3i Group plc

Welcome to 3i's FY25 annual results presentation. I'm Simon Borrows, CEO of 3i Group. On the call with me today are James Hatchley, our Group Finance Director, and Silvia Santoro, our Group Investor Relations Director. The slides supporting our remarks have been put on our website this morning. Last year, when I kicked off this meeting, I started by describing our purpose and approach to building long-term shareholder value. I said our purpose remains the delivery of attractive long-term returns to our shareholders and co-investors. We invest selectively in private equity and infrastructure assets and take advantage of our permanent capital to run our winners and to build the long-term compounders within our concentrated portfolio. We focus on thoughtful, thematic origination linked to ambitious plans. Our objective is to at least double the profits of the companies we buy. Importantly, investing well is our overriding priority. And we don't have to buy into what we see as overpriced vintages just to put third-party monies to work. The results of this approach can once again be seen in today's numbers. We generated another impressive return on equity of 25%. And that was on top of 23% return last year. This is the fifth consecutive year we have delivered a total return of over 20%. Our NAV per share finished at £25.42p. after a foreign exchange translation loss of 259 million. Private equity produced a 26% gross investment return, as well as generating cash proceeds of some 2.3 billion pounds. We ended the year at 3% gearing, and we announced a dividend of 73 pence per share. That's a 20% increase on last year. Here is our Maramico chart. showing the 3i portfolio on a page at the 31st of March, 2025. A share in 3i is a share of this portfolio. 87% of today's portfolio is anchored in private growth companies that are focused on three sectors, value and private label, infrastructure, and healthcare. These are sectors that we believe will offer both consistency and resilience across the economic cycle. The shape of this portfolio gives us a strong foundation for further good compounding in the years ahead. Okay, turning to the FY25 results, I'll start with private equity, where we generated a 26% gross investment return. That 26% includes a 32% gross investment return from action 97% of the portfolio by value grew earnings in the year. In fact, six companies excluding Action grew their earnings by over 20%. The overall return for the non-Action PE portfolio was a little over 10%. And that's after the foreign exchange headwinds I mentioned a minute ago. We used close to £800 million of our proprietary capital investment to increase our stake in action, and we made three new investments, along with further investment into the existing portfolio, which makes up the balance of the £1.2 billion. Cash flows from both realisations and dividends were strong, with action contributing some £1.6 billion of our £2.3 billion total. As we move into FY26, the portfolio is positioned defensively and has decent earnings momentum, particularly amongst our larger companies. And we have only two companies going backwards this year compared to six last year. Overall portfolio performance has improved materially since last year, as you can see here. We had nine large value declines in FY24 compared to just one this year. and our large value increases have overwhelmingly come from earnings growth. Now, this is clearly going to be an unpredictable year. We've certainly seen some new policy approaches out of the US, but we've also seen a very solid start from the portfolio in the first three months of the year. In fact, we're budgeting for another good year of compounding growth. With the geography and shape of our portfolio, we have very little direct exposure to the changes in U.S. tariff policy. Over 90% of our portfolio by value is headquartered in Europe, and very few of our companies actually export to the U.S. We're building a portfolio of compounders to underpin long-term growth. Raw Sanders has joined action as a long-term compounder and is performing very well. We believe we have several other potential candidates for our long-term hold strategy, even if they're unlikely to quite get to the 159x return that Action has already reached. Action produced another very strong performance in 2024. They delivered sales growth of 22% and over 350 store openings, as well as 10.3% like-for-like growth. Scale benefits and excellent cost control delivered 29% growth in EBITDA, and Action had another strong year of cash conversion. It also collected a number of consumer awards again. Last month, it won France's favorite retailer for the third consecutive year. Action made significant cash distributions last year, and once again, We used our proceeds to increase our stake to 57.9%. We also bought out the remaining action carry. That means the full economic benefit of actions performance now benefits 3i shareholders with no dilution. Action has made a strong start to 2025 and delivered a significant milestone in implementing the next generation technology of its ERP software vendor. at the turn of the year. The minor issues with store availability arising from the ERP implementation were fully behind us by the end of March. So store availability has been back to normal since then. Year-to-late like-for-likes for the end of last week were 6.8%, indicating growth above 7.5% like-for-likes since the end of March. Trading across all actions countries continues to be market leading, although on a relative scale, we note a weaker consumer in Belgium, France, and Germany compared to the Netherlands, Poland, and actions newer markets in the south of Europe. Action has opened some 76 stores so far this year, including three very successful openings in Switzerland since the start of April. Early trading puts two of these Swiss stores in Action's top 10 table of store performance. Clearly, that suggests Switzerland will be another very good market for Action. And cash is currently 427 million euros after paying another dividend in March. Action will open its 3,000th store in June, another significant milestone. Their current European white space analysis indicates a total potential store count of over 7,700 stores. And action is continuing to make significant investments to deliver its long-term growth agenda. And as I've emphasized before, through our invest permanent rather than time-limited fund capital, that gives us the advantage of being able to take a long-term view. and support action in its considerable potential over decades, not years. And we aim to do more of that with other portfolio companies. For example, Raw Saunders, our second long-term hold asset, also delivered another very strong performance with excellent organic growth in the personal care category. That organic growth combined with some strong contributions from the eight acquisitions they've made since 3i's investment led to a very good return over the year. And the contributions from Boltons will continue in the coming period as they fully integrate the recent acquisitions of Carium and Treacle Moon onto the Royal Sanders platform. The PE portfolio outside action delivered a resilient performance. The consumer sector produced some outstanding growth, with only a slight drag from a few smaller discretionary consumer businesses. Healthcare made a more modest contribution over the year, but the momentum has built nicely over the last few quarters, and we expect to step up in returns as the recovery and demand in the biologic sector continues to pick up. The industrial sector made a decent contribution, and it was good to see TATO having a good comeback year. And the services and software sector performed resiliently, with the exception of Wilson, and that was due to continued weak demand across the recruitment sector. It was another disciplined year for new investment, but we acquired three quality companies. We invested at sensible prices in themes and sectors we know well, like OMS in the testing sector. and we continued to avoid getting caught up in aggressive auction processes. We also remained active in helping our portfolio companies secure bolt-on acquisitions. And critically, all but one of the 12 additions were financed by the portfolio companies themselves. Despite the fragility of the transaction market, we also achieved some good outcomes on two significant disposals, Nexion WP. These two sales delivered 2x plus returns and were sold at a premium to their marks. In infrastructure, the team remained a leader in the sector with strong portfolio performance. But that investment performance was not recognized in the 3i infrastructure share price, which is now some way behind the consistent growth in NAV. We believe that a responsible approach to investment and portfolio management supports the delivery of active returns over the long term. And it's with that in mind that we set our science-based emissions reduction targets last year. These cover the emissions associated with our direct operations and those associated with our portfolio. Good climate stewardship helps us to support our portfolio companies to position themselves on the right side of climate transition. It also protects our portfolio and us as a business from a broad range of commercial, operational, and reputational risks. In FY25, we made particularly good progress with the two portfolio targets you can see on this slide, and we will update you annually on progress against our targets. Okay, I'll now hand over to James, who will provide the financial review.

Thank you, Simon, and good morning, everyone. Our total return on equity for the financial year was 25%. This result again demonstrates the potential embedded in our portfolio for the delivery of consistent returns year after year. You can see the detail here. The increase in NAV was principally driven by value growth of 500 pence per share. Foreign exchange movements were negative 27 pence and carry movements negative 5 pence. Portfolio income and fees contributed a net 49 pence increase. The dividend payments in the year reduced NAV by 65 pence. That meant we closed the year with an NAV per share of £25.42, up 22% from last year. You can see the components of the 500 pence per share or £4.8 billion of value growth here. Action continued with an impressive contribution of £4.3 billion. The PE performance increases significantly outweighed the decreases. Royal Sanders, Auderley, Taito, MPM and Certec were the largest contributors to the increases. Over the year, we made a small number of changes in multiples, but these netted down to zero. The change in the quoted investment portfolio of £29 million came from the decreases in the 3IN and basic fit share prices. The portfolio ended the period with a value of £25.6 billion. We continue to apply our valuation process consistently and it's withstood the test of time well. So, starting with action, we continue to value action on a post-discount multiple of 18.5 times its LTM run rate EBITDA of 2.3 billion euros. At 31st of March, that gave us an enterprise value for action of 43.1 billion euros. The value on the 3i balance sheet, which takes into account our shareholding of 57.9%, was 17.8 billion pounds. If we look back a year to March 2024, when action was valued on an EV of 34.2 billion euros, and compare that EV to the outturn for the Rumray EBITDA this March, you arrive at a forward-looking multiple of only 14.7 times the Rumray EBITDA action achieved one year later. Having these two benchmarks for the action valuation, 18.5 times and 14.7 times, is helpful when you're comparing action to the usual peer group. These two charts cover the period from March 24 to March 25. You will notice some fluctuations in the latest quarterly mark for some of the peers. This is nothing new. On an LTN basis, actions valuation continues to sit well within the better rated peers. We think that this valuation is justified given that actions operating KPIs continue to be better than its peers. On a next 12-month basis, action sits above but closer to the average of the peers. But as you know, our valuation process takes a long term through the cycle approach. So in that context, it's helpful to look again at multiples over a longer time frame. This slide shows the peer group average multiples over five years. On this chart, I've shown the year end position and extended the chart to early May for context because of the recent choppy markets. This five-year timeframe includes some significant periods of external uncertainty and volatility caused by COVID, Russia's invasion of Ukraine, the change in the inflation and interest rate environment, and now, By putting a greater weight on averages over a longer time series and not focusing on individual peers, there is a lot less noise in this presentation of the comp set. We like this assessment of fair value for companies in this sector. Actions valuation continues to be well supported. Let's now have a look at how the rest of the portfolio and its valuation multiples compare to the peer sets. Just to remind you, this chart shows the valuation multiples for our PE assets in dark blue and the average of the multiples from the relevant valuation peer sets in light blue. With the underperformance of the market running into our year end, this picture is a little different from what we presented at the half year. In the box on the right hand side of the chart, you can see that we now have seven out of 25 companies with a valuation multiple above the average of the peer group. Most of the differences are pretty marginal, but that's four more than the half year. Importantly, all the assets across the portfolio remain within their respective peer group ranges. Two multiples moved up and four multiples moved down during the year. In all cases, they reflect company specific factors like performance against investment case or proximity to exit. Overall, the weighted average post-discount non-action LTM multiple across the portfolio is 13.4. We successfully exited two sizeable assets at good money multiples this year, Nexi and WP, with valuations that were higher than our book value. And that's something we've consistently done over the years since our restructuring in 2012. So turning back to the business line performance for the year. As Simon said, our private equity portfolio generated a gross investment return of 26% for the year. We saw strong cash proceeds from Action, WP and Nexi in the year. Our reinvestments included our buying of an additional 3% of Action and the purchase of Constellation, OMS and Water Wipes. We also invested capital in our other long-term hold asset, Royal Saunders, and a number of other existing portfolio companies, including, for example, 1023. The overall PE portfolio value ended the period at 23.6 billion pounds. In terms of the leverage position across the portfolio, we show that on the next slide. There are two changes from the position at the half year. Firstly, action reduced its leverage. Its ratio of debt to run rate EBITDA decreased from 2.9 to 2.7 times over the six months to the end of March. Secondly, in terms of the non-action portfolio, cash generation continued to be good and again, leverage levels reduced from 3.7 times at the half year to 3.5 times at the year end. As an average level in the PE industry, 3.5 times remains modest. The maturity profile has also improved from the half year, with 91% of the portfolio debt now repayable in 2028 and beyond. So, on to infrastructure. The infrastructure result was held back by the underperformance of the 3IN share price over the year, which reduced by 3% despite the good underlying portfolio return of 10.1% in the year. The next investment return from infrastructure, including fee income, was 6%. Together with Scanlines, our infrastructure portfolio is valued at just over £2 billion and produced a very useful cash income contribution, as you can see on the next slide. Overall cash income totalled £598 million, broadly in line with the contribution last year. After operating cash expenses of 129 million pounds, we again ended the year with a healthy cash operating profit, even before taking into account the dividends we got from action. Our cash position was also helped by our consistent focus on costs across the group and on simplification of processes where it makes sense. So now let's take a look at the balance sheet. The balance sheet continues to be strong, with cash of £423 million and liquidity of £1.3 billion at the end of March. Not only is it strong, but it's simple, largely made up of our portfolio assets, cash and our modest long-term debt and carry balances. The strength of the group was recognised this year by the upgrades to A- stable by S&P and A3 stable by Moody's. and nothing has changed in terms of our conservative approach to managing our capital resources. The growth in the balance sheet has caused us to reflect on capital management guidance. As part of the FY23 results, I updated our tramlines by stating we aim to operate within a range of 500 million net cash and 1 billion of net debt. With a tolerance to operate outside of this range on a short-term basis, depending on realization and investment flows. In the two years since FY23, the NAV has grown by just under eight billion pounds. Going forward, the group will aim to operate within a range of net cash of 2.5% of NAV and net debt of 5% of NAV, with the usual tolerance to operate outside of this range in the short term as we have before. At this year end, we'd be looking at tramlines of approximately 600 million net cash to 1.2 billion of net debt. The actual result for this year is net debt of 771 million, well within range. This new formulation retains our cautious approach and allows us to operate with parameters that consistently reflect the scale of the balance sheet as it continues to grow. So turning to carried interest. The private equity carry accrual in the period was £70 million and the balance sheet payable was £344 million at the end of March. The net reduction in the balance sheet accrual during the year of £454 million primarily reflects the final payment related to action. Going forward, the carried interest payable accrual relates to assets within the PE business with zero accrual related to action. Before we leave the balance sheet completely, I thought I'd give you a quick update on the hedging position. In FY25, we experienced a currency headwind of 341 million before hedging and 259 million after the benefit of our hedging program. This principally reflects the 2% appreciation of sterling against the euro in the year. We took advantage of the recent market volatility related to tariffs to execute an incremental top-up of 400 million euro of hedging, again at favorable rates. This time we locked in an effective euro-pound rate of 1.13. That means the hedging program now has a notional value of 3 billion euros and 1.2 billion dollars. On the left, you can see a pie chart showing the net asset exposure by currency. The updated sensitivities are shown at the bottom of the slide in a banner. So finally, let's turn to the dividend. This morning we announced our intention to pay a second dividend of 42.5 pence. When you add that to the interim dividend we paid in January, it will make a full year dividend payout of 73 pence. that remains subject to shareholder approval and would represent a growth of 20% on the prior year. Now, before we get into Q&A, I will hand back to Simon.

Thank you, James. I'd like to close with a few final remarks. FY25 was another challenging year for the PE industry, but we saw strong realization in dividend cash flows, quality new investments, and bolt-ons, as well as resilience and good growth from our larger investments. Action had another excellent year in Canada 24. Action's like-for-like performance since the pandemic has been sector-leading. In fact, they delivered total like-for-like growth of over 50% over the last four years. So Action's 2020 stores are 50% bigger, just as a result of sales growth over that period. But this is a compounding measure and action won't continue to grow at double digit rates of like for like. However, we do remain confident that action will continue to produce sector leading results. We've remained careful investors since our restructuring in 2012 and our portfolio has repeatedly demonstrated its resilience throughout the challenges of the last five years in particular. And we feel confident about the portfolio's ability to continue to perform resiliently in the face of today's economic and trade challenges. This chart is another of my favorites. It shows how action in particular has a long record of thriving whatever the economic circumstances. And that ability to perform in all weathers has been reflected in 3i's consistent strong performance since 2012. and particularly in the compounding over the last five years. We're playing a long game and our processes give us very good visibility on trading across the portfolio. The shape of our portfolio is the foundation and the competitive strength of our larger assets gives us a great deal of confidence in our compounding momentum over the medium term. Many of our companies are just getting into their stride And that includes action, which is seeing very strong trading in yet another new country, Switzerland. So we see no reason why the next decade shouldn't be just as exciting as the last decade for 3i shareholders. Thank you, and we'll now open for questions.

Thank you. We will now conduct the question and answer session. To ask a question via the conference call, you will need to press star 1 1 on your telephone and wait for your name to be announced. To withdraw your question, please press star 1 1 again. As a reminder, participants can also submit questions to the webcast page by using the Ask a Question button. Please stand by while we compile the Q&A roster. Our first question comes from the line of Manjari Dar from RBC. Your line is now open.

Thank you. Good morning, Simon. Good morning, James. Thank you for taking my questions. I had three, if I may, all on action, please. My first question was I wondered if you could give some color on how you see the competitive backdrop in the European discount sector and Perhaps if you've seen any sort of shift from the likes of TMU, we've heard that they are increasing their marketing spend in Europe or have been since the announcement of the US tariffs last month. And secondly, I just wondered, was there any sort of inventory overhang following the ERP-related disruption in February and March? Did you guys have to clear stock a little bit more aggressively there? And then finally, I just wondered if you could give some color on how you view the opportunity for REI to take further stake of action this year. Do you think that will be a good opportunity to increase that share a bit higher? Thank you.

Okay, thanks, Majoree. Let me take those. So how do we see the competition changing? We're not seeing material change. As we said before, Timu competes with us in some general merchandise items, but not in much of the store, which is based around essentials. We still think our price advantage is where we presented in the CMD, so we don't have any concerns about that, and we think trading across the estate is very robust. So we're not seeing a change there that affects us in any way. There's no inventory overhang from the ERP problems. There was an availability challenge for a time, but there's no inventory overhang problem. We came into the year thinking it would not be a great year for further stake purchases given how confident everyone seemed to be about lots of transactions in the private equity sector and flow going back to LPs, which has not been happening over the last few years. I don't think that looks as obvious now. And therefore, we may find that there are indeed some LPs who need liquidity. And we're very interested in obviously buying further action stakes if they do need liquidity. So perhaps more of an opportunity there than we would have thought three months ago.

Great, thank you very much. Thank you. Our next question comes from the line of Hubert Lam from Bank of America. Your line is now open.

Hi, thank you for taking my questions. I've got three of them. Firstly, can you talk about the seasonal sales exposure of action and has weather played a part also on the like for likes so far? Second question is, can you talk about the potential benefit for you of tariffs in the U.S.? Does it mean that you can get cheaper goods from China now and more availability? And if so, when do you expect this to come through? And lastly, again, on action, if I look at the Q1, revenues were up 17% year-on-year, but EBITDA margin was relatively stable. Can you explain why this is the case and do you still remain confident for a margin expansion for this year? Thank you.

Thanks, Hubert. Okay, let me take those again. So seasonal sales, yes, in recent weeks we have been seeing good seasonal sales, and that's nice because they tend to be our slightly higher margin categories. So that's going to be good for profitability, et cetera, as we roll through these weeks of sunny weather. Yes, garden and outdoor, some toys, multimedia, deco, these are all good performing categories at the moment, so that is correct. In terms of the benefits of tariffs, what we are seeing at the moment is that China is very much more focused as a supplier base on Europe. That may or may not change with the recent agreements, but I think there is definitely some scar tissue over what's been happening between China and the U.S. over the last few weeks. So we are seeing some very good deals coming out of China, and we are taking advantage of those volumes as they come across to us. Much of that buying is going to be for next year. Most retailers have already ordered their Christmas items. There will be some that benefits us this year, but a lot of the benefit will come in next year. And it will be gross margin benefits that we will share with the consumers. So Action will benefit itself, but the consumers will be a primary benefit from that as well. In terms of the Action EBITDA, I just remind you that Q1 is the very quiet quarter. We tend to do just over 20% of sales in Q1. It's always a low margin quarter for the business. It's low in cash generation. So it's the quiet quarter of the year. So if you have an ELP availability issue, it's the quarter to have it in. And I really wouldn't read too much into the static EBITDA margin. Great. Thank you.

Thank you. Our next question comes from the line of Bruce Hamilton from Morgan Stanley. Your line is now open.

Hi, morning. Thank you for taking my questions. Just the first one on action, I think you referenced some sort of weaker consumers across France, Belgium, and Germany, just to confirm. Could you give a little more color about that and maybe how big a divergence that's driving in terms of like-for-like growth experience in those regions versus the others? And then secondly, on the pause we've seen in general industry deal-making, how quickly do you think that that might lift if we're now past the worst of the uncertainty around tariffs? And when you look at your pipeline, does it feel that that's a six-month delay, or is it worse than that? Just any clarity that you have on that would be helpful. Thank you.

Thanks, Bruce. In terms of the color around the action trading across Europe, we would suggest that it's manifesting itself through a number of ways. So slightly smaller baskets in those markets that I mentioned, and less spending towards the end of the month, if you like, the week before paychecks. So these are the the trends and indications we're seeing that the consumer is being very careful in those three markets. We're still seeing very strong trading in the other markets and we're not seeing those effects to anything like the same degree. So it's smaller baskets and slightly less footfall towards the end of the month. In terms of industry deal making, I think it feels like we're through the worst, but I'm not convinced that the unpredictability will not continue. I don't know if the foundations in the US-China situation have really been sorted out. We need to see how it develops from here. I think some things will come back quite quickly. But I think other things people will remain cautious about, so it will take longer to do. But I certainly expect some activity to pick up in the coming months. Great. Thank you.

Thank you. Our next question comes from the line of Andrew Lowe from Citi. Your line is now open.

Hi, guys. Thanks for taking the question. Just a follow-up on the greater buying power in China and your comment, Simon, that that would probably have an effect more in 2026. Given that your inventory turnover is about two months, what explains that lag that you're talking about with the inventory turnover? Any comments there would be really helpful. And then the other question was just around your comments on the Swiss stores. So I think you said that two of your Swiss stores were in the top 10 of store performance. So I assume that this is sort of sales of all new stores. And I remember at the Capital Markets Day in March, you made a similar comment about a store opening in Munich, which I think was the best performing. So I'm just curious if you think there's a structural shift to these stores maturing more quickly than they have done in the past, or whether there's any regional drivers in these two markets that maybe explains that difference. Thanks.

Thanks, Andrew. You're correct on inventory turnover, but the sort of orders that we are placing in China at the moment are significant volume orders, primarily of general merchandise. This stuff will not have been made yet. So these have to go through an entire ordering, manufacturing, quality assurance, and then getting to a port, getting onto a container, and then coming to Europe. So these are not These are not 60, 70 day lead times that we're talking about in inventory turn. These are significant orders where you need good chunks of a year to bring them into the stores. On the Swiss stores and the Munich store, I think we've said before that actually recent cohorts of stores have been stronger and that's what's brought the payback period down under 12 months. And so this is very much in line with that. And clearly, Switzerland is an expensive market. And there are not very many stores in Switzerland that have the prices that we have on offer. Got it. Thank you.

Thank you. Our next question comes from the line of Gregory Simpson from BNP Paribas Exxon. Your line is now open.

Yeah, morning. Can I ask for an update on the mix between price and volume within the like-for-like sales and also what are you expecting around the gross margin evolution in 2025 versus the 40.4% level last year? Second question is, can you talk about how the new next generation ERP systems impact action operationally. Now it's fully live. Is it mainly about future scalability? Just impact now it's live. Then further on Royal Sanders, which is looking, performing really well. Could you provide a bit more color on the kind of revenue growth or EBITDA growth, organic or total, that you are seeing? Thank you.

Hi, Gregory. So price and volume, the number is overwhelmingly underpinned by volume. Price we would we would say there's the slightly better margins gross margins for us this year But we're seeing slightly smaller baskets So it's really all about all about volume and our stores would probably in the consumers eyes be about one to two percent cheaper Than the store last year if you looked across the the items in the store in terms of I didn't quite catch your second question. Let me go to the ERP system. The ERP system is really about creating the platform for many more countries, many more stores, and many more DCs, and that is why we wanted to upgrade in the way that we did. So it's a very fundamental part of the growth that we envisage in the coming years. That's really what it's all about. In Royal Sanders' case, we don't really discuss those numbers too overtly. This is a supplier to many retailers, and we don't really want to give too much cover on that, Gregory. Can you repeat your segment?

That was it. It was a price volume, which you answered, gross margin, which you answered. Yeah, I think you answered it, yes.

Okay, thank you.

Thank you.

Thank you. As a reminder, if you wish to ask a question, please press star 1 and 1. That's star 1 and 1 if you wish to ask a question. Our next question comes from the line of Chris Brown from J.P. Morgan. Your line is now open.

Morning, Simon. Just a quick question really, I suppose, around earnings growth and returns in the projected portfolio X-action. It looks to me as if there was a fairly decent pickup in earnings growth. Can you quantify that if possible? And also, what was the gross investment return on the private equity portfolio X action?

That was, we talked about the 10% return or 10.

Yeah, I think that's, Chris, maybe just repeat the question. It was the portfolio return.

Yeah, the gross portfolio, yes, exactly. So we know there's a 26% return on the private equity portfolio. Yeah, that's backing it up, presumably, from, yeah. And just in terms of the actual earnings growth on that portfolio, I mean, I did a quick back of the envelope, and it looks as if it was about 14%. Does that strike you as being about right?

Yeah, it's just below mid-teens.

Yeah, thank you. And lastly, are you prepared to sort of name any of the names that sort of may join Royal Saunders in action in that long-term compounding market? Or are you still keeping that to yourselves?

No, we think it's in those sectors which we like and I called out. So discount private label, healthcare, those sorts of assets is where it's likely to come from.

Yeah. And again, in the sort of, I think it was six companies that reported earnings growth over 30%. I'm assuming Ross Arndt is in there, but are you naming any of the others?

Not offhand. I think James called out some of the high performers when he went through his section of presentation. Yeah.

Okay.

That's great. Thanks a lot. All right. Cheers, Chris.

Thank you. I am showing no further questions, so I will now hand over to Sylvia Santoro, Three Eyes Group Investor Relations Director, to address the written question submitted via the webcast page. There are no questions through the webcast.

Okay, so we're done? All right, everyone, thanks for joining. It was good to speak, and we'll be meeting some of you as we go around the next few weeks. Have a good day. Thank you very much, everyone.