Alfa Financial Software Holdings PLC

LSE:ALFA

Hello, everybody, and welcome to Alfa's 2021 Half Year Results, which we are labeling stepping into our opportunity. I'm very pleased to be joined by Matthew White, our Chief Operating Officer; and Duncan Magrath, our Chief Financial Officer, and we are going to be taking you through the detail of the results and giving some background on the half year that we have been extremely pleased with. In terms of agenda, I'm going to be starting off and giving some key highlights of our first half before handing over to Duncan for the financial review. Matthew will then pick up the baton around operational delivery for our business before I finish with business and sales update and summarize at the end. So moving to the overview and first, the review of the first half of 2021. As you'll see on the next slide, we've had a really strong first half delivering above expectations despite currency headwinds. I'm particularly pleased that we've continued to deliver successfully. And that's something that Matthew will go into in more detail. And within that, it's been great to be able to help a number of our existing version 4 customers to continue their journey with us by upgrading to version 5. Employee engagement remains high as we move into our smart working response to a post-COVID world and again, that's something that Matthew will talk about. Duncan will talk about our continuing robust balance sheet. With GBP 50 million of cash and no debt as at the half year. And given our theme for this half of stepping into our opportunity, I'm also pleased to be able to report progress in all of the accelerators, which supports our future growth. Our subscription revenue stream, Alfa Start, Partnerships and Advanced Technology in the form of Alfa iQ. As we look forward, we see that the market conditions for us are very favorable in our target markets. And on the back of this, we're continuing to recruit more people and as always, innovate and invest in our product to capitalize on this opportunity. We have continued our conversion of the late-stage pipeline that we reported to you at the full year. And we've won 3 new customers in the first half -- 2 more this quarter, and then we're adding 2 more to the late-stage pipeline as new entrants and that provides great visibility through this year and into next year. We're also seeing encouraging growth in the early-stage pipeline, which provides a foundation for growth beyond that. On the back of this and on our continued strategic progress and our confidence going forward, our full year revenue expectations have been raised by circa 4%. And the strength of our balance sheet and this performance has given the Board the confidence to declare a special dividend of 10p per share, totaling a return of GBP 30 million to our shareholders. Turning then to the key highlights for this half, and starting with revenue. Revenue, as I said, has exceeded our expectations, and we've outperformed last year by 12% on a constant currency basis, which is a great progress for us. Similarly, we've made really good progress in terms of our operating profit margin, which over last year at this time, has increased by 22% on a constant currency basis. I just talked about our sales performance and our progress in this area is reinforced by the 30% growth in our total contract value that we are seeing compared to this time last year. Part of that story, as Duncan will go into, is the continued growth in subscription. This is as a result of strong delivery and also as a result of really strong uptake of our cloud hosting proposition. And of course, as we've always said, the key element in all of this performance and our performance going forward is the Alfa team. Growing our team allows us to do more, and we've seen strong growth in this area. Building from the previous slide, that high employee engagement has translated into increased retention and making sure we keep our people together. Stepping now to strategic priorities. The idea of stepping into our opportunity and doing a great job of that requires total clarity of those strategic priorities. Starting with maintaining our differentiation. First and foremost, as we grow, we must maintain our differentiators of People, Product and Delivery. And as we grow, we will focus on our target markets of North America, Europe and the U.K. in both auto and equipment finance, and we will look to increase the size of our subscription revenue stream as we grow. And we want to be able to do more, more efficiently. And Matthew will touch on our continuous focus on simplification as we go forward. And we will also build on our first half progress in partnering and start to increase our capability and our addressable market. And these strategic priorities are governing and casting a light on everything that we do and every decision that we make within the business to ensure that all aspects of our operations and our growth are fully joined up. I'll now hand over to Duncan to take us through the financial review.

Thanks, Andy. It's worth noting that this is the first time I've reported to you with the new revenue streams. So I will take some time to remind you of what goes into each stream as I go along. So to start, I will deal with the headlines from the profit and loss account. We've had a strong financial performance in the first half 2021. Currency has been a bit of a headwind, so I will also quote constant currency figures as we go through. But despite this, we have shown good growth. Revenue was up 8% in the period or 12% at constant currency. With expenses growing slightly slower than revenue, up 7%, it meant that operating profit performance was up 9% or 22% at constant currency. The effective tax rate of 20% is lower than the 22% we saw for the first half last year. Although a quick reminder that last year's full year effective tax rate was only 12% due to 2 years of R&D tax credits recognized in the second half. EPS of 3.0p was up 11% on last year. Turning now to the first of our 3 revenue streams: Subscription Revenues. The subscription revenue stream is the group's recurring revenue and includes all revenue charged on a subscription basis, including subscription license fees, post-implementation maintenance, Alfa Start and cloud hosting. It is really pleasing to see the shift in our revenue mix towards subscription, with subscription revenues up 46% from GBP 7.8 million last year to GBP 11.4 million this year. The increase was driven by a 14% increase in maintenance revenues, up from GBP 7.0 million to GBP 8.0 million, along with a fivefold increase in hosting and bundled subscription revenues over the same period last year as the hosting service gained real traction towards the end of the first half last year. In total, 13 customers are now taking bundled or hosting only contracts. We anticipate that the majority of new clients will take a hosted service and all of the current v4 to v5 upgrades are moving into a hosted v5 environment.Moving on to our second revenue stream: Software. The software revenue stream follows the group's customized license revenue recognized under IFRS 15, the accounting standard for revenue recognition. It therefore includes the software perpetual license granted to the customer, along with revenue from any development efforts required to customize the software during the implementation period to meet the customers' specific requirements and any maintenance fees for the period during which the Alfa software is being implemented. In addition, it includes any additional license payments from existing customers for new modules or additional license payments triggered by customers exceeding agreed contract numbers. It also includes any development services provided to customers. It does not, however, include the revenues from implementing the software as this is included in the services category. As anticipated, revenues reduced to GBP 6.4 million in the period as a lot of our work in the first half of 2021 was directed towards upgrading customers from v4 to v5, which although does not generally trigger any significant new license payments does generate development work, which is shown here in the software stream. The work on implementing the upgrades themselves is shown in the services stream. Turning to our final revenue stream: Services. Services revenue includes all other sources of revenue, principally based on charging clients on a day rate basis for professional services. This includes pre-implementation revenues, software implementation revenues at the stand-alone selling price, any additional consulting work for customers post go-live, but excluding any work for customers on developing software. Total services revenue increased by 4% to GBP 23.3 million at adequate exchange rates. What we're particularly pleased with was the continuing reduction in customer concentration. With the top 5 services customers in H1 2021, now accounting for 47% of the revenues, which is down from 59% for the same period last year. As Matt will cover later, we have continued to have high levels of service and strong delivery whilst continuing to operate 100% remotely. And additional headcount has helped both increase both the services revenues and through development work also the software revenues. There was a reduction in pre-implementation revenues, where last year, we had 2 large clients requiring detailed pre-implementation work, 1 of which had a partner supporting us with a lot of systems integration work. Excluding the systems integration work, partner days increased over last year by approximately 15%. Turning now to expenses. Overall costs increased to 7% in the period, largely driven by the increased headcount with average FTEs increasing from 322 last year to 375 this year, an increase of 16%. We reduced the contractor cost to nil as these costs were replaced with permanent headcount where needed. We have a profit share scheme where employees share a pool of money. This increased in the period on the back of higher profits. Partner costs were down in the period. As noted before, there was a large pre-implementation project where the partner was doing some systems integration work. Hosting costs jumped in the period with the business this time last year just starting to accelerate. This is a good revenue stream for us and given the automated tools we have introduced can deliver growth with relatively limited increases in headcount. Matt will talk more about cloud hosting later. In the first half of last year, we had some transactional FX gains as sterling weakened, but given the strengthening in sterling this year, we have seen some small losses. As previously stated, at the moment, our policy is not to hedge our currency exposure. We minimize at any point in time, the foreign currencies we have by converting into sterling as soon as possible. Finally, our costs benefited from a full 6 months without travel with last year, there was some travel in January and February. Turning to cash flow. As previously discussed, our first half cash performance is always strong due to the annual maintenance billings. Last year's performance was slightly held back by some delayed overseas billings, whereas this year, we had no issues. And so the strong annual maintenance billing has come through in the figures, hence our cash conversion of 138% is significantly ahead of the 108% last year. We had net tax receipts in the period of GBP 0.3 million due to the receipt of GBP 1.6 million of prior year R&D tax credits. We also funded our employee benefit trust to the tune of GBP 2.6 million for the trust to acquire shares to satisfy current and future LTIP vestings, ensuring that as the LTIPs vest, there is no dilution of existing shareholders. So now on to the balance sheet. The balance sheet remains very straightforward. You can see the strong cash flow increased the net cash balance at the end of the period to GBP 50 million benefiting from the seasonal inflow from the maintenance billing. Trade receivables are very clean with no issues. The 2020 dividend was paid on the 2nd of July 2021, and so is sitting as a payable at the end of the period. Contract liabilities increased largely due to the annual maintenance billing. Looking now to future revenues and TCV. As you know, we have consistently reported what we call TCV or total contracted value and the methodology for calculating it remains unchanged. On the graph, I have shown the figures from H1 2019 up to H2 2020, broken down into the previous revenue streams in shades of purple. I've then shown December 2020 TCV again, but this time in the new revenue streams, you can see the bars are now in shades of blue. This graph shows strong growth again in the first 6 months of 2021. As despite the strong revenues, we increased TCV as we had good cash conversion of the late-stage pipeline. Over the last 2 years, we have seen 34% annual compound growth, demonstrating excellent performance from our sales team since it was reorganized in H1 2019. I also show the TCV for the next 12-month period, i.e., covering the period H2 2021 and H1 2022. This is up 6% over the last 6 months with some good conversion of software revenue, including the license receipts, I just mentioned, slightly offset by a reduction in services revenue as customers work through contracts before renewing at the end of the year in their new budget cycle. One final point to note is that TCV is converted at an exchange rate of $1.38 compared with $1.29 at December 2020. And so netted within this growth is a currency headwind. Next, I will cover capital allocation and dividends. As you have seen, the business continues to be very cash generative even through the last 18 months of economic uncertainty. And as at 30th of June, we had net cash of GBP 50 million. We announced the start of regular dividend payments with our 2020 results, and we intend to continue this with declaring a single dividend with each set of full year results. We expect the level of dividend to grow as the business grows. Significant M&A is not part of our existing strategy as we have plenty of organic growth opportunities. We have reviewed our cash forecast and looked at various downside scenarios and concluded that we have excess cash for our needs. We are therefore declaring a special dividend of 10p per share, which will amount to a return of capital of GBP 30 million. This will take the total cash return to shareholders over the last 12 months to 26p or GBP 77 million, while still retaining a strong balance sheet. Next, a brief update on modeling guidance. 2021 effective tax rate will only benefit from 1 year of R&D tax credits, so will revert to approximately 18%. We will declare a regular dividend with our 2021 results, and this will be payable in H1 2022. CapEx for the remainder of 2021 is expected to remain relatively low. You will have your own forecast for currency, so I have given you a sensitivity to use, which assumes sterling moves in parallel with dollar and euro, each $0.01 movement is about GBP 0.3 million impact on revenue and GBP 0.2 million impact on operating profit for a 12-month period. I will now hand over to Matt for him to give you an operations update.

Thanks, Duncan. It's the same agenda from me as 6 months ago in March. So I'll be talking about our software, including our hosting product, about our people, and about delivery of our software for our customers. But I've also included this first slide, which I'm not going to talk through for reference. This sets out our strategic priorities, which Andy has already described and which you can also find in our annual report. But here, I've highlighted the areas in which I'm going to report progress today. We provide highly functional software for a market with very complex requirements. That software is fully digitally enabled and it's on a leading-edge technology stack. Competitors either lack our functionality or operate on the legacy technology stack or both. We believe that we have increased the distance between us and the competition in the last 6 months. Moving Alfa systems forward through a combination of customer-funded development and internal investment. Much of our software development is customer funding, the development of software in partnership with our customers ensures that we're tightly aligned with industry requirements, industry priorities and industry trends. Our European regulatory support has been a particular beneficiary of this approach over the last 6 months. But we also maintain a road map for internal investment in our product. As trailed in March, the focus for internal investment is now moving away from technical improvements to our product and more towards functional enhancements aimed at enabling sales to our target markets. An example of internal investment from the last 6 months has been credit decisioning and the next 6 months will see significant work in billing collection. In both of these areas, we'll bundle functionality to create new modules for Alfa systems as part of a more deliberate approach to identifying incremental sales. And our work on our UI is important for new sales. We have extremely sophisticated customers making diligent buying decisions that nobody is immune to aesthetics. The UI is also very important for our users who spend much of their working life immersed in our software, improvements in this area enable more efficient, more effective and happier users. Wholesale Finance is a relatively new market for us. Wholesale financiers provide working capital for stock, for example, for vehicles on a car dealership workout. We developed wholesale functionality for the large retail auto market, and this helps make Alfa a uniquely functional solution for customers that provide wholesale as part of a range of finance options. But we've recently started implementation work with a pure wholesale customer in the U.S., pure wholesale finance is an interesting new market for us and it's part of a broader ongoing review of strategic opportunities. Internally, our key ongoing activity in the software engineering space sees improvements to our SDLC ensuring that we remain leading edge in our development processes and tooling. This enables us to attract and retain talent as well as to maintain and improve developer efficiency. And simplification in the software space is an important part of the overall agenda for simplification that Andy was talking about and which I'll mention a few times today. Deployment simplification efforts include standardizing our technical stack between customer implementations, reducing customer-specific code in our application and increasing co-brand sharing and customer upgrade cadence. Our hosting offering is a compelling proposition, and we're seeing growing customer numbers. We expect the majority of new implementations to use Alfa's hosting service, even those customers who choose to take control of production environments within their own infrastructure, will generally use Alfa hosting environments temporarily during design and implementation. In addition to the agility and automation that comes with any cloud-hosted infrastructure Alfa hosting provides enhanced monitoring for our software. It provides automated scheduling for system tasks and for patching. And really importantly for our customers, Alfa hosting also enables built-in tools for data management. We are to that simplification agenda, deploying Alfa Systems through our hosting platform simplifies implementation projects by removing complex environment setup and environment management tasks. And that's all on our technology for today, but as you may have seen, we're planning an investor event on Thursday, the 14th of October, which will give an opportunity for an in-depth look at the Alfa Systems software, but the technology that underpins it and at our plans for the future of the platform. Our employer brand is excellent and improving internally as well as externally, and we've continued to attract and to retain the best talent in our industries despite a challenging recruitment market. We compete for talent with the likes of Facebook and Google, but also with the likes of JPMorgan and Goldman Sachs, and we will not reduce our standards for new recruits. So we're really pleased, and we're really proud that we've continued to do so well in this area. We have a very full agenda in our global HR function where activity is included updating our approach to onboarding and to learning and development as well as an ongoing review of rewards and benefits. Employee share ownership is something that's always been really important to Alfa. And as part of that ongoing reward review, we will be introducing our Save as you Earn share scheme in the U.K. and an ESPP share scheme in the U.S. over the autumn. Positive engagement scores continue, as Andy said, and provide a leading indicator for ongoing strong retention. But we're careful to avoid complacency and we saw a few more levers than usual in the early summer as the world opened up after various lockdowns. But actually, we saw in the late summer, if anything, fewer levers than we might expect. We do everything we can to make up a great place to work and that underpins our fantastic retention. Where possible, our people have been welcome to return to our offices across the world, but we haven't insisted on office location for anyone. And we continue to keep office opening under review as local conditions and COVID case numbers fluctuate. Between now and the end of the year, we will be defining at individual team level, our approach to Alfa Smart Working in the future. Every team will create and maintain a team charter that sets out the team's goals and collaboration approaches. For most teams, we expect that to involve a hybrid home and office approach, depending on the activities undertaken by the team. The requirement for focus versus collaboration and the team's evolving view of the best ways of working together. Our global team of client account directors takes much of the credit for maintaining our fantastic delivery track record and our extremely close working relationships with our customers and our increasing delivery cadence. We're a software and delivery company, and we never forget that all our efforts come together when we see successful delivery of our software for our customer. We succeed with complex projects where our competitors struggle. Progress continues with Alfa Start, which is our product for smaller asset finance providers, and we had a further Alfa equipment start to go live in the U.K. in March. We've also increased the coverage of the Alfa Start product to include additional preconfiguration and additional business processes. All of our projects are now based on Alfa Start configuration, which is an example of all of our projects benefiting from innovation in the Alfa Start space. And it's also another example of simplification. The reason that simplification is so important to us is that it enables sales by reducing our costs while increasing our margin. Simplification reduces the effort required to bring on new customers with associated license, maintenance and hosting fees. We work with delivery partners in 2 different casters. Firstly, system integrators or SI partners, assist our customers in integrating Alfa Systems into their own environment. And secondly, staff augmentation partners add bench to our team and partners in general, assist with market presence and with sales opportunities. We've increased our use of staff augmentation partners. In the first half of the year, we had partners operating with us on 7 customers, which is up from 4 customers in the same period last year. And in March, I said that progress with U.S. partnership was a particular focus for 2021. We've recently signed contracts with a U.S. partner and we're working towards a first project assignment. As usual, I won't talk through this slide and the next, which show all of our ongoing v5 implementations, but I will pick up a few. In the past, I haven't included v5 upgrades for existing customers in this slide, but I've done so here because, as Andy said, it's a real highlight for us at the moment. We're thrilled that we have so many long-term Alfa customers committing their long-term future to Alfa Systems. Major upcoming event for us is a go-live at Auto Finance B in the U.S., OEM A is a new U.S. implementation for an existing EMEA customer, Auto Finance D, Auto OEM D and Wholesale Finance A, are all projects that have moved into implementation in the last 6 months. Also since March, Auto OEM E has started work with an initial minimum viable product implementation, which is now in a production environment. And finally, honorable mentions for OEM B where we're now live in 12 countries in Europe. And also for Retail Bank C where around 1/3 of the team is provided by partners and where we're currently focusing on digital enablement for end customers in Africa. That's all from me, and I'll hand back to Andy.

Thanks, Matt. It leaves it for me to close with the business and sales update. Starting with ESG and continuing to create a positive impact. I spoke at the annual results about our passion for our people and societal and environmental impact. And this period, we have done even more than before. I think Matthew did a great job of picking up our focus on culture this period and smart working. This is all about clarity, safety and productivity in the post-COVID world and continuing to the best of our ability to keep all that is Alfa within Alfa. And I think we've done a really good job of that and a lot of hard work has gone into making that happen this period. Inclusion, diversity and belonging, we've continued to support our community groups to celebrate and communicate about all of our heritages to lock in our culture through training and we continue to speak up for what is right. This is justifiably an area in which we take great pride as a business. Within the communities in which we work around the world, we've also continued to create impact through fundraising, volunteering and getting stuck in wherever it is that Alfa does business. From the perspective of environmental impact, we've also had an excellent period of progress. We have continued to make progress in greening our business practices, and we expect to be carbon neutral by the end of this year. All of these things wrapped up together, and again to our great pride, have been recognized in accreditations. With ISS, we have achieved ESG prime status. And with sustained analytics, we have been ranked 15 out of 847 companies in the software and services sector. This is a great result for us, and it's fantastic to be recognized within the financial markets for something that we do because it's the right thing to do. Looking now at the market overview. In the short term, markets are remaining favorable for us. And we've talked a lot about demand for subscription, Matt talked about the great results that we've been having with the new adjacent market of wholesale, and we continue to penetrate that market. And as we spoke at the full year, digitalization and servitization continue to drive sales. The short-term outlook is looking very good for Alfa. Likewise, the medium- to long-term outlook similarly looks good. There is definitely a degree of economic uncertainty around. But as we've said before, asset finance markets do well during downturns, they take a greater share of finance necessary for recovery. So whatever the weather, we expect conditions to remain favorable. And I would add to that point the fact that greener assets are also increasing their share of the financing of assets. So as people move towards greening their part of the economy, we're also seeing greater growth within the asset and auto finance sectors that we serve. Underlying that, the secular drivers for change are still valid, the push and pull factors that we often talk about in terms of what makes people want to move enterprise software platform. COVID-19 and remote working as they do with us with others continue to force companies to review the way that they work, which increases the tractional footprint that comes with digital. And overall, customers will increasingly see the need as they are for flexible modern systems to cope with changes that are now seen as inevitable and improve their own performance. And then looking slightly longer term, the industry is changing. More of our customers are thinking about banking-as-a-service type approaches. There is a move to direct and hybrid sales within OEM and vendor-driven parts of our target market. High emphasis on customer journey, which makes an organization with software that has much greater digital strength, stronger still. Thematically, all of these changes we see is playing hugely to our strengths, and we are very, very optimistic about all of the time lines within the markets that we serve. Moving then to the late-stage pipeline update. And similarly to Matthew, I won't go through all of these, but I will pick up some highlights. And I did talk about the progress of our late-stage pipeline at the start. As I said then, and it's worth reinforcing since the beginning of the year, we have won 5 and we have added 2 new entrants to this important part of our sales pipeline, but also really important to pick up of the remaining 5, we are already doing work with all but one of them. All of these are reasons why we have an enormous amount of optimism within the late-stage pipeline, which as I said before, is an enormous foundation for the growth of our business and our confidence looking ahead. Moving then to the growth drivers and the investment case, which brings a few of the themes of this presentation together. We believe that our investment case remains strong. Our strengths of target market differentiation through technology and delivery and our financial strength provide the strongest of foundations for this growth. But our progress with strategic accelerators is speeding that growth and the opportunity of new markets and new strategic options that we're evaluating multiply that opportunity more still. So in summary, we are very pleased with our first half performance this year. We have continued to develop and deliver our software. We've continued to retrain, retain and attract diverse smart people. We've continued to convert and replenish our pipeline. We've continued to make a difference in the communities in which we work and the green economy. We have made strong progress in executing our strategy to accelerate the journey that we're making and to increase our opportunity. We've increased our revenue expectation for this year by circa 4% which will be a significant growth in our 2020 underlying revenues. And looking longer term, we remain very positive about our prospects. And this, along with the cash generative nature of the business and the strength of our balance sheet has enabled us to declare a special dividend. In summary, we truly think we are stepping into our opportunity. Thank you for listening.

We will now take our first question from James Goodman of Barclays.

Maybe, Andy, just on the early-stage pipeline. I mean the late-stage pipeline has been developing very well for some time now. We've seen some very clear traction there. On the early-stage pipeline it seems like today you're -- if anything more positive than 6 months ago. So maybe you can just compare and contrast in a little bit more detail what's been happening out there in terms of those earlier prospects and whether it's right to sort of think about that as a step change. You made some comments around the the sales cycle still been relatively long. But do you think you sort of have a better handle on timing now there? And then second question, perhaps Duncan, you can chip in on this. The TCV, if we look out 12 months, I think it's up at GBP 56 million, which is encouraging. I mean, clearly, we're at the end of Q3, nearly now. So the visibility for this year must be becoming better and better. Just wondered if you could talk a little bit more about the seasonality of the business and anything else we should be thinking about in terms of comparing H2 of this year to H1 because looking at it very simplistically, I guess, if the utilization in the business remains as high as it's been over the past months, then there's still a little bit more upside in terms of if H2 were to look more similar to H1? Thank you.

Terrific. Thanks, James, and good morning. So if I pick up on the early-stage pipeline, I think your observation is exactly right, the early-stage pipeline is reflective of the underlying demand that we see from the market. And as I said in my portion of the presentation, demand is strong. We're seeing strong demand from within the asset finance markets in our target markets. As I said, based on secular drivers and those are not going away. The move towards digital being put into sharp focus by the demands that COVID has put on our customers. And frankly, other factors such as the people greening their fleets means that there's a greater place for finance because overall, environmentally friendly assets, particularly wild assets tend to cost more money. So I think your observation is right. Early-stage pipeline is looking in a very good place for us. And we're seeing progress from early stage through into late stages, we've shown in the presentation material with 2 new prospects joining that late-stage pipeline.

Okay. To deal with the TCV, thanks, James. Just to be -- just to pick up the figures that you quoted. So at the end of December last year, our TCV, as you said, for the next 12 months, was GBP 53 million. And then as of the end of June, it's now GBP 56 million. So that's GBP 56 million of TCV from effective the end of H1 '21 through second half of 2021 and into the first half of 2022. So that's a 6% growth over those 6 months, which is good. I think the other thing that's worth pointing out is that those are actually what is contractually signed at those dates. Andy referred to in his slides the fact that we had 2 new additional wins. They're not in that TCV, as an example, so your question on Q3, we will see those 2 wins coming into our TCV as well. Some of that will be much more in effect for next year than this year as an example over those figures. But yes, so I think we are seeing still good performance in the TCV. There is also a slight negative currency effect in those figures as well. To your point on utilization and looking at the TCV and looking at the first half, second half, we did have just under GBP 1 million worth of one-off license income in the first half. So that's -- we're not expecting that to repeat in the second half. And we also do have a degree of seasonality in the business, so more holidays taken in the second half than the first half. So naturally, we would perhaps expect the second half to be slightly behind the first half. But I think the point is that the order book is looking good and really, it's a question of having the right people in the right place and delivering against that more than the order book in terms of delivering the full year expectations.

[Operator Instructions]It appears there are no further questions at this time. I'd like to hand the call back to the speakers for any additional or closing remarks.

Thank you very much, and thank you for your help this morning. Closing remarks, very much as I said within the presentation, we're really very pleased with the half that we've had. Matthew touched upon the version 4 to version 5 upgrades. It's fabulous to see long-standing customers, reevaluating the strengths of our product and our services and choosing to recommit to us for the long term, high employment engagement, really good sales performance. And as Duncan has touched upon, visibility in terms of what we see for our future and what we're able to report back to the market is growing all the time. Partly that's helped by what hopefully people have picked up from the presentations and a continuing downward trend in customer concentration. We are taking on more work with more customers, and that is a continuing trend within our business. So a terrific half, we're very pleased with it, very proud of what we've achieved, and we look forward to speaking to you in about 6 months' time. Thank you for listening to us this morning.