I think that's 9:30. Is it 9:30, Dan?

It is.

It is 9:30, we'll kick off and welcome everybody to The last couple of presentations we've done, Investec's offices were under reconstruction and they are palatial now. Welcome to to to where we are and thanks Investec for hosting us.

Small bit of admin for the questions. Please wait for the microphone to arrive.

Apparently that helps for all the online for the offline question for the for the stream. That's admin.

These are the full-year results for '25. I think we're really pleased.

We're really pleased not just about what we've achieved, but where the business is in terms of going forward. As people realize, Dan and I sort of came in the last quarter of '23, and the first thing to do was work out what the hell had gone wrong, what what was happening.

There are a few simple things, like taking head office down from 55 people to 10. There was working out.

Then '24 was really about sorting it out. Then, and yeah, one or two things.

We were slow off the mark with our digital business to realize the depth of the problems there. We didn't really get onto those till about May '24.

So '24 was about sorting things out. Then '25 is very much about getting it all working right.

I think these results suggest we have got it working right, exactly where we want it. Actually what's really exciting now is that '26 and henceforth is actually about taking what is quite a well-oiled machine, like, business is never straightforward.

There's always something goes wrong, but generally we're in pretty good we're in very good nick, and looking at where we take this business now as a high-margin We've got so many attractive elements to our business, you know: high margins, wonderful cash flow, great opportunities for growth, really stable recurring revenues. We're very excited about the future.

I'll I'll I'll do the high-level numbers on the next page, and then Dan can get into the detail. Yeah.

It's good. Revenue up.

I'll show the charts in a moment. Adjusted operating profit, all of the stuff, adjusted EPS.

Our adjustments are really are quite fiddly. Dan will explain to everybody, but things like the earn-out on Scann-Tech goes through our P&L.

Don't even ask me what how all of that works. I did complain to our auditors a couple of days ago going, "Any normal punter looking at our results and saying, 'I want to see the statutory numbers,' hasn't got a hope.

Hasn't got a hope to understand why if you've got to pay £50 million in two years' time why that goes through today's P&L." There you go.

We're very comfortable that we're not The adjusted EPS is genuine. That's where it is.

We're not sort of doing some any tricks here. It is really straightforward and you can judge our performance by the adjusted EPS.

We'd said back in back end of '23 that our goal was to achieve 20% operating margins. I love high operating margin businesses.

That's where you look That's where you establish real quality. Yes, one or two people say, "Well, that's a bit of a fudge, because you just offloaded Harrow Green, which is a low-margin business."

I think what you'll see is, firstly, the trend in the margins has been exactly what we've been trying to achieve, and secondly, even without If Harrow Green had been performing normally, we probably would have been pretty close to 20%. As it happens, we are at 20.8%, and hopefully there's a bit more to come over the over the time.

The next slide will show how everything's doing better. Seven deals, we weren't we didn't do any Just as we didn't do any media for the first six or nine months, we didn't do any deals in '24.

This Some of our businesses are ideal for bolt-ons and some And also, where we're positioned, we've got certain gaps. In '25, the Scann-Tech deal, there was a gap which I'm not sure It was Dan who recognized it.

I'm not sure I'd recognize that gap, but there was a gap. We saw the opportunity, and this Scann-Tech deal is really, really exciting and has been a gap which we filled in our armory.

The bolt-on acquisitions, we've done another couple this this year. There are There are more of those to come.

We're not short of opportunities. It's about getting the right sort of returns on them.

Interestingly, in the Box business, we could buy more business buy more Box businesses, but the vendors want too much money, where we can't get our ROI. We don't need them strategically.

Funnily enough, I had somebody a couple of days ago saying, "Do you still want to buy us?" I said, "Well, we made you an offer last last year.

You said it wasn't good enough. Unless something's changed on your side, no, we don't want to buy you."

We're in pretty good shape. As I'd say, acquisition of Scann-Tech, which is really Dan and Nigel are really helping run that very strong team there.

That's a really exciting space. Being able to do outbound mail alongside our inbound, and where that business goes is really, really exciting.

Harrow Green, we said a couple of years ago that if it didn't fit, we weren't going to keep it. Harrow Green didn't It was unfortunate that trading was bloody awful, but also it was just low-margin, non-recurring revenues.

We'd acquired it, 15 years ago or so, primarily for its Box business. It had done a really nice job for us, made made But the market had changed, and actually it's far better off being owned by Pickfords, being off the market.

It's a fiddly fiddly thing. That was And I think we got there, we got there reasonably We gave it a really We really liked the team, really liked the people, and we gave it a really good run.

Then we just went I think it was about May last last year, I sort of wrote a board paper and I just said, "What's the point here? Really sorry, but this doesn't make any sense."

Dan will talk about it more. We generate a lot of cash out of this business, and we can deploy it in acquisitions, but we make sufficient a surplus over and beyond that, certainly in the short term.

We'll spend £20 million over the next year buying in our shares, which I won't tell you what I think about our share price, but that's life. Hey, if nobody wants to buy the shares, they don't.

We'll buy them dirt cheap. Moving on, here are some Here are the sort of charts which the CEO and the CFO love presenting: up, up, up!

Operating profit, 18% CAGR. The margin, very good for anybody In all these, we have quite a few scientists in in our team.

The adjusted operating margin, that's good stuff. That's exactly what we're about: 16.8% to 20.8%.

EPS, 23% CAGR. We really think we can we can keep moving up moving those numbers up in a similar way.

Free cash flow: We've We've generated over £120 million the last three years. Then if I look at the So the share buyback will will will will not dent us too much in terms of that.

All of the businesses which we've got: Information Management, what's going on there is the Box business is a wonderful business. I wouldn't underestimate how well we've done with that business.

We've been whacked with a lot of rent reviews going through recently. We've been whacked with extra business rates.

It's got We've got quite a lot of people in that business, the minimum wage shooting up, the NI. To maintain, or marginally increase, our margins in that business has is been hasn't been easy.

That's really good. At the same time, sorting out our digital business, which was a which was a real mess and now is a huge opportunity for us, so that's has been has been a real triumph.

I'll stop patting ourselves on the back. Again, Datashred, it's a good It's a really good business.

It chucks off the cash. We've got it right.

Operating margins going up. Technology, which was a basket case, we've got a good team there.

We've sorted it out. They're very methodical.

We've got to the point now We didn't increase revenues in that business last year, but we've got the margins up, and now we've got the scope to to do to have to have a bit of fun with that business and to grow it. The focus there We've sorted out ops.

We've worked out which market we want to be in. We've understood where the numbers are.

We've understood where our customers are. Now we get Now we can grow that business.

Now we can go after the market which we like in that space. We like acquisitions.

It's always been part of the Restore model. Historically, it was very much about buying Box businesses very cheaply, and we grew it on the back of that.

There are still some of those around. Topwood had a Box business, an archive warehouse, sort of quite slightly opportunistic, but they know that we're in the market.

There is nobody who's got a Box business who doesn't get a letter from me at least once a year. They know where where to come to.

That's been good. We're on our toes.

The This was a very NEC. They had an an electric mail room, a digital mail room.

It wasn't in their sweet space sweet spot, very easy for us to help them out, uplift it, move it onto somewhere else. Scann-Tech was a strategic deal.

This We'll always We'll always look at things and we'll discard most of them, but Scann-Tech, as I say, Dan nobbled it very early, convinced me that it was exactly the right thing. Nigel got involved in its operation, and we're really, really pleased with that business, really, really pleased.

I'm very pleased with the structure of the deal. We've been We've got the The owners of the previous owners are excellent, and we Our relationship with them is building in a really, really good way.

We're really excited about how that works and how it fits. We take on some of our IT issues, we talk to Scann-Tech people about what they do.

We can bring quite a lot of stuff to them. We're really excited about that.

Datashred Shredding is just a classic for bolt-on acquisitions. Contracts are secure.

You pick them up, you pull them through your place. It's been a tough market for most shredding shredding owners.

The paper price has collapsed. People like us are far more efficient than they are, but customers are sticky.

You can pick up the customers, put them through your machines. The ROI on those deals is great, and I hope in due course the way we're going, we should be the biggest.

We was was currently smaller than Shred-it, but I suspect that we we will be larger than them in due course. Of course, we've got a whole load of of great stuff like all the old paper from the Box business goes through Datashred.

There's so many A lot of the Datashred sites are actually on on on Records Management's business on Records Management sites. We've got a lot of advantages there.

We bought three businesses last year and a couple couple more so far this year. Obviously Harrow Green we disposed of.

As I said at the begin- at the top of the show, we were We think we've got a really good machine now, and then it's about how how do we push more through it. The as a This first point is really, really interesting.

Basically, in the world of digitization, the real problem is where soft meets hard. All of you will have filled out things for the bank and passports and all the rest of it.

All the problems come from when hard copy meets soft copy. We've got a big contract we're looking to bid for at the moment.

All of the issues around that are around It all goes If everything is digitized, everything works. You can you can Everything goes through it.

If If ever you run into hard copy issues, as you do with HMLR, as you do with HMRC, as you do with DWP, that's where all the problems are. We're the best people in the UK to sort those out.

With AI coming along and everybody going, "We need more data," actually, if for example, and I always sort of was a joke, but we've always said you could digitize all of the NHS's records. Actually we did.

I'm going to I'll It's a nameless I won't name the hospital, cuz it was a bit of a disgrace. Three years we spent with 100 people back-scanning all of their all of their old records, which at the time I thought was completely pointless.

There may So this is just an illustration. I don't think it's going to happen.

There may actually come become a time when somebody says, "If we had all the NHS historic records and we digitized the whole lot, we would have the best databank you can ever imagine." I'm not saying that's going to happen, but it's the sort of world in which we're living.

We are by far the biggest digitizer of documents in the space. Plus, we hold a lot of this stuff.

That's not going to happen, but it's an illustration of where we sit in this market. I've always liked being at the at the bottom of the value chain, but actually we're going to creep up right in this particular space just because you're you're If when you've got these really practical problems, it's not the software guys who are going to sort it out.

It's not the It's not the big four accountancy and consultancy firms who sit up there doing holistic vision. It's It's people like us who really understand what it's like when HMRC get sent, £13.70 in cash.

That's That's where all the problems are, and that's where we are. I'm I don't know where where this journey is going to take us.

All I know is that it's really good news for where we sit. Also, I get into trouble because I But the new word is halo, isn't it?

Heavy assets, low obsolescence. You ain't going to get AI to pick a box at 14 m.

You're not going to get AI to un- to un- unpick a a Post-it note from the GP and all the rest of it. The sort of stuff which we do, there is no threat.

There is just opportunity. I think Scann-Tech, I won't The NHS failed to send out some missives last at the back end of last year.

The impact was problems for a lot of people. This year, they realized they can't do that again.

Who do they go to to do that? Scann-Tech.

How does that fit? We do inbound for everybody.

We do the outbound. This is, as I say, Dan and Nigel are closer to this than I am.

This is a really good space to be in, and it's exactly where we want to be. I think thirdly, there's a lot going on in the in the IT asset life cycle place space.

People are doing joining joiner, mover, leavers. A lot of people in this room, somebody will need to When you spill coffee on your laptop, somebody will need to tidy it up and work out whether to chuck it out or not.

That will not be Computacenter or Bechtle or whoever. That They're not interested in that.

Again, that comes down to us. We think there's a really good space here.

I'm really excited about what we've achieved. Again, that business hasn't grown in '25 deliberately, but now we've got the platform from which we can move forward.

I think if I look forward three or four years, historically, this has been Well, you you buy the stock because actually the Box business is worth £500 million. Move on.

Actually, I think where we are now is that Box business is really, really solid, but it all it helps us feed into these other areas, which where we sit as a sort of grubby business process outsourcer is a real sweet spot going forward. We're really excited.

I As usual, I've probably overspoken, Dan, but over to you.

Thank you, Charles. It never gets any easier following you, but there you go.

Good morning to you all. Thanks so much for coming.

In a world where you can't predict what's going to happen, I am pleased to have quite a predictable set of results for you. Usual set of slides plus an extra one just going through the buyback.

A bit like Charles's first slide, this is quite an easy one for a CFO to present. Everything is going in the right direction.

Revenues up 27%, £304 million. Most of that is down to the acquisitions we made in the year, but really solid result.

Operating profit up 18%. Margin up, and we've hit that target we set ourselves three years ago of 20%, 20.8% this year.

There's a little bit of structural help from Harrow Green, but that absolutely doesn't change the year-on-year momentum. I should say that all the little text at the bottom that you may not be able to read, all these results are excluding Harrow Green.

EPS up 23%, dividend tracking that. We'll come back to cash flow later in the slides, but another strong year of cash flow, good cash conversion, and leverage within our preferred range.

Just going through the three divisions: Within Information Management, we've got the Boxes business, a broadly stable number of boxes, and we've now got all of the contracts inflation-linked, RPI or CPI. The property consolidation strategy is now in its final phase.

Just a reminder, we said we'd move about 4 million boxes. That's easier to say than it is to do.

They have been busy and they will be busy, but that's all going really well. When we look at the site numbers, we've exited probably six or so sites over the last 12 months.

Digital, as Charles mentioned, we kind of got onto that in about May, June 2024. That's now completed.

We've got £5 million annualized savings, of which about £4 million are in this year. That's more than we thought.

It's actually a little bit more than we hoped, really really pleased with how that's gone. Then we've got Scann-Tech, as Charles touched on, and that just provides a really compelling end-to-end offering around communications, both the mail in through the mailrooms that we already have and now mail out through Scann-Tech.

Then Datashred, really good performance, highly recurring revenues. That did have a bit of a bad reputation, and I think we didn't explain it well enough.

75% of the revenues there are recurring revenues. They're service fees.

The remaining 25%, the remaining quarter, is paper. We'll touch on paper, but we've hedged two-thirds of the paper for this year that we're in now, 2026.

2025, we hedged about 50%, I've slightly won the arm wrestle about hedging more this year. Really stable business, very happy with that.

It has really good KPIs. If you compare our visits per day and paper collected, they're really strong.

I'm really pleased to say that they haven't deteriorated despite acquiring businesses. Just to scale that for you, our trucks do around 12 visits a day across the UK.

Some of the businesses we're doing, there's some geography involved, but do about six. The fact that we've bought businesses in the period and still got those KPIs is really pleasing.

Natalie and team have done a fantastic job there. As Charles touched on, two further bolt-ons so far this year, and I've got plenty of SPAs on my desk back in the office of future stuff, really good pipeline.

In Technology, really good operational progress, we just do things a lot better there. Some of you have been on the site visit that we did to Cardington.

Some of you in the room have been and seen Cardington evolve. It's really well-run machine now, and we're increasingly getting into VARs, value-added resellers.

The market trend we have seen and continue to see is that companies are outsourcing their IT provision to VARs, and then VARs are outsource the provision of the life cycle management to people like us. Really good opportunity for growth.

Next slide, I think, is the one that I've convinced Charles the merit of waterfalls. Just going through the three businesses: First one, Information Management.

Pricing is the first block. It's what I touched on a second ago.

That's basically the boxes with inflation-linked pricing. Digital integration: This is the amount of savings in year.

If you roll back and you look at this deck last year, there was about a million in there, £5 million annualized savings. We've then got contribution from the acquisitions.

Almost all of that is Scann-Tech. Scann-Tech we acquired almost a year ago exactly, there's 9.5 months' worth of contribution in 2025.

The property consolidation, that's effectively us moving out the smaller properties into the larger ones, more efficient both in terms of the rent per square foot, but also those of you have been to one of our sites, the eaves are higher, you can get more boxes per square foot of space, it's a win-win for us. Then a couple of headwinds: Cost inflation, the largest one of those is what we talked about in October 2024.

Following on from that budget, NI was the big hit. NI and then National Minimum Wage, we said it was about £3 million annualized for the group, so that's the amount last year that hits Information Management.

Then activity, that large last block in Information Management, we've talked about this before. It's the loss of a big contract towards the end of 2024.

We've replaced it with DWP. DWP was at full running capacity in Q4 2025.

As we look into this year, you'll see that come back round the other way. We're really pleased with the way that DWP is running.

We think the largest mailroom in Europe, in the UK, and it's running really well. Then just on Datashred, we've got contribution from acquisitions, and we've also got net paper movement.

It was around about £170 a ton last year, which is broadly similar to the year before that. Then Technology, that's effectively us running it better, it's cost savings.

Head office, Charles, just for your benefit, that does include some share-based payments. I know you'd tell me off if I didn't mention that.

There is a non-cash charge within head office year on year. Just in a little bit more detail, Information Management, you've got the key metrics there.

Just to make it easier for the analysts, we present the margins excluding the postage costs. We just put that box around so you can figure out it's £38 million or so of post.

Boxes under management consistent year on year. We have talked before, what we're seeing there is broadly the similar number of boxes for the group.

Change in mix very slightly. Public sector are creating more boxes than they're destroying.

Corporates are destroying more than they're creating. Net-net, that means we're pretty much the same number of boxes, which makes life easier when you're trying to move 4 million of them as part of the property consolidation.

Scanned image volume up very slightly. They're just gearing up for the exam season.

My daughter is about to sit her GCSEs, they're starting to gear up for the exam season. Outbound communication volumes, that's new this year.

That's Scann-Tech. So 111 million of communications sent in that 9.5 months.

That's a combination of physical letters and emails and text messages. Staff up slightly.

Most of that is Scann-Tech. Then sites, sites up two, but actually that's a story of Scann-Tech four in and we've exited six within the Boxes business.

Up very slightly year on year. Datashred: Just a reminder, three-quarters of revenue is service revenue, a quarter is paper.

We've hedged three-quarters of the paper volume. Paper tons are up year on year, it's now about 60,000 tons in 2025.

Annualized, it's a bit more than that. We're there or thereabouts market-leading.

We've had some really strong acquisitions there. Those acquisitions have done really well.

The key worry for us on those acquisitions is that you lose the customers. That hasn't happened.

Kept the customers. The other worry is, can you get the cost synergies?

Yes, we absolutely have. We're happy with that.

As Charles mentioned, more to come. Then Technology: We have had a conscious mix change where we've come out of lower-value contracts and we've gone into higher-value contracts.

The assets process, kind of you've got a mix there of us coming out of some smaller contracts and into new ones. We are continuing to see VAR growth.

Within that year, it's really a story of the smaller customers decreasing and the VARs increasing, and that's the trend that we think we'll continue to see. We're confident about that growth going forwards in the top line.

The cost base has benefited from operational improvements. Ian, the MD, has done a really good job of making that business run much, much better.

Adjusting items: The new entry, or maybe a re-entry, I should better say, is acquisition costs. Most of that £13 million is the Scann-Tech earn-out that Charles did a bit of an accounting bashing about earlier.

£10 million of that is that, and there's a bit of interest attributed. If you take that out, and that will continue It's a four-year earn-out, so that will continue for the next couple of years.

If you take that out, there's about £2 or so million of normal acquisition costs, which is fees and integration costs. Then we have some of the restructuring.

That's the completion of the digital integration, which is now done. That will drop off.

Then property costs, and that's a combination of double running, to rent, and also logistics costs of moving the boxes around. Cash generation: It continues to be strong, good cash flow.

As Charles mentioned, three-year cash flow of over £120 million, £43 million last year, consistently high cash conversion. We spent some of that money in 2025 on acquisitions.

You've got Scann-Tech is the biggest one. That had some borrowings with it as well of £11 million.

You've got Shred Station was next biggest. Then the rest of the bolt-ons.

We disposed of Harrow Green in December 2025. There's a deferred consideration due in a year's time for that, £2 million in the year.

Finance costs, most of that is the bank loan. We've got some of the bankers here in the room, who I'm sure are happy to see about the share buyback.

Then we had some treasury share purchase as well, and that's to satisfy their own share schemes. Leverage ended the year at 1.9 times.

That's EBITDA to net debt, and that's well within our target range. We refinanced in October, and we've got plenty of headroom in the facility, and we've got an accordion on top of that.

Thank you for all the banking friends in the room with help from us that. Capital allocation: This is a familiar slide.

Had it a few years now. The slight tweak is we've changed the tense on the share buyback now that we've announced one this morning.

Just a reminder: Invest for growth, number one, and we'll always do that first. We'll always do M&A first or invest in ourselves.

The buyback, just for clarity, is not an instead of, it's as well as. We'll keep doing that.

The buyback doesn't hinder our ability to keep doing that. Then secondly, deliver shareholder returns.

All that's within the underpin of maintaining a strong balance sheet and a leverage range of 1.5 to 2 times. Then my final slide is the buyback program.

As we've talked about a few times now, highly cash generative, £43 million of cash flow in the year. Most of that went to acquisitions.

We've got a healthy pipeline of more acquisitions. What we've decided to do now, especially in the context of the share price, is return excess to cash holders where we can.

Therefore, we're saying £20 million buyback over the next 12 months. Some of that may run into Q1 next year.

We'll see how we go. We're maintaining a dividend, and think about how we track whether we do more buybacks in the future.

That's it for me. Back to you, Charles.

Great. I haven't really got much more to say which I haven't said already.

Business outlook: We're very focused on the operating margin, and that will continue to be the case. As I said earlier, things like the Box business maintaining and possibly increasing its margins, we've done a lot of work on this, moving 4 million boxes around and things like that.

We've been very smart. The people have been brilliant.

Continuing to drive margins in that business has been a real feat, and it applies across all of the group. Everybody knows we've got to keep the operating margin up, and when we do that, then you put through more volume and really great things happen.

The Box business is a marvelous business. Now it's working with our digital stuff, that is perfect.

We have the same sales team. They're so melded these days that, particularly with the AI implications, particularly with people trying to access this data, that's a really, really powerful combination, and we're really cracking in, particularly into the public sector in this space.

Really, really exciting. Also the other thing in the digital business, we're actually winning quite a lot of bulk scanning work, whereas previously we weren't at the races.

We need to make sure we keep the margins in the right place on that, because it's an area which we're very focused on. This is all going well.

The Notify contract, which has started to kick off, will be very helpful for Scann-Tech. That's from the NHS.

If I look at the other people who they're able to use under the Notify contract, they're not at the races compared to us. Datashred, good business.

It works very well. Again, classic business.

How are you going to get AI to come to the seventh floor in Investec and pick up their shredding bins and tip them in, etc.? This is a good business and it's absolute winner-take-all territory.

Technology, we're really pleased with how the management team there has taken a really difficult business with a huge opportunity. They've sorted it out, they've made it a really good business, and it's still got that huge opportunity.

That's really good. We're doing things right, growing on all the metrics above inflationary growth, operating margins.

In the larger scheme of things, the last couple of years has not been the easiest time to be running businesses in the UK. Our businesses are sufficiently robust, and our people get what they're being asked to do and do it so well.

We've had the odd tailwind, not much. We've had a few headwinds.

Good start to the year, and I think Dan nudged the numbers up in December or whatever, and now we're nudging them up a bit more. Great.

We don't want appendices. We'll go back to the starting line.

Just remember Nick is our man with the mic, and so if you wait till it turns up, Dan will point at people to let them know who's speaking next. Dan, you can

Sam, there you go. You've been gifted the mic.

Thank you. Sam [unclear] from Stifel, please.

Just two questions from me. Firstly, on the bolt-on M&A, can you give a sense of what you'd expect that level to be going forward?

Is that sort of £5 million to £10 million or anything like that? Then secondly, on Scann-Tech, in terms of the medium-term growth opportunities, I think in the statement you highlighted sort of trying to win more public and private sector work on top of the NHS.

Can you just talk about how you're going to go about that and the opportunity there? Thank you.

Great. I'll let Dan deal with Scann-Tech because it's really his and Nigel's baby rather than mine.

On the M&A, there are still quite a few independent shredding businesses out there. It's really tough for them.

The paper price is low. They're up against us with national coverage, the fact that we've got this captive market from our Box business, the fact we can share sites.

We expect to continue to add these on, and the ROI is pretty good on those. They, as independents, they may be turning over £2 million, they're not making any money.

If we turn up and pay them, for the sake of argument, £2 million, we can pick that up, put it through our system. Sometimes it's never quite perfect, but there might be a million of costs which we don't need.

That will continue. There are a few straggling Box companies there which are around.

Those are real sort of slam dunks. I wouldn't expect us to spend more than £10 million or £15 million on those this year.

As I say, we know the universe of people. They'll know us.

It'll be a question of who wants to buy their kids a house rather than keep going running their own business. That's the bolt-on M&A.

I'm not mad on bolt-ons in the digital space because it's so much more about relationships. I think there are bolt-ons probably in Scann-Tech's market where there are independent printers who are doing exactly what we're doing.

We see synergies around that, which would be an interesting space. IT recycling, there are one or two companies which are struggling there, but generally that's about relationships rather than contracts.

In my head, I've sort of got £10 million or £15 million to be spent this year on those types of things. Then, if something comes along for £30 million, £40 million, we'll have an interesting discussion.

I'm sure our lovely bankers in the room would love us to borrow the money off them, and then it'd be a question of how long it would take us to get back below two times gearing if we do them. That's M&A.

Thanks, Charles. Sam, on Scann-Tech, there are two parts to that really.

One is around relationships and the other is around offering. On the relationships part, 85% of Scann-Tech's revenues are with the NHS.

They're weaker on corporates, and if you look at our business, we're strong on both. Then on the offering, the really lovely thing about it is it enables you to look at communications end-to-end.

Some of the information is stored in boxes. If you're a car OEM, car company, or a bank that provided the finance, some of that information is in the boxes.

You need to get that information, you need to communicate out to your customers, and then your customers need to come back to you. How many people in the market can do that?

We can. There are two elements.

We're not there yet, because the motor finance is a bit down the track, but we see a lot of opportunity there.

Morning, both. James Bayliss from Berenberg.

Two, if I may: on the Datashred M&A strategy, you talked about winner-takes-all as a market dynamic. Is there any steer on whether the game for you is broadening your national coverage versus prioritizing kind of infill and route density to conquer local markets first?

Then my second one, on NHS Notify, if I'm right, would be at the kind of the top level of the NHS. Does that then open up opportunity for you to go out and engage with the local trusts more for the regular mail communications?

Thanks.

Great. Again, I'll let Dan deal with Scann-Tech.

On Datashred, possibly one of my biggest concerns is we've got a really good team there, and in about 18 months' time they're going to be really bored, because it fits in very well, but it will be a cash cow. There will continue to be demand for people to shred stuff.

I don't know about you, but at home, I don't put my bank statements in the bin. I bring them into the office to be shredded.

That market is not going away. We've probably got the sort of most of the national coverage that we want.

We will stop buying businesses in this space in the next year, 18 months, because we won't want anything else. It will be a cash cow, and we will run it really, really well.

We're doing a lot more in that space on Restore Recycle, we're collecting more textiles, batteries, all the rest of that. That's where we take that business.

It's a really good management team. As I say, I think in a year, 18 months, we're going to have to focus on Restore Recycle.

The only other thing, which I know about life, is sometimes I don't like necessarily disposing of businesses, because you've got a sort of ticket into the game. Just as with our digital business, which is now in a really great sweet spot, which I wouldn't have recognized 10 years ago when we were going, "Do we really want to do scanning?"

Quite often, if you're just being somewhere and doing it right gives you the opportunity to move into something else. I think the team at Datashred think that there are some quite interesting areas which we can edge our way into.

Dan, Notify?

Thanks, Charles. Thanks, James, for the question.

NHS Notify, they sort of sit parallel to NHS England, but they'll continue, they're nationwide. What they've been tasked with is effectively, one, aligning communications across the trusts, and, two, over time, moving towards digital.

If you look at what they have on their to-do list, they've got vaccination, COVID, flu; they've got screening across all the types of cancers and other things; and they've got local trust hospital appointments. If you look across those different elements, some of them are trust-specific.

That's a long-winded way of answering your question. Yes, it does open up opportunities in trusts.

We're still at the phase where they are allocating out the work. We're doing pretty well out of that, and some of that is with trusts where we didn't previously have a relationship with.

Dan, you told me something this morning which I was unaware of. How do I know whether I had a letter from Scann-Tech in my endless hospital appointments?

Oh, yes. Useless fact, if you open up the envelope, then there's lots of sort of hashtags in the middle, and you can see Scann-Tech written inside the envelope.

Now I know that there are

Next time you get a letter from the NHS, there's a 20% chance that you'll you'll find that and it'll be Scann-Tech. In I'm sure in two years' two years' time there'll be a 35% chance that it's Scann-Tech.

Sorry. Nick seems to be the person who's making the decisions, the man with the mic and the power.

Morning. Tom [unclear] from Investec.

Just one, please. What's the current revenue split in terms of public versus private sector, and do you see that materially shifting either way over the course of the next sort of three to five years?

I can give you the sort of high-level answer, but I think you better get it from Dan. He'll probably give you the accurate answer.

Yeah.

Thanks, Tom. It's under 50%.

It's probably about 60/40: 40% public sector, 60% corporate. Scann-Tech nudged that up a little bit.

There's opportunities in both, I think that sort of works. If you look at the Boxes example, you've got that mix where the two different types of people are behaving differently.

There's a lot of opportunity left in public sector where they haven't yet outsourced it. Scann-Tech, although 85% of their work is with the NHS, that's only 25% of the NHS work.

The rest of the 75%, they're still doing effectively in-house. We're happy with that mix and there's opportunities in both.

I think it's interesting that I think the government in the financial crisis went, "What can we do about this?" One of their targets was to say, "Let's be more efficient.

Let's go for digitization." Much as we all like to beat up the government and the public sector, actually we've done a pretty good job as a nation on digitization.

We're probably in the top five nations in terms of our digitization, and this is absolutely critical to government thinking, that they've got to get the digitization to work. We are in a real sweet spot here.

I really do. Increasingly, we have these relationships.

We're upping, as I say, in this particular space. I hate being up the value chain; I love being at the bottom of the value chain.

In this particular case, we're being dragged up the value chain because our offering is so important to how things work. Everybody's got this issue, but you get into trouble the moment you come across hard copy, and there's a lot of hard copy out there, and it will not be going away.

Probably Dan's grandchild will be doing their exam papers in a physical form is my guess. That's not a bet.

I'm saying that the tail on physical is intractable and huge.

Thanks.

Thanks. Morning.

Greg Poulton from Singer Capital Markets. Just a couple from me, please.

Firstly, on Tech, there's obviously big growth opportunity in outsourcing there. Could you talk about how you're positioning yourself to win share proactively in that market?

Linked to that, what do you see as the margin potential for that business? Cuz I know that's the sort of laggard of the group at the moment.

Then lastly, obviously you had a big contract loss in the period, which you were able to replace with the DWP contract. Are there any big renewals coming up this year that you're sort of looking to?

Okay. In our IT recycling business, which is called Restore Technology I did say to them, "Can you not change your name?

Because I've no idea what Restore Technology does." They said, "No, we're a great brand.

You can't. We're going to stick with it."

You've got different business streams. Really the first one is end-of-life.

In end-of-life, you've really got your direct. That's where we deal with big accountancy firms, big universities, a lot of people.

They give us their kit at the end of life and we deal with them directly. The big area which is growing is the value-added resellers, so that is the Bechtles, the CDW, etc.

They say, and what they want is they want us to look after the kit once they've sold it. That area is growing very dramatically.

We haven't really, and in terms of particularly the direct stuff, but also the VARs, because we weren't really happy with our offering, we haven't really been targeting that space so much, and now we are. Also, in that business, it's the joiners, movers, leavers, and that's beginning to expand.

We've also were very good at destruction in this space, and we've just put on another three salespeople into destruction as well as reorganizing our sales force. Having the focus now is on growing that business, and we've got it.

Interestingly, actually, there's a business which was bought when I was away, which is basically repairing old hard drives called Ultratec. Funnily enough, that's increasingly moved into being a Restore-type business, because actually with all the data centers and everybody trying to all these hard discs flying around, they break and then you can chuck them out or you can repair them, and you can repair them and then you trade them.

Actually, that's becoming very much a sort of Restore-type business in terms of doing grunt work in data. We think there's a lot of those different business streams.

There's growth in them, possibly the most exciting is really the VARs. There's a whole load of people who really shouldn't be doing the job.

I wouldn't give my second-hand laptop to some of the people who some very big companies are giving them to. Now, that was not a very good answer, but there you go.

That's my shake.

Shall I do digital?

I was going to do digital, but after that poor performance, Dan, I'll hand over to you.

The contract point, Greg, so that was DWP came in. That's the DWP, Department for Work and Pensions, mailroom for Q4 at full run rate.

If you look at the ones that we have now, HMRC, DWP, HMLR, RM, who do the exams, Office of the Public Guardian, they've all got quite a long way to run, not worried about those. There are one or two bigger new things out there.

There're also quite a number of smaller things. We've picked out a couple of them in the past.

We've got a couple of new ones we haven't necessarily named because we're still in that sort of standstill period. That digital business is now in a much better shape where it can really compete in the market, and they're not individually big, £1 [million], £2 million scanning contracts, but there's quite a lot of them, and that adds up quite quickly.

Thanks.

James Tetley, Cavendish. Couple of questions for me: On Information Management, now you've nearly finished the property consolidation, where is capacity utilization settling out?

Is that broadly where you want it to be? Then, secondly, on Scann-Tech, can you remind me of the relationship between the profit performance within Scann-Tech and the ultimate earn-out that you pay?

Does that sort of big accounting adjustment this year, does that imply that it's on track to, if it carries on current trajectory, to hit the maximum earn-out? Thank you.

I'll do IM capacity and Dan will do Scann-Tech. I'm really pleased with the structure of the earn-out on Scann-Tech, but Dan will explain it in detail.

That was my idea, how to structure the earn-out, by the way. The IM capacity, we're in a really good space now that we do not have to take on another huge building.

We're sort of shuffling it around, getting more efficient, etc. In the past, it was always really difficult when both the industry was growing and we were doing a lot of M&A in this space.

You'd buy something and we would be overflowing, and then you'd buy something else and they were half-full. Actually it was historically much more inefficient, whereas now, when we've got a pretty steady level, my target to that business is to have at least one more box than we had at the end of the year as we had at the beginning of the year, and I think we're going to achieve that.

The market is flat, but that's what we've got to do. It does mean that in terms of your efficiency gains, you can know that's our space and we don't have to think about whether we take on another 200,000 ft² to fill it up.

It's really helpful. You want to be at about 96%, and we're pretty close to that at the moment.

We have a quarterly property meeting which is broadly around working out, "Yes, we've just taken on a new building in Stroud. What does that mean?

Do we need space wherever?" We can slightly feed it into, "I think we might be buying the 300,000 Box business in the next 6 months.

Where would we put them?"

I'll do Scann-Tech then. Thanks, James, for the question.

I'm an accountant and this is a slightly embarrassingly complex accounting. It's a four-year earn-out.

Their year-end was March and we've pegged it around that. Year three is March '28, so that's the first earn-out.

Then year four is March '29. You get slightly different accounting treatment depending on whether the former shareholders, are still there or if they left as part of the transaction.

If they're still there, it's treated as remuneration. Most of them are still there, which is why you then see it running through the P&L.

The way the earn-out is structured is it's pound-for-pound EBITDA, ignoring amortization, but including depreciation, they get. They get year three EBITDA.

There's a threshold to it and there's a cap and a collar effectively. If they earn above the threshold, pound-for-pound they get that amongst the former shareholders in year three and in year four.

What that means on multiples is that it basically stays between 5 and 6 times. Weirdly, the way the maths works, thanks to some thinking from Charles, is actually the more they make, the slightly lower the multiple is.

We're really happy with that deal. In answer to the question, is it on track?

Yes. So '26 is actually ahead of where we thought it might be, so, yeah, very happy with that.

It's one of those ones which If the business makes £15 million in 2028, '29, and we have to pay them £15 million, happy as Larry. A, it's self-funding, and, b, what kind of a business have we got there?

They've never lost a customer. Hopefully I haven't just jinxed it, but

We thought they'd lost a customer a month ago, and it was a technical error. We just gone, "God, they've lost a customer.

What's going on?" "Oh, no, that wasn't a lost customer.

That was moved to a different account." Good business, that business.

Morning. Chris Bamberry, Peel Hunt.

Three questions, if I may: Firstly, on Technology, what's the current pipeline like for opportunities with VARs? Secondly, you've talked about a 15% margin in the medium term, just trying to get an understanding of how much operational gearings in the business, and as a consequence, kind of how big the revenue base needs to be ballpark?

Finally, just a general update on the competitive behaviors across your three markets, but in particular shredding given the ownership of Shred-it now kind of settled under Waste Management? Thank you.

Okay.

With so the the the VARs, we've we've now got our teams have been allocated to individual VARs to generate more business out of them. We are confident that the way we're selling to the VARs And it's a it's a It's a slightly fiddly sell because you're you've got the customers.

For example, with the DWP, which we're doing through CDW, the DWP had to come round and inspect all our sites at the same time as actually our direct customer is CDW. It's it's quite And also, because it's a sort of thing which people don't think too hard about, what quite often happens is you go through a long tender process, then all of a sudden they want it now, or sometimes they sort of go, "Blimey, what are we going to do with that?

We haven't thought about that. Right."

The pipeline is good. There's quite a lot of opportunities.

There's one very prestigious public sector one which I was hoping to find out before before today, but we still haven't heard out of heard about. That that there are but there are there are good opportunities there, and and I really the team there know that they've done everything they can on how to get the margins there, and now it's about volume.

It's also the pricing in this space is really opaque, because some people are getting we sell the kit for them and they get they get 60%, 70% of whatever we sell the kit for. Others, we charge them the others, we charge them up front, we just get most of the money when we sell it.

To me, this is this is a fiddly business and it's one where we, without being disrespectful to our customers or anybody else, we know far more about how this service should be priced than than they do. If I ask anybody in this room how how much would should you how much would you pay or expect to receive by giving us 100 duff duff laptop 100 laptops, you wouldn't have a clue.

Whereas obviously something like Harrow Green, if I said, "How how much it's going to cost to to rejig this room?" you'd all be able to go, "Well, it's got a van and six blokes."

It's this area where the pricing is really opaque, and that tends to tends to favor the supplier, because we know where we're going to make money, where we're going to lose money. Increasingly because of our pricing model, we can which is pretty sophisticated, bit of time and motion, but also how far's the truck got to go, all the rest of it.

We've now got a pretty sophisticated pricing model, we can know that, okay, we're going to quote you, 50% rebate on everything you do and and £10,000 for the job. You won't know whether that's a good price or a bad price.

If you say, "I'm not going to pay that," we we might go, "Okay, forget it. You don't understand how it costs."

Now because we've got a handle on the costs, etc., that that's how it goes. That's why I think this is a it's it's a fiddly business.

It's It's a 15% to 20% margin business, because it's just difficult and it hasn't got the transparency. You hate construction, you hate cleaning, and things like that, where everybody knows what a cleaner costs, you know you know how much you can get for the contract.

This has got the level of opacity which I really like, and tends to lead to high margins. I think in the in the markets generally, in terms of our pricing position, the in IT asset recycling, it's the margins are all over the place.

Great. Once we know where we're making our money, we can get to those margins, because you just turn down the stuff you don't want to do, because people don't want to pay it, and the people who you can make money out of probably don't recognize yet that you're you're doing really well out of them.

That's so that's the pricing in that space. The pricing in in shredding has historically been quite commoditized, but with the low paper price, it's really difficult for the independents, because historically they've made all their money on the on what they sell the paper for rather than the service charges.

If they're not selling the paper for very much, they've got to jack up the service charges. We see that there's there's one rogue player in that market who, it's a question as to whether they'll go whether they'll go bust or not before they realize that they're not making any money.

They're the sort of number three, four in it. Ourselves and and the market leader, we're we're plodding along making margins, but we're very they and we are really well-invested.

This is a 15%-plus margin business, and and we're not too worried about that that space. The Records Management, the Box business, the pricing's pretty commoditized and things aren't moving around much.

We sort of we are where where we are. In terms of competition in the digital side, clearly the the mailrooms are really, really sticky.

The online hosting is really, really sticky. We tend to You just look at our customer base, particularly in the public sector on the on the on the digital mailrooms, and you know that this this again is a difficult space.

More people NECs and people, they're coming out of it. They It's a difficult space.

They're leaving it to the experts, which is us. We are now because we've got our we're we've worked out we've we're not an inefficient operator, we're not efficient enough, but now we can compete for the big bulk scanning contracts.

Probably an issue this year is going to make is doing the time-and-motion studies, etc., to make sure we increase our Now we've got decent volumes going through this, it's about tweaking the margins on that and getting your labor cost per You want to get your labor cost We need to get our labor cost down a bit in that space, and that's that's a key focus of this year. Scann-Tech, as I say, they've they've never lost a customer, which probably tells you quite a lot about that market.

Thank you.

Oh. Nick.

Oh, sorry.

Hi, yeah. James [unclear] from Canaccord.

I've got two questions on digital. The first follows on from what you were just saying there, Charles.

Really kind of interested in what's changed in terms of your commercial approach to start winning those bulk scanning contracts again. Then the second one on margin: I think last year you kind of did sub-10% on digital.

There's kind of a hint in the text that it's going to hit 15% this year. That suggests a favorable run rate year-to-date, but I'm kind of wondering whether that 15% target is now looking light in your eyes, and if so, where could it get to?

I think you take £5 million of overhead out of a business, £5 million, £6 million of overhead out of a business, your operating margins swing round pretty damn quick. We absolutely feel that 15% that 15% is on.

Getting there and beyond it will actually be about how slick we are with our bulk scanning, and having not been in that market in the same way as we have been in digital mailrooms and things, that's where we need to focus. Bulk scanning operating margins are never going to be as big as they are in electronic mailrooms and online hosting, but that'll be what'll drive the margins in that business above 15%.

I've written down "bulk contracts" here, but I can't remember

what Commercial approach.

Oh, the commercial approach, yes. James, thanks for the question.

The approach really stems from two things: One, us sorting out the cost base, and that means they can pitch at a much more competitive price than they previously could. If you take the Lloyd Georges, which are those bundles of patient records, the price we're pitching is probably £1 lower than it was before the integration, and that's just a reflection of the cost base.

The other element is the approach to market, when you've got both the physical and digital businesses coming together, rather than sometimes, in hindsight, they were sort of competing against each other or kind of a little bit, "I'm not sharing our relationships." It's just chalk and cheese.

It's a combination of both those things, which is why we think we're winning more. We've probably got time for one more, Andy.

Sorry, Andy.

Yeah. Good morning.

Andy Smith from Panmure Liberum. Two questions: One is, for the sake of my spreadsheet, what was the contribution from Scann-Tech last year in order to work out the organic growth rate in IM?

Then, just on a wider point, following on from what you've just said on the margin, you've targeted 20% margin now for the last what, two, two and a half years. You're at that level.

Or where can the margin go from here? Is there an aspiration that it can go much higher, or that's the run rate we can assume?

I'll let Dan deal with the technicalities of how much we're making out of synergy and the margin that's there, because there's all around the post price and all the rest of that. There's a finite amount you can push the margins.

There is a model which I set for Nigel when he was running the Records Management business as to what percentages it should be. There is peak margin, which is still 100-odd basis points base bps away from, but if ever I will buy him a glass of shandy if he ever gets to what his target is, and he's struggling to get there.

There's a bit more to go there, not much. That'll be muddled up now because of the joint sales team, joint processing with the digital side, but the digital side, there's more margin to go for there without a doubt.

I can see 15% out of shredding is the right number, and we're only at 12% at the moment, and I think we can get to 15% out of the IT recycling business. Overall, if we do all of that, you're looking at sort of 21% to 22%, and then it's about putting more revenue through the business at those margins.

Sometimes, if we're going to try and put more revenue through to be able to compete to win that stuff, then we're going to have to accept that we just want to be doing £100 million more revenue at these levels. Sort of 21% to 22% feels If you get too far above that, it feels that you might be creating an opportunity for somebody else, or you might be encouraging your customers to go, have we been too generous here?

I think, by its nature, this is a 20% to 22% type of business. We're not SaaS or whatever.

We're not going to get to 30-odd percent. It's about going, we're the market leaders, let's put more volume through, let's go into related areas where we can achieve these margins.

Thanks, Charles. I think he deserves more than a shandy, by the way, if he does that, but

Don't tell him that.

Scann-Tech: In the margin graph, Andy, there's an acquisitions block which is £4.4 million for the contribution in the year. Almost all of that is Scann-Tech, and that is 9.5 months' worth if you want to think about sort of run rate going forwards.

Then you got to take the interest off that to work backwards to work out what's happening in the rest of the business.

Yeah. I think that's everyone.

If we just go to the lines quickly to see if there is anybody online. Looking at Sean.

No? No.

Great. Very good.

Thanks, everybody. Thanks, as I say, for Investec for inviting us to their palace.

Hopefully we'll be back here in July. Great.

Thanks, everybody.

Thank you.

Right.