Good morning, everyone, and welcome to our FY24 results presentation. I'm Bill Berman, CEO, and I'm joined today by our CFO, Ollie Mann. I'm delighted to announce a set of results ahead of analysts' expectations, and then Ollie will take us through the headline financials shortly. But first, I'm going to reflect on what has been a landmark year for Pinewood. After the successful conclusion of the transaction with Lithia, we have worked hard to ensure the company's transformation into a standalone software business and it's off to a really good start. Our main area of focus at the beginning of the year was to make sure we had strong foundations in place to support ambitious growth targets. This involved getting our resource levels to ensure we are in the strongest position possible to execute against our strategy.
This early preparatory work was so successful that we are already beginning to see it bear fruit, with early success delivering on key strategic goals set out at our Capital Markets Day in October. Let me take you through some of the highlights. We have signed up two of the largest auto retailers in the U.K. in Marshalls and Lookers, which is a testament to the strength of the Pinewood platform. We are very excited about working with both these groups and look forward to helping them grow their businesses, make them more efficient, more productive, and ultimately save them costs. Next, the acquisition of Seez, a leading automotive AI platform, in February 2025 is one of the most exciting developments in Pinewood's history.
We have a unique opportunity to use the power of their AI technology to grow Seez as a standalone business and increase cross-sale and up-sale opportunities for the legacy Pinewood business. The oversubscribed equity raise to fund the cash component of the deal shows that our investors share our optimism for the deal's potential to boost our prospects in the coming years. We are also making very good progress in expanding our international business and have an exciting pipeline of opportunities. Finally, we have made excellent progress on our North American rollout. We are on course to pilot our system in North America in the second half of 2025 before commencing full rollout later in 2026. I'll now hand over to Ollie to take us through the financial review.
Thanks, Bill. Good morning, everyone. Before I take you through the financial highlights, just a quick reminder on the period this set of results covers. With FY23 being a 13-month period ending at the end of January 2024 due to the timing of the Lithia deal completing, we are now moving back to December year-ends. So FY24 covers the 11-month period ending December 2024. As a result, FY24 and FY23 can't be compared on a like-for-like basis, so we have presented the 11 months ending December 2023 as a comparative. As Bill said, we've got off to a very strong start as a standalone software business, and our financial performance reflects that. On a like-for-like basis, revenue has grown by 15.1%, and gross profit has grown by 16.5%. This means that gross margin increased from 89.3% to 90.4%.
One of the main drivers for our strong revenue growth has been the highly successful system rollout into the remaining Lithia U.K. stores that finished in December 2024. Our high recurring revenue of 86.5% is in the 85%-90% range that we typically expect our recurring revenue to be in. The majority of our non-recurring revenue is training and implementation income from rolling the system out. The vast majority of our cost of sales are resource hosting costs. We improved gross margins by implementing a number of cost-saving initiatives on our hosting setup while still optimizing system performance. Operating costs have increased as planned year on year as we've built up our team, so to better position the business for growth over the next few years. Finally, our underlying profit before tax of GBP 8.5 million was ahead of analyst expectations.
Moving on to slide seven, where I'll talk through the key movements in our cash flow during the period. Although the Lithia transaction completed on 31 January 2024, the cash movements associated with the transaction completed on 1 February 2024. You can see a number of these movements on the cash flow slide, including the transaction proceeds and repayment of loans, the GBP 10 million investment in a North American JV, and then finally the GBP 358.4 million dividend paid to shareholders. While the accounting and legal steps were taken to pay the dividends, interest of GBP 4.3 million was earned. In September 2024, we made an initial investment in Seez, acquiring 9% of the business for $4.2 million, or GBP 3.2 million. All of these movements, in addition to the cash generated from trading, led to a year-end cash position of GBP 9.3 million.
In March 2025, we also received £9.9 million from Lithia relating to a tax debtor, as well as several million pounds from the equity raise in February 2025, so we are in a good cash position. But as Bill will take you through in more detail later, we have a strong pipeline of strategic opportunities, and we are continually looking for ways to maximize the growth of the business. On slide eight, you can see the end of FY24 balance sheet, and the headlines from this are closing shareholders' funds of £39 million, with the main driver to the reduction being the £358 million dividend, the £9.6 million investment in the U.S. JV. This is the initial £10 million investment less our share of costs incurred during FY24. The other investment of £3.2 million is the initial Seez investment.
Other intangible assets of £16.3 million is the capitalized software asset that has increased as resource levels and development work have grown during the period. The £21.4 million receivable balance includes the £9.9 million tax debtor. Then the final balance to call out is the £9.3 million cash balance. In addition to this cash, we also have a £10 million RCF facility, which remains undrawn. Onto slide nine, there are a number of non-underlying items, most of which relate to the Lithia transaction. There were £2.2 million of restructuring and transition costs following the Lithia deal and transaction costs of £0.9 million. In addition, £4.3 million of interest was earned on cash held while the special dividends relating to the transaction were being finalized. Other items include the share of the JV results, which was a cost of £0.5 million, and share-based payment charges of £1 million.
I'll now hand back to Bill to run through the operating highlights and the strategy.
Thanks, Ollie. I will now take you through some of the highlights for the year and early progress we've made against our strong strategy. Key to our growth this year has been the significant expansion of our user base, which was up 6% to more than 35,000 users. Alongside this, we maintain our focus on vertical sales, or upselling into existing customers, as well as new customer wins that have also driven revenue increases. Ollie touched on the net churn we saw in our customer base, which remained exceptionally low at just 1.1% for FY24. This shows the strength of our solution and the sticky nature of our customer base, which supports an attractive rate of recurring revenues. Given the increasing impact of vertical sales, we feel that user count is not the best metric to assess our business performance.
As we move forward, we'll currently look at other potential alternative measures. We also signed a five-year contract with Marshall Motor Group to implement our full product suite across all of the dealers across the U.K. Winning a contract with one of the top dealership groups in the U.K. is a significant milestone for the business. We are looking forward to getting started on working with Marshall Motor Group, and we expect the rollout to begin in H2 2025. Moving on to slide 12. For the past year, we've had it very clear that North America represents a significant opportunity for Pinewood. As such, a key area of focus in 2024 has been preparing for the system rollout there. Our product and development teams are making good progress in enhancing the system to U.S. customer-specific needs.
We remain on course to pilot the system in North America in the second half of 2025, with the full rollout beginning in mid-2026. In recognition of the potential we see in the market, we'll be opening an office in North America, meaning we'll be closer to new and existing partners. This base will be opened during 2025, and we've already started to recruit our North American team. Last year, our technical teams were hard at work developing a new user experience for all Pinewood system customers. I'm delighted to confirm that it'll be launching during 2025 after several years of development work. This is a complete update to the front end of our system and all parts of our customer usage. The underlying architecture of the system remains the same, supported by market-leading security measures.
As we have one version of the system used in all countries that we operate in, the significant enhancement in user experience will benefit all of our customers. It will be used in all system rollouts going forward, including Marshalls, Lookers, and our North American pilot. We look forward to sharing more of this with you, including some of the new features, once the UX launches later this year. Following the year-end, we signed a major new contract with Global Auto Holdings. They are one of the biggest auto retail groups in the world, with franchise dealer locations in the U.K., North America, and Scandinavia. The largest part of their group are the ex-Looker stores. They are one of the U.K.'s largest auto dealer groups. They also have a sizable presence in North America and Scandinavia.
The agreement is well aligned with our strategy, with Global Auto Holdings's global footprint straddling three of our four strategic pillars. In recognition of the scale and nature of this agreement, we issued Global Auto Holdings with a cashless warrant for which the strike price is 330p. The warrants are not only exercisable once the Pinewood system rollout is completed in separate geographies, with 5% relating to the U.K., 1% to North America, and 1% to Scandinavia. Another significant event in the past year is that we took the acquisition of Seez, a leading AI machine learning and AI generative automotive platform. This follows our initial minority investment in Seez, during which time we were impressed by the quality of their technology and the potential it had to bring further benefits to Pinewood users. We therefore took the decision to acquire the remainder of Seez in February 2025.
At our Capital Markets Day in October 2024, we outlined our approach to expanding our products and adding new verticals. In summary, we said we would weigh up whether it made sense to build the technology in-house, buy the technology to accelerate strategic progress, or partner on some products through a revenue share agreement. In this case, we took the decision that the speed with which Seez would bring benefits both to our customers and to Pinewood's earnings profile far outweigh the cost and time associated with developing the technology ourselves. In the short term, Seez chatbots offer an opportunity for significant revenue generation, particularly in North America, where over 90% of dealers are using some form of AI chatbots.
Lithia Motors' commitment to install Seez chatbots into all their U.S. and U.K. stores will not only enhance revenue as soon as they are launched, it will also be an opportunity for breaking into the market for Pinewood AI branding across all of North America. GBP 26.7 million of the GBP 35.7 million of gross proceeds generated from the equity raise was used to fund the cash element of the Seez acquisition, with the remaining proceeds used to accelerate Pinewood's growth opportunities. Onto page 16. In terms of how we have progressed against these strategic goals, we couldn't be more pleased with how the Pinewood team have responded. On the U.K. and Ireland, we have already achieved our objective of securing two top 20 U.K. dealer groups, which is a huge achievement and underlines the confidence that customers have in the Pinewood system.
Internationally, we continue to pursue a number of avenues where we have shortlisted for a number of sizable contracts in Central Europe. We continue to expand our vertical sales channels, are developing a number of new revenue streams in-house in areas that haven't previously been monetized. Finally, in North America, we are extremely pleased with our progress so far. Our product and development teams are making excellent progress in localizing work needed for North America. And finally, onto slide 18. As we've set out, our priority in the upcoming year for the U.K. is to replicate what we've done with Lithia U.K. with Marshalls and Lookers, in delivering a best-in-class system implementation, which will enable them to run their business more efficiently, more productively, for a significant reduction in cost.
We have added talent and expertise to our already strong sales team, and we are confident that we are well placed to add to our customer base in the top 100 U.K. dealers. As outlined in the strategy section, our priority markets remain North America, Central Europe, Japan, Southeast Asia, and South Africa, and we are confident in the pipeline in each of these regions. We are focusing on rolling out our new user experience during 2025, which we think will significantly enhance the customer experience on what is already a market-leading system, so looking ahead, we expect underlying profit before tax for FY25 to be in line with current market expectations. Beyond that, our previous guidance for FY27 was underlying EBITDA of GBP 30 million. We're increasing this to a range in the mid to high 30s for underlying EBITDA in FY27.
Thank you for joining us today, and we look forward to any questions.
I'm going to do questions now. Jack's going to come around to do in-room ones first with the microphone. So if you've got a question in the room, and then we'll take the outside room ones after that.
Yeah, thanks a million. It's Kieran Donnelly from Berenberg. A few for myself, maybe just to kick off first. In terms of the commentary around the potential scenarios for the US JV, I guess without kind of sharing too much, could you just talk us through what kind of the range of scenarios you see and potentially what you see as maybe an optimal scenario?
Sure, so ultimately, the JV, I think, was a great way to break into North America. Our product's great. We're in 21 countries. It works. We know we can go into North America. The uniqueness about that structure is that we got to partner with Lithia. So we had access to their well over 300 stores, and they've given us thousands of man-hours' worth of their time and effort to help us bring the product to North America. But on a go-forward basis, with the current JV structure, there may be some limitations on us being able to break into the market. Oftentimes, not too dissimilar than we had when Pendragon was the owner, it would be a limiting factor in being able to sell to other dealer groups.
We're in discussions with Lithia right now in a number of different ways to look to exit them from the JV possibly and for Pinewood to take control over it in total. And there's a number of different ways you can do that, whether it's cash, whether they're a financial instrument, maybe exchange for equity for equity, or a combination of two or three of those in conjunction with all that. But they've been great partners, and they're very receptive to the conversation. So hopefully, sometime later this year, we'll be able to come to the market and let everybody know where we're at.
Maybe second question, just on the international pipeline. Sounds like that's progressing quite well. You've clearly had great success in the U.K. Is there any kind of different dynamics that we should be aware of in terms of winning new customers in the international market versus the U.K.? Any differences, I guess, would be interesting to you.
I mean, there's definitely differences in localization, and operating systems are slightly different the way people transact. The nice thing about our system is very flexible, so we can accommodate that. Other of our peers or competitors out there actually have different systems for different parts of the world. That's very difficult to maintain multiple systems, multiple versions of those systems. If you have stores in multiple countries and you have one system for one country, another one, it really puts a lot of pressure on the dealer group, and a platform like ours, which borders really don't matter, we're language agnostic, so we can facilitate multiple countries, multiple languages, even multiple languages within a single footprint, gives us a great advantage.
Just how you can see some of the economic headwinds out there, whether it's inflation, interest rates going up, potential tariffs, and whatever else, there's definitely headwinds on costing within the dealer groups, and a platform like ours gives them the ability to be much more efficient, generate higher productivity, and ultimately lower an overall cost of operation. It really puts us in a good position going forward worldwide.
And maybe just final one from me. Great to see, obviously, upgrading the FY27 medium-term target. Maybe, Ollie, could you just touch on kind of visibility in terms of, obviously, short term, but maybe going out to FY27, kind of obviously you've given a range of mid to high 30s. How should we think about that? And I guess in terms of the visibility you guys have out to that point.
Yeah, sure. Look, before, when we did the CMD back in October, we came out with £30 million for FY27, which at the time we said we were confident in, and there was upside potential. We're in the same position now with that mid to high 30s. Look, we think since then we've signed the Global Auto deal, we've bought Seez, and we think, look, we're very comfortable with that point. We'll see how things progress. Look, in terms of Marshalls and Global Auto, we think by that point, by the start of 2027, they'll both be on. Look, Seez, we've had a really good start. We're only a few weeks in, but we're already in a really good position with them. We're very excited. Look, we think there's upside potential there, but we're confident in the FY27 numbers, the guidance we put out.
And Kieran, the way the rollouts go and because it takes a chunk of time to be able to do that, you start looking out forwardly. To Ollie's point, we can look and know that we'll get Marshalls and Lookers on between now and the end of 2026. You pretty much know what the revenues, EBITDA, and ultimate net will be of that. So we're very confident of that. There's not a lot of volatility to that. Even if we signed up another large customer by the time you do the behind-the-scenes work and implementation, you have to align two different contract periods with them. Even if we signed someone else big, it wouldn't necessarily be a huge add into 2027. It might be modest, but that would really play off into 2028. And that's just the kind of the sales cycle and the life cycle that goes with this.
The big thing is, Kieran, sorry to just add into it, is that we get a question on the recurring revenue quite a lot, and we don't see a big change in that going forward. So historically, we've been in that 85%-90% range, and we see us staying in that range going forward. So it gives us great visibility and confidence in what we've got coming through.
Brilliant. Thanks.
Hi there, Andy Wade from Jefferies. A couple from me. First one, K.W. Bruun, the European distributor. How confident are you in the 200 sites there that they're going to be part of the rollout opportunity?
So in that transaction with Global Auto Holdings, within that, there's eight dealerships there that they bought directly, and they're putting onto that system. I can't speak for Global Auto Holdings, and it's not part of the deal, but it doesn't make sense to have eight stores on one system through the distributor and the other 200 on various different systems. In conversations with them, ultimately, they would like to go down to a single platform. And I think we're in the pole position for that, but can't comment to it. We haven't figured that into any of our forecasts or whatever else, but we think that's definitely an opportunity for some upside.
Cool. Plays into our sort of USP, if you like, for groups of size and scale, reducing that headcount cost and operational efficiency. So we can't speak for them, but we think that certainly plays into that. I guess once you've tried it. Yeah. Okay, cool. Second one, any sort of color you can give us as people who are closer to it on sort of progress that Tekion's making, given they're sort of a bit of a forerunner for what you're looking to achieve out there?
Listen, they've got a great product. They started in 2016 from nothing and have built themselves into a big player. They're not sure of the exact size here, but I think they have probably about the same number of users that we do, give or take. Overall, the nice thing about them is they're kind of plowing a road for us, so we get to go in behind. Right now, I think they've got some challenges with some of the incumbents. There's multiple lawsuits flying back and forth at each other between some of the incumbent systems and themselves. While they work through that, we continue our path in partnership with Lithia. And as that vets out, I think that just helps us as we go forward. It's a huge market, 20,000 groups. I'm sure they will come out ahead and be competition for us, but it's a big market.
With 20,000 opportunities out there, they can have their piece, and we'll take ours.
Great. Thank you. And then last one, I risk this being a very naive question, but I'm going to ask it anyway. The decision makers for you are obviously pretty senior in the businesses, right? I'm just sort of genuinely interested why you really need to bulk up sales teams when it's the senior guys that are the ones that, well, guys and girls, that make the decisions. Interested in the process side of things, really.
Part of it is just because we're across 21 countries, so there's just size and scale to be able to handle that way. To the point that Ollie talked about, and then I referenced being in the vertical sales channels, well, like a Global Auto Holdings or a Marshalls, Ollie and I, the senior management team would be involved in that. When it's a new product that we're selling vertically through there, that's probably not going to be handled at that level, and you'd have a traditional sales associate do that. Some of the AI chatbots that Seez is going to bring to the table for us, it's easier for our team to go out there and sell that in there. You've got to think a lot of our current customer base is the small to medium-sized dealers.
We were kind of locked out in the past because of our ownership by Pendragon, so now that's off. That's how we've got Marshalls and Lookers and opened up that market. Those still might be handled by Ollie, myself, and the senior management team, but the 5, 10, 15, 20 store group, they have account managers. They have great people they work with. That's who they know, and that's who it'll sell through to. It's actually a really good question, but then again, we've got stuff in Sweden and Switzerland and Japan. They're only, I think, a day behind us or ahead of us or something like that, so we have other people over there to handle that one.
Makes sense. Thanks.
Hi, Damindu from Peel Hunt. Maybe other people know the market landscape well. I just wanted to ask, is Central Europe, Japan, and South Africa, the region, especially Central Europe, is the competitive environment very similar to North America? Are they the same players? And relatedly, I was just going through the Tekion versus CDK lawsuit that it's interesting, even when they had that court win where the data was supposed to be handed over, they made Tekion drag on in that, I think it's a discovery trial, essentially forcing Tekion to spend money before go live and get charged. Do you see similar kind of competitive environment in those other regions, or?
Not necessarily. So I can talk to the Tekion on that piece in a second. But if you go into France, for example, it's a handful of French platforms that exist in there. Reynolds and Reynolds from the U.S., Keyloop, have a moderate stake there. If you go into Germany, there's like 20 different companies doing this. Of all the countries, you would think there'd be some more standardization and structure. It's kind of a free-for-all. And nobody really has much more than low double-digit share, like 10%, 12%, 13%. So that actually opens up a really good opportunity because it's just so fragmented and people are on multiple systems. Especially if we're able to partner with an OEM, we can come into it. Nothing's quite like the U.K., where right now we're pretty much us, CDK, and a 10%-15% with some small groups out there.
You get into North America. Three groups right now, incumbent groups have, prior to Tekion, had about 80% market share. I think that might be down to 75% at CDK, Reynolds and Reynolds, and Dealertrack. Now you have Tekion coming in. There are a few small players kind of floating around, but they're incredibly small. Data is everything at the end of the day with this. One of our best strengths is, yes, we have a great tech stack, but the purity of our data. This is also what powers AI. So with the Seez combination, having access to this pure data stack sits here and really supercharges that product. There's multiple different ways to access data and to be able to get it out.
And over the years, we've become very creative with that, working within the confines of whatever the local rules and regulations might be on that. But it'll be interesting to see how the CDK and Tekion lawsuits. Because now CDK is suing Tekion for piracy and hacking and everything else. So those are some pretty big allegations. But by the time they're done beating each other up, hopefully there'll be clarity on directionally which way everything goes.
Can I also ask, I guess it's a month or two ago, another conference, NADA conference, I would say, in the US, and I was looking at this long-term data trend that one of the chaps was presenting. It's interesting for a very long time, in aggregate, the dealers were basically making 2%, 3% PBT margin, and then obviously, COVID changed everything. New car versus used car, and then there's kind of a mean reversion happening, I suppose, so it's.
I can plot this out, for I've been in automotive for 30 years in North America. It's a cycle. It happens where genius is one minute and maybe not quite so much the next, whether it was 1992 in the dot-com bust, the financial crisis, 9/11, now COVID, and supply chains and different things like that affect this stuff. But in aggregate, for a moderate-sized dealer group with a mix of brands, if you're at 3%, you're doing a good job there.
Does this kind of coming off the peak present to you guys an opportunity?
Absolutely. Absolutely. So you don't have, I mean, right now there's maybe a few more headwinds in the U.K. You heard Vertu a month ago or something talk about the headwinds at GBP 10 million between minimum wage and the new tax on National Insurance and as such. You have similar pressures, but slightly different in North America, whether it's increased interest rates, inflation, who knows how the tariffs are going to affect into that. But you have the traditional headwinds, and things are kind of normalizing. So we're not in the peak or a valley. We're kind of in that trough. And a system that can give you higher efficiencies, generate more productivity, and ultimately give you a lower cost of operation really are attractive at that point. And when I'm saying lower cost of operation, it isn't that our platform costs less than a competing platform.
It's ever hard to really compare because everyone's got different ways of doing it. It's our system facilitates the ability to operate with a much lower number of people to be able to sit here and do it. So a lot of the stuff that Ollie did prior life in conjunction with Pinewood have facilitated an accounting platform that doesn't need the same staffing model that the incumbents have currently in North America, for example. So yeah, this opens up huge opportunities. And to your thing here, talking about long-term data stacks in North America, this is one of the keys because if you look at the incumbents, primarily, and they've bought lots of bolt-ons and third-party layered apps, but they only have transactional data. They can't get the CRM data. That's in a different layered app. And some of that comes through. Used cars are a different one.
After sales is something completely different. CRM is a completely different world, and if you're trying to aggregate data, you're trying to copy from all these different things here. There's multiple duplications. It's virtually impossible to truly cleanse it out. You never get one version of the truth or one version of your customer, and on a modern platform like us and the way our system's set up, you get a pure data stack, which really becomes of value to go out there and drive this up. When we worked through this with Lithia and we walked through our vision, they literally looked at this, and their biggest expense is SG&A, and the biggest part of that is human capital.
And they're starting to look at it. Well, if I can reduce this many people, if I can get lead conversion up one point, if I can get an extra tenth an hour per day per tech at their size and scale, this starts to ratchet up for them very, very quickly. So as we go into there, we have a compelling message. Better tech stack, more secure, higher efficiencies, higher productivity, lower overall cost of operation. It's not the easiest, it's not the hardest conversation to have with a car guy.
Bear with me one second.
Yes, Catherine from Edison. Just, I think you already hinted at it. Automotive tariffs, what are your thoughts on how that will affect dealers in all countries that you operate in?
I'll put it how it affects us, and then I'll give you context just from my experience outside of the tech side. Tariffs exist and gone back and forth. Like I said, I've been doing it over 30 years in North America. The original version of NAFTA and whatever else, they're constantly going out there. Personally, I don't think there'll be something that lasts for five years or something like this. I think this is a means to an end. Just my own personal opinion. There'll be some disruption in the short to medium term, then ultimately, everything will ultimately play out. As far as it affects us directly, it kind of goes back to that example.
We can still give, if you have more headwinds, if you have margin compressions, if your prices are going up, if your costs are going up, a platform like us helps mitigate some of those threats. So whether it's the higher minimum wage or the increased National Insurance tax here right now, or it's a tariff on cars that pushes that up, or interest rates or whatever else, we can give a more modern tech stack, a better customer experience for a lower overall cost of operation. It makes a product like ours even more necessary today than it would have been yesterday.
Just to add some color to that, as an example. So in a dealership, technicians every minute is chargeable. And as Bill was saying on competitor systems, if you've got four or five different windows open and having to navigate around those, taking five or 10 seconds isn't a big deal. But if you've got 10 or 15 technicians in a workshop having to do that 15, 20, 30 times a day, it stacks up and makes a big difference. So we can see that, and we've seen that with our customers. And that's one example. But as Bill said, in times like this, that makes all the difference. And it quickly shows in the bottom line for our customers.
Ian from Progressive, just trying to get my head around, you talk about the data stack and the tech stack. One of the things about car dealers is they don't make money selling cars. They make money from servicing cars. So when you're going to the customers, what are you selling? Who do you pinpoint? The head of after sales? The head of used?
First of all, I disagree with you. It depends on what part of the world you're in. The most profitable and the highest flow-through within the revenue stream within a dealership is finance and insurance. So in North America.
Touchy point this week. Touchy point in this country.
It is, but still, even though it's nowhere near as high of a revenue stream as you get in North America, the flow-through is extremely high, so no, after sales, and we have different products and different components that facilitate different aspects of the sales journey, so we have obviously a CRM and a front-end tool to be able to engage with the customer in the early stages, be able to present offers, whether that's digitally, online, in person, part exchanges, and all that type of stuff, and then we have the same thing for finance and insurance, a very rigid pathway to make sure we comply with all the local rules and regulations, no matter what part of the world we're in, whether it's GDPR and how we disclose different things in a U.K. context.
And then in the after sales, we have a very mature product called Service Intelligence, which gives the ability for a customer to engage digitally soon via a bot outside this and be able to do what Ollie was explaining and be able to track the whole progress through. Generally, when we're having the conversations for a group, you're normally starting at the top side of the business and giving them a whole customer journey. This is how your sales process would look. Now, obviously, it's flexible to accommodate if you want to do it outside of the core pathway and the same thing with service and the same thing with accounting. So it's a holistic approach. I talked about it, and Ollie led this with Pendragon many years ago.
We took the back office accounting from well over 400 people to just over 200 people because of Pinewood and because of the way that tech stack is. If our product did nothing else but just do that on a mid- to large-sized store, it more than offsets the cost of the product coming into it. So once again, it depends on the audience. Some people are more sales-oriented, some people are more service-oriented, or just overall cost-oriented. We're able to sit here and cover all those. The best thing about our product is, I would say, we're industry-leading in every single one of those aspects. So it's a holistic approach to going out there. But once we talk to a CEO, CFO, you're always talking to the CTO or the tech guy, and then you're talking to the business leaders for each one of the individual departments.
Thanks. Looking ahead, we always get very excited about top 10, top five, whatever. Where do you think the sweet spot is going to be for you going forward? Should we be sitting there waiting for top 10 announcements, or are we happy with the top 50, top 60? Don't care.
We're not going to probably even keep referencing that anymore. That was one of the challenges we had last year. A lot of the questions that were brought up, we had at that time in the high 25%-30% range of overall rooftops within the U.K., but it was the mid to small-sized groups because we were kind of locked out of the large groups because of the old ownership. We're in a good place now. We want to serve all customers. So if you have two stores, ten stores, or 300, we want to be there for all. So it's not just to target the big ones. It's how can we penetrate the market to the fullest?
Thanks.
Thanks. Yes, Kieran from Berenberg again. Just maybe looping back on one point. On the North American go-to-market strategy, I guess, could you talk about the Seez's sales cycle relative to the Pinewood Core platform sales cycle? I assume it's shorter.
Yeah.
And therefore, I guess, could we think about Seez almost as a kind of Trojan horse in terms of entering some of these U.S. auto dealers, obviously ex-Lithia?
Yeah. So we just, I actually kind of mentioned that in the script, but Seez outside of where Pinewood exists and through our current footprint, Seez will remain branded under Seez. So whether in the Middle East, Mexico, South America, Australia, and such, it'll be Seez. As they go through our products here, it'll be incorporated in the Pinewood AI, and that's where we're going to go to North America with it. Lithia’s already liked the product they have. We're localizing it, and that'll be able to roll out. Yes, the sales cycle is much shorter there. It's weeks and months, not quarters and years, to be able to go out to market with that. And in North America, that'll be our first entrance into the market. And absolutely, we want to be able to leverage off that over time.
They have some great tools that we haven't even talked about, well, next time we sit down, we'll be able to go over with everybody. Those will definitely be things that could literally pivot us in and be able to start there and then be able to put our core system in in conjunction with that.
Thanks.
There've been a few questions through on the web chat. A couple from Roger Phillips at Investec. The first one is, can you talk about the outcome from competitor cybersecurity issues last year? Is that accelerating any competitive landscape shift in the US?
I don't know if it's shifting the competitive landscape, but it's definitely on everybody's radar where I think in the past, dealers looked at their own networks and their own vulnerabilities. They didn't maybe necessarily look at the OEM or their core system provider. I think just by the nature of it, you would have thought it's secure. Any large group has cyber hackings everywhere, and they're going after everybody. Our system is different than theirs. So we've got as high of a cybersecurity platform as you can possibly have. Our risks are more if our actual cloud hosting through Microsoft got hacked. That's something I can't protect against. But say that we have the highest, but going into there, and we even talked about it in the script, cybersecurity is now a talking point where in the past it wasn't.
And it's a top two or three talking point now where in the past it was just an assumption that it was there. But it's definitely on everyone's mind now, and it's a point of, I wouldn't say contention, but it's a point of conversation. I will say the team for years has done a really good job focusing on that. We continue to focus on that, and we continue to find ways to beef that up, whether it's internal hackathons on ourselves trying to break into our own system. We do pen testing. Outside of it, we use third-party companies to be able to facilitate and look for vulnerabilities and stuff. But we feel confident where we're at right now.
Roger's second question is on the Lithia rollout. He asks, can you talk about what the key software development milestones to hit in the next year are and if there are any change to timescales there?
No, I mean, the timescale, as much as anything, is going to be on our customer side, whether that's Lithia or anybody else. These are, you're taking a huge company. I think this year, don't quote me, but I think the trajectory is to be close to $40 billion in revenue. I mean, they're selling 700,000 cars a year. So changing your core system is no small effort. So, as such, we're going to go at their pace and speed. The core integrations that we have to do, first and foremost, are the OEMs. While you would think Mercedes-Benz in Germany, in the U.K., and the U.S. would have the same tech stacks and same integrations, they don't, and they're, for the most part, bespoke by geography. So the biggest hurdle is to get through that, but we've progressed quite far with several of the OEMs.
We don't have to have them all done at once. So if we start with OEM A and have a pathway there, we can start rolling out stores there and then B, C. The only thing that does is instead of being able to roll out geographically, you're going to roll out by OEM, which is fine, and we can facilitate that. Tax, title, and license is probably the most complicated thing in North America. Anything else that we don't have, if there's some nuance or whatever else, we can write an API into a different application if we feel that that's needed. And/or, and what we've done in most cases is just write our own solution in real time. It's what's great on being on a modern tech stack and having a product and development team like we have.
If there's an opportunity, we can go out there and go out there ourselves. But the biggest one's Tax, Title, and License and OEMs.
The final question is from James Musker at Singers. He asks, please could you speak about the terms of the Lithia deal in the U.S.? Are Pinewood or Lithia tied to any exclusivity arrangements? What still needs to be agreed to roll out in Lithia's U.S. sites? And what has already been contractually agreed?
No, there's no limitations. Ultimately, contractually, as long as our product is viable, they're obligated to go on. We have through the end of 2028 to facilitate that. Outside of that, the only thing that's left is pricing. In conversation, we're aligned on pricing, which compared to the U.K. pricing is quite favorable on both sides. It gives them better than what they currently have there and gives us a much higher, if you used on a per rooftop or per user basis, revenue stream from there. None of that's been finalized. It's just been talked at the highest level. Once again, they're partners in the JV with us, which hopefully we'll be able to look for a different structure in that later this year. They're a shareholder, our largest shareholder in the PLC, and they've been nothing but great partners.
So for them, this is a huge opportunity for them. So first off, they get to be a first mover. They get to get all the advantages. They don't look at this as a Lithia solution, but an industry solution. They just get to be the first ones to take advantage of it.
There are no further questions on the web chat, so I'll hand it back to Bill and Ollie for any closing remarks.
No, listen, it's an exciting time. We accomplished a lot in a year. I tend to set insane expectations, and the team met every single one. Andy and I go back too far, and the team exceeded every single one of them, so just a great thank you to the entire Pinewood team for all their hard work and effort, and appreciate all of you coming out today.
Thanks, everyone. Thank you.