加载中...
共找到 37,649 条相关资讯
Robert Bishop: Good morning, everyone, and apologies for the slight delay. Thank you for joining us for today's presentation. I'm Rob Bishop, Chief Executive Officer for New Hope Group. On my left, I'm joined by Rebecca Rinaldi, our CFO; and Dominic O'Brien on my right, who is our Executive General Manager and Company Secretary. This morning, we released our full year results for the 2025 financial year. Hopefully, you've had a chance to go through the presentation. But in any case, I'll step you through our key highlights for the year before we open up the line for a Q&A session. Despite a softening coal price and a challenging operating environment, 2025 was a strong year for New Hope, where we delivered another considerable increase in saleable coal production as we continue to execute our organic growth plans. Pleasingly, we've seen a significant improvement in safety this year with our 12-month moving average TRIFR decreasing by 35% to 3.22. It's positive to see these metrics improving, and we'll continue to focus on this area as we move into 2026. During the year, we navigated significant wet weather and logistics constraints at our operations in both Queensland and New South Wales. Despite these uncontrollable factors, the group delivered run-of-mine coal production of 16.4 million tonnes, up 33%; saleable coal production of 10.7 million tonnes, up 18% and coal sales of 10.5 million tonnes, up 21%. In terms of our financial highlights, we delivered an underlying EBITDA of $766 million and a statutory net profit after tax of $439 million. Both earnings results were largely impacted by lower realized pricing with the Newcastle export coal price hitting a 4-year low during the 2025 financial year. This year, our business generated $571 million in cash flow from operating activities, which funded investment in our organic growth pipeline and has enabled us to continue to deliver returns to our shareholders. On that note, I'm pleased to announce the Board has declared a fully franked final dividend of $0.15 per share. This brings total dividend for FY '25 to $0.34 per share, all of which are fully franked. Turning to safety. The safety of our people is a key priority, and we are focused on ensuring our people operate in an environment where they are unharmed. As I mentioned earlier, we have seen an improvement in our TRIFR and our All Injury Frequency Rate since we reported to the market last year. Pleasingly, our TRIFR now sits below the 5-year industry average for New South Wales open-cut coal mines. While there's still opportunity for improvement, it's pleasing to see the safety programs we put in place during the year have had a positive impact across our sites. Turning to our operational performance. This year, our Bengalla mine in New South Wales faced notable operational challenges due to significant weather events and logistics constraints across the Hunter Valley. These disruptions led to elevated shipping queues, increased rail cancellations and stock management challenges at site. Despite these headwinds, Bengalla mine delivered a solid performance, producing 7.9 million tonnes of saleable coal, just 2% lower than the previous year's output. Despite lower-than-expected production, Bengalla mine achieved an FOB cash cost, excluding royalties and trade coal, of $76.50 per sales tonne, within guidance range, and a 2% improvement from the previous period. The ramp-up of our New Acland mine progressed throughout the 2025 financial year, supported by commencement of night shift operations in the prep plant and increased workforce intake. As a result, the mine delivered 2.8 million tonnes of salable coal and continues to ramp up towards its target of becoming a 5 million tonnes per annum operation. Overall, strong operational performance at both sites contributed to an 18% increase in group saleable coal production, reaching 10.7 million tonnes. Group FOB cash costs improved by 8% to $82.40 per sales tonne. In terms of our financial performance, the group achieved an average sales price, including hedging, of $161 per tonne and an underlying margin of $64 per tonne. During the year, the thermal coal market was impacted by oversupply, economic uncertainty and a mild winter in Asia, resulting in a softening in coal price. Despite these market conditions, the group's low-cost assets remain resilient and continue to generate solid margins through the cycle. Our business generated $571 million in cash flows from operating activities, enabled continued investment in our assets, allowing us to return $347 million to our shareholders by way of fully franked dividends. This represents $0.41 per share paid during the period, which equates to a gross dividend yield of 12%. Our approach to capital management is underpinned by a disciplined focus on delivering sustainable returns to shareholders. Our two forms of capital returns are fully franked dividends and on-market share buyback. As at the end of 2025, the pace of the share buyback has slowed in conjunction with increase in the company's share price. As previously mentioned, our Board has declared a fully franked dividend of $0.15 per share. New Hope has a significant franking account balance, and we continue to utilize this value for our shareholders. Today and in conjunction with our results release, we announced the introduction of a Dividend Reinvestment Plan, providing shareholders with the option to reinvest their dividends. The DRP is in operation for the 2025 final dividend. Our group strategy is to safely, responsibly and efficiently operate our low-cost, long-life assets with a focus on disciplined capital management, providing valuable returns to our shareholders. We believe our investment proposition is underpinned by these six key areas, which I'll briefly touch on in the following slides. The outlook for our industry is strong. Our strategy is underpinned by the belief that demand for thermal coal produced from Australian operations will continue to play a vital role in providing reliable and secure energy supply to the world. Whilst we expect coal's share of global power generation to reduce over time, the sheer increase in global power demand will continue to support seaborne thermal coal exports into the future. In addition, the aging of existing thermal coal assets, combined with underinvestment in new projects suggest a potential supply shortfall and attractive pricing outlook for the industry. Regardless of pricing dynamics, our low-cost assets produce high-quality coal, providing resilience in cyclical environment and ensuring continued margin generation. In a year where the coal price has touched multiyear lows, our assets were still able to generate margins of circa 40%, which showcases our low-cost nature as well as the significant upside potential available to New Hope and ultimately, our shareholders. New Hope holds a key focus on delivering returns to shareholders. In the last year -- in the last 4 years, fully franked dividends have totaled $1.9 billion, which equates to nearly 55% of the company's market capitalization as at 31 July 2025. In addition, New Hope's share price has outperformed the ASX All Ordinaries by nearly 8x since its initial public offering in 2003. At New Hope, we take pride in our people and the communities in which we operate. We aim to effectively manage our economic, social and environmental impact to ensure the resilience of our business so that we can continue to create stakeholder value. Key aspect of being a responsible operator is rehabilitation. At our Bengalla and New Acland mines, we have disturbed approximately 3,000 hectares of land for mining operations and rehabilitated 36% of that disturbance. In addition, the majority of our land is used for agricultural operations once successfully rehabilitated. Looking ahead, we remain focused on the organic growth of our business throughout the continued ramp-up of New Acland mine, the sustained production at Bengalla mine and the development of Malabar's Maxwell Underground mine, all of which are low unit cost assets. Our pipeline targets a significant increase in coal production over the next 3 years, which represents low-risk, cost-effective growth. Looking ahead to the 2026 financial year, we are focused on remaining resilient, low-cost coal producer while executing our organic growth plans, which will enable us to continue to deliver shareholder value. Thank you very much. I'll now hand over to the operator to start the Q&A session. Operator: [Operator Instructions] Your first question is a phone question from Rob Stein from Macquarie. Robert Stein: Just looking at Slide 14 of your presentation, you've outlined the growth program or a growth profile. Just sort of chipping into it a little bit more, I noticed the Maxwell mine progressive ramp-up and the long-term rate there providing an indication of absolute volumes. Just wondering if you could comment on that as to how you see the ramp-up potential of the mine. And then similarly, just looking at the constant sustained basis for Bengalla, just thinking through the long-term CapEx requirements there. Robert Bishop: Sure. So I guess with our organic ramp-up, we're looking to double our production from -- I think your first question was in relation to Maxwell mine, Malabar's mine. That is already in ramp up. Bord and pillar pit is fully operational. And really, the increase in -- material increase in tonnes will come from the longwall pit or the Woodlands Hill pit when we should see first longwall coal first quarter calendar year 2026. So from that projection, and you can see the uplift on that chart, that should get up to around sort of 6 million to 7 million product tonnes from that operation around about sort of FY '29 onwards. So -- and then I guess, with regards to Bengalla, growth project there has been very successful. Both the prep plant and the pit has achieved targeted production from that growth project albeit hampered by uncontrollable events offside. So you would have seen in the report, we touched on weather events and resulting logistics impact. So that's hampered us in the final quarter of the FY '25 year, and it continued to hamper us into the beginning of this year, and we'll be putting out guidance for this year, I think, in mid-November. Robert Stein: So just as a brief follow-up, in Maxwell, you've got 6 -- sort of ramping up to the 6 million tonne rate there. That's what we should be looking at modeling and taking forward in terms of a view on the mine's potential? Robert Bishop: Yes, I think somewhere in the 6 million to 7 million is what the expectation is. I guess where that asset is at the moment, it's developing up the first longwall panel. So obviously, when you get into a longwall pit, despite all the exploration you can do, you don't really get to understand geological conditions until you're down there. So that's progressing well. And like I said, we're expecting to get the first year of the longwall in first quarter of next year. So assuming everything goes to plan, that should get up to sort of that circa 6 million to 7 million product per annum. Operator: [Operator Instructions] We'll now move to our webcast questions while we wait for any other phone questions to register. Your first webcast question reads, with thermal coal now having retraced back to $102 per tonne, what are your views on the state of the market. Anything we could look out for into the second half other than typical seasonality in coal demand in industrial production and renewable energy generation? Robert Bishop: Yes, that's quite right. And I think we've almost dipped under $100 for the Newcastle index. So pricing is certainly challenging at the moment. We've seen good, consistent supply across the globe of thermal coal. And we've also seen the impact of low coking coal prices affecting thermal coal with some semi-soft products being pushed into the thermal coal market. So if you overlay a fairly soft demand for this calendar year, that's obviously put downward pressure on pricing. As to what that's going to do moving forward, it's a good question. I think there could be some restocking as we go into the Northern Hemisphere winter, which is those typical cyclical changes which you mentioned. But I think our view is we don't see a significant increase in coal prices in sort of the next 6 months or so. I think that oversupply, which I talked about, that really needs to push itself out of the market, and we'll see what this Northern Hemisphere winter brings. Operator: Your next webcast question asks, during the new year, New Hope Group increased its equity interest in Malabar Resources Limited by 3% to 22.98%. Is the business looking to increase its equity interest in Malabar again this year? Robert Bishop: So I guess overarching, our key focus is our organic growth, which we've touched on at both Bengalla and Acland. Yes, we did take an additional 3% in the financial year just gone, and that was really off the back of an approach from another major shareholder. I guess with all M&A, we consider acquisitions as a put forward. But obviously, any acquisition we do would need to meet stringent returns, et cetera. And obviously, with the soft market at the moment, we'd need to take that into account. Operator: Your next webcast question asks, your final dividend is much higher compared to what your peers have announced. Are you able to sustain this level of dividend in the current coal price environment? Robert Bishop: Yes, that's a good question. And as always, we like to reward our shareholders with dividends. And I think the $0.15 fully franked, which we announced today, has been well received. I guess our underlying assets really put us in the position to reward shareholders, the low strip ratio and as a result, low cost, we put a lot of focus on cost control. And as a result, we continue to make a strong margin even in the cyclical lows, which we're seeing right now. So we're confident that's going to continue, and we'll see what this year lies ahead for us. Operator: There are no further webcast or phone questions at this time. I'll now hand back for any closing remarks. Robert Bishop: Well, thank you for joining. And again, apologies for the delay in our start, a few technical issues, but it's been a pleasure delivering this result, and we'll see you next time. Thank you.
Nick Wilkinson: So good morning, and an emotional welcome to the Dunelm prelims presentation covering our financial year to the end of June. My name is Nick Wilkinson. And Alison Brittain, Karen Witts and I are delighted to welcome you to the offices of Peel Hunt in London in what is my last results presentation. Whether you are here in person or joining virtually, I hope you're well, and thank you for your interest in the continuing story of Dunelm. It's our normal running order. I'll introduce the highlights. Karen will then go through the FY '25 financials and our guidance, and I'll be back to share more on our plans as we carry on growing Dunelm as the U.K.'s home of homes. So with images from our autumn/winter product collections, we'll get started. Our full year results show strong performance as we again successfully balanced growth and grip. Sales up by 3.8%, were ahead of the market, which was up only slightly, and we continue to move towards our next market share milestone of 10%. As reported by global data, our combined share now stands at 7.9%, which is up by 20 basis points on the prior year. The balance of our sales growth was particularly broad-based from a customer point of view, by which I mean we saw both higher volumes and higher average item values this year. Last year, we only saw higher volumes and not higher AIVs. And we saw both higher frequency as well as more active customers, which grew by 80 bps on the prior year. And in terms of grip, a strong gross margin and profit before tax of GBP 211 million reflects the strength of our operating model in a cost environment which is more challenging than we expected this time last year. And in a year when digital channel grew significantly, there's particularly good grip on digital profit levers. Operating cash flow was strong, supporting a higher than normal for us level of capital investment and therefore, good free cash flows. We've announced this morning an increased total ordinary dividend for the year of 44.5p. Alongside this is the continued development of our business, and FY '25 saw a number of firsts, our first store serving in London customers, our first sales outside of the U.K. with the acquisition of a third-generation family business, selling home textiles through a national network of small stores in Ireland. And we built in-house production for the first time in the Midlands for made-to-measure Venetians, roller blinds and shutters. All of these moves, along with getting to know the Designers Guild business, whose brand and IP we also acquired bring us new capabilities and new opportunities. These are seeds for future development, and many of them are complementary, coming together already in our Made-to-Measure business, which grew by 1/3 last year. Our nonfinancial highlights demonstrate our commitment to growing sustainably making good decisions for all of our stakeholders, doing the right thing for the long term is in our DNA from our founders. But make no mistake, these are areas where we're looking to create value. So while regulatory and consumer expectations may shift and fragment, we are clear sighted on our goals. In terms of reducing our impact on the planet, we relish the innovation opportunity that new materials and technology bring. We've made good progress in the year on Scope 1 carbon reduction and in reducing plastic packaging, but Scope 3, that's the impact of the products we design and source and our customers' use of them, Scope 3 progress is more challenging. We're sourcing lower impact materials, but there is more work to do at all tiers of the supply chain to measure and reduce both carbon and water consumption. It's also been a meaningful year for our role in communities. Being a good neighbor is not difficult, but it's not something that every business does. We've got 1.4 million Facebook followers on our store community pages, up 15% year-on-year, and they've helped us to organize campaigns to connect generous customers with great local causes. Alongside all of this, our national charity partnership with AgeUK is thriving. And with our colleagues, higher levels of retention and engagement, the start of progress on developing more leaders from ethnic minority backgrounds and increasing opportunities for colleagues to access lifelong training and personal development. A particular thank you, therefore, to all my colleagues listening today for everything you do to adapt and develop and to grow yourselves and thereby our business. And now over to Karen to walk you through the financials. Karen Witts: Thank you, Nick, and good morning, everybody. So, as usual, I'll start with a summary of our full year financial results, then I'll take you through our financial performance in more detail. This time around, I've included a schedule that sets out how we are thinking about costs, both the input costs that sit within gross margin and our operating costs to show how we also think about sustainably managing PBT margin. And then for completeness, I'll conclude with our guidance and our outlook for the year, and then I'll hand back over to Nick to focus on our strategic progress. We're very pleased to be reporting another good set of results, demonstrating ongoing progress and growth in a market that continues to be challenging. We grew sales in the year by 3.8% to GBP 1.8 million. We saw stronger growth in H2 than we did in the first half of the year, but we're not yet calling out a consumer recovery. Our sales were high quality, meaning that they were driven by a combination of volume and a higher average item value from product and category mix. We held retail prices largely stable over the year, absorbing most of the impact of high inflation in our cost base rather than passing it on to customers, and we were disciplined around promotional activity. This, in combination with strong operational cost grip drove a very strong gross margin of 52.4%, up 60 basis points year-on-year. Delivering with grip remains important as input costs continue to rise, particularly those driven by labor cost inflation. We're balancing these inflationary pressures by ensuring that we deliver more efficiencies. And at the same time, we believe in continued careful investment to sustain both short- and long-term growth. Profit before tax of GBP 211 million grew by 2.7% in the year with slightly higher earnings per share growth of 3.2%, reflecting the normalization of our effective tax rate after a once-off adverse impact last year. Our PBT margin remained broadly stable year-on-year at 11.9%. Cash generation remains strong. Operating cash flow was up 10% year-on-year with full year free cash flows of GBP 127 million after an increased level of CapEx. We ended the year with net debt of GBP 102 million, with a net debt-to-EBITDA ratio of 0.3x, comfortably within our target range of 0.2 to 0.6x. With healthy cash generation and ongoing confidence in our business model and prospects, the Board has declared a final ordinary dividend of 28p, taking the total ordinary dividend to 44.5p per share, up 2.3% year-on-year. We also paid a special dividend of 35p per share in April. So that takes our total declared distribution to shareholders in the year to 79.5p per share. This next slide sets out how our sales growth was delivered through broad-based growth in active customers with increased average item value, not driven by price increases and slightly higher frequency, resulting in another year of market share gains. As I said, we were pleased with the quality of our sales, which were delivered with a focus on bringing more of our ranges more conveniently to more of our customers, all while maintaining our outstanding value proposition and our focus on our good, better and best price quality tiers. Digital sales participation increased by 3 percentage points year-on-year and now makes up 40% of our total sales, reflecting the success of our ongoing efforts to improve our customers' digital experience. As a reminder, digital sales include Click & Collect sales, which are ordered online and fulfilled in store and which grew very strongly in the year, up by around 30% as we expanded the number of products available for in-store collection. As we reached more customers with our proposition, we grew our active base by 80 basis points. We saw particularly strong growth in our 16- to 24-year-old younger consumer cohort, and we grew well in the London region, where we opened our first inner London store in the year with another to be opened in quarter 2 in Wandsworth, Southwest London. We gained 20 basis points of market share year-on-year and now have 7.9% share of the U.K. market that grew only slightly. So we're still confident in reaching our medium-term market share milestones of 10%. As well as sales growth, we delivered further gross margin expansion with gross margin up by 60 basis points year-on-year. We have maintained our outstanding value proposition and kept retail prices broadly stable, understanding that most of our customers are feeling the impact of macroeconomic pressures. We've been disciplined around our approach to promotional activity in order to underpin the quality of sales growth. And we had a good quarter 4 when an early start to the summer season helped us to deliver a strong performance on seasonal sell-through and full price sales throughout our summer sale period. Freight costs and the impact of FX were broadly stable across the year, although towards the end of the year, we began to see a slightly favorable impact from foreign exchange. We expect a small overall net gain from freight and FX in FY '26. And as ever, we will keep optionality over pricing in order to deliver the right combination of value growth and profitability to our various stakeholders. The pressure on costs in the retail environment is well documented. Our operating cost base grew through a combination of volume-driven cost growth, inflation and investment, partly offset with efficiency and productivity gains. Volume increased variable costs by GBP 18 million. This related particularly to those costs associated with digital sales, including Click & Collect expansion and 2-person delivery related to strong furniture sales. We've had to deal with more than GBP 20 million of inflation, which is around 3% on our operating cost base, with most of this coming from increases in the national living wage and some from the national insurance contribution threshold and contribution increases in quarter 4, which will fully impact in FY '26. Because of this, we've worked hard on accelerating productivity gains, largely through what we call continuous improvement initiatives. including the efficient management of our performance marketing spend, optimizing our store operating model and making improvements to our supply chain operations, for example, by improving internal processes around returns. In total, we delivered GBP 22 million of productivities to help offset inflation and to limit the impact on our overall cost to sales ratio. We believe in an ongoing drumbeat of investment to realize opportunities for growth and efficiency. The incremental investment activity we expensed in the last year was focused on new store openings, further investments in made-to-measure capability, improving digital search capability and costs associated with acquisitions. As we're talking about costs, this is where I thought it might be helpful to describe how we think about them to show the various characteristics of costs in our business model and to give our current view of the direction of these costs over the next 12 months. As a management team, we think about all of our costs, whether they're reported in our gross margin or through operating costs. We like to live our value of acting like owners, and therefore, we make every pound count. Our focus is on delivering a broadly stable PBT margin over time rather than guiding specifically to gross margin as we think this better suits the evolving nature of our business. Our reported gross margin will continue to be strong, but we won't be guiding to it. Our costs can be impacted by external factors like freight, foreign exchange, raw materials and inflation, where we have limited direct control, but where we can create a degree of cost certainty through, for example, freight agreements or our hedging activity. We can also mitigate cost increases by using P&L levers like pricing and promotions and by making sourcing decisions. And we invest with regard to the balance of growth initiatives to productivity drivers. As we start FY '26, we believe that freight and FX will give us a small net tailwind. We see relatively stable raw material cost impacts at least for the first half of the year, but we will need to work hard to deliver efficiencies to help offset the impact of another 3% to 4% of inflation across our cost base. This is largely driven by the National Living Wage and National Insurance contribution increases. Continued sales growth will come with associated variable costs. These costs depend on where the growth comes from. So store labor costs, logistics costs and performance marketing costs will vary depending on sales by channel and product category. Across these various moving parts, we have flexibility in our P&L to make choices and to manage profitability to a broadly stable PBT margin. Profit before tax of GBP 211 million grew 2.7% year-on-year, while our PBT margin of 11.9% was broadly stable year-on-year. You will see that our effective tax rate of 25.9% is back within our guidance of 50 to 100 basis points above the headline rate of tax as FY '24 was impacted by a one-off tax -- deferred tax adjustment. And this has had a positive effect on diluted earnings per share, which grew by 3.2% to 76.8p. Our operating cash flow was strong, up 10% year-on-year, reflecting a good trading performance and well-controlled inventory, which is benefiting from the investment in and deployment of forecasting and replenishment tools, particularly in stores. As I explained in our interim presentation, CapEx of GBP 67 million is higher than we've seen recently, primarily driven by the acquisition of two freehold retail properties in attractive locations, which will connect us with more customers in areas where we're currently underrepresented. These opportunities are unpredictable, and we still expect most of our store openings to be leasehold. We remain a CapEx-light business, and we take significant amounts of investment through our P&L while still delivering that broadly stable margin. We ended the period with a net debt position of GBP 102 million, which at 0.3x EBITDA, it is comfortably within our target range, and this was after the payment of GBP 159 million of dividends in the year. To give more color to our GBP 67 million of CapEx this year, more than half of it was driven by our decision to take advantage of four strategic opportunities. These were primarily the two freehold properties in the Southeast of the country that I've described, and we'll start work to convert these to Dunelm stores this year. We also acquired a small business in Ireland with a portfolio of 13 stores. We're currently bringing new Dunelm product to our Irish customers and are refitting and rebranding the stores we have acquired as well as working on developing a full e-commerce offer for Ireland. Finally, we acquired the Designers Guild brand and design archive, which will give us an exciting opportunity over time to bring more beautiful fabric designs to our customers. And then more usually, we also continue to invest in new stores and refits, spending GBP 22 million on opening 6 new superstores, including 1 relocation, our first store in inner London and an 8 major refits. We aim to continue this approach on stores and refits in FY '26 with a view to opening 5 to 10 new superstores, a second inner London store, and we have more than 10 refits planned. It's important to us that we invest in the business for growth and efficiency. And we're also proud of our track record of strong shareholder returns in the form of a progressive ordinary dividend and further distributions from the surplus cash on the balance sheet. This year, the Board is declaring a final dividend of 28p per share, bringing the total dividend for the year to 44.5p per share, up 2.3% year-on-year. Ordinary dividend cover for the year was 1.73x, very slightly outside our target range of 1.75x to 2.25x, but comfortably covered by cash generation and a reflection of our confidence in the business. We also paid a special dividend of 35p per share in April, bringing the total distribution for the year to 79.5p. I'll now give our guidance and outlook for FY '26 before handing back to Nick for his strategic update. In terms of financial guidance, we will continue to invest in the business for growth and efficiency, and we're guiding to CapEx of around GBP 50 million for 5 to 10 new superstores, at least 1 in the London store and a continued program of store refits. We expect working capital to be broadly neutral over the year, but we expect a timing benefit of around GBP 90 million at the end of H1, just as we saw in the first half of FY '25. And finally, we expect our effective tax rate once again to be 50 to 100 basis points above the U.K. rate of corporation tax. Moving on to outlook. At this early stage of the year, we're pleased with trading so far and that despite some pretty warm weather, which has impacted store footfall, we're pleased that we've seen a positive response to our new autumn/winter ranges. Nevertheless, we're not yet seeing trends that would indicate a sustained consumer recovery. We will continue to progress our strategic initiatives. We're excited about our future plans, which as well as more new stores and investment for growth and productivity include our app, which will be available for download -- for customers to download this autumn. We're well placed to deliver sustainable, profitable growth despite entering another year of challenging inflationary pressures. And we are confident of making further market share gains as we progress towards our 10% medium-term milestone. And with that, thank you for your attention, and I'll now pass back to Nick for the last time. Nick Wilkinson: Thanks, Karen. So onwards. As you know, our ambition is to build Dunelm into the most trusted and valued brand for customers in homewares and furniture. We want to be The Home of Homes and a 10% share of our addressable market is simply the next milestone on that journey. To achieve this, we have three broad focus areas which frame our priorities and our investments. And in summary, outlined on the right-hand side of this page, we drive sustainable growth through the combination of elevated product, the development of our channels, to offer better shopping experiences to more customers and the harnessing of our operational capabilities to drive efficiency and effectiveness. These pillars are compounding, which necessitates a high degree of cross-team collaboration and of learning, something which our values and culture sets us up well to do. We're doing all of this in a period of lackluster consumer confidence, but we're happy to embrace the realities of how U.K. consumers are feeling right now. There's plenty of joy in our offer. And in the current environment, we're getting on with helping our customers create the joy of truly feeling at home and raising the bar on the value that we offer at every price quality tier, remembering that our average item value is still only just over GBP 10. As we enter a new year, we're accelerating and evolving those parts of our plan, which play to our multichannel and multi-category strengths. I think the benefits of operating both physical and digital channels proficiently are now well understood. Almost 30% growth in our Click & Collect sales last year is an illustration of this. At the same time, the benefits of being a multi-category specialist are also increasingly apparent. Coordinating our offer across categories allows our customers to better sell their homes, makes it more easy for them to shop with us and improves our marketing efficiency. Our current student campaign is a great example of this for some of our newest customers. So to bring our plans to life, I'll talk just briefly to a couple of examples in each of those three focus areas. And we'll start with furniture. It's been a strong contributor to our growth for many years now. And you've heard me say regularly how we're building capabilities here in product design and in sourcing. There's no better example of this than in upholstered chairs and sofas. From an early success in a chair that some of you may remember called Ila, we have grown a well-curated range of strong sellers. Ila lives on in the LC chair shown here with new colorways and materials this year. Beatrice is another best seller, recently evolving into Beatrice II, you've got the picture. Our supply chain is also getting more sophisticated. We deliver furniture through our own home delivery network to most of the U.K. and most of our range is available for quick delivery. If you order today, Tuesday, you'll have it before the weekend. Meanwhile, in our U.K. manufactured made-to-order collections, it's important not to overwhelm customers. That's why the 14,000 combinations we offer are presented as four simple steps. You choose the shape, the fabric, the padding and the feet of the sofa or chair you want us to make for you. With our supply chain increasingly advanced, our focus is now on evolving the furniture shopping experience in our channels with changes to our store presentation being tested this year. I'll make all of this sound rather methodical, but the results are dramatic. In upholstered chairs and sofas, our market share has more than doubled in the last 5 years. But with only 2.2% of product category worth over GBP 3 billion, there is plenty of headroom for further growth. Moving to our heritage textile categories where our market shares are higher, product development is still the starting point for raising the bar on our customer offer. I've listed three examples of this. Egyptian Cotton towels, we talked about in February, where we invested more quality in the yarn and manufacturing process and increased prices slightly while still being lower priced than comparable quality elsewhere. Results have been really good with growth in sales and gross margin. Hanging pack curtains is a current example. And to explain very briefly, we offer many price/quality tiers of curtains from good to better to our best made-to-measure curtains. Our good tier curtains are folded and packaged on shelf. Our better curtains are heavier weighted. So rather than fold them in packets, we hang them on rails in store. To this tier, we've now added more quality, weighted corners and deeper headings and a refreshed and updated color selection. The top image on the right-hand side is taken from our recent summer product event in Somerset House before we open the doors to press and influencers. As we double down on our product in these heartland categories, we are attracting customers who might otherwise go to nonspecialists. So we are evolving, evolving our packaging to more clearly explained product features as well as price, easier navigation of the range in store and more personalized content to inspire in our digital channels. Our soon-to-air Home of Color autumn campaign presents our depth and breadth of product in simple terms, giving consumers confidence across our categories from curtains to upholster chairs and beyond. On to our second focus area, connecting with more customers, and I'll start with online. Here, I've stepped right back to when we were in a phase that we called catch-up to show you in the graphic how enabled by improving data and tech capabilities, we've been constantly raising the bar on the digital customer experience that we are able to offer. With experimentation to improve customer experience, more choice, AI-driven search tools, more data to allow better personalization, we have excellent levers to carry on growing sustainably now and into the future. The phase we're entering next will see us doing more scaling up. And with the imminent launch of our app, we're also referring to this phase as joining up. Launching an app at this stage when we have good product data and good digital capabilities, we see a twofold opportunity. Firstly, the app will offer us more capability for product inspiration. That's because, and I know many of you know this really well, the app won't have the high cost of generating website traffic, so it's possible for us to play further up the customer funnel, focusing on product stories and ideas that appeal to customers who are browsing rather than necessarily looking to buy immediately. And because you're always signed into the app, we'll be able to show you better content that's more relevant to your preferences. That's exciting for us as a product specialist with many, many stories to tell. Secondly, the app will allow us to better develop our cross-channel experiences, easier to check availability in your preferred local store, more product information on the shelf, more personalized offers and in time, much more beyond. Good cross-channel shopping drives frequency and differentiation from single-channel players, which is why we love our stores. And as you'd expect, we've been very busy here. And as Karen explained, we've invested slightly more than normal in our stores in the last 12 months. London is simply a segment of our addressable market that we underserve. 10 years ago, we were very much just arriving in Greater London, opening stores close to the North and South circular roads. And those stores have done very well for us, but there's a lot more to go for. As you know, we've recently opened our first store in London borough, connecting us to new customers, and it's going to be joined by another similar sized store in Q2. And the two freehold developments we purchased last year will be large stores when they open just outside of London to the South. It's worth emphasizing that the different sizes of stores we operate are a function of site availability and catchment size. We favor large superstores, 20,000 square feet with a mezzanine to trade 30,000 square foot in total wherever practical, such as recently opened in our latest store in Manchester. But in Trowbridge, which is a smaller infill catchment in an area with longer drive times, we'll happily open a smaller superstore. Both sizes generate good paybacks and sustainable growth, giving us more optionality in a tight property market. This year, we expect to open 5 to 10 superstores and for the majority to be larger ones. We're also busy with store refits. These are ongoing programs of work to ensure our estate is upgraded on a regular basis. Refits allow us to introduce new ideas. And as I mentioned earlier, when I talked about product innovation, we're improving our store presentations and densities in furniture as a current focus. The best ideas we then roll out through the refits we do each year, such as our new cafe format or more quickly to many stores, such as the new self-checkout that we will roll out to all stores by the end of the year after this. And on to our third focus area, harnessing our operational capabilities, to drive efficiency and effectiveness. This one is not just about cost, it's also about growth. Karen has given you more on costs. So just one slide here of examples. Continuous improvement first. And I'd call out our performance marketing efficiencies as a good example of a small team doing smart things with data and experimentation to drive customer level transaction profitability. In our big labor areas, I'll highlight store operations as a good example of a large team doing smart things and managing a lot of change. In the last 6 weeks, we've introduced new store leadership structures, new delivery schedules and new Click & Collect processes. Self-checkouts are taking 70% of total transactions where we rolled them out. Tech and data-enabled changes like self-checkout and the new forecasting replenishment system we've successfully implemented are examples of moderate-sized programs that have grown our skills and confidence in good product discovery, tech delivery and business change. We've got many new initiatives that we're exploring, as you would expect. And 3 examples to share with you here. We like the benefits we've seen from the initial testing of RFID tagging in textiles to improve stock accuracy and store processes. We're developing with our committed suppliers and partners the optimum approach to adding more mechanization into our logistics operations. And we're excited by what we've already done with AI, site search, for example, and with some proofs of concept, we're currently running in new areas, the optimization of ultra-high-quality content images at scale as an example of this. I'm as excited as I am for the opportunities we have on grip as I am for growth for profitability and efficiency as well as for sales. So to sum up, it's fair to say that my ambition for the business is no less now than it was when I was preparing for my interview in 2017. With amazing colleagues, we've built and achieved a lot since then, but there is still so much more to do. A feature of my tenure has been the fast-changing macro environment. In sometimes stormy seas, my team and I have benefited greatly from inheriting a very strong business model. In turn, that's allowed us to continue investing, ensure we make our model even stronger, always adding quality as well as quantity. We now have a thriving digital business alongside our stores and scaling up digitally has been in lockstep with elevating our product offer, the two have fueled each other. And this combination, multi-channel and multi-category positions us strongly for the future. Analysts often ask me who our biggest competitors are. And when your share is only 8% and you face different players in different categories, the answer is really fragmented. We are surrounded, which we love. We respectfully compete against some of the best businesses in the world, but we feel strong for being multi-channel, and we feel strong for being multi-category. In shopping for their homes, U.K. consumers are multi-channel and they are multi-category. We also like to be different in our relationships. We want our customers to be themselves, not our image of what they should be, never judged in terms of budget or style. We do extraordinary things in our local communities and our committed suppliers are as much part of our business as our own teams of buyers and designers. All the team at Dunelm are ambitious and restless. They're looking forward to the arrival of Clodagh Moriarty, and I'm profoundly grateful to them for all they have taught me and how much they have grown over the years. On the right-hand side of this page, probably my favorite graph, showing our market share growth by category. This is the data up until calendar year 2024. But with only 8% of the market, the picture is of headroom, not of achievement. I know that all my Dunelm colleagues look at that graph and see what can be done and the opportunity to sell more. From furniture to hard goods like lighting to textiles we've been selling for over 40 years, we are, in many ways, still only just getting started. Just getting started is not the typical last line of a departing CEO, but it's my last lines and why I'm delighted to carry on as a long-term shareholder in this business. So on that note, we're going to go to Q&A, but I think Alison is going to say a few words before that. So [indiscernible]... Alison Brittain: Good morning, everybody. For those of you who don't know me, I'm hoping not very many, I'm Alison Brittain, I'm Dunelm's Chair. As many of you know, I don't normally speak at these results presentations, and I am promising you now that I will not make a habit of it. However, we are approaching a pivotal moment, a transition in leadership for our company. And so I thought it was worth me saying a few words about that. So I'd like to start by recognizing Nick for his enormous contribution and all that he's done for Dunelm in his 7.5-year tenure as CEO. As he himself said in his presentation, Dunelm's inherent strengths have been a constant throughout this time. However, he has undoubtedly used his own special blend of skills, experience and leadership to harness those strengths and to move the business forward. Beyond Dunelm's strong financial performance, Nick has overseen a significant transformation, building Dunelm's strengths and developing the business as a truly multichannel retailer. He's preserved the very best of the company's values whilst modernizing and developing its capabilities in what have often been extremely challenging external circumstances. So on behalf of the Board, I'd like to extend a huge thank you to Nick and to wish him every success for the future. As you've seen this morning, Nick's leaving the business in fantastic shape. And testament to this was the very high quality of candidates who wanted to succeed in. And of those, the outstanding candidates through the process was Clodagh Moriarty, who's known as Clo. I'm delighted that Clo will be joining us as our new CEO in just a few weeks' time. She brings extensive experience across a range of leadership positions, combining successful roles in retail, strategy, digital, technology and transformation. I have no doubt that her passion and energy alongside her expertise will be invaluable to Dunelm as we move forward. And Clo is joining the business at a great time. There's lots of opportunity in the business. She's joining a very strong, well-established executive team, and she has a supportive and experienced Board behind her. So I'm really excited to be working with her, and I know that she is equally excited to be getting started. So I hope that many of you with us today will get the chance to meet her in person over the coming months and before, of course, hearing from her properly at the interim results presentation in February.
Operator: Hello, and welcome to the JTC PLC Interim Results Presentation. My name is David, and I'll be your host for today's event. Please note that the event is being recorded. [Operator Instructions] Before we proceed, as you will have seen, JTC is currently in an offer period under the U.K. Takeover Code. As summarized in the company's RNS of 12th of September regarding possible offers, the Board received three preliminary nonbinding proposals from Permira in August, which were considered by the company and its advisers and unanimously rejected by the Board. The Board received a fourth revised proposal on the 9th of September and is in early stage discussions with Permira in relation to the possible offer. The Board also received two preliminary and nonbinding proposals from Warburg Pincus in early September, which were considered and unanimously rejected. A further proposal has been received and the Board is currently in early-stage discussions with Warburg Pincus in relation to the possible offer. In respect of these approaches, you will appreciate that management are very restricted in the comments they make only commentating on information already in the public domain, and we therefore prefer that most of the questions this morning are focused on the business. Thank you. I will now hand you over to the presenters for today. Nigel Le Quesne: Good morning. Welcome to the presentation of JTC PLC's interim results for the period ended 30th of June 2025. I'm Nigel Le Quesne, the Group CEO, and presenting with me today is Martin Fotheringham, our Group CFO. Let's move to Slide 1 and the agenda. We will begin with my CEO highlights for the period, after which Martin will run through the financial review. Following this, I'll take a deeper look at the group and the divisions and then go on to discuss how the rise in popularity of alternative assets positively impacts JTC's long-term growth potential and explain how we act as a key enabler of capital flows in these asset classes through both divisions. I'll also give a brief progress report on the integration of Citi Trust into our wider business post completion and we'll provide color on our focus areas for the medium to long term. Finally, I will summarize our key takeaways and my expectations for the group for the rest of the year. We will then open the forum up for questions. 2025 is the second year of our Cosmos era business plan, in which we aim to double the size of the business by no later than 2027 and for the third time since our IPO in 2018. The group has delivered a strong performance in the first half of 2025 with strong organic growth of 11%, record new business wins achieved through high win rates in what has been a more challenging macro environment. The results underline the benefits of having access to both institutional and private capital bases and continues to demonstrate the sustainable and evergreen nature of the JTC business model. As we approach the end of our 38th consecutive year of revenue and profit growth since inception, our unique shared ownership culture, diversified professional services business model and continued focus on client service excellence, all lead to our being well positioned to succeed and continue growing in any economic environment. In H1 2025, our group revenue was up 17.3% and EBITDA was up 15.1%, delivered at an underlying EBITDA margin of 32.8%. Our net organic growth was 11%, ahead of our guidance for the Cosmos era with growth at 14.6% and client attrition at 3.6%, an improvement on last year's 4.8%. We also achieved another record for new business wins in the period of GBP 19.5 million. As a result of our performance in H1, coupled with the benefit of our two most recent acquisitions, Citi Trust and Kleinwort Hambros Trust, we remain confident that we will achieve our Cosmos era goals ahead of schedule. The PCS division has performed particularly well in the period with outstanding net organic growth of 14.5%, continuing a strong trend. It is now established as the leading independent global trust company business and is the largest independent provider by some distance in the important U.S. market, which continues to be an opportunity-rich environment for the group. It is pleasing to report the completion of our acquisition of Citi Trust on the 1st of July, and we've made good progress to accelerate the integration and harmonize the business model. I will return to this later. Building on this, post period end, we were delighted to announce the proposed acquisition of Kleinwort Hambros Trust Company or KHT. The KHT deal is further evidence of the reputation JTC has established as the offtaker of choice for banks as they seek lighter operating models and retrench to their core capabilities. KHT is highly complementary to JTC's existing offering and brings us a U.K. trust presence for the first time. The deal was executed at an attractive price of circa 6x EBITDA, and we expect to complete in Q4 2025 and for it to be earnings accretive in 2026. The ICS division delivered net organic growth of 9.2%. This is a strong result in a market where macroeconomic headwinds have led to a period of volatility and uncertainty leading to prolonged sales cycles. Nevertheless, our pipeline has remained healthy, and we achieved robust win rates of over 50% and onboarded some significant clients in the period. At a group operations level, there's been heightened project activity in the period. In the process of implementing a global billing platform to enhance consistency and standardization across the group in support of our proprietary frameworks performance management tool. We are also enhancing our global risk and compliance framework, including a review and harmonization of policies and procedures underpinned by the implementation of an enhanced new RegTech solution [ CAMS ] . In addition we're using the Citi acquisition as a catalyst to accelerate the planned upgrade to [ Quantios Core ], our group-wide primary administration system. These important projects, together with our recently implemented group HR platform and our development of the ChatJTC AI tool, our infrastructure investments, which allow us to future-proof our global platform and capture the strong growth opportunities we see, both in the current Cosmos era and into the Genesis era that will follow. Although temporarily margin dilutive, these investments are all designed to improve commercial performance and enhance the platform for growth in the medium term. As always, I will wrap up my highlights by thanking the top-quality team we have at JTC. In July, we were delighted to award the second tranche of warehouse shares from our employee benefit trust to our global workforce for their individual and collective achievements in the Galaxy era between 2021 and 2023. We continue to believe that the power of our shared ownership culture is the foundation of JTC's 37-year track record of uninterrupted revenue and profit growth. Having 2,300 owners rather than employees makes an enormous difference to our working environment and the organization's culture, which is reflected in our industry-leading staff retention figures, which are currently 96%. This enables us to ensure that the team are happy, valued and empowered and highly motivated to improve our business and client experience every day. So now let's turn to Slide 4 and the financial highlights. Our revenues have grown to GBP 172.6 million and underlying EBITDA was GBP 56.5 million, delivered an underlying group EBITDA margin of 32.8%. As previously highlighted, our group net organic growth was an excellent 11%. New business wins were a period record of GBP 19.5 million as the group continues to benefit from excellent win rates of greater than 50% across both divisions. Now a consistent performance metric achieved in a competitive market. The new business pipeline remains strong and increased from GBP 49.8 million at year-end to circa GBP 60 million at the end of H1, indicating the probability of good momentum in the second half of the year. The Lifetime Value of work Won was another record at circa GBP 267 million based upon the 14.2-year average lifespan of our client book. This gives us visibility of over GBP 2.4 billion of forward revenues from our existing client book, i.e., what the business would generate without the addition of any new mandates from this point forward. This metric continues to demonstrate the long-term and compounding value of the group. And finally, on to the interim dividend, which has been proposed at 5p per share, up 16.3% from 4.3p. Now over to Martin for a deeper look at the financials. Martin Fotheringham: Thank you, Nigel. We've delivered a strong set of results that are in line with our expectations, where we've continued to focus on delivering growth. Organic growth was 11%, the sixth successive reporting period where net organic growth has exceeded 10%. The financial highlights slide shows that our overall revenue growth was 17.3%. We're performing well, led by net organic growth. It's pleasing to see the momentum we built in 2024 carry into 2025. Our underlying EBITDA margin dropped by 0.6 percentage points from H1 '24 and was 32.8%, and there's more on this later. Earnings per share increased by 7.1%. Cash conversion was 86% and is in line with our guidance range of 85% to 90% annual cash conversion. This is lower than our normal H1 performance, and I'll explain why later. Net debt increased by GBP 43 million, and this was driven by drawdowns for earn-outs. It was a busy year in 2024 for M&A with 5 deals completed, which we've continued to integrate throughout 2025. The Citi Trust acquisition also completed on the 1st of July, and we have the KHT deal, which will complete later this year. At the period end, our reported underlying leverage was 2.06x. On a pro forma basis, our underlying leverage was below 2x underlying EBITDA. And finally, our return on invested capital for the last 12 months was 13%, an improvement from the 12.6% we reported at the end of 2024. Moving on a slide, we'll start with revenue and our revenue bridge. On a constant currency basis, our revenue growth was 18.4%. This was above our reported growth of 17.3%, where we were again impacted by the weaker U.S. dollar during the last 12 months. As our U.S. presence has increased, so has our exposure to the U.S. dollar. Gross new revenue was GBP 36.8 million, a decrease from GBP 38.3 million in H1 '24. The prior period continued to enjoy the benefit of the immediate impact from the launch of our banking and treasury service. Gross attrition was GBP 9.1 million, which is 3.6% of annual revenues and is down from the 4.8% reported in the prior year. GBP 6.2 million of this attrition was end of life, and therefore, 98.8% of non-end-of-life revenue was retained. This is the highest retained revenue result we've posted since IPO. Revenue recognized on new business wins in the year was 54% compared to 51% recorded in H1 '24. Our new business pipeline at the period end was a best ever GBP 60.4 million, which is a GBP 10.6 million increase from the end of 2024. Let's move on to Slide 9 and take a look at the first of our key metrics, net organic growth. As I've already said, we delivered organic growth of 11% in the last 12 months with our 3-year average now standing at 14.8%. We've posted net organic growth in excess of 10% for 3 successive years. ICS recorded net organic growth of 9.2%, which was commendable when considering external factors where the continuing macroeconomic and geopolitical uncertainty has generally stalled fund launches and slowed down activity levels. The U.S. has continued to deliver good growth for our ICS business. PCS has excelled with 14.5% net organic growth with the U.S. and Cayman the key drivers. Pricing growth remained strong at 5.1%, demonstrating our ability to recover increased costs of doing business. To conclude on revenue, let's look at the geographical profile on Slide 10. All regions once again supported revenue growth in the period. The U.S. continues to deliver impressive levels of organic growth and has established itself as a leading growth region. At IPO, the region represented 4% of our global revenue, and this now stands at 31%. Taking into account the Citi acquisition, we expect the U.S. will represent approximately 35% of our global revenues. The rest of the world also recorded impressive growth of 74.3%, and this was driven by the inorganic growth of the FFP acquisition and the continued growth of our own Cayman business. We now move on to the EBITDA margin on Slide 11. The underlying margin was 32.8%, a drop from the 33.4% recorded in H1 '24. I said previously, there are many moving parts in our margin story. On the one hand, we've improved our margin over recent years through the introduction of higher-margin banking and treasury business. Typically, we also have a small operational gearing uplift each year of approximately 1%. As you know, we're committed to the future success of the business, and it's our strategy to invest in areas where we believe will ultimately benefit the business, whilst delivering an acceptable margin. This includes start-up services in new jurisdictions, current examples of which are our private office, ESG service and Irish Funds business, which we calculate drag our margin today by 0.6%. We also see margin dilution from investment in growth jurisdictions. These are jurisdictions where organic growth exceeds 15% or where the current infrastructure is disproportionate to the revenue generated. We currently have just over 10 jurisdictions that fall into this grouping. Gross margins from this cohort averaged 51% compared to mature jurisdictions where the average is 69%. Four years ago, 33% of our revenues came from these growth jurisdictions, whereas today, it's over 50%. Finally, on margins, I've previously noted our higher spend on risk and compliance. Notwithstanding the hard to quantify amount of chargeable time we spend dealing with regulatory obligations, we also continue to invest into our group capability. Over time, that alone has impacted margins by 50 basis points. Now focusing on cash conversion on Slide 12. Cash conversion was 86%, a decrease from 104% recorded last year. Our normal cash collection cycle is that we have strong collections in H1 that were above 100%. So this is a significant drop, albeit it remains within our guidance range. The drivers for the drop are temporary and do not impact our ability to meet our annual target. Adjusting for these temporary impacts, would have seen us delivering cash conversion of approximately 102%. The drivers for the decrease, as shown in the bottom graph, were as follows: 4 percentage points for temporary timing differences. These include cash outflows that we paid in H1 this year that we would normally pay out in H2. 4 percentage points for a change in billing cycles for one of our business segments, where we've moved to a biannual billing cycle for fees that were previously billed on an annual basis at the beginning of each year. These fees were collected in July. A 2 percentage point impact due to FX in the period. This can fluctuate and has been adjusted to show a constant currency position. The 6 percentage points is due to the impact of recent acquisitions, primarily FFP and SDTC, where the businesses do not follow our usual H1 seasonality and our cash inflows are not weighted to the first half of the year. As you can see, adjusting for these, our underlying performance in H1 was strong. We maintain our medium-term guidance range for annual cash conversion of 85% to 90%. Now let's look at net debt and leverage on Slide 13. At the end of 2024, our reported net debt was GBP 182.3 million. And by the 30th of June, it stood at GBP 225.1 million, an increase of GBP 42.8 million. This was driven in the main by the net outflows for acquisitions of GBP 47.8 million, where material outflows included the payout in full for the FFP earn-out of GBP 24.9 million, the SDTC earn-out of GBP 19.1 million and a total of GBP 3.8 million covering Hanway, perfORM and Buck earn-outs. Our reported leverage was 2.06x underlying EBITDA. However, annualizing recent acquisitions to achieve a pro forma leverage shows that we would be within our guidance range. With the Citi and KHT acquisitions, leverage will be above 2x at the year-end, but below our absolute peak of 2.5x. We expect to rapidly delever through 2026. As anticipated at the year-end, we completed on a U.S. private placement facility in the first half of 2025 for $100 million. As at 30th of June 2025, the group had total undrawn funds available from banking facilities of GBP 123 million. And finally, our return on invested capital. We delivered a return on investment of 13% in the last 12 months. This was an improvement of 40 basis points from the position at the end of 2024, and this continues to be significantly above our cost of capital. I'm really pleased with this improvement in a period of ongoing acquisition activity. The lifetime value of clients, which represents the revenue that our client relationships will generate in the absence of new business, increased by 4.3% from 2024 to GBP 2.4 billion. Since IPO, we've reported over a 700% increase from GBP 0.3 billion in 2018 to GBP 2.4 billion today. To conclude, we continue to deliver a solid and resilient set of financials in the second year of our Cosmos era. And on that note, I'll hand back to Nigel. Nigel Le Quesne: Thank you, Martin. As I've mentioned earlier, next, we will cover the macro environment, its effect on the M&A market and take a deeper look at the 2 divisions. Following which I will discuss 2 key topics. Firstly, how the growth of capital allocation to alternative assets acts as a tailwind for the group; then secondly, detailing the positive progress of the Citi Trust integration and how our ability to solve for banking institutions seeking lighter operating models provides JTC with a competitive advantage. In the wider M&A market, global deal volumes were down 13% in the first half of 2025 when compared with the previous year. This was largely due to the macro environment, including trade uncertainty, geopolitical instability and a difficult funding environment. The sentiment has definitely improved in H2 as the financing markets improve. Buyer appetite remains strong as firms face mounting pressure to deploy capital, demonstrated to some degree by the recent interest in JTC. Advisers have backlogs of deals creating a buoyant market. In our sector alone, we're aware of close to 10 deals of a good size attracting strong market interest. Given our current financial leverage and recent acquisition activity, we will concentrate on maximizing the opportunities presented by Citi Trust and KHT in the short term. But we will keep a close eye on the developments in the wider market, where we continue to be viewed as a good counterparty and long-term home for businesses by sellers and advisers alike. The regulatory regimes continue to prove challenging, as I've commented on previously. The propensity to look to impose regulatory fines on organizations for specific client matters, which are often minor in nature rather than systemic issues has been unhelpful. At JTC, this current environment has led to increased costs in the risk and compliance teams, created a need for greater technology spend and a disproportionate amount of time being demanded on the divisional fee earners. The number of regulatory interactions we've been required to engage with across our growing global platform continues to increase period-on-period, reflecting the trend of increased scrutiny across the sector as a whole. Regulation can, of course, also act as a tailwind to our industry, however, creating additional demand for our services and providing M&A opportunities as businesses consolidate to share the cost of the regulatory burden. As I mentioned earlier, the divisions have both performed well, although have been faced with slightly different challenges. In PCS, we have had opportunity of pre-completion work ahead of the delivery of Citi Trust, our largest acquisition to date. As mentioned, we have also been successful in our bid for the KHT business and are now following a similar but less complex integration process and expect to complete the transaction following regulatory consents in Q4. Alongside this, division has benefited from excellent net organic growth of 14.5% and continues to lead its market. In ICS, we have not had the benefit of M&A activity in the period. And as a result, it has been a consolidation phase. We have taken the opportunity to refresh our go-to-market strategy and implement operational and technological enhancements. As indicated earlier, the macro environment has been more challenging. As a result, we were pleased with organic growth performance of 9.2%. This has included the addition of some substantial clients, which will continue to grow and flourish on our watch. Overall, as we look across the group, what is crystal clear is that we have an abundance of opportunities to explore in the second half of the year and beyond. I mentioned earlier that our industry has developed to deal with greater complexity over time, leading to a several market participants leaving the sector. In part, this has been due to increased burden of regulation and internationalization, which in turn has led to sector consolidation. This has then been accelerated by the attractive nature of the business model to investors. However, in our view, the core underlying tailwind has been the growth and increase in popularity of alternative assets. This is particularly evident by the retrenchment of banks from the market where bankable assets alone do not provide the breadth of holistic solutions demanded by ultra-high net worth individuals and families. Similarly, on the institutional side, with the growth of alternatives came the need for new and innovative corporate and fund structure solutions to manage those assets, creating a powerful driver for the industry in the process. As a result, we are operating in a market which has undergone profound structural change. It has expanded, consolidated and become increasingly multifaceted, driving demand for sophisticated administration, advisory and governance solutions, all of which are core strengths of JTC. According to the data provider, Preqin, today, there's around $16 trillion in global capital allocated to alternatives across private equity, real estate, infrastructure, renewables, private debt and hedge strategies. This figure is projected to nearly double to $30 trillion by 2030, growing at 9.5% compound annual growth rate. The growth is driven by both institutional allocators, for example, pension funds, sovereign wealth funds and endowments, all of which are supported by JTC's diversified model and by private capital from ultra-high net worth individuals and family offices, many of whom have a scale and sophistication that means they operate at a quasi-institutional level. JTC facilitates this capital deployment by providing administration for funds, companies and trusts. This places JTC at the intersection of two major flows, institutional capital seeking exposure to higher return illiquid strategies and private capital pursuing diversification and intergenerational wealth preservation. From an analysis of our own book of clients, we estimate that around 80% of our revenues are linked to structures that are designed for or contain alternative assets. This underscores the group's strategic focus and exposure to these long-term growth trends. As global allocation shift further towards alternatives, demand for sophisticated and scalable administration services like those provided by JTC can be expected to rise significantly. JTC is, therefore, not merely a professional service provider, we are an enabler of capital allocation in the fast-growing alternatives market. With strong exposure to both institutional and private capital flows, we are positioned to benefit from multiyear tailwinds. We have recently decided to update the names of the divisions to Institutional Capital Services and Private Capital Services, respectively, to better reflect both what we do and this important value driver that is common to both divisions and the vast majority of client types. The alignment between our service offering and expansion of the alternatives ecosystem across both institutional and private capital provides a clear, durable and scalable growth trajectory for the business. Now on to the progress of the Citi Trust integration. This deal has already had a significant positive impact on our profile and in particular, increased the awareness of the JTC brand in the United States and opened up greater access to very important markets in the Middle East and Asia. The Citi credentials have been particularly important in this regard, and we've experienced excellent collaboration from the bank with a sense of a true partnership, including the introduction to both potential and established clients, providing new distribution channels for JTC. We are already able to report that we have a clear route to improve the operating model, bringing an accelerated margin enhancement from our previous estimates made at the time of the acquisition was announced. As we indicated in July trading update, we are now confident the margin of the business will be 30% plus by the end of 2026. And this acquisition continues to look to be one of our most exciting deals to date. More generally, we have proved ourselves as a reliable counterparty for bank carve-out deals by concentrating on the priorities of the banks, which are focused on protecting their reputation and the client experience. We now have a track record that places us as the offtaker of choice for deals of this nature as a lighter operating model is sought as most recently demonstrated by the subsequent KHT deal. Finally, on to the key takeaways. We have delivered sector-leading performance with strong organic growth and stable margins that reflect our ongoing investment in the global platform. We are established as the leading independent provider of trust company services globally and the additions of Citi Trust and KHT are highly complementary to JTC's existing offering. The growth in capital allocation to alternative assets is a major structural tailwind for the group, and JTC is positioned at the intersection of those capital flows ready to capture significant growth opportunity for both divisions. We are progressing well towards achieving our Cosmos era goal of doubling the business from January 2024 and are highly confident we'll be able to do this ahead of schedule before the end of 2027. Looking at the second half of the year, we have a strong new business pipeline and consistent high win rates, giving us good momentum for organic growth in H2. While we will focus on the ongoing integration of Citi and early stages of KHT, we continue to track good opportunities to our M&A pipeline across both divisions and our key target markets. Return on invested capital is expected to continue to strengthen in 2025 with further improvement anticipated in 2026 as we realize the full year contributions from the Citi Trust and KHT acquisitions, both of which have been acquired at excellent multiples. As always, we will continue to invest the growth, ensuring that our global platform is always scalable and fit for purpose. Ultimately, we continue to concentrate on being the best service provider and less on being the biggest. Once again, we maintain our guidance metrics that define what sustainable success looks like for a business of our nature. So thank you for listening and for your ongoing support. We will now be happy to take your questions. Operator: Thank you to Nigel and Martin for the presentation. They're now unmuted. So we'll be happy to take questions. [Operator Instructions] I think the first one was Michael Donnelly. So Michael, we will come to you and unmute first. Michael Donnelly: Three from me. Could we take them in turn, please? First one, Nigel, you said the 20% new business pipeline growth from December to June suggested it was the effect of strong growth in the second half or good growth or something like that. Can you just confirm, should we interpret that growth in the second half as being in line with the 10% or 10% plus organic growth in that period? Nigel Le Quesne: I think, Michael, the signs are good, right? So it's the fullest pipe we've ever had. I think we've seen slower delivery, in particular, in the institutional market in terms of bringing clients through to a successful launch and into fee-earning territory. But the signs are really good, and it's a very strong pipe. So we're expecting, I think, to be keeping above our 10% plus organic growth metric. Michael Donnelly: That's great. Secondly, the 14.5% organic in private capital services, can you tell us how much of that you think came from U.K. Channel Islands? You may not have the exact number, but just a feel for was it the -- was it a major contributor? Or was it just in line with everything else? Nigel Le Quesne: I don't think -- the question is around the exposure to or migration from one to other. We're not really that exposed to the U.K. market to a large degree. So what I can tell you is the Jersey is probably the biggest single jurisdiction for wins in that period. And then we've had some really good wins in Cayman, Singapore and Dubai as well. So -- but not necessarily as a result of sort of driven by tax or other considerations. We're just not exposed to that market particularly. Michael Donnelly: Understood. And then finally, on Kleinwort and Citi, both trust businesses, do you think that once they're both completed and embedded in, the number of -- the amount of revenues exposed to assets under management will be very different from the sort of 15% that I think historically we've been used to that are AUM exposed? Nigel Le Quesne: No. The KHT book is actually a time and materials book in any event. So that doesn't change the mix at all. The Citi book, on the other hand, has got AUM elements associated or primarily as AUM. And the way we're dealing with that is we will use this year's fees to create, if you like, the minimum for future fees. So we create a floor and then we'll run the clock alongside the work we do for these clients and top up accordingly if we believe that's what it is. So in effect, we'll make it -- how can I put it, measured by time and materials. Operator: Thanks, Michael. It was great. Appreciate your questions. Next, could we unmute Vivek Raja, please. Vivek Raja: Thank you for your presentations. I found your results presentation very comprehensive. I don't have any questions. So apologies, I'm going to ask you about the bid situation. Just a simple question. You've set different PUSU dates for Permira and Warburg Pincus. I was just curious about why you've done that? Nigel Le Quesne: No, we didn't set separate different PUSU dates. It's really driven by when the bids were received. So they were just received on different days, and therefore, the dates are different. Unknown Analyst: Nigel, would help if I jumped in. It's [ Stuart ] from Deutsche. The PUSU dates are set by the date of the leak announcement. It's as simple as that, and there's sort of 2 different leak announcements. That's what sets those 28 days. Vivek Raja: Okay. I mean is that process -- how are you going to sort of align that process given you've got competing bids then? Unknown Analyst: There is no obligation to align it. Operator: Can we go to James Clark, next please. James Clark: My first is just on the wider industry and sector. There's obviously, as you know, right now, a lot of PE interest in all sorts of assets, both bolt-on and sort of larger platforms. I guess I just wondered from your perspective, when you take part in these bids and you see PE either out compete on price or maybe you outcompete them. I guess I just wondered what you are able to offer to some of these larger businesses privately that's drives their interest specifically, i.e., things like are they able to accelerate the margin profile because of greater automation or great use of AI? Are there any other areas that they're able to really explore that perhaps publicly as a publicly listed company, it's a bit harder. So I guess what really drives their specific interest? Obviously, it's a highly consolidating industry and there's lots of M&A potential. But what are they able to deliver, do you think privately that perhaps is harder publicly? I have a second question as well, which is more on the margin profile, but I'll wait for the answer. Nigel Le Quesne: I think -- well, can I just answer it from our perspective? Look, we like and have liked being a listed business. So -- but our industry is dominated by private equity, as you probably -- as you're alluding to, and it's at various levels. So if I look at it from our perspective, currently, it's fair to say that the ability to -- we have got balance sheet constraints in a consolidating market. So that is a challenge for us to work through as a listed business. And I think occasionally, it's meant that we couldn't compete for good assets over time. But we work it through and we find and we always have found very good deals to be done sort of away from and outside of perhaps the normal processes that you go through. But clearly, there wouldn't be the same balance sheet constraints in the business as a whole. In terms of what they can do that we couldn't do ourselves, I think it's debatable. I think there is a little bit of -- there can be a sense that we're in sort of period-to-period sprints as a listed business, which you may not be in quite the same place with a longer-term view that may be taken by a private equity house, particularly to, if you like, just we take time to sort of pit stop for a little bit and work out what it is you want to be doing in particular areas, technology you alluded to could be one of those. So there's obviously pros and cons with both, but there's definitely advantages for us for being the only listed business in our space, but occasionally works as a disadvantage for us as well. So I hope that answers the question. James Clark: That does. That's very helpful. And then my second question is just on the additional costs to do with compliance and risk management sort of spending centrally and the regulatory cost headwind. I think you flagged it was 50 bps headwind in the first half. Should we expect that heightened level of spending to kind of continue? And I guess, is it accelerating today versus a year ago? And then sort of follow-up to that would be the upper end of your margin limits being 38%. Is that now not really achievable because you've got this sort of, I guess, headwind structurally to your margin? And then I think -- so that's a big question here, but you also flagged that you can manage that margin headwind through scale. So I'd be interested to know how you sort of do that and why you wouldn't pass it on through price? Nigel Le Quesne: Happy to pick that up. I think it's too early to say whether the risk and compliance or risk and regulation environment we work in is necessarily always going to be a drag on margin to the degree it is today. But just to answer your question about sort of regulatory interactions, which we track, we've gone from 46 in 2022, 58 in 2023, 76 in 2024, expecting 90-plus this year. So that gives you an idea of -- now in fairness, we will have -- we're probably regulated in more ways, in more places than we were initially. But just gives you an idea of the burden and that is permanently some sort of regulatory interaction required. More generally, I think we were quite pleased with the Moneyval visits to Jersey and Guernsey, which obviously quite big jurisdictions for us that seem to go reasonably well. And we had a very good meeting with the group of international finance centers. I think we met 5 or 6 of them together in a forum around the beginning of the year. So having said that, we've seen a little bit more interest in the regulatory environment from both the Netherlands and Luxembourg in the last sort of 6 months or so. So it's there's sort of one area you feel is feeling -- is going quite well and then you'll get interest from another area. So -- but I wouldn't necessarily say that it will -- it means that 38% isn't doable. I just think there are different ingredients in different times, and there's other things we're doing all the time. I mean the margin is quite complicated. I'm sure as you know, growth can affect your margin, tech investment can affect your margin in the short term with a view to being long term. But I wouldn't say it's impossible for us to get to 38%, but it's probably a little bit more difficult than it was when we set the 33% to 38%. And then in terms of how we might address that, I think there's discipline, efficiency are all things I'm thinking of. Scale is part of it, technology is part of it. And frankly, pricing could be part of it as well. So I hope that's helpful. Operator: Thanks, James. We don't have any further hands up. So unless anyone wants to jump in quickly, I think we are through most of our time anyway. Great. Well, thank you very much to Nigel and Martin and all who have attended today. I hope you enjoyed the presentation, and the presentation will be on our website later today also. Many thanks. Goodbye.
Andrew O. Davies: Okay. We'll start then. So good morning, everyone, and thank you for joining our full year 2025 results presentation. For those of you who are here in person, and welcome to those joining us today by webcast and by audio as well. I'm Andrew Davies, I'm Chief Executive of Kier Group. And somewhat pointedly for me, this marks my last Kier results presentation. I'm joined today by Simon Kesterton, our Chief Financial Officer; and also by Stuart Togwell, currently our GMD for Construction, who will become the Chief Executive on the 1st of November this year. So just quickly before we go through the results, Stuart, if I can invite you to introduce yourself to those who you may not have yet met, Stuart? Stuart Togwell: Good morning, everyone. I'm Stuart Togwell. I'm delighted to see you all this morning, and I'm really proud and excited to become the next Chief Exec of the Kier Group. I've worked in this industry that I love for over 39 years now, the last 6 years of which has been working closely with Andrew and Simon in Kier. Initially, I came in as the Group Commercial Director, where I introduced the risk management and the operational discipline that we still use today. The last 2 years, I've been in the GMD for the Construction business and have also been a member of the main Board. I'm looking forward to talking to some of you here in person after the presentation, but in the meantime, Back to you, Andrew. Andrew O. Davies: Okay. Thank you, Stuart. And let's move on now to our FY '25 results. So firstly, I'll walk you through the highlights from the last financial year and then hand you over to Simon to talk through the group's financial performance. And this will be followed by an operational review, an update on ESG and we'll finish off with our outlook and recap of the long-term sustainable growth plan. And then, of course, there will be an opportunity for questions and-answers at the end. So working through the disclaimer, and we move on to the results summary and highlights. So starting with the highlights for FY '25, which is the first year of the long-term sustainable growth plan that we launched last September. In the year, the group's order book grew to a record GBP 11 billion, reflecting contract wins across our business and providing us with multiyear revenue visibility. Specifically, the order group -- the order book currently covers 91% of our targeted FY '26 revenue and around 70% of FY '27's. Group saw continued overall revenue growth of 3%, which delivered an adjusted operating profit of GBP 159 million. And this result represents a margin of 3.9%, which is above our own initial expectations and also progressing well towards our long-term target level of between 4% to 4.5%. This higher level of profitability continues to convert strongly into cash at a rate above our long-term target, leaving us with a net cash position of GBP 204 million at June 2025. We also saw a significant improvement in average month end net debt for the year to GBP 49 million. So given the continued progress that our group has made, I'm pleased to say we've significantly increased our returns to shareholders in year. We're proposing to pay a final dividend of 5.2p per share, representing a full year dividend of 7.2p, 38% higher than last year. We also launched a GBP 20 million share buyback during the year, which, as we speak, is roughly 50% complete. Additionally, we increased the capital deployed in our Property business where we're on track to deliver our long-term target of 15% ROCE, thus further enhancing shareholder returns. So overall, I'm pleased to say, as leadership of Kier now transitions to Stuart, that we're a business in very good shape, our strategy is progressing well, driven by our great people and now underpinned by our high-quality order book and strengthened balance sheet. We're progressing well to deliver against our long-term sustainable growth plan. So for this -- now my last set of results, I thought it's worth reflecting on Kier's track record of consistent delivery in the past few years and how that performance underpins our conviction in our ability to deliver our long-term plans. In recent years, we've proved that we can deliver for our customers and shareholders alike. As you can see from these figures, we've seen significant growth in revenue, profits and earnings since 2021. This has been achieved with growing levels of cash flow and as a result, significant improvement in the levels of debt, whereby we are now touching -- in touching distance of reporting average net cash. At this point, I'll hand over to Simon, who will take you through the detailed financial results. Simon? Simon Kesterton: Thank you, Andrew. Good morning, everyone. Turning to Slide 7. This sets out our high-level results. Revenue in the period, as Andrew mentioned, is higher than FY '24 and reflects strong performance across the group, especially in the Infrastructure Services segment, which I'll cover more in detail in the next slide. We delivered an adjusted operating profit of GBP 159 million, up 6% in the year and at a margin of 3.9% as we progress well towards our long-term sustainable growth plan target of 4% to 4.5%. We continue to generate significant levels of operating cash flow with net cash at the end of June 2025 as a consequence, materially improved year-on-year, rising to GBP 204 million compared to GBP 167 million at June 2024. This performance includes a strong working capital performance as inflows follow revenue growth to normal levels, allowing us to deploy additional capital to our property business, which will drive future earnings growth. In terms of average month-end net debt, this has improved to just GBP 49 million from GBP 116 million in FY 2024. The group has also been able to significantly increase dividend payments and further grow returns to shareholders through the launch of our initial share buyback as well as invest in the property business, as mentioned. Turning to Slide 8. I'll walk you through the group's revenue growth. Starting on the left-hand side, you can see FY '24 revenue of GBP 4 billion. Infrastructure Services revenue grew by 7%, primarily due to growth from water and nuclear, supported by continued HS2 activity. Construction revenue was steady with continued delivery of Justice projects. We have worked to increase the quality and profitability of our Kier Places business, resulting in us exiting some lower-margin contracts. Finally, for property, we saw a significant increase in transactions compared to the prior year, although the positive impact of this is only seen in operating profit given the mix of transactions with our property business being a return on capital business rather than a return on revenue business. So overall, growth was 3%. And if you adjust for property and the FM contracts, closer to 4%. Moving now to the adjusted operating profit bridge. We start on the left-hand side with the previous year's adjusted operating profit of GBP 150 million. Overall, volume, price and mix have resulted in an increase of GBP 0.6 million. As we just mentioned, we saw an increase in the volume of property transactions in the year, which resulted in increasing profit by GBP 6 million. Cost inflation was more than offset by management actions that delivered GBP 11.6 million during the year. These savings related to projects such as improving supplier onboarding, site setup optimization and Kier 360 and reflect the success of our performance excellence program as we demonstrate sustainable growth across our businesses. In terms of cost generally, it's worth reminding you all that more than 60% of our order book is made up of target cost or cost reimbursable contracts. And if we do choose to give price certainty to our customers, it's only done after key risks and opportunities are understood. The overall result is growth in adjusted operating profit of 6% to GBP 159 million and a margin of 3.9% that is progressing well towards our long-term target of 4% to 4.5%. Adjusted items, including -- excluding noncash amortization, amounted to GBP 26 million in the year, GBP 1 million lower than the previous year. The main element relates to fire and cladding costs, GBP 17 million in the year. The property costs relate to the sale of a legacy office in Manchester, which completes our corporate office space reorganization. This slide illustrates how our sizable attractive market opportunity flows ultimately into our strong order book and the visibility that we have on it. The government has committed to improving and renewing the U.K.'s infrastructure and in June this year, reaffirmed its 10-year strategy, setting out total spending to 2035 of GBP 725 billion. Also in June, as part of their comprehensive spending review, the government detailed their priorities in the next 3 to 5 years. This strategy and projected spend map to the markets served by our business via frameworks. Kier is well placed to benefit as we currently hold positions on frameworks worth GBP 156 billion. These frameworks cover key areas of government focus, such as health, education, defense, water and nuclear. As you can see on this slide. It is these frameworks from which projects are awarded to preselected contractors that provide the path by which we fill our order book, driving revenue growth, giving us confidence in the successful delivery of the long-term sustainable growth plan. This slide considers our order book in more detail, standing now at a record GBP 11 billion, as Andrew mentioned. This order book gives us a clear view of future revenue and cash flows, representing 91% of FY '26 revenue already secured and around 70% of FY '27 revenue. As I've just said, 60% of our order book is under target cost or cost reimbursable contracts or otherwise subject to a 2-stage pricing process, which reduces considerably a contract's risk profile. Furthermore, as we've just seen, our order book is fed by our sustainable long-term framework agreements, where the value of the positions that we hold amount to GBP 156 billion. As you can appreciate, the combination of our strong order book underpinned by these framework positions illustrated here provides us with considerable visibility of future revenue streams and cash generation. Now let's turn to our cash flow. Adjusted EBITDA in the year grew 10% to GBP 228 million. We then have GBP 28 million of working capital inflow, a great performance. It's worth noting that last year saw 17% revenue growth, which drove a higher working capital inflow, while FY '25 saw revenue growth of our expected GDP plus levels. CapEx in the period amounted to GBP 65 million, with GBP 48 million of that relating to payments made under leases now capitalized under IFRS 16. Net interest and tax increased by GBP 13 million in the year due to interest payments to new bondholders, which commenced in August 2024. The group's deferred tax asset of GBP 137 million relates to losses made in previous years, allowing us to offset half of our tax charge in any one given year, and we anticipate it will take around 7 years to fully utilize this asset. All this means that we generated significant free cash flow of GBP 155 million in FY '25 with a conversion of 125%, significantly above our long-term sustainable growth target. This strong cash generation has allowed the group to grow our cash balance while significantly increasing shareholder returns. Starting on the left-hand side with closing cash of GBP 167 million at June 2024, we then have the FY '25 free cash flow of GBP 155 million that we've just seen on the previous slide. Next, we have the adjusting items of GBP 18 million, significantly lower as we've seen in the GBP 37 million paid in FY '24, followed by the payment of GBP 8 million to our smaller pension schemes. The level of cash generation after these items provides us with considerable scope for capital allocation. Firstly, regarding dividends. It's notable that FY '25 is the first year to include payment of both interim and final dividends totaling here GBP 24 million. Then we have GBP 51 million of capital deployed to the property business. Lastly, we have the purchase of Kier Group shares, both the shares bought under the share buyback program as well as the shares for the group's employee benefit trust. As a reminder, this trust acquires Kier shares from the market for use in settling the long-term incentive plan scheme shares and the share schemes when they vest. This results in a net cash position of GBP 204 million, a significant improvement, as we've mentioned, compared to the GBP 167 million at the start of the year. Now moving to Slide 15 and as a reminder of the significant progress we've made by effectively eliminating our average month-end net debt. Over the last 4 years, we've reduced our average net debt and debt-like items by over GBP 500 million, a significant improvement, resulting in just GBP 49 million of average net debt in FY '25. This slide sets out our long-term funding arrangements that we have in place to support our strategy while retaining flexibility to deliver future growth. The long-term financing of the group is provided through the GBP 250 million of 5-year senior notes expiring in 2029, combined with our GBP 150 million revolving credit facility, which runs to 2027. In January 2025, we fully repaid all of the outstanding USPP notes and GBP 111 million of the revolving credit facility matured, both in line with their agreements. For my penultimate slide, I'd just like to remind everyone of our capital allocation priorities. Overall, we're focused on optimizing shareholder returns while maintaining a disciplined approach to capital allocation and maintaining our strong balance sheet. In short, we target dividend cover of around 3x earnings through the cycle. We plan to invest further in our property business to generate consistent returns over time, deploying up to GBP 225 million of capital, targeting consistent long-term return on capital employed of 15%. With regard to acquisitions, we will continue to consider value-accretive acquisitions in core markets. Lastly, in January earlier this year, we announced an initial GBP 20 million share buyback program, further increasing returns made to our shareholders. I will finish with a look at our shareholder returns. As we saw earlier, Kier has an astonishing record of delivery in the period under Andrew's stewardship. Material improvements have been made to grow the order book, improve profits, grow cash flow and reduce net debt. All this combined with the substantial revenue visibility now provided by our order book and the pipeline of growth opportunities gives us confidence in the group's future prospects. It allows us to propose a final dividend of 5.2p or 7.2p in total for the year 2025, an increase of 38% versus the prior year and representing earnings cover of 3x, in line with our long-term sustainable growth targets. This, combined with the GBP 20 million initial share buyback shows that shareholders will continue to benefit from Kier's significant financial improvement as well as the renewed strength of the group's balance sheet. And now before the last time I hand over to Andrew for his operational review, I'd just like to say thank you very much to Andrew. Thank you for his efforts, for his hard work in leading and putting together a great team, which has been very successful. And thank you very much for being a pleasure to work with. Congratulations for all of that success. And then, of course, finally, to wish him all the best for the future. And now, for the last time, back to you, Andrew. Andrew O. Davies: Thank you, Simon, and a real thank you to you as well for all you've done for the company. So if we move now to the operational update, and we'll start with Infrastructure Services first. In 2025, we saw revenue growth of 7%, driven by HS2 capital works as well as growth from water and nuclear projects, where our previously announced contract wins are now converting to revenue. In particular, our Natural Resources, Nuclear Networks or NRNN business has continued to build on our strong position in water market as the operating companies in the sector commence the next investment cycle of AMP8. Adjusted operating profit was GBP 111 million, representing underlying growth of 4%, allowing for a one-off GBP 6 million customer gain in the prior year. It's widely acknowledged that the industry remains affected by delays at the start of the works under Control Period 7 for rail and the deferred announcement of the RIS3 program for highways. Nevertheless, the strength and breadth of our design and build business in highways, where we maintain and build national and local highways and our excellent customer relationships, combined with our strong order book allows us to continue to effectively manage risk and return in this segment, providing us with good current throughput and future visibility of revenues. If we turn to a slide which emphasizes the strong position Kier has across the U.K.'s water sector. So here, we have a clear growth opportunity in what is a regulated market, which, of course, sits outside the public spending envelope. The AMP8 investment cycle is now well underway with operating companies set to deliver a significantly larger investment worth circa GBP 104 billion to 2030, and that's double of AMP7. As we said in the past, with the market doubling, we expect Kier's activity to match that growth, thus doubling in the same time frame. The momentum and determination behind this level of investment is clear. An aging asset base, which needs replacing or refurbishing, increasingly stringent environmental regulations and the focus on extending the life of existing facilities through maintenance. The operating companies are thus turning to Tier 1 contractors to deliver these upgrade and maintenance programs, particularly those with specialist mechanical and engineering skills where Kier is demonstrably well placed to take advantage of this opportunity. And this slide sets out our U.K. footprint in water. We're one of the largest Tier 1 contractors supporting the regulated water companies with their asset optimization. As you can see, at June, we held positions on a total of 17 frameworks with 9 water companies worth a combined GBP 15 billion of spend opportunity. Moving next to our construction business, where we build schools, hospitals, prisons and defense projects for government as well as projects for the commercial sector. Also included here is Kier Places, our facilities management and housing maintenance business. Construction revenue remained steady overall at GBP 1.9 billion. During the year, we successfully delivered significant levels of work for the Ministries of both Justice and Education, alongside starting work for HMP Glasgow for the Scottish government, where activity levels will ramp up through 2026. We also acted to better position Kier Places for enhanced future returns through the exit of some of the lower-margin contracts, which Simon mentioned. The adjusted operating profit grew 8% to GBP 75 million, seeing the benefit of an improved business mix. And lastly, let's look at our property business, which invests and develops commercial and residential sites, largely operating through joint venture partnerships to deliver urban regeneration projects right across the U.K. Operating profit grew significantly, driven by the higher volume of transactions Simon mentioned in the year compared to 2024 -- FY '24. Indeed, many transactions were achieved in the second half of the year as we continue to build momentum and scale in this business, and we expect this seasonal profile to repeat in FY '26. Just a reminder, we remain focused on the disciplined expansion of the property business through selective investments and strategic joint ventures with capital employed totaling GBP 198 million at June 2025. Our long-term plan is to increase capital employed to GBP 225 million, and we expect that this stable capital and the maturing partnerships will result in the business exiting 2027 on or around its targeted ROCE of 15%. So let's turn to our sustainability framework. It's through this framework that we align our activity to our major clients, the U.K. government and regulated companies by focusing on 3 key pillars: people, places and planet. As a reminder, our purpose is to sustainably deliver infrastructure, which is vital to the U.K. As a strategic supplier to the U.K. government, ESG is fundamental to our ability to win work and secure positions on long-term frameworks. U.K. government contracts above GBP 5 million require net zero carbon and social value commitments. And in order to help achieve these goals, we focus on our people pillar, which targets to build a workforce which has the relevant skills and capabilities to deliver these goals, ensuring where possible that everyone receives equitable treatment that our people reflect the communities where we live and we operate. Secondly, leave a positive legacy in our communities through our places pillar. We do this through the projects we deliver and the people we employ within them, mindful always in addressing the challenges of inequality. And thirdly, as the stewardship of the planet is vital to all of us, we're reducing our carbon emissions and supporting our customers with their infrastructure requirements as they adapt to climate change. Our sites aim to protect and enhance nature as well as efficiently use resources on our projects. To just review our environmental progress as we see carbon reduction as both an obligation and an opportunity. Overall, we're seeing increased demand from customers to deliver projects sustainably, which is reflected in our Green Economy Mark accreditation. Our net zero targets for Scopes 1, 2 and 3 have been validated by SBTi. And in line with these, we have reduced Scope 1 and 2 emissions by 4% in FY '25 and by 71% since FY '19, which is our baseline year. We continue to reduce our emissions according to our carbon reduction plan. In terms of our efficiency, we achieved a 3% reduction in our waste intensity overall in the year. And secondly, we'll reflect on our social responsibility. Safety as ever is our license to operate, and we're pleased to report a 26% reduction in our accident incident rate in FY '25. Kier's performance depends ultimately on our ability to attract and retain a dedicated skilled workforce. During the year, this included 590 apprentices with over 10% of the workforce in formal training and development or earn and learn programs. Furthermore, over 40% of our graduate intake in the year were female as we focus on making Kier a diverse and inclusive place to work, reflecting the communities we work within and we serve. And turning to our supply chain partners. In FY '25, over 60% of our subcontractor spend was with small and medium-sized enterprises, while we continue to adhere to the prompt payment code. So before we come to our outlook, I thought I'd just remind everyone of our long-term growth plan, which is laid out here and provides clear visibility of the direction of the group. We target revenue growth above GDP, driven by the attractive market dynamics combined with our market-leading positions. We're targeting to reach an adjusted operating margin of 4% to 4.5%. For cash flow, we target around circa 90% conversion of operating profit and the achievement of average net cash position to allow us to invest surplus cash in those areas that will deliver increased shareholder returns. This includes a targeted sustainable dividend policy of circa 3% earnings cover through the cycle, which we have, of course, now delivered for this year. And now to finish with a short summary and our outlook. The group has continued to make significant operational and financial progress in the year, delivering revenue growth with margins ahead of expectations and progressing well towards long-term target range. We've continued to grow our order book to a record GBP 11 billion, providing us with significant multiyear visibility. This has allowed us to significantly increase the proposed dividend payment, and we're well progressed with the initial GBP 20 million share buyback program launched in January 2025. And building on our outperformance in FY '25, the group has started FY '26 financial year well and is trading slightly ahead of the Board's expectations. And on a personal note, it's been a privilege to lead Kier over the last 6.5 years and to see the group transformed into a strong and sustainable business with enhanced resilience and a reinforced financial position. That transformation has only been possible due to the capability, professionalism and frankly, hard work of Kier's teams and the support of our clients and our partners. I'd like to thank them all for their support and commitment in ensuring Kier's continued success in delivering infrastructure that is vital to the U.K. And in particular, I'd like, of course, to wish Stuart and Simon the very best for the future and thank them both. And with that, I will open up the meeting to questions and answers. And I suggest we do questions first from the room, and then we'll take questions from the conference call. Thank you. Robert Chantry: Rob Chantry at Berenberg. Obviously, congratulations on the delivery and your time in the business, Andrew. So 3 questions from me. So firstly, thoughts around, I guess, the debt position. Obviously, tremendous increase in delivery in recent years and kind of business moving towards an average net cash position. The '29 bonds trading well. Can you just remind us of the options available on the refi, any longer-term thoughts around capital structure given the cash delivery? I think secondly, clearly, you've been successful on getting on the GBP 15 billion of frameworks in water and water revenues set to double. Can you just talk, I guess, a bit more anecdotally around what surprised you about the evolution of that market in the past years? Has it been more competitive? Has there been things where you've done better than you might have expected, things that might be more challenging? Just how that market has evolved in terms of the contracting structure? And then thirdly, property, clearly, kind of good step up this year. You're talking about 15% ROCE by '28, so that's GBP 30 million, GBP 35 million of EBIT. Can you just give us an indication of kind of what's working particularly well in that division at the moment? Any indication of the shape of going from GBP 12 million EBIT this year towards GBP 30 million, GBP 35 million 3 years out would be very helpful. Andrew O. Davies: Simon, do you want to take the first and the third, maybe I'll do the middle one. Simon Kesterton: Absolutely. So thanks, Rob. In terms of debt position, I mean, we're very happy with the balance sheet, GBP 49 million of monthly average net debt is pretty much there, plus or minus zero. And as I've mentioned previously, I think we're comfortable really even going up to probably 0.5 turn plus or minus on the balance sheet of EBITDA in terms of monthly average net debt. In terms of the refi, yes, we did that in February 2024. So the first time we could refi the bond would be in February 2026. And you're right, it's trading very well. So that would give us an opportunity. And of course, we've got our half year results probably out March that year in 2026. So that might be a good opportunity if things remain the same to refinance. Andrew O. Davies: Property? Simon Kesterton: I can cover off property as well first. So in terms of shape, it's probably going to be back-end weighted, Rob. So I'd expect a small increment in this current financial year on last year before we really start towards the back end of FY '27, delivering that 15% return on capital employed. And that's just sort of the nature of when you invest, it takes 3 years before you start to see the returns. Andrew O. Davies: Rob, just on the water question you're asking, I mean, we do see our revenues doubling because the AMP8 has doubled. We've got material positions on all of the frameworks circa GBP 15 billion by advertised values positions on the frameworks, which we've won. So we feel we are confident that we will double alongside AMP8. The competitive environment is they have sought out -- the water companies sought out Tier 1 contractors to deliver some of the larger schemes, and that's why we've been selected by many of the larger water companies to deliver those. But there are -- there is plenty of space within this sector for other companies to operate. But I think we're probably one of the leading Tier 1 companies operating in that sector. So yes, we're very confident over the next 5 years, certainly on AMP8 and probably thereafter, but we'll see what happens on AMP9 that water is going to come a mainstay of this company. There's no doubt about it. Andrew? Andrew Nussey: Andrew Nussey from Peel Hunt. Two questions. First of all, for Simon. When we look at the profit bridge, obviously, inflation and management actions are pretty big chunks there. What are the thoughts in terms of '26 and '27 and the ability to keep driving management action to offset those inflation pressures is the first one. Simon Kesterton: Okay. Yes. So firstly, I think inflation, the number that you're seeing there, obviously, our projects are quite long term. So you're seeing the impacts of prior -- a couple of years ago inflation there. So I would expect, firstly, the inflation number to start to tail off a little bit. And then in terms of management actions, I don't think any question that we'll be able to continue to more than offset that. Andrew Nussey: Second question is actually for Stuart. Obviously, you've led the Construction division, which has been a leader in terms of modern methods of construction and digital tools. I'm just curious, when you move into the CEO role, what other opportunities can you see for those developments across the group? And what might that mean? Stuart Togwell: Okay. I'll stand up. I was enjoying sitting in the audience. I think the most important thing to start with in terms of we're not being complacent, although we're already sitting with GBP 11 billion order book. I'm a big fan in terms of AI and digital, first of all. in particular, the work we've been doing around digital twin in terms of how that drives energy efficiencies and also product improvements. But alongside that, in terms of Simon's team is already using bots at weekends to run around to look at administration improvements. Alongside that, to make sure it's really important with AI that we create a safe environment for us to use. So we're working with our IT providers in terms of how we can do that. And even more importantly is to make sure that when we do have that technology in the business, we have a workforce that is comfortable and can embrace that technology to make the most of it. Regarding MMC, again, we haven't been complacent. And what we've been looking at is rather than just concentrating on volumetric, we've been looking at all forms of MMC to ensure that we can come up with the appropriate solution for our customers. And there are 2 key themes that I would take around from MMC. First of all, if you don't have the design right, you lose the benefits of MMC. So one of the huge benefits we have across the group is we were already sitting with 700 designers that can help us. And the other point in terms of that is just to remember, that provides us the opportunity to working with new clients like the defense when they're bringing out volumetric and single-living accommodation in terms of 2D models, we can provide very cost-effective designs for them to actually start working through at scale. The other key factor on MMC is you got to have integration with the M&E. So again, in terms of care, we have our own in-house M&E company that can help bring those both design and M&E to the forefront of any MMC solution. Jonathan William Coubrough: Tony Coubrough from Deutsche Numis. Could I ask firstly on Living Places, you mentioned exiting some underperforming contracts. Were those always underperforming or had something changed there? And how does the portfolio look today? Another question would be on property. What was driving the increase in transactions? Was there any particular sector there? And then last one, probably a follow-up on MMC, where you're able to access R&D tax credits. Is that predominantly in where you've been using MMC and a bit of detail there, please? Andrew O. Davies: I'll take the first one, Simon, perhaps take the second and third. On the Living Places, the key to getting efficiencies in housing maintenance is density. So you may have some very effective contracts. But if you don't have the density, you won't get the utilizations you need to make the money you need. So we elected to exit certain contracts where we didn't feel we could get the density around those contracts to make it profitable. We're focusing now on areas where we can get the density in both reactive and planned maintenance as well. So I think that was a fairly straightforward set of actions, which the team just delivered very effectively. So we're pretty pleased where we find ourselves now. We do think in the future, that will be an area of growth as society seeks to upgrade affordable housing in particular. So we want to stay heavily connected to that. Simon, do you want to take the one on property, the transactions? Simon Kesterton: Yes. I mean, property, Jon, it's just across the board really. So the 3 segments that we serve, really pretty much equal in transactions. So nothing really standing out. And then in terms of R&D tax credits, this isn't just focused on MMC. I mean Stuart touched on it, 700 designers go to it, and it's between 100 and 200 projects a year that it's spread across. So it's not one big chunky claim. It's lots and lots of little claims. Adrian Kearsey: Adrian Kearsey, Panmure Liberum. Another question on property, if I may. Simon, you talked about the lead time for property being sort of 3 years in order to do a project sort of from start to finish. And so therefore, you've got a building visibility. Could you give us some idea within that sort of 3-year sort of time frame, what types of property are you looking to develop and deliver? And also what kind of development relationships you have and perhaps give us an indication of how much JVs are going to be used within that context? Simon Kesterton: Yes. So as in JVs, we use extensively. That allows us to keep the amount invested in any one project small and hence, spreads risk and helps keep liquidity in the portfolio. So we intend to use JVs extensively. Where we focus on is last mile logistics, mixed-use residential redevelopment projects and, of course, environmentally friendly offices as well. And so those are the 3 sectors that I think we'll continue to focus on going forward. Andrew O. Davies: You mentioned the 3-year gestation. That's what gives us the confidence because we're putting the increased capital into that. That will take a period to gestate whether it's 3 years or slightly more, slightly less. It's never a precise number like that, but that's where we get the confidence and where we're getting the performance is out to the pre-existing financial investments we've made. So we put more money into that in the same strategy in the similar sort of areas which are paying well for us. That's why we're confident this thing will grow to 2027, hitting the 15% ROCE target. Any more questions? Are there any questions online? Operator: [Operator Instructions] At present, we have no questions on the conference call. Andrew O. Davies: Okay. Then with that, I... Andrew Nussey: I just thought as perhaps one of the elder statesmen in the room, I really just like to acknowledge all your efforts on behalf of the city over the last few years. 2019 seems like quite a long time ago, but Slide 5 clearly articulated the progress. So I appreciate it's a team effort, but you put the band together. So on behalf of the city, well done. Andrew O. Davies: Andrew, that's very kind of you, thank you. That's probably why I have the gray hair I have hanging in there. But can I thank everybody in this room and my team present and past for the enormous efforts and support. And thank you for all your help and advice over the years. It's been hugely appreciated. And I think we've got a great company back to exactly where it needs to be. And again, wish Simon and in particular to Stuart, the very best of luck in the future. They won't need luck. They're a great team, and they'll continue to do the great work. So thank you all very much.
Operator: Good day, and thank you for standing by. Welcome to the Transgene 2025 Half Year Financial Results Conference Call and Webcast. [Operator Instructions] After the speaker's presentation, there will be the question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lucie Larguier, Chief Financial Officer. Please go ahead, madam. Lucie Larguier: Thank you, Maria, and good afternoon, everyone. Thank you for joining us on today's call to discuss our progress over the First Half of 2025 as well as a half year results. You can access the press release issued today on the Investor page of our website. On today's call is Dr. Alessandro Riva, our Chairman and CEO. After Alessandro's discussion, we will take questions already on this telephone call and also on the web platform. Before we begin, I'd like to remind everyone that today's discussion contains forward-looking statements, which are subject to a number of risks and uncertainties. And with this, I now hand over the call over to Alessandro. . Alessandro Riva: Thank you, Lucie, and good afternoon, everyone. I would say that it has been an exciting first half of the year, not only for Transgene Individualized Therapeutic Vaccine, but also and more importantly, for the head and neck cancer community. We presented the full 24 months disease-free survival data for all Phase I patients treated in randomized Phase I trial in a rapid oral presentation at ASCO this year in a session that was dedicated to head and neck cancer. We are extremely proud that all operable head and neck squamous cell carcinoma patients treated with our Individualized Therapeutic Vaccine, TG4050 in the randomized Phase I trial remain disease-free after a median follow-up of 30 months, as you can see from the Kaplan-Meier course projected in this slide. And now on Slide 5, all the trial endpoints of the randomized Phase I study were met. Safety is extremely good. Immunogenicity has been demonstrated. And not only do we see the induction of a specific cellular immune response, but also we see that this response are durable and can still be seen after 24 months since the start of treatment. We will present additional immunological data from this trial at a scientific conference in Q4 2025, including insight into the phenotyping of patients' immune response. In addition, as you can see in this slide, the ongoing Phase II trial is progressing at a very good pace, and we are very confident that we will randomize the last patient in Q4 2025 allowing us to plan for the communication of the first immunogenicity data in the second semester 2026 and the 2-year efficacy data in the Q4 2027. I'm now going to Slide 6. TG4050 randomized Phase I data were presented at ASCO along with other 2 trials with immune checkpoint inhibitors in the adjuvant treatment of operable head and neck squamous cell carcinoma, the KEYNOTE 689 and the NivoPostOp trial. These 2 trials, as you can see, extremely encouraging data and pembrolizumab, as you know, is now approved for this patient population in the United States of America and probably soon in Europe. Nevertheless, 35% of patients relapse within two years after surgery and that is exactly where the future lies for TG4050, improving the outcomes for these patients that do not benefit durably from immune checkpoint inhibitors. Moving to Slide 7. So as you can see, we want to build on the positive Phase I data and the successful inclusion in the Phase II trial. And for this reason, we are discussing with clinicians the best way forward for TG4050 in the head and neck cancer so that we can bring this potential new treatment to patients in need as quick as possible. In addition, our myvac platform has broader potential in early solid tumor setting that goes beyond head and neck tumors. We want to continue to leverage this unique technology to address areas of high unmet medical need. And that's why in parallel, we continue to prepare a potential new Phase I trial in the early treatment of a solid tumor with biology that different from the head and neck tumors. We aim to initiate this study as soon as all conditions are met from a regulatory and financial point of view. As you know, and I'm on Slide 8, the manufacturing is key for Individualized Vaccine as it is key for CAR-T cell therapy. That's a topic that we started to address from the beginning of our work on myvac. We have demonstrated feasibility to deliver TG4050 to operable head and neck cancer patients in the context of a multicentric multinational Phase I/II trial. The next step for us is to continue optimizing the manufacturing process for myvac technology and for TG4050 to be able to scale up and run several trials in parallel, including a potential registrational trial. Under the guidance of our Chief Technical Officer, Simone Steiner, who joined Transgene before this summer, we will continue to invest to ensure smooth execution to support further acceleration of the myvac program. We believe that scientific excellence, strong data and operational focus generated with TG4050 clearly differentiated Transgene in this highly competitive and attractive field. Hence, the rationale, as you can see in this slide, of our decision to focus our efforts and resources on our lead program myvac platform and today TG4050. With regards to our other programs, we will present a poster at ESMO in Berlin on the data generated by BT-001 in the Phase I trial as monotherapy and in combination with pembrolizumab. We have seen interesting responses in patients with refractory diseases, in particular, leiomyosarcoma patient and melanoma patient. Looking at leiomyosarcoma patients, you can see that BT-001 was able to positively change the tumor microenvironment. The science generated around this initial trial constituted the basis of discussion with clinicians to continue the development of this candidate in the intratumoral setting. Looking at our two other candidates, TG4001 and TG6050, we are assessing different scenario in a context where the overall financing environment for biotech company is pushing us to focus on key value-creating programs. And now I'm going to hand over to Lucie for some words on the financials. Lucie? Lucie Larguier: Yes. Thank you. So our financials are, as usual, in line with our forecast, thanks to strict monitoring of [ dilution ] and stringent cost control in today's environment. In terms of outlook, and I think it's positive, we have extended our financial rhythm, and our business is now funded until the end of December 2026, thanks to the credit facility and the engagement support from TGH, which is, in fact, [indiscernible]. I now hand over to Alessandro for a few concluding words. Alessandro Riva: So to conclude, I will say that we are now building increasing momentum on the myvac platform. The data we presented at ASCO in operable head and neck cancer with 100% survival at two years represent a solid proof of principle for TG4050 in an indication where a significant medical need remains in spite of a great improvement delivered by immune checkpoint inhibitors. Our vision is clear with a focus on individualized cancer vaccine. In the next couple of years, we will continue to present clinical catalysts in head and neck, the Phase I will deliver additional and informative immunogenicity data that will be presented in Q4 2025 at a scientific conference. You can also expect the follow-up at three years from the same study in the middle of 2026. The Phase II trial in operable head and neck cancer patients is well on track and data are expected in second half 2026 regarding the first immunogenicity data and in Q4 2027, the 2-year disease-free survival data. When all conditions are met, as discussed, we'll be able to start an additional Phase I trial in a new indication in operable setting. The individualized cancer vaccine field continues to evolve and start to be derisked from both scientific and clinical point of view. And when looking at the economics, operable head and neck cancer alone represent a market of more than $1 billion per year at peak. We continue to work harder to deliver on our strategy with important milestone in sight, we are confident that Transgene is well positioned for the next step. And now Lucie and I will take your questions. Operator, please. Operator: [Operator Instructions] And now we're going to take our first question from audio line. And it comes from the line of Clara Montoni from [indiscernible]. Unknown Analyst: This is [ Clara Montoni ] from [indiscernible]. Congrats for the update. I was wondering if you could remind us when do you expect to announce more on the TG4050 development plans? Will this be pivotal plans? And also, can you talk a bit more about or in the context of the recent approval of Neoaduvant and Adjuvant KEYTRUDA in localized head and neck cancer. So specifically, I was wondering if those 35% of patients relapse, do they have particular baseline features? Could you please expand on that? Alessandro Riva: Okay. Thank you, Clara. So first of all, in terms of more clarity and visibility related to the next step for TG4050 in head and neck and in particular, the potential pivotal Phase III trial. We plan to have some visibility by Q2, 2026. The reason being that, of course, we are starting the discussion with some expecting clinicians in the field of head and neck. We're going to finalize the proposal that, of course, will be discussed with the health authorities, and we plan to update the community on the potential next step kind of around the second quarter of 2026. So -- And with regards to your second question related to KEYTRUDA pembrolizumab in the KEYNOTE 689. So if you look at the New England Journal of Medicine publication, that is the only source of information that we have -- it doesn't appear that there is a particular prognostic factor that is underscored in terms of potential risk of relapses. So this is something that will have to be explored further. And also when we will have more data from the other trial with nivolumab, NivoPostOp [indiscernible], we are going to clarify this topic. So the [ idea ] that we have independently of the risk factors is that knowing that there are around 35% of patients that unfortunately continue to relapse despite the immune checkpoint inhibitor is really to try to find the way TG4050 can further improve the treatment outcome, [ dependency ], I would say, of the prognostic factors. Lucie Larguier: So we have other questions coming from the web -- my mailbox. We have one from Amar Singh from [ Intron ] Health. Will the Phase I trial of TG4050 in a new indication still be initiated in Q4 2025? And can you provide us with any detail on this next indication? Alessandro Riva: So the answer, as we said during the call, so we are already working towards the finalization of the protocol. We are in discussion with the health authorities. And as soon as we have the green light from the health authorities, and the financial condition are met. In other words, we have the right financing for the trial. We're going to start the trial. And of course, we are still aiming towards an initiation of the trial as quick as possible. As I said, it will depend from the regulatory authorities' feedback and from financing that we are considering as we speak. Lucie Larguier: Another question that we have, well, two questions from [indiscernible]. Could you please disclose the conference -- well, at which conference the new data on TG4050 will be presented in Q4 -- and is an early access program a realistic opportunity for TG4050 probably in line of 36 months data. Alessandro Riva: Okay. So we are going to disclose the full data set of the immunogenicity data at the ST conference in November in the United States of America. This is an important conference for immunology in cancer. So -- and we have submitted an abstract to the conference that has been accepted for presentation. And of course, we look forward to sharing this very important information from the Phase I study. So -- and in terms of the early access program, we think that it is rather early to activate this type of program. And we think that this is something that we could eventually assess in the near future with additional information and additional data. So that's. Yes. Lucie Larguier: And we have a final question that I received from [indiscernible] that somehow overlaps with [indiscernible] Joni's question, but it is up to you. So in the press release, you highlight that [indiscernible] is currently evaluating the most efficient regulatory pathway to accelerate the development of 4050 and bring it to patients with operable head and neck cancer as quickly as possible. Could you elaborate these thoughts or objectives? What are the challenges or the next step to have more visibility on the regulatory pathway or market environment? It's a pretty broad question. Alessandro Riva: Yes. So it's a very broad question and it's very similar to what also [ Piara ] asked. So I mean, the bottom line is that we believe that there is a very significant momentum for innovation with immunotherapy in head and neck cancer operable patients. We believe that the data that we have shown at ASCO, know this very compelling in order to think about the potential next step given the fact that pembrolizumab is going to become a kind of standard in the early setting head and neck cancer. So we are brainstorming as we speak with clinicians with expertise, of course, in the head and neck on the potential trial design that could also be considered pivotal in nature. So -- and then based on the feedback, we are going also to have discussion with the health authorities. As I mentioned in my presentation, this process will last around 6, 9 months. And by Q2 2026, we'll be able to share with the community what's going to be the next step in terms of the next trial for squamous head and neck cancer patients. Lucie Larguier: I don't have -- I think we've covered all the questions. We have an additional question from Marcias. Could we have an update on TG6050? And what could we expect for this compound in the next steps? Will you disclose the Phase I data in a future conference? Alessandro Riva: Yes, we are going to -- first of all, TG6050 is our IV oncolytic virus. We have completed the Phase I study in relapsed/refractory non-small cell lung cancer patients. We are going to share the information with the community on this asset. However, we don't think that this is going to be an oncolytic virus that will be accelerated in the context of our priortization that I mentioned in the presentation and in the context also of that we are observing in heavily pretreated patient population. So this is TG6050 is not our focus, and we prefer, as mentioned, focusing on the value creation assets that we shared in todays call. Lucie Larguier: Sorry. So I don't see any other questions -- sorry for my voice. Alessandro, maybe a closing statement. Alessandro Riva: Yes, we do. So it has been -- I would say it has been a very exciting first 6 months. We are already in September, I would say also the third quarter is getting very, very interesting. As we try to convey to you, Transgene is ideally positioned to deliver multiple clinical milestones for myvac platform and TG4050. So -- and really, we are very well positioned to execute and focus on our key priorities. Obviously, we remain committed to deliver -- [indiscernible] in patient, in particular in operable. And with this, I would like to conclude today's call. Have a great afternoon and evening and talk to you soon and see you soon. Bye. Lucie Larguier: Goodbye. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Operator: Good afternoon, and welcome to the Flux Power Fourth Quarter and Fiscal Year 2025 Earnings Conference Call. [Operator Instructions] Please note, this event is being recorded. I would now like to turn the conference over to Joel Achramowicz, Managing Director. Please go ahead. Joel Achramowicz: Good afternoon, and welcome to Flux Power's Fourth Quarter and Full Year Fiscal 2025 Earnings Conference Call. I'm Joel Achramowicz, Managing Director of Shelton Group, Flux Power's Investor Relations firm. And joining me today are Krishna Vanka, Flux Power's CEO; Kevin Royal, Chief Financial Officer; and Kelly Frey, Chief Revenue Officer. Before I turn the call over to Krishna, I'd like to remind our listeners that during the course of this conference call, the company will provide financial guidance, projections, comments and other forward-looking statements regarding future market developments, the future financial performance of the company, new products or other matters. These statements are subject to the risks and uncertainties that we discuss in detail in our documents filed with the SEC, specifically our 10-K and our most recent 10-Q, which identify important risk factors that could cause actual results to differ materially from those contained in the forward-looking statements. Also, the company's press release and management statements during this conference call will include discussions of certain adjusted or non-GAAP financial measures. These financial measures and related reconciliations are provided in the company's press release and related current report on Form 8-K, which can be found in the Investor Relations section of Flux Power's website at www.fluxpower.com. For those of you unable to listen to the entire call at this time, a recording will be available via webcast on the company's website. And now it's my great pleasure to turn the call over to Flux Power's CEO, Krishna Vanka. Krishna, please go ahead. Krishna Vanka: Thank you, and welcome to everyone as we review our fourth quarter and fiscal year 2025 results and business update. I have been at Flux Power now for 6 months as CEO and have had the opportunity to meet more extensively with our customers and partners. This gave me a better understanding of their business, the product requirements and how Flux Power can offer added value through our battery solutions. These discussions have made me very excited about the company's future and the opportunities that lie ahead of us. Flux Power is at the forefront of shaping the future for intelligent energy solutions where every lithium-ion battery functions as part of a connected self-optimizing network. This vision is part of a mandate shared across the members of our newly established management team, and we are all fully committed to achieving our long-term objectives, both operationally and financially. In our last earnings call, I shared with you the 5 strategic initiatives that will be guiding our execution and performance in the upcoming quarters and years. These initiatives include: number one, achieving profitable growth; number two, executing on operational efficiencies; number three, implementing a solution selling approach; number four, building the right products for customer needs; and number five, integrating value-added software across our battery portfolio to generate recurring revenue streams. As highlighted in our press release issued earlier today, we finished 2025 with a solid year-over-year growth both on a quarterly and annualized basis. We also significantly improved our gross profit and margin performance, contributing to meaningful improvement in our bottom line results. Acknowledging that we still have some work to do to achieve our goals of profitability and cash flow break-even, we are demonstrating initial progress. In support of these goals, we have implemented various operational efficiencies to further reduce costs. First, I spent time in China meeting with existing partners in order to strengthen the vendor relationships. We discussed the macroeconomic situation and determined ways to work together to help offset the impact of the current tariffs. More broadly, we also engaged with our domestic vendors to mitigate the international tariff exposure by renegotiating contract terms where possible. We are also evaluating additional product engineering work to reduce costs by simplifying our design. This work is ongoing, and we'll have more details to share with you on future calls. Finally, in June, we took action to reduce our headcount by about 15% across all segments of the company, except for sales and marketing. This will help to reduce our ongoing operating expenses and ultimately our cash burn. As part of our initiative to grow our software offerings and provide high-value solutions to customers, we have made good progress on our SkyEMS AI platform during this quarter. I'm pleased to inform you that we have provided beta testing access of our SkyEMS version 2.0 to one of our airline customers, and we will be rolling it out soon to additional customers in the coming months. By embedding our solution into a connected ecosystem of vehicles, chargers and software, Flux will eventually create an integrated services and solutions that will generate recurring revenue and predictable replacement cycles. We believe these initiatives will position Flux to accelerate product adoption among our customers, thus expanding our market share and driving our growth of sustained profitable growth. Now I would like to review some of our recent customer successes, recent orders. In early July, we received a significant purchase order through our GSE distributor for a major North American airline for 120 units of our newly announced and redesigned G80-420 lithium-ion battery pack. This $2 million-plus order will be delivered throughout the calendar year 2025, reinforcing this airline's commitment to operational efficiency, sustainability and next-generation fleet readiness. In mid-August, we received an additional $1.2 million plus purchase order through our GSE distributor from another airline for a G80 lithium-ion energy solution, along with the SkyEMS software platform. This is a great example of success of our new solution selling strategy. We offer the customer a powerful combination of both hardware and software designed specifically to transform their fleet of ground service equipment. In addition to our progress on the new business development, it is also important to note that we have now shipped more than 28,000 battery packs. This represents a tremendous opportunity to add intelligence to the customer's existing equipment and IT infrastructure with our SkyEMS software and telemetry systems. Now I would like to hand over the call to Kelly Frey, our Chief Revenue Officer, to discuss our partnerships and solution selling initiatives, which are transforming the way we sell by aligning our product offerings to each customer specific needs. Kelly, please go ahead. Kelly Frey: Thank you, Krishna, and thanks, everyone, for joining us today. I'm now in my third quarter at Flux Power. And like Krishna, over the past several months, I've immersed myself in the outbound business development activities across the company. I'd like to spend just a few minutes walking you through how we're thinking about the business today and where we see opportunities and momentum building. At Flux, our top focus is on building long-term partnerships with customers, dealers and OEM sales teams. Over the last couple of quarters, we've shifted our sales approach to engage more directly with end customer users while continuing to fulfill business through OEMs, dealers and distribution partners. This is giving us better visibility into their needs and how we can deliver more value along with our dealer and OEM partners. We're not just selling a battery, we're also selling the accompany telematics software, which can be a critical component for customers to design their charging and energy management infrastructure. In fact, our SkyEMS telemetry and energy management systems for monitoring and optimizing battery performance are becoming a bigger piece of the conversation. In addition to the potential new revenue streams from our software, we're also excited about our growth opportunities in new market verticals and geographies. We're leveraging our strong foothold in the United States and targeting expanded opportunities in North and Central America, where we think Flux can play an important role. These efforts are expected to open up significant market potential to help drive future growth. Partnerships are another key driver of our growth strategy. Currently, we're engaged in more OEM discussions than at any other point in our history. We are working to remove barriers to adoption by expanding certifications, pursuing private label opportunities and investing in marketing. The goal is to turn first-time buyers into long-term repeat customers. We are also looking at partnerships beyond OEMs with telematics providers as well as energy and charging infrastructure players. We see a real opportunity to strengthen the ecosystem around our solutions and add more value for our customers. Finally, in terms of our sales pipeline, Flux has been involved in more opportunities this year and quoting activity is up significantly. And even though it may take a couple more quarters for that activity to materialize into backlog, the recent trend is very encouraging. So with that, let me now hand the call over to our CFO, Kevin Royal, to discuss our results for the quarter and year. Kevin? Kevin Royal: Good afternoon, everyone. Revenue for the fourth quarter of 2025 was $16.7 million compared to $13.4 million during the same quarter of the prior year. Full year 2025 revenue increased to $66.4 million from $60.8 million in the prior year. Increased sales for the full year 2025 was driven by higher volume in both material handling and ground support equipment markets, higher average selling prices in the GSE market, while slightly offset by lower average selling prices in the material handling market. Gross margin in the fourth quarter was 34.5% compared to 26.8% during the same quarter of the prior year. Full year 2025 gross margin increased to 32.7% from 28.3% in the prior year. The improvement in gross margin was driven by sales of higher-margin products, the benefit of cost savings initiatives and lower warranty-related expense. Operating expenses in the fourth quarter of 2025 were $6.5 million compared to $5.4 million in the fourth quarter of 2024. Full year 2025 operating expenses increased to $26.8 million from $23.8 million in the prior year. Higher operating expenses were driven by $2.9 million of onetime costs associated with the multiyear restatement of previously issued financial statements. The net loss for the fourth quarter was $1.2 million or $0.07 per share compared to a net loss of $2.2 million or $0.13 in the fourth quarter of 2024. Net loss for the full year was $6.7 million or $0.40 per share, which includes approximately $3 million in onetime costs. This compares to a net loss of $8.3 million or $0.50 per share in 2024. Excluding onetime costs associated with the multiyear restatement of previously issued financial statements and stock-based compensation, the fourth quarter non-GAAP net loss was $30,000 or $0.00 per share compared to a non-GAAP net loss of $1.9 million or $0.11 per share in the prior period. For the full year, non-GAAP net loss was $2.8 million or $0.17 per share, which excludes onetime costs associated with the multiyear restatement of previously issued financial statements and stock-based compensation. This compares to a net loss of $6.8 million or $0.41 per share in the prior year. Adjusted EBITDA for the fourth quarter was positive $600,000 compared to negative $1.2 million in the same quarter a year ago. Full year 2025 adjusted EBITDA was a negative $0.1 million compared to a negative $4 million in the prior year. Turning to the balance sheet. We ended the quarter with cash and cash equivalents of $1.3 million compared to $600,000 a year ago. I will now turn it over to Krishna for his final remarks prior to the question-and-answer session. Krishna Vanka: Thank you, Kevin. As we highlighted today, we finished fiscal 2025 with solid year-over-year growth on both a quarterly and as well as on annualized basis. We have a refreshed leadership team here that's fully focused on executing our strategic initiatives, including implementing our solutions-based sales approach with partners and customers to increase the value we provide. Although the current tariff and macroeconomic environment create uncertainty and near-term caution to certain customers, the growth of our sales opportunities, combined with the expected benefits from our strategic initiatives gives us a reason to be increasingly optimistic for the later part of our fiscal year. With that said, I will now turn the call back over to the operator for Q&A session. Operator? Operator: [Operator Instructions] Our first question is from Craig Irwin with ROTH Capital Partners. Andrew Scutt: It's Andrew on for Craig. First question for me. It was really nice to see the strong gross margin expansion in the quarter. Can you guys just kind of talk a little bit more about what went right in the quarter there? And you guys have also talked about near-term visibility to 40% gross margin. So kind of additional color on kind of where we are in that journey would be great. Kevin Royal: Yes. So we've had some initiatives to improve the cost of our product input. So the components and raw materials that go into our products. Really, that's what you're seeing flow through the quarter that contribute to probably about 60% of the improvement. The other being lower warranty costs. As we continue to improve the quality of our products, we're really starting to see the number of repair incidents decline both for the full year, but especially in the fourth quarter. So both of those items contributed to the improvement that we saw in the gross profit in the quarter. Andrew Scutt: Great. Now it was great to see the progress. And second one for me before I jump back in the queue. Congrats on getting the beta rollout of SkyEMS 2.0. Can you just kind of talk about how that's -- the customers received the product so far? And maybe just remind us kind of what the upgraded product provides versus the initial rollout of SkyEMS. Krishna Vanka: Yes. So this new version, SkyEMS 2.0 is really designed with customer in mind. We work closely with both the airline industry and the material handling to understand their pain points. These are specifically related to, "Hey, let us know when it's time to charge your battery. Can you increase the efficiency of the battery charging? Can we know when [ are we ] overusing the battery when it's discharging just to warm up the vehicle," for example, in colder environments. So we took all the feedback and we improved the product. We also made it pretty light and sleek that can almost work on a mobile environment like in a browser. So this is a new product. We are very proud, as I mentioned, that we gave this to an existing airline who is testing this, gave us good feedback so far. We are also giving it to a material handling customer this week as we speak. And pretty soon, we will roll this out. And as you heard me saying, we are packaging this together when we sell the battery. That's one of the things we did earlier with the airline for $1.2 million. That solution included SkyEMS software. Andrew Scutt: Congrats on the continued progress and the strong quarter. Operator: The next question is from Amit Dayal with H.C. Wainwright. Amit Dayal: Congrats on all the progress. Just trying to see what the pipeline is looking like for you guys? And if you maybe have shared the backlog number, I didn't see it in the press release, I think. So any color on that would be helpful. Kevin Royal: Yes. So specifically related to the outlook, while we don't provide guidance, we have seen kind of a bit of a slowdown and a pause from some of our customers in the quarter that we're currently in, which would be our first fiscal quarter. We've also started to see an increase in quoting activity, which we think bodes very well for the second fiscal quarter, which is the fourth calendar quarter. As it specifically relates to backlog, our current number is right at $9 million as we end the quarter. Amit Dayal: Okay. And as you sort of look to now maybe moving from beta to actual sort of product rollout for the SkyEMS, how should we think about what the plan is on that side? And what are your expectations for the attach rate? Are you selling this independently as well? Or will this exclusively initially be sold along with the battery solutions? Just trying to get a sense of what the sort of -- at least the initial sales strategy is going to be for this offering? Krishna Vanka: Sure. I'll answer this, and then I'll have Kelly add any more color. So yes, our strategy is to package and sell the SkyEMS software along with the battery. That's why we are calling it intelligent battery. And we are seeing some good success with it as we roll this out. Beta is the name we gave it to make sure customers are happy and they will gladly use the product, but the product is literally ready with their live data. So as I mentioned, in a month or 2, we will remove the name beta from the product and call it SkyEMS 2.0, which we are already selling, as I mentioned, with every battery possible. You also probably noticed we have 28,000 units that are already in the field. Our intentions are to go back and get them on the platform as much as we can. We do have a few thousands of the batteries in the field that are already online. It's literally working with these customers, giving them access and having them pay for it, which gives us a very good upsell opportunity. With that said, Kelly, do you want to add any other color? Kelly Frey: Sure. I think, Krishna, you nailed it, but it's really 3 motions. The first is telematics on every battery to make sure that we're positioning in it, including at least a base level of telemetry, SkyEMS with each battery. Then is going back to the installed base of customers who are maybe in their first, second, third, fourth year of having a Flux battery even longer and saying, "Hey, there could be value in you putting telemetry on this battery so you can get better visibility, which allows for better capital planning, better optimization." That's kind of the second motion. And then the third motion is once somebody takes perhaps their first version of SkyEMS, as we move [Technical Difficulty] we have upsell opportunities, perhaps advanced reporting, advanced optimization capability, integrations with other software they may be using. So it's kind of an upsell on top of the additional -- sorry, the original purchase of that telemetry. Operator: The next question is from Rob Brown with Lake Street Capital Markets. Robert Brown: First question is on the airline orders that you received. I think there were 2 pretty sizable orders there. Could you give us a sense of sort of what's driving that? Is it an expansion into the fleet or really kind of the new product offerings that you've got? Krishna Vanka: So the G80-420, the $2 million is a redesigned battery. It was redesigned to be more efficient, more gross margin-driven design. So I would say it is as a new product almost that we sold to an existing airline. And the second order we mentioned is for the G lithium-ion, which is sold as a package with SkyEMS. So that's an existing product that we sold with the software added to it as a package. Kelly Frey: Could I add something, Krishna? The other thing is -- so Krishna is accurate in that. The other thing is just to remind everybody, we're still at a very early adoption phase of lithium within the ground support equipment market. So even our existing customers who have purchased several hundred or even a couple of -- thousand of batteries from us or low thousands of batteries from us, still have a lot of migration to do from lead acid to lithium or from internal combustion to lithium. So it's not only just upselling the existing customers to get further adoption throughout their fleets, they typically roll out airport by airport by airport or sometimes by region or by country. So it's the existing increased adoption and then it's new airport acquisition is the other -- sorry, new airline acquisition is the other key focus in that market. Robert Brown: Great. And then on the quoting activity, I think you talked about an uptick after a bit of a lull. What's the -- is that both material handling and ground support equipment? Or what's sort of the dynamics of that improving order quoting? Krishna Vanka: Kelly, do you want to take it? Kelly Frey: Yes, I can. So really, I think everybody on this call is aware, we service 2 main markets. There's the ground support equipment market and the material handling market. The ground support equipment market, we didn't see as much of a pullback in capital expenditures. There was a little where there was related to uncertainty with the economy, we think driven mostly by the tariffs and what was going to happen, perhaps a little downturn in passenger traffic. So there was some impact on the ground support equipment market. However, in the material handling market, we did see in particularly Q1 calendar year, there was a little bit of advanced purchasing. Let's get it before the tariffs hit. And then there was a pullback on capital expenditures. I think everybody is aware, our batteries go into lift trucks. Lift trucks are a fairly heavy capital expenditure. We saw customers kind of holding their capital tied to chest in kind of late Q1, Q2. And now that increased quoting activity is really people saying, "Okay, I think I understand what's going on with tariffs. I understand the impact on my supply chain. Okay, I'm now going to release that capital to purchase the lift trucks, purchase the batteries," et cetera. So that's really what's driving it in the material handling market. Operator: This concludes our question-and-answer section. I'd like to turn the conference back over to Krishna Vanka for any closing remarks. Krishna Vanka: Thank you all again for joining us on the call today. We really look forward to speaking with you again during our first quarter call in November time frame. Operator, you may now disconnect. Operator: The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.
Operator: Good afternoon, and welcome to the CRISM Therapeutics Corporation Interim Results Investor Presentation. [Operator Instructions] Before we begin, I'd like to submit the following poll. I'd now like to hand to CEO, Andrew Webb. Good afternoon to you, sir. Andrew Webb: Thanks, Alessandro. Good afternoon. Thank you for taking the time to join today's presentation. My name is Andrew Webb. I'm Chief Executive of CRISM Therapeutics. And today's presentation, we'll be looking to really reflect on the highlights for the interim results that we posted yesterday. And following that, I really want to take some time to look at the important development for the company, and that's our movement now into commence our clinical trials. So in order to take that forward, and I'm looking -- I'm joined today by Professor Garth Cruickshank. Professor Cruickshank is Professor of Neurosurgery at the University Hospital in Birmingham. And Professor Cruickshank, if you just take perhaps a couple of minutes to introduce yourself, that would be helpful. Garth Cruickshank: Hi, Andrew, thanks very much, and welcome to everybody. Yes. So I'm Emeritus Professor of Neurosurgery in Birmingham. I've been involved with the treatment of glioblastoma for well over 30 years or so and have been heavily involved in the development of trials, which have really focused in on the very difficult ways of treating these tumors, bearing in mind that they sit within the brain. Also working with Chris McConville and with CRISM, I've been quite instrumental in helping design the current trial that's now been approved by the MHRA and also in particular, how we might actually progress this in terms of sort of practical solution for surgeons to use in the trial. Andrew Webb: Okay. Thank you. So if I may start, firstly, I'll run through the highlights from our interim results. As those of you that have heard me talk before and give you more of an insight into the company, everything we do is around ChemoSeed. ChemoSeed is our key asset. It's the platform drug delivery technology, which we're developing. And we're developing it as a platform technology and the brain tumor work we're doing at the moment is our primary indication. There are other solid tumors, which we're looking to address and some of those programs have started, which I'll highlight shortly. As I mentioned briefly in our introduction, we've had an absolute focus on delivering our first treatments in the brain tumor indication. And the highlight really is over the last few months is that the -- our application to the MHRA, the U.K. regulator to commence our clinical trial has now been given approval. And so we are on track for H1 to make the submission and I'm delighted the MHRA at the end of August approved us to go into trial. That removes any regulatory hurdles now, and we're free now to set up commence the trial itself. Professor Cruickshank has highlighted, we are starting with the most challenging of the brain tumor indications of grade 4, which is glioblastoma, which we'll talk about in a little bit more detail. It's important just to note as part of the set of an approval for the clinical trial, we also had to see ethics approval and where we've got a very positive feedback on the approach we're taking to the trial. Clearly, given the unmet clinical need, this is a sensitive area. Clearly, ahead of the trial, we need to have a clinical batch of products of the ChemoSeeds and where our manufacturing partner has initiated the clinical batch. And so that manufacturing process is under GMP, which is the regulatory standard for human trials and human medical purposes. We talked about -- we announced that we've established the Scientific Advisory Board. And clearly, Cruickshank is our lead medical adviser here on the design and setup of the trial, which we'll hear more about shortly. I did mention just briefly that we worked on as a platform technology, and I know there's interest to think, we know where else can we be using the technology for. We have building up our portfolio now to extending into prostate cancer. And clearly, this is quite a bit of airtime sadly for some high-profile individuals that have been diagnosed. This is now the prevalent cancer in men, and we have a strategy and the ChemoSeed we believe is suitable. So with support from Innovate the Launchpad grants, we have actually already initiated that program earlier this year. So it's an early stage, but initial progress has been good. In order to move things along, we did pause and raise some money just in the end of June, July. I'm pleased to say that we raised some GBP 874,000 to take us through to the commencement of the clinical trials. And so we brought in quite a number of new investors, which was very pleasing. But I'm also grateful to very grateful to our incumbent shareholders who have been with us through this early part of our journey, which was raised GBP 74,000 as part of that offering. So thank you very much for that. Final comment is our net cash at the end of September was just over GBP 900,000. So just quickly in terms of ChemoSeed itself, I think many of you have heard me talk this, so I'll just be very brief. This technology is the -- really the brainchild of our Chief Scientist, Professor Chris McConville, Garth Cruickshank has an early influence as well on this program, as you'll hear when we talk about the early clinical journey that the technology has taken. But first McConville has had this vision to basically improve. We have a lot of good cancer drugs are out there. But often the way they're delivered and particular indications like the brain tumor where the blood-brain barrier really does a very too good job of actually keeping the therapies out from the brain. Local delivery, this is something that Professor Cruickshank has championed personally, really we believe is a significant opportunity to progress and for the company. So without further ado, I think it's fully appropriate now. I'll hand over to Garth. Garth will set the scene for the glioblastoma and walk through then the plans and the strategy for the clinical development of ChemoSeed treatment. Garth Cruickshank: Thanks, Andrew. So I thought it would be useful for those who are perhaps not up to speed with the complications of patients with glioblastoma to give you a good feel for what the problem is and how we've gone about attacking it. So this slide shows you a montage of MRI scans using contrast enhancing substances to show up a tumor in a patient over time. Now there are unusual set in the sense that the very first scan actually occurred in this gentleman 9 months before he presented with his brain tumor. So we have what you might call a normal scan right at the top. And we can then see the focal development of his glioblastoma when he first presents on that second -- second montage with a tumor in the brain, which enhances. You see it's very focal nature. And you can see what happens over time over those scans. So at the beginning, when he first presented, he actually presented with mild headache, and we actually thought he might have had problems related to his previous head injury. But when we did the scan, we found this tumor in the right side of his head here. Now the appearances on the MRI scan were fairly diagnostic of that. But it was important to try and understand also whether we've missed anything before. So we checked on the previous scans and so on. Now patients who present with glioblastoma don't always present with headache. That's a relatively unusual way to present. Most of them usually present with what we call focal symptoms related to the part of the brain in which they actually have their tumor. A few will present with seizures. And later on, if the tumor gets larger and starts causing swelling, so they will develop headaches and a very particular type of headache that's persistent. But going back to the presentation, which is sort of what you might call focal symptoms, these can often be very difficult to pick up and GPs and doctors have real problems trying to understand whether a slight discomfort in the hand or a little bit of memory loss or whatever it happens to be, is really a symptom or not. So unfortunately, a number of these patients will present quite late. And that means that the tumor is already of the kind of size that you can see there. And that makes it more of a challenge to deal with. Glioblastoma is universally unifocal. You do occasionally get patients who've got multiple sites at the time of presentation. But more often than not, it's really focal. And this means that as a sort of surgical target, it becomes quite possible to think about trying to remove as much of this tumor as possible. So you can see on that third scan down that we've managed to get quite a lot of the -- if not all of the enhancing tumor out. But unfortunately, these tumors are not discrete. They have a diffuse component and a focal component. And that means that there's an amount of tissue -- tumor tissue still left in the walls of the area where we've actually operated. It doesn't enhance, but it's definitely there. And if you were to do further biopsies in that area, you would probably be able to demonstrate it. Now the current treatment for these patients is good surgery, followed then about 4 weeks later by radiation treatment and chemotherapy running together. And although that can have an effect, and I'll show you some of the results of that, by and large, these patients will recur and then go on to get progression of the tumor. Once you've had recurrence, there's virtually no treatment available for these patients. And perhaps one of the more solitary things to pick up here is that the picture on the right there shows you a postmortem specimen of a patient who had a glioblastoma. And although you can see there that sort of darker brown patch, and you can see the brain being distorted there. And this a coronal section highlights the damage that these tumors cause to both function, which can obviously impact on something like physical behavior or physical performance, but much more frightening and awful to patients and families is the erosion of mental function and personality, making this type of cancer truly awful. So down the bottom right there on the slide, I've shown you that the median survival is on/or around 15 months or something like that for these patients, but they all go on and progress and less than 5% of patients live 5 years. So it's a truly dreadful cancer in many different ways. If we have the next slide, please, Andrew. Now this is an important slide, and many of you who look at the literature will see this slide. This goes back to 2005. It's from a European ERTZ study and the publication was by Roger Stupp. It is probably -- and this is sad to say as someone in the business as it were, the last time we saw any real benefit from any particular agent in this disease. It's a survival curve. So on the y-axis there, you can see the percentage of patients surviving. On the x-axis, you can see time in -- I think it's in months there. It's in months. And you can see that these curves coming down, and you can see them separating. And this was actually at the time, quite a remarkable slide in the sense that for the first time, someone had actually shown that something worked in terms of separating out a control group who are having standard therapy with radiotherapy and those who had radiotherapy and a drug called temozolomide. And although they are separating -- those curves are separating, the downward trajectory of those cures is still fairly disappointing. And indeed, this is an important trial for us to understand because it was a trial which never achieved its intended statistical outcome. That is to demonstrate that you could get a 3-month improvement in survival. However, this treatment then went on to become the gold standard treatment and still is for this drug in conjunction with radiotherapy for patients with glioblastoma. And if you look at the figures, the reason why it actually went into and became the standard drug was because the 2-year figures, 24 months there showed that there was a rough doubling in terms of patients surviving from about 8% or 10% up to over 20%. Not remarkable, not fantastic in terms of the living 5 years, where I say less than 5% live about 5 years. But nonetheless, it did show an improvement. Now look, that date there is 2005. And if I'm right in saying that's 20 years ago, and we've hardly seen any real improvement since that. Also, less than 50% of patients with glioblastoma get any real benefit from this additional drug, temozolomide. And subsequent research has failed to advance even on this limited benefit despite many trials. So many have failed, I think, because we've not been able to ensure that the tumor is adequately dosed or that with the new drug, all because of poor penetration, as Andrew was saying, into the brain. And also one of the more problematic areas, of course, is that some of these drugs is a limitation on the dose you can give systemically before you get more side effects, making a limitation on the total amount that you can actually give. So this led me to think about what other ways could we overcome these problems and particularly to start thinking about whether we could put drugs in proximity with the tumor and also whether we could do it as early as possible as, for example, during surgery. Go to the next slide, please, Andrew. So this rather wordy slide describes some information around a Phase I trial that I did probably 8 to 10 years ago. So we know that irinotecan is a topoisomerase inhibitor. It works in a completely different way to temozolomide and carmustine. And it's been shown in -- had been shown in clinical trials at the time to have an effect on patients with glioblastoma that you almost always had to discontinue the therapy because they had too many side effects. However, those that were able to stay on it seem to get benefit from it and quite clearly were showing imaging changes as well, which was helpful. We know also that the substrate for irinotecan, the topoisomerase enzyme is upregulated in glioblastoma and is more potent and that the product of the enzyme creates a substance called SN38, which is about 1,000x more toxic than irinotecan. So there were some good biomechanical chemical reasons why exploring irinotecan seemed a good idea. Not only that, but it seemed to have in terms of tissue status relatively little toxicity. So in a Phase I study, I had access to some microbeads, about 100 micron microbeads that we were able to inject in a gel, an allogeneic gel directly into the tumor margin, in this case, recurrent patients, patients with recurrent disease. And we were able to demonstrate not only that it was safe in the sense that we didn't have anything like the inflammation and wound problems that we had with carmustine wafers, but also that these patients felt well after it. They were not having to have further chemotherapy because they had their chemotherapy put in. And not only that is that there was some evidence from the 9 patients that we treated that there was an improvement in survival somewhat unexpectedly, bearing in mind that we understood that one of the problems with what we were doing and what we hadn't realized was that there was very rapid offloading of the drug from these seeds. But it had a sort of silver lining effect in the sense that we were able to work out what dose was released from those seeds at the time. And this gave us a starting point for considering where we might want to go if we could improve the treatment. So that is the time that I started to talk to Chris McConville about the idea of, well, now isn't it possible for us to put in a much bigger dose of irinotecan and control the dosing in a way in which we could get prolonged release in a format formulation that would fit for a surgeon to be able to put into a tumor. And I think, Andrew, you're going to summarize briefly what some of the work that Chris has done. Andrew Webb: So those of you that listened to our presentations before maybe be familiar with this slide. This slide was actually pivotal in the proposal to the MHRA to take this proposed treatment forward. So what we show here is that the differences we're comparing -- this is the first work with the ChemoSeed. This is the small cylindrical implants loaded with the drug, irinotecan. What it means is here, we've compared this to the standard of care, which is temozolomide and also irinotecan itself when given intravenously. And as you can see that we had an exceptional survival on the ChemoSeed. So just to put it in context, this was a study conducted in mice, -- they've been administered well in the brain was actually a human cell line, which is very aggressive. It's called a patient-derived xenograft. So it's actual human brain tumor that was administered. And then we put in a ChemoSeed to treat it. And you can see that from those images on the right-hand side, at the end of the study, this is 148-days was the ethical limit of the study. Those mice that hadn't died through the brain tumor as has happened in most cases were then euthanized, we imaged the brains afterwards. So what was remarkable here is that those mice which had the ChemoSeed showed no sign of recurrence at all. We did lose one mouse early on, and that was really felt that it didn't recover fully from the surgery. But with temozolomide, you see on the right-hand side, as you'd expect and as Professor Cruickshank just described, inevitably sadly the tumor that does return, it does really, really quite aggressively. So -- but to have no recurrence of ChemoSeed really gives us a reason to be optimistic about the opportunities for the program. So with that, I'll hand back to Professor Cruickshank, and he'll talk about now the plans and how we're going to take the ChemoSeed technology through into clinical trials. Garth Cruickshank: So when Chris and I discussed this, we were trying to think of a formulation that would enable us to give perhaps a higher concentration of irinotecan in such a way that it's released at a dose rate, which would be satisfactory. So Chris then went on and did a number of in vitro studies looking at what kind of dose we had to achieve to kill tumor cells, and he did a lot of studies during that. And also to look at the way and the kinetic behavior of his formulation to enable that dose to be released under the conditions that exist within the tumor bed margin here. And also in a form in which we could actually use this as surgeons to put into the tissue to allow us to carry out the dosing. There has been around for a number of years, a drug called calmustine, which is in a wafer form, which you tend to -- which is approved by NICE for use in this particular situation. And the problem with that is that it looks a bit like sort of peppermint tablets, sort of like little seed tablets you just place within the cavity. And the trouble with this is that it just releases drug into the cerebral spinal fluid that bathes this area and virtually none of it goes into brain. So built on what I had done on the Phase I study, we felt that implantation that is actually putting the drug into tissue and allowing that to, as it were, temporarily heal over it would allow diffusion of the drug within parenchymal tissue, brain tissue directly. And that proved to be the case even from some of the seeds we used in the Phase I study. But this form of it as little rods. So these rods are 6 millimeters by 2 millimeters and they contain about 7 to 8 milligrams of irinotecan. And the matrix that they're in certainly breaks down over time, giving us -- we estimate somewhere between 30 to 60 days release of the drug, which is an important time period to understand because that's from the time of surgery to well into the time of radiation for these patients -- and not only that is that you're getting dose into these patients from the moment of their surgery from the moment you've got the pathological diagnosis, you're getting treatment running. The other problem that we had to think about here was dosing. Well, we had information from the Phase I study, which gave us an understanding about what sudden high doses might happen because of the offloading effect. And we were then able to calculate how we might do the dosing up to about 30 seeds to generate a reasonable dose for treating these patients. You can see there in that left-hand picture, you can see how the seeds are rained into the resection cavity. And then on the right on the cartoon, where you do this is to make a small 6-millimeter hole, a little bit bigger there with a standard brain cannula and then you put the next seed in. How do you work out the distance between them? Well, we use the sort of raster pattern as I've demonstrated there on the right. And that enables you to cover the area that you want to cover. And indeed, because of the imaging and because of what you know is the surgeon when you go into these, you can avoid risky areas and you can make sure you try and put it in areas where we think it's more likely that the tumor is going to be so you can get the most effective dosing that you can hope to achieve. And this is obviously based on the idea, most important idea that a very high proportion of these glioblastomas will recur locally, implying that that's the area to hit when you're going to retreat these patients. So if we go to the next slide, Andrew. So in terms of designing our study, we have to build -- we are obliged to build on the work that we've done already. We're not allowed to just jump off into unknown territory. We have to build on what we've done on the Phase I study, take it that bit further, prove safety and go on from there. So in this study, what we've got -- we've done is broken into 2 parts. In part 1, we're going to use the same kind of patients that I used in the Phase I study. And what we're going to do is to dose escalate. Because we know the kind of dose that was released quickly in the Phase I study that I did, we know that we're unlikely to get to what you might call dose-limiting toxicity in the early phase. So the last thing we want to do is to disadvantage these early patients by giving them suboptimal therapy. So the idea is to try and get the dose up as quickly as possible. So what we've designed is a novel Bayesian approach based on the probabilities of toxicity arising from the first study to rapidly increase the dose so that as many patients get as good a dose as we can give them early on. And it's probably more useful in terms of toxicity to have more patients at the higher dose than to have a lot of patients who are on suboptimal doses. The MHRA were concerned about the rate of dosing versus the numbers of seeds, and we explained in detail that, of course, this will be dependent very much on what the surgeon thinks they can do. I'm very grateful to Victoria Witt, who is our lead investigator for a lot of discussions on how we might achieve the kind of high doses that we actually want to achieve and the sheer practicalities of actually doing this towards the end of a period of surgery on these patients. So we plan to treat in the first quarter of this part 1, 12 patients. And from that, we will confirm the dosing, and we will also get a much better idea of any issues and complications to do with the technical procedure and also how patients respond to this. Now the most important thing for us is to optimize the chances of getting a result from this kind of therapy. We need to get ourselves in a position where we can get the best chance of getting these patients to respond. So by selecting patients who are newly diagnosed, who have the smallest amount of tumor left because they just had maximal surgery and to treat them at the earliest instance, i.e., the moment we've got that diagnosis at least for glioblastoma offers a unique opportunity, I have to say, because I've not seen any studies which have tried to do this in quite this way and quite so early is to get a high dose of chemotherapy in very early on with the idea of building on the surgery that you've done to get as big a cytoreductive effect as you can. And that will also see patients through the 4-week period whilst they're recovering from their surgery and then before they start their radiation therapy later. So this is the plan, and we hope to recruit in the initial phase, 60-odd patients and be looking at progression-free survival. This is a very common parameter to measure in these sorts of patients. And what we've opted for is to look for a slightly better threshold to obtain this kind of data statistically with the idea that we will get an answer quicker as to whether these patients are getting any kind of response. Not only that, but we've set up the statistics so that if we do get an answer, if we are able to demonstrate statistically significant progression-free survival, automatically, we can then consider overall survival, median overall survival as another critical endpoint, the kind of endpoint that NICE and the NHS will need to hear about to be able to take this further. So that's where we stand at the moment. We've had a lot of discussions with MHRA about the trial, and they're extremely enthusiastic to see how we get on. And this is really breakthrough from the point of view of this kind of cancer in these patients. And I'm very optimistic, me as a surgeon I know I've been heavily involved with this, but to be able to offer surgeons something that they can do over and above just surgery alone here and accelerate the therapeutic armamentarium that they've got for these patients is just -- is it very exciting, but it's also very needed and given, as I said, for the outcome for these patients, absolutely needed to try and progress this field further. So I think that's more or less all I've got to say, Andrew. I think you've got some other slides there, yes. Andrew Webb: Just a final slide. But thanks very much for what is an exceptional account of the story, the back story really to where we are today. And we certainly -- I certainly share your enthusiasm for the potential that we have within our grasp here. So just on a final summary slide. One that we haven't mentioned, we talked about the drug irinotecan. This is a well-known, it's a well-understood drug. We can only derisk these programs to a certain extent. The MHRA they're welcoming irinotecan as a choice. It's a well understood, well used drug. It's still used in first-line in bowel cancer and also as part of the drug combination in pancreatic. So it's well-known, it's well understood. And as being described, it is a mechanism of action, which we feel will be complementary to the other treatments out there at this point. Clearly, the securing access to the trial with the MHRA has been a most significant tipping point. It's been a significant amount of work. And Cruickshank and colleagues as well as our COO, actually put in -- this has been months of work to get this. And we've had a great engagement and a very positive engagement, I'm pleased to say with MHRA. So we're looking forward, everything now is to focus on the clinical trial setup and treating our first patient hopefully early into 2026. The commercial opportunity clearly is significant, and we've highlighted that before. We would hope that with our innovation passport, you may remember, we were awarded as of last year. We are under regulatory fast track, as I've indicated, we are getting very, very good support on this journey. We do have some service contract work. It isn't the primary focus. We're reactive, but it does certainly brings in some additional revenues to help mitigate the cash burn. And clearly, that is key. We need to make sure that we manage our cash runway as best we can at this point. But we know the journey, this is really this -- what we're doing here in brain tumor, I do believe is open the door to other opportunities. I'm pleased that Innovate saw that in us when they've helped to agree to fund the initiation of our prostate program. So that's started a little earlier than planned, but with the funding that was available, it gave us the opportunity to get a head start there. But plans are also commencing for commercialization as well. And again, the regulatory environment is supportive of that. So this has really been quite a remarkable journey. I've been through this with this lived this for some 8 years now, 6, 5, 7 years. But clearly, for professor Cruickshank, this has been a long and exciting journey, and we're actually really quite an inflection point. But -- so that really ends the formalities of the presentation. And Professor Cruickshank, thank you again for your input there. There will be 1 or 2 questions, which I'd like to pick up on before we close. One which I think I partly covered beyond glioblastoma, how do you see ChemoSeed developing as a platform for other cancers? And I think we touched on the fact that it is suitable really for any solid tumor. And we believe we can formulate most drugs into this -- into ChemoSeed, and that gives us a great opportunity. They just put some parallels. So with pancreatic cancer -- sorry, with prostate cancer, which we started on, we're using it again, a well-known well understood drug, docetaxel. Docetaxel has similar challenges. It's delivered systemically, but it does have some challenges how its uptake into the prostate. So working with the lead hematologist, we've got some guidance now about implanting these seeds into the prostate directly. And that's a program we're running at this point. Pancreatic is something we really, really would like to be doing. It's more global complex, will require more development because we're looking at doing cover today standard of care is a 4-drug combination. And we believe we can formulate this, but it will take a little more in terms of development. Somebody asked, can you please give an approximate cost for treating the first 12 patients in the Phase II trial and expand on how you intend to raise the cash? Clearly, this is key. The cost of the trial will start in this month. So it was about GBP 250,000 for the setup. It's going to take probably to get to a reportable data point, probably around GBP 700,000. Total Part 1 costs will be -- we're thinking somewhere around GBP 1 million in totality. That is -- I hesitate a little on that. And the reason being is that the rate of recruitment is going to be key here. And -- but as you can understand from Professor Cruickshank's network, we're working with to on board numerous clinical trial sites that will help to speed up that recruitment. This is really all about -- it's a rare disease, so there's only so many patients, but we believe there's a level of interest in order we can cover this very quickly. How the question is, how do you plan to balance advancing clinical pipeline whilst creating value for shareholders in the near term? All I can say is we believe that the commercial opportunity is significant. There is -- the standard of care has been adequately described here has not changed for 20 years. There's a real appetite for this. We have the proposed costing, which has been -- came from an independent health economic report done by patient consulting a couple of years ago. That gives us a good figure, somewhere it was around GBP 13,000 per patient. This sits nicely within the NICE guidelines as we currently understand them. There's always going to be pressure on the drugs. But one thing the company is very clear on we do not want to fuel this health and quality we see with such expensive cancer therapies coming forward. So we're trying to find -- we obviously find a pathway through that. And we will likely partner at some point. But this is something we're working on. So the -- in terms of the approval, just to be clear on the question, in terms of approval, we will have these inflection points as Professor Cruickshank described, where we can issue data through to the MHRA and we could get an early approval on the basis of the data, and it's all about the data. And I think that has been adequately described, we have a very good preclinical data set and some early clinical experience with irinotecan, which gives us reason to be optimistic. But our primary market will be with NHS in the first instance and then we've rolled out through Europe and then leveraging the ILAP program for other markets. And U.S. is very much on our radar. There's a question here for... Garth Cruickshank: Yes. So from your experience of clinical trials, Professor Cruickshank, do you think ChemoSeed will have making a significant difference to the life outcomes of patients of the trial has been completed. The answer is I don't know. But the reason why I think it might be work and some evidence to prove that it probably will work is the fact that in a number of patients where we were able to treat super early with temozolomide, for example, in 1 or 2 of the trials that I was involved in, there was no doubt that, that cohort did better. In other words, indicating that very early treatment of the tumor, whilst it's small, is actually beneficial as a general principle of treating this kind of cancer. So that's very clear. The other thing is that in a few of the patients that I've treated in the Phase I study, some of the results are quite remarkable. And it was as if, if we want to hit some kind of threshold, maybe you could get an effect. That's why I think that there's a very, very good chance because we're doing something that's not been done before, bearing in mind that previous trials have failed where you've done about conventional adjuvant type treatments. This is what you might call ultra early. And I think that this stands a really good chance of having an effect. So if one can not only treat early and get the tumor smaller, but you can also expect to see some enhanced effect of the radiation because of the presence of irinotecan there as well, which we know from our biological work is probably true, then I think that the outlook for this is good. So I would be -- what's the word? Probably about 75% certain that we're going to see some kind of a result here. Is that result going to be big enough to make a real difference in terms of patients now living -- going from 5% at 5 years to 25% at 5 years. I think that's a tall order. But I do think we might see something that's better than the impact of temozolomide was in terms of those curves for a larger number of patients. And this is really actually economically important because most of the current trials that are going on or most of the current attempts of treatment are involved in looking for molecular pathways and particular molecular signatures within tumors where you can target whatever it is with some kind of IB or AB type drug. Now the trouble with that, particularly in glioblastoma is that so variable is the tumor and so heterogeneous is it that you have a relatively few number of patients who are likely to respond. So for example, larotrectinib works extremely well on the NTK (sic) [ NTRK ] fusion, but only in 1% or 2% of cases of glioblastoma where the abnormality is demonstrated. And a lot of the current drug companies are worried that their molecular-based approaches are only going to yield relatively few patients who are going to be sensitive. Now our treatment here that we're proposing here seems to have a much more broad effect based on its particular effect on the universal mechanism to do with basic excision repair and the way in which repair mechanisms work, double-strand breaks and so on in tumors. So I think it's much more likely that, one, we'll get an effect; and two, we'll be able to do it in many more patients. So that's the best answer I can give you, I'm afraid. Andrew Webb: That's great. So I think that concludes the questions. I don't think we've had any more come in. No. So I want to take this opportunity to thank everybody very much for taking your time and for your attention during this presentation. Thanks to Professor Cruickshank for that insightful information really about the setting the scene for glioblastoma and how we plan to address such a challenging disease and one where clearly, as we've seen, the unmet need is really there with some need to address with some urgency. So I look forward to keeping shareholders updated as we continue our journey. But thank you again for your commitment, your support is immensely important to us, and I look forward to updating you again in due course. Thank you very much. Operator: That's great. Well, thank you both for updating investors today. Could I please ask investors not to close the session as you now be automatically redirected to provide your feedback in order the management team can better understand your views and expectations. On behalf of the management team of CRISM Therapeutics Corporation, we'd like to thank you for attending today's presentation, and good afternoon to you all.
Robert Bishop: Good morning, everyone, and apologies for the slight delay. Thank you for joining us for today's presentation. I'm Rob Bishop, Chief Executive Officer for New Hope Group. On my left, I'm joined by Rebecca Rinaldi, our CFO; and Dominic O'Brien on my right, who is our Executive General Manager and Company Secretary. This morning, we released our full year results for the 2025 financial year. Hopefully, you've had a chance to go through the presentation. But in any case, I'll step you through our key highlights for the year before we open up the line for a Q&A session. Despite a softening coal price and a challenging operating environment, 2025 was a strong year for New Hope, where we delivered another considerable increase in saleable coal production as we continue to execute our organic growth plans. Pleasingly, we've seen a significant improvement in safety this year with our 12-month moving average TRIFR decreasing by 35% to 3.22. It's positive to see these metrics improving, and we'll continue to focus on this area as we move into 2026. During the year, we navigated significant wet weather and logistics constraints at our operations in both Queensland and New South Wales. Despite these uncontrollable factors, the group delivered run-of-mine coal production of 16.4 million tonnes, up 33%; saleable coal production of 10.7 million tonnes, up 18% and coal sales of 10.5 million tonnes, up 21%. In terms of our financial highlights, we delivered an underlying EBITDA of $766 million and a statutory net profit after tax of $439 million. Both earnings results were largely impacted by lower realized pricing with the Newcastle export coal price hitting a 4-year low during the 2025 financial year. This year, our business generated $571 million in cash flow from operating activities, which funded investment in our organic growth pipeline and has enabled us to continue to deliver returns to our shareholders. On that note, I'm pleased to announce the Board has declared a fully franked final dividend of $0.15 per share. This brings total dividend for FY '25 to $0.34 per share, all of which are fully franked. Turning to safety. The safety of our people is a key priority, and we are focused on ensuring our people operate in an environment where they are unharmed. As I mentioned earlier, we have seen an improvement in our TRIFR and our All Injury Frequency Rate since we reported to the market last year. Pleasingly, our TRIFR now sits below the 5-year industry average for New South Wales open-cut coal mines. While there's still opportunity for improvement, it's pleasing to see the safety programs we put in place during the year have had a positive impact across our sites. Turning to our operational performance. This year, our Bengalla mine in New South Wales faced notable operational challenges due to significant weather events and logistics constraints across the Hunter Valley. These disruptions led to elevated shipping queues, increased rail cancellations and stock management challenges at site. Despite these headwinds, Bengalla mine delivered a solid performance, producing 7.9 million tonnes of saleable coal, just 2% lower than the previous year's output. Despite lower-than-expected production, Bengalla mine achieved an FOB cash cost, excluding royalties and trade coal, of $76.50 per sales tonne, within guidance range, and a 2% improvement from the previous period. The ramp-up of our New Acland mine progressed throughout the 2025 financial year, supported by commencement of night shift operations in the prep plant and increased workforce intake. As a result, the mine delivered 2.8 million tonnes of salable coal and continues to ramp up towards its target of becoming a 5 million tonnes per annum operation. Overall, strong operational performance at both sites contributed to an 18% increase in group saleable coal production, reaching 10.7 million tonnes. Group FOB cash costs improved by 8% to $82.40 per sales tonne. In terms of our financial performance, the group achieved an average sales price, including hedging, of $161 per tonne and an underlying margin of $64 per tonne. During the year, the thermal coal market was impacted by oversupply, economic uncertainty and a mild winter in Asia, resulting in a softening in coal price. Despite these market conditions, the group's low-cost assets remain resilient and continue to generate solid margins through the cycle. Our business generated $571 million in cash flows from operating activities, enabled continued investment in our assets, allowing us to return $347 million to our shareholders by way of fully franked dividends. This represents $0.41 per share paid during the period, which equates to a gross dividend yield of 12%. Our approach to capital management is underpinned by a disciplined focus on delivering sustainable returns to shareholders. Our two forms of capital returns are fully franked dividends and on-market share buyback. As at the end of 2025, the pace of the share buyback has slowed in conjunction with increase in the company's share price. As previously mentioned, our Board has declared a fully franked dividend of $0.15 per share. New Hope has a significant franking account balance, and we continue to utilize this value for our shareholders. Today and in conjunction with our results release, we announced the introduction of a Dividend Reinvestment Plan, providing shareholders with the option to reinvest their dividends. The DRP is in operation for the 2025 final dividend. Our group strategy is to safely, responsibly and efficiently operate our low-cost, long-life assets with a focus on disciplined capital management, providing valuable returns to our shareholders. We believe our investment proposition is underpinned by these six key areas, which I'll briefly touch on in the following slides. The outlook for our industry is strong. Our strategy is underpinned by the belief that demand for thermal coal produced from Australian operations will continue to play a vital role in providing reliable and secure energy supply to the world. Whilst we expect coal's share of global power generation to reduce over time, the sheer increase in global power demand will continue to support seaborne thermal coal exports into the future. In addition, the aging of existing thermal coal assets, combined with underinvestment in new projects suggest a potential supply shortfall and attractive pricing outlook for the industry. Regardless of pricing dynamics, our low-cost assets produce high-quality coal, providing resilience in cyclical environment and ensuring continued margin generation. In a year where the coal price has touched multiyear lows, our assets were still able to generate margins of circa 40%, which showcases our low-cost nature as well as the significant upside potential available to New Hope and ultimately, our shareholders. New Hope holds a key focus on delivering returns to shareholders. In the last year -- in the last 4 years, fully franked dividends have totaled $1.9 billion, which equates to nearly 55% of the company's market capitalization as at 31 July 2025. In addition, New Hope's share price has outperformed the ASX All Ordinaries by nearly 8x since its initial public offering in 2003. At New Hope, we take pride in our people and the communities in which we operate. We aim to effectively manage our economic, social and environmental impact to ensure the resilience of our business so that we can continue to create stakeholder value. Key aspect of being a responsible operator is rehabilitation. At our Bengalla and New Acland mines, we have disturbed approximately 3,000 hectares of land for mining operations and rehabilitated 36% of that disturbance. In addition, the majority of our land is used for agricultural operations once successfully rehabilitated. Looking ahead, we remain focused on the organic growth of our business throughout the continued ramp-up of New Acland mine, the sustained production at Bengalla mine and the development of Malabar's Maxwell Underground mine, all of which are low unit cost assets. Our pipeline targets a significant increase in coal production over the next 3 years, which represents low-risk, cost-effective growth. Looking ahead to the 2026 financial year, we are focused on remaining resilient, low-cost coal producer while executing our organic growth plans, which will enable us to continue to deliver shareholder value. Thank you very much. I'll now hand over to the operator to start the Q&A session. Operator: [Operator Instructions] Your first question is a phone question from Rob Stein from Macquarie. Robert Stein: Just looking at Slide 14 of your presentation, you've outlined the growth program or a growth profile. Just sort of chipping into it a little bit more, I noticed the Maxwell mine progressive ramp-up and the long-term rate there providing an indication of absolute volumes. Just wondering if you could comment on that as to how you see the ramp-up potential of the mine. And then similarly, just looking at the constant sustained basis for Bengalla, just thinking through the long-term CapEx requirements there. Robert Bishop: Sure. So I guess with our organic ramp-up, we're looking to double our production from -- I think your first question was in relation to Maxwell mine, Malabar's mine. That is already in ramp up. Bord and pillar pit is fully operational. And really, the increase in -- material increase in tonnes will come from the longwall pit or the Woodlands Hill pit when we should see first longwall coal first quarter calendar year 2026. So from that projection, and you can see the uplift on that chart, that should get up to around sort of 6 million to 7 million product tonnes from that operation around about sort of FY '29 onwards. So -- and then I guess, with regards to Bengalla, growth project there has been very successful. Both the prep plant and the pit has achieved targeted production from that growth project albeit hampered by uncontrollable events offside. So you would have seen in the report, we touched on weather events and resulting logistics impact. So that's hampered us in the final quarter of the FY '25 year, and it continued to hamper us into the beginning of this year, and we'll be putting out guidance for this year, I think, in mid-November. Robert Stein: So just as a brief follow-up, in Maxwell, you've got 6 -- sort of ramping up to the 6 million tonne rate there. That's what we should be looking at modeling and taking forward in terms of a view on the mine's potential? Robert Bishop: Yes, I think somewhere in the 6 million to 7 million is what the expectation is. I guess where that asset is at the moment, it's developing up the first longwall panel. So obviously, when you get into a longwall pit, despite all the exploration you can do, you don't really get to understand geological conditions until you're down there. So that's progressing well. And like I said, we're expecting to get the first year of the longwall in first quarter of next year. So assuming everything goes to plan, that should get up to sort of that circa 6 million to 7 million product per annum. Operator: [Operator Instructions] We'll now move to our webcast questions while we wait for any other phone questions to register. Your first webcast question reads, with thermal coal now having retraced back to $102 per tonne, what are your views on the state of the market. Anything we could look out for into the second half other than typical seasonality in coal demand in industrial production and renewable energy generation? Robert Bishop: Yes, that's quite right. And I think we've almost dipped under $100 for the Newcastle index. So pricing is certainly challenging at the moment. We've seen good, consistent supply across the globe of thermal coal. And we've also seen the impact of low coking coal prices affecting thermal coal with some semi-soft products being pushed into the thermal coal market. So if you overlay a fairly soft demand for this calendar year, that's obviously put downward pressure on pricing. As to what that's going to do moving forward, it's a good question. I think there could be some restocking as we go into the Northern Hemisphere winter, which is those typical cyclical changes which you mentioned. But I think our view is we don't see a significant increase in coal prices in sort of the next 6 months or so. I think that oversupply, which I talked about, that really needs to push itself out of the market, and we'll see what this Northern Hemisphere winter brings. Operator: Your next webcast question asks, during the new year, New Hope Group increased its equity interest in Malabar Resources Limited by 3% to 22.98%. Is the business looking to increase its equity interest in Malabar again this year? Robert Bishop: So I guess overarching, our key focus is our organic growth, which we've touched on at both Bengalla and Acland. Yes, we did take an additional 3% in the financial year just gone, and that was really off the back of an approach from another major shareholder. I guess with all M&A, we consider acquisitions as a put forward. But obviously, any acquisition we do would need to meet stringent returns, et cetera. And obviously, with the soft market at the moment, we'd need to take that into account. Operator: Your next webcast question asks, your final dividend is much higher compared to what your peers have announced. Are you able to sustain this level of dividend in the current coal price environment? Robert Bishop: Yes, that's a good question. And as always, we like to reward our shareholders with dividends. And I think the $0.15 fully franked, which we announced today, has been well received. I guess our underlying assets really put us in the position to reward shareholders, the low strip ratio and as a result, low cost, we put a lot of focus on cost control. And as a result, we continue to make a strong margin even in the cyclical lows, which we're seeing right now. So we're confident that's going to continue, and we'll see what this year lies ahead for us. Operator: There are no further webcast or phone questions at this time. I'll now hand back for any closing remarks. Robert Bishop: Well, thank you for joining. And again, apologies for the delay in our start, a few technical issues, but it's been a pleasure delivering this result, and we'll see you next time. Thank you.
Operator: Hello, and welcome to the JTC PLC Interim Results Presentation. My name is David, and I'll be your host for today's event. Please note that the event is being recorded. [Operator Instructions] Before we proceed, as you will have seen, JTC is currently in an offer period under the U.K. Takeover Code. As summarized in the company's RNS of 12th of September regarding possible offers, the Board received three preliminary nonbinding proposals from Permira in August, which were considered by the company and its advisers and unanimously rejected by the Board. The Board received a fourth revised proposal on the 9th of September and is in early stage discussions with Permira in relation to the possible offer. The Board also received two preliminary and nonbinding proposals from Warburg Pincus in early September, which were considered and unanimously rejected. A further proposal has been received and the Board is currently in early-stage discussions with Warburg Pincus in relation to the possible offer. In respect of these approaches, you will appreciate that management are very restricted in the comments they make only commentating on information already in the public domain, and we therefore prefer that most of the questions this morning are focused on the business. Thank you. I will now hand you over to the presenters for today. Nigel Le Quesne: Good morning. Welcome to the presentation of JTC PLC's interim results for the period ended 30th of June 2025. I'm Nigel Le Quesne, the Group CEO, and presenting with me today is Martin Fotheringham, our Group CFO. Let's move to Slide 1 and the agenda. We will begin with my CEO highlights for the period, after which Martin will run through the financial review. Following this, I'll take a deeper look at the group and the divisions and then go on to discuss how the rise in popularity of alternative assets positively impacts JTC's long-term growth potential and explain how we act as a key enabler of capital flows in these asset classes through both divisions. I'll also give a brief progress report on the integration of Citi Trust into our wider business post completion and we'll provide color on our focus areas for the medium to long term. Finally, I will summarize our key takeaways and my expectations for the group for the rest of the year. We will then open the forum up for questions. 2025 is the second year of our Cosmos era business plan, in which we aim to double the size of the business by no later than 2027 and for the third time since our IPO in 2018. The group has delivered a strong performance in the first half of 2025 with strong organic growth of 11%, record new business wins achieved through high win rates in what has been a more challenging macro environment. The results underline the benefits of having access to both institutional and private capital bases and continues to demonstrate the sustainable and evergreen nature of the JTC business model. As we approach the end of our 38th consecutive year of revenue and profit growth since inception, our unique shared ownership culture, diversified professional services business model and continued focus on client service excellence, all lead to our being well positioned to succeed and continue growing in any economic environment. In H1 2025, our group revenue was up 17.3% and EBITDA was up 15.1%, delivered at an underlying EBITDA margin of 32.8%. Our net organic growth was 11%, ahead of our guidance for the Cosmos era with growth at 14.6% and client attrition at 3.6%, an improvement on last year's 4.8%. We also achieved another record for new business wins in the period of GBP 19.5 million. As a result of our performance in H1, coupled with the benefit of our two most recent acquisitions, Citi Trust and Kleinwort Hambros Trust, we remain confident that we will achieve our Cosmos era goals ahead of schedule. The PCS division has performed particularly well in the period with outstanding net organic growth of 14.5%, continuing a strong trend. It is now established as the leading independent global trust company business and is the largest independent provider by some distance in the important U.S. market, which continues to be an opportunity-rich environment for the group. It is pleasing to report the completion of our acquisition of Citi Trust on the 1st of July, and we've made good progress to accelerate the integration and harmonize the business model. I will return to this later. Building on this, post period end, we were delighted to announce the proposed acquisition of Kleinwort Hambros Trust Company or KHT. The KHT deal is further evidence of the reputation JTC has established as the offtaker of choice for banks as they seek lighter operating models and retrench to their core capabilities. KHT is highly complementary to JTC's existing offering and brings us a U.K. trust presence for the first time. The deal was executed at an attractive price of circa 6x EBITDA, and we expect to complete in Q4 2025 and for it to be earnings accretive in 2026. The ICS division delivered net organic growth of 9.2%. This is a strong result in a market where macroeconomic headwinds have led to a period of volatility and uncertainty leading to prolonged sales cycles. Nevertheless, our pipeline has remained healthy, and we achieved robust win rates of over 50% and onboarded some significant clients in the period. At a group operations level, there's been heightened project activity in the period. In the process of implementing a global billing platform to enhance consistency and standardization across the group in support of our proprietary frameworks performance management tool. We are also enhancing our global risk and compliance framework, including a review and harmonization of policies and procedures underpinned by the implementation of an enhanced new RegTech solution [ CAMS ] . In addition we're using the Citi acquisition as a catalyst to accelerate the planned upgrade to [ Quantios Core ], our group-wide primary administration system. These important projects, together with our recently implemented group HR platform and our development of the ChatJTC AI tool, our infrastructure investments, which allow us to future-proof our global platform and capture the strong growth opportunities we see, both in the current Cosmos era and into the Genesis era that will follow. Although temporarily margin dilutive, these investments are all designed to improve commercial performance and enhance the platform for growth in the medium term. As always, I will wrap up my highlights by thanking the top-quality team we have at JTC. In July, we were delighted to award the second tranche of warehouse shares from our employee benefit trust to our global workforce for their individual and collective achievements in the Galaxy era between 2021 and 2023. We continue to believe that the power of our shared ownership culture is the foundation of JTC's 37-year track record of uninterrupted revenue and profit growth. Having 2,300 owners rather than employees makes an enormous difference to our working environment and the organization's culture, which is reflected in our industry-leading staff retention figures, which are currently 96%. This enables us to ensure that the team are happy, valued and empowered and highly motivated to improve our business and client experience every day. So now let's turn to Slide 4 and the financial highlights. Our revenues have grown to GBP 172.6 million and underlying EBITDA was GBP 56.5 million, delivered an underlying group EBITDA margin of 32.8%. As previously highlighted, our group net organic growth was an excellent 11%. New business wins were a period record of GBP 19.5 million as the group continues to benefit from excellent win rates of greater than 50% across both divisions. Now a consistent performance metric achieved in a competitive market. The new business pipeline remains strong and increased from GBP 49.8 million at year-end to circa GBP 60 million at the end of H1, indicating the probability of good momentum in the second half of the year. The Lifetime Value of work Won was another record at circa GBP 267 million based upon the 14.2-year average lifespan of our client book. This gives us visibility of over GBP 2.4 billion of forward revenues from our existing client book, i.e., what the business would generate without the addition of any new mandates from this point forward. This metric continues to demonstrate the long-term and compounding value of the group. And finally, on to the interim dividend, which has been proposed at 5p per share, up 16.3% from 4.3p. Now over to Martin for a deeper look at the financials. Martin Fotheringham: Thank you, Nigel. We've delivered a strong set of results that are in line with our expectations, where we've continued to focus on delivering growth. Organic growth was 11%, the sixth successive reporting period where net organic growth has exceeded 10%. The financial highlights slide shows that our overall revenue growth was 17.3%. We're performing well, led by net organic growth. It's pleasing to see the momentum we built in 2024 carry into 2025. Our underlying EBITDA margin dropped by 0.6 percentage points from H1 '24 and was 32.8%, and there's more on this later. Earnings per share increased by 7.1%. Cash conversion was 86% and is in line with our guidance range of 85% to 90% annual cash conversion. This is lower than our normal H1 performance, and I'll explain why later. Net debt increased by GBP 43 million, and this was driven by drawdowns for earn-outs. It was a busy year in 2024 for M&A with 5 deals completed, which we've continued to integrate throughout 2025. The Citi Trust acquisition also completed on the 1st of July, and we have the KHT deal, which will complete later this year. At the period end, our reported underlying leverage was 2.06x. On a pro forma basis, our underlying leverage was below 2x underlying EBITDA. And finally, our return on invested capital for the last 12 months was 13%, an improvement from the 12.6% we reported at the end of 2024. Moving on a slide, we'll start with revenue and our revenue bridge. On a constant currency basis, our revenue growth was 18.4%. This was above our reported growth of 17.3%, where we were again impacted by the weaker U.S. dollar during the last 12 months. As our U.S. presence has increased, so has our exposure to the U.S. dollar. Gross new revenue was GBP 36.8 million, a decrease from GBP 38.3 million in H1 '24. The prior period continued to enjoy the benefit of the immediate impact from the launch of our banking and treasury service. Gross attrition was GBP 9.1 million, which is 3.6% of annual revenues and is down from the 4.8% reported in the prior year. GBP 6.2 million of this attrition was end of life, and therefore, 98.8% of non-end-of-life revenue was retained. This is the highest retained revenue result we've posted since IPO. Revenue recognized on new business wins in the year was 54% compared to 51% recorded in H1 '24. Our new business pipeline at the period end was a best ever GBP 60.4 million, which is a GBP 10.6 million increase from the end of 2024. Let's move on to Slide 9 and take a look at the first of our key metrics, net organic growth. As I've already said, we delivered organic growth of 11% in the last 12 months with our 3-year average now standing at 14.8%. We've posted net organic growth in excess of 10% for 3 successive years. ICS recorded net organic growth of 9.2%, which was commendable when considering external factors where the continuing macroeconomic and geopolitical uncertainty has generally stalled fund launches and slowed down activity levels. The U.S. has continued to deliver good growth for our ICS business. PCS has excelled with 14.5% net organic growth with the U.S. and Cayman the key drivers. Pricing growth remained strong at 5.1%, demonstrating our ability to recover increased costs of doing business. To conclude on revenue, let's look at the geographical profile on Slide 10. All regions once again supported revenue growth in the period. The U.S. continues to deliver impressive levels of organic growth and has established itself as a leading growth region. At IPO, the region represented 4% of our global revenue, and this now stands at 31%. Taking into account the Citi acquisition, we expect the U.S. will represent approximately 35% of our global revenues. The rest of the world also recorded impressive growth of 74.3%, and this was driven by the inorganic growth of the FFP acquisition and the continued growth of our own Cayman business. We now move on to the EBITDA margin on Slide 11. The underlying margin was 32.8%, a drop from the 33.4% recorded in H1 '24. I said previously, there are many moving parts in our margin story. On the one hand, we've improved our margin over recent years through the introduction of higher-margin banking and treasury business. Typically, we also have a small operational gearing uplift each year of approximately 1%. As you know, we're committed to the future success of the business, and it's our strategy to invest in areas where we believe will ultimately benefit the business, whilst delivering an acceptable margin. This includes start-up services in new jurisdictions, current examples of which are our private office, ESG service and Irish Funds business, which we calculate drag our margin today by 0.6%. We also see margin dilution from investment in growth jurisdictions. These are jurisdictions where organic growth exceeds 15% or where the current infrastructure is disproportionate to the revenue generated. We currently have just over 10 jurisdictions that fall into this grouping. Gross margins from this cohort averaged 51% compared to mature jurisdictions where the average is 69%. Four years ago, 33% of our revenues came from these growth jurisdictions, whereas today, it's over 50%. Finally, on margins, I've previously noted our higher spend on risk and compliance. Notwithstanding the hard to quantify amount of chargeable time we spend dealing with regulatory obligations, we also continue to invest into our group capability. Over time, that alone has impacted margins by 50 basis points. Now focusing on cash conversion on Slide 12. Cash conversion was 86%, a decrease from 104% recorded last year. Our normal cash collection cycle is that we have strong collections in H1 that were above 100%. So this is a significant drop, albeit it remains within our guidance range. The drivers for the drop are temporary and do not impact our ability to meet our annual target. Adjusting for these temporary impacts, would have seen us delivering cash conversion of approximately 102%. The drivers for the decrease, as shown in the bottom graph, were as follows: 4 percentage points for temporary timing differences. These include cash outflows that we paid in H1 this year that we would normally pay out in H2. 4 percentage points for a change in billing cycles for one of our business segments, where we've moved to a biannual billing cycle for fees that were previously billed on an annual basis at the beginning of each year. These fees were collected in July. A 2 percentage point impact due to FX in the period. This can fluctuate and has been adjusted to show a constant currency position. The 6 percentage points is due to the impact of recent acquisitions, primarily FFP and SDTC, where the businesses do not follow our usual H1 seasonality and our cash inflows are not weighted to the first half of the year. As you can see, adjusting for these, our underlying performance in H1 was strong. We maintain our medium-term guidance range for annual cash conversion of 85% to 90%. Now let's look at net debt and leverage on Slide 13. At the end of 2024, our reported net debt was GBP 182.3 million. And by the 30th of June, it stood at GBP 225.1 million, an increase of GBP 42.8 million. This was driven in the main by the net outflows for acquisitions of GBP 47.8 million, where material outflows included the payout in full for the FFP earn-out of GBP 24.9 million, the SDTC earn-out of GBP 19.1 million and a total of GBP 3.8 million covering Hanway, perfORM and Buck earn-outs. Our reported leverage was 2.06x underlying EBITDA. However, annualizing recent acquisitions to achieve a pro forma leverage shows that we would be within our guidance range. With the Citi and KHT acquisitions, leverage will be above 2x at the year-end, but below our absolute peak of 2.5x. We expect to rapidly delever through 2026. As anticipated at the year-end, we completed on a U.S. private placement facility in the first half of 2025 for $100 million. As at 30th of June 2025, the group had total undrawn funds available from banking facilities of GBP 123 million. And finally, our return on invested capital. We delivered a return on investment of 13% in the last 12 months. This was an improvement of 40 basis points from the position at the end of 2024, and this continues to be significantly above our cost of capital. I'm really pleased with this improvement in a period of ongoing acquisition activity. The lifetime value of clients, which represents the revenue that our client relationships will generate in the absence of new business, increased by 4.3% from 2024 to GBP 2.4 billion. Since IPO, we've reported over a 700% increase from GBP 0.3 billion in 2018 to GBP 2.4 billion today. To conclude, we continue to deliver a solid and resilient set of financials in the second year of our Cosmos era. And on that note, I'll hand back to Nigel. Nigel Le Quesne: Thank you, Martin. As I've mentioned earlier, next, we will cover the macro environment, its effect on the M&A market and take a deeper look at the 2 divisions. Following which I will discuss 2 key topics. Firstly, how the growth of capital allocation to alternative assets acts as a tailwind for the group; then secondly, detailing the positive progress of the Citi Trust integration and how our ability to solve for banking institutions seeking lighter operating models provides JTC with a competitive advantage. In the wider M&A market, global deal volumes were down 13% in the first half of 2025 when compared with the previous year. This was largely due to the macro environment, including trade uncertainty, geopolitical instability and a difficult funding environment. The sentiment has definitely improved in H2 as the financing markets improve. Buyer appetite remains strong as firms face mounting pressure to deploy capital, demonstrated to some degree by the recent interest in JTC. Advisers have backlogs of deals creating a buoyant market. In our sector alone, we're aware of close to 10 deals of a good size attracting strong market interest. Given our current financial leverage and recent acquisition activity, we will concentrate on maximizing the opportunities presented by Citi Trust and KHT in the short term. But we will keep a close eye on the developments in the wider market, where we continue to be viewed as a good counterparty and long-term home for businesses by sellers and advisers alike. The regulatory regimes continue to prove challenging, as I've commented on previously. The propensity to look to impose regulatory fines on organizations for specific client matters, which are often minor in nature rather than systemic issues has been unhelpful. At JTC, this current environment has led to increased costs in the risk and compliance teams, created a need for greater technology spend and a disproportionate amount of time being demanded on the divisional fee earners. The number of regulatory interactions we've been required to engage with across our growing global platform continues to increase period-on-period, reflecting the trend of increased scrutiny across the sector as a whole. Regulation can, of course, also act as a tailwind to our industry, however, creating additional demand for our services and providing M&A opportunities as businesses consolidate to share the cost of the regulatory burden. As I mentioned earlier, the divisions have both performed well, although have been faced with slightly different challenges. In PCS, we have had opportunity of pre-completion work ahead of the delivery of Citi Trust, our largest acquisition to date. As mentioned, we have also been successful in our bid for the KHT business and are now following a similar but less complex integration process and expect to complete the transaction following regulatory consents in Q4. Alongside this, division has benefited from excellent net organic growth of 14.5% and continues to lead its market. In ICS, we have not had the benefit of M&A activity in the period. And as a result, it has been a consolidation phase. We have taken the opportunity to refresh our go-to-market strategy and implement operational and technological enhancements. As indicated earlier, the macro environment has been more challenging. As a result, we were pleased with organic growth performance of 9.2%. This has included the addition of some substantial clients, which will continue to grow and flourish on our watch. Overall, as we look across the group, what is crystal clear is that we have an abundance of opportunities to explore in the second half of the year and beyond. I mentioned earlier that our industry has developed to deal with greater complexity over time, leading to a several market participants leaving the sector. In part, this has been due to increased burden of regulation and internationalization, which in turn has led to sector consolidation. This has then been accelerated by the attractive nature of the business model to investors. However, in our view, the core underlying tailwind has been the growth and increase in popularity of alternative assets. This is particularly evident by the retrenchment of banks from the market where bankable assets alone do not provide the breadth of holistic solutions demanded by ultra-high net worth individuals and families. Similarly, on the institutional side, with the growth of alternatives came the need for new and innovative corporate and fund structure solutions to manage those assets, creating a powerful driver for the industry in the process. As a result, we are operating in a market which has undergone profound structural change. It has expanded, consolidated and become increasingly multifaceted, driving demand for sophisticated administration, advisory and governance solutions, all of which are core strengths of JTC. According to the data provider, Preqin, today, there's around $16 trillion in global capital allocated to alternatives across private equity, real estate, infrastructure, renewables, private debt and hedge strategies. This figure is projected to nearly double to $30 trillion by 2030, growing at 9.5% compound annual growth rate. The growth is driven by both institutional allocators, for example, pension funds, sovereign wealth funds and endowments, all of which are supported by JTC's diversified model and by private capital from ultra-high net worth individuals and family offices, many of whom have a scale and sophistication that means they operate at a quasi-institutional level. JTC facilitates this capital deployment by providing administration for funds, companies and trusts. This places JTC at the intersection of two major flows, institutional capital seeking exposure to higher return illiquid strategies and private capital pursuing diversification and intergenerational wealth preservation. From an analysis of our own book of clients, we estimate that around 80% of our revenues are linked to structures that are designed for or contain alternative assets. This underscores the group's strategic focus and exposure to these long-term growth trends. As global allocation shift further towards alternatives, demand for sophisticated and scalable administration services like those provided by JTC can be expected to rise significantly. JTC is, therefore, not merely a professional service provider, we are an enabler of capital allocation in the fast-growing alternatives market. With strong exposure to both institutional and private capital flows, we are positioned to benefit from multiyear tailwinds. We have recently decided to update the names of the divisions to Institutional Capital Services and Private Capital Services, respectively, to better reflect both what we do and this important value driver that is common to both divisions and the vast majority of client types. The alignment between our service offering and expansion of the alternatives ecosystem across both institutional and private capital provides a clear, durable and scalable growth trajectory for the business. Now on to the progress of the Citi Trust integration. This deal has already had a significant positive impact on our profile and in particular, increased the awareness of the JTC brand in the United States and opened up greater access to very important markets in the Middle East and Asia. The Citi credentials have been particularly important in this regard, and we've experienced excellent collaboration from the bank with a sense of a true partnership, including the introduction to both potential and established clients, providing new distribution channels for JTC. We are already able to report that we have a clear route to improve the operating model, bringing an accelerated margin enhancement from our previous estimates made at the time of the acquisition was announced. As we indicated in July trading update, we are now confident the margin of the business will be 30% plus by the end of 2026. And this acquisition continues to look to be one of our most exciting deals to date. More generally, we have proved ourselves as a reliable counterparty for bank carve-out deals by concentrating on the priorities of the banks, which are focused on protecting their reputation and the client experience. We now have a track record that places us as the offtaker of choice for deals of this nature as a lighter operating model is sought as most recently demonstrated by the subsequent KHT deal. Finally, on to the key takeaways. We have delivered sector-leading performance with strong organic growth and stable margins that reflect our ongoing investment in the global platform. We are established as the leading independent provider of trust company services globally and the additions of Citi Trust and KHT are highly complementary to JTC's existing offering. The growth in capital allocation to alternative assets is a major structural tailwind for the group, and JTC is positioned at the intersection of those capital flows ready to capture significant growth opportunity for both divisions. We are progressing well towards achieving our Cosmos era goal of doubling the business from January 2024 and are highly confident we'll be able to do this ahead of schedule before the end of 2027. Looking at the second half of the year, we have a strong new business pipeline and consistent high win rates, giving us good momentum for organic growth in H2. While we will focus on the ongoing integration of Citi and early stages of KHT, we continue to track good opportunities to our M&A pipeline across both divisions and our key target markets. Return on invested capital is expected to continue to strengthen in 2025 with further improvement anticipated in 2026 as we realize the full year contributions from the Citi Trust and KHT acquisitions, both of which have been acquired at excellent multiples. As always, we will continue to invest the growth, ensuring that our global platform is always scalable and fit for purpose. Ultimately, we continue to concentrate on being the best service provider and less on being the biggest. Once again, we maintain our guidance metrics that define what sustainable success looks like for a business of our nature. So thank you for listening and for your ongoing support. We will now be happy to take your questions. Operator: Thank you to Nigel and Martin for the presentation. They're now unmuted. So we'll be happy to take questions. [Operator Instructions] I think the first one was Michael Donnelly. So Michael, we will come to you and unmute first. Michael Donnelly: Three from me. Could we take them in turn, please? First one, Nigel, you said the 20% new business pipeline growth from December to June suggested it was the effect of strong growth in the second half or good growth or something like that. Can you just confirm, should we interpret that growth in the second half as being in line with the 10% or 10% plus organic growth in that period? Nigel Le Quesne: I think, Michael, the signs are good, right? So it's the fullest pipe we've ever had. I think we've seen slower delivery, in particular, in the institutional market in terms of bringing clients through to a successful launch and into fee-earning territory. But the signs are really good, and it's a very strong pipe. So we're expecting, I think, to be keeping above our 10% plus organic growth metric. Michael Donnelly: That's great. Secondly, the 14.5% organic in private capital services, can you tell us how much of that you think came from U.K. Channel Islands? You may not have the exact number, but just a feel for was it the -- was it a major contributor? Or was it just in line with everything else? Nigel Le Quesne: I don't think -- the question is around the exposure to or migration from one to other. We're not really that exposed to the U.K. market to a large degree. So what I can tell you is the Jersey is probably the biggest single jurisdiction for wins in that period. And then we've had some really good wins in Cayman, Singapore and Dubai as well. So -- but not necessarily as a result of sort of driven by tax or other considerations. We're just not exposed to that market particularly. Michael Donnelly: Understood. And then finally, on Kleinwort and Citi, both trust businesses, do you think that once they're both completed and embedded in, the number of -- the amount of revenues exposed to assets under management will be very different from the sort of 15% that I think historically we've been used to that are AUM exposed? Nigel Le Quesne: No. The KHT book is actually a time and materials book in any event. So that doesn't change the mix at all. The Citi book, on the other hand, has got AUM elements associated or primarily as AUM. And the way we're dealing with that is we will use this year's fees to create, if you like, the minimum for future fees. So we create a floor and then we'll run the clock alongside the work we do for these clients and top up accordingly if we believe that's what it is. So in effect, we'll make it -- how can I put it, measured by time and materials. Operator: Thanks, Michael. It was great. Appreciate your questions. Next, could we unmute Vivek Raja, please. Vivek Raja: Thank you for your presentations. I found your results presentation very comprehensive. I don't have any questions. So apologies, I'm going to ask you about the bid situation. Just a simple question. You've set different PUSU dates for Permira and Warburg Pincus. I was just curious about why you've done that? Nigel Le Quesne: No, we didn't set separate different PUSU dates. It's really driven by when the bids were received. So they were just received on different days, and therefore, the dates are different. Unknown Analyst: Nigel, would help if I jumped in. It's [ Stuart ] from Deutsche. The PUSU dates are set by the date of the leak announcement. It's as simple as that, and there's sort of 2 different leak announcements. That's what sets those 28 days. Vivek Raja: Okay. I mean is that process -- how are you going to sort of align that process given you've got competing bids then? Unknown Analyst: There is no obligation to align it. Operator: Can we go to James Clark, next please. James Clark: My first is just on the wider industry and sector. There's obviously, as you know, right now, a lot of PE interest in all sorts of assets, both bolt-on and sort of larger platforms. I guess I just wondered from your perspective, when you take part in these bids and you see PE either out compete on price or maybe you outcompete them. I guess I just wondered what you are able to offer to some of these larger businesses privately that's drives their interest specifically, i.e., things like are they able to accelerate the margin profile because of greater automation or great use of AI? Are there any other areas that they're able to really explore that perhaps publicly as a publicly listed company, it's a bit harder. So I guess what really drives their specific interest? Obviously, it's a highly consolidating industry and there's lots of M&A potential. But what are they able to deliver, do you think privately that perhaps is harder publicly? I have a second question as well, which is more on the margin profile, but I'll wait for the answer. Nigel Le Quesne: I think -- well, can I just answer it from our perspective? Look, we like and have liked being a listed business. So -- but our industry is dominated by private equity, as you probably -- as you're alluding to, and it's at various levels. So if I look at it from our perspective, currently, it's fair to say that the ability to -- we have got balance sheet constraints in a consolidating market. So that is a challenge for us to work through as a listed business. And I think occasionally, it's meant that we couldn't compete for good assets over time. But we work it through and we find and we always have found very good deals to be done sort of away from and outside of perhaps the normal processes that you go through. But clearly, there wouldn't be the same balance sheet constraints in the business as a whole. In terms of what they can do that we couldn't do ourselves, I think it's debatable. I think there is a little bit of -- there can be a sense that we're in sort of period-to-period sprints as a listed business, which you may not be in quite the same place with a longer-term view that may be taken by a private equity house, particularly to, if you like, just we take time to sort of pit stop for a little bit and work out what it is you want to be doing in particular areas, technology you alluded to could be one of those. So there's obviously pros and cons with both, but there's definitely advantages for us for being the only listed business in our space, but occasionally works as a disadvantage for us as well. So I hope that answers the question. James Clark: That does. That's very helpful. And then my second question is just on the additional costs to do with compliance and risk management sort of spending centrally and the regulatory cost headwind. I think you flagged it was 50 bps headwind in the first half. Should we expect that heightened level of spending to kind of continue? And I guess, is it accelerating today versus a year ago? And then sort of follow-up to that would be the upper end of your margin limits being 38%. Is that now not really achievable because you've got this sort of, I guess, headwind structurally to your margin? And then I think -- so that's a big question here, but you also flagged that you can manage that margin headwind through scale. So I'd be interested to know how you sort of do that and why you wouldn't pass it on through price? Nigel Le Quesne: Happy to pick that up. I think it's too early to say whether the risk and compliance or risk and regulation environment we work in is necessarily always going to be a drag on margin to the degree it is today. But just to answer your question about sort of regulatory interactions, which we track, we've gone from 46 in 2022, 58 in 2023, 76 in 2024, expecting 90-plus this year. So that gives you an idea of -- now in fairness, we will have -- we're probably regulated in more ways, in more places than we were initially. But just gives you an idea of the burden and that is permanently some sort of regulatory interaction required. More generally, I think we were quite pleased with the Moneyval visits to Jersey and Guernsey, which obviously quite big jurisdictions for us that seem to go reasonably well. And we had a very good meeting with the group of international finance centers. I think we met 5 or 6 of them together in a forum around the beginning of the year. So having said that, we've seen a little bit more interest in the regulatory environment from both the Netherlands and Luxembourg in the last sort of 6 months or so. So it's there's sort of one area you feel is feeling -- is going quite well and then you'll get interest from another area. So -- but I wouldn't necessarily say that it will -- it means that 38% isn't doable. I just think there are different ingredients in different times, and there's other things we're doing all the time. I mean the margin is quite complicated. I'm sure as you know, growth can affect your margin, tech investment can affect your margin in the short term with a view to being long term. But I wouldn't say it's impossible for us to get to 38%, but it's probably a little bit more difficult than it was when we set the 33% to 38%. And then in terms of how we might address that, I think there's discipline, efficiency are all things I'm thinking of. Scale is part of it, technology is part of it. And frankly, pricing could be part of it as well. So I hope that's helpful. Operator: Thanks, James. We don't have any further hands up. So unless anyone wants to jump in quickly, I think we are through most of our time anyway. Great. Well, thank you very much to Nigel and Martin and all who have attended today. I hope you enjoyed the presentation, and the presentation will be on our website later today also. Many thanks. Goodbye.
Operator: Good day, and thank you for standing by. Welcome to the Transgene 2025 Half Year Financial Results Conference Call and Webcast. [Operator Instructions] After the speaker's presentation, there will be the question and answer session. [Operator Instructions] Please be advised that today's conference is being recorded. I would now like to hand the conference over to your first speaker today, Lucie Larguier, Chief Financial Officer. Please go ahead, madam. Lucie Larguier: Thank you, Maria, and good afternoon, everyone. Thank you for joining us on today's call to discuss our progress over the First Half of 2025 as well as a half year results. You can access the press release issued today on the Investor page of our website. On today's call is Dr. Alessandro Riva, our Chairman and CEO. After Alessandro's discussion, we will take questions already on this telephone call and also on the web platform. Before we begin, I'd like to remind everyone that today's discussion contains forward-looking statements, which are subject to a number of risks and uncertainties. And with this, I now hand over the call over to Alessandro. . Alessandro Riva: Thank you, Lucie, and good afternoon, everyone. I would say that it has been an exciting first half of the year, not only for Transgene Individualized Therapeutic Vaccine, but also and more importantly, for the head and neck cancer community. We presented the full 24 months disease-free survival data for all Phase I patients treated in randomized Phase I trial in a rapid oral presentation at ASCO this year in a session that was dedicated to head and neck cancer. We are extremely proud that all operable head and neck squamous cell carcinoma patients treated with our Individualized Therapeutic Vaccine, TG4050 in the randomized Phase I trial remain disease-free after a median follow-up of 30 months, as you can see from the Kaplan-Meier course projected in this slide. And now on Slide 5, all the trial endpoints of the randomized Phase I study were met. Safety is extremely good. Immunogenicity has been demonstrated. And not only do we see the induction of a specific cellular immune response, but also we see that this response are durable and can still be seen after 24 months since the start of treatment. We will present additional immunological data from this trial at a scientific conference in Q4 2025, including insight into the phenotyping of patients' immune response. In addition, as you can see in this slide, the ongoing Phase II trial is progressing at a very good pace, and we are very confident that we will randomize the last patient in Q4 2025 allowing us to plan for the communication of the first immunogenicity data in the second semester 2026 and the 2-year efficacy data in the Q4 2027. I'm now going to Slide 6. TG4050 randomized Phase I data were presented at ASCO along with other 2 trials with immune checkpoint inhibitors in the adjuvant treatment of operable head and neck squamous cell carcinoma, the KEYNOTE 689 and the NivoPostOp trial. These 2 trials, as you can see, extremely encouraging data and pembrolizumab, as you know, is now approved for this patient population in the United States of America and probably soon in Europe. Nevertheless, 35% of patients relapse within two years after surgery and that is exactly where the future lies for TG4050, improving the outcomes for these patients that do not benefit durably from immune checkpoint inhibitors. Moving to Slide 7. So as you can see, we want to build on the positive Phase I data and the successful inclusion in the Phase II trial. And for this reason, we are discussing with clinicians the best way forward for TG4050 in the head and neck cancer so that we can bring this potential new treatment to patients in need as quick as possible. In addition, our myvac platform has broader potential in early solid tumor setting that goes beyond head and neck tumors. We want to continue to leverage this unique technology to address areas of high unmet medical need. And that's why in parallel, we continue to prepare a potential new Phase I trial in the early treatment of a solid tumor with biology that different from the head and neck tumors. We aim to initiate this study as soon as all conditions are met from a regulatory and financial point of view. As you know, and I'm on Slide 8, the manufacturing is key for Individualized Vaccine as it is key for CAR-T cell therapy. That's a topic that we started to address from the beginning of our work on myvac. We have demonstrated feasibility to deliver TG4050 to operable head and neck cancer patients in the context of a multicentric multinational Phase I/II trial. The next step for us is to continue optimizing the manufacturing process for myvac technology and for TG4050 to be able to scale up and run several trials in parallel, including a potential registrational trial. Under the guidance of our Chief Technical Officer, Simone Steiner, who joined Transgene before this summer, we will continue to invest to ensure smooth execution to support further acceleration of the myvac program. We believe that scientific excellence, strong data and operational focus generated with TG4050 clearly differentiated Transgene in this highly competitive and attractive field. Hence, the rationale, as you can see in this slide, of our decision to focus our efforts and resources on our lead program myvac platform and today TG4050. With regards to our other programs, we will present a poster at ESMO in Berlin on the data generated by BT-001 in the Phase I trial as monotherapy and in combination with pembrolizumab. We have seen interesting responses in patients with refractory diseases, in particular, leiomyosarcoma patient and melanoma patient. Looking at leiomyosarcoma patients, you can see that BT-001 was able to positively change the tumor microenvironment. The science generated around this initial trial constituted the basis of discussion with clinicians to continue the development of this candidate in the intratumoral setting. Looking at our two other candidates, TG4001 and TG6050, we are assessing different scenario in a context where the overall financing environment for biotech company is pushing us to focus on key value-creating programs. And now I'm going to hand over to Lucie for some words on the financials. Lucie? Lucie Larguier: Yes. Thank you. So our financials are, as usual, in line with our forecast, thanks to strict monitoring of [ dilution ] and stringent cost control in today's environment. In terms of outlook, and I think it's positive, we have extended our financial rhythm, and our business is now funded until the end of December 2026, thanks to the credit facility and the engagement support from TGH, which is, in fact, [indiscernible]. I now hand over to Alessandro for a few concluding words. Alessandro Riva: So to conclude, I will say that we are now building increasing momentum on the myvac platform. The data we presented at ASCO in operable head and neck cancer with 100% survival at two years represent a solid proof of principle for TG4050 in an indication where a significant medical need remains in spite of a great improvement delivered by immune checkpoint inhibitors. Our vision is clear with a focus on individualized cancer vaccine. In the next couple of years, we will continue to present clinical catalysts in head and neck, the Phase I will deliver additional and informative immunogenicity data that will be presented in Q4 2025 at a scientific conference. You can also expect the follow-up at three years from the same study in the middle of 2026. The Phase II trial in operable head and neck cancer patients is well on track and data are expected in second half 2026 regarding the first immunogenicity data and in Q4 2027, the 2-year disease-free survival data. When all conditions are met, as discussed, we'll be able to start an additional Phase I trial in a new indication in operable setting. The individualized cancer vaccine field continues to evolve and start to be derisked from both scientific and clinical point of view. And when looking at the economics, operable head and neck cancer alone represent a market of more than $1 billion per year at peak. We continue to work harder to deliver on our strategy with important milestone in sight, we are confident that Transgene is well positioned for the next step. And now Lucie and I will take your questions. Operator, please. Operator: [Operator Instructions] And now we're going to take our first question from audio line. And it comes from the line of Clara Montoni from [indiscernible]. Unknown Analyst: This is [ Clara Montoni ] from [indiscernible]. Congrats for the update. I was wondering if you could remind us when do you expect to announce more on the TG4050 development plans? Will this be pivotal plans? And also, can you talk a bit more about or in the context of the recent approval of Neoaduvant and Adjuvant KEYTRUDA in localized head and neck cancer. So specifically, I was wondering if those 35% of patients relapse, do they have particular baseline features? Could you please expand on that? Alessandro Riva: Okay. Thank you, Clara. So first of all, in terms of more clarity and visibility related to the next step for TG4050 in head and neck and in particular, the potential pivotal Phase III trial. We plan to have some visibility by Q2, 2026. The reason being that, of course, we are starting the discussion with some expecting clinicians in the field of head and neck. We're going to finalize the proposal that, of course, will be discussed with the health authorities, and we plan to update the community on the potential next step kind of around the second quarter of 2026. So -- And with regards to your second question related to KEYTRUDA pembrolizumab in the KEYNOTE 689. So if you look at the New England Journal of Medicine publication, that is the only source of information that we have -- it doesn't appear that there is a particular prognostic factor that is underscored in terms of potential risk of relapses. So this is something that will have to be explored further. And also when we will have more data from the other trial with nivolumab, NivoPostOp [indiscernible], we are going to clarify this topic. So the [ idea ] that we have independently of the risk factors is that knowing that there are around 35% of patients that unfortunately continue to relapse despite the immune checkpoint inhibitor is really to try to find the way TG4050 can further improve the treatment outcome, [ dependency ], I would say, of the prognostic factors. Lucie Larguier: So we have other questions coming from the web -- my mailbox. We have one from Amar Singh from [ Intron ] Health. Will the Phase I trial of TG4050 in a new indication still be initiated in Q4 2025? And can you provide us with any detail on this next indication? Alessandro Riva: So the answer, as we said during the call, so we are already working towards the finalization of the protocol. We are in discussion with the health authorities. And as soon as we have the green light from the health authorities, and the financial condition are met. In other words, we have the right financing for the trial. We're going to start the trial. And of course, we are still aiming towards an initiation of the trial as quick as possible. As I said, it will depend from the regulatory authorities' feedback and from financing that we are considering as we speak. Lucie Larguier: Another question that we have, well, two questions from [indiscernible]. Could you please disclose the conference -- well, at which conference the new data on TG4050 will be presented in Q4 -- and is an early access program a realistic opportunity for TG4050 probably in line of 36 months data. Alessandro Riva: Okay. So we are going to disclose the full data set of the immunogenicity data at the ST conference in November in the United States of America. This is an important conference for immunology in cancer. So -- and we have submitted an abstract to the conference that has been accepted for presentation. And of course, we look forward to sharing this very important information from the Phase I study. So -- and in terms of the early access program, we think that it is rather early to activate this type of program. And we think that this is something that we could eventually assess in the near future with additional information and additional data. So that's. Yes. Lucie Larguier: And we have a final question that I received from [indiscernible] that somehow overlaps with [indiscernible] Joni's question, but it is up to you. So in the press release, you highlight that [indiscernible] is currently evaluating the most efficient regulatory pathway to accelerate the development of 4050 and bring it to patients with operable head and neck cancer as quickly as possible. Could you elaborate these thoughts or objectives? What are the challenges or the next step to have more visibility on the regulatory pathway or market environment? It's a pretty broad question. Alessandro Riva: Yes. So it's a very broad question and it's very similar to what also [ Piara ] asked. So I mean, the bottom line is that we believe that there is a very significant momentum for innovation with immunotherapy in head and neck cancer operable patients. We believe that the data that we have shown at ASCO, know this very compelling in order to think about the potential next step given the fact that pembrolizumab is going to become a kind of standard in the early setting head and neck cancer. So we are brainstorming as we speak with clinicians with expertise, of course, in the head and neck on the potential trial design that could also be considered pivotal in nature. So -- and then based on the feedback, we are going also to have discussion with the health authorities. As I mentioned in my presentation, this process will last around 6, 9 months. And by Q2 2026, we'll be able to share with the community what's going to be the next step in terms of the next trial for squamous head and neck cancer patients. Lucie Larguier: I don't have -- I think we've covered all the questions. We have an additional question from Marcias. Could we have an update on TG6050? And what could we expect for this compound in the next steps? Will you disclose the Phase I data in a future conference? Alessandro Riva: Yes, we are going to -- first of all, TG6050 is our IV oncolytic virus. We have completed the Phase I study in relapsed/refractory non-small cell lung cancer patients. We are going to share the information with the community on this asset. However, we don't think that this is going to be an oncolytic virus that will be accelerated in the context of our priortization that I mentioned in the presentation and in the context also of that we are observing in heavily pretreated patient population. So this is TG6050 is not our focus, and we prefer, as mentioned, focusing on the value creation assets that we shared in todays call. Lucie Larguier: Sorry. So I don't see any other questions -- sorry for my voice. Alessandro, maybe a closing statement. Alessandro Riva: Yes, we do. So it has been -- I would say it has been a very exciting first 6 months. We are already in September, I would say also the third quarter is getting very, very interesting. As we try to convey to you, Transgene is ideally positioned to deliver multiple clinical milestones for myvac platform and TG4050. So -- and really, we are very well positioned to execute and focus on our key priorities. Obviously, we remain committed to deliver -- [indiscernible] in patient, in particular in operable. And with this, I would like to conclude today's call. Have a great afternoon and evening and talk to you soon and see you soon. Bye. Lucie Larguier: Goodbye. Operator: This concludes today's conference call. Thank you for participating. You may now all disconnect. Have a nice day.
Operator: Good morning, everyone, and thank you for participating in today's conference call to discuss the Brand House Collective's financial results for the second quarter ended August 2, 2025. Joining us today are CEO, Amy Sullivan, and CFO, Andrea Courtois; and the company's External Director of Investor Relations, Caitlin Churchill. Following their remarks, we'll open the call for your questions. Before we go further, I would like to turn the call over to Ms. Churchill as she reads the company's safe harbor statement within the meaning of the Private Securities Litigation Reform Act of 1995 that provides important cautions regarding forward-looking statements. Caitlin, please go ahead. Caitlin Churchill: Thank you. Except for historical information discussed during this conference call, the statements made by company management are forward-looking and made pursuant to the safe harbor provision of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve known and unknown risks and uncertainties, which may cause The Brand House Collective's actual results in future periods to differ materially from forecasted results. Those risks and uncertainties are more fully described in the company's filings with the Securities and Exchange Commission. A webcast replay will also be available via the link provided in today's press release as well as on the company's website at kirklands.com. Now I'll turn the call over to the Brand House Collective's CEO, Amy Sullivan. Amy? Amy A. Sullivan: Good morning, and thank you for joining us today. We're at the beginning of a new chapter as we accelerate our transformation through our partnership with Bed Bath & Beyond. Our first store is open in Brentwood, additional store conversions are already underway and the early results validate the strength of the brand to chart a new path forward. Second quarter did bring unexpected challenges, but it also clarified our direction and strengthened our conviction in the future of each brand. Before Andrea reviews the results in detail, I'll share the key factors that shaped the quarter and the progress fueling our path to future growth. As noted in our press release, the second quarter was impacted by two significant events. First, the disruption at our Jackson, Tennessee distribution center following the tornado in late May, and second, the strategic and ongoing liquidation of select inventory as we optimize our category mix and prepare stores for Bed Bath & Beyond conversions. Together, these two events were the dominant drivers of the year-over-year decline in profitability and created significant pressure on our top line, particularly in our e-commerce channel. Looking ahead, we do expect continued liquidation of non-go-forward inventory as we accelerate store conversions. This is a necessary step unlocking liquidity by turning inventory into cash and redeploying that capital into the assortments that our customers expect in Bed Bath & Beyond Home. Our actions are deliberate and our capital is being deployed where it matters most to accelerate store conversions and strengthen our foundation for growth. Last month, we opened our first Bed Bath & Beyond Home store in Brentwood, Tennessee, and the response has been incredible. National Media coverage generated more than 250 million impressions amplifying the excitement customers showed from the moment the doors opened. Sales continue to exceed our expectations, driven by increases in traffic and average ticket. This new format honors the legacy of Bed Bath & Beyond as a house of brands with more than 30 trusted national brand names throughout bedroom, bathroom and kitchen alongside seasonally relevant home decor and furnishings through our Kirkland's Home brand. We are seeing significant growth in traffic and more importantly, new customer growth and that momentum gives us the confidence to accelerate our store conversions. The results make it clear. The Bed Bath & Beyond name is a powerful asset and the nameplate change is proving to be a high-return growth engine, driving performance for the brand itself while amplifying sales across our Kirkland's Home branded products. We will continue to leverage the Kirkland Home legacy by bringing the best of its assortments into our Bed Bath & Beyond Home stores giving customers curated solutions for every corner of their home. Brentwood is just the beginning. In fact, our next grand opening is this Saturday, September 20 in Spring Hill, Tennessee. Over the next six weeks, four more locations in the greater Nashville market will convert to Bed Bath & Beyond Home, providing us with a range of store sizes and formats that allow us to fine-tune our assortment and capital allocation strategy to ensure we have the correct formula for every store in our fleet. Over the next 24 months, we plan to convert all Kirkland's Home stores into Bed Bath & Beyond stores to capture this momentum and scale for long-term growth. By leveraging our existing infrastructure in stores, supply chain and product development, we're able to execute this as a capital-light transformation. Each conversion is expected to cost less than $100,000 in CapEx per store, which allows us to scale quickly, stay efficient and maximize return on capital. As we've discussed before, our vision extends across more than Bed Bath & Beyond Home to the broader portfolio of Bed Bath & Beyond brands, including buybuy BABY and Overstock. Both strategies are still in development, and I'm incredibly excited about the opportunity ahead for buybuy BABY, which will be the next omnichannel initiative we build from the ground up with our first new store expected in 2026. As announced yesterday, we are also in the early stages of planning an expansion of Kirkland's Home into the wholesale market, which would bring our designs to independent retailers nationwide. In addition to creating a new growth channel, wholesale could add scale, improve supply chain efficiency and strengthen the unit economics of our products. We could not be more excited for this next chapter, our partnership with Bed Bath & Beyond is the cornerstone of this transformation, and Marcus and I share a strong omnichannel vision for how these brands grow. That shared conviction gives us the confidence to accelerate conversions and unlock the momentum we're already seeing. Let me now introduce Andrea, who joined us in late July with more than two decades of financial expertise in planning, analysis and inventory management. She has already established herself as a key partner in our transformation and will play a critical role in driving our long-term growth and success. Andrea? Andrea Courtois: Thank you, Amy, and good morning, everybody. I am excited to be a part of the Brand House team in such a pivotal moment in our business. As Amy mentioned, we could not be happier with the reception of the first Bed Bath & Beyond Home store has had since opening in early August, and we are all energized for the path ahead. With that said, our second quarter results reflect headwinds in our Kirkland's business as we navigated unforeseen circumstances with the impact of tornado had on our distribution center in late May and began purposeful and disciplined liquidation efforts to optimize inventory ahead of expanding our Bed Bath & Beyond assortments. For the second quarter, net sales were $75.8 million compared to $86.3 million in the prior year quarter. The decrease was driven by 9.7% decline in comparable sales as well as the decline in store count of approximately 5%. Our stores had a slightly positive comparable sales growth for the quarter, driven by increases in traffic and conversion, which were partially offset by lower average transaction due to liquidation efforts I mentioned. Our positive store comp was offset by a decrease of 38.5% of comparable sales in e-commerce. Our e-commerce business continues to face challenges and was also impacted by the tornado disruption to our distribution center in late May. We estimate this disruption negatively impacted our e-commerce sales by 750 basis points and total comparable sales by 190 basis points. Gross margin decreased 410 basis points to 16.3% of sales primarily driven by a decline in merchandise margin and occupancy deleverage. The decline in merchandise margin was primarily due to 130 basis points related to liquidation activity, 100 basis points related to the write-off of damaged inventory due to the tornado and 30 basis points related to incremental tariff costs. Our operating expenses increased slightly to $31.1 million from $31 million in the prior year quarter. During the quarter, we incurred $1.3 million in insurance costs related to the tornado damage. Given this incremental rental expense as well as the lower sales in the quarter as a percentage of sales, total operating expenses was 41.1% compared to 35.9% in the prior year quarter. Before we turn our attention to the net loss and adjusted net loss, please refer to the terminology and reconciliation between each of our adjusted metrics and the most directly comparable GAAP measurement in our earnings release issued earlier this morning. Net loss was $19.4 million for the quarter compared to $14.5 million in the prior year quarter. Adjusted net loss, which excludes estimated $2 million for the total impact of the tornado disruption was $17.8 million in the quarter, compared to an adjusted net loss of $13.9 million in the prior year. The decline compared to the prior year is primarily attributed to the impact of the headwinds associated with our e-commerce business, the liquidation activity reviewed and the incremental tariff costs incurred in the quarter. Adjusted loss per share was $0.90 compared to a loss of $1.11 in the prior year quarter. The year-over-year improvement in adjusted loss per share was entirely driven by the increase in share count from 13 million shares to 22.3 million shares due to the Beyond transaction that was completed in late third quarter of fiscal 2024. From a balance sheet perspective, we ended the quarter with $82 million in inventory, down 12% to the ending prior year Q2 ending inventory. The decrease was driven by a temporary pause in inventory shipments during the beginning of Q2 out of Asia due to tariff uncertainty. We have since received those goods, inventory is now in a similar position to the prior year and more in line to total comparable sales trends. We had total debt outstanding of $55.2 million at the end of the quarter, which is comprised of $41.5 million under a senior revolving line of credit and $13.7 million in debt to Beyond related to the term loan, convertible term loan and sale of a percentage of Kirkland's future revenues to Beyond net of debt issuance and original issue discount costs. As of September 16, 2025, the company had $49 million of outstanding debt with $10.8 million of availability after the minimum required excess availability covenant and $13.7 million in term loans to Beyond with $20 million available from Beyond. As a reminder, availability under our revolving credit facility fluctuates largely based on eligible inventory levels and as eligible inventory increases in the second and third fiscal quarters in support of our back house sales plans, our borrowing capacity increases correspondingly. In summary, as we have detailed, our second quarter results were largely impacted by two factors, the disruption of the tornado and the strategic and purposeful decision to liquidate goods in preparation for our conversion to Bed Bath & Beyond Home stores. As we look ahead in the second half of the year, where we do not expect any additional significant expenses related to the tornado damage, we do expect to continue our promotional activity, and we will see some incremental tariff costs beginning in the third quarter. Our teams are working hard to mitigate this impact, and we will remain focused and committed to setting the stage for the company's next phase of growth and our conversion strategy and plans through our partnership with Bed Bath & Beyond. I will now turn the call over to Amy for a few closing remarks before we open up the call for questions. Amy? Amy A. Sullivan: Thank you, Andrea. As we close today's call, I want to be clear. We are not simply executing a brand conversion, we are architecting an omnichannel retail transformation. Every detail of the customer experience matters from the products we design to the way we bring our story to life through marketing, all delivered with the operational excellence our customers expect. With Bed Bath & Beyond's continued partnership, a leadership team, we continue to strengthen and early results that exceeded our expectations and validated our proof of concept, we are accelerating our national rollout with conviction. I want to thank our team for their tireless work and our shareholders for their continued support as we move forward together. The best results are ahead of us, and our focus is firmly there. Operator, we are now ready to take questions. Operator: [Operator Instructions] The first question comes from Jeremy Hamblin with Craig-Hallum Capital Group. Jeremy Hamblin: I wanted to start with the Bed Bath conversions. And obviously, a really positive launch here of the first one in Nashville and excited to see how the next few rollout here. But I wanted to get back to -- I think you noted about $100,000 in conversion costs. I wanted to understand if the first one in Brentwood, was it a similar cost, if there was a little bit more invested into that. And just to get a sense for now that we've got a little bit of time with the opening, and I know it drew quite a bit of media attention certainly at kind of the first couple of weeks, but I wanted to get a sense for how trends are continuing to develop at that store. Amy A. Sullivan: Yes, I'll take that, Jeremy. So from a CapEx perspective for Brentwood, and remember, all of our store formats are slightly different, which is why we wanted to use Nashville for the initial pilot because it gives me 5 or 6 formats where I can really work through the formula of how we begin to convert these nationwide. And so for Brentwood, specifically, the CapEx was actually significantly less. That store is more newly remodeled within the Kirkland fleet, and so it really was as simple as a sign change on the front of the store and all of the other work we did internally as a team just to remerchandise the store using the existing fixtures and structures of the store. So that one was closer to $30,000 as we get through and look at other stores that might need a flooring change or something more significant to the construction, we still believe we can track in that $100,000 or less range as we convert. As I shared in my prepared remarks, the next one opening this Saturday required a little more because we changed out the floors, but again, still came under -- came in well under the $100,000 mark. So from a CapEx perspective, I feel really good about what we've projected in terms of the conversions. And then in terms of results, honestly, we were so thrilled and you noted the national media coverage that we got for the opening. And certainly, it was a good reminder of the power of the brand and how much people love in this Bed Bath & Beyond. And I'm pleased to say the results have continued. Traffic is up far significant to what a Kirkland store was. New customer acquisition is really strong and the sales are definitely holding in. And so, as we go through the peak season for what would have been in that store this time last year in Kirkland, we'll continue to monitor what mix of seasonal product should be in the store versus the legacy Bed Bath categories. But honestly, all categories are seeing big lifts and really seeing runaway success in things like bedroom and kitchen. Jeremy Hamblin: Got it, and then just you have a little over 300 locations today. As we go through this process and converting and you talked about a 24-month time frame, what portion of those just over 300 locations do you think ultimately will be converted versus, I would imagine some may best be just closed, but wanted to get a sense for ultimately a couple of years from now where you expect kind of the chain to be and kind of the mix of the various banners? Amy A. Sullivan: Yes. I would say we shared this a few times throughout the year and even on the fireside chat, we did with you all, we are going through literally location by location and looking at the real estate, the health of the center, the performance that it has done as a Kirkland store and layering on what we believe the target customer demographics to be for Bed Bath & Beyond and the future of our company and making sure that it matches the criteria that we need to see in real estate, and so we want to be very thoughtful about our choices there. We are currently planning to close about 25 stores that have natural lease expirations in January of 2026. So I suspect as we go forward and really continue navigating the review of real estate as well as making sure that the economics work for each location. I would estimate 250 to 275 of our existing Kirkland stores remaining in the mix over that time, and certainly, we're opportunistically looking for other locations. And so as we see success in a market, we want to make sure that we cover both the markets that we're in today as well as the markets that were true to Bed Bath legacy, you know our store fleet really well, Jeremy, and if you look at the Northeast, that is definitely an area where there's less dominance of Kirkland's, and we know that will be likely a very strong area for Bed Bath, and so of our existing fleet, I'd stick with that 250, 275 number over time, but just know that we do believe there's still upside to that in terms of our real estate portfolio geographically. Jeremy Hamblin: Great, and then I want to come back to the issue. Obviously, you guys had this terrible tornado that ripped through, it's had significant disruption to the business, but you're also going through this kind of reimagination, this rebirth of the brands, and I wanted to just get a sense for how we should be thinking about the expectations of the store momentum versus your e-com business and when you might expect the e-com portion of your business to see some stabilization. Obviously, we're coming into a key part of the -- from a seasonal perspective, whether you're talking about harvest or obviously, the holiday season. Do you have a sense for when you think that might be stable? I mean there's just obviously a lot of moving parts that are going on here with the conversions as well that I'm sure taking up quite a bit of attention. Amy A. Sullivan: Yes. So I mean, you're spot on in that we have had a struggling e-commerce business for the quarters prior. And obviously, the tornado worsened that impact in Q2 pretty significantly based on the damage to the distribution center and the fact that we were not shipping direct to consumer for several weeks during that quarter. What I would tell you, and we've been talking about this quite a bit this year is, we also want to make sure that the transactions that we're driving towards are the most profitable transactions that we can deliver, and so we're intentionally funding more efforts towards brick-and-mortar as we really try to clean up the balance sheet and improve our liquidity to fund conversions. And so I want to see our owned part of the business, the inventory we own versus the drop ship as well as the ability to drive buy online, pick up in store continue to accelerate as we go into the back half of the year, but we will remain intentional driving more of the brick-and-mortar business. And I think it's okay for the e-commerce business to normalize back down to sort of the declines we were seeing earlier in the year. That's where I'd like to see it go because, again, I don't want to continue to push a channel that is less profitable than what we're able to convert in stores. Jeremy Hamblin: Got it. Okay. That's helpful. And then you hinted at this, but in terms of just understanding the mechanics behind the sale of the intellectual property, and where kind of the balance sheet stands. I think by my math, is the debt level is about 60 -- just under $68 million, and then it looks like you have about $30 million or so of total liquidity currently? Can you just confirm. Amy A. Sullivan: Yes. Yes, that's correct. If you look at our ABL as well as our loan with Bed Bath & Beyond. Jeremy Hamblin: Okay. Great. And then one other item continues to be a bit of a hot button here. But tariff noise continues to be fairly significant, particularly for your industry. I wanted to get a sense for how we should be thinking about tariff impact here in Q3, Q4? And then there's this investigation about the furniture industry, which I know is not a huge portion of your business, but relevant, certainly and wanted to get a sense for what our expectations should be in the back half of the year in terms of total impact from tariffs? And then as we think about how this potentially plays out in 2026, which obviously is still a guessing game, but how do you feel about your exposures and potential for more domestic sourcing? Amy A. Sullivan: Yes. I would say, as we walk into Q3, obviously, that is when we're receiving the goods that were mostly impacted, particularly in China, and the China negotiations, and we shared this pretty early on, our partners really did meet us in the middle. So I feel like between cost negotiations with our Chinese factories, strategic pricing changes within our business that we've mitigated some of that from a China perspective. Obviously, we recognize there will be some margin pressure, pivoting to sort of what we're in the middle of right now negotiating through the impact in India, those negotiations are a little tougher at the moment. Again, won't be an impact to Q3, but something that we're navigating day by day. And then the interesting piece, I would say, is that as we're converting from Kirkland's, which is 85%, 90% of those goods are our own unique designs, and we're sourcing those directly overseas. As we're converting to Bed Bath & Beyond stores, we're obviously getting back into the domestic market in a pretty big way. And so I think there's opportunity to continue to balance that dependency as we convert stores, in fact, I am in New York this week, meeting with vendors to begin to buy quantities for the larger chain conversion. And we'll stay close on that, but it's certainly something top of mind. I do expect margin pressures in Q3 just based on the impact from what we've received thus far, but appreciative of the vendor partners for meeting us in the middle. And I think we'll continue to shift away from China as best we can as we move forward. Jeremy Hamblin: Are you able to quantify at all in terms of back half of the year expectation for impact on gross margin? Amy A. Sullivan: Andrea, do you want to give any color on that? Andrea Courtois: Jeremy, I think it's hard to quantify. I would say that you're looking at, in Q2, it was 30 basis points of impact to the business. I would say it will probably be a little bit more than that, probably in the 100 basis point range during Q3. Although in Q4, we're thinking there should be a limited impact. We're really seeing the biggest impact of the tariffs are going to be came in through the inventory coming in through the end of Q2 and the beginning of Q3, which should be selling mostly during the Q3 time period and the beginning of Q4. So really expecting the impact to hit that Q3 time period from a pressure on the gross margin, but as we spoke about in both of our highlights, we do plan to continue to strategically liquidate non-go-forward categories and really restructure our stores and get ready for conversion. So I would think about the margin as the liquidation piece potentially having a more impactful on the gross margin than they would necessarily on tariffs as we continue throughout the year. Jeremy Hamblin: Fantastic. Last one for me. Just as we look ahead to the conversions and coming back to the cost of that, the time line and having some momentum here and excitement built around bringing the brand back. How many do you think you might be able to do in 2026 versus 2027? Amy A. Sullivan: That is -- that's the golden question right now, Jeremy. We are -- we have just placed buys for 30 conversions for the first quarter of 2026. And we are, again, here in New York this week, chasing opportunistically to be back into the back-to-campus business in a significant way for Bed Bath & Beyond going into the back-to-campus season of 2026. So to be determined on the number of stores that will impact, but it is our goal for that to be wide and as many stores as we can influence going into that important season. And I think as I look back at the Bed Bath & Beyond history, the Q2 benefit that we could see compared to the Kirkland's seasonality is really significant. And so if I'm flashing forward to this time next year, I really see us being able to level out how the quarters play out and really begin to improve our profitability and our revenue in the first half of the year. So it is my goal to be in as many stores as possible based on the inventory that I can get over the next 6 to 8 weeks. So a lot of that will become really crystal clear as we're finishing out Q3 because the buys will need to place for back-to-campus of next year really need to be solved by the end of October. Jeremy Hamblin: Got it, and best wishes. Amy A. Sullivan: Thank you, Jeremy. Operator: At this time, this completes our question-and-answer session and concludes today's call. Thank you for your participation. You may now disconnect your lines.
The upbeat report defied projections of a spending slump last month as hiring slowed and inflation picked up.
'The Big Money Show' panel discusses the Federal Reserve's upcoming interest rate decision as President Donald Trump voices his displeasure with Jerome Powell.
The Federal Reserve is expected to cut rates on Wednesday at the Federal Open Market Committee meeting for September.
Convertible securities have been helped by strength in materials, technology, and an assorted group of growth companies that are represented in the market.
Keith Buchanan, senior portfolio manager at Global Investments, joins CNBC's 'Power Lunch' to discuss why bank stocks may be poised to benefit from a rate cut.
New York Life's Lauren Goodwin, Bartlett's Holly Mazzocca and Wells Fargo's Scott Wren, joins 'Closing Bell' to discuss the latest news affecting markets.
The current market rally has been driven by enthusiasm around the AI Revolution and coming reductions in the Fed Fund rate. The rise in the market has sent the NASDAQ and S&P 500 to all-time highs, despite a deteriorating jobs market and struggling housing sector.
Alexandra Wilson-Elizondo, Goldman Sachs Asset Management co-head of multi-asset solutions, joins CNBC's 'Power Lunch' to discuss policy expectations from the Fed, market outlooks, and much more.
Our previous assessment for a rally to SPX6690+/10 proved correct, and we therefore continue to expect a 3-5% pullback from there before the next rally to approximately SPX7120 starts.