Ten Lifestyle Group Plc

delighted to be presenting the results or 10 group to the end of february this year um and the reason i'm delighted is that we're going to have to next slide please we're going to be i'm going to be taking you through the details of those results then alan reminding everybody about our business model um there'll be an operational update and an outlook and before we go into the actual details let's just remind ourselves what we're all about so really we've got a main mission And then a secondary mission. The main mission is that we need to be the best place in the world for wealthy and affluent people to organize their lives. So we deliver better results than people can get on their own using the best resources of the Internet or large language models across dining, entertainment, travel, luxury retail. We get them access, pricing and other benefits that they couldn't organize for themselves. And as we do that, we become the most trusted service in their lives for organizing across travel, entertainment, dining, and retail. Now, because we get very good at that, that then allows us to become the most trusted customer loyalty platform for our corporate clients. What that means is that most of our members don't need to pay to use our wonderful services. Their bank, their credit card company, or their wealth manager pays for them to have access to our services. So that's what we're all about as a business. We need to be a brilliant service for the end users of our service. And then because we are, we can become the customer loyalty platform for anybody really, but primarily financial services today that wants to look after high net worth and mass affluent customers. And the highlights are really a good set of results. So revenue is up, 9% increase in net revenue at constant currency, 6% otherwise. EBITDA is up, PBT is up. We have no long-term debt in the business. And importantly, the digital transformation in the business is coming through in the numbers. So net revenue per FTE is up 11%. So making more money per full-time employee in the business. And our operating expenses per request managed is down by 9%. And that's largely because of how we operate, led by our investment in technology, which we've got running at a run rate level of around £6.5 million every six months. Probably the best number overall in terms of percentage increase, although actually PBT, to be fair, is up by even more than that, is the number of active members in the business. So we've got 436,000 people who've used our service in the past 12 months, and we've won more contracts both before the period and since. But the best slide, my favorite slide of the whole deck is the next one. which really does show all of that visually. So continued growth on all of the important metrics in our business. Moving on, short reminder that we are all about delivering to the end users of our service, but those people do not need to pay to get access to our service. These wonderful clients, our corporate clients here, pay for people to be able to use our service. So they are a global group of companies who have got one thing in common, which is that they want to look after and grow the customer value of their affluent and high net worth customers. And we help them do that. And on the next slide, we've got some good evidence, not least, probably the best evidence is the fact that we've got very high client retention. But when we ask As part of our corporate service, we collect data on net promoter score and also we ask customers in a representative market research auditable way what impact our service has on their decision to stay with their bank or wealth manager. And 62% say that our service plays a strong or decisive role in people staying with their wealth manager, bank or credit card business. And that's a really strong result. It's actually up from 54% in the last reporting period. And saying that we play some kind of strong or some kind of role has gone up to 90% from 88%, very reflecting the improvement in our service. And there's more about that on the case studies part of our website. This slide is worth kind of looking at for people that are new to our business and so people watching this largely on video should spend a little bit of time uh having a look at this but for all of you on the call i'll skip this slide and just remind us that the uh the the investment case is that we're growing revenue and margin which you see in the numbers today because of our investment in tech uh and our operational improvements as well we are still less than 0.25 percent of the customer loyalty market in financial services, let alone the other customer loyalty markets we can move into. And as we become the leading customer experience and loyalty platform, we've got a huge addressable market that we're playing in. And that growth engine, next slide, which really does sit at the heart of our business model, is happening. Our service gets better. More members use us because the proposition is stronger. More members use us for the first time because the service they deliver is better. They use us more and more. That drives a better ROI return on investment from our corporate partners who invest more with us. They invest more with us and we get more members. We can build a stronger member proposition. And then behind all of that, the secondary flywheel We invest more into making our service more efficient, more personalised and higher quality because of the technology in our business. And all of that continues to develop our service, our business, our revenues, our profitability and the future strength of the business as well. parent who achieves to halt the business model.

Thank you, Alex. This slide you'll recognise is just to remind you of our revenue model. As Alex said, we get paid by the bank's credit company to look after our high value members, so that's 87% of our revenue. We do make about 13% of the supplier revenue. That's ticked up a bit, and I'll go into that in a bit more detail. And that supplier revenue is mostly from travel hotel commissions. And then on a corporate revenue, a contractual long-term in nature with guaranteed minimums, and we get paid by activity, be it through a high touch request through our lifetime manager, which may be phone, email, chat, or more so our digital platform, where that would be a lower fee per request, but higher margin for the business. Next slide. And then how we differentiate by value segment. We do do a value segment between very high, high and medium. Very high being clients who might have assets under management. High, you might have a premium bank account or a premium credit card. And the medium clients are the card networks. That would be Visa or MasterCard. the reason we differentiate that is in terms of how we the proportion is put to them and so where it's a medium client where they can't afford to spend as much money per member it's more digital first and that's the mass affluent area so that could be up to 70 to 100 digital to remind you we signed our first digital only contract in january this year that launches in h2 of this year and then it goes up to on the high net worth side it's it's a channel choice and then we have some high touch service hyper personalized marketing and it's more of an optimal hybrid service then uh looking at that in terms of the eligible members and the high and very high value segments we've got 2.1 million eligible members who can get access to our service and the immediate sectors tens of millions in there you can't graph that but then on the on the right hand side that has our active members by value segment and as i said earlier the the the great numbers have grown 23% to 436,000 year on year actually growing well about 16% from the year end as well from 375 to 436 a lot of that's been driven by the digitization of the business as we grow it out and to remind the active members our NB has used our service at least once in the last year come to this point about affordability the very high the average conscious revenue per active member the very highest i'm going to afford to spend more with their clients because they make more money from their clients and that's where it could be more of a hybrid service whereas on the medium it's less and it'll be additional service going forward And then this is a really good example of how digitization impacts the business. And this is a case study where we did a full digital relaunch to a subset of an existing bank that we have. We launched this back in October and this is our sort of six month results. So we ran into 40,000 eligible members. And the impact of that six months after launch is we've reached 11,500 members of which over 75% were new to Concierge. and we in that time we've grown our active members by over 90 percent we've increased our penetration to over 25 percent so a quarter of the portfolio uses the service at some point and also we've increased the digital mix as we've launched the relaunched digital so that's up 75 percent so that's really strong numbers and it's a lot better than we anticipated when we launched it back in October and the outcomes is when members are aware of concierge the ones engaged with it And the engagement for the bank becomes more affordable with digital transformation, allowing the service to scale. And also what allows us to do is as people register, they register their interests, their follow interests, preferences. And that's really powerful for us because then that means we can go an ongoing hyper-professionalization. We can market to them what they like and want. and that's powerful in terms of going forward and we're looking to roll out the rest of the portfolio which is a bigger part of the portfolio later in the year which will materially grow our active members with this client at a lower cost per active member then we've got some verbatims coming back from from members who've used their service the first time so it's a really good example of what happens as we launch digital into into our clients Then moving on to the numbers. Income statement, as Alex said, net revenue up 6%, 9% in cost of currency, and then net revenue per FTE up 11%. Operating expenses are only up 3% to 26.7% with the cost per request down 9%. That's more just the requests coming to the business. And actually driven a really good margin uplift. That's a 10% uplift, million pounds up year on year. And that would be even more. We have some cost of currency impact. It would be up 28% like for like. And that margin is driven up by over 10%. So a good growth and margin coming through in the business. And I'll go into a couple of things explaining that later. We did have exceptional items as we restructured the business. Sorry, just go back a little bit. And then net finance expense was well up, but that was driven by FX losses. So if we exclude FX losses and exceptional items, our adjusted POT was actually up at 1.6 million versus 1 million last year, which is good growth. on to the next slide this is our net revenue and as you can see as I said net revenue has gone up to 33.7 34.6 a constant currency base corporate revenue grew by 1.2 million that would have been higher although we did make an investment in a contract we we negotiated at the start of the year where the revenue is lower in each one but but the renegotiating allows us to market to more members so looking for growth in h2 and actually it will really impact fy27 as in terms of the exit rate that was a consciousness and we made on that and that probably cost us about 700 000 pounds of revenue on this bridge so the base copper revenue would have been higher uh without that and then we have some new contract wins which offset the medium loss that we announced at the full year and and then as i said supply review good growth and supply revenue so if you go on to the next slide This shows our supply revenue, the actual percentage of our total revenues, and it popped up to 13%. It's normally been around 12. And what's really happened there is, whilst Europe has been a mature region where we make good supply revenue there, our other regions, America's AMEA, are coming through as well. And that's upping the percentage of net revenue. And the absolute number went up to 4.5 million this year compared to 3.8 last year. Next slide. And then just breaking down that revenue and EBITDA by region, as you know, Europe is our most mature region. Net revenues are up at 8% actual and costed currency with growth both in corporate and supplier revenue. Just EBITDA wasn't up that much because we had invested in our proposition to really grow engagement and that was our constitution as well, although the margin is still over 30% in our most mature region. americas we did have some impact on on currency with the us dollar uh mainly so whilst revenue is down we've been down at one percent of constant currency we didn't have the contract once i mentioned and that contract renegotiation mentioned it impacted our short-term growth and then on that our just even was up by 0.3 and and that was partly offset by the contract investment but also some adverse effects on our latam currencies that held back the growth in ebitda Our star region still is AMEA, net revenue up 21%, 26% of cost of currency. And that's continued base business growth and demand in Japan. That region is doing really well for us just now. And that's really driven the adjusted EBITDA up by 0.6 to 2.4. So that's up to a margin of 27.6%. So again, close to Europe now as a region. Next slide. This is the one we always show of us, continuing technology and AI investment. So our technology investment as a percentage of revenue tends to go down from 21% to 19% year on year. And as I've said, we're maintaining the spend. And why do we do that? We spend this because it grows competitive actions, efficiency, service levels and revenues. And that's what's coming through the numbers now. And that tech investment, the trend will continue as we go out, will remain fairly flat and will be a reducing percentage of net revenue as we go forward. On our cash flow, operating cash is up 2.8 year on year. investment intangibles continue as I talked about then more importantly we are now debt free so we paid off the remaining loan notes that we took out during Covid that is now gone and that's been replaced by a finance arrangement which is a five million revolving credit facility that's with NatWest our bank and I'm pleased that they've supported us and looked at where this business is going and that gives us just a buffer for our short-term working capital needs and it's a more flexible arrangement and less expensive than the loan notes we had in the past And then that's led to net cash being at 9.3, up 2.5 million year on year. On that, I'll hand back to Alex now, I think.

Super. Thank you very much. So, Ted, let's go straight into a very short two-minute video.