Ten Lifestyle Group Plc

Well, thank you, everybody, for coming. I think we'll kick off. We're pleased to be announcing our results for the year to the end of August, and we'll press on straight through with that. So first thing to remind, we are all about becoming the world's most trusted service, and we do that by providing our service through large corporate clients, specifically banks, private banks, and wealth managers. Next slide, please. We see that as a huge market opportunity. So firstly, we get paid from premium brands driving the loyalty of their most profitable customers. And we're becoming the best way for those wealthy and mass affluent individuals to organize their lifestyle and travel needs, which is an absolutely huge market. We've become the best way for people earning more than £100,000 a year or up to the ultra high net worth. That is a colossal part of the market. And within our market of providing concierge and travel services, we're now the established market leader. So we've got 100% corporate client retention. We win almost all of the tenders that come up, albeit there are quite a few more still out there. And we're looking forward to continuing to grow our competitive advantage. There's also in our model a growth engine. What I mean by that is that as we get bigger, we get better, both in terms of efficiency and service quality. And as we get more efficient and improve our service quality, we get bigger, which drives efficiency and service quality. More about that later. So essentially where we're at today is we are winning new clients. We are improving the service engine. We can show that with the data that we go through today. And the market opportunity remains huge, both the immediate market opportunity of working with wealth managers, private banks, banks, premium credit card businesses, They look after their top customers. And then as we get better and better and better, other market opportunities as well. And the growth engine is something which I think everybody on this call has seen the video of before. But it is worth reminding that as we get bigger, we increase member engagement. So more end users use us. That today was a better and stronger ROI for our corporate clients who give us more money. And that allows us to invest into tech, improving our proposition. That then allows us to increase more cash, more margin, because we get more efficient. But the improvement in service proposition actually leads to more members activating the service and using it. And so that growth engine continues. This year, we're particularly pleased because we are at record levels of net revenue. We're at record levels of EBITDA. And that 4.9 million EBITDA really masked the fact that four of that came in the second half. The first half of this year was poorly damaged by Omicron. If you remember, we hired a load of people because we saw good growth in September, October, November last year. And then the wind very much got taken out of our sails in terms of revenues. in December and January, albeit we hung on to that cost. So the first half of this year that we're reporting, we only had 0.9 million EBITDA, the second half, 4 million, and that increased across the second half. Cash levels are pretty much at the same level as last year. We won new contracts. We retained all of our existing contracts. We've got active members up as well, the number of end users using our service in the past 12 months, going to 275,000. And that also grew a lot more in the second half than the first half. Our profitability was notwithstanding the fact that we invested actually more than ever into our technology content and telecoms. And so because of the training to date so far this year, albeit we've only had two months, because we've got very strong client retention, growing demand, and because our proposition is getting better all the time, We're very optimistic about meeting the expectations in the market for 2023. And our platform is very well positioned for growth. This is quite important. So we mentioned this is a half year. We've got a large member base and we're scaling that, but we don't need to be scaling in new markets. We don't need to be scaling into new categories. And we don't need to be scaling even outside of financial services to meet the expectations that exceed the expectations that are out there in the market. So what's good for us is we want to, over the next 18 months, really be doing more of the same in existing markets with existing categories that will help us achieve decent cash generation. And then some of that cash will invest back into future growth. So that's why we're feeling good in the business today. Over to Anna.

Thank you, Alex. And as I said, record net revenue both this year of 35% and adjusted EBITDA up 11% despite the impact of all the cornerstops indicated earlier. So with that growth, all three regions grew, in particular, America's was up 67% year-on-year, EMEA 21 and APAC 25, so strong across all three regions. With our corporate revenue, that's the revenue we get from our corporate clients who pay us to look after their high-revenue members, that's up 29%, 21.1 million. Supplier revenue has recovered well as global travel started again, that's more than doubled to 5.7 compared to last year. As I said, it just steeped up 11% to 4.9. As Alex said, it was a game with two halves. The first half impacted by Omicron with 0.9 EBITDA. And then in the second half, we had a strong return to profitability, 4 million in the second half. And that's around about 15% margin in the second half. And that means our loss before tax has improved by 31% to 3.8 million against 5.5 last year. As I was going to get cash, it's at 6.6, which is similar to gross cash last year, although we did take on debt during the year, and that's to support future growth in the business and manage our working capital. In relation to the income statement, our operating expenses did go up year on year, partly due to the removal of payroll assistance, where we took salary sacrifice last year as a Covid project, and also government support came away as well, and that was £2.8 million. And then we did put additional FTE on to support the increased activity as it came back strongly, especially in the second half. Debrisage is down by 0.5% and naturally driven by reducing right of use assets, as if we reduced our office space year on year. Career-based payments are down by 1.1 million. Again, that's due to the salary sacrifice option schemes that we had during COVID, and we ended in March 21. We do have exceptionalism this year. The majority of that relates to the closure of our Russian office, where we sold that in May, and it was called Seclosures, and that was in March 22. Our net finance expense is slightly better, and that's primarily due to FX, difference in our intercompany balances, and that, as I said, lost before taxes improved by £1.7 million. This is a normal chart that we show in terms of net revenue growth and splitting it. As Alex said, we retained all material contracts for the third year running. Our base corporate revenue has grown by £6.9 million, And we included a new measure here. We call it the net corporate revenue retention rate. And that's basically looking at our recurring revenues year on year from the same customer base. And in 2022, that rose by 120%. Prior to that, it was 75%, but that was the impact of COVID. So this is a measure that we're going to use going forward to track how good, in terms of the money we get from our base business going forward. And I think that range will be between 100% and 20% going forward. New contract wins in the year contribute to 2.3 million. That's the four contracts we launched during the year. And as I said, supply revenue up more than double year on year. But on that point, the next slide is to look at the recovery of supply revenue. And I've shared this before. And the two graphs here, the left-hand side shows the year-on-year improvement. So actually, we're above peak overlevels. In 2019, we had 5.5 million supply revenues. This year, just gone, we did 5.7. And if you look at it on the half year to half year, you'll see how COVID impacted us strongly through 20 and 21. And we've seen strong recovery through each half of the year. At the end of the second half of the year, our supplier raised 12.8 of our net value. Moving on to, as I said, all three regions grew strongly, EME up 21%, and that was the recovery of base business plus supply revenue recovery, despite the impact of the business for three or four months. And as I said, we won a lot of two-region contracts in the region. America has been the star of the regions, up 67%, and that's through increased member activity. And one of the big increases has been, if you remember, we launched the XLARS contract in February 2020, just as COVID hit. So that contract has never really re-inflated to the size it was, and there's no stop to do that, especially in the second half of the year, we've seen strong growth come in America's region. APEC is up 25% year-on-year and that's primarily due to credit stays on the new large contract one which launched at the start of the financial year. However, we have seen that APEC is the last region to come out of COVID as we saw various lockdowns throughout the year and it's just starting to come out even towards the end of the year. Then from an adjusted EBITDA point of view, EMEA is down slightly year-on-year by 0.6. But as Alice explained, that's where we did. We increased our FTE at the beginning of last year. We kept that FTE because we knew that we need it when we came out of Omicron, and that's proved right in terms of the growth that came through in H2. And then America's are just used to a loss improved by 1.5 million, and that's the strong uplift in net revenue offset by increased FTE. And the increased activity in net revenue moved the region to profitable in H2, and I've got a slide on the next slide to explain that. That's it, APAC slightly down year on year as we've got the new contract prices on, but base business was down, but we are seeing some signs of recovery towards the end of the year. This is a new slide we've put in just to show the improved profitability in Americas, and this slide looks at net revenue over the four years against adjusted EBITDA. And as you can see from a net revenue perspective, we are actually higher than people with levels at 16.5 million against 15.8 in 2019. And we've improved profitability year on year. So we've gone from about 4 million loss in 1922, just under a million loss at 0.7 in 2022. And we just went into profitability in the second half of that year. So that's where we're plugging that hole that America's was the sort of drag on our profitability and that's improving and we're looking to see if we can move into profit for this financial year coming up. I'll show this slide over here. It shows that we continue to invest in our technology, and that's really across our digital platform, our CRM system, content, and our infrastructure and communications. Why do we do that? Because it creates competitive advantage, then drives efficiency, service levels, and revenues. And we'll sort of maintain that level of investment. It will probably also go up, but not as fast as our net revenue growth. We will still maintain that going forward. Lastly, our cash flow. Operating cash flow came in at £4.8 million, slightly better than last year. That was due to the reduced loss before tax of £1.7 million going through. A bit of a drag on working capital as the business grows. And we've got some reduction in non-cash items, principally due to the share-based payments. As I said, we did invest in intangibles at 6.4 million. And during the year, we did receive some receipts where employees did exercise some of their sacrifice options at the start of the year, 1.4 million. We raised loans at 3.4, as I said before. And then lastly, that means that our decreasing cash is only 0.1 in a year, 6.6, I think 6.7.

Back to Alan. Great. Brief reminder, again, I think everybody on this call knows about a growth engine, so I'm not going to play that video. today, but I'm going to skip through that, but it is worth having a look. There's a new updated version of that on our website and really worth having a look at that and certainly very useful for sharing with any colleagues, friends, family you might want to share that with to explain our business model. But a brief reminder, we make our money mostly from blue chip corporates, particularly in financial services, paying us to look after their customers. We also make some money from supplier revenue, mostly in travel. We get paid for delivering high-touch service, where human beings get involved, and also for digital service, which is self-serve. mostly on multi, almost all on multi-year, either three or five year contracts with guaranteed minimums on the larger contracts or contracts in new markets. This year, one of the things that underneath our business that drives it is the number of active members using our service and the number of active members that we've got that are either very high value, high value or medium value. Very high value are very high value to the company that's paying us to look after them. So that would be a private bank and their high net worth customers. It would be the top end of a retail bank where some of their customers have got assets under management with them as well. It also includes a couple of the very, very, very top credit cards. So for instance, credit cards where people are paying thousands and thousands of pounds a year for the benefits of that product. High value are customers who are worth a little bit less. Maybe they are wealthy people, but they've got a bank account, but no assets under management associated with that product, for instance. And then the medium value customers tend to be people that we get, members that we get through Visa, Mastercard, through the payment networks. You can see that in every different type of member, we've seen a growth in active members, and we've seen them in each geography, and we've seen them in each segment as well. And now, because those people then use us, once you're active, you tend to use us and use us more, that grows our revenues very directly. Operational update. Contracts have gone up. Four new contracts, retained contracts. We've talked about active members going up. Member satisfaction levels have continued to be high. And one final thing to mention here is that we have applied for B Corp certification. I'll talk about that a little bit more later on. And rolled out our digital platform as well. We're now live on 80% of our material contracts have got our digital platform. That's up from 64% previously. Around the world, the new growth is spread geographically. And we've also had not only growth, but good contract expansions, renewals. When we are renewing contracts, we're typically pricing up as well now, as you may expect. And we're also launching more engagement, really, by having more digitalization, more of our platform as part of our service, more onboarding, more re-engagement when people haven't used the service for a while and so on. So generally very happy with our corporate client growth this year. And when we look at the client list, it's pretty awesome. We've got some really rock solid corporate clients, some of whom, by the way, don't let us use their logos. So it would be even better if we hadn't had to not only use logos that we've got permission to use, but it's a pretty fantastic client list that we're really proud of it. And we're proud of how familiar that looks to people that have been looking at our client list for the last few years. We tend to add to it, but very few come away and none have come away in the last three years. As I said earlier on, we're not looking to add new categories. We're not looking to get good and serve our clients, our members, in new areas. But these are the areas, particularly dining, entertainment, travel, retail and events. The book club really I would categorise as a type of event. and editorial really spans across dining entertainment travel and retail but in each of these areas we're just getting better all the time as our buying power improves we demand more from our from our suppliers as we our technology improves we've got more things integrated in with our tech stack as our knowledge about our members and their preferences improves we can target the right thing to the right number at the right time. And of course, as we get more known in the market, we also just have a lot more things coming to us. So hotels that years ago didn't want to do business with us will be desperate to come and visit our offices and give us good deals. Same for airlines, same for entertainment and so on. Actually, we had a nice breakthrough the other day. It's a little bit cheesy, but because we not only want to work with venues and with ticket companies to get tickets, we also want to work with producers. I was delighted that we got Michael Bublé availability all over the world on his latest tour without having to deal with either a ticket company or a venue by hand. He did that just straight directly with his global producers at that tour. But these kind of things, the kind of things that turbocharge each individual part of the business, both in terms of efficiency and service quality as we grow the business. And the platform is getting better all the time. More languages, more currencies, more functionality, and more ability to customize it to the corporate, which is really important for them as well, whilst maintaining it as a single platform. What we don't want to do is build different technology stacks for different clients and we haven't needed to do that. That really counts against scalability and in the end counts against having a really high quality tech stack with the right features and benefits for members. It would also make us far less efficient. So the fact that we're delivering to all of those brands that you saw on that slide earlier on with the same tech stack but that that tech stack allows things to look, feel, and be different, but without adding complexity for us in terms of coding and content and features and so on. And we got better at engaging our members with better content. And all of you who've got access to the 10 platform Please do go on and have a look at the new inspiration section there, because it really is just a huge improvement on last year. They've got much better use of video, our content's much easier to search, much easier to find what you're looking for, and that's already driving lots of repeat use, because it just works better than ever did before. But the improvements we've made in inspiration are matched by improvements in travel, and improvements in some of the other areas as well, offers and experiences for sure. And our content's also got better looking and is used more broadly by different corporate clients as well around the world. We've had content that we've actually sold as additional things to corporate clients in seven or eight languages in the past year, more than we've ever done before. And when they use our content, that not only makes us more money because they pay for it, it also drives more usage of our service, which also drives our stickiness and revenues as well. Other things, payments is important. So making sure that people can store their cards and then can, with one click, buy is a small but very important improvement. And we can also increasingly Our corporate clients want to have only their cards able to be used on a platform, sometimes only their cards to be used. If they want to use another card, they might be in charge for that or it might be made possible. Preferences are something that we're good at now and we're going to carry on getting better at. So enhancing mental preferences so people can tell us what they like and then we can tell them more about those things at the right time, when they're in the right place and so on. And channel choice. For years, our service was email and phone. And then we had email, phone and the platform. And now we've got email, phone and chat, both through WhatsApp and also through our own chat functionality on the platform as well. And WhatsApp and our own chat functionality is just going up and up and up in terms of use. And that's really helping us engage with our members as well. And some of those conversations can be automated or semi-automated. In terms of improving how we operate today, rather than changing what it is we do, is a bit of a theme for the last year and the next 18 months. A big part of that is that we've got automated journeys. So if somebody had stopped using our service, where the corporate client agrees to this, which is a majority of them, we would then say, look, you've not used us for three months. Here are some ways you might think to use us from here on in, based on their profile. That is really growing the number of members that stay engaged with the service and will continue to grow active members. But also when we get a new member base and we go out to them, when we tell them about our service, where previously a long time ago, we would just send them one email, see who responded. Now we're doing a lot more in terms of video. Often our communications are targeted to people based on their age, their location and so on. And we do more than one. We do a series that are really, really well received and that are growing the number of people that actually activate our service right at that very early stage by an additional 50%. And these small changes, 50% improvement there, 10% improvement somewhere else, 5% somewhere else, 20% somewhere else, add up to a much, much better member experience and far more engaged members. B Corp is something which is also something that we've applied for B Corp. We are moderately confident of getting it. I would say we are confident of getting it, but we haven't got it yet. But this year, why did we apply for B Corp? B Corp is a certification that you are a business that's serious about doing the right thing by the world and how it operates. Now for us, this is a good thing in itself, but it also helps us attract and retain talent. There's a lot of people who find this a very attractive thing in an employer. and it gives us a competitive advantage and it enables conversations with the corporates to pay our bills. So, for instance, Mastercard are extremely keen to grow their environmental credentials. They're also very keen on DE&I, diversity and inclusion and equity. Coots are themselves a B Corp. Lombard Odier, the Swiss private bank, who we don't yet work with, but they are a B Corp. Coots, we certainly do work with. This allows us to have conversations at very senior levels about how we can help them with their agenda around ESG or indeed being B Corp. But the B Corp certification gives us a kind of table stakes to have those conversations at senior levels. Grows our revenue, helps us attract and retain talent, and makes us even prouder of the business that we run. So in terms of outlook, Now, as you know, we want to be growing the size of our current contracts. And then we want to win new contracts with current clients. We want to win new contracts with new clients. And then we also want to win new clients in new sectors. But this is the most boring slide in the deck and the most exciting one at the same time. So apologies, this is really a cut and paste, which is what our corporate governments tell us to do. from our prelims that were published today, but let me talk you through it. So we do expect to grow revenues because of growing demand as we continue to increase active members and first-time users from a growing eligible member base. Now, our corporate clients, particularly the banks who are benefiting from higher interest rates, are enthused about paying us to deliver more service to more of their wealthier customers. And to put that in some context, amongst our very high-value members, we have around... We have around a 10%, actually 11% penetration of the eligible very high members today. We've got about 11% penetration. On some programmes, we're up at 30, 40, 60% penetration. We've got a long way to go. And we have very few of our corporate clients that have very high-value customers that are asking us to look after, asking us to, you know... hold engagement they want us to grow engagement they're happy to pay more and we can do that through the tools that we've got similarly amongst our high value clients we've only got three percent of the eligible members using our service today we think it's very credible we should get that to 10 percent 12 percent so we could we could do very well only by growing in existing clients, albeit we do expect to win new corporate clients as well. And we have done that last year, four new material contracts, and we'd want to see ourselves continuing at that kind of ordered magnitude of growth. Supplier revenue is important as well, because although this is our smaller revenue stream, only 12%, it doesn't cost us much more to, if anything, to actually grow that line because booking travel successfully with more people we get paid for in terms of corporate revenue and then we make the revenue on the supplier side as well on many contracts. And so I'm very pleased that we've got record levels of that so far this year and we're expecting to have a good year on supplier revenue for sure, a record year. Beyond that, We want to continue to grow profitability. Now, how do we grow profitability? Firstly, whilst we expect to maintain our investment in our kind of central costs, if you like, chief amongst which are our technology, communications, and content, we do not expect to grow that investment at the same level as we grow our net revenues. So that will drop to the bottom line and improve our profitability. On top of that, we will continue to grow efficiencies as the growth engine kicks in more and more, and we have more things that are digitized or semi-automated and more experienced staff in the markets, particularly in the Americas, where we've had very high growth in the past six months in particular. So that will grow our margins, and we are very focused on improving our profitability, probably even more focused on that than growing our net revenue, albeit We're very happy that we will be growing our net revenue at very healthy levels. We did take some loans into the business, and that's really just to give us a very prudent level of working capital and a buffer there. And we then expect to achieve cash generation in the second half of the current financial year. So overall, looking forward, trading today has been strong. We've got very good metrics in the business. that mean that we are very optimistic about another year of good progress and meeting the expectations that are out there in the market. So at half an hour, that is...