Hello from myself and Mickey, and thanks for joining. We're really pleased to be able to take you through our results for fiscal year 2026 over the coming hour or so.

We'll take you through everything, and then we'll leave time for Q&A. If you want the kind of one-minute summary, it's that fiscal year 2026 has both been a very difficult year for Next 15, but also a very incredibly important one, too.

Despite a very tough external environment and internal pressure that we've seen from these legacy issues, we've stabilized performance, we've simplified the group materially, and we're now seeing early signs of progress into fiscal year 2027. As normal, you'll hear from myself and from Mickey, and we'll look at the fiscal year overview.

I'll hand over to Mickey to look at the financials in more detail, and then I'll come back to talk about strategy and the outlook, and then we'll have time for a Q&A at the end. Starting with the key headlines, what have we achieved so far?

First, we've taken really decisive action to reset this business. We've simplified and realigned the portfolio.

We've reduced the number of businesses in this year from 22 at the beginning of the year to 11 today, and we've reduced costs, delivering £26 million of annualized savings, and we've restored operating discipline through our unified, but not uniform, operating model. Second, we've seen performance stabilizing.

We've delivered in line with expectations, we've protected our margins, and we've improved cash generation. We've seen a £43 million inflow versus a £7 million outflow in fiscal year 2025.

Third, we are working really hard to drive the business to become a higher-quality, more focused business with a clear shift towards data, technology, and AI in structurally growing markets. Fourth, our financial foundations remain really strong.

We have low leverage, improved working capital, and as a result, we're maintaining our dividend. Fifth, the Mach49 arbitration remains ongoing.

It does create some uncertainty, but we're managing it actively. We continue to maintain the earnout liability on the balance sheet, but we remain really confident in our legal case.

Finally, we're seeing early signs of progress into fiscal year 2027, particularly in digital transformation, and across the whole portfolio, we're seeing a much more stabilized performance. With all that said, let's focus on the progress we're making in stabilizing that performance.

The group delivered net revenue in line with expectations, down 4% like-for-like, which I think is a pretty robust and encouraging number despite a challenging macroeconomic environment and a period of significant structural change for Next 15 as well. Within that, our core Track 1 businesses delivered growth of 4% like-for-like on a net revenue basis and 7% profit growth.

We saw really strong growth in digital transformation, that was up over 40% in the year, and continued growth in retail media, too. We've also materially improved the resilience of our client mix, gone from a heavy reliance on tech to actually a more balanced client mix with retail and FMCG now actually our largest sector, and government being our fastest growing.

Now, that performance was offset by declines in revenue from both our technology clients and our creative production revenue. That's been driven by more cautionary spending from our clients as a result of the macroeconomic uncertainty we've seen.

On execution, we've been really focused on building a better business. We've reduced our headcount by 16%, delivering, as I said, £26 million of annualized cost savings, £11 million of those were realized in the year.

Simplified the business and the portfolio from 22 to 11, and there's more of that to come. We've exited Mach49, which was a significant legacy issue.

Against that backdrop, we've managed to protect our margins at just over 15%. Taking all of that together, performance has stabilized, business is in a much more controlled position, and we're starting to see some really good early progress into fiscal year 2027.

We've also materially improved the balance sheet. We've delivered a significant improvement in our cash performance: £44 million working capital inflow, and that's driven by tighter operational control.

The result: our net debt has reduced to £35.6 million, puts our leverage at 0.4 times EBITDA. Our earnout exposure, as a result of the passing of time, is also reduced, which increases our financial flexibility.

As a result, we're maintaining the dividend. That reflects our confidence in the underlying business because we believe the balance sheet is strong and it gives us more capacity and resilience moving forward.

Let's dig into those numbers in some more detail, and I'll hand over to Mickey to talk it through, and then I'll return soon to talk through about the strategy.

Thanks, Sam. Good morning, everyone.

I'll take you through the financial review, and I will start on the P&L, overview the whole P&L. Revenue, Sam said, is in line with expectations, and that is against a backdrop of a challenging environment.

Like-for-like revenue declined 4%, reflecting global economic pressures that we're all familiar with. We are somewhat weighted in the US, there were US policy shifts that affected us, and reduced tech client spend as well, which had an impact.

That said, there was resilient growth within Transform, within SMG, and within our M Booth companies, they provided somewhat of an offset against some of that decline. Our margins, despite that revenue decline, we held our margins that were firm, they were broadly in line with prior year, and that was a result of restructuring and a continued focus on cost management.

EBIT was 63.4, diluted EPS at 44.4p, all in line with the movements in revenue. Sam said we've maintained our dividend of last year of 15.35p.

At the Capital Markets Day, we split out our businesses into different tracks, and look at those now: Track 1, Track 2, Track 3. We'll report on those for the foreseeable future.

Track 1 comprises our core growth portfolio. Those are the higher-quality, data, technology, and AI-enabled businesses that operate in markets we think are going to show size of longest-term growth.

That's our area of focus, Track 1, and they delivered revenues of £273.4 million. That's growth on last year of 4% on revenue, and adjusted operating profit, up 7.2%.

The businesses that we believe are our future are growing. They're growing year-on-year, and we believe they will continue to grow for the foreseeable future.

Track 2 is a managed portfolio, as we describe, is those businesses which have some, but not necessarily all, the characteristics that are required to make it to Track 1. Track 2 revenues were £160.9 million versus £191 million last year, and adjusted operating profit £32.4 million versus £43 million last year.

Track 3 businesses are those businesses that we've already divested. We divested those businesses last year, that's Palladium, Beyond, BCA, and Blueshirt.

We got a total consideration for those businesses of £7.5 million, resulting in an aggregate net loss of £3.2 million. Looking at the movement in revenue year-on-year, I'll take you through those key movements.

Just one point to note is there were disposals that had an £11.3 million impact on that revenue bridge. Focusing on like-for-like revenue, if we look at the second chart at the bottom half of this, and we split that out into Track 1 and we split that out into Track 2.

Track 1 revenue grew, as I said. The best performer there was Transform, which was up over 40%, and SMG and M Booth also performed strongly in that Track 1 movement.

Track 2 declined, result of headwinds from reduced tech client spend, fewer creative projects, and delayed project starts impacting Elvis and [Arche?] in particular.

We also took a bit of a hit, unfortunately, from currency. The weaker US dollar resulted in 4% which was 4% lower year-on-year, created a £8 million adverse variance.

Same thing again looking at the operating profit bridge. The good news here is that despite that revenue decline, our margins are broadly the same year-on-year, which is all to do with cost management.

If we just focus on that cost management for a second, staff costs were significantly reduced. They were driven by restructuring, the benefits of restructuring savings from FY25 as well as ongoing improvements, cost savings, productivity improvements in FY26.

Our headcount was reduced at the end of the year to 3,350 from 3,992 the year before, 642 employees. The annualized benefit of that is £26 million.

Breaking our business down into segments, we've covered the tracks. Now we have segments, which are again new, and we covered those in the Capital Markets Day.

There are five operating segments, and I'll take you through all of them, and they all relate back to our new, refreshed group strategy. The Retail Media, that was up 8.2%, that's all SMG in there, and that continued to expand during the year.

We continue to invest in the US market. It's a significant medium- to long-term growth opportunity, and that investment had a near-term impact on operating margin, which decreased to 18.2% from 25.3%.

Data and Research, which is the Savanta business, revenue declined by 8.5%, largely driven by client inhousing of research activities and reduced demand for traditional market research. We strengthened the leadership there last year with the appointment of the new CEO in June, and the business took some strong restructuring actions, the result of which is that despite the revenue decline of 8.5%, operating margins increased to 14.5% from 12.7%.

I've mentioned that retail media grew. Digital Transformation grew at a phenomenal rate last year at 41.8% year-on-year.

That's all UK public sector focused, that's the entirety of that business, and it was driven by a number of large contracts that grew during that period, including one that we announced at the end of last year, which was Department for Education. Marketing Communications declined by 7.9%.

This is our largest segment. It produced £53.8 million profit at a margin, an increased margin, of 22.6%.

The core reason for the decline was largely down to B2B technology marketing, and that, true to the rest of the industry, that sector saw quite a significant decline. Having said that, within that we have a health marketing business, which has experienced very significant growth in the second half of the year, and we see that continuing in the first half of this year.

Finally, our last segment is Creative Services, and as you probably all know, that is a sector that is really facing a challenge at the moment, and that declined in our group by 18.6%. Now looking at our customer base and customer segments, I'll just take you through each of those.

Consumer and Retail is now our largest sector, that contributes 31% of total revenue, and that spend is very heavily weighted towards the Retail Media segment through SMG. Technology client spend, it was our biggest segment, it isn't any longer, client spend is subdued, and its share of total revenue declined by 4%.

Going back to the five segments we have, we have a large component of tech spend in Marketing and Comms. If you see the decline in Marketing and Comms, that's in large part driven by technology clients.

Professional Financial Services, those declined due to client losses and reduced spend from existing clients. As I mentioned before, Public Sector is our fastest growing vertical, that's our Transform business where UK government spend grew significantly.

As I said before, we expect it to grow into 2027. Cash flow, looking at the major movements in cash flow in FY26, we had net inflows from trading of £43 million, and then we had a very, very strong working capital inflow, a very, very strong one.

Not necessarily one that we can repeat every single year, but nonetheless a really strong performance last year: £43.8 million came in, and that's a material improvement on the £7 million that went out the prior year. What was that driven by?

That was driven half, at least, 50% by strong, disciplined working capital management across the whole group. The other half was due to the wind down of Mach49 and the accruals related to the ongoing litigation.

That was a really, really good result for us, one of the strongest elements in this presentation. Then that was partially offset by earnout payments of £35 million, which we'll go into a second.

Looking at our leverage and our liquidity, our net debt-to-EBITDA ratio at 0.4 is well within our covenant limit. It's a very healthy place.

Even if we were to include the full provision for the Mach49 earnout, we'll talk about that in a second, even if we were to include that full provision, that still takes us to 1.5 times, comfortably within our limits. Total debt comprises an RCF loans and borrowings of £57.3 million versus £65.9 million, and an overdraft £66.7 million.

On the RCF, we have £118 million undrawn of the £175 million facility. That facility lasts until December 2027, and then we have a further year at £155 million until December 2028.

On the earnouts, the majority of the earnouts have now been settled. We've got £13 million of earnout liability still to come if you exclude the Mach49 liability, and the majority of that is expected to be settled in cash rather than shares.

Then just talking about Mach49, it is a discontinued operation. We announced in August 2025 that we were going to close and discontinue the operations.

We've done that. They ceased operating on the 31st of January, and we have reported it, therefore, as a discontinued line item.

You won't see that within the numbers, it's a separate line item. Now looking at the losses, the writedowns, and fees associated with all of that, the loss after tax was £14.9 million versus a profit prior year of £18.9 million, and that comprises operating losses after tax of £5 million, goodwill and acquired intangible write-offs of £10 million.

We incurred £12.5 million of legal and advisory fees relating to the misconduct arbitration proceedings that you're familiar with and the wind down of Mach49. Finally, talking about how we accounted for the remaining earnout liability.

I'll just go through it. We've announced in June the serious misconduct, and we reported that to the relevant law enforcement agencies, and we've made no further payment of the earnouts as a result of that.

We are now in arbitration proceedings, and until we know the outcome of those proceedings, we are holding on the balance sheet that earnout liability of £63.4 million. We would expect a ruling on that arbitration by the 31st of January at the latest.

We hold our position on the non-payment of the remaining earnout. Only the earnout provision is probable, and we don't recognize anything beyond that.

We've also, finally, counterclaimed for previously paid earnout provisions. We had paid out £120 million before, although they have claimed for the earnout that's due, we've claimed them for the earnout that's already been paid.

Thanks, Mickey. Looking a little bit to the future and how we're progressing.

I think we saw mostly in the Capital Markets Day back in January. Thank you again for attending that.

We set out at that day a new chapter for Next 15, one that was focused on data and an AI-led growth platform. We're already making good progress.

The business is simpler, is more connected, better aligned around strengths in data and technology. Over time, we see an opportunity to grow revenue and profit, an increasing proportion coming from these high-growth areas.

Let's dig into it a little bit. Give you some examples of where we're making progress.

Remember we talked around this flywheel for growth: the data that drives the differentiation, the technology that provides the insight and access to that data, and then finally and critically, activation that delivers results that you can measure or data that keeps that flywheel spinning, and that flywheel can be accelerated through AI and our people. We're already seeing this across the business in so many ways.

Here are just a few examples. If you look at M Booth, we partnered with Google on their Veo launch, which I'm sure a lot of you saw, and we delivered the end-to-end creative actually using their AI technology, Veo, and their associated tools across that workflow.

All the way from concept through to production, we created a full campaign utilizing Veo AI tools, which Google used themselves to advertise their own AI tools. It performed incredibly well: over 1,000% performance versus the benchmark, and was one of the top-performing contents that Google had all year.

This is an example of the new world of creative, where we're pioneering production through AI with one of the pioneers of AI. At the very core of our business, we're right at the forefront of this movement.

At Transform, a business that is highly specialized in creating AI tools both for government and increasingly in private sector, too, they've created a platform with Go Inspire, which takes huge amounts of data and creates self-service models, effectively allowing you to change campaigns in-flight. As campaigns are happening, usually as a marketer you'd need to wait 2 weeks, 3 weeks to understand whether they work; you can now understand that in seconds, and the tool will help you to decide what to do next.

Because it's connected agentically, will actually do that in-flight. That produces campaigns from weeks to minutes and improves performance and accuracy exponentially.

At Savanta, we're using Snowflake-powered data and AI platforms to look at large volumes of campaign data and customer sentiment. These are the drivers of what we call brand impact, i.e., "Do you like this?"

, essentially. ITV are using that to optimize and scale their partnership strategy based on that real-time data and insight, rather than in the past relying more on intuition.

At SMG, we've developed a really exciting AI-led planning and activation platform. You might remember from the Capital Markets Day we talked about the huge data set that SMG have around sales uplift and brand uplift.

We're now able to use AI to generate recommendations about what to do next based on how those campaigns are performing, increasing our forecasting accuracy, our scenario modeling, effectively we're able to tell brands what's going to happen before it does and then optimize those campaigns in-flight. That is in place across some pretty major brands and some pretty major retailers like Co-op, Morrisons, WHSmith in the US, and Boots.

The key point that I'm trying to make here is that whilst others are talking about what AI is going to do, we're actually pioneering it here. We're applying it across all of our business, especially across the Track 1 businesses, that are delivering measurable outcomes for clients and value to the group today.

We understand AI, we're applying it, and that gives us confidence not just in our capability, how we can scale that into the group into the future, and you're starting to see some of those numbers follow this trend. That feeds directly into our capital allocation.

We're increasingly focusing our investment into our Track 1 businesses, where we see structural growth, strong capabilities, and attractive returns. Our Track 2 remains profitable, but performance is more mixed there.

What we're doing with our Track 2 businesses is we're working really hard to actively improve their performance, stabilize their performance, a lot of that work has been done, and then we're working alongside them to either reclassify them as Track 1 or unlock value through disposal. Each one of those businesses that you see in that Track 2 are in a time-boxed process to do exactly that.

As a result of that prioritization, the group has become progressively more focused on our higher-growth, AI-led businesses. Then all of this is enabled by a change in our operating model.

From a kind of highly federated model historically, we've moved to what we call unified, but not uniform, operating model. What that means is that we're bringing the group together where we think we can add real value, particularly around data sharing, technology, and also client delivery, whilst still preserving the entrepreneurial spirit that existed in the individual businesses.

We've established a more connected operating structure. We now have a Track 1 operational board, which consists of all of the CEOs of those Track 1 businesses working together to remove silos and drive more joined-up decision making.

That's felt like a real change in the business. As a result, we're increasing sharing data, sharing technology, whether that's data sets or AI capabilities, there's a lot of things that each one of these businesses are doing that other businesses can benefit, and we can scale that quickly across our group.

Importantly, we've also changed incentives, where we've aligned incentives more closely so that we're not just rewarding individual business performance, but we're now rewarding collaboration and group-wide outcomes as well. We're starting to see early benefits of this.

We're seeing more cross-selling, we're seeing better utilization of data, we're seeing faster deployment of AI-enabled solutions. Although it's really still early days, this model is already improving how the group operates, and we see this as a key enabler in the future, too.

Our priorities: we're now just over 9 months in, myself and Mickey, and we've moved quickly to fundamentally reshape the group. Although changes like this do take time, we're seeing the early benefits of that come through in our performance, in the quality of our portfolio, and how the business is operating.

From here, our focus is actually quite simple, falls into three buckets. First is to resolve this Mach49 arbitration and bring to a conclusion that process and remove that uncertainty.

Working incredibly hard to make that happen. Second is to simplify, continue to take decisive portfolio actions, and also fully embed the new operating model across the group.

The third priority is to grow. As we talked on our Capital Markets Day, we're making investments in our Track 1 businesses, we're scaling our AI capacities, and we want that to drive organic growth in those Track 1 businesses and over time in the total group, too.

This is a business that's moved at pace, we're seeing early results, it's leaner, it's simpler, it's now very clearly focused on the next phase of delivery. As we look at the outlook, trading in fiscal year 2027 is showing clear signs of progress.

We're seeing progression across key growth areas, as Mickey said, particularly digital transformation, alongside early benefits, tangible benefits from our more focused investment approach. It's still really early in the year, but the direction of travel is positive, and we're encouraged by the momentum we're starting to see across the business.

On that basis, we expect our full-year performance to be in line with our expectations. As we've said, we've maintained the final dividend, which gives you confidence in how we see the business, too.

In summary, this has been a year where we've taken decisive action. We've addressed key issues, we've simplified, we've established control, performance has stabilized, portfolio is materially improved, and the foundations are stronger.

It's still early days, we've still got a lot of work to do, but we're seeing early progress, particularly in those growth areas. The business is now, we believe, better positioned to move forward.

There's uncertainty in Mach49, but the focus here is very much on execution: simplify, scale, deliver against the strategy we've set out. We believe that this is a business now that is much more focused, much more disciplined, and moving in the right direction.

We'll go to Q&A. Steve, you put your hand up just first.

Thanks. Steve Liechti from Deutsche Numis.

I'll pitch three, if I can. One, SMG US expansion.

Can you just dig into that a bit more in terms of where you are in terms of pitching, wins, aspirations in the near term there relative to the costs you're investing there? Second, can you give us an update on Pretzel?

It's kind of buried in Comms. You've put together a lot of businesses there.

It's early days, but just a bit more on how that's progressing across there. Then on trading today, I'm not going to ask you for a first-quarter number necessarily, but maybe you can flesh out if market expectations are for what is like-for-like growth in the full year, what's the shape of that will be between the first half and second half, to try and bring your comments about early days with kind of good progress.

Sure.

Shall I take the first two?

Yeah.

SMG obviously have a good foundation in the US already with WHSmith, which is a client that is driving revenue and growing. It's developing a good case study.

I think what I can say is that we're really encouraged by the progress the team is making in pitching as well. I would say that landing these retailers, this is a business that I built, I've experienced it and know takes time because what SMG do is pretty structural.

You're actually putting big teams of people into retailers. Once you land a big retailer, it's incredibly valuable.

Whilst the new business cycle takes a bit of time, once it happens, it's really transformative. I'd say progress is encouraging.

As I said at the Capital Markets Day that we want to land one to two clients this year. We're still very much targeting against that.

We're encouraged by the results we're seeing so far.

Can I just ask, the KPI we need to look for is retail client wins? Because presumably the brands, it's pretty difficult to get the brands in the US.

Actually the brands follow the retailers. Once you win a retailer, the brands follow.

The KPI is, do we win new retailers in the US, yes or no? Even if we win a retailer in year one, sometimes it takes a little bit of time for that to really drive profitability, but these are long-term contracts that are high value.

Is that

helpful, Steve? Maybe one other thing, just in terms of pitches, you mentioned pitches.

Decent pitch pipeline, or still kind of getting on the No, decent. It's like that.

Very much so. On

Pretzel, we've made really good progress over the course of last year. That group of businesses has significantly improved their profitability as a result of bringing them together, and we've seen early progress in terms of value added for our clients and what we can do together.

There's still a lot to do there. Bringing four businesses into one creates a ton of workflow changes.

Also, we're embedding AI in Journey Labs, which is our new AI model into that business, too. Out of the businesses in Track 1, there's still a bit of work to do in that business, but we're pleased with the progress so far and then the early signs from clients are encouraging.

Do you want to talk like-for-like?

Trading today? Yeah.

Trading today, it's been good. We're 3 months into the year, and we're all pleased with where we're at.

We are in line with the expectations that we set that you are familiar with. We don't break those out H1, H2, but we'll talk about those in a second.

There have been a few strong performers in the year so far, a few strong businesses. Mentioned Transform over and over, but they deserve one more mention because they really are performing well.

They're not the only one, but they are exceptionally strong so far this year. Steve, you asked about H1, H2.

Just shape of growth, yeah. Yeah.

Shape of growth. Growth occurs in H2.

You may see the beginnings of it at the end of H1, but you'll see it in hopefully full force in H2. That's when the growth really comes through.

Having said that, there are a few brands that are really, really pushing it in H1. Their logic is, if we push hard in H1, no matter what happens in H2, we can secure a full-year result.

We're very pleased with performance so far. It bodes well for full year.

]:

Hi. Morning.

[Jessica Pok?] from Peel Hunt.

A three, please. Transform's performing very well.

Can you just talk a little bit about nature of the contracts as in multi-year contracts or 1-year contracts, and we're going to see benefits flow through not just for this year, but into the next fiscal year? The second one is on SMG.

Doing really well in the UK, is it all about the US expansion now? When we look at the UK, is there potential to increase spend current client base you have, or is it a matter of winning new clients now?

Then just the third one, versus back at the Capital Markets Day, how are you viewing the Track 2 assets as a whole in a sense? They've performed better than you've expected.

Are some assets leaning towards disposal, and are you making good progress towards all five, so?

Transform contracts, first of all. The reason Transform is making so much progress is because they have a big specialty in AI.

The work that they can do in AI and technology, especially with the government, is helping them to drive efficiency, which is top of the agenda for governments at the moment. They've got great credibility in what they've delivered for departments across the government, including HMRC, Department for Education.

The contracts typically are multi-year contracts that are up to a certain amount of revenue. Now, they're not guaranteed for that amount of time, at any point, they can stop.

Typically, when they are awarded, they do continue for that period of time. It would give us confidence that the growth that we're seeing now will continue into this year and into next year, too, as we win more of these foundational contracts that we're seeing.

As we continue to win contracts and continue to deliver good work, we're seeing a real flywheel of growth for Transform, which is incredible to see. We've also got an excellent team there.

I don't know whether you remember Emma, who presented at the Capital Markets Day, but she's really, really good and doing a great job there, lots of confidence in Transform. Is the growth only in the US in SMG, or is there growth in the UK, too?

I think the answer is we see growth in both. In terms of the acceleration of growth, I think the biggest kind of size of prize is in the US, but probably the hardest to get to.

In the UK, we've got a very strong foothold with a number of great retail clients. Later this year, we'll also be announcing some new technology, I hope, that will give us an opportunity to expand our revenue beyond just the kind of direct-to-brand revenue that we're seeing at the moment.

That creates a big opportunity to tap into brand budgets, tap into traditional above-the-line budgets, which create a new area of growth for SMG in the UK, too. We foresee some growth in the UK, too.

Then Track 2 businesses, I'd say the performance amongst those businesses is mixed. Have some businesses surprised us?

Yes, and actually positively. We've seen a couple of the businesses in that group, specifically Marca, performing pretty strongly in the first part of this year.

We've seen stabilization across the rest of the portfolio as well. We're actively working on the reclassification or disposal process.

Obviously, I can't say too much about where we are with all of those, but we're pleased, I think, with the progress that we're making. We hope to be able to give you all news over the course of the year on progress in that space, too, as and when we have them.

That answer the questions? ]: Yeah.

Thanks. Will Lawson, Panmure Gordon.

Firstly, just on this sort of flywheel effect and the examples that you gave, just wondering about how sort of impact are they having in terms of you talked about that 1,000% return. How are you sort of, I guess, pricing for those outcomes?

Is that how you're thinking about pricing going forward? Secondly, just in terms of technology clients, it's been down year-over-year.

What's the outlook for that client set going forward? Then finally, just in terms of capital allocation, there was a line in the statement about sort of shareholder returns and then looking at bolt-on M&A.

Just on the M&A piece, if you could sort of give us a bit more color on type of assets you're looking at, where you are on that journey, what's sort of, I guess, what's got you looking at that?

Is AI performance second question for Will just Tech clients, yeah. Okay.

I'll take the first two? Yeah.

It's a really interesting question, and we're still figuring it out. We're certainly moved almost entirely away from time and materials now in a lot of our businesses, and we're moving more towards a more fluid, performance-based model in our pricing.

Obviously, as creative production costs reduce, for example that example that we gave with M Booth, obviously the cost is so much lower than it used to be, but the improvement for brands from their creative can still be the same. There's so much more value for the clients in that work, and so they are willing to share more of that with us if you're really good at doing it.

Because we're pioneering a lot of this with some of the biggest brands in the world, M Booth is one example, but if you look across some of our other businesses, we're working with a lot of big forward-facing tech brands, we're increasingly seeing value from that come through to our bottom line, and that's helping to drive our margins. In Track 1 businesses, obviously the profit growth is ahead of the revenue growth, which gives you a hint as to why that is.

Talking of tech, to your second question, we spoke in the last results, we didn't want to call it too early, but we're starting to see a recovery in our tech clients. A lot of the losses that we saw in those businesses were in the first half of last year.

We saw that sort of improve in the second half, and in the early part of this year continue to improve. That trend is positive there.

We're not quite at a stage where we're seeing like-for-like growth, but it's certainly improving in terms of the headwinds that we've been facing. Then on your question on capital allocation and shareholder returns, M&A: first, we said this before, we'll say it again, we need to sort out the Mach49 arbitration.

Get that out of the way. As soon as that's out of the way, we can really concentrate on what we do next with capital.

We're nearly there with that, we think. There is a choice between shareholder returns and M&A at the moment.

If you just assume it's 50/50 until such time as we can actually get there. What kind of M&A would we be looking at?

It would be that M&A that sits squarely within our new operating segments, probably focusing on those segments that are going to grow anything in Track 1, they're all growing fast, but those that we think are going to grow the fastest. We have seen a few businesses that are really interesting, that would fit really neatly within the Track 1 businesses.

Interestingly, there we can get them for really good value. They would be very accretive.

We would love to do them now, but we're not going to. We have to sort out the things we've said we're going to sort out.

As soon as that's done, we can turn our attention to those.

Thanks, Sam. Arthur [unclear] from Investec.

Perhaps firstly to follow up on the M&A. Would you be willing to pay multiples above your current multiple there?

I guess you've seen the multiples of sort of Kainoses of the world. The pivoting towards the transformation might take you into a sort of higher multiple part of the market.

Are you sort of willing to consider that? Secondly, you mentioned sort of early progress on cross-selling.

Do you have any sort of metrics for that, either now or where that could get to sort of longer term? Then, I guess, two together on financial front for Mickey.

Just on to working capital and this big inflow last year. That won't be repeated, but would we expect more inflows potentially?

Related to that, just highlighted that the fees to sort of lawyers and advisers, any chance of recouping some of that if there's a favorable outcome?

I'll take the first two? Sure.

I think the answer to the first question is yes, we might, but probably not big assets at high multiples. What we'd probably be looking at is bolt-on assets for the businesses that add our capabilities or our data, that we can see driving our revenue and profitability.

It totally depends on the asset, obviously, and whether it's strategically important, but we would consider it is the answer. We don't have any specific metrics yet on cross-selling because previously it was zero, but I would like to start reporting on that as we progress.

We are starting to see some really interesting progression with the Track 1 brands working together, and there are shared clients. There probably hasn't been the connections up to now to create value out of that.

That's one of the things that we see big value in.

On the question of working capital fees, you're right. We said it, we had a very, very significant inflow this year, £44 million, and that was against an outflow last year, the swing is very, very significant.

You can't defy gravity continuously, I think our modeling would suggest that we've got neutral working capital, maybe a slight outflow next year. That's probably quite conservative, but that's the way we've modeled it.

You also asked a question of whether we could recoup any fees, legal fees, for the dispute that we're in. Potentially, yes.

We have insurance, and we're looking at the extent to which that insurance can sort of recoup money back for our legal fees.

Morning. It's Jonathan [unclear] from Berenberg.

Two, actually. One is a follow-up on Retail Media and SMG.

If we've seen a dip in margin for this year as the investments have gone into the US expansion, if we were to think longer term and look back at the margins that that business has delivered as part of a previous expansion, should we see that as a template for sort of margin profile of that business should the success be made in the US? Just a follow-up on that, if we were to look at the business ex-US, would we see a similar margin profile to that which was reported historically?

The next question is just on the cost savings. You talked about a £26 million annualized benefit.

Should we think about that as being a relatively contained exercise, i.e., we shouldn't therefore assume there could be further cost savings could be made beyond that? Or should we just think that that £26 million really is where expectations should sit around the efficiency improvements that can be taken out the group at this point in time?

Okay. Starting with the margins on SMG: historically being a very high-margin business.

We are investing in its growth in the US because we see the potential of the rewards we talked about. Should you take that investment out, it would be a very high-margin business.

We expect that as that US arm of the business grows, actually the margin would improve materially that business over the course of next 2 to 3 years, even more so than they were in the UK. The way that the model works there is those businesses that SMG work for are generating high revenues at high margins, and SMG take a small percentage of that.

Increasingly, as we do more and more of that through AI and technology, that obviously reduces cost base for us, too, the model is highly margin-generative. On cost savings, we can both answer this.

My opinion is no, that's not the end of it. We are continuing to look at the business in every way and working our way through.

We are continuing to optimize. As we see more and more of the work that we do become more efficient as a result of the technology that we're using and the tools that we're using, we see a path to further cost savings, is the reality.

Hi. It's Simon Baker from Kepler Cheuvreux.

There's not much more to ask, really, but just possibly comment on the nature of the inhousing of market research you've seen. Has that been a couple of clients, or has that been sort of more widespread issue for you?

Then, just to come back on the working cap question, I think you're running about 110, 120 days on receivables. Is that, do you think, a national neutral level with the structure of your business?

Would we expect a change if you execute the two changes of Track 2 dispose? The last question, just on US policy shifts.

Could you give us some context of what you're saying there now and how that's manifesting itself, or if it's got away now and the clients are just conditioned? Thanks.

Okay. Just to clarify the first question, you're talking specifically about inhousing of market research.

Within the Savanta business, we've got two competing forces. You've got the traditional market research business, which is declining at 10% to 15%, and you've got the data and product business, which is growing at a faster rate, but from a lower base, which is why you're seeing a kind of overall decline in that business in the segment.

That's driven, as you say, by inhousing of market research, by the availability of tools externally. How we're counteracting that is through things like the launch of Virtual Personas that we talked about at the Capital Markets Day, which gives the data set that we have a new way of inhousing, of self-serving, that is higher margin for us and more accessible to the client as well.

That is a trend, Jonathan, but it's something that we're ahead of, and that's driving some of the growth in the Savanta business as we see. Actually, we see that as far more scalable than the traditional models.

We can launch that well. Virtual Personas launched earlier in this year.

We've already got a strong set of beta clients using it every day, and we're getting really great feedback. Some of the businesses that you compare with, you can sort of saw this offline, are generating huge amounts of funding for similar technology, and we're very lucky that we developed it in-house, we want to really grow that.

Working capital? For working capital, you asked a question on debtor days, you said 110 days, 120 days.

That's right. Will that change if we have a greater weighting towards Track 1 versus Track 2?

Both the businesses that probably has the greatest working capital pull/drain is our retail media business. The nature of that business, our clients pay later than the most, that's the way retailers work.

Having said that, the timing of our year-end works to our advantage because they tend to pay at the end of the year, it all comes good at the end of the year typically for Retail Media. You don't really see that in the numbers at year-end.

As Retail Media gets bigger, that invariably puts a greater weighting on those debtor days. Having said that, if Transform continues to grow the way it grows, it counteracts that, it sort of balances off the retail media side of things.

I don't think we're going to see a discernable change from where we are at the moment.

Debtor days in Transform are radically different, are they? Yes.

They're At the moment you're roughly neutral, if you take account of current mix? Days are about right?

Yeah. Then on US policy shifts, I think the biggest impact that we saw last year was in our technology clients.

The way that they shifted their capital focus into CapEx side, into data centers and AI development. I do think of that settling.

I think we've seen some headwinds from macroeconomic uncertainty over the course of the 12 past 12 months. Clients are getting more used to the uncertainty, and they're planning accordingly.

It would be better without the uncertainty, but we're seeing a stabilized picture, I think. Any other questions in the room?

No. Actually, the opposite, I think, is where we're starting to scale our Transform business.

It's allowing us to make more efficiencies in our cost base, and as a result, we're seeing margins improve. The short answer is no, we're not seeing it.

Okay. Thank you all very much.

Thank you.