levels. And a lot of that growth is actually in smaller clients Because for most companies around the world, the first area they decide to invest in is kind of greater efficiencies, information, tech, Market offerings because, of course, most companies have had to radically change their market offering as they've gone through this downturn. There's therefore a lot more investment in go to market I think that naturally leads into the IT sector, and that's across all companies. And I think we're aware that SME is investing in the most. I think it's a replenishment of roles that they didn't fill, and that's you can see A and F and everything else. But I think real incremental investment is pretty much all in the IT sector. And then on your point about can we get back to high levels of productivity over time? I think that's to be determined, Jeff, Matthew. I think we've all got to be a little bit careful about knee jerk Statements about where the world will be in 1, 2 or 5 years. If I knew that, I probably wouldn't be doing this well. You probably wouldn't be doing it. Exactly. And Vic Futures from the beach in the Caribbean. Correct. And we'd be asking for the season to get orders and be watching all the games. But We're not in that position. I think what is true is, first of all, your comment about the Zoom part of it and the comment about if you look at most companies now And the policies they're talking about in return to work and the fact that it's going to be hybrid, then That obviously, as we discussed last time, I think you asked me this question last time, is I think that increases the geographic pool for candidates. And I think that is a real positive because there's not the expectation that everybody will be in the office all the time. People may well be in the office 50% of the time. Who knows really in the longer term? But I think that gives an opportunity for a greater A broader candidate, Paul. Well, I think the other part of it is, as you well know, we're the heavy skill short market now. I think pretty much any role In excess of £40,000 to £50,000 is very skill short. And therefore, candidates have quite a bit of choice. And whilst candidates may not be Perfectly certain what right mix they want between home and office because actually a lot of people want to be surrounded by people and working by people for the energy and the innovation that brings. Well, they absolutely know that they don't want to be sucking into London all of the time. So I think those candidates have got greater power because it's a candidate short market. It's a very hot market, and therefore, they can be a little bit more demanding. So I think all of that suggests that the candidate pool becomes broader. And by the very nature, therefore, there's more career opportunities for those candidates. And recruitment companies like Hayes can More opportunities in front of those individual candidates, not all of which has to be you have to go to the largest capital city anywhere around the world. So I think All of that are positives for productivity. I think the harder part is we've all got to be a bit Yes. At the moment, productivity is higher because we reduced our associate pool 15 months ago, like most recruitment companies. And up until Christmas, we've been very modest in hiring. We've hired a number of more experienced hires, But we haven't really gone back full force on new hiring for associate consultants. Now we need to do that because we need a larger capacity pool To make sure that we are driving material sequential fee growth when we get into 'twenty three. And of course, all of us are in a race back to peak profitability and beyond, and we set our targets out years ago. We will clearly, at some point, do an Investor Day. And therefore, at the moment, we're in invest mode. That, by its very nature, of course, suppresses profitability a bit. Certainly, we can make more money in 2022 than we will do By increasing our consultant headcount, I think we set that saw that today. And the strategic growth parts are more on the future And positioning us really well for the future rather than maximizing in a year or 2. But what I do think is possible is I see no reason why consultant productivity will be lower in the new There are clearly some opportunities to improve it. And then when we get back this if you classify FY 'twenty two as a bit of a transition year, I think when we get back beyond that, of course, there's also some big cost opportunities because there's no way companies can go back To the level of flying that we're doing and traveling and everything else and hit their green targets. And we also see real opportunities to drive some efficiencies. But those projects, Matthew, that again, we'll set out at the right time, are going to take us a few years to deliver. But I think there's some real opportunity Improve margins over time. Where exactly that comes from, I think time will tell. But I think It is both a strong market today. I think the next few years feel to me to be very encouraging because quite uniquely, we're coming out of the downturn where governments I'm cutting money. And both of us are reasonably old, certainly older than most of the people on these calls. And we've been through Several degrees of austerity. And therefore, this time, none of that is there when there's going to be significant investment In GreenTech, etcetera. And therefore, we're going to be on the front foot investing into that. So our focus is on absolutely, there will be a strong rebound in 'twenty but our focus is more on 'twenty three and beyond. But an integral part of the long term story is going to be productivity, both consultants and non consultants. Thank you. And of course, you've got to invest in headcount as well. I'm not suggesting that you shouldn't, how you want to grow the business. I'm just interested in terms of the underlying. Thank you very much for the answers. The next question comes from the line of Hans Pluegge calling from Kepler. Please go ahead. Yes, Good morning, gentlemen. A few questions from my side. First of all, if you look at your it doesn't compare to Q4 2019. You already indicated group level and the different Geographies. But if you look at, let's say, perm versus temp, a quick back of the envelope calculation. I believe that Perm is doing slightly better than temp on average. My quick estimate is that perm is about down 6% compared to Q4 2019 and temp around 8% to 9%, is that a fair estimate from my side? Can you give some feeling on that? And secondly, if you look at June, could you give some feeling how, let's say, developed compared to Q4 2019? Then secondly, on the drop through rates, could you give some feeling what it was in Q4 of this year or sorry, of Full year 2021. And last question is on, again, also developments for June. If you look, you said already that activity levels was again at good levels. But if you look at KPIs, A special indication for Q1. I guess you could give some feeling, let's say, how it developed sequentially through the quarter. Is also KPIs were clearly up Through the quarter, so looking at new vacancies and that kind of thing, could you give some feeling on that? Hans, I think the one thing I can be certain of is that I won't I've remembered all of the questions and therefore, well, I answered. So please, if you've got the audience, please do come back because you've just thrown so much I don't think I can possibly cover all of them. Let me start off with the perm versus term. There's not a massive difference, Hans, so we had there been a big difference, we would have stated it. And I think we're slightly so you're 6% and 9%. Actually, we had hardly any difference at all. I think we had 1 percentage point difference between Permanent hemp. So it certainly wasn't significant enough to plug to bring out. Of course, the backdrop to June 2019 was that we actually didn't grow fees in that quarter. So I think the important bit here, and I As you guys know, first of all, I've been doing this job for 15 years. And secondly, we focus really quite a lot on the exact words that we use in here. We talked about exiting entering the New Year with positive trading momentum. We talked about that we had good momentum In the quarter. But absolutely, this quarter is quite different from the previous quarter. So if you think of this recovery and you break it into 3 phases, Clearly, for us, our fees troughed in May. That May to September period was kind of a gradual rebound. We had a very, very strong rebound from September, October time right the way through to March. I said last time, March was materially bigger And any other quarter that we any other month that we have had. And as you posed the question on March, was that would we beat that In June, because I think one of the questions was, were there a lots of catch up jobs and all those sorts of things. I think the positive is, if there were, Then there's a more broader recovery in June than there were in March. I think that's positive. And let me give you an example of that. We picked up some Kind of COVID related work as well going into February March. The good news is that has all disappeared now. So this, in my mind, June is a much clearer period. But June is always better than March in a normal year. We were about 3% higher June versus March in absolute levels of fees. It should have been a good 1% to 2% higher. But I actually still think the fact that March was sorry, that June was higher is a positive. And actually, if we look across this quarter, and this doesn't answer your question, but it gives a little bit of color, where was the sequential momentum across this quarter? ANZ, We actually haven't had that much of recovery. I mean, it wasn't as hard hit in the first place. There wasn't a lot of recovery from October through to March. We saw a real acceleration This quarter, we clearly are watching what's going on in Sydney at the moment because it looks like they're heading for a 6 week extension to the lockdown. But So far, it has been very strong. The U. S. Is a phenomenally hot market. It's actually in this Quarter is now our 4th largest business, and we've now got £50,000,000 fees. But strategically, we need that business to be 2, 3, 4 times bigger, and that's an important part of our growth plan. German contracting was really encouraging. While some of those additional contractors are more on kind of 3, For your 4 day assignments and all being on 5, that was a real positive on the volume, and we got that strongly. Actually, Parts of Continental Europe, certainly the northern parts of Continental Europe, were reasonably sequentially flat across the quarter. And the UK, we had a massive uplift In March, actually, we traded broadly sideways across this quarter, but we were pretty happy with that because I think the quality of the business in June is higher than the one it is in March. So June was better than March, 3%. It should have been better anyway, but let's call it 1% to 2%. So we're really happy with that. If I look at the forward trends, and what is clear is that perm job registrations continue to increase, Interview numbers continue to increase. Temp volumes is a very gradual increase. That's the beauty of the tent market. It never falls as much, And you never get a spike going on the way back. We've got a very diversified global temp and contracting business. And I would expect that to continue. So I think sequentially, I would actually say from a sequential standpoint across this quarter, about 80% of our fee growth was in the perm space and about 20% of it is in temp. And I think that's Probably right. And we're pretty happy with this quarter versus June versus March in this quarter versus the previous quarter. On drop through rates, I don't have the Q4 drop through rate number, and I'm not sure whether it would be that significant. And you can see that we put significant headcount in. We've also spent a lot of money on the return to growth projects, and some of that is not in consultant headcount. It's In managerial capability, I was very explicit on the last call that our strategic imperative is to double the size of our IT business. We're back above Pre pandemic level. And we're determined to drive that from that $250,000,000 pre pandemic to $500,000,000 over the next 3, 4, 5 years, that's the biggest opportunity, and that involves strengthening management team and everything else. But importantly, looking into FY 'twenty two, because I think this is the important point, We actually expect our drop through to be around 40%. Now if you add the answer I've given to you and the answer I gave to Matthew, Clearly, we are getting on the front foot and we're investing. And that's not just about the 4 20 people we brought in, in Q4, a similar amount we'll give you in Q1. That's going to continue across the next year. I actually expect that we will exit, assuming everything continues, So we will exit FY 'twenty two with the CONSORT headcount in line with where we were broadly in line with where we were pre Pandemic, the pre pandemic peak. And that is all about driving significant substantial fee growth in FY 'twenty three and 'twenty four and So absolutely, we're trading profitability in FY 'twenty two. We know we'll get a good bounce back in 'twenty two, but we're trading that off Because we believe there's a massive opportunity in PRISE, and we're focused on that. So Hans, I've tried to answer your questions and bring them together, If there's anything I've missed, please, please do ask me again. No. Thank you. Good evening, sir. Thanks very much. Thank you. Thank you. Before we move to the next question, please be reminded if you would like to ask a question today, please press star 1 on your telephone keypad. The next question comes from the line of Amvesh Agrawal calling from Morgan Stanley. Please go ahead. Hi, good morning. Just a couple of questions and you sort of partially answered my question around the cost. But exiting at a monthly For a period cost base of $71,000,000 which is sort of already higher than when you where you are in FY 2019 and then with further investments to come, Are we looking at like a structurally higher cost base from here on? And then sort of or how should we sort of think about in terms of Then you're surpassing the peak profitability in this cycle. And then just on the cash, which is better than where at least I was, Is that also partially due to temp being probably slower than perm? Or does this mean we have an upside to your Targets of cash returns over next 12 to 18 months? Let me take the second one first. That's easy. I think the good news, Amvesh, is I'm Probably got me and my FDs have probably got a job for at least another 3 months because the cash performance was superb. And whilst I don't have the statutory for the final numbers yet, Certainly, in our management accounts, it's an all time record debtors level. So a year ago, we were all time record debtors level up 34 days. We've reduced that further across this year. We've had an absolutely stellar cash performance across all of our businesses around the world. I think we're really very proud. I mean, that's something that James Hilton, who drives a lot of this and myself are really proud about. And that has broadly helped pay for the increase in temp because we had a strong rebound in temp. And I'm back earlier Our highest paid temps on German contractors were back at all time record volume levels. And therefore, I think we're in a really strong position. So GBP410,000,000 clearly will reflect on what we're going to do When we come to year end. But I think one of the things that's absolutely clear is if you do your modeling, at the moment, we're kind of We're trying to led everybody to something like GBP 120,000,000 dividend this year. But I think when the trading specials kick back in strongly over the next couple of years, Dividend payments are going to be certainly GBP 150,000,000 a year for the next year. So I think we're in a really strong position from a cash perspective. About 30% of our shareholder base is income funds. They've stayed with us throughout this pandemic. We're very grateful to that. And we look forward to rewarding them. On the cost base, actually, you weren't factually correct. So let me just fix that. The number that we were quoting pre pandemic was the February cost base. But of course, June's cost base Often, I mean, June's fees are greater than we were in February 2020. And we'd already started To reduce headcount and everything else going into that. So we're happy with the cost base. It is tightly in control and that there are 0 surprises at all. And it is all about the strategic growth investments, which are around making sure that we have All of the pieces in place to drive material increase in IT fees around the world. And that, of course, It's not just absolute fees. It's making sure that we're in all of the relevant subspecialisms. And Alistair talked on the last At the interims and the prelims, so we've got very strong market positions in some areas, but other ones that we need to increase. So I think From that standpoint, I don't think we're going to have a structurally higher cost base, Ambrish. I do believe if you take a 5 year horizon, we will be able to reduce our property cost by something in the region of £20,000,000 James Hilton is also leading and complete review of all of our functions around the world. And we'll look at driving efficiencies there through both automation and AI and where we are located and everything else. I think we've got good opportunities. We've always had the most efficient cost base in the industry. We've always had the highest conversion rate in the industry, and that will continue going forward. We are fairly positive on it. But what is true is that Things like coming from a cost base perspective, if we're looking at exiting 'nineteen versus where we are now, 'nineteen were very low incentive levels. Clearly, FY 'twenty one, actually, all of our businesses have materially beat their targets, incentive payments are higher, all those sorts of things. I think we're really well placed for significant structural growth over the next few years. And we're investing significantly In some areas that I think are quite exciting, Alastair will take you through in detail on those now. David would kick me if I start covering them today. He's looking at me with Doug's at the moment. You know what a forceful person he is. But I think take all of this, please, The uniformity of the recovery, the fact that we've had a few upgrades, and we know we're going to materially increase profitability next year just through the annualization of fee levels we've got. But absolutely, I'm not here to I am a top 100 shareholder. I've 15 years. We know this business inside out, and we're determined to invest ahead of the curve, And that's going into strengthening management in certain areas around the world. So we've got everything in the right place to attack the markets. It's also making sure that we've got a very strong presence in civil engineering and civil construction around the world because that's going to lead into The green economy investments that will come down 5 to 10 years into the future as well, as I said earlier, attacking the IT sector. So I think This is good investment. We're seeing the market opportunities. We set out a stall at the 2017 Investor Day. That's all profitability opportunities well beyond $250,000,000 Those are there today. And I think all of us know, whilst we all know some point in time, we're all going to put our hands in the pocket to pay for all the government expenditure that's going on. But at the moment, I think the next 2, 3 years really positive, and we're determined to attack the market. So we've got very loyal shareholders, very supportive of us focused on growth, and I think we're in for an exciting few years. Yes. Well, that's very comprehensive. And just to be clear on that, you said something in the beginning of your answer that June is anyways higher. So to take the $71,000,000 and then on the top of it applying for the $20,000,000 of investment you're making like divided by 12.5 obviously Plus the headcount would be a wrong way to think about it, right, then? Because Yes. Let me help you with that. And this is one of the things that you always Debate to the team as to what you put in an announcement and everything else. But if we look at the headcount that we've already done and the headcount that we expect to do, Excluding the return to growth projects for next year, that's about a £50,000,000 investment in increases in consultants' Headcounts across the year, so an impact of £50,000,000 Clearly, they're going to deliver some fees, but we won't fully get Next year. So there is a net investment on that €50,000,000 And then on top, we've got £20,000,000 worth of strategic growth Investments, as I said, Alastair will set the stall out. A good half of that, we get no return on at all next year, but it really positions us for FY20 Free and beyond. And we are really focused on making sure that we're putting everything in place to get back to peak profitability Either in 'twenty three or 'twenty four and to go well beyond that. That's our objective. And therefore, We're absolutely prepared to invest in 'twenty two and accept that we could. We may well leave €20,000,000 to €30,000,000 profit on the table in 'twenty So I think that's the right thing to do in a strong market. What I don't want to do is swept the consultant asset base, swept the management asset base, and we protected all of management All senior consultants across the pandemic, we're now investing to leverage off that by bringing newcomers into the business. But I don't want to focus everything on 2022, sweat that, and then lose momentum in 2023. That's not what we're paid to do. What we're paid to do Is to identify the key opportunities in the marketplace and attack those. And therefore, both in 'twenty one but even more in 'twenty two, We're putting some key investment into getting us ready for the next 5 to 10 years because the beauty of Phase is that We're the 53 year of our business, and we've got a long way to go. So we're determined to come out to this. Mean this has been a strange recovery, hasn't it? And it's been so strong, but all the signs are there. And therefore, we should not play the last downturn. We should play this recovery, and we should invest strongly. Yes. That's really helpful. Thank you so much. Thank you. We have no further questions in the queue at this point. So I'll hand the call back over to your host. Thank you. Well, thank you very much. If that's all the questions for today, we'd like to thank you all again for joining the call. I look forward to speaking to you at our next FY 'twenty one premium results on the 26th August. And should anybody have any follow-up questions, of course, David, Charles and I will be Available to take your calls for the rest of the day. Thank you very much for joining. Have a good day. And for those of you in the UK, it looks like a good weekend, so please enjoy. Thank you. Thank you for joining today's call. You may now disconnect.