Ten Lifestyle Group Plc

I'm Alex Cheetle. I'm the chief executive co-founder and Alan Donald's going to be talking soon as CFO. Our mission remains that we want to be on the world's most trusted service platform working behind global brands. And I think we're more excited than ever because the tech is now available to really make that vision happen quicker and better than ever before. More of that later. But our growth engine that sits at the heart of the business model is working well for us. So as our business gets bigger, it gets better and it becomes more efficient. And we'll see how we're doing on that in a little moment. It's a huge market opportunity. Not only are we a fraction of the market for customer loyalty in financial services, but we're an even smaller fraction of the market for organizing travel, lifestyle, luxury, retail, tickets, dining, as our key categories. However, within our niche market, we are the number one leader, both in terms of scale, technology, success, reputation, and so on. On top of that, the growth engine means that we can build on that success to be ever more, ever stronger. Now, recently, the net revenue is up. So we've seen growth in net revenue, both on constant currency and in absolute terms. Profitability is also up. Cash and cash equivalents are up. We've won an extra large contract in the US, an important market for us, and a medium contract in EMEA in Japan, the single largest opportunity market for us in Asia. We've continued to invest at the similar levels than we have done over the last few years into tech, specifically around AI. And we've grown the number of active members. Now, importantly, since the end of the half, so since the end of February, we've also made six advances, either with existing clients or with new clients, winning and underpinning profitable growth into next year. And we'll talk a little bit more about that in Outlook. And here you can see the growth. All of these are full years apart from the final bar on net revenue and adjusted EBITDA and PVT. So we're halfway through the year. And H1 is always a little bit smaller for us, both in terms of net revenue and particularly EBITDA and PVT. But we're doing well and showing growth on last year, as we've just talked about. I'll hand over to Alan to talk the business form.

Thank you, Alex. Just as a reminder, our revenue model is that we get most of our revenue from our corporate clients, pay to look after their high-value members, and we get supplier revenue, which is mostly travel commission. And the typical contract is through a high-touch request or element manager or a digital request, which we can go into more detail later. And that wraps up into our total corporate revenue. And these contracts are long-term in nature with some agreed minimums. These are lists for corporate clients. These are mostly financial services. No real change here. But as I've said, we're renewing quite a few in the post half year as well. So we'll go through that. And why do we do that? When the clients come to us, we can demonstrate an ROI to them by improving customer acquisition, retention, and profitability, be it through higher spend, AUM, and the upsell versus non-users of our service. And it also drives net promoter score and gets loyalty to the customers. And what do we do? We do travel, dining, entertainment, luxury retail experiences, inspiration. I won't go through each of these bullet points. Alex will cover the tech advances we've had, as we just talked about, around how we're linking in and getting an agentic AI to support us going forward. And this is how we look at our membership base. We do, as you know, segment it into very high, high, and medium segments, very high being sort of asset under management segments. high being premium banking credit cards and the medium being through the networks be it Mastercard, Visa, Amex and this looks at our eligible member base just for the high and bear high on the left hand side and that's the year end number with 2.1 million eligible members in that little segment we've got millions more in the medium segment there are active members that's grown from the year end as we've got the new contracts coming on board got a net increase of 5,000 to the end of the year and half year. And active members are going to use our service at least once in the last 12 months. And then you look at the continuous revenue per active member, just to remind you that on the very high segments, they can afford to spend more per active member than the high or medium because of the value those members have or those clients have for the banks. And we make up to three times the average continuous revenue per active member on very high compared to medium. And then this is how we sort of differentiate the proposition by value segments between medium, high, and very high, where medium will be more digital first, and that's what we'll go through in more detail a bit later on, where high may be more enhanced hybrid, and very high being rather personalised, dedicated team, and proactivity in terms of how we market to those members. And moving on to financial results, Alice has already given you a high level. So as you said, net revenue has been up on both actual and constant currency. We've managed to maintain operating expenses flat year on year. And that's meant our adjusted EBITDA is up nearly 12%, up to 6 million against 5.3 last year. And I am improving EBITDA margin as well, just under 19%, against 17% last year. We continue to invest in digital investments. Our amortization is broadly flat. Share basements are a little bit down because we did have a one-off charge last year for the extension of the salary sacrifice options that we have for our staff. And the finance expense was flat. So that meant our PVT is actually up 0.8 to 1.1 million in the half year against 0.3 last year. And then just looking at the net revenue bridge, base corporate revenue was up 1.2 million. So we did have good growth in some of our base business. A few of our clients are actually holding back in marketing until we get the full digital rollout. So we're hoping that will come through, especially in 25, 26. And then our new contract wins have basically offset the last contract loss, and that's been offset. And our supplier revenue, it's just slightly up at 0.1. And there's a little bit of a headwind on the FX to get to our actual number. Supplier revenue has remained consistent with some of the new business coming in and some advancements in terms of improved port offering and supplier relationships across all the regions, which has helped us maintain our supplier revenue. And then if you look at it by region, the net revenue between Europe, Americas and EMA. So within Europe, net revenue up 5%, down 5% in Q4-24. And that's impacted the margin on our EBITDA, down 13% against 39%. That's our most mature region in the group. America's net EBITDA is 1% of constant currency. And that's where some of our clients are awaiting our enhanced digital rollout. So growth has been sort of flat there in that market. But I'll just see if it is in line with prior year with some of the FX rates, favorable FX rates offsetting some of the setup costs that we had for our new XL contract that we won in America's that launched in December last year. Really good performance in the EMEA, net revenue up 30%. That's where we've had strong base business growth and demand. And then Adjusted ETA is up 1.2 million to 1.8, so strong EBITDA growth as we get to continue to operate superficially in that region as we grow that business. And then this is a slide we normally show that looks at the sustained technology investments. The 6.6 million we spent in the half year, that's our total investment cash cost across P&L and capitalisation. So that 6.6, 3.2 million was capitalised in the half year. And why do we do that? It drives competitive advantage, efficiency, service levels and revenues, and it really drives that operating jaws of increased revenue and reduced operational costs going forward. Lastly, our cash flow, operating cash was 2.3 in the period, and that's been impacted by a sort of increase in net working capital, which is our normal working capital. There's a more out in H1 that comes back in H2, and we will be positive in H2. Within that, as I said, we've invested in our technology at 3.2 million. The share was received in 5.7 million. We used some of that to repay all the related party loans. They've now been repaid at 1.5 million. And that's left us with a net calculation of 6.8 million against 1.9 last year and 3.9 at the year end. I'll hand back to Alex.

Thank you very much. So we're not going to play the video here of our Gentic AI, but that's an eight minute video that we're using with corporate clients now. And I'm going to skip this slide, but this is just really to talk about why we have got the opportunity to really make AI happen in our business. Instead, I'll talk about we have launched entertainment. So the box office is live and is growing our ticketing business well. Dining, we've deployed seven rooms, which in the UK, for instance, is about 40% of the top restaurants. And we're now building the API integration with OpenTable that will give us 99% of restaurants in the UK that our members want to book. We have improved service functionality, so we're rolling out WhatsApp, but we also launched Line, which is the kind of Japanese equivalent of WhatsApp or WeChat in Japan, which is going well. And we have launched our Gentic AI as beta, and we will be launching that later in the year. But we've been showing that to corporate clients. And when we've shown our tech improvements, as well as the agentic AI to our corporate clients, the feedback is really validating that this is what's going to be growing our business. So my favorite one there is Top Left. What you've built is what we want to buy. Effectively, people want us to be touching more members at a lower cost per member per interaction. because they get a better return, a better ROI, and they're future-proofing their business. And the feedback we're getting back from our clients is that we're miles ahead of the competition, and this is something that they want to grow our business behind because it grows their customer metrics. So ticketing is a good example of that. Because we've integrated the box office, Ticketmaster and Griff, so we can market tickets and at much higher volumes. And the cost to the corporate client of us fulfilling those digitally is a fraction of what it was by touch. And so that means they want us to be asking our members, which bands and shows are you interested in? So we tell them about them when they come up. with priority booking. And then that becomes a virtual cycle in ticketing where we book more tickets, make more of their customers happy at a lower cost so we can do it at a much, much bigger scale. But AI isn't only about improved servicing and improving our service and efficiencies by category. Here's an example about where we've used AI to drive content and communication efficiencies. We've used AI to create content, to translate content, to source content sometimes, and also to make sure that people can discover our content more easily. Now, all of that has saved us a huge amount of money whilst driving up the amount of content and hence the amount of engagement that's available to our corporate partners, sorry, to our members and our corporate partners. And across the business, not only in translation and design, but also in technical quality assurance and application support, we have been using AI to reduce the roles and the costs in those areas. And then we've been reinvesting What we've saved money in one area, we're investing it into AI developers, transformation managers who are making the changes happen and will make the changes continue to happen, and an investment in growth with a sales director in North America driving our business in that key market. So where from here? Well, you know we're about winning more contracts, growing in new markets as well, not least behind the AI that's creating more products for us. and growing the number of members that use us on each programme, which is why having the support of our corporate clients who want to invest more with us is so important. I also thought we'd mention, given the kind of geopolitics of today, that Ten remains very, very diversified, and actually we're more diversified than ever. Because we're a service business, we don't have tariff exposure. If people did become more concerned about things being delivered from countries abroad, well, that's no terrible thing for us because mostly we deliver our services in market. In countries like the US or Japan, we're in market. In Brazil, we're in market. Switzerland, the UK, we're mostly delivering our services in market. And we'll be diversifying even more into other categories behind our digital models. Final thing to say, after the financial crash, Lehman Brothers, we grew at 30% and then continued very material double-digit growth in all of the few years after the financial crash because banks and wealth managers wanted to invest more to retain their cash-rich clients then. And that we would expect to continue to do well in all the scenarios that we've looked at. So we're from here. So since the end of the period, we've had good news on six different contracts, some of them new contracts, some of them renegotiated contracts at better rates, but all of them underpinning growth into next financial year. Many of these things won't make a big difference to this year, but they will for next year. The response to capital markets today was good. People are beginning to understand the difference that AI and technology can make in our business. Now it's up to us to prove that in the real numbers. Of course, the first start of proving that is to get our corporate clients to want to roll it out with increased revenue. And that's gone very well so far. For us now, we expect to continue to generate net cash in the period we're in now, H225. will end at the end of august and then beyond that uh our expectations and including this year are unchanged for now uh clearly we would hope that we would start uh having upgrades um at some point as we announce new wins uh and time will tell but we're feeling good in the business and thank you everybody for your support and for listening to this today thank you